Lennox International, Inc. · NYSE:LII
Lennox International — Q2 2022 Earnings Presentation
17 slides from Lennox International's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Earnings Conference Call
Second Quarter 2022 Earnings Conference Call July 28, 2022 1 | Integrity, Respect, Excellence, Trust, Innovation, Quality
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS The statements in this presentation that are not historical statements, including statements regarding the 2022 full-year outlook and expected consolidated and segment financial results for 2022, are forward-looking statements within the meaning of the Private Securities L
Slide 3: Executive Summary
EXECUTIVE SUMMARY Residential and Refrigeration Drove Record Results Record • Record $1.37B Revenue up 10%; Record Core EPS of $5.00 Quarterly Results • Strong Growth in Residential & Refrigeration Due to Price and Demand • Sequential Improvement in Commercial; Demand Exceeds Capacity Regular Cash F
Slide 4: Innovation: Cold Climate Heat Pump
INNOVATION: COLD CLIMATE HEAT PUMP Lennox’s participation in the DOE challenge to accelerate deployment of cold climate heat pump demonstrates our dedication to product innovation for delivering energy efficiency and reducing greenhouse gas emission. Lennox: First to Complete DOE Cold Climate Heat P
Slide 5: Environmental Social Governance Update
ENVIRONMENTAL SOCIAL GOVERNANCE UPDATE 2021 ESG Report Highlights • Science-Based Targets • Meeting or Exceeding Improvement Targets • Leadership in Heat Pumps and Decarbonization • Continually Improving Diversity and Inclusion Maintaining ESG Goals 5 | Integrity, Respect, Excellence, Trust, Innovat
Slide 6: 2Q22 LII Financial Results
2Q22 LII FINANCIAL RESULTS Revenue +10% Profit +4% Key Messages $1,366 $222 $230 • Quarterly Record (US$ Millions) (US$ Millions) Revenue and Earnings $1,239 • Steady Demand Continues Across Portfolio • Strong Price Yield to Combat Inflation 2Q21 2Q22 2Q21 2Q22 • Continuing to Navigate Supply Chain
Slide 7: 2Q22 Residential Segment Results
2Q22 RESIDENTIAL SEGMENT RESULTS Revenue +17% Profit +14% Profit Margin (50) bps $978 22.6% 22.1% $216 (US$ Millions) (US$ Millions) (Margin %) $838 $190 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 Key Drivers • Record Revenue and Profit • Replacement Revenue Up Mid-Teens and New Construction Revenue Up High-Teen
Slide 8: 2Q22 Commercial Segment Results
2Q22 COMMERCIAL SEGMENT RESULTS Revenue (13%) Profit (62%) Profit Margin (1,010) bps $253 $45 17.9% $220 (US$ Millions) (US$ Millions) (Margin %) $17 7.8% 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 Key Drivers • Ongoing Supply Chain Challenges • Stuttgart Transformation Underway • Driving Price to Offset Cost •
Slide 9: 2Q22 Refrigeration Segment Results
2Q22 REFRIGERATION SEGMENT RESULTS Revenue +14% Profit +73% Profit Margin +470 bps $169 $148 $23 13.8% (US$ Millions) (US$ Millions) (Margin %) $14 9.1% 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 Key Messages • Order Rates and Backlog Remain Strong • North American Sales Up +30% • European Refrigeration Up High-
Slide 10: LII Full-Year Guidance Update
LII FULL-YEAR GUIDANCE UPDATE 2022 Revenue & Earnings Full-Year Assumptions Revenue Growth 10% - 15% • North American Residential HVAC End Market Growth +LSD% GAAP and Adjusted EPS $13.80 - $14.50 • North American Commercial and Refrigeration End Market Growth Other Guidance Points +MSD% Free Cash F
Slide 11: Key Drivers of Second Half Outlook
KEY DRIVERS OF SECOND HALF OUTLOOK HEADWINDS TAILWINDS • Potential Decline in Residential New • Strong Backlog and Order Rates Construction and/or Slowdown of Across Residential, Commercial and U.S. Economy Refrigeration • Inflationary Effects • Slight Easing of Commodity Inflation • Supply Chain Co
Slide 12: LII: Foundation to Enhance Shareholder Value
LII: FOUNDATION TO ENHANCE SHAREHOLDER VALUE High Growth Innovative End Market Products with with Strong Direct-to-Dealer Replacement Network Demand LII is a Leader in Delivering Energy Efficient Climate Control Solutions Robust Narrowly Execution and Focused on Disciplined HVACR with Capital ESG Mi
Slide 13: Second Quarter 2022 Earnings Conference Call
Second Quarter 2022 Earnings Conference Call July 28, 2022 13 | Integrity, Respect, Excellence, Trust, Innovation, Quality
Slide 14: Appendices
APPENDICES 14 | Integrity, Respect, Excellence, Trust, Innovation, Quality
Slide 15: Reconciliation of Diluted EPS to Adjusted EPS
Reconciliation of earnings per share – diluted, a GAAP measure, to adjusted earnings per share – diluted, a non-GAAP measure 15 | Integrity, Respect, Excellence, Trust, Innovation, Quality
Slide 16: Reconciliation of Segment Profit to Operating Income
Reconciliation of segment profit (loss), a non-GAAP measure, to operating income, a GAAP measure 16 | Integrity, Respect, Excellence, Trust, Innovation, Quality
Slide 17: Reconciliation of Operating Cash Flow to Free Cash Flow
Reconciliation of cash provided by operating activities, a GAAP measure, to free cash flow, a non- GAAP measure 2022E Net cash provided by operating activities, a GAAP measure ~$524 Proceeds from the disposal of property, plant and equipment 1 Purchase of property, plant and equipment (125) Free cas