Slide 1: Earnings Conference Call Second Quarter 2023
July 25, 2023 – 9:00am CT Earnings Conference Call Second Quarter 2023
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties and risks, including general economic conditions and conditions in the particular markets in which we operate, supply chai
Slide 3: Q2 2023 Key Messages
Q2 2023 Key Messages Q2 results met our expectations – Outperformance in high growth businesses (heat exchangers, NA CO2 systems, polymer processing all up >20% organically(1)) – Revenue negatively impacted by lost production as a result of an ERP upgrade in vehicle services ~$50M revenue / $0.1
Slide 4: Q2 2023 Performance Highlights
Q2 2023 Performance Highlights Organic Revenue(1) -3% Y-o-Y Organic Bookings(2) -8% Y-o-Y Organic growth in 3 of 5 segments Book-to-bill(2): 0.92, reflecting better lead times and strong shipments against backlogs in longer cycle portfolio 2% headwind from vehicle services ERP system upgrade Total S
Slide 5: Summary Corporate Q2 Results
Summary Corporate Q2 Results Q2 2023 Highlights and Comments Revenue change All-in -3% Y-o-Y organic growth(1) in three out of five segments (Y-o-Y) Organic(1) -3% FX impact: -1%; acquisitions +1% Bookings change All-in(2) -8% Q2 book-to-bill(2): 0.92; better lead times, strong shipments again
Slide 6: Segment Results
Segment Results Q2 2023 Revenue ($M) / Segment Earnings Segment Performance Commentary Y-o-Y Organic(1) ∆% % / bps ∆ Y-o-Y Strong shipments and bookings in waste handling more than offset by lower volumes in $474 15% vehicle services caused by an ERP system upgrade DEP -8% -50 bps Margin decline
Slide 7: Revenue & Bookings
Revenue & Bookings Q2 2023 Revenue Change in Organic Revenue(1): -$64M, or -3% Q2 ’23 Organic Rev Growth(1) ($M) 2,159 -40 -46 1 4 17 -15 20 2,100 US 55% -9% Q2 2022 DEP DCEF DII DPPS DCST FX ACQUISITIONS Q2 2023 Organic Q2 2023 Bookings(2) Change in Organic Bookings(2): -$175M, or -8% EUROPE 21% -1
Slide 8: Year-to-date 2023 Free Cash Flow
Year-to-date 2023 Free Cash Flow $M YTD ‘23 YTD ‘22 ∆ Net earnings 471 516 (45) D&A 157 154 3 Change in working capital (88) (281) 193 Change in other(1) (103) (187) 84 Cash flow from operations 437 202 235 Capex (88) (101) 13 Free cash flow(2) 348 102 246 FCF % of revenue(2) 8% 2% FCF % of adj. ear
Slide 9: Demand Trends and Backlog Strength Driving Robust Growth Outlook
Demand Trends and Backlog Strength Driving Robust Growth Outlook Total Backlog / 2023 Outlook % of Full Year Revenue(2) ’23 Organic ’23 Segment Growth(1) Margin Q2 ’19 Q2 ‘23 H2 Comments Strong bookings and shipments in waste handling and aerospace & defense; Waste Hauling sequential volume recove
Slide 10: H2 2023 Adj. EPS Guide up 10-13% Year-over-Year
H2 2023 Adj. EPS Guide up 10-13% Year-over-Year Adjusted EPS(1) ($/share) 0.04 4.86 – 5.01 0.08 (0.01) 0.21 0.12 – 0.27 4.42 Announced Savings(2): H2 2023: $38M FY 2024: $40M H2 2022 Growth / Restructuring and FX Interest Corporate H2 ’2023E Adj. EPS Conversion Other Cost Actions and Other Adj.
Slide 11: Strong Foundation for 2024
Strong Foundation for 2024 2024 Growth Exposures: ~40% of Portfolio Heat Robust demand for heat pump applications in Europe; significant supply / demand imbalance Exchangers Expanding global capacity by ~50%; on track for completion in ‘24 CO2 Market leader in North America for natural refrige
Slide 12: FY 2023 Guidance
FY 2023 Guidance Narrowing full year adjusted EPS(1) Revenue Growth Rate(1): 2% - 4% guidance to $8.85-$9.00; confidence in second half outlook – Seasonality similar to pre-pandemic Effective Tax Rate: 20% – 21% – Solid underlying demand EPS and other – Significant forecasted volume in backlog
Slide 13: Appendix
Appendix 13
Slide 14: Q2 2023 Total Segment Earnings and Adjusted Net Earnings
Q2 2023 Total Segment Earnings and Adjusted Net Earnings Change in Total Segment Earnings(2) -$21M 21.9% 22.1% -40 bps 20.2% 20.6% ($M) 444 33 477 -8 -14 0 -7 12 461 37 423 TOTAL SEG. NON-ACQ. ADJ. DEP DCEF DII DPPS DCST ADJ. NON-ACQ. TOTAL SEG. EARNINGS D&A (1) EBITDA (2) EBITDA (2) D&A (1) EARNING
Slide 15: Organic Revenue and Bookings Bridges
Organic Revenue and Bookings Bridges Note: Numbers may not add due to rounding 15
Slide 16: Q2 2022 to Q2 2023 Revenue and Bookings Bridges
Q2 2022 to Q2 2023 Revenue and Bookings Bridges Note: Numbers may not add due to rounding 16
Slide 17: Reconciliation of Net Earnings to Total Segment Earnings and Adjusted Segment EBITDA
Reconciliation of Net Earnings to Total Segment Earnings and Total Adjusted Segment EBITDA Note: Numbers may not add due to rounding (1) Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and 17
Slide 18: Reconciliation of Net Earnings to Adjusted Net Earnings and Diluted EPS
Reconciliation of Net Earnings to Adjusted Net Earnings and Diluted EPS to Adjusted Diluted EPS Note: Numbers may not add due to rounding 18
Slide 19: Backlog
Backlog Note: Numbers may not add due to rounding 19
Slide 20: Reconciliation of Free Cash Flow and EPS to Adjusted EPS
Reconciliation of Free Cash Flow and EPS to Adjusted EPS Note: Numbers may not add due to rounding 20
Slide 21: Non-GAAP Definitions
Non-GAAP Definitions Definitions of Non-GAAP Measures: Adjusted Net Earnings: is defined as net earnings adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, and Tax Cuts and Jobs Act. Adjusted Net Earnings Margin: is defined as adjusted net earnings divid
Slide 22: Performance Measures Definitions
Performance Measures Definitions Definitions of Performance Measures: Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends. Organic Bookings represent total orders received
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