Enpro Inc. · NYSE:NPO
Enpro — EnPro Industries — Oppenheimer 14th Annual Industrial Growth Conference 2019
26 slides from Enpro's conference presentation, May 8, 2019
Slide 1: EnPro Industries Investor Presentation Q2 2019
ENPRO INDUSTRIES INVESTOR PRESENTATION Q2 2019
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements made in the course of this presentation that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They involve a number of risks and
Slide 3: Who Is EnPro?
WHO IS ENPRO? Leading provider of highly-engineered solutions for mission critical applications 3
Slide 4: EnPro Mission and Vision
ENPRO MISSION AND VISION CUSTOMIZED SOLUTIONS FOR THE MOST DEMANDING APPLICATIONS WE ARE A PURPOSE-DRIVEN COMPANY WITH STRONG VALUES, A FORWARD-THINKING OPERATING PHILOSOPHY, HUMAN DEVELOPMENT THROUGH THE WAY WE WORK AND A WAY OF WORKING THAT DRIVES BEST-IN-CLASS VALUE CREATION OVER THE LONG-TERM. C
Slide 5: Attractive Portfolio of Businesses
ATTRACTIVE PORTFOLIO OF BUSINESSES COMPANY OVERVIEW LTM 3/31/19 LTM 3/31/19 LTM 3/31/19 ADJUSTED ADJUSTED HISTORY 2002 spin-off from Goodrich Corporation REVENUE EBITDA $1.5B EBITDA Margin $209M 13.7% HEADQUARTERS Charlotte, N.C. #1-3 POSITION IN PRIMARY MANUFACTURING 30 primary facilities globally
Slide 6: EnPro's Three Segments
ENPRO’S THREE SEGMENTS SEALING PRODUCTS ENGINEERED PRODUCTS POWER SYSTEMS LTM 3/31/19 REVENUE $947M LTM 3/31/19 REVENUE $318M LTM 3/31/19 REVENUE $263M LTM 3/31/19 ADJ. EBITDA MARGIN 16% LTM 3/31/19 ADJ. EBITDA MARGIN 15% LTM 3/31/19 ADJ. EBITDA MARGIN 15% REVENUE COMPOSITION (2018) REVENUE COMPOSIT
Slide 7: Diversified Blue-Chip Customer Base
DIVERSIFIED BLUE-CHIP CUSTOMER BASE 7
Slide 8: Leveraging Our Strengths for Mission Critical Products
LEVERAGING OUR STRENGTHS FOR MISSION CRITICAL PRODUCTS STRENGTHS PRODUCTS • Nuclear reactor pressure vessel seals Leadership in high-value niche markets with established, • Aircraft engine seals & landing gear bearings premium brands SEALING • Petroleum/chemical refinery process sealing PRODUCTS • C
Slide 9: EnPro Strategy
ENPRO STRATEGY Leverage the EnPro Operating System for continuous improvement and ongoing 1 shareholder value; still early innings of opportunity 2019 priorities include increasing margins and cash flow Focus on growing in markets where we have competitive advantage 2 Allocating resources to growing
Slide 10: EnPro Operating System
ENPRO OPERATING SYSTEM Combines capabilities that improve productivity, efficiency and innovation in all business units World class standard is always maintained Learning mentality and ownership-based leadership Everyone must play for EnPro Learn from others, contribute to others, ensure commitment
Slide 11: Underlying Trends Will Drive Long-Term Growth
UNDERLYING TRENDS WILL DRIVE LONG-TERM GROWTH SEMICONDUCTOR HYGIENIC AEROSPACE DIGITAL ECONOMY HEALTH NEEDS RISING STANDARDS OF LIVING Increased demand for semiconductor Increased pharmaceutical demand due to Increased demand for air travel logic and memory: greater life expectancy New aircraft deli
Slide 12: Driving Innovation to Unlock Further Value
DRIVING INNOVATION TO UNLOCK FURTHER VALUE SEALING PRODUCTS GYLON® EPIX TRIFECTA® HYDRODYNAMIC SEALS ENGINEERED PRODUCTS PROFLO® EOS EMISSIONS GUARD TRIBOLOGICAL COATINGS POWER SYSTEMS TRIDENT® OP COMMON RAIL FUEL INJECTION SYSTEM 12
Slide 13: 2018 Capital Allocation
2018 CAPITAL ALLOCATION • $66 million in capital expenditures; expected to moderate beginning in FY19 REINVEST IN 2018 CAPITAL ALLOCATION ($M) THE BUSINESS • Approximately 44% maintenance-related and balance focused on growth • High technical know-how, IP-rich offering STRATEGIC • Experienced manage
Slide 14: M&A Filters
M&A FILTERS • Highly engineered products often with mission critical applications; “high value niches” STRATEGIC • Intellectual property / proprietary technology or know-how FIT • Attractive and growing end markets; cycle resistant • Low customer/supplier concentrations • Product Synergies – Fill in
Slide 15: 2019 Guidance
2019 GUIDANCE GUIDANCE COMMENTARY (1) ● Expect full-year adjusted EBITDA to be between $224 and $232 million and adjusted diluted EPS to be between $4.25 to $4.52 ● Revised range reflects the impact of the stronger dollar on the EDF contract in Power Systems 2019 Guidance(1) Low High Adjusted EBITDA
Slide 16: Appendix
APPENDIX
Slide 17: Sealing Products Snapshot
SEALING PRODUCTS SNAPSHOT HISTORICAL FINANCIALS ($M) PROFILE • #1 - #3 in principal markets served; Garlock 125 year operating history • High degree of technical and application expertise; extensive trade secrets • Deep customer engagement to create innovative solutions complemented by value-added s
Slide 18: Sealing Products: Products and End Market Overview
SEALING PRODUCTS: PRODUCTS AND END MARKET OVERVIEW SELECT PRODUCTS SELECT MARKETS SOFT GASKETS BEARING ISOLATORS ISOLATION GASKETS FOOD & PHARMA SEMICONDUCTOR METAL SEALS ELECTROSTATIC BRUSH SEALS NUCLEAR AEROSPACE PEDESTALS SANITARY GASKETS SANITARY HOSES WHEEL-END PRODUCTS HEAVY DUTY TRUCKING OIL,
Slide 19: Engineered Products Snapshot
ENGINEERED PRODUCTS SNAPSHOT HISTORICAL FINANCIALS ($M) PROFILE • Leading brands • Technology and market leadership in plain bearings • High degree of tribological and applications expertise in bearings • Strong aftermarket presence in oil & gas and petrochemical REVENUE COMPOSITION (2018) SALES BY
Slide 20: Engineered Products: Products and End Market Overview
ENGINEERED PRODUCTS: PRODUCTS AND END MARKET OVERVIEW SELECT PRODUCTS SELECT MARKETS METAL POLYMER BEARING TRIBOLOGICAL SOLUTIONS SOLID POLYMER AUTOMOTIVE GENERAL INDUSTRIAL BEARING DRY BEARING FILAMENT WOUND HIGH-FLOW VALVES PETROCHEM AEROSPACE BEARING MONITORING DEVICES PACKING CASES PISTON & RIDE
Slide 21: Power Systems Snapshot
POWER SYSTEMS SNAPSHOT HISTORICAL FINANCIALS ($M) PROFILE • Well-established and respected brand; >1GW of power installed in the last 10 years • 140+ year operating history; significant barriers to entry • Engine of choice for U.S. Navy & Coast Guard • Reliability advantage o Opposed Piston® (OP) te
Slide 22: Power Systems: Products and End Markets Overview
POWER SYSTEMS: PRODUCTS AND END MARKETS OVERVIEW SELECT PRODUCTS SELECT MARKETS AND APPLICATIONS MARINE POWERGEN DEFENSE NUCLEAR COMMERCIAL INDUSTRIAL MUNICIPAL SOLUTIONS SERVICE ANALYTICS ALTERNATIVE FUELS 22
Slide 23: Reconciliation of LTM Results
RECONCILIATION OF LTM RESULTS 23
Slide 24: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA (Stated in Millions of Dollars) 24
Slide 25: Reconciliation of Adjusted Segment EBITDA
RECONCILIATION OF ADJUSTED SEGMENT EBITDA (Stated in Millions of Dollars) 25
Slide 26: Net Debt & Liquidity Summary
NET DEBT & LIQUIDITY SUMMARY (1) Includes impact from unamortized debt issue costs. 26
EnPro Industries — Oppenheimer 14th Annual Industrial Growth Conference 2019 on 6ix