Carlisle Companies Incorporated · NYSE:CSL
Carlisle Companies — Investor Day (December 2023)
62 slides from Carlisle Companies's investor day presentation, Dec 7, 2023
Slide 1: Vision
VISION
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
Forward Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally use words such as "expect," "foresee," "anticipate," "believe," "project," "
Slide 3: A Pure-Play Building Products Portfolio
A Pure-Play Building Products Portfolio 3
Slide 4: Carlisle at-a-Glance
Carlisle at-a-Glance Leading supplier of innovative building envelope products and solutions for more energy-efficient buildings ~5,100 ~$4.5B Revenue Mix5 Talented Team Members Revenue1 70% 30% ~24% ~$15 CONSTRUCTION MATERIALS WEATHERPROOFING TECHNOLOGIES Adj. EBITDA Margin1 Adj. EPS1 61% 39% REPLA
Slide 5: Complete Transformation to a Pure-Play Premier Building Products Portfolio
Complete Transformation to a Pure-Play Premier Building Products Portfolio PRE-PIVOT: TODAY: Carlisle was a Diversified Industrial Pure-Play Building Products Portfolio in 2017 Portfolio ~14% ROIC 8% Food Service Products 25%+ ROIC 7% 57% 20% Fluid Technologies 100% Interconnect Building Products Te
Slide 6: Unparalleled Building Products Company in a Class of Its Own
Unparalleled Building Products Company in a Class of Its Own Building Products & Light Commercial 35+ Public companies 20+ $2B+ ~$4.5B COMPANIES Revenue 15%+ 5 FCF / Sales 15%+ 25%+ 1 ROIC 25%+ Note: Public companies include all Russel 3000 companies classified by FactSet as building products, const
Slide 7: Progress Since Vision 2025 Launch
Progress Since Vision 2025 Launch Exceeded Vision 2025 Target ($15+ EPS) Vision 2030 Leverage ESG • Early realization of The “Pivot” Megatrends Vision 2025 Enhanced • Pivot to Building • Roofing systems, • Vision 2030 builds CCM Price M&A Products insulation, and Leverage on record of to Value Proce
Slide 8: Achieved Key Vision 2025 Financial Target
Achieved Key Vision 2025 Financial Target Exceeded GAAP EPS Target 3 Years Earlier than Planned The Carlisle Experience Driving Price for Value $17.58 Innovation Fueling Higher Share of Wallet $15+ Pivot to Pure-Play Building Products Portfolio ROIC-focused Capital Allocation and Enhanced M&A Proces
Slide 9: Compelling Upside on Strong Fundamental Performance Since Launch of Vision 2025
Compelling Upside on Strong Fundamental Performance Since Launch of Vision 2025 in Early 2018 CSL Performance LTM Q3 2023 vs 2017 +257% Long Track Record of +170% +144% Earnings Growth +128% +97% Creates Compelling Investment Opportunity Revenue Adj. EPS Adj. EBITDA Free Cash CSL Stock Flow Performa
Slide 10: Long-Term Record of Double-Digit Earnings Growth Set to Continue
Long-Term Record of Double-Digit Earnings Growth Set to Continue Streamlined business and continued outperformance should drive premium valuation Adj. EPS CAGR Stock Price CAGR 2024 P/E Ratio Carlisle compounded Adj. EPS growth well LTM Q3 2023 vs 2017 Q3 2023 vs 2017 ahead of the S&P 500 20% Discou
Slide 11: Unmatched, Experienced and Expert Led Team
Unmatched, Experienced and Expert Led Team Years of Years with Name Title Experience Carlisle1 Experience Carlisle CEO since 2016, bringing a wealth of experience in building Chris Koch Chair, President & CEO 34 15 products from prior roles at Graco, and HB Fuller, in addition to Board service at Ar
Slide 12: Vision 2030
VISION 2030 CARLISLE,
Slide 13: Vision 2030 Key Messages
Vision 2030 Key Messages Vision 2030 Builds on Record of Success and Strategic Pivot to a Pure-Play Building Products Portfolio Mega Trends Around Energy Efficiency, Labor Savings and Re-roofing Cycle Expanding our Market Opportunity Infrastructure in Place to Invest in Innovation to Achieve Above M
Slide 14: Vision 2030 Key Financial Targets
Vision 2030 Key Financial Targets $40+ ADJ. EPS 25%+ ROIC Mid Teen CAGR Maintain Superior Returns 5%+ 25%+ 15%+ ORGANIC REVENUE CAGR ADJ. EBITDA MARGIN FCF TO SALES Above Market Growth Resilient Performance Cash Generation Engine 14
Slide 15: Vision 2030 Extends Upon Success of Vision 2025
Vision 2030 Carlisle Operating System Extends Upon Success of Vision The Carlisle Experience 2025 with a Returns Driven Innovation-Driven Organic Growth Focus Superior Strategic M&A Returns Disciplined Capital Allocation Exceptional Talent 15
Slide 16: The Strategic Imperatives That Will Enable Our 2030 Vision
The Strategic Carlisle Operating System The Carlisle Experience Innovation Driven Imperatives That Organic Growth Will Enable Our Drive operational excellence across entire Win with customers through exceptional Energy-efficiency and contractor labor 2030 Vision organization to achieve service and l
Slide 17: Continuous Improvement via Carlisle Operating System (COS) Remains Guiding Principle
Continuous Improvement via Carlisle Operating System (COS) Remains Guiding Principle Under Vision 2030, we will continue to: • Ensure consistent applications of COS across every function in the enterprise • Continue to drive operational efficiencies through clear and Creates Lean ambitious metrics V
Slide 18: Contractors Pay us a Premium for the Carlisle Experience
Contractors Pay us Achieved through consistent and exceptional execution across continuous a Premium for the Carlisle customer touch points Experience Because We Product Quality Warranty Support Bring Them Labor-Saving Efficiencies Product Availability Customer Support Technical Support Personal Con
Slide 19: Our Digital Transformation
Our Digital Transformation Bringing the building envelope into the modern world of business Digital Mission for Customers • Access all the solutions needed • Use preferred device • Easily manage business with us • On-demand, any day, any time AI Enhancements to Supply Chain • More accuracy in demand
Slide 20: Carlisle Pricing Journey
Carlisle Pricing Journey Reliable deliveries, superior service models, best-in-class customer service, Innovation complete solutions and innovation drive price premium Carlisle Experience Carlisle Operating System Vision 2025 20
Slide 21: Innovation-Driven Growth and Price Premium Propelled by Energy-Efficient and Labor-Saving Solutions
Innovation-Driven Growth and Price Premium Propelled by Energy-Efficient and Labor-Saving Solutions Investing in R&D and targeted M&A to drive innovation across full suite of products and services Energy Labor Integrated Efficiency Savings Solutions 21
Slide 22: Innovation: Energy Efficiency
Innovation: Energy Efficiency Energy efficiency is critical for building owners Recyclable products for sustainability Regulatory drivers are catalysts 22
Slide 23: Innovation: Labor Savings
Innovation: Labor Savings Labor savings for contractors Labor scarcity and inflation driving need for labor-saving solutions Strengthens relationships with contractors 23
Slide 24: Innovation: System Solutions
Innovation: System Solutions Increase dollars per sq. ft. sold Grow share of wallet Integrated set of system solutions for increasingly smart buildings 24
Slide 25: Vision 2030 Ambition Focuses on Aggressively Pursuing Innovation
Vision 2030 Ambition Focuses on Aggressively Pursuing Innovation Target of ~5x historic R&D spend Supports goal of 25% of revenues from new products R&D spend as a % of revenue New products as % of revenue 3% 25% 15% <1% Carlisle TODAY Carlisle V2030 Carlisle TODAY Carlisle V2030 Note: New products
Slide 26: Comprehensive Energy Efficiency Solutions for Commercial Buildings from the Roof Down
Well Positioned with Comprehensive Energy Efficiency Solutions for Commercial Buildings from the Roof Down HVAC Sealants & Adhesives EPDM Roofing Thermoplastic Membrane Roofing Membrane Increasing demand for more Air & Vapor energy-efficient products to Barrier address >30% Airflow Hardware of globa
Slide 27: Comprehensive Energy Efficiency Solutions for Residential Buildings
And Comprehensive Energy Efficiency Solutions for Residential Buildings Roof Coatings & Sealants Spray Foam Roofing Underlayment HVAC Duct Sealant Water Resistive Barrier, Flashing & Sealant Foundation Waterproofing EPS Insulation 27
Slide 28: Our Industry and Growth Drivers
Our Industry and Growth Drivers 28
Slide 29: Carlisle's Business Model is at Forefront of Secular Mega Trends
Carlisle’s Business Model is at Forefront of Secular Mega Trends STRATEGIC POSITION AVERAGE AGE OF EXISTING Clear Path ROOFS • Leading commercial market share to Achieve DRIVE FOR ENERGY • Investment in innovation driving new, more EFFICIENCY efficient products and solutions NEED FOR LABOR-SAVING SO
Slide 30: Re-roofing is Historically Recession Resilient and Poised to See Tailwinds
Re-roofing is Historically Recession Resilient and Poised to See Tailwinds from 2000s Builds Historical Construction Activity Drives Nondiscretionary Replacement Activity Significant pent-up demand in Peak in new builds poised coming years given the rising 140 to drive R&R demand average age of exis
Slide 31: Increase in Energy Efficiency Building Regulation Supports Key Innovation Focus
Increase in Energy Efficiency Building Regulation Supports Key Innovation Focus Energy-Efficient Commercial Buildings Starts Driving Outsized Growth 9.2% “Green commercial buildings ~65% of Carlisle building product revenues CAGR are expected to Grow at a were from LEED qualified product sales in 20
Slide 32: Industry TAM and the Path to Sustained Above Market Growth
Industry TAM and the Path to Sustained Above Market Growth Robust M&A Innovation 5%+ Expected Organic Revenue ~$70B CAGR Addressable Building Envelope Market The Carlisle Experience 5%+ CSL Share Driven by Above Market Growth Favorable Exposure to Mega Trends 32
Slide 33: Focused M&A Framework with Significant Runway to Expand Building Envelope Offerings
Focused M&A Framework with Significant Runway to Expand Building Envelope Offerings Disciplined M&A approach focused on targets that can bring energy efficiency to owners and labor savings to contractors ~$70 Billion Addressable Building Envelope Market Four Growth Vectors to Building Products M&A ~
Slide 34: Margin Power
Margin Power 34
Slide 35: Attractive Industry and Carlisle's Solid Positioning Drive Superior, Sustainable Margin Power
Attractive Industry and Carlisle’s Solid Positioning Drive Superior, Sustainable Margin Power Attractive VISION 2030 25%+ Industry Carlisle’s Solid ADJ. EBITDA MARGIN Positioning 35
Slide 36: How Carlisle is Driving Superior, Sustainable Margin Power
How Carlisle is Driving Attractive Industry Carlisle’s Solid Positioning Superior, Dependable tailwinds with non-discretionary The Carlisle Experience Sustainable replacement cycle Products backed by Specifier (i.e. architect, contractor) preference best-in-class warranties Margin Power for establis
Slide 37: The Carlisle Experience Drives Consistently Strong Performance Through the Cycle
The Carlisle Experience Drives Consistently Strong Performance Through the Cycle Carlisle building products businesses generate highly resilient Adj. EBITDA over time 30% 27% 23% 23% 21% 25% 21% 20% 19% 18% 18% 20% 17% $5,449 16% 16% 15% 14% 15% 12% $3,837 $3,233 $2,996 $2,880 10% $2,053 $2,336 $1,7
Slide 38: Building Products Margin Resilience Demonstrated in 2023
Building Products Margin Resilience Demonstrated in 2023 Revenue & Segment Adj. EBITDA Margin Resilient 2023E Margin Performance ~27% 27% Expected sales decline in 2023 due to channel destocking, project delays and weather Pricing relatively stable despite mid-to-high teens $5.5B sales decline ~$4.5
Slide 39: Resilient Business Prepared to Win in Any Environment
Resilient Business Prepared to Win in Any Environment Solid Competitive Downside Value Creation Position Actions Opportunities High R&R exposure Leverage Carlisle Experience, Carlisle Above market organic performance Operating System and competitive Carlisle Experience advantages to protect share, p
Slide 40: Sustainability
Sustainability 40
Slide 41: Significant 2022 Milestones on Our Sustainability Journey
Significant 2022 Milestones on Our Sustainability Journey $3.5B 155M 33M In LEED qualified products Megawatt hours of energy saved on Metric tons of CO2 emission avoided manufactured and sold in 2022 product sold based on products sold ~65% of our building product revenues Enough to power 13.8M home
Slide 42: Our Targets, Operational Changes and Innovation are at the Forefront
Energy-Efficient Solutions: Our Targets, Operational Changes and Innovation are at the Forefront Our aspiration: To meet climate targets, there is increasing demand for more energy-efficient products to significantly reduce the >30% of global energy use from buildings Our 3-Pillar Strategy Our Targe
Slide 43: Our People Make All the Difference
Our People Make All the Difference ~5,100 18% Signature Leadership Development Programs Industry Leading Compensation and Benefits Talented Team 15+ Years Members at Carlisle Robust Training and Employee Engagement Personnel Support 20% 29% Women Racially & Ethnically Diverse Collaborative and Team
Slide 44: Two High Performing Segments
Two High Performing Segments 44
Slide 45: Carlisle Construction Materials (CCM) Features a Leading Industry Position
Carlisle Construction Materials (CCM) Features a Leading Industry Position A leader delivering Growth Drivers and Outlook $3.2B 29% premium building $19B addressable market in attractive industry Revenue1 Adj. EBITDA Margin1 envelope solutions Leading market position with repeatable re-roofing Reven
Slide 46: Carlisle Weatherproofing Technologies (CWT) Offers Building Envelope Solutions
Carlisle Weatherproofing Technologies (CWT) Offers Building Envelope Solutions A leader delivering Growth Drivers and Outlook $1.4B 19% premium building $14B addressable market across fragmented Revenue1 Adj. EBITDA Margin1 envelope solutions product categories Revenue Mix through strong Attractive
Slide 47: CWT Segment is Key Contributor to Vision 2030
CWT Segment is Key Contributor to Vision 2030 Financial Above Market Organic Grow Adjusted EBITDA Superior Ambition Revenue Growth Faster than Revenue Returns Levers Share Gain Margin Expansion M&A Drive Sales Effectiveness Footprint Optimization Key Drivers Differentiate with System Solutions Pursu
Slide 48: Global Production Footprint
Global Production Footprint Leading supplier of innovative building envelope products and solutions for more energy-efficient buildings EUROPE Facilities by Type EPDM (7) TPO (3) CCM PVC (1) Polyiso (8) Sealant & Adhesive (3) Metal (11) EPS Insulation (10) CANADA CWT HVAC Products (2) Polyurethane S
Slide 49: Vision 2030 Financial Outlook
Vision 2030 Financial Outlook 49
Slide 50: Best-in-Class Financial Performance With Multi-Year Runway
Best-in-Class Financial Performance With Multi-Year Runway Above market organic revenue growth Vision 2030 Key Financial Targets • Organic growth drivers: Replace & remodel demand, innovation and sustainability, the Carlisle Experience and share gains $40+ 5%+ • M&A upside broadens Carlisle’s buildi
Slide 51: Solid Free Cash Flow Generation and Balance Sheet Strength Driving Strong Returns
Solid Free Cash Flow Generation and Balance Sheet Strength Driving Strong Returns Solid Cash Generation Since 2018 Capital Deployed into Value Creation • Strong FCF / sales produced cumulative FCF of $3.2B Since 2018 • Additional proceeds from sale of non-core businesses 36% Acquisitions Strong Fina
Slide 52: Robust Free Cash Flow Generation to Build on Record of High Return on Capital
Robust Free Cash Flow Generation to Build on Record of High Return on Capital 25%+ Expected Cash Generated Expected Cash Deployment ’24 – ’30E ’24 – ’30E DEPLOYABLE CAPITAL REINVESTMENT ROIC Free Cash Flow 15%+ ACQUISITIONS of sales DIVIDENDS SHARE REPURCHASES 52
Slide 53: Vision 2030 Key Messages
Vision 2030 Key Messages Vision 2030 Builds on Record of Success and Strategic Pivot to a Pure Play Building Products Portfolio Mega Trends Around Energy Efficiency, Labor Savings and Re-roofing Cycle Expanding our Market Opportunity Infrastructure in Place to Invest in Innovation to Achieve Above M
Slide 54: Appendix
Appendix 54
Slide 55: Non-GAAP Financial Metrics
Non-GAAP Financial Metrics This presentation includes the following financial measures that are not presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”): 1. ROIC, which the Company defines as net income excluding income/loss from discontinued
Slide 56: Reconciliation to ROIC
Reconciliation to ROIC Year Ended (in millions) December 31, 2017 Net income (GAAP) $ 365.5 Less: income from discontinued operations (GAAP) 0.2 Income from continuing operations (GAAP) 365.3 Provision for income taxes 102.9 Interest expense, net 34.0 Interest income (0.5) EBIT 501.7 Amortization 84
Slide 57: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS LTM 9/30/2023 Year Ended December 31, 2017 (in millions) Pre-tax Impact After-tax Impact1 Impact to Diluted EPS2 Pre-tax Impact After-tax Impact1 Impact to Diluted EPS2 Net income (GAAP) $ 736.0 $ 14.38 $ 365.3 $ 5.75 Exit and disposal, and facility rationalization cos
Slide 58: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA LTM 9/30/2023 Year Ended December 31, 2017 (in millions) CCM CWT CBP1 CORP CSL CBP1 CORP CSL Operating income (GAAP) $ 888.9 $ 164.9 $ 1,053.8 $ (115.0) $ 938.8 $ 421.9 $ (63.9) $ 358.0 Non-operating (income) expense (0.1) 0.4 0.3 (4.6) (4.3) 0.8 3.7 4.5 EBIT 889.0
Slide 59: Reconciliation to Free Cash Flow
Reconciliation to Free Cash Flow Operating Cash Flow Capital Expenditures (in millions) (GAAP) (GAAP) Free Cash Flow 20231 $ 812.4 $ (106.3) $ 706.1 2022 1,000.9 (183.5) 817.4 2021 421.7 (134.8) 286.9 2020 696.7 (95.5) 601.2 2019 703.1 (88.9) 614.2 2018 339.2 (120.7) 218.5 Total $ 3,974.0 $ (729.7)
Slide 60: Reconciliation to Adjusted EBITDA – Building Products
Reconciliation to Adjusted EBITDA – Building Products1 Year Ended December 31, (in millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Operating income (GAAP) $ 151.1 $ 155.1 $ 159.1 $ 178.2 $ 273.4 $ 264.3 $ 269.8 $ 351.1 $ 430.3 $ 421.9 $ 435.4 $ 576.0 $ 581.6 $ 68
Slide 61: Reconciliation of Unaudited Leverage Ratios and Net Debt to Capital Ratios
Reconciliation of Unaudited Leverage Ratios and Net Debt to Capital Ratios Unaudited Leverage Ratio (in millions, except ratios) LTM 9/30/2023 Income from continuing operations (GAAP) $ 707.0 Income tax expense 206.0 Interest expense 75.3 Depreciation and amortization 176.9 Non-cash stock-based comp
Slide 62: Vision
VISION