Woodward, Inc. · NASDAQ:WWD

Woodward — Q3 2023 Earnings Presentation

21 slides from Woodward's earnings presentation, Jul 31, 2023

1. Slide 1: Fiscal Year 2023 Third Quarter Results

   FISCAL YEAR 2023 THIRD QUARTER RESULTS July 31, 2023

2. Slide 2: Q3 Fiscal Year 2023 Agenda

   Q3 FISCAL YEAR 2023 AGENDA STRATEGIES & FINANCIAL RESULTS INTRODUCTION MARKET REVIEW & OUTLOOK Dan Provaznik Chip Blankenship Bill Lacey ________ ________ ________ 2 | © WOODWARD, INC. PROPRIETARY

3. Slide 3: Cautionary Statement

   FOR YOUR INFORM ATIO N CAUTIONARY STATEMENT Information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, our expectations of continued strong end m

4. Slide 4: Q3 Fiscal Year 2023 Summary

   Q3 FISCAL YEAR 2023 SUMMARY SALES UP 30% EARNINGS IMPROVEMENT DRIVEN BY • STRONG END MARKET DEMAND • HIGHER VOLUMES • INCREASED OUTPUT • PRICE REALIZATION • PRICE REALIZATION • PARTIALLY OFFSET BY ANNUAL INCENTIVE COMPENSATION ADJUSTED FREE CASH FLOW 1 OF $103M IN RETURNED $64M TO SHAREHOLDERS FY23

5. Slide 5: Q3 Fiscal Year 2023 Consolidated Results

   Q3 FISCAL YEAR 2023 CONSOLIDATED RESULTS $1.37 801 98 103 Adjusted 85 614 ↑30% 52 $0.64 49 Adjusted 39 Net Sales (mil $) Earnings per Share (EPS) Net Earnings (mil $) Free Cash Flow1 (mil $) (Fiscal Year-to-Date) 5 | © WOODWARD, INC. FY22 FY23 PROPRIETARY

6. Slide 6: Aerospace Overview

   W woopwarD AEROSPACE OVERVIEW

7. Slide 7: Aerospace - Commercial

   AEROSPACE - COMMERCIAL COMMERCIAL OEM ▪ 41% sales increase over the prior year quarter ▪ Higher OEM build rates ▪ Price realization COMMERCIAL AFTERMARKET ▪ 28% sales increase over the prior year quarter ▪ Continuing passenger traffic recovery in all regions - both domestic and international ▪ Incre

8. Slide 8: Aerospace - Defense

   AEROSPACE - DEFENSE DEFENSE OEM ▪ 12% sales decrease over the prior year quarter ▪ Decline in guided weapons ▪ Other programs are steady DEFENSE AFTERMARKET ▪ 17% sales increase over the prior year quarter 8 | © WOODWARD, INC. PROPRIETARY

9. Slide 9: Aerospace Q3 Fiscal Year 2023

   AEROSPACE Q3 FISCAL YEAR 2023 83 481 402 17.3% 57 14.1% ↑20% Segment Sales (mil $) Segment Earnings (mil $) Segment Margin 9 | © WOODWARD, INC. FY22 FY23 PROPRIETARY

10. Slide 10: Industrial Overview

    W woopwarD INDUSTRIAL OVERVIEW

11. Slide 11: Industrial

    INDUSTRIAL POWER GENERATION ▪ Strong demand for power generation on growth in Asia ▪ Global aftermarket activity increasing ▪ Ongoing demand for backup power for data centers TRANSPORTATION ▪ Healthy global marine market on increased ship build rates and higher fleet utilization ▪ Increase in China

12. Slide 12: Industrial Q3 Fiscal Year 2023

    INDUSTRIAL Q3 FISCAL YEAR 2023 320 18.2% 58 213 9.9% 51% 21 Segment Sales (mil $) Segment Earnings (mil $) Segment Margin 12 | © WOODWARD, INC. FY22 FY23 PROPRIETARY

13. Slide 13: Selected Financial Results

    SELECTED FINANCIAL RESULTS Quarter and Year-to-Date Comparatives Q3 FY 22 Q3 FY 23 YTD FY 22 YTD FY 23 Gross Margin * 21.8% 25.5% 22.4% 22.8% SG&A Expenses - % of Sales 7.6% 8.1% 8.8% 9.5% R&D Expenses - % of Sales 5.2% 4.4% 5.2% 4.7% Effective Tax Rate 21.6% 20.0% 17.6% 17.3% EBITDA1 (mils) $ 88 $

14. Slide 14: Capital Deployment to Shareholders

    CAPITAL DEPLOYMENT TO SHAREHOLDERS $64M RETURNED TO SHAREHOLDERS YTD FY23 $26M Share Repurchases $38M Dividends RETURN TO SHAREHOLDERS DIVIDENDS SHARE REPURCHASES Long-term commitment to ▪ $38M in fiscal 2023 YTD ▪ $26M of shares repurchased in fiscal 2023 return a minimum 50% of YTD net earnings to

15. Slide 15: Fiscal Year 2023 Revised Outlook

    FISCAL YEAR 2023 REVISED OUTLOOK We continue to expect year-over-year improvements in the fourth quarter of fiscal 2023. Due to continued strong end market demand and our improved ability to deliver for our customers, we are raising certain aspects of our full-year guidance. Prior Fiscal Year 2023 G

16. Slide 16: Appendix

    W woopwarD APPENDIX

17. Slide 17: Non-U.S. GAAP Reconciliations

    APPENDIX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries 1 RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS (Unaudited - in thousands, except per share amounts) Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 Before Income Per Share, Net of Per Share, Net of Ta

18. Slide 18: Non-U.S. GAAP Reconciliations

    APPENDIX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries 1 1 RECONCILIATION OF NET EARNINGS TO EBIT AND ADJUSTED EBIT (Unaudited - in thousands) Three-Months Ended June 30, Nine-Months Ended June 30, 2023 2022 2023 2022 Net earnings (U.S. GAAP) $ 84,599 $ 39,446 $ 149,716 $ 117,657 Inc

19. Slide 19: Non-U.S. GAAP Reconciliations

    APPENDIX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries 1 1 RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (Unaudited - in thousands) Nine-Months Ended June 30, 2023 2022 Net cash provided by operating activities (U.S. GAAP) $ 155,6

20. Slide 20: Non-U.S. GAAP Measures

    APPENDIX NON-U.S. GAAP MEASURES 1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, evaluate Woodward’s operating performance without the impacts of financing and tax related adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, and adjusted non

21. Slide 21: Always Innovating for a Better Future

    ALWAYS INNOVATING FOR A BETTER FUTURE 21 | © WOODWARD, INC. PROPRIETARY

Woodward — Q3 2023 Earnings Presentation on 6ix