Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Baird Global Industrial Conference 2023
28 slides from Enerpac Tool's conference presentation, Nov 8, 2023
Slide 1: Baird Global Industrial Conference
Baird Global Industrial Conference Paul Sternlieb, President & CEO Tony Colucci, EVP & CFO November 8, 2023 1
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Statements made in this presentation that are not historical are forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. The terms “outlook,” “guidance,” “may,” “should, ”“could,” “anticipate
Slide 3: Premier Industrial Solutions Provider
Premier Industrial Solutions Provider Making Complex and Often Hazardous Jobs Possible Safely and Efficiently $598M Global Headquarters Menomonee Falls, WI FY2023 Revenue $136M FY2023 Adj. EBITDA* 22.8% FY2023 Adj. EBITDA margin* 110+ 100+ ~2100 ~1000 ~$1.6B Years of History Countries Served Global
Slide 4: Globally Recognized Leader in Industrial Tools and Services
STRONG BRAND Globally Recognized RECOGNITION Leader in Industrial Tools and Services FY 2023 PREMIUM INDUSTRIAL TOOLS Revenue Mix HEAVY LIFTING PRODUCTS SERVICE & RENTAL 18% Cylinders/Jacks, Pumps, Bolting, Machining Bolting Tools, Presses, and Joint Integrity Pullers, Tools, Heavy Lifting Technolog
Slide 5: Serving Broad Array of Vertical End Markets
MANUFACTURING INFRASTRUCTURE & MACHINING INDUSTRIAL MRO Serving Broad Array OIL & GAS of Vertical End POWER Markets GENERATION MINING (WIND/NUCLEAR) Large, Fragmented Vertical Markets Provide Growth RAIL Opportunities, Both Organic and MILITARY Inorganic, and Create Diversification for Enerpac OFF-H
Slide 6: Offering a Wide Array of Durable and Reliable Products
Offering a Wide Array of Durable and Reliable Products Pumps Cylinders Bolting Pullers Spreaders Cutters Presses Work Holding Heavy Lifting Machining 6
Slide 7: Providing High Quality Services Our Customers Rely On
Providing High Quality Services Our Customers Rely On Service Breakdown BOLTING Primary Focus on Repairs and Maintenance ~50% ~50% Large Opportunity in Niche Services including Specialty MACHINING High Margin Services Additional Opportunities in Rental Manpower Power Generation, Wind, Rail and Indus
Slide 8: Significant Market Opportunity
Significant Market Opportunity Industrial Tools TAM Enerpac Has Identified Large Market >$100B High-Pressure Opportunities Across Our Verticals Hydraulics TAM $20B Growth Strategy Aims to Capitalize on Enerpac SAM Targeted Market Opportunities >$4B EPAC FY22 REVENUE Positioned to Win via our Product
Slide 9: Enerpac's Competitive Advantage
STRENGTH BREADTH AND OF BRAND DEPTH OF PRODUCT QUALITY, PORTFOLIO DURABILITY, RELIABILITY, Enerpac’s SAFETY Competitive Advantage BREADTH OF CHANNEL PARTNER NETWORK TECHNICAL AND GLOBAL APPLICATIONS COVERAGE EXPERTISE THAT CUSTOMERS RELY UPON POSITIVE CUSTOMER/ DISTRIBUTOR EXPERIENCES 9
Slide 10: Transformative Plan to Power Performance
Transformative Plan to Power Performance ACCELERATE IMPROVE DRIVE GREATER ORGANIC GROWTH OPERATIONAL EFFICIENCY & GO-TO-MARKET EXCELLENCE PRODUCTIVITY STRATEGIES AND PRODUCTION IN SG&A EFFICIENCY FULL-TIME PROGRAM MANAGEMENT HUNDREDS OF INITIATIVES Across all Functions and Regions $50-60M OFFICE COO
Slide 11: ASCEND Progress in Fiscal 2023
ASCEND Progress in Fiscal 2023… ACCELERATE IMPROVE DRIVE GREATER ORGANIC GROWTH OPERATIONAL EFFICIENCY & GO-TO-MARKET EXCELLENCE PRODUCTIVITY STRATEGIES AND PRODUCTION IN SG&A EFFICIENCY 8% Core Sales Growth* 49.3% Gross Margin Adjusted SG&A * +280 bps Improvement of 550 bps *Adjusted SG&A expense e
Slide 12: Ambitious Growth Strategy Centered Around Four Key Pillars
Ambitious Growth Strategy Centered Around Four Key Pillars EXPANSION Digital Customer Driven EXPANSION in Targeted TRANSFORMATION INNOVATION in Asia Pacific Vertical Markets 6-7% Organic Revenue CAGR Targeted Through FY26 12
Slide 13: Targeted Vertical Expansion Opportunities
Targeted Vertical Expansion Opportunities Infrastructure Wind Rail Industrial MRO* Standalone Size/Growth Rating Size/Growth Rating Size/Growth Rating Size/Growth Rating Attractiveness SAM: SAM: Rail SAM: SAM: Market Size $550-$650M $330-$430M $140-$180M ~$1.2-$1.6B and Growth Growth Growth Growth G
Slide 14: Driving Consistent Growth & Margin Expansion
Driving Consistent Growth & Margin Expansion ($ in millions) Net Sales* Adjusted EBITDA and Margin (%)* $650 $140 $136 25.0% $598 23.0% $600 $120 $571 22.8% 21.0% $100 19.0% $550 $529 $83 $75 17.0% $493 $80 $500 15.0% AGR $52 6.6 %C $60 14.1% 14.5% 13.0% $450 bps $40 1 220 11.0% R, + CAG 10.6% 9.0%
Slide 15: Long-Term Goals Through FY26
Long-Term Goals >100% Through FY26 >25% Demonstrate 6-7% Commitment to Strong Growth, Margin Enhancement, and Cash Generation Organic Adj. EBITDA FCF Conversion Revenue CAGR* Margin of 25% as We Toward End of Exit FY24 Through Outlook; Lower ASCEND, With 50bps in Earlier Years Improvement in due to
Slide 16: Recent Results, Capital Allocation, & FY 2024 Guidance
Recent Results, Capital Allocation, & FY 2024 Guidance 16
Slide 17: Quarterly Results Show Continued Progress
Quarterly Results Show Continued Progress ($ in millions, except per share) Net Sales & YoY Core Growth* Adjusted Operating Profit and Margin* $37 $161 $156 $34 $152 23.0% $29 $142 $27 $139 21.7% $23 20.2% 13% 10% 9% 17.9% 6% 4% 16.6% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Adjusted EBITDA
Slide 18: Balanced Capital Allocation Strategy
Balanced Capital Allocation Strategy Invest in Ourselves Disciplined M&A Investments in Digital, Product Innovation, R&D, Operational Excellence Improvements Maintain Our Strong Opportunistically Balance Sheet Returning Capital Target Leverage of to Shareholders 1.5x – 2.5x ~4 million shares remaini
Slide 19: Disciplined M&A Program
Disciplined M&A Program Continuing Pure Play Strategy, but Looking Beyond Just Tools and Services to Solve Customer Needs in Targeted Vertical Markets Healthy Pipeline with Focus on Our 4 Key Verticals M&A Activity Focused on Expanding Solutions Offerings by Addressing Gaps in: Product Offerings | M
Slide 20: FY24 Guidance
NET SALES FY24 Guidance Key Assumptions: $590 - $605M CORE GROWTH OF ~2-4% § Targeting to outperform industry and gain market share § No broad-based global recession § Any M&A would be incremental to ADJ. EBITDA guidance Depreciation & Amortization ~$13-$15M $142 - $152M Interest Expense ~$14-$16M A
Slide 21: Q&A
Q&A 21
Slide 22: Appendix
Appendix ENERPAC @ TOOL GROUP
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA and Margin Adjusted SG&A FY2023 FY2022 FY2021 FY2020 FY2023 FY2022 Net earnings from continuing operations $54 $20 $40 $6 Selling, general and administrative expenses 212 225 Financing costs 12 4 5 19 Restructuring charges (7) (8)
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Quarterly Consolidated Core Sales Growth Annual Consolidated Core Sales Growth Q4 2023 Q4 2022 % Change Q1 2023 Q1 2022 % Change FY2023 FY2022 % Change Net sales $161 $152 6% Net sales $139 $131 6% Net sales $598 $571 5% Fx impact - 1 Fx impact - (7) Fx impact - (
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Fiscal 2024 Guidance Fiscal 2024 Low High Reconciliation of Continued Operations GAAP Operating Profit To Adjusted EBITDA GAAP Operating profit $ 113 $ 130 ASCEND transformation program charges 10 7 Restructuring charges 5 3 Adjusted operating profit $ 128 $ 140 O
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures The Enerpac Tool Group fiscal 2023 Q4 earnings release and full GAAP to non-GAAP reconciliation is available online at https://ir.enerpactoolgroup.com/. 26
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures The Enerpac Tool Group fiscal 2023 Q4 earnings release and full GAAP to non-GAAP reconciliation is available online at https://ir.enerpactoolgroup.com/. 27
Slide 28: Footnotes to Reconciliation Tables
Footnotes to Reconciliation Tables (1) Approximately $0.6 million of the Q4 fiscal 2023 restructuring charges were recorded in cost of products sold. (2) Caption updated from "Leadership transition & board search charges (benefit)" used during Fiscal 2022, costs included have not been altered. (3) E
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