Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q2 2023 Earnings Presentation
24 slides from Vertiv's earnings presentation, Aug 2, 2023
Slide 1: Second Quarter 2023 Results
Second Quarter 2023 Results August 2, 2023 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to V
Slide 3: Second quarter 2023 key messages
Second quarter 2023 key messages Organic net sales up 25% compared to last year’s second quarter driven by continued strong growth in Americas. Orders were higher than expectations, down ~3%1 from last year’s second quarter and up ~13%1 from first quarter 2023. Book-to-bill ratio of ~1.0x. Order pat
Slide 4: Market Environment
Market Environment SEGMENT AMERICAS APAC EMEA Apr-23 Aug-23 Apr-23 Aug-23 Apr-23 Aug-23 CLOUD / HYPERSCALE COLOCATION ENTERPRISE / SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS COMMERCIAL & INDUSTRIAL Continuing to see signs of second half 2023 acceleration in market Confidential. Property of Verti
Slide 5: Customer demand and supply chain update
Customer demand and supply chain update CUSTOMER DEMAND & PRICING UPDATE SUPPLY CHAIN & INFLATION UPDATE • Second quarter orders exceeded expectations, down • Supply chains generally stabilizing as availability just ~3%1 from prior year and up ~13% sequentially from improves and lead-times reduce. S
Slide 6: AI is creating momentum for the data center industry
AI is creating momentum for the data center industry DENSITY SPECTRUM IS DRIVING NEW SYSTEM ARCHITECTURES AND COOLING TECHNOLOGIES • Changes in technology and data center design are required to Illustrative Density Spectrum & Cooling Technology2 serve the new higher density / AI workloads 100+ kW •
Slide 7: Second quarter 2023 financial results
Second quarter 2023 financial results $Millions; deltas to midpoint of guidance range Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Adj. Free Cash Flow Up ~24% Up $169M Up ~860 bps Up $0.36 Up ~$460M Organic up ~25% Up $61M vs. prior guidance Up ~260 bps vs. prior guidance U
Slide 8: Second quarter 2023 segment results
Second quarter 2023 segment results $Millions Americas ➢ Organic growth driven by both volume and strong year- over-year price increases. High growth across product Net sales Up 48% Down 3% Up 10% portfolio. Organic +48% Organic +2% Organic +9% ➢ Stronger operating margins driven by favorable price-
Slide 9: Third quarter 2023 financial guidance
Third quarter 2023 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Up ~18% Up ~$119M Up ~540 bps Up ~$0.20 Organic up ~18% ~1,750 1,481 ~253 ~14.5% ~$0.43 134 9.1% $0.23 Q3 2022 Q3 2023 Q3 2022
Slide 10: Full year 2023 financial guidance
Full year 2023 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Adj. Free Cash Flow Up ~$1.1B Up ~$511M Up ~630 bps Up ~$1.06 Up ~$810M Organic up ~20% Up $150M vs. prior guidance Up ~170 bps vs
Slide 11: Key takeaways
Key takeaways Exceeded expectations on all financial metrics for first half of 2023. Expect continued strong performance through end of year. Order patterns normalizing but remain strong with book-bill ratio ~1.0x in first half of the year. 14.5% adjusted operating margin in second quarter 2023 and
Slide 12: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 13: Non-GAAP financial measures – second quarter results
Non-GAAP financial measures –second quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | 2ndQUARTER) 2Q23 2Q22 D ($M | 2nd
Slide 14: Non-GAAP financial measures – second quarter results (cont.)
Non-GAAP financial measures – second quarter results (cont.) Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income ($M, except EPS | 2nd QUARTER 2023) (loss) expense, net warrant liability tax
Slide 15: Non-GAAP financial measures – third quarter 2023 guidance
Non-GAAP financial measures – third quarter 2023 guidance At midpoint of guidance range Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax Net income ($M, except EPS | 3rd QUARTER 2023(1
Slide 16: Non-GAAP financial measures – FY 2023 guidance
Non-GAAP financial measures –FY 2023 guidance At midpoint of guidance range Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax Net income ($M, except EPS | FULL YEAR 2023(1)) (loss) expe
Slide 17: Non-GAAP financial measures: Q1 2022 – Q2 2023 results
Non-GAAP financial measures: Q1 2022 – Q2 2023 results Net Sales(1) ($M) 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Americas $535.1 $647.2 $712.6 $833.7 $2,728.6 $862.3 $959.4 APAC 332.8 407.2 436.1 425.2 1,601.3 313.0 395.8 EMEA 288.5 345.0 332.4 395.7 1,361.6 345.8 378.9 Total $1,156.4 $1,399.4 $1,481.1 $
Slide 18: Non-GAAP financial measures: Q1 2022 – Q2 2023 results
Non-GAAP financial measures: Q1 2022 – Q2 2023 results Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin ($M) 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Net sales $1,156.4 $1,399.4 $1,481.1 $1,654.6 $5,691.5 $1,521.1 $1,734.1 Operating profit (45.2) 26.2 80.0 162.
Slide 19: Non-GAAP financial measures: Q1 2022 – Q2 2023 results
Non-GAAP financial measures: Q1 2022 – Q2 2023 results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted operating profit (loss) ($M) 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Americas $57.9 $82.5 $115.2 $170.5 $426.1 $190.6 $239.8 Asia Pacific 41.5 68.5 83.3 81.1 27
Slide 20: Non-GAAP financial measures – organic growth reconciliation
Non-GAAP financial measures – organic growth reconciliation Reconciliation of change in net sales to organic change in net sales Organic Net Sales Δ FX Δ growth Organic Δ % (1) ($M | 1st QUARTER) Americas: $327.2 $1.3 $328.5 61.4% Asia Pacific: (19.8) 22.6 2.8 0.8% EMEA: 57.3 18.8 76.1 26.4% Total:
Slide 21: Second quarter orders growth from prior year
Second quarter orders growth from prior year $Millions unless otherwise specified Second quarter orders growth Overall (5%) FX headwind 2% Total excluding FX (3%) Pricing 7% Volume (10%) Total excluding FX (3%) Confidential. Property of Vertiv. 21
Slide 22: Full year 2023 projected adjusted operating profit vs. 2022
Full year 2023 projected adjusted operating profit vs. 2022 $Millions; FY 2023 at midpoint of guidance (170) 950 • Volume benefit of ~$735M 235 (40) 65 higher sales • Assumes material and freight inflation of ~$70M and labor inflation of ~$100M 420 • Investments in R&D and 439 capacity support growt
Slide 23: Key FX rates and other modeling assumptions
Key FX rates and other modeling assumptions $Millions unless otherwise specified 2nd Half YTD Sales FX Exposure by Currency Assumption EUR 13% CNY / USD 7.25 CNY 11% USD / EUR $1.09 GBP 7% USD / GBP $1.27 INR 5% INR / USD 82.0 Other non-USD 12% Total non-USD 48% 1-mo SOFR 5.34% USD 52% FX translatio
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