Eaton Corporation, Plc · NYSE:ETN

Eaton — Q1 2023 Earnings Presentation

26 slides from Eaton's earnings presentation, May 2, 2023

Slide 2: Forward-looking statements and non-GAAP financial information
Forward-looking statements and non-GAAP financial information This presentation or the comments we make on our call today contain forward-looking statements concerning, among other matters, full year and second quarter 2023 adjusted earnings per share, organic revenue growth, segment operating margi
Slide 3: Highlights
Highlights Megatrends, re-industrialization, infrastructure spending have changed the long-term growth outlook for our company. Q1 adjusted earnings per share of $1.88, up 16% over 1Q22, and segment operating margin of 19.7% are both Q1 records. Sales of $5.5B up 13%, with organic revenue growth of
Slide 4: Celebrating 100 years on the NYSE
Celebrating 100 years on the NYSE We have reinvented We’ve stayed focused on Today, Eaton is on the ourselves time and again, our responsibility to leading edge of solving the in pace with what society stakeholders -- employees, world's most urgent power and its people need. customers, shareholders,
Slide 5: We're creating a company that plays across the electrical power chain
We’re creating a company that plays across the electrical power chain Solving our customers’ power management challenges © 2023 Eaton. All rights reserved. 5
Slide 6: Megatrends, global infrastructure and re-industrialization are driving large increases in capital investments
Megatrends, global infrastructure and re-industrialization are driving large increases in capital investments Megatrends Global Infrastructure and Re-industrialization • Inflation Reduction Act • U.S. Infrastructure Investment & – Incentives for onshoring Jobs Act EV OEM and battery – $88B for power
Slide 7: Resulting in an unprecedented number of Mega project announcements
Resulting in an unprecedented number of Mega project announcements Cumulative U.S. / Canada Mega Project ($1B+) Announcements since Jan-2021 $600 $500 Nearly $400 $600B ~3X $B $300 in cumulative normal run rate mega projects $200 since Jan. 2021 $100 $- Oct-22 Oct-21 Jun-22 Feb-23 Jun-21 Feb-22 Mar-
Slide 8: Which are creating significant growth tailwinds for Electrical markets
Which are creating significant growth tailwinds for Electrical markets $12-20B electrical content $2-4B line of sight to annual opportunity @ 3-5% incremental electrical of incremental mega market opportunity over project value next 5 to 7 years And expected to fundamentally change the growth outloo
Slide 9: Higher growth expectation is validated by our increased negotiations pipeline
Higher growth expectation is validated by our increased negotiations pipeline For example, the Electrical Americas negotiation pipeline…. © 2023 Eaton. All rights reserved. 9
Slide 10: ...and has already translated into sizable wins in our Electrical business
…and has already translated into sizable wins in our Electrical business Megatrends $180M orders to provide power management solutions for two new electric vehicle battery plants in North America • Power distribution equipment Vehicle • Brightlayer Industrial Remote Monitoring Electrification Sustai
Slide 11: Megatrends also fueling secular growth tailwinds in Industrial markets
Megatrends also fueling secular growth tailwinds in Industrial markets… Aerospace growth cycle Vehicle electrification 2x 50% 2x Projected EV Increase in eMobility historic growth driven by both penetration rate addressable market commercial and defense by 2030 over near term © 2023 Eaton. All right
Slide 12: ...and we're seeing a significant number of early wins
…and we’re seeing a significant number of early wins $500M+ life-of-program win to supply cryogenic cooler and controller for advanced infrared Megatrends systems for U.S. Army helicopters CityAirbus urban air mobility win for power Vehicle distribution unit demonstrates electrical Electrification S
Slide 13: Financial Summary
Financial Summary (M) 1Q '23 1Q '22 V '22 Sales $5,483 $4,843 13% Segment Operating Profit 1,082 909 19% Segment Operating Margin 19.7% 18.8% 90 bps Adjusted Earnings 753 649 16% Adjusted EPS $1.88 $1.62 16% $1.88 1st Quarter Record Adjusted earnings per share Sales Growth: Organic 15% $1,082M 1st Q
Slide 14: Electrical Americas Segment
Electrical Americas Segment (M) 1Q '23 1Q '22 V '22 Sales $2,294 $1,891 21% Operating Profit 525 361 45% Operating Margin 22.9% 19.1% 380 bps  Orders up 18% on a rolling 12-month basis with growth remaining Sales Growth: at high levels and strength driven by data center, utility and Organic 22% ind
Slide 15: Electrical Global Segment
Electrical Global Segment 1Q '23 1Q '22 V '22 (M) Sales $1,500 $1,437 4% Operating Profit 274 279 (2)% Operating Margin 18.3% 19.4% (110) bps  Orders up 4% on a rolling 12-month basis with growth remaining at Sales Growth: high levels and strength driven by data center, commercial & Organic 8% inst
Slide 16: Aerospace Segment
Aerospace Segment (M) 1Q '23 1Q '22 V '22 Sales $803 $718 12% Operating Profit 180 159 13% Operating Margin 22.5% 22.1% 40 bps Sales Growth:  Orders increased 21% in Q1 on a rolling 12-month basis Organic 13% organically from strength across all end markets Forex (1)%  Backlog growth of 27%  1st
Slide 17: Vehicle Segment
Vehicle Segment (M) 1Q '23 1Q '22 V '22 Sales $739 $671 10% Operating Profit 107 113 (5)% Operating Margin 14.5% 16.8% (230) bps Sales Growth: Organic 11%  Organic growth driven by strength in Americas and EMEA  Awarded multiple new programs for sustainable ePowertrain Forex (1)% product offerings
Slide 18: eMobility Segment
eMobility Segment 1Q '23 1Q '22 V '22 (M) Sales $147 $126 17% Operating Profit (Loss) (4) (3) (33)% Operating Margin (2.7)% (2.4)% (30) bps Sales Growth:  Over $1.4B in wins since eMobility was launched in 2018 Organic 18%  Won cumulative program total of $100M with European OEM by Forex (1)% leve
Slide 19: Electrical and Aerospace backlog growth remains robust as orders and supply chain begin to normalize
Electrical and Aerospace backlog growth remains robust as orders and supply chain begin to normalize gradually Record backlog provides tremendous visibility and confidence in 2023 outlook © 2023 Eaton. All rights reserved. 19
Slide 20: 2023 Organic Growth and Operating Margin Guidance
2023 Organic Growth and Operating Margin Guidance Segment Organic Growth Guidance Operating Margin Guidance Electrical Americas 11 – 13% 23.3% – 23.7% Electrical Global 6 – 8% 19.5% – 19.9% Aerospace 10 – 12% 23.7% – 24.1% Vehicle 3 – 5% 16.3% – 16.7% eMobility 25 – 35% 0% – 2.0% Eaton 9 – 11% 20.7%
Slide 21: 2023 Guidance
2023 Guidance 2023 Full Year Outlook Adjusted Earnings Per Share $8.30 – $8.50 Organic Revenue 9 – 11% Currency Translation ($150)M Segment Operating Margins 20.7% – 21.1% Corporate Expenses $710M Tax Rate on Adjusted Earnings 16% – 17% Operating Cash Flow $3.2B – $3.6B Free Cash Flow $2.6B – $3.0B
Slide 22: Eaton's end market growth assumptions are improving – 2023 outlook
Eaton’s end market growth assumptions are improving – 2023 outlook Electrical Sector Industrial Sector % of Total Eaton Sales % of Total Eaton Sales 2022 FY 2022 FY Utility * 10% Electric Vehicles 3% Industrial Facilities 12% Commercial Aerospace 9% Data Centers & Distributed IT 14% ICE Light Vehicl
Slide 23: Summary
Summary Megatrends, re-industrialization, infrastructure spending already driving higher growth and have changed the long-term growth outlook for our company. First quarter record financial performance demonstrates strong ongoing operating execution to deliver profitable growth. Record backlogs and

Eaton — Q1 2023 Earnings Presentation on 6ix

Eaton — Q1 2023 Earnings Presentation

Slide 1: First Quarter 2023 Earnings Release

Slide 2: Forward-looking statements and non-GAAP financial information

Slide 3: Highlights

Slide 4: Celebrating 100 years on the NYSE

Slide 5: We're creating a company that plays across the electrical power chain

Slide 6: Megatrends, global infrastructure and re-industrialization are driving large increases in capital investments

Slide 7: Resulting in an unprecedented number of Mega project announcements

Slide 8: Which are creating significant growth tailwinds for Electrical markets

Slide 9: Higher growth expectation is validated by our increased negotiations pipeline

Slide 10: ...and has already translated into sizable wins in our Electrical business

Slide 11: Megatrends also fueling secular growth tailwinds in Industrial markets

Slide 12: ...and we're seeing a significant number of early wins

Slide 13: Financial Summary

Slide 14: Electrical Americas Segment

Slide 15: Electrical Global Segment

Slide 16: Aerospace Segment

Slide 17: Vehicle Segment

Slide 18: eMobility Segment

Slide 19: Electrical and Aerospace backlog growth remains robust as orders and supply chain begin to normalize

Slide 20: 2023 Organic Growth and Operating Margin Guidance

Slide 21: 2023 Guidance

Slide 22: Eaton's end market growth assumptions are improving – 2023 outlook

Slide 23: Summary

Slide 24: © 2023 Eaton. All rights reserved.

Slide 25: Appendix

Slide 26: © 2022 Eaton. All rights reserved.