A.o. Smith Corporation · NYSE:AOS
A.o. Smith — Q3 2024 Earnings Presentation
16 slides from A.o. Smith's earnings presentation, Oct 22, 2024
Slide 1: Third Quarter 2024 Results
Third Quarter 2024 Results October 22, 2024 3rd Quarter 2024 Earnings Presentation 1
Slide 2: Presenters
Kevin J. Wheeler Charles T. Lauber Helen E. Gurholt Chairman and Executive Vice President Vice President - Investor Relations, Chief Executive Officer and Chief Financial Officer Financial Planning & Analysis 3rd Quarter 2024 Earnings Presentation 2
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “
Slide 4: Third Quarter Messages
Second Quarter Messages 1 2 3 4 5 Sales of $903M China third-party North America Double digit sales India sales grew and EPS of $0.82 local currency water heater growth in North 12% in local sales decrease of sales negatively America water currency and 17% driven by impacted by treatment and Pureit
Slide 5: Third Quarter Performance and Highlights
Third Quarter Performance and Highlights Sales Adjusted EPS Segment Sales Segment Earnings $938 $163M $903 $0.90 $703M $0.82 -4% -9% YOY YOY $210M $14M Q3 2023 Q3 2024 Q3 2023 Q3 2024 North America Rest of World North America Rest of World Highlights North America Rest of World • Net sales decreased
Slide 6: 2024 Expansion Updates
2024 Expansion Updates Product Development Center Lebanon, TN Tankless Building Expansion Ciudad Juarez, Mexico 6
Slide 7: Third Quarter North America Segment
Third Quarter North America Segment Segment Sales ($M) Segment Operating Earnings ($M) $170 $163 $710 $4 $703 $(5) $(2) $(11) -1% 23.9% 23.1% YOY Q3 2023 Sales Organic Growth Acquisition Q3 2024 Sales Q3 2023 Organic Growth Production Q3 2024 Earnings Inefficiencies Earnings • Sales decrease primari
Slide 8: Third Quarter Rest of World Segment
Third Quarter Rest of World Segment Segment Sales ($M) Segment Operating Earnings ($M) $233 $23 $2 $210 $(25) -10% $4 $14 YOY 9.9% $(13) 6.5% Q3 2023 Sales Organic Growth FX Q3 2024 Sales Q3 2023 Earnings Organic Growth Materials, SG&A Q3 2024 Earnings Other • China sales declined 17% in local curre
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity1 $256M Free Cash Flow ($M) Cash Flow From Operations ($M) Cash balance2 $396 $439 $360 5.9% $283 Debt to capital ratio $136M Net cash position ~2.9M 2023 2024 2023 2024 Shares repurchased in 2024 totaling ~$237M 1As of September 30, 2024. 2Includes cash, cash equivalents and
Slide 10: Capital Allocation Priorities
Capital Allocation Priorities Organic Growth • Opportunities for organic growth in all our businesses and geographies • Disciplined focus on transactions that expand/grow the core, enable geographic growth, and establish adjacencies Acquisitions • Recent transactions: Impact Water and Water Tec; Pur
Slide 11: 2024 Outlook and Assumptions
2024 Outlook and Assumptions1 Revenue Increase ~Flat 2024 Guidance 2023 U.S. Residential Water Heater Industry ~Flat Commercial Water Heater Industry ~Flat China Sales Decrease (Local Currency) ~-6% to -8% Diluted EPS (GAAP) $3.70 - $3.85 $3.69 North American Boiler Sales Growth ~8% North American W
Slide 12: Powerful Investment Thesis
Powerful Investment Thesis 1 2 3 4 5 Leading with Capitalizing Leading Compelling Leveraging strong innovative on global North American brand awareness balance sheet for products megatrends in a water heater and in emerging organic that drive large and growing boiler producer markets with and inorga
Slide 13: A. O. Smith. Innovation has a name.
(<6 Smith. Innovation has a name.
Slide 14: Adjusted Earnings and Adjusted EPS
Adjusted Earnings and Adjusted EPS ($ in Millions, except per share data) 3rd Quarter 2024 Earnings Presentation 14
Slide 15: Adjusted Segment Earnings
Adjusted Segment Earnings ($ in Millions) 3rd Quarter 2024 Earnings Presentation 15
Slide 16: Free Cash Flow
Free Cash Flow ($ in Millions) 3rd Quarter 2024 Earnings Presentation 16