Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Q1 2022 Earnings Presentation
25 slides from Regal Rexnord's earnings presentation, Apr 28, 2022
Slide 1: First Quarter 2022 Earnings
Creating a better tomorrow™… First Quarter 2022 Earnings April 28, 2022 Louis Pinkham, Chief Executive Officer Rob Rehard, Vice President, Chief Financial Officer
Slide 2: 1Q 2022 Forward Looking Statements
1Q 2022 FORWARD LOOKING STATEMENTS This document contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which reflect Regal Rexnord’s current estimates, expectations and projections about Regal Rexnord’s future results, performance,
Slide 3: 1Q 2022 Non-GAAP Financial Measures
1Q 2022 NON-GAAP FINANCIAL MEASURES We prepare financial statements in accordance with accounting principles generally accepted income attributable to Regal Rexnord Corporation, adjusted income before taxes, adjusted in the United States of America (“GAAP”). We also periodically disclose certain fin
Slide 4: Opening Comments & Overview; 1Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 1Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 5: 1Q 2022 Opening Comments
1Q 2022 OPENING COMMENTS • Strong Organic Sales Growth & Orders, ($ in millions, except per share Achieved Positive Price/Cost, Strong EBITDA data) 1Q 2021 1Q 2022 Margin Expansion Adjusted Net Sales* $814.1 $1,298.5 • Remain Focused On 80/20, Price Discipline • Over-Managing Supply Chain Challenges
Slide 6: Case Study – Continuous Oil Quality Monitoring
1Q 2022 CASE STUDY – CONTINUOUS OIL QUALITY MONITORING Regal Rexnord expertise in gear drives reduces environmental waste by optimizing oil change efficiency through continuous oil monitoring. Gear Drive Customer Problem A customer in the aggregates market had excessive oil changes based only on run
Slide 7: Opening Comments & Overview; 1Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 1Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 8: Motion Control Solutions
1Q 2022 MOTION CONTROL SOLUTIONS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) • Organic Sales* Up 9.9% ($ Millions) • Key Drivers • General Industrial • Forestry $586.6 $39.0 • Agriculture • Wind & Aero Projects (-) Adjusted EBITDA Margin* $145.7 • 24.8% of Adj. Net Sales $21.3 $201.6 $52
Slide 9: Climate Solutions
1Q 2022 CLIMATE SOLUTIONS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) ($ Millions) • Organic Sales* Up 14.9% • Key Drivers • N.A. HVAC $166.9 $273.9 $268.4 • EMEA Strength 166.9 $268.4 • N.A. General Industrial Adjusted EBITDA Margin* $239.1 • 21.1% of Adj. Net Sales $57.8 $50.9 1Q21 1Q2
Slide 10: Commercial Systems
1Q 2022 COMMERCIAL SYSTEMS Sales Adjusted Net Sales* Adjusted EBITDA* • Organic Sales* Up 24.8% ($ Millions) ($ Millions) • Key Drivers • N.A. General Industrial $293.3 • Pool Pump • C-HVAC $237.0 Adjusted EBITDA Margin* $62.0 • 21.1% of Adj. Net Sales $38.0 1Q21 1Q22 1Q21 1Q22 * Non-GAAP Financial
Slide 11: Industrial Systems
1Q 2022 INDUSTRIAL SYSTEMS Sales Adjusted Net Sales* Adjusted EBITDA* • Organic Sales* Up 7.1% ($ Millions) ($ Millions) Adjusted EBITDA Margin* $144.7 • 8.4% of Adj. Net Sales $136.4 $12.0 $12.2 1Q21 1Q22 1Q21 1Q22 * Non-GAAP Financial Measurement, See Appendix for Reconciliation. Creating a better
Slide 12: Key Financial Metrics & Other Updates
1Q 2022 KEY FINANCIAL METRICS & OTHER UPDATES Capital Expenditures Balance Sheet at March 31, 2022 • $13.4 Million in 1Q 2022 • Total Debt of $2,060.6 Million • Net Debt of $1,435.9 Million Effective Tax Rate (ETR) • Net Debt/Adj. Bank EBITDA* of 1.7 • 23.2% Adj. ETR* in 1Q 2022 • Net Debt/Adj. Bank
Slide 13: Updating 2022 Outlook
1Q 2022 UPDATING 2022 OUTLOOK • Reiterating Guidance for 2022 Revenue of Approximately $5.2 Billion and Organic Growth at a Mid-Single Digit to a High Single Digit Rate. • Raising Adjusted Diluted Earnings per Share* Range to $10.10 to $10.70 from $10.00 to $10.60. Modeling Items • Share-Based Compe
Slide 14: Opening Comments & Overview; 1Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 1Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 15: Opening Comments & Overview; 1Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 1Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 16: Adjusted Diluted Earnings Per Share
1Q 2022 APPENDIX ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Mar 31, Apr 3, 2022 2021 GAAP Diluted Earnings Per Share $ 1.85 $ 1.68 Restructuring and Related Costs 0.19 0.03 Transaction and Related Costs 0.03 0.36 Inventory Step Up 0.04 — Intangible Amortization 0.52 0.21 Share-Based Comp
Slide 17: 2022 Adjusted Annual Guidance
1Q 2022 APPENDIX 2022 ADJUSTED ANNUAL GUIDANCE Minimum Maximum 2022 Diluted EPS Annual Guidance $ 6.90 $ 7.50 Restructuring and Related Costs 0.72 0.72 Transaction and Related Costs 0.05 0.05 Gain on Sales of Assets (0.01) (0.01) Inventory Step Up 0.04 0.04 Intangible Amortization 2.10 2.10 Share-Ba
Slide 18: Adjusted EBITDA
1Q 2022 APPENDIX Three Months Ended Commercial Motion Control ADJUSTED EBITDA Systems Industrial Systems Climate Solutions Solutions Total Regal Rexnord (Dollars in Millions) Mar 31, Apr 3, Mar 31, Apr 3, Mar 31, Apr 3, Mar 31, Apr 3, Mar 31, Apr 3, 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Slide 19: Adjusted Net Sales
1Q 2022 APPENDIX Three Months Ended Commercial Motion Control ADJUSTED NET SALES Systems Industrial Systems Climate Solutions Solutions Total Regal Rexnord (Dollars in Millions) Mar 31, Apr 3, Mar 31, Apr 3, Mar 31, Apr 3, Mar 31, Apr 3, Mar 31, Apr 3, 2022 2021 2022 2021 2022 2021 2022 2021 2022 20
Slide 20: Adjusted Effective Tax Rate
1Q 2022 APPENDIX ADJUSTED EFFECTIVE TAX RATE Three Months Ended (Dollars in Millions) Mar 31, Apr 3, 2022 2021 Income before Taxes $ 163.3 $ 91.6 Provision for Income Taxes 36.2 21.3 Effective Tax Rate 22.2% 23.3% Income before Taxes $ 163.3 $ 91.6 Restructuring and Related Costs 17.0 1.7 Transactio
Slide 21: Free Cash Flow
1Q 2022 APPENDIX Three Months FREE CASH FLOW Ended (Dollars in Millions) Mar 31, Apr 3, 2022 2021 Net Cash (Used in) Provided by Operating Activities $ (5.9) $ 49.5 Additions to Property Plant and Equipment (13.4) (10.7) Free Cash Flow $ (19.3) $ 38.8 GAAP Net Income Attributable to Regal Rexnord Co
Slide 22: Organic Sales Growth
1Q 2022 APPENDIX ORGANIC SALES GROWTH Three Months Ended (Dollars in Millions) Motion Commercial Industrial Climate Control Total Regal Systems Systems Solutions Solutions Rexnord Net Sales Three Months Ended Mar 31, 2022 $ 293.3 $ 144.7 $ 273.9 $ 586.6 $ 1,298.5 Net Sales from Business Acquired - -
Slide 23: Total Gross Debt/EBITDA
1Q 2022 APPENDIX TOTAL GROSS DEBT/EBITDA TOTAL GROSS DEBT/ADJUSTED BANK EBITDA (Dollars in Millions) (Dollars in Millions) LTM Mar 31, LTM Mar 31, 2022 2022 Net Income $ 292.6 Net Income $ 292.6 Plus: Income Taxes 89.6 Plus: Income Taxes 89.6 Plus: Interest Expense 56.8 Plus: Interest Expense 56.8 L
Slide 24: Total Net Debt/EBITDA
1Q 2022 APPENDIX TOTAL NET DEBT/EBITDA TOTAL NET DEBT/ADJUSTED BANK EBITDA (Dollars in Millions) (Dollars in Millions) LTM Mar 31, LTM Mar 31, 2022 2022 Net Income $ 292.6 Net Income $ 292.6 Plus: Income Taxes 89.6 Plus: Income Taxes 89.6 Plus: Interest Expense 56.8 Plus: Interest Expense 56.8 Less:
Slide 25: 2021 Quarterly Net Sales and Adjusted EBITDA by Segment
1Q 2022 APPENDIX Total Regal Rexnord 2021 Climate Solutions 2021 Q1 Q2 Q3 Q4 FY 21 Q1 Q2 Q3 Q4 FY 21 Net Sales 814.1 886.9 892.7 1,216.6 3,810.3 Net Sales 239.1 257.3 268.4 265.8 1,030.6 Adjusted EBITDA 149.4 160.0 162.6 227.9 699.9 Adjusted EBITDA 49.5 52.6 58.4 52.7 213.2 Adjusted EBITDA Margin %