Slide 1: Third Quarter 2021 Earnings Conference Call
Tom Deitrich – President and Chief Executive Officer Joan Hooper – Senior Vice President and Chief Financial Officer Kenneth Gianella – Vice President, Investor Relations Third Quarter 2021 Earnings Conference Call November 4, 2021 ©2021 ITRON PROPRIETARY ©2021 ITRON PROPRIETARY Q3 2021 Earnings Con
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain matters in this presentation and being discussed today, that are not statements of historical fact, constitute forward-looking statements relating to current or future financial performance, management's plans and objectives for future operations, product plans and
Slide 3: Conference Call Agenda
CONFERENCE CALL AGENDA » CEO – Business and Operations Update » CFO – Financial Results » Q&A
Slide 4: Executing Our Strategy
EXECUTING OUR STRATEGY Updates since Investor Day on October 5th Acquisition of SELC to grow Sale of European C&I mechanical A restructuring project to drive smart city and lighting solutions gas meter business; Gas stations reductions in certain locations and metering and pressure regulation suppor
Slide 5: Consolidated GAAP Results: Q3'21
CONSOLIDATED GAAP RESULTS: Q3’21 $ in millions (except per share amounts) Q3 2021 Q3 2020 Change Revenue $486.9 $540.2 -10% Change in constant currency -11% Gross margin 27.7% 26.5% +120 bps Operating income (loss) $4.2 ($24.0) NM Net income (loss) attributable to Itron, Inc. ($1.9) ($25.4) +93% Net
Slide 6: Consolidated Non-GAAP & Cash Results: Q3'21
CONSOLIDATED NON-GAAP & CASH RESULTS: Q3’21 $ in millions (except per share amounts) Q3 2021 Q3 2020 Change Non-GAAP operating income $16.4 $29.7 -45% Non-GAAP operating margin 3.4% 5.5% -210 bps Non-GAAP net income attributable to Itron, Inc. $9.5 $24.6 -62% Adjusted EBITDA $26.1 $39.7 -34% Adjuste
Slide 7: Revenue Year-over-Year Bridge: Q3'21
REVENUE YEAR-OVER-YEAR BRIDGE: Q3’21 -15% -11% +4% -11% Chart in Millions, Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 7
Slide 8: Non-GAAP EPS Year-over-Year Bridge: Q3'21
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q3’21 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 8
Slide 9: Device Solutions Segment: Q3'21
DEVICE SOLUTIONS SEGMENT: Q3’21 Revenue, gross margin and operating margin $ in Millions, actual currency $176 Revenue down 14% and 15% in constant currency » Component shortages resulted in unfulfilled customer demand $152 Gross margin up 310 bps 14.8% 11.7% » Favorable product mix » Reduced manufa
Slide 10: Networked Solutions Segment: Q3'21
NETWORKED SOLUTIONS SEGMENT: Q3’21 Revenue, gross margin and operating margin $ in Millions, actual currency $307 Revenue down 10% and 11% in constant currency $274 » Component shortages resulted in unfulfilled customer demand » Partially offset by timing of project completions 33.4% 32.8% Gross mar
Slide 11: Outcomes Segment: Q3'21
OUTCOMES SEGMENT: Q3’21 Revenue, gross margin and operating margin $ in Millions, actual currency $57 $60 Revenue up 5% and 4% in constant currency » Increase in product sales and software licensing Gross margin up 190 bps 35.6% 37.5% » Cost efficiencies Operating margin down 140 bps » Continued R&D
Slide 12: Debt and Liquidity Overview: Sept 30, 2021
DEBT AND LIQUIDITY OVERVIEW: SEPT 30, 2021 Debt US$M » Net leverage-street 1.6x at end of Q3’21 $460 » Fully repaid Term Loan » Zero interest convertible notes $271 $460 Free Cash Flow and Liquidity » Free cash flow of $11M » Cash and equivalents of $189M 1 » $500M revolver capacity Total Debt Net D
Slide 13: Operational Update
OPERATIONAL UPDATE » Acquisition: Itron recently acquired SELC, a leader in the smart lighting controls industry, which enhances our smart city platform. » Sale of Business: A definitive agreement reached to sell our European Commercial and Industrial mechanical gas meter business; our gas stations
Slide 14: Q3'21 Bookings and Backlog
Q3’21 BOOKINGS AND BACKLOG $3.4 $3.5 $3.4 $3.3 » Book to bill of 0.8 to 1 $2.8 » YTD Book to bill of 1.12 to 1 $1.4 $1.4 » Bookings of $395M $1.2 $1.3 $1.1 » Backlog of $3.4B Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 » 12-month backlog growth to $1.4B 12-Month Backlog Total Backlog Chart in Billions, actual cur
Slide 15: Appendix
APPENDIX
Slide 16: Q3'21 Update
Q3’21 UPDATE » Revenue of $487 million » Adjusted EBITDA of $26 million » Non-GAAP EPS of $0.21 » Free cash flow of $11 million » Backlog of $3.4 billion; 12-month backlog of $1.4 billion ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 16
Slide 17: Consolidated GAAP Results: YTD'21
CONSOLIDATED GAAP RESULTS: YTD’21 $ in millions (except per share amounts) YTD 2021 YTD 2020 Change Revenue $1,495.9 $1,648.2 -9% Growth in constant currency -12% Gross margin 30.2% 27.5% 270 bps Operating income (loss) $28.2 ($43.0) NM Net loss attributable to Itron, Inc. ($22.4) ($79.5) +72% Net l
Slide 18: Consolidated Non-GAAP & Cash Results: YTD'21
CONSOLIDATED NON-GAAP & CASH RESULTS: YTD’21 $ in millions (except per share amounts) YTD 2021 YTD 2020 Change Non-GAAP operating income $82.2 $88.5 -7% Non-GAAP operating margin 5.5% 5.4% 10 bps Adjusted EBITDA $112.0 $122.9 -9% Adjusted EBITDA margin 7.5% 7.5% 0 bps Non-GAAP net income attributabl
Slide 19: Revenue Year-over-Year Bridge: YTD'21
REVENUE YEAR-OVER-YEAR BRIDGE: YTD’21 -9% -16% +4% -12% Chart in Millions. Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 19
Slide 20: Non-GAAP EPS Year-over-Year Bridge: YTD'21
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: YTD’21 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 20
Slide 21: Device Solutions Segment: YTD'21
DEVICE SOLUTIONS SEGMENT: YTD’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 4% and 9% in constant currency $508 $488 » Component shortages resulted in unfulfilled customer demand Gross margin up 470 bps 17.5% » Favorable product mix 12.8% » Reduced manufac
Slide 22: Networked Solutions Segment: YTD'21
NETWORKED SOLUTIONS SEGMENT: YTD’21 Revenue, gross margin and operating margin $ in Millions, actual currency $972 Revenue down 15% and 16% in constant currency » Component shortages resulted in unfulfilled customer demand $828 » Timing of project completions 34.2% 36.1% Gross margin up 190 bps » Fa
Slide 23: Outcomes Segment: YTD'21
OUTCOMES SEGMENT: YTD’21 Revenue, gross margin and operating margin $ in Millions, actual currency $180 Revenue up 7% and 4% in constant currency $169 » Increase in software license sales 37.8% » Higher managed and professional services 33.3% Gross margin up 450 bps » Increased cost efficiencies 17.
Slide 24: Revenue: FX Impact Summary
REVENUE: FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.18 Q3’21 vs $1.17 Q3’20 $1.20 YTD’21 vs $1.13 YTD’20 YoY YoY Change YoY YoY Change Revenue Q3'21 Revenue YTD'21 Change Excluding Change Excluding FX FX Device Solutions $152.2 -13.6% -15.0% Device Solutions $488.0 -3.9%
Slide 25: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES To supplement our consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, adjusted EBITDA
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 26
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2021 ITRON PROPRIETARY Q3 2021 Earnings Conference Call | 27
Slide 28: Thank You
INVESTOR RELATIONS CONTACTS Kenneth P. Gianella Vice President, Investor Relations 669-770-4643 ken.gianella@itron.com David Means Director, Investor Relations 737-242-8448 david.means@itron.com Rebecca Hussey Manager, Investor Relations Thank You 509-891-3574 rebecca.hussey@itron.com www.itron.com