Slide 1: Q1'24 Earnings
Q1’24 Earnings AUGUST 9, 2023 August 2023 © 2023 EnerSys. All Rights Reserved. 1
Slide 2: Forward Looking Statements
Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements on this call that are based on Management’s current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual re
Slide 3: Q1 FY'24 Overview
Q1 FY’24 Overview D AV E S H A F F E R PRESIDENT AND CEO June 2023 © 2023 EnerSys. All Rights Reserved.
Slide 4: Strong Q1'24 Performance
Strong Q1’24 Performance $909M $107M $122M $1.89 $59M Net Sales Adj. Op. Adj. Adj. EPS1 Free Cash Earnings1 EBITDA1 Flow1 +1% Y/Y +65% Y/Y +43% Y/Y +64% Y/Y +$154M Y/Y Adj. Op. Earnings1 Adj. EBITDA1 Margin of 11.8% Margin of 13.4% Delivered Solid Operational Results August 2023 1) Non-GAAP measure.
Slide 5: Strategic Priorities Driving Long Term Growth
Strategic Priorities Driving Long Term Growth Increasing Higher Value Solutions • Customer-centric NPIs (volume and mix) Innovate • State-of-the-art technology Compounding Value Creation • Organic hardware and software • Fast Charge and Storage (FC&S) • Scalable projects across Energy Systems, Motiv
Slide 6: Maintaining Focus on FY'27 Targets
Maintaining Focus on FY’27 Targets ($M, except EPS) FY’22 FY’23 Q1’24 FY’27 Clear strategy to accelerate profitable growth Act. Act. Act. Targets $550M - $600M additional TPPL revenue capacity by FY’27 Net Sales $3,357 $3,709 $909 8% - 10% CAGR2 Well-positioned for margin expansion Adj. Operat
Slide 7: Accelerating Growth in Diverse End Markets
Accelerating Growth in Diverse End Markets Total Net Sales: 8% – 10% FY’23 – 27E CAGR Net Sales Energy Systems Motive Power Specialty Fast Charge & Storage CAGR 6% – 8% 5% – 7% 10% – 12% Incremental Milestones 500K+ Sites 35% - 45% 22% 20% - 30% Small Cell Maintenance Free U.S. MD / HD Revenue from
Slide 8: Q1'24 Executing on our Strategy
Q1’24 Executing on our Strategy Increasing Higher Value Solutions • Lithium-ion based XRTTM ꟷ installations began at key communications customer sites • Announced DPXTM ꟷ safely delivers 10x more power to small cell nodes Innovate • Energy storage and management system (FC&S) – production readiness
Slide 9: Sustainability: Scope 3 Data
Sustainability: Scope 3 Data P U B L I S H E D 2 0 2 2 VA L U E C H A I N G R E E N H O U S E G A S E M I S S I O N S D ATA TOTAL EMISSIONS BY SCOPE Scope 1 • Recorded ~714,000 metric tons of CO2e of Scope 3 emissions in 2022 (baseline year) Scope 2 • Enhancing our understanding of emissions across
Slide 10: Q1 FY'24 Financial Results and Outlook
Q1 FY’24 Financial Results ANDI FUNK and Outlook EVP AND CFO June 2023 © 2023 EnerSys. All Rights Reserved.
Slide 11: Q1'24 Results
Q1’24 Results ($M, except EPS) N E T S AL E S AD J O P E R AT I N G E AR N I N G S 1 & M AR G I N $909 $107 $899 Y/Y Change $65 +9% price Includes $19M (8%) volume 9.2% 11.8% IRA benefit FX flat 7.2% Q1'23 Q1'24 Q1'23 Q1'24 AD J E B I T D A 1 & M AR G I N AD J D I L U T E D E P S 1 $122 $1.89 $86 $1
Slide 12: Adj EPS Bridge & Adj Op Earnings
Adj EPS1 Bridge & Adj Op Earnings1 Q1’24 YEAR-OVER YEAR ($M) Net Sales AOE1 Energy Systems $424.6 $29.7 $1.89 Motive Power $350.8 $50.3 $1.15 Specialty $133.2 $9.8 Corporate/Other - $17.4 Total $908.6 $107.2 2 Price/Mix Outpaced Costs for Fourth Consecutive Quarter $M USD AA August 2023 1) Non-GAAP
Slide 13: Backlog Normalizing and Remains Healthy
Backlog Normalizing and Remains Healthy Backlog coverage ratio (backlog / quarterly net sales) by segment noted above Backlog Down from Peak Prior Year Level; 2X Pre-Covid Levels August 2023 1) Constant Currency “CC” for backlog refers to a static budgeted exchange rate © 2023 EnerSys. All Rights Re
Slide 14: Energy Systems Segment Highlights
Energy Systems Segment Highlights Q1’24 ($M) Y/Y change Net Sales $424.6 +4% Adj. Op. Earnings1 $29.7 +117% Adj. OE Margin1 7.0% +360 bps • Continued price / mix strength • Price / Mix +12% partly offset by Volume (7%) and F/X (1%) • Higher organic volume of battery sales in Americas • Partly offset
Slide 15: Motive Power Segment Highlights
Motive Power Segment Highlights Q1’24 ($M) Y/Y change Net Sales $350.8 (5%) Adj. Op. Earnings1 $50.3 +19% Adj. OE Margin1 14.3% +280 bps • Net Sales down Y/Y on tough comps • Price / Mix +8% offset by Volume (14%), +1% due to acquisition, F/X flat • Softer volume across all geographies • Maintenance
Slide 16: Specialty Segment Highlights
Specialty Segment Highlights Q1’24 ($M) Y/Y change Net Sales $133.2 +9% Adj. Op. Earnings1 $9.8 +10% Adj. OE Margin1 7.4% +10 bps • Strong revenue growth over prior year • Price / Mix +7%, Volume +1% and F/X +1% • Strong volume in U.S. transportation • Improved delivery rates • Significant margin im
Slide 17: Balance Sheet, Cash Flow and Leverage
Balance Sheet, Cash Flow and Leverage SELECTED S E L E C T E D Q U AR T E R LY B AL AN C E S H E E T M E T R I C S 1 C AS H F L O W M E T R I C S 2 ($M) FY’23 Q1’24 ($M) Q1’23 Q1’24 Cash and Cash $347 $258 Equivalents Cash Flow from ($72) $75 Net Debt3 $736 $690 Operations Net Leverage Ratio3 1.8x 1
Slide 18: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy Priorities Q1’24 Future Priorities • Continue TPPL capacity investments & end-to-end solutions Invest in Organic Growth (CapEx) $16M • Optimize EOS to drive additional operational efficiencies • Accelerate domestic-sourced lithium strategy Verkor MOU • Innovat
Slide 19: Dividend Update
Dividend Update • On August 09, 2023, the Board of Directors declared a 29% increase in the Company’s quarterly dividend • Quarterly cash dividend increased to $0.225 from $0.175 per share of common stock payable on September 29, 2023 to holders of record as of September 15, 2023 • As part of a disc
Slide 20: Looking Ahead: Q2'24 Guidance
Looking Ahead: Q2’24 Guidance Guidance Assumptions • Stable customer demand in diverse Gross Margin 25.0% - 27.0% end markets tempered by seasonality Includes 150bps - 250bps (Q2’24) IRA tax credits to be invested in from IRC 45X tax credits • Leveling price / cost U.S. capacity for high density b
Slide 21: Closing Remarks
Closing Remarks D AV E S H A F F E R PRESIDENT AND CEO August 2023 © 2023 EnerSys. All Rights Reserved.
Slide 22: Invest with EnerSys
Invest with EnerSys Provider of highly differentiated energy solutions with 1 full suite of technologies for diverse end markets Strategically aligned with megatrends in 2 large and growing markets Resilient business model positioned for strong cash 3 flow generation, profitable growth, and margin e
Slide 23: Q&A
Q&A August 2023 © 2023 EnerSys. All Rights Reserved.
Slide 24: Appendix
Appendix August 2023 © 2023 EnerSys. All Rights Reserved.
Slide 25: Reconciliations
Non-GAAP Reconciliations August 2023 © 2023 EnerSys. All Rights Reserved.
Slide 26: Reconciliation: Adjusted Operating Earnings
Non-GAAP Reconciliation A D J U S T E D O P E R AT I N G E A R N I N G S August 2023 © 2023 EnerSys. All Rights Reserved. 26
Slide 27: Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation ADJUSTED EBITDA August 2023 © 2023 EnerSys. All Rights Reserved. 27
Slide 28: Reconciliation: Adjusted Diluted EPS
Non-GAAP Reconciliation ADJUSTED DILUTED EPS August 2023 © 2023 EnerSys. All Rights Reserved. 28
Slide 29: Reconciliation: Adjusted Diluted EPS (Continued)
Non-GAAP Reconciliation ADJUSTED DILUTED EPS (CONTINUED) August 2023 © 2023 EnerSys. All Rights Reserved. 29
Slide 30: Reconciliation: Leverage Ratio by Year
Non-GAAP Reconciliation L E V E R A G E R AT I O B Y Y E A R Fiscal year ended March 31, (in millions, except ratios) 2023 2022 2021 2020 2019 2018 Net earnings as reported $175.8 $143.9 $143.3 $137.1 $160.5 $119.8 Add back: Depreciation and amortization 91.2 95.9 94.1 87.3 63.3 54.3 Interest expens
Slide 31: Reconciliation: Leverage Ratio by Quarter
Non-GAAP Reconciliation L E V E R A G E R AT I O B Y Q U A R T E R Last twelve months ($ millions) (in millions, except ratios) July 2, 2023 March 31, 2023 January 1, 2023 October 2, 2022 July 3, 2022 Net earnings as reported $211.6 $175.8 $137.9 $129.8 $131.0 Add back: Depreciation and amortization
Slide 32: Reconciliation: Free Cash Flow
Non-GAAP Reconciliation FREE CASH FLOW August 2023 © 2023 EnerSys. All Rights Reserved. 32
Slide 33: Reconciliation: Primary Operating Capital
Non-GAAP Reconciliation P R I M A R Y O P E R AT I N G C A P I TA L August 2023 © 2023 EnerSys. All Rights Reserved. 33
Slide 34: Reconciliation: Adjusted Gross Profit
Non-GAAP Reconciliation ADJUSTED GROSS PROFIT Quarter ended ($ millions) July 2, 2023 July 3, 2022 Net Sales $ 908.6 $ 899.0 Gross Profit $ 240.3 $ 185.5 Inventory adjustment relating to exit activities 3.1 - Adjusted Gross Profit $ 243.4 $ 185.5 August 2023 © 2023 EnerSys. All Rights Reserved. 34
Slide 35: Reconciliation: FY'23 & FY'22 Adjusted Operating Earnings
Non-GAAP Reconciliation F Y ’ 2 3 & F Y ’ 2 2 A D J U S T E D O P E R AT I N G E A R N I N G S August 2023 © 2023 EnerSys. All Rights Reserved. 35
Slide 36: Reconciliation: FY'23 & FY'22 Adjusted EBITDA
Non-GAAP Reconciliation FY’23 & FY’22 ADJUSTED EBITDA August 2023 © 2023 EnerSys. All Rights Reserved. 36
Slide 37: Reconciliation: FY'23 & FY'22 Adjusted Diluted EPS
Non-GAAP Reconciliation FY’23 & FY’22 ADJUSTED DILUTED EPS August 2023 © 2023 EnerSys. All Rights Reserved. 37
Slide 38: Reconciliation: FY'23 & FY'22 Adjusted Diluted EPS (Continued)
Non-GAAP Reconciliation FY’23 & FY’22 ADJUSTED DILUTED EPS (CONTINUED) August 2023 © 2023 EnerSys. All Rights Reserved. 38
Slide 39: Thank you.
Thank you. For more information visit us at www.enersys.com World Headquarters EnerSys EMEA EnerSys Asia 2366 Bernville Road EH Europe GmbH 152 Beach Road Reading, PA 19605 USA Baarerstrasse 18 Gateway East Building #11- 08 +1 610-208-1991 / +1 800-538-3627 6300 Zug Switzerland Singapore 189721 / +6