Greenbrier Companies, Inc. (the) · NYSE:GBX
Greenbrier Companies, Inc. (the) — The Greenbrier Companies — 16th Annual TD Cowen Global Transportation Conference (September 2023)
47 slides from Greenbrier Companies, Inc. (the)'s conference presentation, September 2023
Slide 1: 16th Annual TD Cowen Global Transportation Conference
NYSE: GBX 16th Annual TD Cowen Global Transportation Conference September 2023
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
Forward Looking Statements & Non-GAAP Financial Measures This presentation and the accompanying oral presentation contain forward-looking statements, including statements that are not purely statements of historical fact. The Greenbrier Companies, Inc. (the “Company,” “we,” “us” or “our”) uses words
Slide 3: An Established Industry Leader
An Established Industry Leader Proven history of delivering strong performance Strategically positioned for growth
Slide 4: The Greenbrier Companies is a leading railcar manufacturer and lessor
The Greenbrier Companies is a leading railcar manufacturer and lessor LTM railcar Railcars in lease ~24,800 deliveries ~12,500 fleet Revenue visibility Strong financially Recurring revenue(1) available $2.9bn backlog ~$665mn liquidity 44% growth Note: Figures as of May 31, 2023 (1) Measured against
Slide 5: Delivering value to our customers throughout railcar life cycle
Delivering value to our customers throughout railcar life cycle Produce virtually all Greenbrier has a fleet of types of railcars for the ~12,500 (1) railcars in North American, North America, covering European and Brazilian Railcar Railcar numerous car types markets. Manufacturing Leasing which ser
Slide 6: Depth of customer relationship
An illustrative example of how we act as a complete solutions provider to our customers Depth of customer relationship Wheels & Incremental Benefits Maintenance + Parts Syndication of railcars to + Services customer Management + Services Purchase of secondary market railcars from customer Manufactur
Slide 7: Greenbrier has a leading position in each of its geographic end markets
Greenbrier has a leading position in each of its geographic end markets North American Backlog Share of Brazilian Production European Wagon Building Capacity 3% 8% 5% 12% 22% 21% 4% 5% 3% 4% 99% 33% 51% 93% 30% 26% 54% 7+ Small 76% 77% 78% builders, 30% Top 5, excl. GBX, 46% 45% 49% 50% 41% 34% Gree
Slide 8: Leadership position across all major product types in North America
Greenbrier has a leadership position across all major product types in North America Description GBX RAIL TRN NSC UTLX Auto Rack Boxcar Refrigerated Flatcar Covered Hopper Gondola Intermodal Open-Top Hopper Tank Car Primary Position Secondary Position 8
Slide 9: Our Management Services business delivers comprehensive service to lessor customers
Our Management Services business delivers comprehensive service to lessor customers ~421,000 assets currently under management (1) Customers include railroads, industrial shippers, investors, operating lessors Keep asset within repair & maintenance rules and fit for service Manages railcar Manages t
Slide 10: Maintenance services network provides strategic services to railcar owners
Maintenance services network provides strategic services to railcar owners 20 Production Facilities 491,000 maintenance hours annually 310,000 wheelsets and 90,000 axles annually 42,000 parts/units annually 10
Slide 11: Leasing is integral to the ongoing success of our business
Leasing is integral to the ongoing success of our business Maintain & Originate Manufacture Hold Syndicate Manage Strong origination Greenbrier Railcars reside on Railcars aggregated Long term capabilities and Manufacturing the balance sheet, and sold to 3rd management fees disciplined builds railca
Slide 12: Our integrated business model leads to multiple client touchpoints
Our integrated business model leads to multiple client touchpoints & revenue opportunities RAILCAR ORDERS DELIVERIES AFTERMARKET REPAIRS & MANUFACTURING CAPACITY MAINTENANCE DIRECT DIRECT BUYERS BUYERS LONG TERM FLEET Long-lived asset creates cash flows LONG TERM while building equity FEES LESSEES G
Slide 13: Superior lease origination capability is a key enabler
Greenbrier’s superior lease origination capability is a key enabler to our business Manufacturing Order Breakdown(1) 23% 20% 37% 41% 42% 77% 80% 63% 59% 58% 2019 2020 2021 2022 YTD 2023 Direct Sales Leased Railcars 13 (1) Nine months through May 31, 2023
Slide 14: Strong foundation for continued growth of lease fleet
Strong foundation is in place for the continued growth of Greenbrier’s lease fleet (1) Lease Types 12,500 4.1 Yrs railcars avg. remaining term 1% 22% ~$1.0Bn 126 net book value # of customers 76% 7.9 Yrs 98.6% avg. railcar age fleet utilization Full service Net lease Offlease (1) As of May 31, 2023
Slide 15: A high-quality portfolio of railcars with diversification
A high-quality portfolio of railcars with diversification across car types and commodities Lease Fleet Railcars by Age (1) Lease Fleet Railcar Types (1) 8.4k 39% 21% 28% 12% 1.2k 0.7k 1.2k 0.2k 0.4k 0.1k 0.2k 0-5 6-10 11-15 16-20 21-25 26-30 31-35 >35 Covered Hopper Box/Flat/Auto Tank OTH/Gondola Ye
Slide 16: An Established Industry Leader
An Established Industry Leader Proven history of delivering strong performance Strategically positioned for growth
Slide 17: Proven history of growing EBITDA through cycles
Proven history of growing EBITDA through cycles; current trough is 2.7x prior trough average Adjusted EBITDA ($ millions) 2.7x higher than $474 ’09 – ’10 trough $434 average EBITDA $318 $332 $317 $310 $291 $254 $231 $161 $163 $145 $129 $112 $113 $103 $90 $76 $64 2005 2006 2007 2008 2009 2010 2011 20
Slide 18: Railcar backlog provides strong visibility into capacity requirements
Railcar backlog has historically provided strong visibility into capacity requirements Greenbrier New Railcar Backlog $4.0 $160 $3.5 $160 $3.5 $3.0 $3.2 $3.3 $160 $2.8 $2.8 $2.9 $2.5 $2.7 $159 $2.0 $2.4 $159 $1.5 $159 $1.0 $159 $0.5 $159 $0.0 $158 2016 2017 2018 2019 2020 2021 2022 3Q23 Backlog Valu
Slide 19: Demonstrated track record of generating significant margin dollars
Demonstrated track record of generating significant margin dollars Consolidated Revenue ($ millions) Consolidated Margin ($ millions) $3,877 $442 $366 $353 $3,034 $2,978 $2,792 $306 $232 $1,748 2019 2020 2021 2022 LTM 2019 2020 2021 2022 LTM 5/31/23 5/31/2023 Consolidated Revenue 10-year Average Con
Slide 20: Focused on growth in segments that drive aggregate gross margins
We are focused on growth in segments that drive aggregate gross margins Contribution of non-Manufacturing Activities to Consolidated Margin 6.3% 4.4% 4.2% 4.0% 3.9% 3.2% 2018 2019 2020 2021 2022 LTM 5/31/23 20
Slide 21: Leasing & Management Services consistently improving financial performance
Leasing & Management Services achieving consistently improving financial performance Segment Margin Segment Margin % $128 70% 66% 68% $105 55% $92 $86 31% $49 2019 2020 2021 2022 LTM 5/31/23 2019 2020 2021 2022 LTM 5/31/23 21
Slide 22: Actions to improve performance of maintenance services
Actions we have undertaken to improve performance of maintenance services ✓ Rationalizing network capacity to eliminate Maintenance Services Margin % underperformers ✓ Standardizing operating processes 9% ✓ Investing in training and workforce development 7% 7% ✓ Investing in locations to minimize 6%
Slide 23: An Established Industry Leader
An Established Industry Leader Proven history of delivering strong performance Strategically positioned for growth
Slide 24: Strategic Initiatives
Strategic Initiatives 1 2 3 4 Capitalize on Continued Balanced Growth of healthy market manufacturing approach to recurring demand excellence capital allocation revenue 24
Slide 25: Railcar demand expected to approximate replacement demand
Railcar demand is expected to approximate replacement demand over the next several years North American Railcar Deliveries 47,940 40,735 38,925 38,350 36,225 33,417 33,850 29,280 2020 2021 2022 2023F 2024F 2025F 2026F 2027F Tanks Covered Hoppers Other Source: FTR, RSI, August 2023 25
Slide 26: Our strategy aligns with the evolving nature of railcar ownership
Our business strategy aligns well with the evolving nature of railcar ownership 25% 16% 47% 57% 19% 17% 9% 10% (2012) (2022) (2012) (2022) (2012) (2022) (2012) (2022) RAILROADS LESSORS SHIPPERS TTX POOL • Overall ownership continues • Shift from RR and shipper- • Shipper ownership share • Overall ma
Slide 27: Strong demand from Europe due to aging fleet and Green Deal
Strong demand from Europe due to aging fleet and requirements to meet Green Deal targets European Fleet Age vs NA Estimated Annual Freight Wagon Demand (# of wagons) 1,600,000 678,000 22,000 Estimated 2023 deliveries > 30 years 22% 38% 10,000 20 - 30 years 21% 12,000 23% < 20 years 57% 39% NA Europe
Slide 28: Capacity rationalization creates $15 - $20 million in annual savings
Capacity rationalization creates $15 - $20 million in annual savings on an ongoing basis We are taking steps to optimize our manufacturing footprint. Ongoing annual savings of $15 - • Production footprint and capacity optimization for more stable demand environment $20 million • Will evaluate additi
Slide 29: Cost optimization leverages vertical integration from ARI acquisition
Cost optimization leverage the vertical integration gained through the ARI acquisition We are leveraging our vertical integration…. Optimizations • Making vs buying components will save create $50 - $55 costs and help us control our supply chains million of annual • Initially focused in Mexico savin
Slide 30: Disciplined approach to capital allocation
Disciplined approach to capital allocation • Preserve strong liquidity position 1 Maintain Strong Balance Sheet • Structure debt facilities to align with business • Reduce non-leasing debt • Investing in our long-term lease fleet to increase recurring 2 Drive Through Cycle Earnings revenue and smoot
Slide 31: Strong liquidity supported through syndications and leased railcar sales
Strong liquidity supported through syndications and leased railcar sales Fleet Proceeds & Syndication Liquidity Total Liquidity ($ millions) ($ millions) $920 $86 $835 $816 $703 $703 $666 $188 $690 $665 $641 $147 $436 $448 $404 $477 $311 $344 $834 $214 $208 $647 $543 $330 $380 $321 $263 2018 2019 20
Slide 32: No near-term debt maturities
No near-term debt maturities & ~94% of debt is fixed at an average rate of 3.7% $374 $284 $244 $219 $119 $48 2023 2024 2025 2026 2027 2028 2029 2024 Convert. Note Leasing Warehouse GBX Term Loan Leasing Term Loan 2028 Convert. Note ABS Notes 32
Slide 33: Corporate recourse debt will be materially reduced
Corporate recourse debt will be materially reduced over the next several years Recourse vs. Non-Recourse Debt Leasing Fleet Debt & Leverage(1) $1,000 81% $976 $941 900 ,000 85% $854 800 ,000 75% $765 700 ,000 65% $671 $587 600 ,000 46% $336 55% $338 500 ,000 45% $268 $307 $197 $195 400 ,000 $198 35%
Slide 34: Recurring revenue has grown by ~44%, expected to double
Recurring revenue has grown by ~44%, and we expect it to double in the next five years Owned Fleet Managed Fleet (1) Recurring Revenue ($Mn) ~ 421,000 12,500 390,000 $119 9,400 $83 2019 as of 5/31/23 2019 as of 5/31/23 2019 LTM 5/31/2023 (1) Includes owned and managed fleet 34
Slide 35: Long-term targets presented at April 2023 Investor Day
Long-term targets presented at Greenbrier’s inaugural April 2023 Investor Day 35
Slide 36: Appendix Slides
APPENDIX SLIDES
Slide 37: We are driven by our values and commitments to stakeholders
We are driven by our values and commitments we have made to our stakeholders 2022 ESG Report highlights: • Advances ESG strategy which is built on a five- pillar foundation based on 2021’s materiality assessment • Focuses on pillars of Safety & Quality, People, Environmental Sustainability, Governan
Slide 38: We strive to be the standard setter in the freight transportation industry
We strive to be the standard setter in the freight transportation industry 38
Slide 39: Greenbrier's Human Capital Management
Greenbrier’s Human Capital Management integrates with our broader objectives Safety Incident Rate 1.09 100% DART Rate .95 Employee Resource Groups 72% 95% 7 * *Source: Source:Association AssociationofofAmerican AmericanRailroads Railroads Participation Rate of DEI Training at U.S. Production Sites E
Slide 40: Policy advocacy to protect & promote growth of freight rail
Policy advocacy to protect & promote model growth of freight rail Regulatory Agencies, Trade Associations & Coalitions Congress & The Administration AAR Interchange Agreement are the “rules of the railroad.” Both ▪ Engage Congress on vital legislative and regulator and trade association. executive a
Slide 41: Income Statement Highlights
Income Statement Highlights Revenue ($ millions) Adjusted EBITDA ($ millions)(1) Adjusted Diluted EPS(1) $1,122.0 $1,038.1 $1.02 $950.7 $97.9 $96.9 $0.99 $88.8 $793.5 $766.5 $0.60 $48.6 $48.7 $0.09 $0.05 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Second consecutive qu
Slide 42: Key Operational Metrics
Key Operational Metrics Backlog(1) Deliveries(1) Syndicated Deliveries 2,200 30,900 7,600 29,500 28,300 6,600 25,900 23,400 5,800 5,200 4,800 1,300 800 800 300 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Backlog trend reflects non-linear order activity and production o
Slide 43: Balance Sheet & Cash Flow Trends
Balance Sheet & Cash Flow Trends Net Capex & Invest. in Operating Cash Flow Net Funded Debt(2) Unconsolidated Affiliates(1) $178.0 $127.9 $1,349.3 $1,298.1 $159.1 $1,277.6 $97.6 $1,077.3 $1,043.8 $532.8 $69.6 $62.2 $43.7 $43.0 $765.3 ($108.1) 3Q22 4Q22 1Q23 2Q23 3Q23 ($255.5) 3Q22 4Q22 1Q23 2Q23 3Q2
Slide 44: Annual Adjusted EBITDA Reconciliation
Annual Adjusted EBITDA Reconciliation Reconciliation of Net Earnings (loss) to Adjusted EBITDA (In millions) Year Ending August 31, LTM 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 5/31/2023 Net earnings (loss) $29.8 $39.0 $18.5 $14.2 ($57.9) $8.3 $8.4 $6
Slide 45: Quarterly Adjusted EBITDA Reconciliation
Quarterly Adjusted EBITDA Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (Loss) to Adjusted EBITDA (In millions, unaudited) Quarter Ending May 31, Aug. 31, Nov. 30, Feb. 28, May. 31, 2022 2022 2022 2023 2023 Net earnings (loss) $7.6 $29.4 ($17.3) $36.8 $26.7 Interest and forei
Slide 46: Quarterly Adjusted Diluted EPS Reconciliation
Quarterly Adjusted Diluted EPS Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (Loss) Attributable to Greenbrier to Adjusted Net Earnings (In millions, except per share amounts, unaudited) Quarter Ending May 31, Aug. 31, Nov. 30, Feb. 28, May. 31, 2022 2022 2022 2023 2023 Net e
Slide 47: 16th Annual TD Cowen Global Transportation Conference
NYSE: GBX 16th Annual TD Cowen Global Transportation Conference September 2023