Slide 1: Second Quarter 2021 Earnings Conference Call
Tom Deitrich – President and Chief Executive Officer Joan Hooper – Senior Vice President and Chief Financial Officer Kenneth Gianella – Vice President, Investor Relations Second Quarter 2021 Earnings Conference Call August 5, 2021 ©2021 ITRON PROPRIETARY ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conf
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain matters in this presentation and being discussed today, that are not statements of historical fact, constitute forward-looking statements relating to current or future financial performance, management's plans and objectives for future operations, product plans and
Slide 3: Conference Call Agenda
CONFERENCE CALL AGENDA » CEO – Business and Operations Update » CFO – Financial Results » Q&A
Slide 4: Q2'21 Highlights
Q2’21 HIGHLIGHTS » Revenue of $489 million » Adjusted EBITDA of $36 million » Non-GAAP EPS of $0.28 » Free cash flow of $64 million » Backlog of $3.5 billion; 12-month backlog of $1.4 billion ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 4
Slide 5: Bookings and Backlog
BOOKINGS AND BACKLOG $3.4 $3.5 $3.3 » Book to bill of 1.2 to 1 $2.9 $2.8 » Bookings of $596M $1.4 $1.3 $1.3 $1.2 » New record backlog of $3.5B $1.1 » 12-month backlog growth to $1.4B Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 12-Month Backlog Total Backlog Chart in Billions, actual currency rates. ©2021 ITRON PR
Slide 6: Component Constraints
COMPONENT CONSTRAINTS » Macro Environment: Industry-wide COVID-19 pandemic recovery constraints, driven by increasing demand, coupled with factory disruptions, logistics constraints, and raw material shortages » Itron Impact: Demand increasing, as expected. Q2’21 revenue constrained by semiconductor
Slide 7: Consolidated GAAP Results: Q2'21
CONSOLIDATED GAAP RESULTS: Q2’21 $ in millions (except per share amounts) Q2 2021 Q2 2020 Change Revenue $489.4 $509.6 -4% Change in constant currency -7% Gross margin 30.6% 27.2% +340 bps Operating income (loss) ($6.9) ($45.4) +85% Net income (loss) attributable to Itron, Inc. ($33.1) ($62.8) +47%
Slide 8: Consolidated Non-GAAP & Cash Results: Q2'21
CONSOLIDATED NON-GAAP & CASH RESULTS: Q2’21 $ in millions (except per share amounts) Q2 2021 Q2 2020 Change Non-GAAP operating income $26.9 $20.3 +32% Non-GAAP operating margin 5.5% 4.0% +150 bps Non-GAAP net income attributable to Itron, Inc. $12.6 $1.3 NM Adjusted EBITDA $36.1 $31.2 +16% Adjusted
Slide 9: Revenue Year-over-Year Bridge: Q2'21
REVENUE YEAR-OVER-YEAR BRIDGE: Q2’21 +19% -19% +6% -7% Chart in Millions, Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-over-Year Bridge: Q2'21
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q2’21 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q2'21
DEVICE SOLUTIONS SEGMENT: Q2’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue +26% and 19% in constant currency $163 » Favorable compare due to COVID-19 impact in Q2’20 $129 » Increase partially offset by component constraints Gross margin up 940 bps 18.7% » Reduc
Slide 12: Networked Solutions Segment: Q2'21
NETWORKED SOLUTIONS SEGMENT: Q2’21 Revenue, gross margin and operating margin $ in Millions, actual currency $324 Revenue down 18% and 19% in constant currency » Component shortages resulted in inability to ship all of demand $265 » Timing of project completions 36.2% 33.4% Gross margin up 280 bps »
Slide 13: Outcomes Segment: Q2'21
OUTCOMES SEGMENT: Q2’21 Revenue, gross margin and operating margin $ in Millions, actual currency $61 Revenue up 10% and 6% in constant currency $56 » Higher managed and professional services Gross margin up 560 bps 38.2% » Favorable solutions mix 32.6% Operating margin up 390 bps » Fall through fro
Slide 14: Debt and Liquidity Overview: June 30, 2021
DEBT AND LIQUIDITY OVERVIEW: JUNE 30, 2021 US$M $491 $805 Debt $31 » Net leverage-street 1.6x at end of Q2’21 $284 » Fully repaid 5.000% Senior Notes » Prepaid $30M on Term Loan $460 » Significantly reduced blended interest rate of 0.6% » Over 90% fixed debt 1 Total Debt Net Debt Free Cash Flow and
Slide 15: Mid-Year Guidance Update
MID-YEAR GUIDANCE UPDATE Prior Guidance Revised Guidance Revenue $2.23 - $2.33B $2.05 - $2.15B Non-GAAP EPS $2.30 - $2.70 $1.00 - $1.50 The revised guidance assumes a euro to US dollar foreign exchange rate of 1.20 on average in the second half of 2021, average fully diluted shares outstanding of ap
Slide 16: Appendix
APPENDIX
Slide 17: Consolidated GAAP Results: YTD'21
CONSOLIDATED GAAP RESULTS: YTD’21 $ in millions (except per share amounts) YTD 2021 YTD 2020 Change Revenue $1,009.0 $1,108.0 -9% Growth in constant currency -12% Gross margin 31.4% 28.0% +340 bps Operating income (loss) $24.0 ($19.0) NM Net income (loss) attributable to Itron, Inc. ($20.5) ($54.1)
Slide 18: Consolidated Non-GAAP & Cash Results: YTD'21
CONSOLIDATED NON-GAAP & CASH RESULTS: YTD’21 $ in millions (except per share amounts) YTD 2021 YTD 2020 Change Non-GAAP operating income $65.8 $58.9 +12% Non-GAAP operating margin 6.5% 5.3% +120 bps Adjusted EBITDA $85.9 $83.2 +3% Adjusted EBITDA margin 8.5% 7.5% +100 bps Non-GAAP net income attribu
Slide 19: Revenue Year-over-Year Bridge: YTD'21
REVENUE YEAR-OVER-YEAR BRIDGE: YTD’21 -6% -18% +5% -12% Chart in Millions. Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 19
Slide 20: Non-GAAP EPS Year-over-Year Bridge: YTD'21
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: YTD’21 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 20
Slide 21: Device Solutions Segment: YTD'21
DEVICE SOLUTIONS SEGMENT: YTD’21 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue +1% and -6% in constant currency $331 $336 » Component shortages resulted in inability to ship all of demand » COVID-related delays, shipments shifting to 2H’21 18.7% Gross margin up 53
Slide 22: Networked Solutions Segment: YTD'21
NETWORKED SOLUTIONS SEGMENT: YTD’21 Revenue, gross margin and operating margin $ in Millions, actual currency $665 Revenue down 17% and 18% in constant currency $553 » Component shortages resulted in inability to ship all of demand » Timing of project completions 34.6% 37.7% Gross margin up 310 bps
Slide 23: Outcomes Segment: YTD'21
OUTCOMES SEGMENT: YTD’21 Revenue, gross margin and operating margin $ in Millions, actual currency $120 Revenue up 8% and 5% in constant currency $111 » Increase in software license sales 37.9% » Higher managed and professional services 32.1% Gross margin up 580 bps » Favorable solutions mix due to
Slide 24: Revenue: FX Impact Summary
REVENUE: FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.21 Q2’21 vs $1.10 Q2’20 $1.21 YTD’21 vs $1.10 YTD’20 YoY YoY YoY Change Revenue Q2'21 YoY Change Revenue YTD'21 Change Excluding Change Excluding FX FX Device Solutions $163.0 26.2% 18.6% Device Solutions $335.7 1.3% -5.
Slide 25: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES To supplement our consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, adjusted EBITDA
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 26
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2021 ITRON PROPRIETARY Q2 2021 Earnings Conference Call | 27
Slide 28: Thank You
INVESTOR RELATIONS CONTACTS Kenneth P. Gianella Vice President, Investor Relations 669-770-4643 ken.gianella@itron.com David Means Director, Investor Relations 737-242-8448 david.means@itron.com Rebecca Hussey Manager, Investor Relations Thank You 509-891-3574 rebecca.hussey@itron.com www.itron.com