Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Q4 2022 Earnings Presentation
21 slides from Enerpac Tool's earnings presentation, Sep 29, 2022
Slide 1: Fiscal 2022 Fourth Quarter Earnings
Fiscal 2022 Fourth Quarter Earnings September 29, 2022 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: Strategy Update – ASCEND
Strategy Update – ASCEND ASCEND Transformation Program ▪ Key Initiatives ▪ Accelerating organic growth go-to-market strategies ▪ Improving operational excellence and production efficiency by utilizing a Lean approach ▪ Driving greater efficiency and productivity in SG&A by better leveraging resource
Slide 4: Strategy Update – Examples of ASCEND Progress
Strategy Update – Examples of ASCEND Progress Initiatives Key Actions Strategic Pricing Analyzed our price position across key product categories in major markets and customer segments globally Reviewed margin profiles and pricing practices throughout global portfolio of products, rentals, and s
Slide 5: Strategy Update – Share Repurchase Update
Strategy Update – Share Repurchase Update Share Repurchase Program ▪ In March we announced that the Board approved a new share repurchase program of up to 10 million shares ▪ Repurchased 2.0 million shares, for a total of $39 million in the fourth quarter ▪ Under the new repurchase authorization, we
Slide 6: Market Update
Market Update Overview ▪ Strong top line, despite currency headwinds, driven by solid customer demand, breaking typical Q4 seasonal trend ▪ Continued to manage on-going supply chain and logistics challenges ▪ Took additional pricing actions to offset inflation ▪ COVID challenges had minimal impact o
Slide 7: Regional Update
Regional Update Americas ▪ Another quarter of solid year-over-year core growth in the Americas ▪ Key Verticals ▪ Broad based improvement ▪ Rail was strong due to investments in maintenance ▪ Industrial MRO demand was strong from our national distributors ▪ Mining continued to be positive in South Am
Slide 8: Regional Update
Regional Update Asia Pacific ▪ Core sales flat year-over-year ▪ While some COVID closures/lockdowns continue to occur, there was significantly less impact in the fourth quarter ▪ Key Verticals ▪ Mining continued to be positive due to demand across the region for raw materials ▪ Shipbuilding activity
Slide 9: Fourth Quarter 2022 Comparable Results
Fourth Quarter 2022 Comparable Results (US$ in millions except EPS) $145 $152 $152 NET SALES** 21.1% • Core sales growth of 10% 16.6% • IT&S product sales 12% 12.0% • Other product 14% • Service 3% • Unfavorable impact of FX ~$7M, reducing core sales by 6% Q4 2021 Q3 2022 Q4 2022 Q4 2021 Q3 2022* Q4
Slide 10: Net Sales Waterfall
Net Sales Waterfall* (US$ in millions) $155 $0.7 $150 $9.1 $151.8 Product price was the primary driver of the year-over- year increase, $145 along with $145.4 $7.5 product volume driven by strong $4.1 customer $140 demand, despite on-going supply chain challenges and FX headwinds $135 $130 Net Sales
Slide 11: IT&S Product Net Sales
IT&S Product Net Sales IT&S Total Product Net Sales (including Acquisitions from date of purchase) (excluding Strategic Exits) Due to continued strong demand, 2015-2019 (pre-COVID) 2022 Actual we exceeded the peak IT&S product sales of the 5 years prior Millions ($) to COVID each month in the fourth
Slide 12: Adjusted EBITDA Waterfall
Adjusted EBITDA Waterfall* (US$ in millions) $35 $33 $0.3 $0.6 Adjusted EBITDA $31 $2.2 $32.1 primarily $29 $5.5 benefited from net price benefit in $27 product slightly offset by higher $25 SG&A costs and 12.3% $1.4 $1.9 13.3% FX $23 $24.2 $21 $19 $17 $15 EBITDA Q4 FY21 Fx Translation Volume - Prod
Slide 13: Operations Update
Operations Update Supply Chain ▪ Supply chain challenges continued during the fourth quarter ▪ As it relates to the US supply base, availability of labor is improving but lead times remain long (castings, forgings and electrical components) ▪ Electrical components are our biggest challenge (up to 80
Slide 14: Liquidity – Positioned for Success
Liquidity – Positioned for Success (US$ in millions) $140 $205 $204 $43 1.1 $27 0.9 $124 0.6 $121 $175 $1 Q4 2021 Q3 2022 Q4 2022 Q4 2021 Q3 2022 Q4 2022 Q4 2021 Q3 2022 Q4 2022 Q4 2021 Q3 2022 Q4 2022 Free Cash Flow Cash Balance Gross Debt TTM Financial Leverage* Free Cash Flow (FCF) Leverage • $7M
Slide 15: Expectations for Fiscal 2023
Expectations for Fiscal 2023 Fiscal 2023 Full Year Guidance: ▪ Net Sales in the range of $565 to $585 million, with core growth of 3%-6% ▪ Projected year-over-year core growth by category We continue to ▪ IT&S Product ~ up mid single digits% be cautious as ▪ IT&S Service ~ down mid single digits to
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: Adjusted Operating Profit Waterfall
Adjusted Operating Profit Waterfall* (US$ in millions) $30 $0.3 $28 $0.9 Adjusted $2.2 $26 Operating Profit $27.2 primarily $5.5 benefited from $24 net price benefit $22 in product slightly offset by $20 higher SG&A $1.1 $1.9 costs and FX $18 $19.3 $16 $14 $12 $10 OP Q4 FY21 Fx Impact Volume - Produ
Slide 19: Fourth Quarter 2022 GAAP vs Non-GAAP Reconciliation
Fourth Quarter 2022 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) Less ASCEND Impairment & Restructuring Transformation Divestiture Tax GAAP Charges Charges Charges Benefits Adjusted Sales $151.8 $151.8 Operating Profit $13.1 ($3.0) ($9.8) ($1.3) $0.0 $27.2 Income Taxes $0.3 ($1.0) ($
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA Free Cash Flow Q4 Q4 2022 2021 Full Year Full Year 2022 2021 Net Earnings $11 $7 0 Net Financing Costs $2 $1 Cash From Operations $ 52 $ 54 Income Taxes $0 $6 Capital Expenditures $ (8) $ (12) Depreciation & Amortization $5 $5 Pro
Slide 21: Enerpac Tool Group
ENERPAC (7) TOOL GROUP