Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Baird 2022 Global Industrial Conference
33 slides from Columbus Mckinnon's conference presentation, Nov 8, 2022
Slide 1: Baird 2022 Global Industrial Conference
Baird 2022 Global Industrial Conference David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Executive Vice President – Finance and Chief Financial Officer November 8, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement These slides, and the accompanying oral discussion (together, this “presentation”), contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning expected g
Slide 3: Intelligent Motion Solutions for Material Handling
Intelligent Motion Solutions for Material Handling (1) Columbus McKinnon (Nasdaq: CMCO) Financial & Market Data Transforming from a legacy cyclical industrial company to a top-tier, secular growth, intelligent motion solutions company $921M $0.8B Strategic priorities Revenue Market Cap. • Strengthen
Slide 4: Lifting, Linear Motion and Automation Solutions
Lifting, Linear Motion and Automation Solutions Rich History as Premium Provider of Products for Material Handling Lifting Solutions: #1 U.S. market position in hoists Lifting capacity from 1/8 ton to ~140 tons Manual chain, electric chain and wire rope hoists Reliable, high-quality products Compass
Slide 5: Precision Conveyance Solutions
Precision Conveyance Solutions Developing Leading Platform for Growth Specialty conveying provides growth platform: ~$4B TAM growing at 6% to 8% CAGR Higher margin profile Strong secular growth drivers: Supply chain automation Acceleration of e-commerce adoption Fragmented market provides target ric
Slide 6: CMCO Transformation Strategy
CMCO Transformation Strategy STRATEGIC PLAN TO TRANSFORM COLUMBUS MCKINNON INTO A GLOBAL INTELLIGENT MOTION ENTERPRISE ✓ Advances CMCO to achieve target ~$1.5 billion in revenue and ~21% EBITDA margin in FY27 ✓ Evolves the enterprise from cyclical industrial to top-tier, secular growth, intelligent
Slide 7: Unlocking CMCO's Potential
Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO CMBS GROWTH FRAMEWORK TRANSFORMATION Framework To Deliver Differentiated Growth, Financial Performance And Shareholder Value 7 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 8: Business Model Transformation
Business Model Transformation Growth Strategy Substantially Advances Underlying Portfolio FUTURE Revenue Growth Rate Specialty FY23 YTD Conveying Linear Motion Linear Automation Motion 13% 9% Automation Specialty Conveying 18% FY21 Lifting Solutions Linear Motion Lifting Solutions & Automation 60% L
Slide 9: Unlocking Potential: Key Strategic Objectives Dashboard
Unlocking Potential Key Strategic Objectives Dashboard STRENGTHEN, GROW, EXPAND AND REIMAGINE CMCO Integrated regional teams to simplify, collaborate and deliver on Intelligent Motion Solutions for material handling Delivered 7.5% YTD growth (constant currency) driven by focus on higher growth, secu
Slide 10: CMBS to Deliver Margin Expansion
CMBS to Deliver Margin Expansion 80/20 Critical Business Tool 80/20 Embedded in CMBS Focus Area: Product Line Simplification Product Line Simplification Raving fans and priority account program Customer list simplification Purchased parts Product SKUs Business Segmentation, Reduced by 40% to Down to
Slide 11: Delivering Innovation
Driving Organic Growth with New Products New xxx Product Development Supports Core Growth Framework • Improved facility safety for large complex loads Tandem Hoist • Available in Compass™ configurator Delivering Innovation Precision • Unique, beltless zone control for pallet and tray handling Pallet
Slide 12: Driving Innovation Through Automation
Driving Innovation Through Automation Intelli-Crane™ Solutions Intelli-Protect™ System Intelli-Lift™ Auto Detection Intelli-Connect™+ Mobile App • Protection boundaries for • Visible and audible warnings • Provides critical crane and improved facility safety when off-center pick is hoist status info
Slide 13: Strong Track Record Creating Value Through M&A
Strong Track Record Creating Value Through M&A September 2015 January 2017 April 2021 December 2021 Acquisition of STAHL Acquisition of Dorner for $485M Acquisition of Magnetek, Inc. CraneSystems from Konecranes advances Intelligent Motion Acquisition of Garvey for for ~$182M added for ~$218M streng
Slide 14: Secular Growth Markets Provide Tailwinds
Secular Growth Markets Provide Tailwinds Precision Conveying Platform Added Attractive Vertical Markets with Enduring Tailwinds Food, Custom designed sanitary and Beverage & easy to clean conveyors Consumer engineered to the strictest USDA ~6% of FY22 sales* Goods guidelines Customizable designs bui
Slide 15: FY2027 Financial Targets
FY2027 Financial Targets Key Assumptions Growing Sales by >10% CAGR • Organic growth of ~5% driven by go-to-market structure and strategic initiatives SALES • Inorganic growth of ~6% from programmatic M&A inclusive of market growth • No material changes to current market conditions Expanding Gross M
Slide 16: Financial Targets
Financial Targets ($ in millions) SALES & ADJUSTED EBITDA & ADJUSTED GROSS MARGIN ADJUSTED EBITDA MARGIN 550 28.0% $2,000 $1,800 ~40% 39.0% 450 ~21% 23.0% 36.1% 36.5% $1,500 $1,600 35.0% 35.4% $1,400 33.7% 34.1% $325 350 15.7% 15.4% 15.6% ~$315 18.0% $1,200 34.0% 15.1% 13.7% $1,000 11.9% $80 250 13.
Slide 17: Revenue Bridge
Revenue Bridge ($ in millions) REVENUE FY22 TO FY27E Strategy Expected to Deliver >10% Revenue Growth 17 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 18: Adjusted EBITDA Margin Bridge
Adjusted EBITDA Margin Bridge ($ in millions) ADJUSTED EBITDA MARGIN FY22 to FY27E ~21% ~19% Actions Pricing & In Process Freight $309M Recovery Backlog at 3/31/22 Expanding Adjusted EBITDA Margins ~550 bps Driven by Cost Actions & Scale 18 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 19: Capital Allocation Priorities
Capital Allocation Priorities GROWTH New product development Invest in growth initiatives and CapEx Decreasing Priority Acquisitions Continue programmatic M&A BALANCE SHEET De-lever the balance sheet Manage capital structure responsibly Fund pension contributions above Terminate plans when feasible
Slide 20: Free Cash Flow and Net Leverage
Free Cash Flow and Net Leverage ($ in millions) FREE CASH FLOW GENERATION & NET DEBT & CONVERSION(1) NET LEVERAGE RATIO(2) 5.00 951% 1000.0 200 4.00 800% 2.6x 2.7x 2.8x 3.00 $160 800.0 250% 2.0x 150 163% 300% 1.7x 2.00 121% 98% 1.1x $630 158% 600.0 1.1x 1.00 $97 58% 100 $87 -200% 0.00 $67 $396 $403
Slide 21: CMCO Peer Group Comparison
CMCO Peer Group Comparison Industrial Peers vs. Motion Control Peers (Based on average TTM ending 3/31/2022) YOY SALES GROWTH ADJ. GROSS ADJ. EBITDA EBITDA TRADING MARGIN(1) MARGIN MULTIPLE(2) Motion Control 22.4% 33.3% 18.8% 11.3x Target: ~21% CMCO 39.5% 36.1% 15.4% 19% 9.3x Legacy Industrial 16.3%
Slide 22: Key Takeaways
Key Takeaways Transforming to a Top-tier, Secular Growth, Intelligent Motion Solutions Enterprise EVOLVED STRATEGY BLUEPRINT FOR GROWTH 2.0 DEFINES GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – ENABLES SCALABILITY CONVEYING SOLUTIONS ADDS GROWTH CATALYST IN ATTRACTIVE MARKETS OPERATION
Slide 23: Baird 2022 Global Industrial Conference
Baird 2022 Global Industrial Conference November 8, 2022
Slide 24: Supplemental Information
OW Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 25: Corporate Sustainability Report
Corporate Sustainability Report SOCIAL RESPONSIBILITY EMPLOYEE HEALTH & SAFETY HUMAN CAPITAL MANAGEMENT PRODUCT QUALITY & INNOVATION PURPOSE, MISSION, VISION, VALUES CUSTOMER SATISFACTION GOVERNANCE & ETHICS SUPPLY CHAIN MANAGEMENT CYBERSECURITY ETHICS & COMPLIANCE Strategic Initiatives ENTERPRISE R
Slide 26: Growing Secular Market Presence
Growing Secular Market Presence Conveying Solutions Serves Less Cyclical Industries FY 2022 Construction 7% Energy & Material Utilities Food, Beverage & Consumer Handling 9% Goods 11% 6% Oil & Gas 5% Chemical & Paper Transportation Processing 15% 5% Aerospace & Government 5% Elevator 3% General Indu
Slide 27: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 83% 80.0% (Manufacturing) 82.4% 81% 80.3% (Total) Q3 2022 75% Sept 2022(1) 79% 77% 70% 75% 73% 71% 65% 69% 67% 60% 65% Manufacturing Total (1)
Slide 28: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% October 2022 52.3% 50% 45% 40% 35% 30% 25% 28 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 29: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Pro-forma net debt leverage ratio of ~2.8x(1) September 30, June 30, • Improved 10 bps 2022 2022 • Net debt to net total capital improved 100 bps y/y to 33.9% Cash and cash equivalents $ 88.9 $ 85.7 Reduced debt $10 million in the quarter and Total de
Slide 30: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Fiscal Year TTM 2018 2019 2020 2021 2022 Q2 FY23 GAAP gross profit $ 285,061 $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 329,361 Add back (deduct): Product liability settlement — — — — 2,850 2,850 Acquisition amortization of backlog — — — — 2,100 2
Slide 31: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year TTM Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 FY 2021 FY 2022 Q2 FY23 GAAP net income (loss) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 14,114 $ 9,106 $ 29,660 $ 44,225 Add back (deduct): Amortization of intangible
Slide 32: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Fiscal Year TTM 2018 2019 2020 2021 2022 Q2 FY23 GAAP net income (loss) $ 22,065 $ 42,577 $ 59,672 $ 9,106 $ 29,660 $ 44,225 Add back (deduct): Income tax expense (benefit) 27,620 10,321 17,484 970 8,786 21,066 Interest and debt expense 19,733 17,144 1
Slide 33: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in thousands) Fiscal Year TTM 2018 2019 2020 2021 2022 Q2 FY23 Cash (used in) provided by operations $ 69,661 $ 79,499 $ 106,795 $ 98,890 $ 48,881 $ 37,088 Capital expenditures (14,515) (12,288) (9,432) (12,300) (13,104) (11,640) Free cash flow (FCF) $ 55,146 $ 67,21
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