Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q1 2020 Earnings Presentation
18 slides from Vertiv's earnings presentation, May 6, 2020
Slide 1: Earnings Conference Call First Quarter 2020 Results
Earnings Conference Call First Quarter 2020 Results May 6, 2020 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Company’s future financial or bu
Slide 3: Dave Cote: themes for recessionary times
Dave Cote: themes for recessionary times Focus on leadership: No need to panic. Consensus building is not always the right approach. Protect workforce: Utilize furloughs as way to keep talent needed for recovery Cast wide net: Important to canvas wide swath of internal / external constituents to obt
Slide 4: Key messages
Key messages Customer demand remains strong with first quarter orders up 13% and record high backlog of $1.6 billion COVID-19 negatively impacted first quarter sales by ~$80 million and adjusted EBITDA by ~$30 million Implemented cost actions driving $60M P&L benefit. “Essential business” designatio
Slide 5: Impact of COVID-19 to date
Impact of COVID-19 to date Americas APAC EMEA Overall First • $20M top-line impact • $50M top-line impact • $10M top-line impact • $80M top-line impact Quarter • Commenced March • Commenced February • Commenced March • Commenced March Impact • 50% supply & 50% demand • 60% supply & 40% demand • 80%
Slide 6: COVID-19 actions to date
COVID-19 actions to date COST ACTIONS ($60M IN 2020) REVENUE ACTIONS • Executive leadership team and Board of Directors • Continuing investment in innovation and technology took 10% base pay reduction • Continuing incorporating voice of the customer in Vertiv • Suspended merit increases and 401(k) m
Slide 7: Debt structure and liquidity
Debt structure and liquidity DEBT STRUCTURE LIQUIDITY • With paydown from SPAC and debt refinancing, reduced • Strong liquidity of $446M at end of March. $289M annual cash interest from ~$280M to less than $90M unrestricted cash and $157M availability on ABL. • Despite negative free cash flow in fir
Slide 8: First quarter 2020 financial results
First quarter 2020 financial results $Millions Net Sales Adjusted EBITDA Adjusted EBITDA Margin Free Cash Flow Down 14.9% Down $40M Down 260 bp Down $158M Organic (13.2%) (45) (203) 10.4% 1,055 7.8% 897 110 70 1Q 2019 1Q2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 Strong order flow (+13% g
Slide 9: First quarter 2020 segment results
First quarter 2020 segment results $Millions Americas Net Sales Sales decline driven by COVID-19 and timing of Infrastructure & solutions project demand from hyperscale and colocation customers Down 15.8% Down 13.6% Down 14.4% Organic (15.0%) Organic (10.7%) Organic (11.8%) Contribution margin i
Slide 10: First quarter 2020 free cash flow bridge from 2019
First quarter 2020 free cash flow bridge from 2019 $Millions Down • Free cash flow (FCF) calculated as: $158M net cash provided by operating activities less: capital expenditures less: investments in capitalized software (45) plus: proceeds from disposition of PP&E (41) • Higher inventory bu
Slide 11: 2020 financial guidance
2020 financial guidance Remain cautiously optimistic with tactical and strategic position amid global COVID-19 pandemic Underlying industries we support more critical today than before crisis. Customer demand remains strong. Generally designated essential in most geographies. Primary manufacturing f
Slide 12: Key messages
Key messages Customer demand remains strong with first quarter orders up 13% and record high backlog of $1.6 billion COVID-19 negatively impacted first quarter sales by ~$80 million and adjusted EBITDA by ~$30 million Implemented cost actions driving $60M P&L benefit. “Essential business” designatio
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation from Net loss to EBITDA and adjusted EBITDA ($M | QTD 3/31) 1Q20 1Q19 COMMENTARY Net loss $(268.9) $(74.3) a) Represents costs incurred in the refinancing and pay down of the Company’s long-term debt. Includes $99.0M write-off of deferred financing fees and
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of segment EBIT to adjusted EBITDA by region (A) Earnings From Continuing Operations Before Interest and Taxes (C) EBITDA Adjustments ($M | QTD 3/31) 1Q20 1Q19 ($M | QTD 3/31) 1Q20 1Q19 Americas $61.6 $87.1 Americas $8.7 $6.6 APAC 13.6 20.4 APAC 6.0 5.4 EME
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Organic Net Sales and Free Cash Flow Reconciliation of Net Sales to Organic Net Sales ($M | QTD 3/31) 1Q20 1Q19 % Organic % Americas $466.7 $554.4 (15.8) (15.0) APAC 223.9 259.0 (13.6) (10.7) EMEA 206.7 241.4 (14.4) (11.8) Total $897.3 $1,054.8 (14.9) (1
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: First Quarter 2020 Loss on Debt & Non-GAAP Operating Other Interest Net earnings Adjusted ($M, except EPS | QTD 3/31/2020) Net Sales profit deductions, net expense, net Income tax expense (loss) Diluted EP
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: First Quarter 2019 Non-GAAP Operating Other Interest Net earnings Adjusted ($M, except EPS | QTD 3/31/2019) Net Sales profit deductions, net expense, net Income tax expense (loss) Diluted EPS(1) EBITDA GAA