Slide 1: Third Quarter 2023 Earnings Call
Chart Industries, Inc. Third Quarter 2023 Earnings Call October 27, 2023
Slide 2: Forward Looking Statements (1/2)
Forward Looking Statements (1/2) CERTAIN STATEMENTS MADE IN THIS INVESTOR PRESENTATION ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING CHART’S BUSINESS PLANS, INCLUDING STATEMENTS REG
Slide 3: Forward Looking Statements (2/2)
Forward Looking Statements (2/2) THIS PRESENTATION CONTAINS NON -GAAP FINANCIAL INFORMATION, INCLUDING ADJUSTED NON -DILUTED EPS, NORMALIZED BASIC EPS, “NET INCOME, ADJUSTED”, FREE CASH FLOW, AD JUSTED FREE CASH FLOW, EBITDA, ADJUSTED EBITDA, ADJUSTED OPERATING INCOME, AND ADJUSTED OPERATING MARGIN
Slide 4: Agenda
Agenda Key Takeaways Record Q3 2023 Results & Continued Strong Demand Howden Synergy Achievements Progress on Deleveraging 2023 and 2024 Outlook GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 4
Slide 5: Q3 2023 Key Takeaways
Q3 2023 Key Takeaways • Accelerating deleveraging actions including achieving ~$500 million in divestiture proceeds by October 31, 2023 • Signed / closed on the sale of American Fans to Arcline (October 26, 2023) for $111M all-cash (multiples in-line with prior Chart transactions) • Expect to close
Slide 6: Executed to Date On-Schedule and to Targets (1/2)
Executed to Date On-Schedule and to Targets (1/2) As previously shared # Action What we said in November 2022 As of October 27, 2023 Status 1 Financing Did not expect to close into the Completed financing in December Completed, Oversubscribed bridge and would seek to limit 2022; No KPS preferred amo
Slide 7: Executed to Date On-Schedule and to Targets (2/2)
Executed to Date On-Schedule and to Targets (2/2) Q3 2023 Updates # Action What we said in As of October 27, 2023 Status November 2022 9 Divestitures Working to complete Completed divestiture of Roots™ • $300 million cash proceeds from Roots received in shortly after the close of business to Ingerso
Slide 8: Agenda
Agenda Key Takeaways Record Q3 2023 Results & Continued Strong Demand Howden Synergy Achievements Progress on Deleveraging 2023 and 2024 Outlook GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 8
Slide 9: All Figures Presented are Continuing Operations
All Figures Presented are Continuing Operations Unless otherwise noted • Our third quarter 2023 results from continuing operations exclude the Roots™ financial results for our entire ownership period (Roots™ is in discontinued operations) • The Roots™ business was sold to Ingersoll Rand for $300 mil
Slide 10: Third Quarter 2023 Results
Third Quarter 2023 Results $ millions, except per share amounts Q3 2023 Q2 2023 Change Q3 2022 PF Change Continuing Operations Orders 1,127.3 1,063.1 +6.0% 1,202.9 -6.3% Q3 2023 Comments 1 excluding Big LNG1 ~30% ~2% 2 Book-to-Bill (Total) 1.26 1.17 1.47 • Record backlog • Record orders (ex BigLNG)
Slide 11: Q3 2023 Sales and Gross Margin Trends
Q3 2023 Sales and Gross Margin Trends Q3 2023 gross margin impact items not added back or adjusted totaled ~$3.7M Chart + Howden ex Roots Metrics for ownership period • Theodore, AL expansion timing = $2.5M • FOAK equipment sold at lower GM% = $1.2M $908 $898 32.5% 31.8% GTLS Standalone Metrics 29.9
Slide 12: Q3 2023 Sales and EBITDA Trends
Q3 2023 Sales and EBITDA Trends GTLS Standalone Metrics Chart + Howden ex Roots Metrics for ownership period 23.1% $898 22.1% $908 21.5% 21.7% 19.0% 18.7% 18.9% 18.9% 18.9% 17.5% 17.1% 16.2% 16.2% 15.3% 15.3% 15.5% $532 13.6% 12.4% $441 $405 $412 $379 $354 $322 $328 10.6% 10.8% 10.4% $289 9.8% Q1'21
Slide 13: Supply Chain Costs Close to "Back to Normal"
Supply Chain Costs Close to “Back to Normal” Deliveries continue to be late with long lead times GTLS: GAS TO LIQUID SYSTEMS® Sources: LME (Aluminum), MEPS (Carbon and Stainless Steel), Freightos 13
Slide 14: Third Quarter 2023 Noteworthy Results
Third Quarter 2023 Noteworthy Results • Safety total recordable incident rate (TRIR) of 0.52 (September 30, 2023) improved from 0.57 (June 30, 2023) • Lost time incident rate (LTIR) of 0.20 is the lowest in our history • 70% of our sites are accident free for more than one year • Chart Changzhou, Ch
Slide 15: Third Quarter 2023 RSL Noteworthy Results
Third Quarter 2023 RSL Noteworthy Results • Q3 2023 RSL backlog is a record at $609.7M, an increase of 35%+ compared to Q3 2022 (proforma combined business) • RSL Q3 2023 book-to-bill of 1.22 • RSL orders increased more than 20% when compared to Q3 2022 (proforma) • YTD Q3 2023 RSL sales increased 1
Slide 16: Third Quarter 2023 Noteworthy Results by Region
Third Quarter 2023 Noteworthy Results by Region • America region delivered solid and consistent performance across sites • Broad end market demand remains very strong with a 70% sequential increase in non-BigLNG orders compared to Q2 2023 • EBITDA margin of 25%, an increase of 500 basis points from
Slide 17: Record Backlog and Orders in Q3 2023
Record Backlog and Orders in Q3 2023 $millions Orders Q3 2023 Q2 2023 % change Key Q3 2023 Bookings: Chart total orders $1,127 $1,063 +6% BigLNG 0 ~200 • Hydrogen and helium liquefiers • Multiple jumbo tanks for space exploration Chart orders ex BigLNG 1,127 ~863 ~30% • Oil and gas project for custo
Slide 18: Chart's End Market Opportunity Pipeline
Chart’s End Market Opportunity Pipeline End Market Prior Quarter Current Quarter June 30, 2023* September 30, 2023* Big LNG • $7.6 billion • $8.5 billion • 27 projects • 29 projects • 9 intl projects for potential IPSMR® • 10 intl projects for potential IPSMR® • 1 intl project selected IPSMR® techno
Slide 19: Four Aspects of LNG End Markets We Serve
Four Aspects of LNG End Markets We Serve Small-scale and LNG Retrofit Big LNG Floating LNG Infrastructure Service & Repair • We have booked Big LNG • SsLNG and FLNG have • ISO containers continue in • Multiple FEED studies from orders in 2021, 2022, 2023 gained traction globally strong demand US Gul
Slide 20: US DOE Hub Applications Status as of October 13, 2023
US DOE Hub Applications Status as of October 13, 2023 * * Potential for Chart & Howden * ** Content * * Confirmed funding Oct.13 * * * * * * * * * * * * * * * * Source: CHF & White House Announcement 10/13/2023 * *
Slide 21: Hydrogen Momentum Across Applications and Geographies
Hydrogen Momentum Across Applications and Geographies H2 Orders 2020-2023 - Order Value 2023 is Annualized from YTD Q3 • Q3 2023 notable hydrogen-related orders around the world • Awarded H2 and He liquefiers (synergy wins) • Received a H2 compressor order ($16M+) from a Korean customer • Orders fro
Slide 22: Agenda
Agenda Key Takeaways Record Q3 2023 Results & Continued Strong Demand Howden Synergy Achievements ~30% Progress on Deleveraging 2023 and 2024 Outlook GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 22
Slide 23: Synergy Achievement (March 17, 2023 to October 26, 2023)
Synergy Achievement (March 17, 2023 to October 26, 2023) # Description Achieved as of Original % of year-one % of year-one October 26, annualized synergies ownership as 2023 year-one target achieved to of 10/26/2023 $ millions date 1 Commercial synergies 297.9 150 ~199% ~60% 3 Cost synergies 135.6 1
Slide 24: Q3 2023 Example Commercial Synergy Wins
Q3 2023 Example Commercial Synergy Wins Chart customer using Howden customer using Chart’s customer using New customer using Howden service Chart’s CCUS Howden’s wind tunnel Chart and Howden full capabilities capabilities and noise testing solution Due to Howden’s field service Won a next generation
Slide 25: OneChart Culture Drives Synergy Ideas and Attainment
OneChart™ Culture Drives Synergy Ideas and Attainment “The team continue to “I would 6 Sigma Training | Emerging Leaders like to share my Awesome Collaboration make great progress Hi Robin, great appreciation to Hi Jill – and the collaboration is Named. He is a great Since we will finish the 6 Sigma
Slide 26: Aftermarket, service and repair is a key area of synergy opportunity
Aftermarket, service and repair is a key area of synergy opportunity Readiness to Installed Base Mgt & Intelligent AFM Customer Serve Campaigning (iAFM) Processes Attachment Enhance our systems Optimize sales & Improve processes to Expand our connected and processes to service capabilities capture m
Slide 27: Agenda
Agenda Key Takeaways Record Q3 2023 Results & Continued Strong Demand Howden Synergy Achievements Progress on Deleveraging 2023 and 2024 Outlook GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 27
Slide 28: Accelerating Net Leverage Reduction
Accelerating Net Leverage Reduction Debt Covenant: Net Debt/ LTM Adjusted EBITDA(1) ▪ Q2 2023 net leverage of 3.59X; pro forma of 3.47X adjusting for Cofimco, Cryo Diffusion and American Fans divestitures 6.0X 4.5X ▪ Reiterate our financial policy that until we are within our target net leverage rat
Slide 29: Cash and Balance Sheet Activities in Q3 2023
Cash and Balance Sheet Activities in Q3 2023 1. Action completed (non-divestiture related) a) Received Howden acquisition working capital settlement ($17.5 million; cash received July 26, 2023) b) Completed additional ~$15.1 million cash repatriation from China (~$35 million YTD 2023), ~$7.5 million
Slide 30: Q3 2023 Accelerated Investment in Theodore, AL Jumbo Tank and Railcar Facility
Q3 2023 Accelerated Investment in Theodore, AL (USA) Jumbo Tank and Railcar Facility; High ROI, Over $115 million in backlog Progress as of June 30, 2023 Current progress Only Low Bay had first concrete pour Including inside photo of High Bay Customer Q3 2023 Orders Total Backlog* • $58M of orders b
Slide 31: Free Cash Flow Details
Free Cash Flow Details (1) $M Description Q3 2023 Comments Actual A Net cash (used in) operating activities as presented ($22.6) • Includes activity related to Roots discontinued operations, (Consolidated US GAAP) Howden acquisition adjustments and Cofimco assets held for sale B Impact of non-contin
Slide 32: Agenda
Agenda Key Takeaways Record Q3 2023 Results & Continued Strong Demand Howden Synergy Achievements Progress on Deleveraging 2023 and 2024 Outlook GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 32
Slide 33: Chart Industries Outlook
Chart Industries Outlook Guidance Metrics as of October 27, 2023 Q4 2023 2023 Comments • Delivering on record backlog • Earlier than anticipated close on sales of American Fan & Revenue $1.1-$1.15B $3.45-$3.5B Cofimco • Timing shifts between quarters • Aftermarket/ book & ship accelerate from Q3 lev
Slide 34: Chart Industries 2024 Outlook
Chart Industries 2024 Outlook Guidance Metrics as of October 27, 2023 2024 Comments • Delivering on record backlog • Big LNG and Specialty backlog conversion Revenue ~$5.1B • Inclusion of commercial synergies • Repair, Service & Leasing growth of 10%+ • Benefits from Volume leverage Adjusted EBITDA
Slide 35: Analyst Day Save the Date
“-clean power, clean water, clean food, and clean industrials regardless of molecule.” 2023 ANALYST SAVE THE DAY DATE! Join Jill Evanko, President and CEO, November 28, 2023 Joe Brinkman, CFO, and the Chart Register here: 8:00am – 12:00pm ET https://investorday.chartindustries.com Industries Leaders
Slide 36: Appendix
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Slide 37: Commercial Pipeline Growth
Commercial Pipeline Growth Our total commercial pipeline, inclusive of commercial synergies, is over $20.3B for the next 3 years and increased quarter-over-quarter despite converting ~$1.13B of pipeline into orders during the third quarter 2023 Total Chart Commercial Pipeline Chart’s Commercial Syne
Slide 38: Recent Macro Activity Driving Chart Demand
Recent Macro Activity Driving Chart Demand # End Market Recent News 1 CCUS • UK strategy to meet net zero emissions includes combing biomass with carbon capture technology (aka BECCS) • Project Stratos, under construction in Texas, is planned to be the world’s largest carbon capture facility, removi
Slide 39: Current Debt Maturity Profile
Current Debt Maturity Profile $ million 3,500 3,000 ▪ Mix of Term Loan B and Bonds 2,500 provides prepayment flexibility, protection against interest rate 2,000 fluctuations 1,500 ▪ Significant capacity on RCF to 1,000 address any near-term needs 500 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 Bo
Slide 40: Third Quarter 2023 Adjusted EPS
Third Quarter 2023 Adjusted EPS $ millions, except per share amounts YTD Q3 2023 Q3 2023 Diluted EPSQ2 2023 Diluted EPS Continuing Operations Diluted EPS Net income attributable to Chart Industries, Inc. 9.4 6.6 0.1 Less: Mandatory convertible preferred stock dividend 6.8 6.9 20.5 Income (loss) from
Slide 41: Third Quarter 2023 Adjusted EBITDA
Third Quarter 2023 Adjusted EBITDA $ millions, except per share amounts Consolidated Q3 2023 Q3 2022 Change v. PY Q2 2023 Change v. PQ Net sales 897.9 412.1 485.8 908.1 (10.2) Net income from continuing $11.6 $41.6 ($30.0) $9.6 $2.0 operations Income tax expense (benefit), net 0.2 (1.6) 1.8 2.4 (2.2
Slide 42: Q3 2023 Addback Detail
Q3 2023 Addback Detail Q3 2023 gross amount Impact to (+ added to / (-) reduced operating income Main category Detailed Description income) • McPhy MTM Mark-to-Market of inorganic No, net income 1 • Stabilis MTM 5.1 investments only • Minority investments, other (Liberty and HTEC) • Integration cost
Slide 43: Sequential Segment Details - Reported
Sequential Segment Details - Reported Gross Profit Operating $ millions Sales Margin Margin Commentary Q3 23 Q2 23 Q3 23 Q2 23 Q3 23 Q2 23 Cryo Tank $159.0 $152.7 22.1% 18.9% 10.8% 6.9% • Q3 sales benefited from Q2 revenue shift Solutions • Q/Q operating performance driven by improvement in price/co
Slide 44: Sequential Segment Details - Adjusted
Sequential Segment Details - Adjusted Adj. Gross Profit Adj. OP $ millions Sales Margin Margin Commentary Q3 23 Q2 23 Q3 23 Q2 23 Q3 23 Q2 23 Cryo Tank $159.0 $152.7 23.3% 21.5% 12.6% 8.6% • Q3 sales benefited from Q2 revenue shift Solutions • Q/Q operating performance driven by improvement in price
Slide 45: Third Quarter 2023 Net Income Bridge
Third Quarter 2023 Net Income Bridge $ millions, except per share amounts Q3 2023, Q3 2023, Adjustments Continuing Operations Reported Adjusted Sales $897.9 - $897.9 Cost of sales 621.7 (9.1) 612.6 Gross profit 276.2 9.1 285.3 Selling, general, and administrative expenses 122.8 (9.0) 113.8 Amortizat
Slide 46: Segment Sales and Operating Margin Information
Segment Sales and Operating Margin Information Sales ($M, except %) Q3 ‘23 Q2 ‘23 % Chg PQ Q3 '22 % Chg PY Specialty Products 240.0 236.7 +1.4% 108.1 +122% Cryo Tank Solutions 159.0 152.7 +4.1% 126.9 +25.3% Repair, Service, Leasing 271.3 298.7 -9.2% 49.7 +445.9% Heat Transfer Systems 232.5 236.0 -1.
Slide 47: Segment Sales and Gross Margin Information
Segment Sales and Gross Margin Information Sales ($M, except %) Q3 ‘23 Q2 ‘23 % Chg PQ Q3 '22 % Chg PY Specialty Products 240.0 236.7 +1.4% 108.1 +122% Cryo Tank Solutions 159.0 152.7 +4.1% 126.9 +25.3% Repair, Service, Leasing 271.3 298.7 -9.2% 49.7 +445.9% Heat Transfer Systems 232.5 236.0 -1.5% 1