Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q3 2021 Earnings Presentation
21 slides from Vertiv's earnings presentation, Oct 27, 2021
Slide 1: Third Quarter 2021 Results
Third Quarter 2021 Results October 27, 2021 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: Third quarter 2021 key messages
Third quarter 2021 key messages Demand continues to be strong with third quarter 2021 orders up 17% vs. third quarter 2020. Third quarter sales of $1,229M are 6% higher (+4% organic) than last year’s third quarter. Third quarter adjusted operating profit of $131M is $64M higher than third quarter 20
Slide 4: Market environment
Market environment Vertiv SEGMENT Sales AMERICAS APAC EMEA Exposure1 June-21 Oct-21 June-21 Oct-21 June-21 Oct-21 CLOUD / HYPERSCALE ~20% COLOCATION ENTERPRISE / ~50% SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS ~20% COMMERCIAL & INDUSTRIAL ~10% Note: 1Sales Revenue FY2020 estimated by customer se
Slide 5: Customer demand and supply chain update
Customer demand and supply chain update CUSTOMER DEMAND SUPPLY CHAIN & PRICING UPDATE • Overall market demand remains robust and consistent • Supply chain challenges accelerated in the third with expectations. Third quarter orders up 17% quarter with no improvement expected in the fourth compared to
Slide 6: Mergers & acquisitions update
Mergers & acquisitions update E+I ENGINEERING HEAVY INDUSTRIAL UPS SALE • Deal anticipated to close ahead of schedule by November 1st • Signed definitive agreement to divest business to InnovaFonds along with management team participation • Issued $850M seven-year, senior secured notes at 4.125% on
Slide 7: Third quarter 2021 financial results
Third quarter 2021 financial results $Millions Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 6% Up ~94% Up 490 bps Up $0.15 Down ($85M) Organic +4% 1,229 129 1,162 131 10.7% $0.20 68 5.8% 44 $0.05 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021
Slide 8: Third quarter 2021 segment results
Third quarter 2021 segment results $Millions Americas ➢ Strong services growth offset by supply challenges for manufactured products. Backlog remains at record level. Net sales ➢ Operating margins unfavorable due to supply chain Up 1.0% headwinds partially offset by pricing, fixed cost reductions Up
Slide 9: Third quarter 2021 free cash flow & liquidity
Third quarter 2021 free cash flow & liquidity $Millions 129 • Liquidity of $1,178M at quarter end ➢ 2.3x net leverage (43) • Large inventory build in Q3 2021 to protect customer deliveries given parts availability challenges (16) (10) • Cash taxes higher driven by timing and (9) higher expected full
Slide 10: Fourth quarter 2021 financial guidance
Fourth quarter 2021 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Up 8% Up ~16% Up 90 bps Down ($0.02) Organic +5% 1,412 55 M&A 176 13 M&A 1,306 1,357 12.5% $0.29 163 $0.27 152 11.6% Q4 2020 Q4 2
Slide 11: Updated full year 2021 financial guidance
Updated full year 2021 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 14% Up 62% Up 330 bps Up $1.15 Up $42M Organic +11% 5,000 55 M&A 553 13 M&A 4,945 $1.00 4,371 540 11.1% 205
Slide 12: Early thoughts on 2022
Early thoughts on 2022 MARKET OUTLOOK & REVENUE PROFITABILITY + Strong backlog should translate into strong sales throughout 2022. + Pricing initiatives continue to accelerate. Expect a favorable net Expect backlog to be ~$500M higher entering 2022 than it was pricing / inflation tailwind for full y
Slide 13: Third quarter 2021 key messages
Third quarter 2021 key messages Demand continues to be strong with third quarter 2021 orders up 17% vs. third quarter 2020. Third quarter sales of $1,229M are 6% higher (+4% organic) than last year’s third quarter. Third quarter adjusted operating profit of $131M is $64M higher than third quarter 20
Slide 14: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 15: Non-GAAP financial measures - third quarter results
Non-GAAP financial measures - third quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | 3rd QUARTER) 3Q21 3Q20 D ($M | 3rd
Slide 16: Non-GAAP financial measures – third quarter results (cont.)
Non-GAAP financial measures – third quarter results (cont.) Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M, except EPS | 3rd QUARTER 2021) (loss) expense, net warra
Slide 17: Non-GAAP financial measures – fourth quarter guidance
Non-GAAP financial measures –fourth quarter guidance Fourth quarter 2021 reflects 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 Change in Income tax ($M, except
Slide 18: Non-GAAP financial measures – updated full year guidance
Non-GAAP financial measures – updated full year guidance Full year 2021 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 Loss on profit Interest extinguishment Change in Income
Slide 19: Full year 2021 inflation and pricing evolution
Full year 2021 inflation and pricing evolution $Millions favorable / (unfavorable) vs. prior year February Guidance April Guidance July Guidance September Guidance October Guidance 1 (adj. OP = $575M) (adj. OP = $595M) (adj. OP = $600M) (adj. OP = $540M) (adj. OP = $540M) Material and freight inflat
Slide 20: Full year guidance bridge including M&A activity
Full year guidance bridge including M&A activity $Millions except earnings per share; midpoint of guidance range unless otherwise specified 5,000 (~10) 4,945 ~65 Net Sales Base Vertiv E+I Heavy Combined Industrial UPS 553 (~1) 540 ~15 Adjusted Operating Profit Base Vertiv E+I Heavy Combined Industri
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