Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Q4 2022 Earnings Presentation
26 slides from Regal Rexnord's earnings presentation, Feb 2, 2023
Slide 1: Fourth Quarter 2022 Earnings
Creating a better tomorrow™… Fourth Quarter 2022 Earnings February 2, 2023 Louis Pinkham, Chief Executive Officer Rob Rehard, Vice President, Chief Financial Officer
Slide 2: 4Q 2022 Forward Looking Statements
4Q 2022 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which reflect Regal Rexnord’s current estimates, expectations and projections about Regal Rexnord’s future results, performa
Slide 3: 4Q 2022 Non-GAAP Financial Measures
4Q 2022 NON-GAAP FINANCIAL MEASURES We prepare financial statements in accordance with accounting principles generally accepted used to help us evaluate our business and forecast our future results. Accordingly, we believe in the United States of America (“GAAP”). We also periodically disclose certa
Slide 4: Opening Comments & Overview; Results and Outlook; Q&A
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2022 Results, 2023 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 5: 4Q 2022 Opening Comments
4Q 2022 OPENING COMMENTS • Organic Sales Growth, Positive Price/Cost, Healthy ($ in millions, except per share EBITDA Margin Expansion data) 4Q 2021 4Q 2022 • Strong Free Cash Flow Conversion* of 165% Adjusted Net Sales* $1,216.6 $1,244.7 • Order Moderation As Expected; Elevated Backlog Continues To
Slide 6: Industrial Powertrain Momentum
4Q 2022 INDUSTRIAL POWERTRAIN MOMENTUM Recent Powertrain Win Reduced Complexity And Offered Enhanced Design And Assembly Support Customer Problem • A large municipal water treatment project owner was seeking an integrated solution to create a more durable, longer-lasting, and more energy-efficient s
Slide 7: Opening Comments & Overview; Results and Outlook; Q&A
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2022 Results, 2023 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 8: Motion Control Solutions
4Q 2022 MOTION CONTROL SOLUTIONS Sales Adjusted Net Sales* Adjusted EBITDA* • Organic Sales* Up 9.4% ($ Millions) ($ Millions) • Key Drivers • General Industrial $596.1 $165.5 • Energy $39.0 • Metals & Mining $135.7 • Aerospace $547.0 • Alt. Energy (-) Adjusted EBITDA Margin* $21.3 • 27.8% of Adj. N
Slide 9: Climate Solutions
4Q 2022 CLIMATE SOLUTIONS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) • Organic Sales* Down 10.7% ($ Millions) • Key Drivers • N.A. Resi HVAC • Europe HVAC • General Industrial $265.8 $53.5 $235.2 $43.4 Adjusted EBITDA Margin* • 18.5% of Adj. Net Sales 4Q21 4Q22 4Q21 4Q22 * Non-GAAP Fina
Slide 10: Commercial Systems
4Q 2022 COMMERCIAL SYSTEMS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) • Organic Sales* Up 5.6% ($ Millions) • Key Drivers • N.A. General Industrial • C-HVAC $260.3 • China (-) $257.1 Adjusted EBITDA Margin* $45.8 • 17.6% of Adj. Net Sales $32.1 4Q21 4Q22 4Q21 4Q22 * Non-GAAP Financial M
Slide 11: Industrial Systems
4Q 2022 INDUSTRIAL SYSTEMS Sales Adjusted Net Sales* Adjusted EBITDA* • Organic Sales* Up 9.7% ($ Millions) ($ Millions) • Key Drivers • U.S. General Industrial • Data Center $153.1 • China (-) $146.7 Adjusted EBITDA Margin* $18.7 • 12.2% of Adj. Net Sales $8.4 4Q21 4Q22 4Q21 4Q22 * Non-GAAP Financi
Slide 12: Key Financial Metrics & Other Updates
4Q 2022 KEY FINANCIAL METRICS & OTHER UPDATES Capital Expenditures Balance Sheet at December 31, 2022 • $29.2 Million in 4Q 2022 • Total Debt of $2,023.5 Million • Net Debt* of $1,335.0 Million Effective Tax Rate (ETR) • Net Debt*/Adj. Bank EBITDA* of 1.2 • 19.0% Adj. ETR* in 4Q 2022 Free Cash Flow*
Slide 13: 2023 Outlook
4Q 2022 2023 OUTLOOK End Market Growth Assumptions, 2023 • Organic Revenue Down Slightly • Diluted Adjusted EPS* of $10.05 to $10.85** * Non-GAAP financial measurement; see Appendix for reconciliations ** Adjusted guidance does not take into account any costs, expenses or any other assumed financial
Slide 14: 2023 Outlook – Modeling Items
4Q 2022 2023 OUTLOOK – MODELING ITEMS Modeling Items • Stock-Based Compensation of $27M • Noncontrolling Interest of $5M • Depreciation of $125M • Diluted Shares of 67.0M • Amortization of $190M • Capital Expenditures of $120M • Interest Expense, net of $105M* • FCF % of Net Income >100% • Adjusted
Slide 15: Opening Comments & Overview; Results and Outlook; Q&A
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2022 Results, 2023 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 16: Opening Comments & Overview; Results and Outlook; Q&A
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2022 Results, 2023 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 17: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 17 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 18: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 18 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 19: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 19 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 20: Net Income to Adjusted EBITDA
4Q 2022 APPENDIX NET INCOME TO ADJUSTED EBITDA (Dollars in Millions) Three Months Ended Dec 31, 2022 Jan 1, 2022 Net Income (Loss) $ 102.7 $ (1.9) Plus: Income Taxes 8.9 11.8 Plus: Interest Expense 43.4 14.3 Less: Interest Income (2.0) (1.9) Plus: Depreciation 30.9 33.2 Plus: Amortization 46.1 44.6
Slide 21: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 21 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 22: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 22 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 23: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 23 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 24: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 24 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 25: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 25 ©2022 Regal Rexnord Corporation, Proprietary and Confidential
Slide 26: 4Q 2022 Appendix
4Q 2022 APPENDIX Creating a better tomorrow™… 26 ©2022 Regal Rexnord Corporation, Proprietary and Confidential