Worthington Enterprises, Inc. · NYSE:WOR
Worthington Enterprises — Worthington Industries — Cowen's 42nd Annual Aerospace/Defense & Industrials Conference (February 2021)
29 slides from Worthington Enterprises's conference presentation, Feb 11, 2021
Slide 1: Worthington Industries
Worthington Industries Joe Hayek – Chief Financial Officer 42 nd Annual Aerospace/Defense & Industrials Conference February 11, 2021
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Worthington Industries 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 which are not historical information constitute "forward looking statements" within the meaning
Slide 3: Vision
VISION TO BE THE TRANSFORMATIVE PARTNER FOR OUR CUSTOMERS, A POSITIVE FORCE IN OUR COMMUNITIES AND EARN EXCEPTIONAL RETURNS 3
Slide 4: Domestic leader in flat rolled steel processing; global leader in pressure cylinders
✓ Domestic leader in flat rolled steel processing ✓ Global leader in pressure cylinders • Consumer Products • Industrial Products ✓ Domestic leader in suspension ceiling solutions (WAVE) ✓ Market-leading joint ventures serving building product & automotive end-markets NET SALES OF $2.8 BILLION LTM 1
Slide 5: Corporate Citizenship & Sustainability
CORPORATE CITIZENSHIP & SUSTAINABILITY Long history of keeping employees safe, practicing good citizenship and protecting the environment Fiscal Year 2020 Highlights For more information on our Corporate Citizenship & Sustainability efforts, please see our first annual Corporate Citizenship & Sustai
Slide 6: 83MM Cylinders & Accessories Manufactured
MANUFACTURED 83MM • CYLINDERS & • ACCESSORIES (FY20) SOLD IN 90+ COUNTRIES • • • • • • LARGEST PURCHASER OF FLAT ROLL STEEL BEHIND AUTOMAKERS 6
Slide 7: $2.8B Trailing 12 Month Net Sales
$2.8B TRAILING 12 MONTH NET SALES 11/30/20 NET SALES BY END-MARKETS OPERATING/EQUITY INCOME BY SEGMENT TTM* $233.2 MILLION 19% 18% 30% 5% 3% 33% 13% 3% 7% 37% 32% Automotive Construction Industrial Consumer Products Steel Cylinders WAVE / Other / JVs Agriculture Heavy Truck Oil & Gas Equipment Other
Slide 8: Steel Processing Profile
STEEL PROCESSING PROFILE AUTO SALES BY END MARKET TTM 11/30/20 $1.7B Wholly-Owned Consolidated JVs CAOGNRSI TCRUUL C TTU IROEN Unconsolidated JVs Automotive 53% 25 FACILITIES in North America (8 wholly owned / 17 JV Owned) Other CORE PRODUCTS 14% AGRICULTURE Carbon flat rolled steel processing - Bro
Slide 9: Pressure Cylinders Profile
PRESSURE CYLINDERS PROFILE SALES BY SBU TTM 11/30/20 $1.1B Industrial Products 15 FACILITIES 49% in North America and Europe Oil & Gas Equipment 6% CORE PRODUCTS Consumer Products 45% Industrial Products - Broad line of pressure cylinders and tanks for industrial gas storage and transportation Consu
Slide 10: WAVE (50% JV) Profile
WAVE ( 5 0 % J V ) PROFILE CONTRIBUTION TO WI EQUITY INCOME ($M) $78 $71 $54 $33 6 facilities in North America FY05 FY10 FY15 FY20 * FY20 excludes the $23.1M gain related to the sale of WAVE’s foreign assets CORE PRODUCTS MARKETS Sustainable revenue and EBITDA OVER growth with creative fabricated Pr
Slide 11: Successful Joint Ventures
SUCCESSFUL JOINT VENTURES Serving building product and automotive end markets OVER • Successful JV portfolio built with trusted partners who help make a $1.0B business better versus the alternative of going solo • JVs managed to produce regular cash dividends that closely approximate earnings in div
Slide 12: Growth Strategy
GROWTH STRATEGY Working together using technology, analytics and automation enables us to deliver… Successful innovation, transformation, and acquisitions that drive value for customers and earn exceptional returns for our shareholders. All with Our Philosophy at the center. 1 2
Slide 13: Value Drivers in Action: Transformation
VALUE DRIVERS IN ACTION: TRANSFORMATION Data driven LEAN events to improve our businesses Example of Transformation project at cylinder facility conducted during pandemic Issue: Strong demand for Coleman® and Bernzomatic® camping gas tanks required transformation efforts to increase production in or
Slide 14: Value Drivers in Action: Innovation
VALUE DRIVERS IN ACTION: INNOVATION Focused effort has resulted in a growing pipeline of new products FUEL GAUGE SMARTLID™ COMFORT CARRY™ FOR CAMPING CYLINDERS INTEGRATED MONITORING SOLUTION PROPANE TANK Check fuel levels to avoid running out Check propane levels remotely Easier to handle, more attr
Slide 15: Value Drivers in Action: Innovation
VALUE DRIVERS IN ACTION: INNOVATION Focused effort has resulted in a growing pipeline of new products CLEAN CANNABIS FOURTIS® TYPE IV EXTRACTION CYLINDER MAX9 BUNDLE™ PROPANE CYLINDER Meets need for a cleaner Holds 25% more industrial gas Heating & cooking indoors globally alternative to carbon stee
Slide 16: Value Drivers in Action: Innovation
VALUE DRIVERS IN ACTION: INNOVATION Focused effort has resulted in a growing pipeline of new products ARMSTRONG VIDASHIELD UV24 AIR PURIFICATION SYSTEM
Slide 17: Value Drivers in Action: M&A
VALUE DRIVERS IN ACTION: M&A Acquired General Tools & Instruments on January 29, 2021 which complements our existing strong brands in consumer products and expands our reach in niche tools and outdoor living ✓ Market leader for feature-rich, specialized tools – Over 1,200 products ✓Attractive financ
Slide 18: Additional Q3 Transactions That Will Improve Financial Performance and Strengthen Liquidity
ADDITIONAL Q3 TRANSACTIONS THAT WILL IMPROVE OUR FINANCIAL PERFORMANCE AND STRENGTHEN LIQUIDITY ✓ Divested … Oil & Gas Equipment business • Exited non-core, loss-making operations in January 2021 • Received nominal consideration at closing with the opportunity for additional consideration in the fut
Slide 19: Financial Goals
F IN A N CIA L G O A L S • GROW EBITDA & FREE CASH FLOW EVERY YEAR • 10%+ RETURN ON CAPITAL • RAISE MARGINS • REDUCE EARNINGS VOLATILITY • BALANCED CAPITAL ALLOCATION • MODEST LEVERAGE / AMPLE LIQUIDITY (INVESTMENT GRADE) • RIGOROUS CAPITAL DISCIPLINE 1 9
Slide 20: 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 $3 BILLION OF CAPITAL DEPLOYED OVER PAST 10 YEARS ✓ Reinvest in the business to create value and support CAPITAL growth (
Slide 21: Consolidated Results
CONSOLIDATED RESULTS $ millions, except EPS FY2019 FY2020 6M FY2020 6M FY2021 Sales $3,760 $3,059 $1,683 $1,434 Adjusted EBITDA* $330 $300 $154 $171 % of sales 8.8% 9.8% 9.1% 11.9% Operating Income* $142 $115 $59 $85 % of sales 3.8% 3.8% 3.5% 5.9% EPS* $2.60 $2.39 $1.23 $1.59 Avg Invested Capital $1
Slide 22: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Worthington offers an attractive investment opportunity • Growth strategy focused on value drivers of innovation, transformation and acquisition to enhance margins • Solid free cash flow and ample liquidity to execute on strategy • Rigorous capital discipline focused on hig
Slide 23: Supplemental Data
4 WORTHINGTON INDUSTRIES SUPPLEMENTAL DATA
Slide 24: Consolidated Adjusted EBITDA / Free Cash Flow
SUPPLEMENTAL DATACONSOLIDATED ADJUSTED EBITDA / FREE CASH FLOW FY19 FY20 FY20 FY21 Annual Annual 6M 6M Net Income $ 153.5 $ 78.8 $ 47.3 $ 542.6 Interest Expense 38.1 31.6 16.8 15.1 Taxes 43.2 26.3 15.7 144.3 EBIT $ 234.7 $ 136.8 $ 79.8 $ 702.1 D&A 95.6 92.7 46.8 43.8 EBITDA $ 330.3 $ 229.4 $ 126.6 $
Slide 25: Consolidated Adjusted Operating Income / EPS
SUPPLEMENTAL DATA CONSOLIDATED ADJUSTED OPERATING INCOME / EPS $ millions, except EPS FY2019 FY2020 6M FY2020 6M FY2021 Operating Income $145 $22 $18 $7 Restructuring and non recurring* (3) 93 $41 $77 Operating Income Adjusted $142 $115 $59 $85 EPS $2.61 $1.41 $0.84 $9.97 Restructuring and non recur
Slide 26: Steel Processing Financials
S T E E L P R O C E S S I N G FINANCIALS $ millions FY2019 FY2020 6M FY2020 6M FY2021 Sales $2,436 $1,860 $1,040 $900 Adj. EBITDA* $122 $79 $36 $66 % of sales* 5.0% 4.3% 3.4% 7.3% Operating Income* $93 $46 $23 $53 excl. Restructuring % of sales 3.8% 2.5% 2.2% 5.9% Capital Expenditures $39 $41 $20 $2
Slide 27: Pressure Cylinders Financials
P R E S S U R E C Y L I N D E R S FINANCIALS $ millions FY2019 FY2020 6M FY2020 6M FY2021 Sales $1,208 $1,148 $595 $533 Adj. EBITDA* $105 $124 $67 $52 % of sales* 8.7% 10.8% 11.3% 9.8% Operating Income* $63 $81 $45 $33 excl. Restructuring % of sales 5.3% 7.1% 7.6% 6.2% Capital Expenditures $38 $41 $
Slide 28: Meaningful JV Earnings
MEANINGFUL JV EARNINGS Unconsolidated JVs managed to produce regular cash dividends that closely approximate earnings DIVIDEND to WII (CASH FLOW) $ MILLIONS $160 EQUITY EARNINGS* $140 *Excludes Restructuring and $120 $110 $113 Impairment Charges $103 $101 $100 $96 $102 $101 $80 $90 $57 $60 $49 $40 $
Slide 29: Contact
CONTACT SAFE HARBOR STATEMENT Worthington Industries 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 which are not historical information constitute "forward looking statements" within the