Acuity Inc. · NYSE:AYI
Acuity — Acuity Brands — Q3 2021 Earnings Presentation
23 slides from Acuity's earnings presentation, Jul 1, 2021
Slide 1: Financial Update
Financial Update Karen Holcom, Chief Financial Officer
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management’s beliefs and assumptions and information
Slide 3: Non-GAAP Financial Measures and Segment Reporting
3 This presentation includes the following non-generally accepted accounting principles ("GAAP") financial measures: “adjusted gross profit,” “adjusted gross profit margin,” “adjusted operating profit,” “adjusted operating profit margin,” “adjusted net income,” “adjusted diluted earnings per share,”
Slide 4: Proud of our associates who returned the Company to growth
4 I am proud of all our associates who worked together to return the Company to growth. Our team thrives in an entrepreneurial environment. We are a values-driven organization and we think like owners. Like you. Karen Holcom, Acuity CFO
Slide 5: Fiscal Q3'21 Highlights
Fiscal Q3’21 Highlights 5 Transforming Acuity Returned the Company to Growth Expanded Gross Profit Margin by 80 Bps versus Prior Year “VPY” and Operating Margin by 240 Bps VPY Announced Trevor Palmer as President of ABL Group Welcomed Peter Han as President of ISG and the Rockpile Team Ann
Slide 6: Consolidated Financial Summary
6 Consolidated Financial Summary Net Sales Gross Profit Margin Operating Profit Margin Adj. Operating Profit Margin1 Diluted EPS Adj. Diluted EPS1 $899.7M ↑ 15.9% VPY 15.2% ↑ 170bps VPY $2.37 ↑ 55.9% VPY 43.0% ↑ 80bps VPY 13.1% ↑ 240 bps VPY $2.77 ↑ 42.8% VPY Solid Performance Across Third-Quarter 2
Slide 7: AYI Performance
7 $834.7 $792.0 $824.2 $776.6 $776.2 $899.7 Q1'20 Q1'21 Q2'20 Q2'21 Q3'20 Q3'21 Fiscal YTD’21 AYI Performance Gross Profit Margin Operating Margin Net Sales 42.6% 42.0% 41.7% 43.4% 43.0% 10.0% 10.8% 9.9% 11.7% 13.1% Improvement Through 2021 Adjusted Operating Margin1 Diluted EPS Adjusted Diluted EPS
Slide 8: We Use Technology to Solve Problems
8 WE USE TECHNOLGY TO SOLVE PROBLEMS
Slide 9: Defining ABL and ISG
9 Defining ABL and ISG Adjusted Operating Profit1 Net Sales $126.5 $135.8 Diluted EPS Adjusted Diluted EPS1 ($ In Millions) $850.0 1 Reconciliations for Adjusted Figures can be found on Slides 18 - 19 Operating Profit Q3’21 YTD’21 Q3’21 YTD’21 Q3’21 YTD’21 ABL ISG Total AYI $7.2 $11.1 $55.4 $118.1 $
Slide 10: ABL Performance in Fiscal Q3'21
ABL Performance in Fiscal Q3’21 $35.0 $39.1 $48.7 $69.4 $549.4 $45.2 $44.0 $36.1 $96.7 $628.0 Other Corporate Accounts Retail Sales Direct Sales Network Independent Sales Network Q3'21 Q3'20 Total ABL Sales Increased 14.6% to $850M for Q3’21 VPY Improvements Driven by Go-to Market Improvements a
Slide 11: ISG Performance in Fiscal Q3'21
ISG Performance in Fiscal Q3’21 Total ISG Sales Increased 46.9% to $55.4M for Q3’21 VPY ISG Operating Profit Increased $ 7.4M to $7.2M for Q3’21 VPY ISG Adjusted Operating Profit1 Increased $ 6.1M to $11.1M for Q3’21 VPY Appointed Peter Han, President of Intelligent Spaces Group Welcomed R
Slide 12: Fiscal YTD'21 Cash Flow Analysis
Fiscal YTD’21 Cash Flow Analysis 12 $316M Operating Cash Flow $31M Capex $341M Share Repurchase Solid Cash Flow Generation; Capital Allocated to Growth Initiatives Capital Allocation Priorities Reinvestment in Growth Working Capital Capex M&A Rockpile Ventures Dividend Maintained Share Repurchases 3
Slide 13: Impact of Price Rises and Supply Chain Volatility
Impact of March 2020 Price Rises Not Felt Until End of Third Quarter of 2021 Revenue Impact Immaterial During Third Quarter of 2021 13 AYI Strategic Topics Price Increases Raw Material Increases Electrical Component Shortages Segment Breakdown Volatility in Component Pricing During the Third Q
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Slide 15: Financial Performance Objective
Transform Maintain/Grow Amplify Last 18 Months Next 18 Months Beyond Repurchased ~10% of Outstanding Shares ABL Revenue ISG Revenue Gross Profit Margin Capital Allocation Priorities Growth During Pandemic ~Mid Teens Organic Growth Bolt-on Acquisitions ~Mid Teens Organic Growth Bolt-on Acquisitions N
Slide 16: Fiscal Q3'21 Key Take-Aways
We Have Done What We Said We Would Do We Have Returned the Company to Growth We Have Improved our Margins We are Being Strategic and Deliberate in our Approach to Capital Allocation We are Focused on Creating Long Term Value for our Shareholders 16 Fiscal Q3’21 Key Take-Aways Continued Sol
Slide 17: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations
Slide 18: Reconciliation of Non-GAAP Measures: Operating Profit and Margin
18 Reconciliation of Non-GAAP Measures: Adjusted Operating Profit and Adjusted Operating Profit Margin (In $Millions) Second Quarter Feb. 28, 2021 Feb. 29, 2020 Nov. 30, 2020 Nov. 30, 2019 Operating Profit (GAAP) $91.0 $81.4 $85.7 $83.6 + Amortization of acquired intangible assets 10.1 10.4 10.1 9.6
Slide 19: Reconciliation: Adjusted Net Income and Adjusted EPS
19 Reconciliation of Non-GAAP Measures: Adjusted Net Income and Adjusted Earnings Per Share (In Millions Except Per Share Data) Second Quarter Feb. 28, 2021 Feb. 29, 2020 Nov.30, 2021 Nov.30, 2020 Net Income (GAAP) $62.9 $57.2 + Amortization of acquired intangible assets 10.1 10.4 + Share-based paym
Slide 20: Reconciliation: Segment Breakdown (ABL)
20 Reconciliation of Non-GAAP Measures: Adjusted Operating Profit and Adjusted Operating Profit Margin (In $Millions) Segment Breakdown (ABL) Second Quarter Feb. 28, 2021 Feb. 29, 2020 Nov. 30, 2020 Nov. 30, 2019 Operating Profit (GAAP) $102.0 $95.8 $98.4 $109.6 + Amortization of acquired intangible
Slide 21: Reconciliation: Segment Breakdown (ISG)
21 Reconciliation of Non-GAAP Measures: Adjusted Operating Profit and Adjusted Operating Profit Margin (In $Millions) Segment Breakdown (ISG) Second Quarter Feb. 28, 2021 Feb. 29, 2020 Nov. 30, 2020 Nov. 30, 2019 Operating Profit (GAAP) $0.8 ($3.4) ($0.1) $1.3 + Amortization of acquired intangible a
Slide 22: ABL Quarterly Trends
ABL Quarterly Trends $798.0 $788.2 $741.6 $853.1 $753.6 $736.8 $850.0 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Net Sales Growth Operating Margin Net Sales Adjusted1 Operating Margin (In $Millions) - 13.7% 15.2% - 12.2% 13.5% - 13.3% 14.6% - 14.3% 15.4% (5.6%) 13.1% 14.4% (6.5%) 13.8% 15.2% 14.6% 14
Slide 23: ISG Quarterly Trends
ISG Quarterly Trends $39.3 $39.1 $37.7 $40.9 $40.8 $43.3 $55.4 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Net Sales Growth Operating Margin Net Sales Adjusted1 Operating Margin (In $Millions) - 3.3% 14.5% - (8.7%) 5.4% - (0.5%) 13.3% - (3.9%) 5.1% 3.8% (0.2%) 9.1% 10.7% 1.8% 11.1% 46.9% 13.0% 20.0% 1