Worthington Enterprises, Inc. · NYSE:WOR
Worthington Enterprises — Q1 2023 Earnings Presentation
34 slides from Worthington Enterprises's earnings presentation, Sep 29, 2022
Slide 1: Q1 FY2023 Results / Business Update
Q1 FY2023 Results / Business Update
Slide 2: Vision
VISION TO BE THE TRANSFORMATIVE PARTNER FOR OUR CUSTOMERS, A POSITIVE FORCE IN OUR COMMUNITIES AND EARN EXCEPTIONAL RETURNS 2
Slide 3: Corporate Citizenship & Sustainability
CORPORATE CITIZENSHIP & SUSTAINABILITY Long history of keeping employees safe, practicing good citizenship and protecting the environment FISCAL YEAR 2022 HIGHLIGHTS RECENTLY ANNOUNCED COMMITMENT TO • Set emissions reduction targets that are aligned with a 1.5 degree Celsius science- based target, s
Slide 4: $5.5B of Sales in Trailing Twelve Months
$5.5B OF SALES IN TRAILING TWELVE MONTHS 8/31/22 NET SALES BY END-MARKETS ADJ. EBIT BY SEGMENT TTM* $454.8 MILLION 10% 6% $94.7 12% 5% 4% 13% 4% $220.6 10% $130.5 36% $14.1 Automotive Construction ($5.1) Consumer Products Building Products Steel Consumer Products Machinery & Equipment Agriculture Bu
Slide 5: $1.4B of Sales in Q1 of Fiscal 2023
$1.4B OF SALES IN Q1 OF FISCAL 2023 8/31/22 NET SALES BY END-MARKETS ADJ. EBIT BY SEGMENT* $112.3 MILLION 11% $20.9 13% 7% 5% 13% 4% $34.9 5% $52.7 7% 35% Automotive Construction $5.1 Consumer Products Building Products $(1.4) Steel Consumer Products Machinery & Equipment Agriculture Building Produc
Slide 6: Financial Goals
F IN A N CIA L G O A L S • INCREASE MARGINS / DECREASE ASSET INTENSITY • REDUCE EARNINGS VOLATILITY • MODEST LEVERAGE / AMPLE LIQUIDITY (INVESTMENT GRADE) • BALANCED CAPITAL ALLOCATION • RIGOROUS CAPITAL DISCIPLINE 6
Slide 7: Strong Capital Structure & Liquidity
STRONG CAPITAL STRUCTURE & LIQUIDITY Strong balance sheet with investment grade credit ratings and significant liquidity available enables financial flexibility and shareholder returns Corporate credit ratings: BBB / Baa3 800 700 600 500 $500 $ Millions 400 300 $164 200 $11 $250 100 $200 $150 0 $34
Slide 8: Balanced Capital Allocation Strategy
BALANCED CAPITAL ALLOCATION STRATEGY Strong cash flows and significant liquidity support balanced approach to capital allocation focused on growth and rewarding shareholders OVER $2 BILLION OF CAPITAL DEPLOYED IN PAST 5 YEARS SINCE START OF FY2018 ✓ Reinvest in the business to create value and suppo
Slide 9: Consolidated Results
CONSOLIDATED RESULTS $ millions, except EPS FY2020 FY2021 FY2022 FY2022 – Q1 FY2023 – Q1 Sales $3,059 $3,171 $5,242 $1,111 $1,409 Adjusted EBIT* $208 $396 $517 $174 $112 % of sales* 6.8% 12.5% 9.9% 15.7% 8.0% Adjusted EBITDA* $300 $483 $615 $196 $140 % of sales* 9.8% 15.2% 11.7% 17.7% 10.0% EPS* $2.
Slide 10: Planned Company Separation
PLANNED COMPANY SEPARATION 1 0
Slide 11: Worthington Industries Plans to Separate into Two Independent Public Companies
WORTHINGTON INDUSTRIES PLANS TO SEPARATE INTO TWO MARKET-LEADING, INDEPENDENT, PUBLICLY TRADED COMPANIES ▪ Transaction will create two distinct, market-leading companies that are more specialized and fit-for purpose, with enhanced prospects for growth and value creation ✓ Enhanced management focus a
Slide 12: Creating Two Market-Leading, Independent Public Companies
CREATING TWO MARKET-LEADING, INDEPENDENT PUBLIC COMPANIES… NEW WORTHINGTON WORTHINGTON STEEL Andy Rose Geoff G. Gilmore Chief Executive Officer – New Worthington Chief Executive Officer – Worthington Steel Current Chief Executive Officer & President Current Chief Operating Officer with 14 Years at W
Slide 13: Well Positioned for Success and Future Growth
…WELL POSITIONED FOR SUCCESS AND FUTURE GROWTH New Worthington Worthington Steel Consumer Automotive Products 49% 49% Net Sales* Sustainable Energy Other Construction Mix 10% 20% 18% (8/31/22 TTM) uilding B Products 41% Heavy Truck Agriculture 6% 7% 08/31/22 TTM 08/31/22 TTM Key Net Sales*: $1,3
Slide 14: New Worthington Is a Market Leader with Premier Brands
NEW WORTHINGTON IS A MARKET LEADER WITH PREMIER BRANDS IN ATTRACTIVE END MARKETS Key Investment Highlights 3 Year ✓ Proven management team with a value creation focused mindset Financial Snapshot ✓ Demonstrated financial stability and strong free cash flow generation (FY20 – FY22) Net Sales* Adj. EB
Slide 15: Three Market-Focused Reporting Segments
COMPRISED OF THREE MARKET-FOCUSED REPORTING SEGMENTS BUSINESS Building Products Consumer Products Sustainable Energy Solutions SEGMENTS (41% of Sales) (49% of Sales) (10% of Sales) 8/31/22 TTM NET SALES*: $577M $678M $136M 8/31/22 TTM ADJ. EBITDA: $239M $106M $2M ◼ Ceiling Solutions ◼ DIY & Pro Tool
Slide 16: Worthington Steel Is a Best-in-Class Steel Processor
WORTHINGTON STEEL IS A BEST-IN-CLASS, VALUE-ADDED STEEL PROCESSOR IN GROWING END-MARKETS Key Investment Highlights Financial & Operational ✓ Proven management team that is focused on value creation Snapshot ✓ One-of-a-kind business with a unique capability set and leading market positions across mul
Slide 17: A One-of-a-Kind Business with a Unique Capability Set
A ONE-OF-A-KIND BUSINESS WITH A UNIQUE CAPABILITY SET #2 #1 #1 #1 #1 #2 Global Producer of Producer of Tailor Trader of Steel Network of Independent Independent flat Stamped Electrical Welded Blanks in Futures by Independent Producer of Hot rolled service Steel Laminations North America Volume in No
Slide 18: Transaction Details
TRANSACTION DETAILS ◼ Pro rata distribution of Worthington Steel stock, which is expected to be tax-free to shareholders for U.S. federal income Transaction tax purposes Structure ◼ Worthington Steel to become publicly traded company that will be owned by Worthington Industries’ then-current shareho
Slide 19: Supplemental Data
4 WORTHINGTON INDUSTRIES SUPPLEMENTAL DATA
Slide 20: Steel Processing Financials
STEEL PROCESSING FINANCIALS $ millions FY2020 FY2021 FY2022 FY2022 – Q1 FY2023 – Q1 Sales $1,860 $2,059 $3,933 $823 $1,039 Adj. EBIT* $40 $208 $203 $108 $35 % of sales* 2.1% 10.1% 5.2% 13.1% 3.4% Adj. EBITDA* $81 $249 $259 $119 $52 % of sales* 4.3% 12.1% 6.6% 14.5% 5.0% Capital Expenditures $41 $28
Slide 21: Building Products Financials
BUILDING PRODUCTS FINANCIALS $ millions FY2020 FY2021 FY2022 FY2022 – Q1 FY2023 – Q1 Sales $383 $402 $542 $115 $150 Adj. EBIT* $105 $118 $217 $49 $53 % of sales* 27.3% 29.3% 40.0% 42.5% 35.1% Adj. EBITDA* $122 $133 $233 $53 $57 % of sales* 31.8% 33.2% 43.0% 45.8% 37.9% Capital Expenditures $18 $23 $
Slide 22: Consumer Products Financials
CONSUMER PRODUCTS FINANCIALS $ millions FY2020 FY2021 FY2022 FY2022 – Q1 FY2023 – Q1 Sales $449 $524 $636 $148 $189 Adj. EBIT* $65 $75 $94 $21 $21 % of sales* 14.6% 14.3% 14.8% 13.9% 11.1% Adj. EBITDA* $76 $87 $107 $24 $25 % of sales* 16.9% 16.7% 16.8% 16.1% 13.1% Capital Expenditures $8 $13 $13 $4
Slide 23: Sustainable Energy Solutions Financials
SUSTAINABLE ENERGY SOLUTIONS FINANCIALS $ millions FY2020 FY2021 FY2022 FY2022 – Q1 FY2023 – Q1 Sales $122 $135 $131 $25 $31 Adj. EBIT* $5 $5 ($6) ($3) ($1) % of sales* 4.1% 3.7% -4.8% -10.0% -4.5% Adj. EBITDA* $11 $12 $0 ($1) $0 % of sales* 8.7% 8.6% 0.2% -3.9% 0.3% Capital Expenditures $14 $9 $6 $
Slide 24: Consolidated Adjusted EBITDA / Free Cash Flow
SUPPLEMENTAL DATACONSOLIDATED ADJUSTED EBITDA / FREE CASH FLOW FY 20 FY 21 FY 22 FY 22 FY 23 Annual Annual Annual Q1 Q1 Net Income $ 78.8 $ 723.8 $ 379.4 $ 132.5 $ 64.1 Interest Expense 31.6 30.3 31.3 7.7 8.6 Taxes 26.3 176.3 115.0 40.2 19.5 EBIT $ 136.8 $ 930.4 $ 525.7 $ 180.4 $ 92.2 Restructuring
Slide 25: Reconciliation of Adjusted EPS Q1
SUPPLEMENTAL DATA RECONCILIATION OF ADJUSTED EPS Q1 (FY2023/FY2022) *The table above presents provides a reconciliation to adjusted operating income, adjusted net earnings attributable to controlling interest and adjusted earnings per diluted share attributable to controlling interest from the most
Slide 26: Reconciliation of Adjusted EPS (FY2022/FY2021/FY2020)
SUPPLEMENTAL DATA RECONCILIATION OF ADJUSTED EPS (FY2022/FY2021/FY2020) Fiscal 2022 Income Tax Net Earnings Operating Earnings Before Expense Attributable to Earnings per (In millions, except per share data) Income Income Taxes (Benefit) Controlling Interest (1) Diluted Share GAAP $ 329.3 $ 514.3 $
Slide 27: Reconciliation of Adjusted EBIT & EBITDA – FY2023 Q1
SUPPLEMENTAL DATARECONCILIATION OF ADJUSTED EBIT & EBITDA – FY2023 Q1 $ Millions (except volume) Three Months Ended August 31, 2022 Sustainable Steel Consumer Building Energy Processing Products Products Solutions Other Consolidated Volume (tons/units) 974,649 22,383,341 2,922,163 133,133 n/a n/a Sa
Slide 28: Reconciliation of Adjusted EBIT & EBITDA – FY2022 Q1
SUPPLEMENTAL DATARECONCILIATION OF ADJUSTED EBIT & EBITDA – FY2022 Q1 $ Millions (except volume) Three Months Ended August 31, 2021 Sustainable Steel Consumer Building Energy Processing Products Products Solutions Other Consolidated Volume (tons/units) 1,062,288 21,388,140 2,885,711 130,676 n/a n/a
Slide 29: Reconciliation of Adjusted EBIT & EBITDA – FY2022
SUPPLEMENTAL DATA RECONCILIATION OF ADJUSTED EBIT & EBITDA – FY2022 $ Millions (except volume) Fiscal Year Ended May 31, 2022 Sustainable Steel Consumer Building Energy Processing Products Products Solutions Other Consolidated Volume (tons/units) 4,170,931 82,393,013 11,707,258 610,811 - n/a Sales $
Slide 30: Reconciliation of Adjusted EBIT & EBITDA – FY2021
SUPPLEMENTAL DATA RECONCILIATION OF ADJUSTED EBIT & EBITDA – FY2021 $ Millions (except volume) Fiscal Year Ended May 31, 2021 Sustainable Steel Consumer Building Energy Processing Products Products Solutions Other Consolidated Volume (tons/units) 4,066,773 74,656,594 11,181,873 897,261 33,419 n/a Sa
Slide 31: Reconciliation of Adjusted EBIT & EBITDA – FY2020
SUPPLEMENTAL DATA RECONCILIATION OF ADJUSTED EBIT & EBITDA – FY2020 $ Millions (except volume) Fiscal Year ended May 31, 2020 Sustainable Steel Consumer Building Energy Processing Products Products Solutions Other Consolidated Volume (tons/units) 3,830,675 70,710,740 10,896,035 846,431 n/m n/a Net s
Slide 32: Notes to Investors
NOTES TO INVESTORS FORWARD LOOKING STATEMENTS. Worthington Industries, Inc. (the “Company” or “Worthington”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements by the Company relating to the intended separat
Slide 33: Notes to Investors
NOTES TO INVESTORS changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability (especially in light of Russia’s invasion of Ukraine), foreign currency exc
Slide 34: Contact
CONTACT 614.840.4663 Marcus.Rogier@WorthingtonIndustries.com 3 4
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