Chart Industries, Inc. · NYSE:GTLS
Chart Industries — Q3 2018 Earnings Presentation
25 slides from Chart Industries's earnings presentation, Oct 23, 2018
Slide 1: Chart Industries Third Quarter 2018
Chart Industries Third Quarter 2018 October 18, 2018 © 2018 Chart Industries, Inc. Confidential and Proprietary
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company's plans, objectives, future orders, revenues, margin
Slide 3: Leading Supplier of Mission Critical Equipment
Leading Supplier of Mission Critical Equipment 1 Energy & Chemical 2 Distribution & Storage ▪ ▪ Supply Brazed Aluminum Heat Exchangers (BAHX), Offer a complete portfolio of cryogenic distribution and Air Cooled Heat Exchangers (ACHX) and Cold storage equipment Boxes ▪ Spearhead innovation in cryogen
Slide 4: Recent Changes to Support Our Strategy
Recent Changes to Support Our Strategy Segmentation with Sale of Oxygen- Acquisition of VRV, Global Commercial Related Products s.p.a Team Business A Take Advantage of Favorable Market Trends Building Blocks of Our Deliver Profitable Growth Through Strategic Initiatives Three Year B Strategy C Achie
Slide 5: Segmentation
Segmentation Energy & Chemicals Distribution & Storage Distribution & Storage Western Hemisphere Eastern Hemisphere Global Key Account Commercial Team 5 © 2018 Chart Industries, Inc. Confidential and Proprietary
Slide 6: Divestiture of Oxygen-Related Products
Divestiture of Oxygen-Related Products ◼ Leading global engineered solutions company specializing Former BioMedical Segment in oxygen related products across the respiratory industry CryoBio Respiratory CAIRE − Stationary − Onsite generation systems Description − Portable − Liquid Revenue: $75-85M1
Slide 7: VRV Company Overview
VRV Company Overview Business description Products overview ◼ VRV s.p.a. manufactures medium / high pressure and cryogenic equipment for the chemical, petrochemical and power industries Energy & Petrochemicals ◼ Founded: 1956 ◼ Headquarters: Ornago, Italy ◼ Operates in two divisions: Cryogenics − En
Slide 8: VRV Strategic Rationale
VRV Strategic Rationale Cost Synergies ✓+ • Adds D&S Indian, Italian and France manufacturing Expand Chart’s Global Footprint • Adds E&C manufacturing in Europe • Additional port access for lead time reduction Maximize Production Capabilities and ✓ • Leverage operational automation in place at VRV E
Slide 9: Expanding Service & Repair Footprint
Expanding Service & Repair Footprint Exploration, Processing/ Re- Lifecycle Value Proposition/ Treatment Transportation Storage Production & Pipeline Liquefaction gasification Services Application Current Chart Service Locations VCT Vogel D&S Canton Current Location and Regional ▪ Direct coverage in
Slide 10: Take Advantage of Favorable Macro Trends
A Take Advantage of Favorable Macro Trends Market Dynamics Chart Exploitation ▪ Supply / demand for LNG needs in ▪ Chart’s patented IPSMR technology 2022-2023 and shift toward modular is key to mid-scale technology facilities ▪ Chart’s and VRV’s customer ▪ Increasing regulatory environment intimacy
Slide 11: Accelerate Growth through Acquisitions
B Accelerate Growth through Acquisitions Acquisition Criteria: Prioritize Key Market Opportunities: ▪ Strong level of strategic fit SERVICE & ▪ TEMPERATURE High degree of leveragability REPAIR EXPANSION (specific and attainable BUILDOUT synergies) ▪ Proven growth and profitability ▪ Reasonable price
Slide 12: Previous Gas to Liquids Offerings
Previous Gas to Liquids Offerings Exploration, Value Processing/ Re- Lifecycle Production & Treatment Transportation Storage Proposition/ Pipeline Liquefaction gasification Services Application ACHX Orca Microbulk Engineered Tanks Ambient Vaporizers Installation & Startup N2 Dosing Cold Boxes Traile
Slide 13: Current Focused Gas to Liquids Offerings
Current Focused Gas to Liquids Offerings Exploration, Value Processing/ Re- Lifecycle Production & Treatment Transportation Storage Proposition/ Pipeline Liquefaction gasification Services Application ACHX Orca Microbulk Engineered Tanks Ambient Vaporizers Installation & Startup N2 Dosing Cold Boxes
Slide 14: Chart Significant LNG Opportunities
Chart Significant LNG Opportunities Project Opportunity Chart Customer Operator Country Capacity Scope of Supply PA ssLNG Confidential Confidential USA 50,000 gpd C50N Cold box, BAHX, ACHX FL ssLNG Expansion EPC TBD Confidential USA 250,000 gpd C250N, Cold boxes, BAHX, ACHX MA ssLNG Confidential Con
Slide 15: Third Quarter 2018 Financial Results
Third Quarter 2018 Financial Results Sales & Revenue1 Adjusted Q3 Highlights 1 1,2 ($USD Million) Earnings Per Share Earnings Per Share $272 $0.65 $0.74 • Sales increase of 34.3% over the third quarter of 2017, 16.0% excluding Hudson Products $0.65 $0.74 $272 • Reported earnings per diluted share in
Slide 16: 2018 YTD Financial Results
2018 YTD Financial Results Sales & Revenue1 Adjusted YTD Q3 2018 Highlights 1 1,2 ($USD Million) Earnings Per Share Earnings Per Share $794 $1.11 $1.41 • Sales increase of 38.5% over YTD third quarter of 2017, 16.2% excluding Hudson Products $1.11 $1.41 $794 • Reported earnings per diluted share inc
Slide 17: 2017 Results – Continuing Operations Segments
2017 Results – Continuing Operations Segments Energy & Chemicals Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 $M Sales $39.9 $40.0 $46.6 $99.1 $225.6 Gross Margin 8.4 5.4 8.6 22.7 45.1 GM % 21.1% 13.5% 18.5% 22.9% 20.0% SG&A 7.8 7.4 7.4 11.7 34.3 % / Sales 19.5% 18.5% 15.9% 11.8% 15.2% Operating Income $
Slide 18: 2018 Results – Continuing Operations Segments
2018 Results – Continuing Operations Segments Energy & Chemicals Q1 2018 Q2 2018 Q3 2018 YTD 2018 $M Sales $89.9 $100.8 $98.1 $288.8 Gross Margin 19.4 21.3 26.9 67.6 GM % 21.6% 21.1% 27.4% 23.4% SG&A 12.6 11.7 11.3 35.6 % / Sales 14.0% 11.6% 11.5% 12.3% Operating Income $2.8 $5.9 $12.1 $20.8 % / Sal
Slide 19: Financial Results – Continuing Operations Consolidated
Financial Results – Continuing Operations Consolidated Chart Industries - Consolidated Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 $M Sales $171.0 $199.8 $202.7 $269.4 $842.9 Gross Margin 48.3 52.3 57.9 73.1 231.6 GM % 28.2% 26.2% 28.6% 27.1% 27.5% SG&A 44.1 41.7 48.1 49.4 183.3 % / Sales 25.8% 20.9% 23
Slide 20: 2018 Guidance
2018 Guidance Prior Guidance Prior Guidance, FY 2018 Guidance2 (Q2 2018)1 Q2 2018, Continuing Ops2 Sales Sales Sales $1.20B - $1.25B $1.04B - $1.09B $1.06B - $1.10B 7-9% organic growth Adjusted EPS $1.85 - $2.05 Adjusted EPS Adjusted EPS Inclusive of ~$0.15 impact from U.S. tax $1.64 - $1.84 $1.90 -
Slide 21: 2019 First Look at Guidance
2019 First Look at Guidance Full Year 2019 Sales $1.24B - $1.30B 16-%18% growth 6%-7% organic growth Adjusted EPS $2.40 - $2.75 Assumes 22% to 23% full year tax rate Excludes any large LNG related revenue Includes Full Year of VRV, s.p.a. and Excludes CAIRE Capital Expenditures $30M - $40M 21 © 2018
Slide 22: Capital Allocation Strategy
Capital Allocation Strategy Organic growth initiatives ▪ Expect $250M Free Cash Flow1 over the next 3 years Deleverage ▪ Long-term leverage target of 2x – 3x ▪ M&A Capital allocated to position the company for growth and maintain a Direct shareholder return strong balance sheet (when/if appropriate)
Slide 23: Strategic Realignment Supports Achieving 2021 Financial Targets
Strategic Realignment Supports Achieving 2021 Financial Targets ~ 40+% 700bps 21% Revenue Growth to $1.7B Operating Margin Expansion to ~17% of Sales from Aftermarket from 13% ▪ Leading Positions Across the Portfolio ▪ Well-Balanced Portfolio of Long-Cycle and Short-Cycle Products ▪ Consistent Growt
Slide 24: Chart Investment Highlights
Chart Investment Highlights Leading diversified industrial global manufacturer with diverse Operate in attractive, growing and broad product offering markets Innovative technical expertise Cross-operating segment scale and and reputation collaboration Longstanding relationships with industry leading
Slide 25: www.chartindustries.com
www.chartindustries.com © 2018 Chart Industries, Inc. Confidential and Proprietary