Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Investor Day (January 2018)
33 slides from Columbus Mckinnon's investor day presentation, Jan 9, 2018
Slide 1: Blueprint 2021: Raising Expectations
Mark D. Morelli President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer BLUEPRINT 2021: RAISING EXPECTATIONS 9 January 2018
Slide 2: Safe Harbor Statement
2 © 2018 Columbus McKinnon Corporation SAFE HARBOR STATEMENT These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertaintie
Slide 3: Blueprint 2021 Strategy
3 © 2018 Columbus McKinnon Corporation BLUEPRINT 2021 STRATEGY Transform into a high performing industrial technology company Increase earnings power with selective deployment of self-funded key initiatives FOCUS ON DRIVING PROFITABLE GROWTH Profitable growth Ramp the New Product Engine - doub
Slide 4: Mission & Vision Statements
4 © 2018 Columbus McKinnon Corporation MISSION & VISION STATEMENTS Mission: We provide expert, professional-grade solutions and products, building the trust of customers by solving their high-value problems. Vision: To become the leading industrial technology company in safe & productive motion cont
Slide 5: Highly Relevant to Customers
5 © 2018 Columbus McKinnon Corporation HIGHLY RELEVANT TO CUSTOMERS Professional grade solutions for complex applications
Slide 6: Strategy: Partners in Motion Control
6 © 2018 Columbus McKinnon Corporation Strengthen the core Ramp new product engine Create end-user pull Become easy to do business with STAHL value creation Portfolio Analysis Pivot strategy: Value creating acquisitions Best in class safety & quality Continuous improvement Optimi
Slide 7: Strategy: Evolution of Columbus McKinnon
7 © 2018 Columbus McKinnon Corporation Pivot from late stage industrial to growth oriented industrial technology company STRATEGY: EVOLUTION OF COLUMBUS MCKINNON Today Future Late State C y c li c a l Indu s tr y Gro w th Or ie n te d Indu s tri a l T e c hnolog y Phase I Get control Achieve results
Slide 8: Phase I: Get Control & Achieve Results
8 © 2018 Columbus McKinnon Corporation PHASE I: GET CONTROL & ACHIEVE RESULTS
Slide 9: Phase I: Get Control
9 © 2018 Columbus McKinnon Corporation PHASE I: GET CONTROL 1. STRENGTHEN THE CORE 2. LEVERAGE MAGNETEK 3. STAHL VALUE CREATION 4. PAY OFF DEBT TIGER TEAMS ESTABLISHED
Slide 10: Phase I Achieve Results: E-PAS Enabler
10 © 2018 Columbus McKinnon Corporation Mission, Vision, Values Strategy Deployment Risk & Opportunity (R&Os) Monthly Operating Reviews (MORs) KPIs Implemented In Progress More to Come Phased implementation: Multi-step, Multi-year MOR’s & R&O’s have been implemented Strategy deployment Earning
Slide 11: Phase I Achieve Results: Tiger Teams
11 © 2018 Columbus McKinnon Corporation PHASE I ACHIEVE RESULTS: TIGER TEAMS STRENGTHEN THE CORE LEVERAGE MAGNETEK Solve for missed revenue due to unplanned purchases Smart Hoist A new approach to gain greater market penetration
Slide 12: Phase I Achieve Results: Tiger Teams
12 © 2018 Columbus McKinnon Corporation PHASE I ACHIEVE RESULTS: TIGER TEAMS $5.0 $11.0 FY 2018 FY 2019 $30.1 FY18 YTD FY 2018E FY 2019E STAHL VALUE CREATION PAY DOWN DEBT On track with synergies Paying down debt ahead of schedule ($ in millions) $55 - $60 $55 - $65
Slide 13: Phase II: Operational Excellence & Profitable Growth
13 © 2018 Columbus McKinnon Corporation PHASE II: OPERATIONAL EXCELLENCE & PROFITABLE GROWTH
Slide 14: Phase II: Market Drives Structure
14 © 2018 Columbus McKinnon Corporation Industrial End Users General Distribution/Rental Lifting Specialists (Direct Sales) Rigging Specialists Crane Builders EPC OEM Motion Technology Distributors Industrial Products Crane Solutions & Kits Engineered Products Motion Technology Channel Partners: Pro
Slide 15: Phase II: Simplify Organization
15 © 2018 Columbus McKinnon Corporation Simplify organization BRANDS: PRODUCTS: Manual Chain Hoist Electrical Chain Hoist Rigging / Clamps Industrial Winches High Capacity Hooks Cranes, Wire Rope Hoists Drives and Controls Crane Kits & Components Jibs, Workstations Linear & Mechanical Ac
Slide 16: Simplify Product Platforms
16 © 2018 Columbus McKinnon Corporation High Performance Standard Industrial Basic Rationalize global platforms while maintaining brands Wire Rope Hoist Platform PHASE II: OPERATIONAL EXCELLENCE Simplify product platforms
Slide 17: Hand Chain Hoist Harmonization
17 © 2018 Columbus McKinnon Corporation Niche Products 9 hoists rationalized to 3, representing ~80% of sales Hand Chain Hoist Platform 80% of sales 20% of sales Basic Standard Industrial High Performance PHASE II: OPERATIONAL EXCELLENCE Hand chain hoist harmonization
Slide 18: Manual Chain Hoist Platform: Common Parts
18 © 2018 Columbus McKinnon Corporation COMMON PARTS LEVER TOOL CHAIN BLOCK CHAIN BLOCK 1 CHAIN BLOCK 3 CHAIN BLOCK 2 LEVER TOOL 2 LEVER TOOL 1 LEVER TOOL 3 INDIVIDUAL PARTS “The individual shell plus outside” Optimization of supply chain Manual Chain Hoist Platform PARTS ARE 100% SHARED “Everything
Slide 19: Potential for Operating Improvements
19 © 2018 Columbus McKinnon Corporation 38% 20% 10% 9% 7% 6% 5% 5% Hoists Forging Power Control Actuators / Rotary Unions Square Footage by Function FY17 Other Crane / Overhead Rail Consolidating warehouses, improved floor space utilization & efficiency improvements represent significant opportunity
Slide 20: Phase II: Investing for Growth
20 © 2018 Columbus McKinnon Corporation PHASE II: INVESTING FOR GROWTH Double R&D spend over next 3 years FY17 FY21 2 Product Engineering Engineered to Order Research Sustaining Engineering Investment1 R&D ~$10M 65% R&D ~$21M 75% ~$16.0 ~$27.0 1 Included in SG&A 2 Excludes impact of STAHL ($ in mill
Slide 21: Phase II: Smart Hoist Vision
21 © 2018 Columbus McKinnon Corporation PHASE II: SMART HOIST VISION Megatrend movement to industrial automation Source: University of Oxford, ARK Original Research 2017 2035 0 80 m ill io n s Projected full-time jobs automated in the U.S. Opportunity to capitalize on automation megatrend
Slide 22: Smart Hoists
22 © 2018 Columbus McKinnon Corporation Leveraging technology and experience to design “Smart Hoists” Onboard diagnostics Remote monitoring Precision lifting Load sensing Preventative maintenance Leads to improved safety and reduced down time Leveraging recent acquisitions to deliver solut
Slide 23: Phase III: Business Development
23 © 2018 Columbus McKinnon Corporation PHASE III: BUSINESS DEVELOPMENT
Slide 24: Phase III: Portfolio Assessment
24 © 2018 Columbus McKinnon Corporation PHASE III: BUSINESS DEVELOPMENT Portfolio assessment Selective Investment Selective Investment Selective Investment Fix / Exit Fix / Exit Divest Invest / Grow Invest / Grow Scale-Up <~$5M >~$5M >~$10M Portfolio Assessment Criteria Business model Profitabil
Slide 25: Phase III: Acquisitions
25 © 2018 Columbus McKinnon Corporation Initial thoughts on fields of interest: Engineered systems Positioning and control equipment Further pivot from late stage industrial to growth oriented industrial technology Action Items: Analyze motion control taxonomy Focus on industrial technology
Slide 26: Driving Results
26 © 2018 Columbus McKinnon Corporation DRIVING RESULTS
Slide 27: Estimated Impact of Initiatives
27 © 2018 Columbus McKinnon Corporation $108 ~$130 - $155 Q2FY18 LTM (pro forma*) FY21 13.3% ~15% -17% $809 ~$860 - $910 Q2FY18 LTM (pro forma*) FY21 GM% 32.6% ~34% - 36% RSG&A% 21.7% ~21% ($ in millions) ESTIMATED IMPACT OF INITIATIVES Blueprint 2021 expected to achieve >15% EBITDA margins EBITDA%
Slide 28: Results Potential: Scenario Analysis
28 © 2018 Columbus McKinnon Corporation High Case Assumptions Bullish growth in key global verticals Rapid adoption of configurator Smart Hoist out performs Low Case Assumptions Key verticals slow to declining Stagnant US economy EMEA political instability No growth in Asia Base Case A
Slide 29: Significant Free Cash Flow Generation
29 © 2018 Columbus McKinnon Corporation SIGNIFICANT FREE CASH FLOW GENERATION Achieving net leverage below 2x in FY19 provides sufficient financial flexibility for pivot strategy ($ in millions) $8.7 $21.0 $30.3 $46.1 $57.6 FY14 FY15 FY16 FY17 Q2 FY18 TTM FY19E FY20E FY21E $70 - $75 $75 - $85 $85 -
Slide 30: Living Our Values
30 © 2018 Columbus McKinnon Corporation LIVING OUR VALUES
Slide 31: Our Values
31 © 2018 Columbus McKinnon Corporation Be easy to do business with. Focus on the customer. Listen. Simplify. Deliver on your commitments. Aim for greatness. Do your best. Hold yourself accountable. Think differently. Be proactive with new ideas. Ask questions. Be part of the solution. Win as a team
Slide 32: Questions?
Questions? BLUEPRINT 2021: RAISING EXPECTATIONS 9 January 2018
Slide 33: Blueprint 2021: Raising Expectations
BLUEPRINT 2021: RAISING EXPECTATIONS 9 January 2018