Slide 1: Q3'24 Earnings
Q3’24 Earnings FEBRUARY 7, 2024 February 2024 © 2024 EnerSys. All Rights Reserved. 1
Slide 2: Forward Looking Statements
Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements on this call that are based on Management’s current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual re
Slide 3: Q3 FY'24 Overview
Q3 FY’24 Overview D AV E S H A F F E R PRESIDENT AND CEO February 2024 © 2024 EnerSys. All Rights Reserved.
Slide 4: Strong Q3'24 Performance
Strong Q3’24 Performance $862M $130M $144M $2.56 $111M Net Sales Adj Op Adj Adj EPS1 Free Cash Earnings1 EBITDA1 Flow1 (7%) Y/Y +53% Y/Y +47% Y/Y +102% Y/Y ($77M) Y/Y Adj Op Earnings1 Adj EBITDA1 +73M Y/Y excluding Asset Securitization in Q3’23 Margin of 15.1% Margin of 16.7% Delivered Adjusted Gros
Slide 5: Q3'24 Executing on our Strategy
Q3’24 Executing on our Strategy Increasing Higher Value Solutions • Launched NexSy® Air wireless charger for AGVs, compatible with traditional flooded, TPPL and li-ion batteries • Awarded grant from Defense Innovation Unit (DIU) to prototype a high-energy Li6T battery to Innovate provide DOD with a
Slide 6: Sustainability Wins
Sustainability Wins 2024 Newsweek's America’s EnerSys ranked in the 2nd annual TCFD Report Most Responsible Companies Top 14% of 100k> Ranked at #352 – 41 spots published in January companies higher than last year TCFD Report and Other Disclosures Driving Awards and Improved Rankings February 2024 ©
Slide 7: Q3 FY'24 Financial Results and Outlook
Q3 FY’24 Financial Results ANDI FUNK and Outlook EVP AND CFO February 2024 © 2024 EnerSys. All Rights Reserved.
Slide 8: Q3'24 Results
Q3’24 Results ($M, except EPS) N E T S AL E S AD J O P E R AT I N G E AR N I N G S 1 & M AR G I N $920 $862 $130 Y/Y Change $85 1% price Includes $59M 15.1% IRA benefit, (7%) volume 9.2% 9.2% $29M retroactive Q3'23 Q3'24 Q3'23 Q3'24 AD J E B I T D A 1 & M AR G I N AD J D I L U T E D E P S 1 $144 $2.
Slide 9: Adj EPS Bridge & Adj Op Earnings
Adj EPS1 Bridge & Adj Op Earnings1 Q3’24 YEAR-OVER-YEAR $2.56 ($M) Net Sales AOE1 Energy Systems $373.5 $14.3 Motive Power $355.4 $52.8 $1.27 Specialty $132.6 $7.5 Corporate/Other - $55.7 Total $861.5 $130.3 2 Sales and Earnings in Line with Expectations; Estimated IRA Benefits Increased Significant
Slide 10: Energy Systems Segment Highlights
Energy Systems Segment Highlights Q3’24 ($M) Y/Y change Net Sales $373.5 (14%) Adj Op Earnings1 $14.3 (46%) Adj OE Margin1 3.9% (220 bps) • Net Sales (14%) Y/Y ‒ Volume (15%) primarily due to continued U.S. Communication Networks CapEx pause and inventory digestion; partially offset by price / mix +
Slide 11: Motive Power Segment Highlights
Motive Power Segment Highlights Q3’24 ($M) Y/Y change Net Sales $355.4 (2%) Adj Op Earnings1 $52.8 +12% Adj OE Margin1 14.8% +180 bps • Net Sales (2%) Y/Y ‒ Volume (3%) partially offset by acquisition +1% ‒ Maintenance-free products increased to 23.1% of segment net sales from 18.9% in Q3’23 • Solid
Slide 12: Specialty Segment Highlights
Specialty Segment Highlights Q3’24 ($M) Y/Y change Net Sales $132.6 +7% Adj Op Earnings1 $7.5 (34%) Adj OE Margin1 5.7% (340 bps) • Net Sales +7% Y/Y ‒ Volume +6%, F/X +1% ‒ Strong bookings in U.S. Transportation and Aerospace & Defense • Adj Op Earnings1 impacted by further capacity reallocation ‒
Slide 13: Balance Sheet, Cash Flow and Leverage
Balance Sheet, Cash Flow and Leverage SELECTED S E L E C T E D Q U AR T E R LY B AL AN C E S H E E T M E T R I C S 1 C AS H F L O W M E T R I C S 2 ($M) Q4’23 Q3’24 ($M) Q3’23 Q3’24 Cash and Cash $347 $333 Equivalents Cash Flow from $206 $135 Net Debt3 $736 $587 Operations Net Leverage Ratio3 1.8x 1
Slide 14: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy Priorities Q3’24 Future Priorities • Continue TPPL capacity investments & end-to-end solutions Invest in Organic Growth (CapEx) $23M • Optimize EOS to drive additional operational efficiencies • Accelerate domestic-sourced lithium strategy • Innovate with incr
Slide 15: Inflation Reduction Act (IRA) Update
Inflation Reduction Act (IRA) Update INCREASED ANNUAL BENEFITS U.S. Department of the Treasury issued updated proposed regulations in December 2023 regarding the Advanced Manufacturing Production Credit - Q4’FY23 Q1’FY24 Q2’FY24 Q3’FY24 Section 45X of the Internal Revenue Code (IRC) Reported $17M $1
Slide 16: Looking Ahead: Q4'24 Guidance
Looking Ahead: Q4’24 Guidance Guidance Assumptions • Revenue up sequentially but down year-on-year 26.0% - 28.0% • Benefit from diverse end markets and ability to Gross Margin Includes 350bps - 410bps hold price, tempered by communication (Q4’24) from IRC 45X tax credits networks capex cycle IRA t
Slide 17: Q&A
Q&A February 2024 © 2024 EnerSys. All Rights Reserved.
Slide 18: Appendix
Appendix February 2024 © 2024 EnerSys. All Rights Reserved.
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations February 2024 © 2024 EnerSys. All Rights Reserved.
Slide 20: Non-GAAP Reconciliation: Adjusted Operating Earnings
Non-GAAP Reconciliation A D J U S T E D O P E R AT I N G E A R N I N G S Quarter Ended December 31, 2023 ($ in millions) Energy Systems Motive Power Specialty Corporate and other Total Net Sales $373.5 $355.4 $132.6 $— $861.5 Operating Earnings ($18.6) $49.5 $6.0 $55.7 $92.6 Inventory adjustment rel
Slide 21: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation ADJUSTED EBITDA Quarter ended ($ in millions) December 31, 2023 January 1, 2023 Net Earnings $76.2 $44.4 Depreciation 16.2 14.8 Amortization 6.9 7.8 Interest 11.7 17.5 Income Taxes 2.5 13.4 EBITDA 113.5 97.9 Non-GAAP adjustments 30.8 0.2 Adjusted EBITDA $144.3 $98.1 The follo
Slide 22: Non-GAAP Reconciliation: Adjusted Diluted EPS
Non-GAAP Reconciliation ADJUSTED DILUTED EPS Quarter ended ($ in millions, except share and per share amounts) December 31, 2023 January 1, 2023 Net earnings reconciliation The following table provides the line of business allocation of the non-GAAP adjustments of items relating operating earnings (
Slide 23: Non-GAAP Reconciliation: Leverage Ratio by Year
Non-GAAP Reconciliation L E V E R A G E R AT I O B Y Y E A R Fiscal year ended March 31, (1) The $51.7 million adjustment to EBITDA in fiscal 2023 primarily related to $26.4 million of non-cash stock ($ in millions, except ratios) 2023 2022 2021 2020 2019 2018 compensation, $22.4 million of restruct
Slide 24: Non-GAAP Reconciliation: Leverage Ratio by Quarter
Non-GAAP Reconciliation L E V E R A G E R AT I O B Y Q U A R T E R Last twelve months ended December 31, October 1, July 2, March 31, January 1, October 2, July 3, ($ in millions, except ratios) 2023 2023 2023 2023 2023 2022 2022 Net earnings as reported $274.1 $242.4 $211.6 $175.8 $137.9 $129.9 $13
Slide 25: Non-GAAP Reconciliation: Free Cash Flow
Non-GAAP Reconciliation FREE CASH FLOW Quarter ended ($ in millions) December 31, 2023 January 1, 2023 Net cash provided by (used in) operating activities $134.5 $206.1 Less Capital Expenditures (23.2) (17.9) Free Cash Flow $111.4 $188.3 Non-GAAP adjusted Net earnings $105.0 $52.3 Adjusted Free Cash
Slide 26: Non-GAAP Reconciliation: Primary Operating Capital
Non-GAAP Reconciliation P R I M A R Y O P E R AT I N G C A P I TA L As part of managing the performance of our business, we monitor the level of primary operating capital, and its ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts payable
Slide 27: Non-GAAP Reconciliation: Adjusted Gross Profit and Gross Margin
Non-GAAP Reconciliation ADJUSTED GROSS PROFIT AND GROSS MARGIN Quarter ended ($ in millions) December 31, 2023 January 1, 2023 Net Sales $861.5 $920.2 Gross Profit 248.6 213.7 Inventory adjustment relating to exit activities 16.1 (0.9) Adjusted Gross Profit $264.7 $212.8 Adjusted Gross Margin 30.7%
Slide 28: Thank you.
Thank you. For more information visit us at www.enersys.com World Headquarters EnerSys EMEA EnerSys Asia 2366 Bernville Road EH Europe GmbH 152 Beach Road Reading, PA 19605 USA Baarerstrasse 18 Gateway East Building #11- 08 +1 610-208-1991 / +1 800-538-3627 6300 Zug Switzerland Singapore 189721 / +6