Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Q2 2022 Earnings Presentation
21 slides from Enerpac Tool's earnings presentation, Mar 23, 2022
Slide 1: Fiscal 2022 Second Quarter Earnings
Fiscal 2022 Second Quarter Earnings March 23, 2022 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not historical are considered “forward-looking statements” and are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. Those factors are contained in
Slide 3: Strategy Update – Announced ASCEND
Strategy Update – Announced ASCEND ASCEND Transformation Program ▪ Completed a deep-dive review of the business and markets, where we looked at all aspects of our business ▪ Spent the last several months evaluating commercial opportunities, operations and footprint, support functions and organizatio
Slide 4: ASCEND Initiatives
ASCEND Initiatives ASCEND has three key broad initiatives: 1 Accelerating organic growth go- 2 Improving operational excellence 3 Driving greater efficiency and to-market strategies and production efficiency by productivity in SG&A by better utilizing a Lean approach leveraging resources to create a
Slide 5: Strategy Update – Announced Share Repurchase
Strategy Update – Announced Share Repurchase Share Repurchase Program ▪ Board of Directors has approved a new share repurchase program of up to 10 million shares, which replaces the previous program that was paused during COVID-19 ▪ Reauthorization and intent to repurchase shares remains an importan
Slide 6: Market Update
Market Update Overview ▪ Strong top line, breaking our typical Q2 seasonality driven by broad based improvement in demand ▪ Continued to actively manage supply chain and logistics challenges ▪ Took previously announced pricing actions in January to offset on-going inflationary pressures ▪ COVID chal
Slide 7: Regional Update
Regional Update Americas / Europe ▪ Another quarter of solid year-over-year core growth in the Americas ▪ Modest year-over-year core sales growth in Europe ▪ Key Verticals ▪ General industrial markets showed solid signs of activity in North America; Power Generation and Rail were also favorable ▪ In
Slide 8: Regional Update
Regional Update Middle East/North Africa/Caspian (MENAC) ▪ Solid year-over-year core growth ▪ Spike in oil & gas activity due to underinvestment the past few years ▪ Maintenance work on certain sites is being pushed out to leverage the high oil prices ▪ COVID related travel restrictions remain in so
Slide 9: Second Quarter 2022 Comparable Results
Second Quarter 2022 Comparable Results (US$ in millions except EPS) 13.4% NET SALES $131 $137 12.0% • Core sales growth of 16% $121 9.5% • IT&S product sales 15% • Other product 35% • Service 13% • Unfavorable impact of FX ~$3M ADJUSTED EBITDA* Q2 2021 Q1 2022 Q2 2022 Q2 2021 Q1 2022 Q2 2022 • Incre
Slide 10: Net Sales Waterfall
Net Sales Waterfall* (US$ in millions) $140 $135 $3.3 $136.6 $3.3 $130 We remain encouraged $11.9 by the level of product $125 volume that we saw during the quarter as our end markets $120 continue to recover, $2.6 $120.7 despite on-going supply chain and logistical $115 challenges $110 $105 Q2 FY21
Slide 11: IT&S Product Net Sales
IT&S Product Net Sales IT&S Total Product Net Sales (including Acquisitions from date of purchase) With continued (excluding Strategic Exits) strong demand, 2015-2019 (pre-COVID) 2022 Actual we broke our normal Q2 seasonal trend Millions ($) this quarter, with Q2 net sales exceeding Q1 Sep Oct Nov D
Slide 12: Adjusted EBITDA Waterfall
Adjusted EBITDA Waterfall* (US$ in millions) $24 $22 $0.3 $2.0 $2.5 $20 $1.3 Adjusted EBITDA $18 $3.0 benefited primarily $7.1 from higher volume, $16 $16.4 price/mix/cost and $14 lower SG&A partially $12 offset by the year- $0.3 over-year decrease $10 $11.5 12.3% in service 13.3% $8 mix/utilization
Slide 13: Operations Update
Operations Update Supply Chain ▪ Supply chain challenges continued during the second quarter; prior to crisis in Ukraine, saw some signs of improvement ▪ Russia/Ukraine conflict has created incremental supply chain concerns ▪ Electrical component shortages continued and expected to remain a large fa
Slide 14: Liquidity – Positioned for Success
Liquidity – Positioned for Success (US$ in millions) $8 $210 $133 $127 2.1 $1 $175 $175 $115 Q2 2021 Q1 2022 Q2 2022 0.7 0.6 $(8) Q2 2021 Q1 2022 Q2 2022 Q2 2021 Q1 2022 Q2 2022 Q2 2021 Q1 2022 Q2 2022 Free Cash Flow Cash Balance Gross Debt TTM Financial Leverage* Free Cash Flow (FCF) Leverage • Inc
Slide 15: Expectations for Fiscal 2022
Expectations for Fiscal 2022 Updating our Fiscal 2022 Full Year Guidance: ▪ Net Sales in the range of $560 million to $580 million We continue to be ▪ Nearly half of the change due to the strengthening of the US Dollar cautious as we enter the back half of fiscal ▪ Challenging macroeconomic environm
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: Second Quarter 2022 GAAP vs Non-GAAP Reconciliation
Second Quarter 2022 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) Less Senior Impairment & Business Leadership Restructuring Divestiture Review Transition Other Tax GAAP Charges Charges Charges Charges Adjustments Adjusted Sales $136.6 $136.6 Operating Profit $4.5 ($1.8) ($1.1) ($2.5)
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA Free Cash Flow Q2 Q2 2022 2021 Q2 Q2 Net Earnings $2 $4 0 2022 2021 Net Financing Costs $1 $1 Cash From Operations $ 9 $ 5 Income Taxes $1 $0 Capital Expenditures $ (2) $ (4) Depreciation & Amortization $5 $6 Other $ - $ - Free Ca
Slide 20: Adjusted Operating Profit Waterfall
Adjusted Operating Profit Waterfall* (US$ in millions) $20 $18 Adjusted $1.8 Operating Profit $16 $0.4 $2.5 primarily benefited from $14 $1.3 $3.0 higher volume, $7.1 price/mix/cost $12 and lower SG&A partially offset by $11.7 $10 the year-over- year decrease in $8 service mix/utilization and an inc
Slide 21: Enerpac Tool Group
ENERPAC (7) TOOL GROUP