Zurn Elkay Water Solutions Corporation · NYSE:ZWS
Zurn Elkay Water Solutions — Q3 2022 Earnings Presentation
12 slides from Zurn Elkay Water Solutions's earnings presentation, Oct 26, 2022
Slide 1: Third Quarter 2022 Financial Results
Third Quarter 2022 Financial Results October 26, 2022
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the federal securities laws that involve risks and uncertainties. Forward-looking statements include statements we make con
Slide 3: Performance Update
Performance Update Strategic Developments • Completed combination with Elkay Manufacturing Company (“Elkay”) on July 1st • Full quarter of Elkay results within consolidated financials • Elkay integration running ahead of schedule Q3 Results • Q3 net sales increased +82% year over year • Core sales(1
Slide 4: Elkay Integration Tracking Ahead of Schedule
Elkay Integration Tracking ahead of schedule… • Independent rep consolidation complete • Improving price realization • Synergy case on-track • Executing on 80/20 walk-away plan • Incorporating into ESG goals & initiatives … Leveraging ZEBS to drive a high performing business 4 |
Slide 5: Simplification Accelerates Growth & Profitability, Delivers Higher ROIC
Simplification Accelerates Growth & Profitability … Delivers Higher ROIC • Simplifies business for improved execution • Committing to $115M of 80/20 exits with rationalization adding +$5M EBITDA • Exits mainly within commodity/private label/OEM residential sinks that are primarily sold through home
Slide 6: Zurn Elkay Pro Forma for 80/20 Walk-away
Zurn Elkay Pro Forma for 80/20 Walk-away Balanced Portfolio of Specified Water Solutions Diverse Stable Business Portfolio New Construction, Application Retrofit, ~45% ~20% ~55% Waterworks, 8% ~30% Commercial, 30% End Markets ~30% Institutional, 47% Residential, 15% ROW, 2% ~20% Geography North Amer
Slide 7: 3Q Zurn Elkay 2022 Results
3Q Zurn Elkay 2022 Results Consolidated Results: Excluding Corporate Costs: $ in millions 3Q 2022 3Q 2021 Change $ in millions 3Q 2022 3Q 2021 Change Net Sales $418 $230 82% Net Sales $418 $230 82% Growth from: Growth from: Core (1) 16% Core (1) 16% Acquisitions 67% Acquisitions 67% Translation (1%)
Slide 8: Zurn Elkay Leverage and Debt
Zurn Elkay Leverage and Debt Net Debt Leverage Ratio (1) Total Debt ($ millions) 2.5x 1,500 2.1x 2.1x 2.0x 2.0x 1.9x 1,149 1,000 1,118 1.9x 1.5x 1.5x 500 540 539 538 537 1.0x Dec- Dec- Dec- Mar- Jun- Sep- 19 20 21 22 22 22 0 Dec-19 Dec-20 Dec-21 Mar-22 Jun-22 Sep-22 (1) Net Debt Leverage is defined
Slide 9: Q4 Outlook
Q4 outlook December Quarter (Q4) • Total sales to be between $350 million and $365 million • Zurn Elkay Adjusted EBITDA(1) margin in the 20.0% – 21.0% range(2) • Corporate expense of ~$7 million • Interest expense of ~$9 million • Stock compensation expense of ~$8 million • Depreciation & amortizati
Slide 10: Q3 to Q4 Sequential Sales Walk
Q3 to Q4 Sequential Sales Walk • 3 less shipping days in Q4 vs. Q3 • Committing to incremental $15M of resi sink exits in the quarter • Residential market assumed to be down ~20% in Q4 10 |
Slide 11: Perspective Heading into 2023
Perspective Heading into 2023 Non-Residential Market Construction backlogs remain high ... Dodge Momentum Index continues to show strength Softening demand in residential end market … reducing exposure from ~22% of sales to Residential Market ~15% of sales after resi sink rationalization Supply Chai
Slide 12: Thank You
Thank You ZUrNn ELKAY
Zurn Elkay Water Solutions — Q3 2022 Earnings Presentation on 6ix