Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (May 2021)
31 slides from Lci Industries's investor presentation, May 11, 2021
Slide 1: LCI Industries Investor Presentation May 2021
1 LCI INDUSTRIES INVESTOR PRESENTATION MAY 2021
Slide 2: Forward-Looking Statements
2 LCI INDUSTRIESFORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and obj
Slide 3: Company Overview
COMPANY OVERVIEW Ll INDUSTRIES
Slide 4: LCI at a Glance: Fiscal Year 2020 Key Metrics
4 LCI INDUSTRIES Fiscal Year 2020 Key Metrics Year-over-Year Growth $2,796 M IN NET SALES +18% $223 M Operating Profit +11% $328 M ADJUSTED EBITDA +19% $6.49 ADJUSTED DILUTED EPS +11% LCI AT A GLANCE Note: See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the
Slide 5: Investment Highlights
5 LCI INDUSTRIESINVESTMENT HIGHLIGHTS Leading market share with unmatched depth and breadth of products Deep culture rooted in innovation, technology, and operational excellence Compelling industry tailwinds, including high-margin growing Aftermarket, robust millennial demand, and recent trend
Slide 6: Business Overview
6 LCI INDUSTRIESBUSINESS OVERVIEW Scaled High-Variation Production Metal Fabrication & Welding Lamination Glass Fabrication Cut & Sew Power & Motion Systems Electronics Plastics Forming With 7 core competencies High Variation / Short Runs at Scale Small batch manufacturing with the benefits of scale
Slide 7: Breadth and Depth of Product Offerings
7 LCI INDUSTRIES Breadth and Depth of Product Offerings Industries BREADTH AND DEPTH OF PRODUCT OFFERINGS Towable RV Chassis Furniture Windows and Windshields Entry and Baggage Doors Mattresses Slide-Out Mechanisms Awnings Axles Steps Leveling Systems Suspension Enhancements
Slide 8: Growth strategy and vision and values
8 LCI INDUSTRIES Our passion to win, coupled with a robust growth strategy, drive us to be a leader in every market we enter We believe our industry-leading innovation, the quality of our products, and customer relationships will drive sales and profitability We strive to leverage the manufact
Slide 9: Culture of Innovation and Technology
9 LCI INDUSTRIESCULTURE OF INNOVATION AND TECHNOLOGY R&D expertise and innovation remains a core component of LCl's long-term strategy Expanding OneControl capabilities to integrate into customer support; success continues as customers increasingly seek technologically sophisticated products A
Slide 10: World-Class Operations Driven by a Culture of Caring
10 LCI INDUSTRIES WORLD-CLASS OPERATIONS DRIVEN BY A CULTURE OF CARING Our Social Impact Philosophy Bringing our core values to life through leadership development and the LCI Dream Achiever program Supporting hundreds of nonprofit organizations by donating our time and talents Encouraging our
Slide 11: Driving Sustainability Through Eco-Friendly Operations
11 LCI INDUSTRIES DRIVING SUSTAINABILITY THROUGH ECO-FRIENDLY OPERATIONS We are committed to the safety of our environment and our communities through conscious resource selection and process improvements that aim to lessen the impact of manufacturing processes. Current environmental initiatives inc
Slide 12: Expanding Our Growth Potential
12 LCI INDUSTRIES $563 $4,113 $607 $4,960 $237 $956 $1,389 $1,026 $2,796 $11,055 EXPANDING OUR GROWTH POTENTIAL 1 1 Amounts in millions | Note: "Opportunity" amounts represent Management's estimate of the size of the addressable market, excluding the Company's current net sales to those markets; est
Slide 13: Growing End Markets to Reduce Cyclicality
13 LCI INDUSTRIESGROWING END MARKETS TO REDUCE CYCLICALITY Our goal is to grow Adjacent, Aftermarket, and International to be ~60% of net sales by the end of 2022 to improve diversification of North American RV industry 2016 Net Sales 2020 Net Sales 2022E Net Sales North America RV - OEM Adjacent In
Slide 14: Positioned to Capitalize on Industry Tailwinds
14 LCI INDUSTRIES 50% 20% 22% 8% 2020 Sales by End Market POSITIONED TO CAPITALIZE ON INDUSTRY TAILWINDS RVIA estimates a record high 522,000 – 544,000 RV unit shipments for FY 2021 46 million Americans will likely take an RV road trip over the next 12 months Vibrant secondary RV market - appr
Slide 15: Growing Aftermarket Segment
15 LCI INDUSTRIESGROWING AFTERMARKET SEGMENT Multiple channels including wholesale distributors, direct to dealer, and direct to consumer (e-commerce) Multiple product categories including functional accessories, repair parts, replacement parts, and upgrades Strong service department establish
Slide 16: Attractive Aftermarket Growth Opportunities
16 LCI INDUSTRIESATTRACTIVE AFTERMARKET GROWTH OPPORTUNITIES CURT has an 18-year history of consistent annual sales growth; 5-year sales CAGR of 6% Truck and towing Aftermarket is combined $7.5 billion+ addressable market, expected to grow Enables distribution channel diversification, with sig
Slide 17: Global Expansion Opportunity
17 LCI INDUSTRIESGLOBAL EXPANSION OPPORTUNITY Grew year-over-year international sales by 50% in Q1 2021 Working closely with Erwin Hymer Group, owned by Thor Industries, to further expand LCI products and technologies in European markets Acquired Schaudt in 2021 – Deepening presence in Germany
Slide 18: Acquisition Strategy
18 LCI INDUSTRIESACQUISITION STRATEGY Over 50 acquisitions in the last 20 years Majority of last 20 acquisitions focused outside of North American RV Industry Acquisition target characteristics: Great leadership Product innovation Consistency with our core manufacturing disciplines Nic
Slide 19: Highly Experienced Management Team
19 LCI INDUSTRIESHIGHLY EXPERIENCED MANAGEMENT TEAM Tenured management team averaging 23+ years of experience Jason D. Lippert President & Chief Executive Officer Years of Experience: 27Brian M. Hall Executive Vice President & Chief Financial Officer Years of Experience: 24 Nick Fletcher Executive V
Slide 20: Financial Overview
FINANCIAL OVERVIEW Ll INDUSTRIES
Slide 21: COVID-19 Response and Resuming Production
21 LCI INDUSTRIES Initial Response to COVID-19 Suspended production in March 2020 Reduced compensation of executive leadership team, general managers, and Board of Directors Enacted workforce reductions, temporary hiring freezes and furloughs Executed aggressive working capital management st
Slide 22: Strong and Consistent Historical Financial Results
22 LCI INDUSTRIES $2,476 $2,371 $2,796 $660 $1,000 2018 2019 2020 Q1 2020 Q1 2021 Sales Trend ($M) EBITDA ($M) STRONG AND CONSISTENT HISTORICAL FINANCIAL RESULTS 2020 net sales were up 18% year-over-year, driven by RV shipments increasing 6% over the same period as retail demand rebounded sharply fo
Slide 23: OEM Segment Continues to Perform and Diversify
23 LCI INDUSTRIES ($ in millions) 2018 2019 2020 Q1 2020 Q1 2021 Sales $2,243 $2,092 $2,168 $532 $816 Operating Profit $167 $165 $156 $43 $79 % of sales 7.5% 7.9% 7.2% 8.1% 9.7% Key Drivers Surge in retail demand, as new consumers and their families enter the RV lifestyle and recognize the benefit
Slide 24: OEM Content Per Vehicle Has Steadily Increased
24 LCI INDUSTRIES $2,287 $2,479 2019 2020 $3,346 $3,390 2019 2020 New Towable RV Approximately 61% of 2020 OEM Segment net sales are for Travel Trailer and Fifth-Wheel OEMs 100% market share in existing products, excluding Furrion, would yield an estimated $5,800 per Towable RV, 58% penetration
Slide 25: Aftermarket Segment Provides Compelling Runway
25 LCI INDUSTRIES ($ in millions) 2018 2019 1 2020 1,2 Q1 2020 1,3 Q1 2021 1 Sales $233 $279 $628 $127 $184 Operating Profit $31 $35 $67 $1 $22 % of sales 13.4% 12.5% 10.6% 0.8% 12.0% 1 CURT amortization expense did not materially impact 2019 but is approximately $9 million annually beginning in 202
Slide 26: Tactical Capital Deployment Strategy
26 LCI INDUSTRIESTACTICAL CAPITAL DEPLOYMENT STRATEGY Reduce Leverage Disciplined Reinvestment to Drive Growth Acquisitions that Align to Strategy and Financial Targets Return Capital to Shareholders Attractive Dividend Yield Opportunistic Share Repurchases Target Net Debt / EBITDA Lev
Slide 27: Appendix
APPENDIX Ll INDUSTRIES
Slide 28: Reconciliation of Non-GAAP Measures
28 LCI INDUSTRIESRECONCILIATION OF NON-GAAP MEASURES Note: Adjusted EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciati
Slide 29: Reconciliation of Non-GAAP Measures
29 LCI INDUSTRIESRECONCILIATION OF NON-GAAP MEASURES Note: Adjusted EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciati
Slide 30: Reconciliation of Non-GAAP Measures
30 LCI INDUSTRIESRECONCILIATION OF NON-GAAP MEASURES 1 The Company recorded one-time non-cash charges related to adjustments to deferred tax amounts from the December 2017 enactment of the Tax Cuts and Jobs Act ("TCJA"). In addition to reporting financial results in accordance with U.S. GAAP, the Co
Slide 31: Industry Statistics Summary: Total Recreational Vehicles (RV)
31 LCI INDUSTRIES INDUSTRY STATISTICS SUMMARY: TOTAL RECREATIONAL VEHICLES (RV)