Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (August 2021)
37 slides from Lci Industries's investor presentation, Aug 17, 2021
Slide 1: LCI Industries Investor Presentation August 2021
LCI Industries Investor Presentation August 2021 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of manag
Slide 3: LCI at a Glance
LCI AT A GLANCE A leading supplier of highly engineered components primarily to the OEMs of RV, buses, trailers, trucks, boats, trains, manufactured housing, and their related aftermarkets * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most directly
Slide 4: Investment Appeals
INVESTMENT APPEALS Our goal is to be a leading supplier for component parts manufacturing in the markets in which we compete Dominant Competitive Position Leading market share with unmatched depth and breadth of products, driven by compelling industry tailwinds supporting consistent, long-term growt
Slide 5: LCI Overview: Industry-Leading Brands and Core Competencies
LCI OVERVIEW Industry-Leading Brands and Core Competencies 7 Core Competencies Metal Fabrication & Welding Lamination Glass Fabrication Cut & Sew Power & Motion Systems Electronics Plastics Forming Applicable Across a Number of Customer Segments Recreational Vehicle Marine Transit & School Bus Eques
Slide 6: Capturing Secular Megatrends
CAPTURING SECULAR MEGATRENDS Strong tailwinds from growing recreation market. Massive, Growing Addressable Market • Out of 128 million U.S. households, nearly 25% currently own or intend to own an RV • Adjacent industries, Aftermarket, and International markets benefiting from similar secular tailwi
Slide 7: Growth Opportunities
Leveraging our leading position in core OEM markets to grow into new markets Expanding organically and through M&A in adjacent, aftermarket, and international markets to enable consistent, long-term growth for LCI Capturing rising demand from rapidly growing outdoor recreation industry Leveraging ou
Slide 8: Expanding Addressable Markets
EXPANDING ADDRESSABLE MARKETS Unlocking value through diversification: (1) Amounts in millions. "Opportunity" amounts represent Management's estimate of the size of the addressable market based on current products as of Q420, excluding the Company's current net sales to those markets. The estimates
Slide 9: Cultural Foundation
CULTURAL FOUNDATION Our experienced leadership team has built a strong company culture from which LCI continues to grow. Andrew Namenye EVP & CLO 14 years of experience Nick Fletcher EVP & Chief HR Officer 35 years of experience Jason Lippert President & CEO 27 years of experience Brian Hall EVP & C
Slide 10: Cultural Foundation
CULTURAL FOUNDATION We strive to drive superior returns to all of our teams…our PEOPLE, our CUSTOMERS and our SHAREHOLDERS Striving to Lead Our passion to win, coupled with a robust growth strategy, drive us to be a leader in every market we enter Fostering Leadership and Leveraging our Culture to G
Slide 11: Innovative Leadership
INNOVATIVE LEADERSHIP Leveraging our culture of innovation and technology: Our innovative culture brings technologically advanced products to a new generation of campers, enhancing the RV experience driving the success of our platforms Safety & Security Monitoring & Control Connected & Digital Comfo
Slide 12: ESG Focus Areas
ESG FOCUS AREAS Driving long-term value creation through progress on ESG initiatives. Commitment to Sustainability Key Metrics and SASB Disclosure • 12,434.59 tons of trash to landfill • 900,000+ lbs. of plastic from regrind recycled • 1,000,000 solar KW hours powered each year • Integrating SASB in
Slide 13: Our Business: North America OEM
OUR BUSINESS: NORTH AMERICA OEM
Slide 14: North America OEM
NORTH AMERICA OEM Robust market primarily comprised RV OEM and supported by expansion of adjacent industries through market share gains and strategic acquisitions RV Building Products Commercial Vehicles TrailersMarine RV OEM Adjacent Industries 14
Slide 15: North American RV OEM Net Sales
North American RV OEM Net Sales 2015 2016 2017 2018 2019 2020 $0M $500M $1,000M $1,500M $2,000M Growth Drivers & Trends RV OEM 6% CAGRKey Drivers • Surge in retail demand, as new consumers and their families enter the RV lifestyle and recognize the benefits of RVing • Industry wholesale RV shipments
Slide 16: Growth Drivers & Trends: Adjacent Industries
Growth Drivers & Trends ADJACENT INDUSTRIES Key Drivers • Benefiting from similar secular tailwinds from outdoor recreation space, driving heightened long-term demand • Strong partnerships in Marine with other leading industry brands, including Bennington and TRACKER Marine • Expanding market presen
Slide 17: Our Business: North America Aftermarket
OUR BUSINESS: NORTH AMERICA AFTERMARKET
Slide 18: North America Aftermarket
NORTH AMERICA AFTERMARKET Extensive portfolio of strong brands and extensive distribution network providing consistent, countercyclical growth opportunities Marine Towing Truck AccessoriesRV Main Product Categories 18
Slide 19: Growth Drivers & Trends: North America Aftermarket
Growth Drivers & Trends NORTH AMERICA AFTERMARKET Key Drivers • Doubled size of Aftermarket segment with acquisition of CURT Group in 2019, opening up $7.5B addressable market • Secular outdoor recreation trends driving Aftermarket businesses forward • End markets comprised of expanding industries i
Slide 20: Our Business: International
OUR BUSINESS: INTERNATIONAL
Slide 21: International
INTERNATIONAL Expanding segment serving international recreation and transportation markets, leveraging wide-reaching footprints and strong customer relationships to establish LCI’s position as a global leader 21
Slide 22: Growth Drivers & Trends: International
Growth Drivers & Trends INTERNATIONAL Key Drivers • Strong growth in 2020, with revenues increasing 62% year-over-year, supported by the four acquisitions in late 2019 • Similar to North America, European consumers increasingly turning to outdoor lifestyle for travel and vacation across the continen
Slide 23: Financial Overview
FINANCIAL OVERVIEW
Slide 24: Financial Overview: Sales, EBITDA, Free Cash Flow, EPS
Free Cash Flow* ($M) $66 $159 $68 $37 $211 $174 2015 2016 2017 2018 2019 2020 $0M $100M $200M $300M EBITDA* ($M) $158 $247 $269 $266 $276 $321 2015 2016 2017 2018 2019 2020 $0M $100M $200M $300M $400M Q2 2021 net sales were up 108% year-over-year, driven by wholesale RV shipments increasing 100% ove
Slide 25: Q2 2021 Financial Performance
Q2 2021 Financial Performance FINANCIAL OVERVIEW * Additional information regarding adjusted EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix. (in th ou sa nd s) Consolidated Net Sales $525,765 $1
Slide 26: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility FINANCIAL OVERVIEW Healthy balance sheet with ample liquidity enables execution of strategic priorities Second Quarter 2021 Second Quarter 2020 Cash and Cash Equivalents $98M $62M Remaining Availability under Debt Facilities $523M $401M Net Debt/EBITDA (T
Slide 27: Capital Deployment Strategy
Capital Deployment Strategy FINANCIAL OVERVIEW Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchases Target net debt / EBITDA leverage of 1.0x to 1.5x
Slide 28: Acquisition Strategy
Over 50 acquisitions in the last 20 years • Majority of last 20 acquisitions focused outside of North American RV industry Looking for: • Great leadership • Product innovation • Consistency with our core manufacturing disciplines • Niche markets • Favorable competitive landscape Typical synergies to
Slide 29: Announcing Agreement to Acquire Furrion Holdings Ltd.
Overview ▪Acquiring Furrion, a leading distributor of a large range of appliances and other products to OEM and aftermarket customers ▪Strong management and R&D teams with international footprint and deep focus on innovation ▪Forecasted 2021 sales of $230 million ▪Exposure to $1.5B addressable marke
Slide 30: Appendix
APPENDIX
Slide 31: Consolidated Financials
Consolidated Financials APPENDIX ($ in millions except per share data) 2015 2016 2017 2018 2019 2020 Net Sales $ 1,403 $ 1,679 $ 2,148 $ 2,476 $ 2,371 $ 2,796 Operating Profit $ 116 $ 201 $ 214 $ 199 $ 200 $ 223 % of Sales 8.3% 12.0% 10.0% 8.0% 8.4% 8.0% Net Income $ 74 $ 130 $ 133 $ 149 $ 147 $ 158
Slide 32: Balance Sheet
Balance Sheet APPENDIX *Debt increase in 2019 and 2020 due to funding recent acquisitions and liquidity for COVID-19 shutdowns. ($ in millions) 2015 2016 2017 2018 2019 2020 Cash & Equivalents $ 12 $ 86 $ 26 $ 15 $ 35 $ 52 Accounts Receivable 42 57 82 122 200 269 Inventory 171 189 275 341 394 494 Ot
Slide 33: Adjusted EBITDA Reconciliation of Non-GAAP Measures
Adjusted EBITDA Reconciliation of Non-GAAP Measures APPENDIX Adjusted EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, deprecia
Slide 34: Adjusted Net Income and Adjusted Diluted EPS
Adjusted net income and adjusted diluted net income per common share Reconciliation of Non-GAAP Measures APPENDIX Adjusted net income and adjusted diluted net income per common share are non-GAAP performance measures included to illustrate and improve comparability of its results from period to peri
Slide 35: Leverage Ratio (Net Debt to EBITDA)
Leverage ratio (net debt to EBITDA) Reconciliation of Non-GAAP Measures APPENDIX The Leverage Ratio (or Net Debt to EBITDA ratio) is a non-GAAP measure of the use of debt. The Leverage Ratio is calculated by dividing the total of long-term indebtedness, plus current portion of long-term debt, less c
Slide 36: Free Cash Flow
Free cash flow Reconciliation of Non-GAAP Measures APPENDIX Free cash flow is a non-GAAP measure of liquidity, calculated by subtracting capital expenditures from net cash flows provided by operating activities. The Company considers free cash flow to be a profitability and liquidity measure that pr
Slide 37: Industry Statistics Summary
APPENDIX LCI industries Industry Statistics Summary TOTAL RECREATIONAL VEHICLES (RV) Tor] Whotosate Units ™ 1 Retail Uns Dealer Inventory Impact Toh VID Tit Toth YD i Woah YI. a Tis) arene Ta Bae aga ae ar (918) qo) Gey 7390305 600258 68 50.156 sti Yet 897 teat eis pases. 40,462 11% 176,062 69.671 3