Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Q1 2020 Earnings Presentation
18 slides from Enerpac Tool's earnings presentation, Dec 19, 2019
Slide 1: Fiscal 2020 First Quarter Earnings
Fiscal 2020 First Quarter Earnings December 19, 2019 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: A Global Leader in Industrial Tools and Services
A Global Leader in Industrial Tools and Services Global leader in high 110 Menomonee Falls, WI ~2,600 100+ 90+ precision tools, controlled YEARS OF HEADQUARTERS EMPLOYEES MANAGEMENT TEAM # OF COUNTRIES force products and HISTORY YEARS EXPERIENCE PRODUCTS SOLD INTO solutions for precise heavy lifting
Slide 4: Executing on Our Strategy
Executing on Our Strategy Goal of enhancing Enerpac’s position as a premier industrial tools and services company and its commitment to sustainable Invest in Ourselves to Disciplined M&A within shareholder value creation Drive Organic Growth Tool Space Continued NPD Growth Active Pipeline Reduce
Slide 5: Clear Value Creation Model – 5 Year Vision
Clear Value Creation Model – 5 Year Vision CORE GROWTH ABOVE MARKET DRIVING EFFICIENCY AND PROFITABILITY ~5% CORE GROWTH CAGR OR ~25% EBITDA MARGINS 200-300bps CORE SALES GROWTH > MARKET 35%-45% incremental Completion of service & margins product line restructuring Product innovation Commerc
Slide 6: First Quarter 2020 Comparable Results
First Quarter 2020 Comparable Results (US$ in millions except EPS) NET SALES* 13.3% • Core sales were flat $159 12.3% • IT&S sales (1%) $147 • General indicators of regional market softness • Cortland +12% • Continued growth of medical sales • New Product Development (NPD) – 3 new products launched
Slide 7: Net Sales Waterfall
Net Sales Waterfall* (US$ in millions) $160 $159 $2 $10 $155 Planned strategic exits, the stronger dollar, and general market softness resulted in lower sales year-over-year $150 We saw stabilization in Europe and growth in Middle East service $1 along with Cortland $1 $147 $1 medical $145 $140 Q1 '
Slide 8: Adjusted EBITDA Waterfall
Adjusted EBITDA Waterfall* (US$ in millions) $22 $21 $0.6 Adjusted EBITDA $0.8 was flat year-over- $0.5 year due to savings $20 $0.1 $0.5 from restructuring $1.2 $0.5 and strategic exits $19.4 $0.4 $19.4 offset by reduced $19 volume and mix 12.3% 13.3% $18 $17 $16 Q1 '19 FX Restructuring Strategic M
Slide 9: Balance Sheet - Leverage Continues to Improve
Balance Sheet - Leverage Continues to Improve (US$ in millions) $36 • Improvement in use of cash in Q1 fiscal 2020 vs Q1 fiscal 2019 $25 (including 2 months of EC&S) • Lower working capital build • Lower incentive compensation payment • Q1 cash balance $207 million • EC&S proceeds used to pay off te
Slide 10: Strategic Vision: Achieving EBITDA Margin Expansion
Achieving EBITDA Margin Expansion – Next 5 Years Fiscal 2019 Fiscal 2020 Fiscal 2021-2024 Incremental Profit EBITDA ~25% Incremental Profit on on Growth Growth Footprint Optimization ~275-325bps** Based on actions taken Restructuring Run Rate / Strategic Vision in fiscal 2020-2024 Structural ~150-
Slide 11: Industry Dynamics
Industry Dynamics Core Sales Expectations • General economic factors Core Growth FY 2020 – Moderate improvement in Composite PMI – Euro area remains the weakest Industrial Tools (1%) – 3% – Trade issues creating volatility Service (9%) – (5%) • Industrial Tools & Services – Weaker demand vs. 2019 in
Slide 12: Guidance Assumptions
Guidance (US in millions except EPS) Full Year Guidance for Fiscal 2020* Net sales of $575 to $600 million Full Year Adjusted EBITDA of $94 to $104 million 2020E Adjusted diluted EPS of $0.68 to $0.81 Net Sales $575-$600 Free cash flow of $50 to $75 million Adj. EBITDA* $94-$104 Adj. Diluted
Slide 13: Q&A
Q&A
Slide 14: Appendix
Appendix ee = s geet s ~ ok iaitee
Slide 15: Adjusted Operating Profit Waterfall
Adjusted Operating Profit Waterfall* (US$ in millions) $17 $16 $0.8 Adjusted Operating $1.2 Profit was flat year- $15 $0.9 $0.8 $0.6 $0.5 over-year due to $0.4 $15.0 $14.9 $0.1 savings from $14 restructuring and strategic exits offset by reduced volume $13 and mix $12 $11 $10 Q1 '19 FX Strategic Pro
Slide 16: First Quarter 2020 GAAP vs Non-GAAP Reconciliation
First Quarter 2020 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) Less Net Impairment & Accelerated Divestiture Restructuring Debt Issuance GAAP Gains Charges Costs Adjusted Sales $146.7 $146.7 Operating Prof it $14.4 $1.4 ($2.0) $0.0 $15.0 Interest Expense $6.7 $0.0 $0.0 $0.6 $6.1 Inc
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA Free Cash Flow Q1 Q1 2020 2019 Q1 Q1 Net Earnings $6 ($16) 0 2020 2019 Net Financing Costs $6 $7 Income Taxes $1 $0 Cash From Operations $ (23) $ (29) Depreciation & Amortization $5 $5 Capital Expenditures $ (5) $ (8) Restructurin
Slide 18: Tool Group
TOOL GROUP e ) < Oo of Ww 2 Ww