Westinghouse Air Brake Technologies Corporation · NYSE:WAB
Westinghouse Air Brake Technologies — Q4 2024 Earnings Presentation
36 slides from Westinghouse Air Brake Technologies's earnings presentation, Feb 12, 2025
Slide 1: Wabtec Financial Results & Company Highlights, Fourth Quarter 2024
Exhibit 99.2 NN Wabtec Financi Results & Company Highlights i : = FOURTH QUARTER 2024
Slide 2: Forward Looking Statements & Non-GAAP Financial Information
Forward Looking Statements & Non-GAAP Financial Information This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21£ of the Securities Exchange Act of 1934, as amended by the Private Securities Litigati
Slide 3: Today's Participants
Today’s Participants Ma RAFAEL JOHN KYRA SANTANA OLIN YATES President & Executive Vice President & Vice’Rresident, Chief Executive Officer Chief Financial Officer InvestonRelations
Slide 4: Wabtec Highlights
Wabtec Highlights =" Robust Financial Performance in 2024 = Another Strong Year in 2025 Expected = Long-Term Guidance Updated Wabtec
Slide 5: 4Q 2024 Overview
4Q 2024 Overview Q4 sales growth up moderately behind rebalance of Sales $2.58B Up 2.3% YOY Freight segment production. Full year up 7.3% . . 12.9% 16.9% Strong gross margin expansion offset by higher SG&A Operating Margin GAAP Adjusted as a percent of revenue Earnings Per Share $1.23 $1.68 GAAP EPS
Slide 6: 2025 Market Expectations
2025 Market NORTH AMERICAN NORTH AMERICAN AVERAGE FREIGHT CARLOADS ACTIVE LOCOMOTIVES Expectations 2.5% 2.3% 2.1% ean , 1.8% FREIGHT NA Carloads + Active Locomotive Fleet o 1Q24 2Q24 3Q24 4Q24 4Q21 4Q22 4Q23 4Q24 International Freight Volumes + ee 7 : _ NORTH AMERICAN INTERNATIONAL FREIGHT NA Railca
Slide 7: Executing On Our Value Creation Framework
»> »> »> »> »> Executing On Our Value Creation Framework VALUE CREATION FRAMEWORK Accelerate innovation of scalable technologies Grow and refresh expansive global installed base Drive fuel efficiencies thru emerging technologies Expand high-margin recurring revenue streams Drive continuous operation
Slide 8: Resilient Portfolio Through The Cycle
Resilient Portfolio Through The Cycle ROBUST BACKLOG DEMONSTRATED EXECUTION & RECURRING REVENUE a CAGR $7.58 $7.78 $6.38 $6.88 OPERATING MARGIN 18.9% 17.0% 15.5%| 15.9% 16.2% Aas 15.1% yo 12.19% $5.5B oy 11.2% 9 4Q20 4Q21 4Q22 4923 © 4Q24 2020 2021 2022 2023 2024 ' 2020 2021 2022 2023 2024 = Strong
Slide 9: 4Q 2024 Financial Summary
4Q 2024 Financial Summary $2.53B 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 GAAP GAAP ADI =~ ADIO GAAP GAAP ADI) ADS 2.3% INCREASE (2.9% INCREASE EX-CURRENCY) Wabtec
Slide 10: 4Q 2024 Sales
4Q 2024 Sales (Sin millions) PRODUCT LINE Services Equipment Components Digital Intelligence Freight Segment Transit Segment TOTAL SALES 4Q24 806 499 282 207 $1,794 789 $2,583 YOY 4Q KEY DRIVERS (15.9)% 41.8% 4.8% (1.4)% 0.3% 7.1% 2.3% SERVICES Lower modernization deliveries and overhauls as expecte
Slide 11: 4Q 2024 Consolidated Gross Profit
4Q 2024 Consolidated Gross Profit ($ in millions) 2023 GROSS PROFIT $764 $777 % Gross Profit Margin 30.3% 30.8% Volume Wy Sf Mix/Pricing t - Raw Materials Vv Vv Currency Vv Vv Manufacturing/Other + 0 2024 GROSS PROFIT $797 $815 % Gross Profit Margin 30.9% 31.6% Note: Adjusted numbers represent non-G
Slide 12: 4Q 2024 Consolidated Operating Income
O) 4Q 2024 Consolidated Operating Income (in millions) 2023 OP INCOME % Operating Margin Gross Profit SG&A Engineering Amortization 2024 OP INCOME % Operating Margin GAAP $308 12.2% 33 (37) 10 20 $334 12.9% Adjusted $431 17.0% 38 (41) 10 $438 16.9% Note: Adjusted numbers represent non-GAAP financial
Slide 13: 4Q 2024 Freight Segment Performance
4Q 2024 Freight Segment Performance ALES OP INCOME / OP MARGIN 12-MONTH BACKLOG $1.79B $5.42B $273M 2023 2024 2023 2024 2023 2024 2023 2024 GAAP GAAP ADI = ~— ADJ 0.3% INCREASE 2.9% INCREASE YOY (1.1% INCREASE EX-CURRENCY) (5.4% Excluding Currency) 1.1% INCREASE MULTI-YEAR BACKLOG? YOY(+3.2% Excl. C
Slide 14: 4Q 2024 Transit Segment Performance
4Q 2024 Transit Segment Performance OP INCOME / OP MARGIN 12-MONTH BACKLOG $737M $2.04B $103M 2023 2024 2023 2024 2023 2024 2023 2024 GAAP GAAP ADI = ADIN 7.1% INCREASE 3.3% INCREASE YOY (7.5% INCREASE EX-CURRENCY) (5.6% Excluding Currency) 1.7% INCREASE MULTI-YEAR BACKLOG") YOY (+5.0% Excl. Currenc
Slide 15: Resilient Business Allows For Execution On Financial Priorities
Resilient Business Allows For Execution On Financial Priorities FOCUSED ON CASH CONVERSIO DISCIPLINED CAPITAL ALLOCATION Strong balance sheet and financial $1.83B" position ... liquidity of $2.21B” 117% Cash Conv” $1.20B" 89% Cash Conv) $1,834M ES RUCYAY EM Shore repurchase Debt leverage ratio of 1.
Slide 16: Integration 2.0 & Portfolio Optimization Update
Integration 2.0 & Portfolio Optimization Update INTEGRATION 2.0 UPDATE PORTFOLIO OPTIMIZATION UPDATE RUN-RATE SAVINGS?) Eh Realized Unrealized SSM 2022 2023 2024 2025 Restructuring $46M $49M $28M $161M? charges) thru 2025 Run rate savings estimate increased to ~$97M from $75-$90M Wabtec ¥ Pruned ~$1
Slide 17: 2024 Overview
2024 Overview Increased sales were driven by growth in the Freight & Sales $10.39B Up 7.3% YOY Transit Segments ‘ 7 15.5% 18.9% Operating margin benefited from sales growth and Operating Margin GAAP Adjusted improved gross margin . GAAP EPS up 33.3% YoY ...Adjusted EPS up 27.7% Earnings Per Share $6
Slide 18: 2025 Outlook and Guidance
2025 Outlook and Guidance 2025 GUIDANCE REVENUES $10.725B t. $11.025B ADJUSTED DILUTED EPS $8.35 t0 $8.75 CASH CONVERSION” >90% Cash from operations conversion sis defined as GAAP cash from ‘operations divided by GAAP netincome plus depreciation and amortization including deferred debt cost amortiza
Slide 19: Long-Term Guidance Update
Long-Term Guidance Update
Slide 20: 5-Year Outlook
1) 5-Year outlook exclude: Accelerate innovation of scalable technologies Build high-margin, innovative and scalable products to increase customer productivity, automation, utilization, and capacity Grow and refres ) Increase share across asset lifecycle (Locos/Mining, Freight Cars & Transit) Drive
Slide 21: Future Revenue Growth & Margin Expansion
Future Revenue Growth & Margin Expansion ANNUAL REVENUE GROWTH x ADJUSTED MARGIN IMPROVEMENT EXPECTATIONS 2025 - 2029: EXPECTATIONS 2025 - 2029: MID-SINGLE DIGITS 350+ BPS Technology-driven growth x Pricing for value Portfolio optimization headwinds Transit selectivity headwinds CAPITAL & TECHNOLOGY
Slide 22: Introducing Integration 3.0 & 2025 Portfolio Optimization
Introducing Integration 3.0 & 2025 Portfolio Optimization INTEGRATION 3.0 (2025 - 2027) PORTFOLIO OPTIMIZATION (2025) CONSOLIDATE FOOTPRINT / REDUCE COMPLEXITY Value chain improvement Office/facility rationalization Streamline operation to reduce mfg. complexity $125-155M ANTICIPATED MANUFACTURING,
Slide 23: Key Takeaways
Key Takeaways Strong revenue growth, margin expansion, increased earnings and improved cash flow Positive productivity driven by continuous cost improvement combined with realization of Integration 2.0 & 3.0 savings Continued momentum across the portfolio and strong order pipeline and backlog, inter
Slide 24: Income Appendix A (1 of 2)
Income Appendix A(1 of 2) WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION ‘CONDENSED CONSOLIDATED STATEMENTS OF INCOME t t m n t FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) ‘Three Months Ended ‘Twelve Months Ended December
Slide 25: Income Statement (cont.)
Income Statement (cont.) WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) Segment Information Freight Net Sales Freight Income from Operations Freig
Slide 26: Balance Sheet
Wabtec Balance Sheet WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS Inmilions Cash, cash equivalents and restricted cash Receivables, net Inventories, net Other current assets Total current assets Property, plant and equipment, net Goodwill Other intangible ass
Slide 27: Cash Flow
Cash Flow Wabtec WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS. (UNAUDITED) Inmillions Operating activities Net income Non-cash expense Receivables Inventories Accounts Payable Other assets and liabilities Net cash provided by operating activities Ne
Slide 28: Appendix D (1 of 2) EPS and Non-GAAP Reconciliation
Appendix D (1 of 2) EPS and Non-GAAP Reconciliation Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period- to-period com
Slide 29: EPS and Non-GAAP Reconciliation
EPS and Non-GAAP Reconciliation ‘Set forth below is the calculation of the nan-GAAP performance measures included in ths press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period- to-period comparisons. Non-GAAP f
Slide 30: EBITDA Reconciliation
Wabtec EBITDA Reconciliation Sot forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP finan
Slide 31: Sales by Product Line
Sales by Product Line WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION Wabtec tn.mitions Freight Segment Equipment Components, Digital Intelligence Services Total Freight Segment Transit Segment Original Equipment Manufacturer Aftermarket Total Transit Segment In mitions Freight Segment Equipment ‘Co
Slide 32: Segment Gross Margin & Appendix G
‘ Segment Gross Margin & Appendix G acme Income from. Income from_ Income from. Income from_ Jn mitons Gross Profit ‘Operations ross Profit ‘Operations ross Profit ‘Operations ross Profit ‘Operations \Freight Segment Reported Results: 556 $ 273 $ 556 $ 245 2,523 $ 1,422 2,181 $ 1,065, |Transit Segme
Slide 33: Segment Sales Reconciliation
Wabtec Appendix H Segment Sales Reconciliation WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF CHANGES IN NET SALES - BY SEGMENT (UNAUDITED) Three Months Ended December 31, inmitions sit Consolidated [ |2023 Net Sales $ 1789 $ 7S 2,526 ‘Acquisitions 6 3 9 Foreign Exchange (14) @) (
Slide 34: Cash Conversion Reconciliation
Cash Conversion Reconciliation ‘Set forth below is the calculation of the non-GAAP performance measures included in his press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP fin
Slide 35: Cash Conversion Reconciliation (cont.)
Wabtec Cash Conversion Reconciliation (cont.) Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparison
Slide 36: Operating Margin Reconciliation
Appendix J Operating Margin Reconciliation WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF REPORTED RESULTS TO ADJUSTED RESULTS (UNAUDITED) ‘Twelve Months Ended December 31, Jomilions 2020 2024 2022 2023 2024 Reported Income from Operations $ 745 $ 876 $ 4,011 § 1,266 $ 1,609 Repor
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