Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (June 2022)
32 slides from Lci Industries's investor presentation, Jun 7, 2022
Slide 1: LCI Industries Investor Presentation
LCI Industries Investor Presentation May 2022 1 LCI INDUSTRIES INVESTOR PRESENTATION June 2022
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of manag
Slide 3: LCI at a Glance
LCI AT A GLANCE A leading supplier of highly engineered components primarily to the OEMs of RVs, buses, trailers, trucks, boats, trains, manufactured housing, and their related aftermarkets * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most directly
Slide 4: Key Strategic Opportunities
KEY STRATEGIC OPPORTUNITIES Our long-term growth is guided by execution against four strategic pillars: 4 INNOVATION AS A CULTURE QUALITY LEADERSHIP & CULTURE CUSTOMER EXPERIENCE
Slide 5: LCI Overview: Industry-Leading Brands and Core Competencies
LCI OVERVIEW Industry-Leading Brands and Core Competencies 7 Core Competencies Metal Fabrication & Welding Lamination Glass Fabrication Cut & Sew Power & Motion Systems Electronics Plastics Forming Applicable Across a Number of Customer Segments Recreational Vehicle Marine Transit & School Bus Eques
Slide 6: Leadership & Culture
LEADERSHIP & CULTURE Our experienced leadership team has built a strong company culture from which LCI continues to grow. Andrew Namenye EVP & CLO 15 years of experience Nick Fletcher EVP & Chief HR Officer 36 years of experience Jason Lippert President & CEO 28 years of experience Brian Hall EVP &
Slide 7: Leadership & Culture
LEADERSHIP & CULTURE We strive to drive superior returns to all of our teams...our PEOPLE, our CUSTOMERS and our SHAREHOLDERS 7 Striving to Lead • A passion to win, coupled with a robust growth strategy, drives us to be a leader in every market we enter • Strong cultural underpinning has helped redu
Slide 8: Innovation as a Culture
INNOVATION AS A CULTURE Innovation Propelling our Differentiation Strategy Continuously developing new product innovations to meet increasing demand for technologically-advanced products 8 Independent Suspension Gate Defender Jack ABS (Anti-Lock Brake) System OneControl On-The-Go Ladder Temp & Propa
Slide 9: Leader in Customer Experience
LEADER IN CUSTOMER EXPERIENCE Driving engagement through customer events and initiatives • Collecting valuable product insights through grassroots Lippert Scouts Program and Campground Project while strengthening the Lippert brand • Launched Lippert Getaway RV Rally in 2021, attended by 200+ familie
Slide 10: Dedication to Quality
DEDICATION TO QUALITY Reputation for safe and reliable products enabling continued market share growth • Quality of our products leads to strong customer relationships, helping us win new business and increase our market share Focus on automation to maintain enhanced quality while meeting heightened
Slide 11: Growth Opportunities
Leveraging our leading position in core OEM markets to grow into new markets Expanding organically and through M&A in Adjacent, Aftermarket, and International markets to enable consistent, long-term growth for LCI Capturing rising demand from rapidly growing outdoor recreation industry Leveraging ou
Slide 12: Expanding Addressable Markets
EXPANDING ADDRESSABLE MARKETS Over $11 billion in combined growth opportunity through various markets as we expand our footprint and diversify offerings Unlocking value through diversification: (1) Amounts in millions. "Market Opportunity" amounts represent Management's estimate of the size of the a
Slide 13: ESG Focus Areas
ESG FOCUS AREAS Driving long-term value creation through progress on ESG initiatives. Commitment to Sustainability Reducing the environmental impact in our operations • Solar power in seven locations prevent CO2 emissions equivalent to 1,349 passenger vehicles driven for a year • More than 67,000 to
Slide 14: Our Business
OUR BUSINESS
Slide 15: North American RV OEM Net Sales
North American RV OEM Net Sales 2017 2018 2019 2020 2021 $0M $500M $1,000M $1,500M $2,000M $2,500M Growth Drivers & Trends RV OEM 12% CAGRKey Drivers • Heightened retail demand, as new consumers and their families enter the RV lifestyle and recognize the benefits of RVing, supporting record wholesal
Slide 16: North American Marine OEM Net Sales
North American Marine OEM Net Sales 2017 2018 2019 2020 2021 $0M $100M $200M $300M $400M Growth Drivers & Trends MARINE OEM 52% CAGR Key Drivers • Benefits from secular tailwinds within the outdoor recreation space, driving heightened long-term demand • Strong partnerships with leading industry bran
Slide 17: North America Aftermarket Growth Drivers & Trends
Growth Drivers & Trends NORTH AMERICA AFTERMARKET Key Drivers • Secular outdoor recreation trends driving Aftermarket businesses forward • Substantially expanded addressable market with 2021 acquisition of Furrion, opening an additional $1.5 billion opportunity within North America • Strong focus on
Slide 18: International Business & Other Adjacencies
Growth Drivers & Trends INTERNATIONAL BUSINESS & OTHER ADJACENCIES Key Drivers • International: ◦ Similar to North America, European consumers are increasingly turning to the outdoor lifestyle for travel and vacation across the continent, driving demand for LCI's products internationally • Adjacenci
Slide 19: Financial Overview
FINANCIAL OVERVIEW
Slide 20: Financial Overview: Sales, EBITDA, Free Cash Flow, EPS
Free Cash Flow* ($M) $159 $68 $37 $211 $174 -$210 2016 2017 2018 2019 2020 2021 $(200)M $(100)M $0M $100M $200M $300M EBITDA* ($M) $247 $269 $266 $276 $321 $511 2016 2017 2018 2019 2020 2021 $0M $200M $400M $600M FY 2021 net sales were up 60% year-over-year as historical levels of new consumers ente
Slide 21: Q1 2022 Financial Performance
Operating Margin 10.1% 16.4% First Quarter 2021 First Quarter 2022 (in th ou sa nd s) Consolidated Net Income $74,120 $196,181 First Quarter 2021 First Quarter 2022 (in th ou sa nd s) EBITDA* $125,947 $301,513 First Quarter 2021 First Quarter 2022 Q1 2022 FINANCIAL PERFORMANCE * Additional informati
Slide 22: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility FINANCIAL OVERVIEW Healthy balance sheet with ample liquidity enables execution of strategic priorities First Quarter 2022 First Quarter 2021 Cash and Cash Equivalents $55M $63M Remaining Availability under Revolving Credit Facility $130M $142M Net Debt/E
Slide 23: Capital Deployment Strategy
Capital Deployment Strategy FINANCIAL OVERVIEW Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchases Target net debt / EBITDA leverage of 1.0x to 1.5x
Slide 24: Acquisition Strategy
Over 50 acquisitions in the last 20 years • Majority of last 20 acquisitions focused outside of North American RV industry Looking for: • Great leadership • Product innovation • Consistency with our core manufacturing disciplines • Niche markets • Favorable competitive landscape Typical synergies to
Slide 25: Completed Acquisition of Furrion Holdings Ltd.
Overview ▪Acquired Furrion, a leading distributor of a large range of appliances and other products to OEM and aftermarket customers ▪Strong management and R&D teams with international footprint and deep focus on innovation ▪Exposure to $1.5B addressable market in North America ▪Enables further expa
Slide 26: Appendix
APPENDIX
Slide 27: Consolidated Financials
Consolidated Financials APPENDIX ($ in millions except per share data) 2015 2016 2017 2018 2019 2020 2021 Net Sales $ 1,403 $ 1,679 $ 2,148 $ 2,476 $ 2,371 $ 2,796 $ 4,473 Operating Profit $ 116 $ 201 $ 214 $ 199 $ 200 $ 223 $ 398 % of Sales 8.3% 12.0% 10.0% 8.0% 8.4% 8.0% 8.9% Net Income $ 74 $ 130
Slide 28: Balance Sheet
Balance Sheet APPENDIX *Debt increase in 2019, 2020, and 2021 due to funding recent acquisitions and liquidity for COVID-19 shutdowns. ($ in millions) 2015 2016 2017 2018 2019 2020 2021 Cash & Equivalents $ 12 $ 86 $ 26 $ 15 $ 35 $ 52 $ 63 Accounts Receivable 42 57 82 122 200 269 320 Inventory 171 1
Slide 29: EBITDA Reconciliation of Non-GAAP Measures
EBITDA Reconciliation of Non-GAAP Measures APPENDIX EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization e
Slide 30: Leverage Ratio Reconciliation of Non-GAAP Measures
Leverage ratio (net debt to EBITDA) Reconciliation of Non-GAAP Measures APPENDIX The Leverage Ratio (or Net Debt to EBITDA ratio) is a non-GAAP measure of the use of debt. The Leverage Ratio is calculated by dividing the total of long-term indebtedness, plus current portion of long-term debt, less c
Slide 31: Free Cash Flow Reconciliation of Non-GAAP Measures
Free cash flow Reconciliation of Non-GAAP Measures APPENDIX Free cash flow is a non-GAAP measure of liquidity, calculated by subtracting capital expenditures from net cash flows provided by operating activities. The Company considers free cash flow to be a profitability and liquidity measure that pr
Slide 32: Industry Statistics Summary
APPENDIX LCI Industries Industry Statistics Summary TOTAL RECREATIONAL VEHICLES (RV) YD TH YD. W082 a7 Hoss 6% 30316 Bear si% ists 1% S273 2.408 (61.087) (oo) 45.830 39% 531.6483 13 488 (88,400) 48.206 30% ‘540,987 10246 23,730 65,451) 54201 79% 16,566) 18,164 (96.310)] (12.532) $632 79.281)] Gira)