Generac Holdings Inc. · NYSE:GNRC
Generac — Generac Holdlings — Q4 2023 Earnings Presentation
27 slides from Generac's earnings presentation, Feb 14, 2024
Slide 1: Investor Presentation
GENERAC INVESTOR PRESENTATION February 2024 OUR PURPOSE: Lead the evolution to more resilient, efficient, and sustainable energy solutions.
Slide 2: Investor Relations
GENERAC 2 INVESTOR RELATIONS Aaron Jagdfeld PRESIDENT & CEO York Ragen CHIEF FINANCIAL OFFICER Kris Rosemann SENIOR MANAGER – CORPORATE DEVELOPMENT & INVESTOR RELATIONS (262) 506-6064 InvestorRelations@generac.com
Slide 3: Forward Looking Statements
GENERAC 3 Forward Looking Statements Certain statements contained in this presentation, as well as • frequency and duration of power outages impacting demand • changes in laws and regulations regarding environmental, other information provided from time to time by Generac for our products; health an
Slide 4: Generac Overview
Generac 2023 NET SALES $4.0 BILLION 2023 NET SALES MIX: 80% DOMESTIC 20% INTERNATIONAL $638 MILLION 2023 FREE CASH FLOW $396 MILLION COMMERICAL & INDUSTRIAL* sl ~1,100 RESIDENTIAL* 2023 ADJ EBITDA 51% OTHER* 12% ~8,600 EMPLOYEES WORLDWIDE AS OF 12/31/2023 ENGINEERS WORLDWIDE AS OF 12/31/2023 OMNI CH
Slide 5: Generac Global Footprint
GENERAC 5 Generac Global Footprint
Slide 6: Track Record of Growth
GENERAC 6 $6,000 15% REVENUE CAGR Track Record 2010 IPO Through 2024F of Growth $5,000 Each growth cycle $4,000 creates new & higher baseline $3,000 $2,000 $1,000 $- '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24F Note: $ amounts in millions. Represents net sales. Figures include results from
Slide 7: Mega-Trends Review
GENERAC 7 Mega-Trends Review "Grid 2.0” - Evolution of the traditional electrical Emergence of cleaner alternative fuels utility model • Natural gas and other alternative fuels are • Increasing intermittent generation sources and vital to the energy transition electrification of everything • Cleaner
Slide 8: A Growing Problem – Supply/Demand Imbalance
GENERAC 8 A Growing Problem – Supply/Demand Imbalance • SUPPLY RELIABILITY DETERIORATING • DEMAND GROWTH ACCELERATING • Climate change & severe weather • Electrification of everything • One-way system prone to outage • Transportation, HVAC, appliances • Infrastructure underinvestment • Next-generati
Slide 9: Powering a Smarter World
GENERAC 9 Powering a Smarter World OUR PURPOSE: Lead the evolution to more resilient, efficient, and sustainable energy solutions.
Slide 10: Strategy Evolution Unlocks Massive & Growing SAM
GENERAC 10 Strategy Evolution Unlocks Massive & Growing SAM 2026 Key drivers of increase in SAM… ✓ Clean Energy – Residential and C&I storage, rooftop MLPEs, EV chargers 2018 ✓ Connected Devices – Smart thermostats, monitoring & Projected ~5X Expansion management devices of Served Addressable ✓ Ener
Slide 11: Broad Product and Solutions Offerings Address Strategic Opportunities
GENERAC 11 Broad Product and Solutions Offerings Address Strategic Opportunities Home Standby Residential Energy C&I Natural Gas C&I BESS Generator Storage Generator Propane Tank Monitor Generator Controls EV Charger Smart Thermostat Residential Load Manager C&I Connectivity Telecom Generator Mobile
Slide 12: Building a Residential Energy Ecosystem
GENERAC 12 Building a Residential Energy Ecosystem Power Generation & Storage + Monitoring & Management Devices + Platform & Controls + Grid Services Global Resi SAM $50 $40 $36.6B $30 $22.4B $20 $10 $- Multiple hardware devices connected to a single interface to optimize 2022 2026F the consumption
Slide 13: Massive HSB Penetration Opportunity
GENERAC 13 Massive HSB Penetration Opportunity Widespread growth potential: • Total US penetration rate ~6.25% as of 2023 • Highest penetrated markets are 15-20%+ and growing Mega-trends and competitive advantages expected to drive robust growth: • Targeted Marketing drives growing demand for long d
Slide 14: Residential Energy Technology Market Opportunity
GENERAC 14 Residential Energy Technology Market Opportunity Rebuilding Clean Energy Portfolio Expanding ecobee Portfolio To With Quality First Develop The Home Energy Hub • Major investments in talent and • Leveraging award-winning Large and growing markets: infrastructure necessary to win technolog
Slide 15: Building a Commercial & Industrial Energy Ecosystem
GENERAC 15 Building a Commercial & Industrial Energy Ecosystem Power Generation & Storage + Monitoring & Management Devices + Platform & Controls & Monitor Connect + Grid Services Global C&I SAM $35 $30 $29.8B $25 $20 $16.0B $15 $10 Turnkey solutions managed through a single $5 interface integrating
Slide 16: Generac's Solution To Address The Industrial Customer Energy Journey
GENERAC PRESENTATION TITLE 16 Generac’s Solution To Address The Industrial Customer Energy Journey CUSTOMER ENTRY POINT Infrastructure & Equipment Energy Programs & Solutions Energy Efficiency and Sustainability - Backup Power - Grid Services and VPP - Battery Energy Storage - Facility Expansion - D
Slide 17: Financial Summary
GENERAC 17 Financial Summary Total Net Sales Gross Margin % Adjusted EBITDA Adjusted EBITDA margin % $5,000 55.0% $1,000 35.0% $4,000 50.0% $800 30.0% $3,000 45.0% $600 25.0% $2,000 40.0% $400 20.0% $1,000 35.0% $200 15.0% $0 30.0% $0 10.0% 2019 2020 2021 2022 2023 2024F* 2019 2020 2021 2022 2023 20
Slide 18: Business Outlook
GENERAC 18 Business Outlook 2024F Guidance As Reported On February 14, 20241 Consolidated net sales • Consolidated revenue: increase between 3% to 7% • Residential products: increase at a mid-teens rate • C&I products: decrease approximately 10% • Slight favorable impact from foreign currency Adjust
Slide 19: Capital Deployment Priorities
GENERAC 19 Capital Deployment Priorities 1 | Asset lite with capex only 2.5% to 3.0% of sales Organic Growth | Investment in technology, innovation, and R&D capabilities Asset Lite | Capacity expansion, global systems, high ROI automation 2 | Robust M&A pipeline | Demonstrated ability to execute; 28
Slide 20: Appendix
APPENDIX GENERAC EEE
Slide 21: HSB: A Penetration Story
GENERAC 21 HSB: A Penetration Story North American Penetration Opportunity(1) 90% 88.3% 80% Aging Population Fits Demographic 70% • ~65% of buyers age 60 and older % of US Addressable Market 60% • ~Median home value of approximately $525k • ~80-85% retro-fit application 50% 40% • ~$145K median house
Slide 22: HSBs are the Solution for Extended Power Outages
GENERAC 22 HSBs are the Solution for Extended Power Outages The only worry-free, Outage Backup (Hrs) whole-home solution Standalone 18kWh Storage* for long outages Solar + 18kWhStorage* Ford F150 Lightning Lariat** Home Standby 24kw 0 20 40 60 80 100 120 The most cost- Installed Cost effective solut
Slide 23: Expanding Power Outage Severity
GENERAC 23 Expanding Power Outage Severity1 Total Outage Hours (Severity) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (1) Represents power outage hours for mainland U.S. only
Slide 24: Q4 2023 & 2023 Financial Overview
GENERAC 24 Q4 2023 & 2023 Financial Overview Actual Y/Y % Actual Y/Y % Q4 2023 Change 2023 Change (unaudited) (unaudited) Residential $ 580.4 1.0% $ 2,062.9 (29.2%) Commercial & Industrial 362.9 0.4% 1,494.8 18.6% Other 120.4 6.5% 464.9 18.6% Net Sales $ 1,063.7 1.4% $ 4,022.7 (11.9%) Gross Profit $
Slide 25: Adjusted EBITDA Reconciliation
GENERAC 25 Adjusted EBITDA Reconciliation 2019 2020 2021 2022 2023 Net income $ 252.3 $ 347.2 $ 556.6 $ 408.9 $ 217.1 Interest expense 41.5 33.0 33.0 54.8 97.6 Depreciation and amortization 60.8 68.8 92.0 156.1 166.6 Income taxes provision 67.3 99.0 135.0 99.6 73.2 Non-cash write-down and other char
Slide 26: Adjusted EBITDA Reconciliation
GENERAC 26 Adjusted EBITDA Reconciliation Three months ended Net income to Adjusted EBITDA reconciliation December 31, Year Ended December 31, 2023 2022 2023 2022 (unaudited) (unaudited) Net income attributable to Generac Holdings. Inc. $ 96,601 $ 71,015 $ 214,606 $ 399,502 Net income attributable t
Slide 27: Adjusted Net Income Reconciliation
GENERAC 27 Adjusted Net Income Reconciliation Net income to Adjusted net income reconciliation Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 (unaudited) (unaudited) Net income attributable to Generac Holdings. Inc. $ 96,601 $ 71,015 $ 214,606 $ 399,502 Net income attrib