Slide 1: Fourth Quarter 2021 Earnings Conference Call
Tom Deitrich – President and Chief Executive Officer Joan Hooper – Senior Vice President and Chief Financial Officer Kenneth Gianella – Vice President, Investor Relations Fourth Quarter 2021 Earnings Conference Call February 28, 2022 ©2022 ITRON PROPRIETARY ©2022 ITRON PROPRIETARY Q4 2021 Earnings C
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain matters in this presentation and being discussed today, that are not statements of historical fact, constitute forward-looking statements relating to current or future financial performance, management's plans and objectives for future operations, product plans and
Slide 3: Conference Call Agenda
CONFERENCE CALL AGENDA » CEO – Business and Operations Update » CFO – Financial Results and 2022 Guidance » Q&A
Slide 4: Record Breaking Bookings and Backlog
RECORD BREAKING BOOKINGS AND BACKLOG » Record: Q4’21 bookings of $1.1B $4.0 $3.4 $3.5 $3.4 $3.3 » Record: FY’21 bookings of $2.8B » Book to bill of 2.2 in Q4 and 1.4 for FY’21 $1.4 $1.5 $1.3 $1.4 $1.2 » Record: Ending backlog of $4.0B Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 » Record: 12-month backlog of $1.5B
Slide 5: Operational Insights
OPERATIONAL INSIGHTS » Strong customer demand offset by component constraints continuing in 1H’22 » Full year 2021 revenue impact of approximately $225M » Anticipate semiconductor constraints to continue at similar levels through 1H’22 » Actively working price / cost actions » Closing the Price / Co
Slide 6: Q4'21 and FY'21 Performance Summary
Q4’21 AND FY’21 PERFORMANCE SUMMARY » Revenue in Q4’21 of $486 million and FY’21 of ~$2.0 billion » Adjusted EBITDA in Q4’21 of $3 million and FY’21 of $115 million » Non-GAAP diluted EPS in Q4’21 of $0.75 and FY’21 of $1.75 » Free cash flow in Q4’21 of $7 million and FY’21 of $120 million » Booking
Slide 7: Consolidated GAAP Results: Q4'21
CONSOLIDATED GAAP RESULTS: Q4’21 $ in millions (except per share amounts) Q4 2021 Q4 2020 Change Revenue $485.6 $525.2 -8% Change in constant currency -6% Gross margin 25.0% 28.3% -330 bps Operating income (loss) ($107.5) $32.6 NM Net income (loss) attributable to Itron, Inc. ($58.9) $21.5 NM Earnin
Slide 8: Consolidated Non-GAAP & Cash Results: Q4'21
CONSOLIDATED NON-GAAP & CASH RESULTS: Q4’21 $ in millions (except per share amounts) Q4 2021 Q4 2020 Change Non-GAAP operating income (loss) ($6.6) $43.6 NM Non-GAAP operating margin (1.4%) 8.3% NM Non-GAAP net income attributable to Itron, Inc. $34.1 $26.3 +30% Adjusted EBITDA $3.2 $55.5 -94% Adjus
Slide 9: Revenue Year-Over-Year Bridge: Q4'21
REVENUE YEAR-OVER-YEAR BRIDGE: Q4’21 -13% -4% +4% -6% Chart in Millions, Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q4 2021 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-Over-Year Bridge: Q4'21
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q4’21 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q4 2021 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q4'21
DEVICE SOLUTIONS SEGMENT: Q4’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 16% and 13% in constant currency $186 » Component shortages resulted in unfulfilled customer demand $157 » Tough compare due to catch up on shipments in prior year 11.8% Gross margi
Slide 12: Networked Solutions Segment: Q4'21
NETWORKED SOLUTIONS SEGMENT: Q4’21 Revenue, gross margin and operating margin $ in Millions, actual currency $277 Revenue down 5% and 4% in constant currency $265 » Component shortages resulted in unfulfilled customer demand » Partially offset by ramp of new deployments 36.2% 30.2% Gross margin down
Slide 13: Outcomes Segment: Q4'21
OUTCOMES SEGMENT: Q4’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue up 4% as reported and in constant currency $61 $64 » Increase in software and professional services 42.9% 42.6% Gross margin down 30 bps » Impact from mix Operating margin down 450 bps 29.6% » H
Slide 14: Full Year 2021 Summary
FULL YEAR 2021 SUMMARY Revenue Year-Over-Year Bridge1 (in constant currency) » 2021 results impacted by component shortages » Revenue of ~$2.0B down 9% from 2020 » Down 10% in constant currency » Gross margin of 28.9% Non-GAAP EPS Year-Over-Year Bridge1 » Adj EBITDA of $115M » Non-GAAP EPS of $1.75
Slide 15: Debt and Liquidity Overview: Dec 31, 2021
DEBT AND LIQUIDITY OVERVIEW: DEC 31, 2021 Debt US$M » Net leverage 2.5x at end of Q4’21 $460 » Zero interest convertible notes Free Cash Flow and Liquidity $288 » Q4 Free cash flow of $7M » Cash and equivalents of $172M 2 » $500M revolver Share repurchase authorization Total Debt 1 Net Debt 2 » Effe
Slide 16: 2022 Guidance
2022 GUIDANCE » Revenue of $2.0 – $2.1 billion » ~3+% growth at the midpoint (~8% normalized for sale of business) » Non-GAAP diluted EPS of $1.25 – $1.75 » ~50+% growth at the midpoint (normalized @ 25% tax rate for both years) Assumptions: o Euro/USD of $1.14 o Effective non-GAAP tax rate of ~25%
Slide 17: Appendix
APPENDIX
Slide 18: Consolidated GAAP Results: FY'21
CONSOLIDATED GAAP RESULTS: FY’21 $ in millions (except per share amounts) FY 2021 FY 2020 Change Revenue $1,981.6 $2,173.4 -9% Change in constant currency -10% Gross margin 28.9% 27.7% +120 bps Operating income (loss) ($79.3) ($10.4) NM Net income (loss) attributable to Itron, Inc. ($81.3) ($58.0) -
Slide 19: Consolidated Non-GAAP & Cash Results: FY'21
CONSOLIDATED NON-GAAP & CASH RESULTS: FY’21 $ in millions (except per share amounts) FY 2021 FY 2020 Change Non-GAAP operating income $75.6 $132.1 -43% Non-GAAP operating margin 3.8% 6.1% -230 bps Adjusted EBITDA $115.2 $178.4 -35% Adjusted EBITDA margin 5.8% 8.2% -240 bps Non-GAAP net income attrib
Slide 20: Revenue Year-Over-Year Bridge: FY'21
REVENUE YEAR-OVER-YEAR BRIDGE: FY’21 -10% -13% +4% -10% Chart in Millions. Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q4 2021 Earnings Conference Call | 20
Slide 21: Non-GAAP EPS Year-Over-Year Bridge: FY'21
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: FY’21 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q4 2021 Earnings Conference Call | 21
Slide 22: Device Solutions Segment: FY'21
DEVICE SOLUTIONS SEGMENT: FY’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 7% and 10% in constant currency $694 » Component shortages resulted in unfulfilled customer demand $645 15.4% Gross margin up 290 bps 12.5% » Favorable product mix » Lower manufactu
Slide 23: Networked Solutions Segment: FY'21
NETWORKED SOLUTIONS SEGMENT: FY’21 Revenue, gross margin and operating margin $ in Millions, actual currency $1,249 Revenue down 13% as reported and in constant currency $1,093 » Component shortages resulted in unfulfilled customer demand » Timing of project completions 34.6% 34.7% Gross margin up 1
Slide 24: Outcomes Segment: FY'21
OUTCOMES SEGMENT: FY’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue up 6% and 4% in constant currency $244 » Increase in software license sales $230 » Higher managed and professional services 35.8% 39.0% Gross margin up 320 bps » Favorable solutions mix » Increa
Slide 25: Revenue: FX Impact Summary
REVENUE: FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.14 Q4’21 vs $1.19 Q4’20 $1.18 FY’21 vs $1.14 FY’20 YoY YoY YoY Change YoY Change Revenue Q4'21 Revenue FY'21 Change Excluding Change Excluding FX FX Device Solutions $157.1 -15.7% -13.2% Device Solutions $645.1 -7.0% -10
Slide 26: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non- GAAP financial measures, including non-GAAP operating expense, non-GAAP operati
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q4 2021 Earnings Conference Call | 27
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q4 2021 Earnings Conference Call | 28
Slide 29: Thank You
INVESTOR RELATIONS CONTACTS Kenneth P. Gianella Vice President, Investor Relations 669-770-4643 ken.gianella@itron.com David Means Director, Investor Relations 737-242-8448 david.means@itron.com Rebecca Hussey Manager, Investor Relations Thank You 509-891-3574 rebecca.hussey@itron.com www.itron.com