Lci Industries · NYSE:LCII
Lci Industries — Investor Day (September 2022)
36 slides from Lci Industries's investor day presentation, Sep 29, 2022
Slide 1: LCI Industries Investor Briefing
LCI Industries Investor Presentation May 2022 1 LCI INDUSTRIES INVESTOR BRIEFING September 28, 2022
Slide 2: Forward-Looking Statements and Non-GAAP Disclosures
FORWARD-LOOKING STATEMENTS AND NON-GAAP DISCLOSURES 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 and strategies, acq
Slide 3: Agenda
AGENDA 3 Introduction, Company Overview & Go-Forward Growth Strategy Jason Lippert, President & Chief Executive Officer Outdoor Lifestyle and Customer Experience Panel Nicole Sult, Vice President of Customer Experience, LCI Industries Jon Ferrando, Chief Executive Officer, RV Retailer LLC Jen Young,
Slide 4: Global Locations
GLOBAL LOCATIONS f CJLiPPERT CONTINENTS NOT TO SCALE © vc! INDUSTRIES
Slide 5: 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 6: Our Growth Through Diversification
OUR GROWTH THROUGH DIVERSIFICATION Over the last three decades, LCI has strategically diversified operations into the RV adjacent market, aftermarket and marine industry; leaning into outdoor lifestyle movement 1994 1994 - 2012 2012 - Present Manufactured Housing Manufactured Housing RV Manufactured
Slide 7: Our Businesses Today
OUR BUSINESSES TODAY 7 • Growth supported by similar secular megatrends driving RV • Continued content expansion and new product introductions • Strong brand recognition led by industry leading partnerships • Industry leader with ~50% market share • Utilizing international trends to introduce popula
Slide 8: Our Manufacturing Capabilities
OUR MANUFACTURING CAPABILITIES
Slide 9: Our Daily Production
OUR DAILY PRODUCTION W i n d o w s 20,000+ E n t r y D o o r s 2,000+ C h a s s i s 2,500+ L e v e l i n g S y s t e m s 450+ A x l e s 4,500+ M a t t r e s s e s 3,500+ Aw n i n g s 2,200+ S l i d e - O u t s 3,000+ Fu r n i t u r e S y s t e m s 5,000+ B e d L i f t M e c h s 300+
Slide 10: Key Competitive Advantages
KEY COMPETITIVE ADVANTAGES 10 Since LCI was founded, we have always focused on the following: Building the best teams with the best leaders Developing lasting customer relationships • 18-years of average industry experience amongst executive leadership team • Centralized base in Indiana keeps leader
Slide 11: Four Strategic Pillars
FOUR STRATEGIC PILLARS Well-positioned to capture long-term growth opportunities through execution against our four strategic pillars: 1 1 INNOVATION QUALITY LEADERSHIP & CULTURE CUSTOMER EXPERIENCE
Slide 12: Innovation
INNOVATION Innovation Propelling Our Differentiation Strategy Developing new product innovations to meet increasing demand for technologically-advanced products 12 Independent Suspension Gate Defender Jack Anti-Lock Brake (ABS) System OneControl On-The-Go Ladder Temp & Propane Sensors• Driving ongoi
Slide 13: 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 14: Leadership & Culture
LEADERSHIP & CULTURE We strive to drive superior returns to all of our teams...our PEOPLE, our CUSTOMERS and our SHAREHOLDERS 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 reduce
Slide 15: 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 16: Sustainability Focus
SUSTAINABILITY FOCUS Development and execution on ESG initiatives have become an integral part of LCI’s culture 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
Slide 17: LCI's Next Growth Chapter
LCI’S NEXT GROWTH CHAPTER LCI’S NEXT GROWTH CHAPTER
Slide 18: Expanding Addressable Markets
EXPANDING ADDRESSABLE MARKETS $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 addres
Slide 19: Growth of the Outdoor Lifestyle
GROWTH OF THE OUTDOOR LIFESTYLE Soaring popularity of outdoor lifestyle expected to support long-term industry growth • Steady expansion of RV and Marine industries has been significantly bolstered by waves of new consumers seeking to experience the outdoors with friends and family • Established tre
Slide 20: Executing on Acquisition Pipeline
Over 65 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 21: Key Acquisitions
KEY ACQUISITIONS KEY BRAND ACQUISITIONS 65
Slide 22: Key Takeaways
KEY TAKEAWAYS 22 Proven strategy to support global expansion and diversification, supported by strategic acquisitions Strong culture rooted in innovation, product quality, customer focus, and operational excellence, led by experienced leadership team1 Consistent growth across end markets supported b
Slide 23: Outdoor Lifestyle & Customer Experience Panel
OUTDOOR LIFESTYLE & CUSTOMER EXPERIENCE PANEL 23 Outdoorsy Smokercraft RV Retailer (RVR) Lippert Customer Experience
Slide 24: Financial Overview
FINANCIAL OVERVIEW
Slide 25: Financial Overview
Driving substantial, stable growth while expanding profitability through strong operational focus FINANCIAL OVERVIEW * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. 25
Slide 26: Growth Through Diversification
GROWTH THROUGH DIVERSIFICATION Long runway for growth supported by low industry inventories, strong consumer demand LCI’s diversification into expanding markets helps mitigate the cyclicality of RV, supports long- term growth across our business NA RV NA Marine NA Aftermarket International & Adjacen
Slide 27: Well-Positioned in Volatile Markets
WELL-POSITIONED IN VOLATILE MARKETS 40% 60% Sales Mix - FY 2000 RV MH/Other 57% 8% 12% 15% 7% Sales Mix - TTM Q2 2022 RV Marine MH/Other Aftermarket International -10% -5% 0% 5% 10% 15% 20% 1998 1999 2000 2001 2002 2000 - 2001 Recession US RV Retail Growth US GDP Growth Historically, the RV industry
Slide 28: ESG Next Steps
ESG NEXT STEPS Ongoing, enterprise-wide focus to continue driving progress on ESG initiatives 28 • Collecting greenhouse gas data to better define our strategy and opportunities Projects and initiatives currently underway include: • Evaluating our current processes and systems to align and conform w
Slide 29: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY 29 Historical Use of Cash Projected Future Use of CashCash Priorities Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchase
Slide 30: Long-Term Financial Outlook
LONG-TERM FINANCIAL OUTLOOK * See the Appendix to this presentation for reconciliation of TTM Q2 2022 EBITDA to the most directly comparable GAAP financial measure Consolidated Net Sales ($B) $5.6 $7.4 TTM Q2 2022* 2027E $816 $1,000 TTM Q2 2022* 2027E EBITDA* ($M) 5-Year Financial TargetsKey Assumpt
Slide 31: Q&A
Q&A
Slide 32: Appendix
APPENDIX
Slide 33: 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 34: EBITDA (Cont.) Reconciliation of Non-GAAP Measures
EBITDA (Cont.) 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 amorti
Slide 35: EBITDA (Cont.) Reconciliation of Non-GAAP Measures
APPENDIX Reconciliation of Non-GAAP Measures EBITDA (Cont.) 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 amorti
Slide 36: 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 (used in) operating activities. The Company considers free cash flow to be a profitability and liquidity measu