Worthington Enterprises, Inc. · NYSE:WOR
Worthington Enterprises — Worthington Industries — Jefferies 2020 Virtual Industrials Conference
27 slides from Worthington Enterprises's conference presentation, Aug 5, 2020
Slide 1: 2020 Jefferies Industrials Conference
ANDY ROSE – PRESIDENT JOE HAYEK – CFO 2020 JEFFERIES INDUSTRIALS CONFERENCE AUGUST 5, 2020
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Worthington Industries wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by the Company which are not historical information constitute "forward looking statements" within the meaning
Slide 3: COVID-19 Pandemic Response Plan
COVID-19 PANDEMIC RESPONSE PLAN Proactive measures taken to ensure a safe workplace, manage operational costs and maintain financial flexibility Health & Safety • Established cross -functional COVID -19 taskforce and implemented governance structure involving regular updates at business unit, corpor
Slide 4: Vision
VISION TO BE THE TRANSFORMATIVE PARTNER FOR OUR CUSTOMERS, A POSITIVE FORCE IN OUR COMMUNITIES AND EARN EXCEPTIONAL RETURNS 4
Slide 5: Net Sales of $3.1 Billion, Fiscal Year 2020
NET SALES OF $3.1 BILLION FISCAL YEAR 2020 7,500 4,500 56 6 5
Slide 6: 83MM Cylinders & Accessories Manufactured
MANUFACTURED 83MM • CYLINDERS & • ACCESSORIES (FY20) SOLD IN 90+ COUNTRIES • • • • • • LARGEST PURCHASER OF FLAT ROLL STEEL BEHIND AUTOMAKERS 6
Slide 7: $3.1B Trailing 12 Month Net Sales
$3.1B TRAILING 12 MONTH NET SALES NET SALES BY END-MARKETS OPERATING/EQUITY INCOME BY SEGMENT TTM* $207.0 MILLION 16% 39% 18% 4% 3% 5% 12% 10% 22% 39% 32% Automotive Construction Industrial Consumer Products Steel Cylinders WAVE / Other / JVs Agriculture Heavy Truck Oil & Gas Equipment Other * Exclu
Slide 8: Profile: Steel Processing
STEEL PROCESSING PROFILE AUTO SALES BY END MARKET TTM 5/31/20 $1.9B Wholly-Owned AGRICULTURE Consolidated JVs Unconsolidated JVs Automotive 53% 27 FACILITIES in North America (8 wholly owned / 19 JV Owned) CORE PRODUCTS CONSTRUCTION Other 15% Carbon flat rolled steel processing - Broad range of meta
Slide 9: Profile: Pressure Cylinders
PRESSURE CYLINDERS PROFILE SALES BY SBU TTM 5/31/20 $1.1B Industrial Products 16 FACILITIES 48% in North America and Europe Oil & Gas Equipment 10% CORE PRODUCTS Consumer Products 42% Industrial Products - Broad line of pressure cylinders and cryogenic vessels, tanks and trailers for industrial gas
Slide 10: Profile: WAVE
WAVE ( 5 0 % J V ) PROFILE CONTRIBUTION TO WI EQUITY INCOME ($M) $78 $71 $54 $33 6 facilities in North America FY05 FY10 FY15 FY20* * FY20 excludes $23.1M gain related to the sale of WAVE’s foreign assets CORE PRODUCTS MARKETS Sustainable revenue and EBITDA OVER growth with creative fabricated Produ
Slide 11: Successful Joint Ventures
SUCCESSFUL JOINT VENTURES Serving automotive and construction end markets OVER • Successful JV portfolio built with trusted partners who help make a $1.0B business better versus the alternative of going solo • JVs managed to produce regular cash dividends that closely approximate earnings in dividen
Slide 12: Growth Strategy
GROWTH STRATEGY Working together using technology, analytics and automation enables us to deliver… Successful innovation, transformation, and acquisitions that drive value for customers and earn exceptional returns for our shareholders. All with Our Philosophy at the center. 1 2
Slide 13: Complementary Value Drivers Are Well Established
COMPLEMENTARY VALUE DRIVERS ARE WELL ESTABLISHED TRANSFORMATION INNOVATION ACQUISITIONS Broad based business system Innovation as a discipline: Focus on the core: focused on: • New product development • Consolidate higher value add markets • Data-driven decision making • Product design & engineering
Slide 14: Value Drivers in Action: Transformation
VALUE DRIVERS IN ACTION: TRANSFORMATION Data driven LEAN events to improve our businesses Example of Transformation project at core steel facility What we did to drive improvements: Issue: Sales & operations planning receiving inaccurate information ✓ Analyzed historical forecasts and shipment data
Slide 15: Value Drivers in Action: Innovation
VALUE DRIVERS IN ACTION: INNOVATION Creating innovative solutions to meet the needs of customers and expand into new markets Cannabis Extraction Cylinders • Need for cleaner alternative to traditional steel 100# tank identified • Voice of customer work conducted to understand need and size opportuni
Slide 16: Value Drivers in Action: M&A
VALUE DRIVERS IN ACTION: M&A Pressure Cylinders has experienced meaningful earnings growth over the past 10 years driven by 16 acquisitions CYLINDERS SALES ($M) CYLINDERS OPERATING INCOME* ($M) $1,149 $81 $1,001 $58 $468 $30 2010 2015 2020 2010 2015 2020 *excludes restructuring and non-recurring cha
Slide 17: Financial Goals
F IN A N CIA L G O A L S • GROW EBITDA & FREE CASH FLOW EVERY YEAR • 10%+ RETURN ON CAPITAL • RAISE MARGINS • REDUCE EARNINGS VOLATILITY • BALANCED CAPITAL ALLOCATION • MODEST LEVERAGE / AMPLE LIQUIDITY (INVESTMENT GRADE) • RIGOROUS CAPITAL DISCIPLINE 1 7
Slide 18: Balanced Capital Allocation Strategy
BALANCED CAPITAL ALLOCATION STRATEGY Strong cash flows and significant liquidity support balanced approach to capital allocation focused on growth and rewarding shareholders OVER $3 BILLION OF CAPITAL DEPLOYED OVER PAST 10 YEARS ✓ Reinvest in the business to create value and support CAPITAL growth (
Slide 19: Consolidated Results
CONSOLIDATED RESULTS $ millions, except EPS FY2018 FY2019 FY2020 Sales $3,582 $3,760 $3,059 Adjusted EBITDA* $397 $330 $300 % of sales 11.1% 8.8% 9.8% Operating Income* $195 $142 $115 % of sales 5.5% 3.8% 3.8% EPS* $3.05 $2.60 $2.39 Avg Invested Capital $1,696 $1,628 $1,532 ROIC (Adj. EBIT/Avg. Inv.
Slide 20: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Worthington offers an attractive investment opportunity despite the current economic environment • Growth strategy focused on value drivers of innovation, transformation and acquisition to enhance margins • Solid free cash flow and ample liquidity to execute on strategy • R
Slide 21: Supplemental Data
4 WORTHINGTON INDUSTRIES SUPPLEMENTAL DATA
Slide 22: Supplemental Data: Adjusted EBITDA / Free Cash Flow
SUPPLEMENTAL DATA CONSOLIDATED ADJUSTED EBITDA / FREE CASH FLOW FY 18 FY 19 FY 20 Annual Annual Annual Net Income $ 194.8 $ 153.5 $ 78.8 Interest Expense 38.7 38.1 31.6 Taxes 8.2 43.2 26.3 EBIT $ 241.7 $ 234.7 $ 136.8 D&A 103.4 95.6 92.7 EBIT DA $ 345.0 $ 330.3 $ 229.4 Restructuring and non recurrin
Slide 23: Supplemental Data: Adjusted Operating Income / EPS
SUPPLEMENTAL DATA CONSOLIDATED ADJUSTED OPERATING INCOME / EPS $ millions, except EPS FY2018 FY2019 FY2020 Operating Income $142 $145 $22 Restructuring and non recurring 54 (3) 93 Operating Income Adjusted $195 $142 $115 EPS $3.09 $2.61 $1.41 Restructuring and non recurring* (0.04) (0.01) 0.98 EPS A
Slide 24: Financials: Steel Processing
S T E E L P R O C E S S I N G FINANCIALS $ millions FY 2018 FY2019 FY2020 Sales $2,253 $2,436 $1,860 Adj. EBITDA* $177 $122 $79 % of sales* 7.9% 5.0% 4.3% Operating Income* $143 $93 $46 excl. Restructuring % of sales 6.3% 3.8% 2.5% Capital Expenditures $32 $39 $41 Avg Invested Capital $510 $550 $512
Slide 25: Financials: Pressure Cylinders
P R E S S U R E C Y L I N D E R S FINANCIALS $ millions FY2018 FY2019 FY2020 Sales $1,206 $1,208 $1,148 Adj. EBITDA* $127 $105 $124 % of sales* 10.6% 8.7% 10.8% Operating Income* $80 $63 $81 excl. Restructuring % of sales 6.6% 5.3% 7.1% Capital Expenditures $33 $38 $41 Avg Invested Capital $914 $879
Slide 26: Meaningful JV Earnings
MEANINGFUL JV EARNINGS Unconsolidated JVs managed to produce regular cash dividends that closely approximate earnings DIVIDEND to WII (CASH FLOW) $ MILLIONS $160 EQUITY EARNINGS* $140 *Excludes Restructuring and $120 $115 $113 Impairment Charges $110 $103 $101 $100 $102 $101 $90 $96 $80 $87 $60 $40
Slide 27: Contact
CONTACT SAFE HARBOR STATEMENT Worthington Industries wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by the Company which are not historical information constitute "forward looking statements" within the
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