Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q4 2021 Earnings Presentation
29 slides from Vertiv's earnings presentation, Feb 23, 2022
Slide 1: Fourth Quarter and Full Year 2021 Results
Fourth Quarter and Full Year 2021 Results February 23, 2022 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes, without l
Slide 3: Fourth quarter 2021 key messages
Fourth quarter 2021 key messages Fourth quarter organic sales up 4% from prior year as supply chain constraints limited customer deliveries. Underlying market demand remains strong with fourth quarter orders up over 50% from last year’s fourth quarter. Fourth quarter adjusted operating profit $58M l
Slide 4: 2021 review and 2022 outlook
2021 review and 2022 outlook 2021 REVIEW 2022 OUTLOOK • Demand remained incredibly strong with full year orders • Demand environment remains strong, but deliveries +29% leading to a record backlog of $2.9B ($3.2B including remain constrained by parts shortages, especially E&I) semiconductors and ele
Slide 5: Market environment
Market environment SEGMENT AMERICAS APAC EMEA Oct-21 Feb-22 Oct-21 Feb-22 Oct-21 Feb-22 CLOUD / HYPERSCALE COLOCATION + + ENTERPRISE / SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS + COMMERCIAL & INDUSTRIAL Demand in our primary markets remain robust with mid-term visibility becoming clearer 5
Slide 6: E&I acquisition update
E&I acquisition update • 2022 financial expectations ➢ Sales: ~$470 million ➢ Adjusted operating profit: ~$80 million • Expectations lower than prior guidance due to same underlying challenges as Vertiv. Higher than expected inflation, supply constraints and lag of price realization in income statem
Slide 7: Fourth quarter 2021 financial results
Fourth quarter 2021 financial results $Millions Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 8% Down ~38% Down 490bps Down ($0.25) Down ($167M) Organic +4% 175 1,411 1,306 152 11.6% $0.29 94 6.7% 8 $0.04 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020
Slide 8: Fourth quarter 2021 segment results
Fourth quarter 2021 segment results $Millions Americas ➢ Strong services growth offset by significant supply chain- disruptions for manufactured products. Orders and Net sales backlog at record highs. E&I added ~$21M. Up 4.8% ➢ Operating margins unfavorable due to materials and Up 3.8% Up 20.0% Orga
Slide 9: Fourth quarter 2021 adjusted operating profit vs. guidance
Fourth quarter 2021 adjusted operating profit vs. guidance $Millions 176 • Inflation accelerated in Q4 including significant spending on spot buys and premium freight to (36) protect customer deliveries • Labor inflation primarily in (10) Services business (high (10) premium labor usage) (8) (5) (2)
Slide 10: Full year 2021 financial results
Full year 2021 financial results $Millions Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 14% Up ~38% Up 160 bps Up $0.91 Down ($27M) Organic +11% $0.76 4,998 471 163 4,371 136 342 9.4% 7.8% ($0.15) FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 FY 2021
Slide 11: 2022 outlook
2022 outlook ore IV.
Slide 12: Expectations for 2022
Expectations for 2022 First half challenged but second half $Millions – at midpoint of guidance range recovery sets stage for strong 2023: Sales 5,650 ➢ Volume: ~$195M higher in second half due 2,465 3,185 to normal seasonality and some improved parts availability – consistent with 1H/2H volume spli
Slide 13: 2022 financial guidance by quarter
2022 financial guidance by quarter $Millions – at midpoint of guidance range Net Sales Organic Sales Growth from 2021 Volume 415 3,185 Pricing 165 2,465 235 180 105 1,680 60 1,505 15 0 250 1,340 1,125 30 80 120 130 110 (45) (65) (15) (110) Q1 Q2 Q3 Q4 H1 H2 Q1 Q2 Q3 Q4 H1 H2 Adjusted Operating Profi
Slide 14: 2022 pricing and inflation by quarter
2022 pricing and inflation by quarter $Millions – year-over-year impact excluding E&I • Pricing actions included in YE Pricing Inflation backlog ~$125M ~360 • Pricing actions implemented in ~130 ~120 ~260 Q4 2021 and Q1 2022 expected ~100 ~$235 to drive incremental ~$235M ~80 ~80 benefit ~50 ~30 ~30
Slide 15: 2022 Price Realization: $360 million
2022 Price Realization: $360 million • Market accepted 2021 price increases. Strong fourth quarter orders growth (+51%) and end- market demand backdrop suggested significant opportunity for additional 2022 price. • Multiple waves of definitive list price increases at end of 2021 and early 2022. YTD
Slide 16: Full year 2022 financial guidance
Full year 2022 financial guidance $Millions Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 13% Up 11% Down 10bps Down $0.06 Up $14M Organic +8% 5,650 4,998 525 150 471 9.4% 9.3% $0.76 136 $0.70 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2
Slide 17: First quarter 2022 financial guidance
First quarter 2022 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Up 2% Down $132M Down 1,200 bps Down ($0.38) Organic down (1%) $0.21 10.2% 1,098 1,125 112 ($0.17) (1.8%) (20) Q1 2021 Q1 2022 Q1
Slide 18: Fourth quarter 2021 key messages
Fourth quarter 2021 key messages Market demand is very strong with confidence in short- and mid-term pipelines Short-term inflation and supply chain headwinds will dampen first half 2022 profitability Significant portion of price target is already booked and recent order flow indicates new price act
Slide 19: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 20: Non-GAAP financial measures – fourth quarter results
Non-GAAP financial measures – fourth quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | 4th QUARTER) 4Q21 4Q20 D ($M | 4t
Slide 21: Non-GAAP financial measures – fourth quarter results (cont.)
Non-GAAP financial measures – fourth quarter results (cont.) Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Gain on tax Operating profit Interest receivable Change in Income tax ($M, except EPS | 4th QUARTER 2021) (
Slide 22: Non-GAAP financial measures – full year results
Non-GAAP financial measures – full year results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | FULL YEAR) FY21 FY20 D ($M | FULL YEAR
Slide 23: Non-GAAP financial measures – full year results (cont.)
Non-GAAP financial measures – full year results (cont.) Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Loss on Gain on tax Operating Interest extinguishment receivable Change in Income tax Net income ($M, except EPS
Slide 24: Non-GAAP financial measures – 2022 guidance
Non-GAAP financial measures – 2022 guidance At midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Income tax Net income ($M, except EPS | 1st QUARTER 2022(1)) (loss)
Slide 25: Non-GAAP financial measures – 2022 guidance continued
Non-GAAP financial measures – 2022 guidance continued At midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Income tax Net income ($M, except EPS | 1st HALF 2022(1))
Slide 26: Non-GAAP financial measures – 2022 guidance continued
Non-GAAP financial measures – 2022 guidance continued At midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Income tax Net income ($M, except EPS | 2nd QUARTER 2022(1
Slide 27: Additional 2022 guidance assumptions
Additional 2022 guidance assumptions SEGMENT EXPECTATIONS1 FREE CASH FLOW Guidance Actual FY 2022 FY 2021 B/(W) E&! Adjusted operating profit 525 471 54 D&A (excluding intangible amortization) 96 83 13 AMERICAS APAC EMEA2 621 554 67 NET SALES $2,200 - $2,350 $1,700 - $1,800 $1,100 - $1,200(3) M&A co
Slide 28: Full year 2022 adjusted operating profit vs. 2021
Full year 2022 adjusted operating profit vs. 2021 $Millions; FY 2022 at midpoint of guidance • Pricing includes ~$125M in year end 2021 backlog and ~$235M in new 2022 pricing actions 20 70 • E&I 2022 adjusted operating profit of ~$80M less ~$7M in 2021 (260) • Volume benefit of $55M higher sales • M
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