Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (June 2021)
36 slides from Lci Industries's investor presentation, Jun 10, 2021
Slide 1: LCI Industries Investor Presentation June 2021
LCI Industries Investor Presentation June 2021 1
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 RV, 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: Investment Appeals
INVESTMENT APPEALS Our goal is to be a leading supplier for component parts manufacturing in the markets in which we compete Dominant Competitive Position Leading market share with unmatched depth and breadth of products, driven by compelling industry tailwinds supporting consistent, long-term growt
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: Cultural Foundation
CULTURAL FOUNDATION Our experienced leadership team has built a strong company culture from which LCI continues to grow. Andrew Namenye EVP & CLO 14 years of experience Nick Fletcher EVP & Chief HR Officer 35 years of experience Jason Lippert President & CEO 27 years of experience Brian Hall EVP & C
Slide 7: Cultural Foundation
CULTURAL FOUNDATION We strive to drive superior returns to all of our teams…our PEOPLE, our CUSTOMERS and our SHAREHOLDERS Striving to Lead Our passion to win, coupled with a robust growth strategy, drive us to be a leader in every market we enter Fostering Leadership and Leveraging our Culture to G
Slide 8: ESG Focus Areas
ESG FOCUS AREAS Driving long-term value creation through progress on ESG initiatives. Commitment to Sustainability Key Metrics and SASB Disclosure • 12,434.59 tons of trash to landfill • 2,293,057 lbs. of plastic from regrind recycled • 2,200,000 solar KW hours powered each year • Integrating SASB i
Slide 9: 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 10: Expanding Addressable Markets
EXPANDING ADDRESSABLE MARKETS Unlocking value through diversification: (1) Amounts in millions. "Opportunity" amounts represent Management's estimate of the size of the addressable market based on current products as of Q420, excluding the Company's current net sales to those markets. The estimates
Slide 11: Innovative Leadership
INNOVATIVE LEADERSHIP Leveraging our culture of innovation and technology: Our innovative culture brings technologically advanced products to a new generation of campers, enhancing the RV experience driving the success of our platforms Safety & Security Monitoring & Control Connected & Digital Comfo
Slide 12: Capturing Secular Megatrends
CAPTURING SECULAR MEGATRENDS Strong tailwinds from growing recreation market. Massive, Growing Addressable Market • Out of 128 million U.S. households, nearly 25% currently own or intend to own an RV • Adjacent industries, Aftermarket, and International markets benefiting from similar secular tailwi
Slide 13: Our Business: North America OEM
OUR BUSINESS: NORTH AMERICA OEM
Slide 14: North America OEM
NORTH AMERICA OEM Robust segment primarily comprised RV OEM and supported by expansion of adjacent industries through market share gains and strategic acquisitions RV Building Products Commercial Vehicles TrailersMarine RV OEM Adjacent Industries
Slide 15: North American RV OEM Growth Drivers & Trends
North American RV OEM Net Sales 2015 2016 2017 2018 2019 2020 $0M $500M $1,000M $1,500M $2,000M RV OEM Growth Drivers & Trends OUR BUSINESS 6% CAG RKey Drivers • Surge in retail demand, as new consumers and their families enter the RV lifestyle and recognize the benefits of RVing • Industry wholesal
Slide 16: Adjacent Industries Growth Drivers & Trends
Adjacent Industries Growth Drivers & Trends OUR BUSINESS Key Drivers • Benefiting from similar secular tailwinds from outdoor recreation space, driving heightened long-term demand • Strong partnerships in Marine with other leading industry brands, including Bennington and TRACKER Marine • Expanding
Slide 17: Our Business: North America Aftermarket
OUR BUSINESS: NORTH AMERICA AFTERMARKET
Slide 18: North America Aftermarket
NORTH AMERICA AFTERMARKET Extensive portfolio of strong brands and extensive distribution network providing consistent, countercyclical growth opportunities Marine Towing Truck AccessoriesRV Main Product Categories
Slide 19: NA Aftermarket Growth Drivers & Trends
NA Aftermarket Growth Drivers & Trends OUR BUSINESS Key Drivers • Doubled size of Aftermarket segment with acquisition of CURT Group in 2019, opening up $7.5B addressable market • Secular outdoor recreation trends driving Aftermarket businesses forward • End markets comprised of expanding industries
Slide 20: Our Business: International
OUR BUSINESS: INTERNATIONAL
Slide 21: International
International OUR BUSINESS Expanding segment serving international recreation and transportation markets, leveraging wide-reaching footprints and strong customer relationships to establish LCI’s position as a global leader
Slide 22: International Growth Drivers & Trends
International Growth Drivers & Trends OUR BUSINESS Key Drivers • Strong growth in 2020, with revenues increasing 62% year-over-year, supported by the four acquisitions in late 2019 • Similar to North America, European consumers increasingly turning to outdoor lifestyle for travel and vacation across
Slide 23: Financial Overview
FINANCIAL OVERVIEW
Slide 24: Financial Overview: Sales, EBITDA, Free Cash Flow, EPS
Free Cash Flow* ($M) $66 $159 $68 $37 $211 $174 2015 2016 2017 2018 2019 2020 $0M $100M $200M $300M EBITDA* ($M) $158 $247 $269 $266 $276 $321 2015 2016 2017 2018 2019 2020 $0M $100M $200M $300M $400M Q1 2021 net sales were up 52% year-over-year, driven by RV shipments increasing 49% over the same p
Slide 25: Q1 2021 Financial Performance
Q1 2021 Financial Performance FINANCIAL OVERVIEW * Additional information regarding adjusted EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix. (in th ou sa nd s) Consolidated Net Sales $659,670 $1
Slide 26: 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 2021 First Quarter 2020 Cash and Cash Equivalents $63M $98M Remaining Availability under Debt Facilities $292M $342M Net Debt/EBITDA (TTM
Slide 27: Capital Deployment Strategy
Capital Deployment Strategy FINANCIAL OVERVIEW Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchases Target net debt / EBITDA leverage of 1.0x to 1.5x
Slide 28: Acquisition Strategy
Over 50 acquisitions in the last 20 years • Majority of last 20 acquisitions focused outside of North American RV industry Looking for: • Great leadership • Product innovation • Consistency with our core manufacturing disciplines • Niche markets • Favorable competitive landscape Typical synergies to
Slide 29: Appendix
APPENDIX
Slide 30: Consolidated Financials
Consolidated Financials APPENDIX ($ in millions except per share data) 2015 2016 2017 2018 2019 2020 Net Sales $ 1,403 $ 1,679 $ 2,148 $ 2,476 $ 2,371 $ 2,796 Operating Profit $ 116 $ 201 $ 214 $ 199 $ 200 $ 223 % of Sales 8.3% 12.0% 10.0% 8.0% 8.4% 8.0% Net Income $ 74 $ 130 $ 133 $ 149 $ 147 $ 158
Slide 31: Balance Sheet
Balance Sheet APPENDIX *Debt increase in 2019 and 2020 due to funding recent acquisitions and liquidity for COVID-19 shutdowns. ($ in millions) 2015 2016 2017 2018 2019 2020 Cash & Equivalents $ 12 $ 86 $ 26 $ 15 $ 35 $ 52 Accounts Receivable 42 57 82 122 200 269 Inventory 171 189 275 341 394 494 Ot
Slide 32: Adjusted EBITDA Reconciliation of Non-GAAP Measures
Adjusted EBITDA Reconciliation of Non-GAAP Measures APPENDIX Adjusted EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, deprecia
Slide 33: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted net income and adjusted diluted net income per common share Reconciliation of Non-GAAP Measures APPENDIX Adjusted net income and adjusted diluted net income per common share are non-GAAP performance measures included to illustrate and improve comparability of its results from period to peri
Slide 34: Leverage Ratio (Net Debt to EBITDA) Reconciliation
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 35: Free Cash Flow Reconciliation
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 36: Industry Statistics Summary
APPENDIX Industry Statistics Summary LCl industries TOTAL RECREATIONAL VEHICLES (RV) Whotesate Unite [ Retail Units Dealer Inventory impact Tonth a) Tie Month car) Tia Worth YD rain asi ae Were Tem 06,173 ous oe E00" 5,001 Oa 62778). (48,888) 33,003 39% 33.003 29% aia 575. 21.667 0% 21667 455 094 41