Lennox International, Inc. · NYSE:LII
Lennox International — Q4 2024 Earnings Presentation
18 slides from Lennox International's earnings presentation, Jan 29, 2025
Slide 1: Fourth Quarter 2024 Earnings Release
INTEGRITY | RESPECT | EXCELLENCE FOURTH QUARTER 2024 EARNINGS RELEASE JANUARY 29, 2025
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES The statements in this presentation that are not historical statements, including statements regarding the 2024 full-year outlook and expected consolidated and segment financial results, as well as financial targets for future years, are forwa
Slide 3: 2024 Financial Highlights
2024 FINANCIAL HIGHLIGHTS RECORD MARGINS: MANAGEMENT EXECUTION CONTINUES Q4 CORE ADJ. SEGMENT OPERATING REVENUE* PROFIT MARGIN* CASH FLOW 2024 Adjusted Earnings Per Share* $1.3B 18.4% $332M +22% YoY +250 bps YoY +$26M YoY Q4 Full Year Full Year $5.60 $22.58 CORE ADJ. SEGMENT OPERATING +54% YoY +26%
Slide 4: Drivers of 2024 Business Success
DRIVERS OF 2024 BUSINESS SUCCESS DIFFERENTIATED GROWTH RESILENT PROFIT MARGINS EXECUTION MANAGEMENT • Share gain through successful • Continued execution of pricing • Accountability with Lennox navigation of R-410A availability excellence programs Unified Management System • Sales investments to ele
Slide 5: Q4 2024 Lennox Results
Q4 2024 LENNOX RESULTS CORE REVENUE* ADJUSTED SEGMENT PROFIT* (US$ MILLIONS) (US$ MILLIONS) +22% +$73M or +41% +3% 0% +1% $1,345 +18% Adjusted +54% to $5.60 $35 $1,099 $73 ($4) $248 EPS* ($31) $175 ROS 18.4% Consistently delivered ROS double-digit adjusted EPS* 15.9% growth Eight Consecutive Acquisi
Slide 6: Q4 2024 Home Comfort Solutions
Q4 2024 HOME COMFORT SOLUTIONS REVENUE SEGMENT PROFIT (US$ MILLIONS) (US$ MILLIONS) $887 $709 $193 ROS 21.7% $115 Volume: Industry pre-buy given low-GWP regulatory transition ROS 16.2% Price: Consistent execution of pricing initiatives Product Cost: Factory productivity/absorption 2023 2024 2023 202
Slide 7: Q4 2024 Building Climate Solutions
Q4 2024 BUILDING CLIMATE SOLUTIONS REVENUE SEGMENT PROFIT (US$ MILLIONS) (US$ MILLIONS) $458 $99 $390 $91 ROS 23.2% ROS 21.6% Volume: Solid growth across all three business units Product Cost: New factory ramp-up costs & inefficiencies 2023 2024 2023 2024 Other: Distribution productivity and + 17% +
Slide 8: Full Year 2024 Lennox Results
FULL YEAR 2024 LENNOX RESULTS CORE REVENUE* ADJUSTED SEGMENT PROFIT* (US$ MILLIONS) (US$ MILLIONS) +13% +$187M or +22% 2% $5,341 +3% 0% +8% Adjusted $162 ($23) $1,036 EPS* +26% to $22.58 $134 ($86) $849 $4,734 Delivering results while ROS ROS investing 17.9% 19.4% for the future Exceeded $1B in Acqu
Slide 9: Cash Flow and Capital Deployment
CASH FLOW AND CAPITAL DEPLOYMENT 1000 946 250% CASH 900 736 Cash conversion continues to improve 800 612 200% CONVERSION 700 600 516 150% • R-410A Inventory destocking OPERATING CASH FLOW 500 400 137% 302 100% • Accounts Payable terms TTM FCF CONVERSION* 300 85% 97% • Accounts Receivable collections
Slide 10: 2025 Financial Guidance
2025 FINANCIAL GUIDANCE CORE REVENUE OTHER GUIDANCE ITEMS Current Prebuy Volume Price Mix Total Inflation ~3% Home Comfort - (MSD) Flat + LSD + MSD ~ Flat Solutions COST Investments ~$25M ∆ YoY Building Climate Productivity ~($50M) - (LSD) + MSD + LSD + LSD + ~6% Solutions Interest ~$35M Total LII (
Slide 11: 2025: Self Help Transformation Priorities
2025: SELF HELP TRANSFORMATION PRIORITIES SELF-HELP TRANSFORMATION PLAN GROWTH RESILIENT PROFIT EXECUTION ACCELERATION MARGINS MANAGEMENT Recover & Invest 2022 - 2024 • Improved digital • Net positive low GWP • Lennox Unified customer experience transition Management System as foundation • Enhanced
Slide 12: Attractive Investment Opportunity
ATTRACTIVE INVESTMENT OPPORTUNITY Execution Consistency and Disciplined Capital Deployment Advanced Technology Resilient Margin Solutions with Business Focused on Direct-to-Dealer Network Sustainable HVACR Talent & Culture Driven by Growth End Core Values, Guiding Markets with Strong Behaviors and P
Slide 13: Thank You!
INTEGRITY | RESPECT | EXCELLENCE THANK YOU!
Slide 14: 2026 Long Term Targets Originally Provided Jan 2024
2026 LONG TERM TARGETS ORIGINALLY PROVIDED JAN 2024 19% - 21% ~90% of Net $5.4B - $6.0B ROS * Income Revenue Home Comfort Building Climate 20% - 22% 22% - 24% Free Cash Flow Integrity | Respect | Excellence *Estimated corporate cost of ~2% of revenue 14
Slide 15: Core Revenue and Adjusted Segment Profit
CORE REVENUE AND ADJUSTED SEGMENT PROFIT Change Year-over-Year Change Year-over-Year Net Sales Q4 2024 Q4 2023 Volume Price Mix Other Total YTD 2024 YTD 2023 Volume Price Mix Other Total Home Comfort Solutions $ 887 $ 709 21% 4% - - 25% $ 3,577 $ 3,223 7% 4% - 0% 11% Building Climate Solutions 458 3
Slide 16: Adjusted EPS
ADJUSTED EPS For the Three Months For the Years Ended December 31, Ended December 31, (Unaudited) (Unaudited) 2024 2023 2024 2023 Per Per Per Per After Tax After Tax After Tax After Tax Diluted Diluted Diluted Diluted Amount Amount Amount Amount Share Share Share Share Net income, a GAAP measure $ 1
Slide 17: Net Debt to Adjusted EBITDA
NET DEBT TO ADJUSTED EBITDA Q1 Q2 Q3 Q4 LTM Q1 Q2 Q3 Q4 LTM LTM LTM LTM 2024 2024 2024 2024 2024 2023 2023 2023 2023 2023 2022 2021 2020 Income before taxes, a GAAP Measure $ 154.2 $ 307.0 $ 293.9 $ 238.7 $ 993.8 $ 125.1 $ 263.7 $ 175.2 $ 173.5 $ 737.5 $ 615.8 $ 560.1 $ 445.2 Items in losses (gains)
Slide 18: Free Cash Flow & FCF Conversion
FREE CASH FLOW & FCF CONVERSION For the Three Months For the Years Ended December 31, Ended December 31, (Unaudited) (Unaudited) 2024 2023 2024 2023 2022 2021 2020 Net Cash provided by operating activities, a GAAP measure $ 332.4 $ 306.3 $ 945.7 $ 736.2 $ 302.3 $ 515.5 $ 612.4 Purchases of property,