Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Q2 2024 Earnings Presentation
30 slides from Regal Rexnord's earnings presentation, Aug 1, 2024
Slide 1: Second Quarter 2024 Earnings
Creating a better tomorrow™… Second Quarter 2024 Earnings August 1, 2024 Moti Louis Pinkham, Chief Executive Officer on Co Indus Rob Rehard, Executive Vice President, Chief Financial Officer ntrol trial S Solut ystem ions s
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
2Q 2024 FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES All statements in this communication, other than those relating to historical facts, are "forward-looking statements." Forward-looking statements can generally be identified by their use of terms such as “anticipate,” “believe,” “con
Slide 3: Opening Comments & Overview
1Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2024 Results, 2024 Outlook ROB REHARD, CFO Questions & Answers Moti on Co Indus Closing Remarks ntrol trial S LOUIS PINKHAM, CEO Solut ystem ions s
Slide 4: 2Q Performance
2Q 2024 2Q PERFORMANCE • Sales Down 7.0% On An Organic Basis* + Adjusted Net Adjusted EBITDA* + Sales*+ & Margin*+ • Daily Orders Down 1.5% , Or Up 2% Excluding Large Prior Year Blanket Order; July Orders Trending Up LSD $370.0 • Record Adjusted GM* Of 38.1%+ $1,631.9 $1,508.6 $335.3 o Firmly On Tra
Slide 5: Power Systems Overview
2Q 2024 POWER SYSTEMS OVERVIEW Creating a better tomorrow™… 5 ©2024 Regal Rexnord Corporation, Proprietary and Confidential
Slide 6: 2Q 2024 Results, 2024 Outlook
1Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2024 Results, 2024 Outlook ROB REHARD, CFO Questions & Answers Moti on Co Indus Closing Remarks ntrol trial S LOUIS PINKHAM, CEO Solut ystem ions s
Slide 7: Automation & Motion Control
2Q 2024 AUTOMATION & MOTION CONTROL Sales Net Sales ($M) Adjusted EBITDA* ($M) & EBITDA • Organic Sales* Down 10.0% Margin* • Key Drivers $473.1 o Aerospace (+) $422.2 o Data Center (+) o Medical (+) $119.5 o Discrete Factory Automation (-) $94.9 25.3% 22.5% 2Q23 2Q24 2Q23 2Q24 * Non-GAAP Financial
Slide 8: Industrial Powertrain Solutions
2Q 2024 INDUSTRIAL POWERTRAIN SOLUTIONS Sales Net Sales ($M) Adjusted EBITDA* • Organic Sales* Down 2.8% ($M) & EBITDA • Key Drivers Margin* $698.7 $675.5 o Metals & Mining (+) o Power Generation (+) o Ag/Construction (-) $53. $174.4 o General Industrial (-) $235.2 5 $164.7 $43. 4 23.6% 25.8% 2Q23 2
Slide 9: Power Efficiency Solutions
2Q 2024 POWER EFFICIENCY SOLUTIONS Sales Net Sales ($M) Adjusted EBITDA* • Organic Sales* Down 10.1% ($M) & EBITDA • Key Drivers Margin* $460.1 o N.A. Residential HVAC (-) $165. $410.9 o Europe & Asia C-HVAC (-) 5 $39.0 o N.A. C-HVAC (+) $135. $85.8 7 $66.0 $21.3 18.6% 16.1% 2Q23 2Q24 2Q23 2Q24 $189
Slide 10: Other Financial Updates
2Q 2024 OTHER FINANCIAL UPDATES Capital Expenditures Balance Sheet at June 30, 2024 • $32.4 Million in 2Q 2024 • Total Debt of $5,769.2 Million • Net Debt* of $5,258.8 Million • Net Debt*/Adj EBITDA (Including Synergies)* of 3.62 Effective Tax Rate (ETR) • Interest Coverage Ratio (Including Synergie
Slide 11: 2024 Outlook
2Q 2024 2024 OUTLOOK • Lowering Outlook On Softer 2H Ramp In AMC Markets, And Minor Below-The-Line Adjustments • Revenue For 2024 Now Expected To Be ~$6.2 Billion • Adjusted EBITDA Margin* For 2024 Now Expected To Be ~22.4% • Now Expect 2024 Adjusted Diluted EPS* In A Range Of $9.40 - $9.80 (M/P $9.
Slide 12: Segment Outlook
2Q 2024 SEGMENT OUTLOOK * AMC and IPS sales growth targets are pro forma for the Altra transaction Continue To Expect 2H Performance Ramp, But Now At A More Measured Pace Creating a better tomorrow™… 12 ©2024 Regal Rexnord Corporation, Proprietary and Confidential
Slide 13: 2024 Investor Day
2Q 2024 2024 INVESTOR DAY Creating a better tomorrow™… 13 ©2024 Regal Rexnord Corporation, Proprietary and Confidential
Slide 14: Questions & Answers
1Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2024 Results, 2024 Outlook ROB REHARD, CFO Questions & Answers Moti on Co Indus Closing Remarks ntrol trial S LOUIS PINKHAM, CEO Solut ystem ions s
Slide 15: Closing Remarks
1Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2024 Results, 2024 Outlook ROB REHARD, CFO Questions & Answers Moti on Co Indus Closing Remarks ntrol trial S LOUIS PINKHAM, CEO Solut ystem ions s
Slide 16: Adjusted Diluted Earnings Per Share
2Q 2024 APPENDIX ADJUSTED DILUTED EARNINGS PER SHARE Unaudited Three Months Ended Six Months Ended Jun 30, Jun 30, Jun 30, Jun 30, 2024 2023 2024 2023 GAAP Earnings Per Share $ 0.94 $ 0.48 $ 1.23 $ 0.39 Intangible Amortization 0.98 1.02 1.96 1.54 Restructuring and Related Costs (a) 0.20 0.18 0.39 0.
Slide 17: 2024 Adjusted Annual Guidance
2Q 2024 APPENDIX 2024 ADJUSTED ANNUAL GUIDANCE Unaudited Minimum Maximum 2024 GAAP Diluted EPS Annual Guidance 3.70 4.10 Intangible Amortization 3.92 3.92 (a) Restructuring and Related Costs 0.68 0.68 Share-Based Compensation Expense 0.51 0.51 Operating Lease Asset Step Up 0.01 0.01 Impairments and
Slide 18: 2024 Net Income to Adjusted EBITDA Annual Guidance
2Q 2024 APPENDIX 2024 NET INCOME TO ADJUSTED EBITDA ANNUAL GUIDANCE Unaudited (Dollars in Millions) Minimum Maximum Net Income $ 263.4 $ 290.4 Plus: Income Taxes 83.2 91.7 Plus: Interest Expense 386.5 386.5 Less: Interest Income (10.5) (10.5) Plus: Depreciation 170.0 170.0 Plus: Amortization 347.0 3
Slide 19: Adjusted EBITDA - Three Months Ended
2Q 2024 APPENDIX ADJUSTED EBITDA Unaudited (Dollars in Millions) Three Months Ended Industrial Powertrain Automation & Motion Solutions Power Efficiency Solutions Control Industrial Systems Total Regal Rexnord Jun 30, Jun 30, 2024 Jun 30, 2023 Jun 30, 2024 2023 Jun 30, 2024 Jun 30, 2023 Jun 30, 2024
Slide 20: Adjusted EBITDA - Six Months Ended
2Q 2024 APPENDIX ADJUSTED EBITDA Unaudited (Dollars in Millions) Six Months Ended Industrial Powertrain Power and Automation & Total Regal Solutions Efficiency Solutions Motion Control Industrial Systems Rexnord Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, 2024 202
Slide 21: Net Income to Adjusted EBITDA
2Q 2024 APPENDIX NET INCOME TO ADJUSTED EBITDA Unaudited (Dollars in Millions) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2024 2023 2024 2023 Net Income $ 63.0 $ 33.2 $ 83.4 $ 27.7 Plus: Income Taxes 33.9 9.9 44.8 22.2 Plus: Interest Expense 101.7 116.4 207.1 211.8 Less:
Slide 22: Adjusted Net Sales - Three Months
2Q 2024 APPENDIX ADJUSTED NET SALES Unaudited (Dollars in Millions) Three Months Ended Industrial Powertrain Power Efficiency Automation & Total Regal Solutions Solutions Motion Control Industrial Systems Rexnord Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, 2024 20
Slide 23: Adjusted Net Sales - Six Months
2Q 2024 APPENDIX ADJUSTED NET SALES Unaudited (Dollars in Millions) Six Months Ended Industrial Powertrain Power Efficiency Automation & Total Regal Solutions Solutions Motion Control Industrial Systems Rexnord Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, 2024 2023
Slide 24: Adjusted Effective Tax Rate
2Q 2024 APPENDIX ADJUSTED EFFECTIVE TAX RATE Unaudited (Dollars in Millions) Three Months Ended Six Months Ended Jun 30, 2024 Jun 30, 2023 Jun 30, 2024 Jun 30, 2023 Income before Taxes $ 96.9 $ 43.1 $ 128.2 $ 49.9 Provision for Income Taxes 33.9 9.9 44.8 22.2 Effective Tax Rate 35.0 % 22.9 % 34.9 %
Slide 25: Adjusted Free Cash Flow
2Q 2024 APPENDIX ADJUSTED FREE CASH FLOW Unaudited (Dollars in Millions) Three Months Ended Six Months Ended Jun 30, Jun 30, Jun 30, Jun 30, 2024 2023 2024 2023 Net Cash Provided by Operating Activities $ 158.3 $ 221.1 $ 241.4 $ 327.3 Payments for Certain Acquisition Costs (Net of Tax of $11.4 Milli
Slide 26: Organic Sales Growth - Three Months
2Q 2024 APPENDIX ORGANIC SALES GROWTH Unaudited (Dollars in Millions) Three Months Ended Industrial Power Powertrain Efficiency Automation & Industrial Total Regal Solutions Solutions Motion Control Systems Rexnord Net Sales Three Months Ended Jun 30, 2024 $ 675.5 $ 410.9 $ 422.2 $ 39.0 $ 1,547.6 Im
Slide 27: Organic Sales Growth - Six Months
2Q 2024 APPENDIX ORGANIC SALES GROWTH Unaudited (Dollars in Millions) Six Months Ended Industrial Power Powertrain Efficiency Automation & Industrial Total Regal Solutions Solutions Motion Control Systems Rexnord Net Sales Six Months Ended Jun 30, 2024 $ 1,318.9 $ 796.2 $ 822.4 $ 157.8 $ 3,095.3 Net
Slide 28: Debt to EBITDA
2Q 2024 APPENDIX DEBT TO EBITDA Unaudited (Dollars in Millions) Last Twelve Months Jun 30, 2024 Net Income $ 1.4 Plus: Income Taxes 75.3 Plus: Interest Expense 426.3 (a) Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line ex
Slide 29: Adjusted Gross Margin - Three Months
2Q 2024 APPENDIX ADJUSTED GROSS MARGIN Unaudited (Dollars in Millions) Three Months Ended June 30, 2024 Industrial Power Automation & Powertrain Efficiency Motion Industrial Total Regal Solutions Solutions Control Systems Rexnord Net Sales $ 675.5 $ 410.9 $ 422.2 $ 39.0 $ 1,547.6 Gross Margin $ 270.
Slide 30: Adjusted Gross Margin - Six Months
2Q 2024 APPENDIX ADJUSTED GROSS MARGIN Unaudited (Dollars in Millions) Six Months Ended June 30, 2024 Industrial Power Automation & Powertrain Efficiency Motion Industrial Total Regal Solutions Solutions Control Systems Rexnord Net Sales $ 1,318.9 $ 796.2 $ 822.4 $ 157.8 $ 3,095.3 Gross Margin $ 535