Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Q3 2022 Earnings Presentation
20 slides from Enerpac Tool's earnings presentation, Jun 28, 2022
Slide 1: Fiscal 2022 Third Quarter Earnings
Fiscal 2022 Third Quarter Earnings June 28, 2022 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not historical are considered “forward-looking statements” and are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. Those factors are contained in
Slide 3: Strategy Update – ASCEND Update
Strategy Update – ASCEND Update ASCEND Transformation Program ▪ Key Initiatives ▪ Accelerating organic growth go-to-market strategies ▪ Improving operational excellence and production efficiency by utilizing a Lean approach ▪ Driving greater efficiency and productivity in SG&A by better leveraging r
Slide 4: Strategy Update – Share Repurchase Update
Strategy Update – Share Repurchase Update Share Repurchase Program ▪ Last quarter we announced that the Board approved a new share repurchase program of up to 10 million shares ▪ Repurchased nearly 1.8 million shares in the third quarter for total of $36 million ▪ Reauthorization and intent to repur
Slide 5: Market Update
Market Update Overview ▪ Strong top line, despite FX headwinds, driven by solid customer demand ▪ Actively managed on-going supply chain and logistics challenges ▪ Continued to take additional pricing actions to offset cost increases and preserve margin ▪ COVID challenges did impact the quarter but
Slide 6: Regional Update
Regional Update Americas ▪ Another quarter of solid year-over-year core growth in the Americas ▪ Key Verticals ▪ Oil & Gas was favorable due to higher oil prices and timing of turn around season ▪ Industrial MRO demand was strong from our national distributors ▪ Mining was positive in South America
Slide 7: Regional Update
Regional Update Asia Pacific ▪ Year-over-year core growth ▪ COVID impacted the quarter as a result of the China shutdowns, but we were able to manage through the situation ▪ Key Verticals ▪ Mining was positive due to demand across the region for raw materials out of Australia ▪ Oil & Gas activity dr
Slide 8: Third Quarter 2022 Comparable Results
Third Quarter 2022 Comparable Results (US$ in millions except EPS) NET SALES • Core sales growth of 10% $152 • IT&S product sales 12% $143 $137 17.1% • Other product 18% • Service 1% 12.0% 12.0% • Unfavorable impact of FX ~$5M, reducing core sales by 4% ADJUSTED EBITDA* • Incremental margins of ~40%
Slide 9: Net Sales Waterfall
Net Sales Waterfall* (US$ in millions) $155 $0.2 $5.7 $151.9 $150 Product volume was the main driver of the year- over-year increase, $145 $7.6 driven by strong customer demand as $4.7 our end markets $143.1 continue to recover, $140 despite on-going supply chain and logistical challenges and FX hea
Slide 10: IT&S Product Net Sales
IT&S Product Net Sales Due to continued strong demand, we exceeded the peak IT&S product sales of the 5 years prior to COVID each month in the third quarter 10
Slide 11: Adjusted EBITDA Waterfall
Adjusted EBITDA Waterfall* (US$ in millions) $34 $32 $30 $1.7 $3.5 $28 $0.1 Adjusted EBITDA $10.8 $26 benefited from $3.6 $24 higher product $24.4 $0.8 volume and $22 $20 mix/cost, net $18 (primarily pricing) offset by higher $16 $18.3 12.3% SG&A costs $14 13.3% (primarily health $12 insurance and T
Slide 12: Operations Update
Operations Update Supply Chain ▪ Supply chain challenges continued during the third quarter and were compounded by Russia/Ukraine conflict ▪ COVID-related shutdowns in China impacted supplier on-time delivery ▪ Experiencing long lead times in the US, especially for castings, forgings and electrical
Slide 13: Liquidity – Positioned for Success
Liquidity – Positioned for Success (US$ in millions) $35 $136 $133 $205 $195 1.1 1.1 $124 $175 0.6 $8 $1 Q3 2021 Q2 2022 Q3 2022 Q3 2021 Q2 2022 Q3 2022 Q3 2021 Q2 2022 Q3 2022 Q3 2021 Q2 2022 Q3 2022 Free Cash Flow Cash Balance Gross Debt TTM Financial Leverage* Free Cash Flow (FCF) Leverage • $16M
Slide 14: Expectations for Fiscal 2022
Expectations for Fiscal 2022 Refining our Fiscal 2022 Full Year Guidance: We continue to be ▪ Net Sales in the range of $560 million to $570 million cautious as we enter Q4 ▪ Refined range primarily due to FX headwinds of fiscal 2022 but are closely monitoring ▪ Projected year-over-year core growth
Slide 15: Q&A
Q&A
Slide 16: Appendix
Appendix
Slide 17: Third Quarter 2022 GAAP vs Non-GAAP Reconciliation
Third Quarter 2022 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) Less Leadership ASCEND Transition & Business Restructuring Transformation Board Search Review Gain on Sale GAAP Charges Charges Charges Charges of Facility Adjusted Sales $151.9 $151.9 Operating Profit $6.6 ($0.5) ($3.9)
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA Free Cash Flow Q3 Q3 2022 2021 Q3 Q3 2022 2021 Net Earnings $4 $25 0 Net Financing Costs $1 $1 Cash From Operations $ 3 $ 12 Income Taxes $1 ($4) Capital Expenditures $ (2) $ (4) Proceeds on Sale of PPE $ 1 $ 22 Depreciation & Amo
Slide 19: Adjusted Operating Profit Waterfall
Adjusted Operating Profit Waterfall* (US$ in millions) $30 Adjusted $25 $1.5 Operating Profit $3.6 $0.1 $0.1 $10.8 benefited from higher product $3.6 volume and $20 mix/cost, net $19.5 $0.7 (primarily pricing) offset by higher $15 SG&A costs (primarily health $13.7 insurance and T&E) and an $10 incr
Slide 20: Enerpac Tool Group
ENERPAC (7) TOOL GROUP