Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Investor Presentation (February 2022)
33 slides from Columbus Mckinnon's investor presentation, Feb 8, 2022
Slide 1: Investor Presentation February 2022
Investor Presentation February 2022 1 Gregory P. Rustowicz Senior Vice President Finance and Chief Financial Officer
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement These slides, and the accompanying oral discussion (together, this “presentation”), contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning: future
Slide 3: Intelligent Motion Solutions for Material Handling
3 Intelligent Motion Solutions for Material Handling (1) Market data as of 2/2/2022 (Source: S&P Capital IQ); Financial data represents TTM ended December 31, 2021 (2) Product mix data represents quarter ended December 31, 2021 Columbus McKinnon (Nasdaq: CMCO) Financial & Market Data (1) Transformin
Slide 4: Blueprint for Growth 2.0 Business System and Core Growth Framework
4 Blueprint for Growth 2.0 Business System and Core Growth Framework Transform CMCO Strategy evolves Columbus McKinnon into a high value, intelligent motion enterprise
Slide 5: Columbus McKinnon Business System enables top-tier performance and scalability
5 Columbus McKinnon Business System (CMBS) enables top-tier performance and scalability Columbus McKinnon Business System 8. Operations 9. Finance 10. Digitization 6. Commercial / Selling 7. Product Development 1. People & Values 2. Strategic Planning 3. Marketing 4. Product Management 5. M&A Core C
Slide 6: CMBS framework provides repeatable, sustainable enterprise-wide processes
6 CMBS framework provides repeatable, sustainable enterprise-wide processes CMBS Cascading Tiers Playbook for Standard Work and Processes Level 1 Strategic Framework (4) Level 3 Key Processes (65) Level 4 Sub-Processes (270) • Commercial / Selling • Customer Experience • Commercial 80/20 • Selling P
Slide 7: Our Core Growth Framework
7 Our Core Growth Framework Providing a clear path to organic and strategic growth initiatives Rethink current addressable markets and target further strategic expansion through innovative approaches Improve vertical market, channel and geographic access, expand technology and product offerings Take
Slide 8: Business Model Evolution
8 Business Model Evolution Revenue Growth Rate EBITDA Margin CMCO Q3 FY22 With Conveying Solutions Platform Crane Solutions 46% Industrial Products 42% Engineered Products 12% Automation 14%Linear Motion 10% Lifting Solutions 59% Conveying Solutions 17% Automation 15% Lifting Solutions 73% Linear Mo
Slide 9: Highly diverse end markets with varying industry cycles
9 Highly diverse end markets with varying industry cycles Increasing Presence in Secularly Driven Markets Conveying Solutions Serves Less Cyclical Industries General Industrial 20% Transportation 15% Material Handling/ Industrial Automation 11% Energy & Utilities 10%Chemical/Paper/Metals Processing
Slide 10: Global leader in intelligent motion solutions for material handling
10 Global leader in intelligent motion solutions for material handling Columbus McKinnon Legacy Solutions Lifting, Linear Motion and Automation Solutions Standard Hoist & Rigging Products: #1 U.S. market position in hoists Lifting capacity from 1/8 ton to ~140 tons Reliable, high-quality products En
Slide 11: Conveying Solutions Advances Intelligent Motion Strategy
Conveying Solutions Advances Intelligent Motion Strategy Developing Leading Platform for Growth Scalable, high-growth platform to advance our Intelligent Motion Strategy 11 Specialty conveying provides growth platform: ~$4B TAM growing at 6% to 8% CAGR Higher margin profile Strong secular growth dri
Slide 12: Acquired Garvey Corporation December 1, 2021
12 Acquired Garvey Corporation December 1, 2021 Leader in accumulation technology complements Dorner’s conveying solutions Leading automation solutions company concentrated in F&B and pharma Provides unique, patented technologies in the design, application, manufacturing and integration of accumulat
Slide 13: Secular Growth Markets Provide Strong Tailwinds
13 Strong performance and market share gains within attractive verticals Secular Growth Markets Provide Strong Tailwinds Single piece picking, robotics integration to automate picking and sorting functions ~3% of YTD Q3 FY22 sales* Custom designed sanitary and easy to clean conveyors engineered to t
Slide 14: Driving Organic Growth with New Products
14 Improved customer experience, safety and productivity at the core of new product development Driving Organic Growth with New Products Delivering Innovation • Unique, beltless zone control for pallet and tray handling • Ideal for accumulation and automation assembly applications • Improved facilit
Slide 15: Driving Innovation Through Automation
15 Creating competitive advantages with pre-engineered automation solutions Driving Innovation Through Automation Intelli-Crane™ Solutions INTELLI-LIFT™ AUTO DETECTIONINTELLI-PROTECT™ SYSTEM INTELLI-CONNECT™+ MOBILE APP • Visible and audible warnings when off- center pick is detected • Auto-correcti
Slide 16: Strong Track Record of Creating Value Through M&A
January 2017 Acquisition of STAHL CraneSystems from Konecranes for ~$218M strengthens leading global position in lifting solutions Transforming Columbus McKinnon into a top-tier, higher growth, higher margin enterprise 16 Strong Track Record of Creating Value Through M&A Programmatic M&A M&A Pipelin
Slide 17: Strong Demand Driving Recovery
17 Driving towards $1 billion in annualized revenue Strong Demand Driving Recovery NET SALES $166.5 $186.2 $213.5 $223.6 $216.1 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 (1)Guidance provided on January 27, 2022. Equates to ~$888 million of FY22 revenue. $809.2 $649.6 FY20 FY21 ($ in millions) Strong d
Slide 18: Converting Revenue to Earnings
18 Advancing strategy to drive profitable growth and realize long-term objectives Converting Revenue to Earnings ADJUSTED EBITDA MARGIN Adjusted EBITDA margin benefits from accretive acquisitions and economic recovery 10.9% 13.9% 16.0% 16.1% 14.2% Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 • 200 basis
Slide 19: CMBS to Deliver Margin Expansion
Created more than $41 million of incremental OI beginning in FY19… More opportunities to pursue CMBS to Deliver Margin Expansion 80/20 Critical Business Tool Product SKUs Down to ~26,500 from ~50,000 in 2019 Goal: 26,000 Purchased parts Reduced by 33% to ~270,000 Simplify the Business: Eliminate ble
Slide 20: Cash Flow
$67.2 $97.4 $86.6 $34.8 88% 127% 229% 48% FY19 FY20 FY21 Q3 FY22 TTM 20 Free Cash Flow (2) Cash Flow • Positive cash generation in Q3 FY22 despite inventory build to address supply chain constraints • Q3 FY22 YTD includes cash outflow of $14.0 million for acquisition deal costs • FY22 expected CapEx
Slide 21: Capital Structure
21 Capital Structure Financial flexibility • ~$190 million of liquidity Pro-forma net debt leverage ratio of ~2.9x(1) • Net debt to net total capital: 35.7% Financed Dorner acquisition with $207 million of equity and $450 million Term Loan B Financed Garvey acquisition with $75 million incremental T
Slide 22: Continued Strength in Orders
22 Continued Strength in Orders Record backlog of $294.7 million Orders and Backlog • 37% year-over-year increase driven by short cycle demand, project business and acquisitions • Avg daily order rate essentially unchanged from trailing quarter • Conveying solutions orders were $37.8 million in quar
Slide 23: Q4 FY22 Outlook and Perspective
23 Executing on Blueprint for Growth 2.0 strategy to drive value creation Q4 FY22 Outlook and Perspective (1) Revenue guidance provided January 27, 2022 Q4 FY2022 outlook • Expect Q4 FY22 net sales of approximately $235 million(1) Robust pipeline of opportunities • Strength in e-commerce, food & bev
Slide 24: Key Takeaways
24 Key Takeaways Transforming to a Top-tier, Secular Growth, Intelligent Motion Solutions Enterprise Growth strategy is underpinned by CMBS enabling scalability and operational excellence EVOLVED STRATEGY BLUEPRINT FOR GROWTH 2.0 DEFINES GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – EN
Slide 25: Gregory P. Rustowicz, Chief Financial Officer
Investor Presentation February 2022 25 Gregory P. Rustowicz Senior Vice President Finance and Chief Financial Officer
Slide 26: Supplemental Information
Supplemental Information 26
Slide 27: Advancing ESG priorities aligned with materiality assessment
27 Advancing ESG priorities aligned with materiality assessment Launched Inaugural CSR Report Strategic Initiatives • Five-year plan – based on baselines, gap analysis & target setting • Tightly aligned with business strategy • Prioritized by impact, risk assessment and opportunity for value • Metri
Slide 28: Capacity Utilization
28 U.S. Capacity Utilization Eurozone Capacity Utilization Industrial Capacity Utilization Source: The Federal Reserve Board Source: European Commission 60% 65% 70% 75% 80% Manufacturing Total 77.0% (Manufacturing) & 76.5% (Total) December 2021(1) 65% 67% 69% 71% 73% 75% 77% 79% 81% 83% 85% 82.1% Q4
Slide 29: ISM Production Index
29 ISM Production Index Source: Institute for Supply Chain Management 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 59.2% December 2021
Slide 30: Adjusted Net Income Reconciliation
30 Adjusted Net Income Reconciliation (1) Applies normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items and at a normalized tax ra
Slide 31: Adjusted EBITDA Reconciliation
31 Adjusted EBITDA Reconciliation Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly
Slide 32: Free Cash Flow & Free Cash Flow Conversion Reconciliation
32 Free Cash Flow & Free Cash Flow Conversion Reconciliation Free cash flow is defined as cash from operations minus capital expenditures. Free cash flow conversion is defined as free cash flow divided by adjusted net income including amortization. Free cash flow and free cash flow conversion are no
Slide 33: Global organization with production facilities in the Americas, EMEA, and APAC
33 Global organization with production facilities in the Americas, EMEA, and APAC Global Enterprise Kunzelsau, DE Hoist Milwaukee, WI Power Control Conveying Solutions Wadesboro, NC Hoist Damascus, VA Hoist Charlotte, NC Actuator Mexico Hoists Conveying Solutions Lexington, TN Chain Chattanooga, TN
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