Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q2 2020 Earnings Presentation
18 slides from Vertiv's earnings presentation, Aug 5, 2020
Slide 1: Earnings Conference Call Second Quarter 2020 Results
Earnings Conference Call Second Quarter 2020 Results August 5, 2020 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Company’s future financial or bu
Slide 3: Dave Cote: Continuing to strengthen the foundation
Dave Cote: Continuing to strengthen the foundation Executing during the downturn Mentality of “plan for the worst and hope for the best” Tight cost controls but not at the expense of our customers Innovation spending is critical Fixed costs constant Easier to say than do Process and busine
Slide 4: Key messages
Key messages Demand remains strong despite second quarter top-line headwinds primarily driven by COVID Backlog at record high $1.8 billion. Second quarter orders up 2% from last year – up 5% organically. Lower net sales from prior year driven by negative COVID impacts and timing of larger projec
Slide 5: Market environment
Market environment Industry segment status by region overview Vertiv Sales SEGMENT Exposure AMERICAS APAC EMEA CLOUD / HYPERSCALE ~20% COLOCATION ENTERPRISE / ~55% SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS ~20% COMMERCIAL & INDUSTRIAL ~5% Cloud, colocation and telecom markets showing growth acr
Slide 6: Demand and supply update
Demand and supply update CUSTOMER DEMAND PRODUCTION & SUPPLY CHAIN • Overall demand strong with order rates ahead of 2019 • Majority of our operations are running normally and record backlog • Mexico and India continue to be hot spots with workforce • Second quarter orders up 2% (5% organically) dri
Slide 7: Second quarter 2020 financial results
Second quarter 2020 financial results $Millions Net Sales Adjusted EBITDA Adjusted EBITDA Margin Free Cash Flow Down 11.3% Down $2M Up 150 bp Up $128M Organic (8.8%) 62 14.4% 1,134 12.9% 147 145 1,006 (66) 2Q 2019 2Q 2020 2Q 2019 2Q 2020 2Q 2019 2Q 2020 2Q 2019 2Q 2020 + Lower interest payments ($59
Slide 8: Second quarter 2020 segment results
Second quarter 2020 segment results $Millions Americas Net Sales Sales decline driven by COVID-19 and lower Infrastructure & Solutions large project demand Down 15.7% Down 0.2% Down 15.9% Organic (14.0%) Organic +3.6% Organic (13.3%) Contribution margin improvements (mix, productivity and pricin
Slide 9: Second quarter 2020 free cash flow & liquidity
Second quarter 2020 free cash flow & liquidity $Millions 62 • Strong liquidity of $530M at end of June. $365M unrestricted cash and $165M availability on ABL. 9 8 • Second quarter free cash flow higher than internal expectations, and we expect strong 44 free cash flow in second half of year consiste
Slide 10: Third quarter 2020 financial guidance
Third quarter 2020 financial guidance Guidance What we expect in third quarter 2020 • Organic net sales expectations by region: AMER Adjusted relatively flat. APAC and EMEA higher by “mid to Net sales EBITDA upper single digits.” • Expect $20M FX headwinds from last year’s third $1,090M - $1,115M $1
Slide 11: Early thoughts on 2021
Early thoughts on 2021 MARKET OUTLOOK & REVENUE CONTRIBUTION MARGIN & FIXED COSTS • Expect to see solid demand from the cloud and • Continue focus on contribution margin enhancement colocation customers as data usage continues to through pricing and productivity initiatives grow • Targeting “fixed c
Slide 12: Key messages
Key messages Demand remains strong despite second quarter top-line headwinds primarily driven by COVID Backlog at record high $1.8 billion. Second quarter orders up 2% from last year – up 5% organically. Lower net sales from prior year driven by negative COVID impacts and timing of larger projec
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation from Net loss to EBITDA and adjusted EBITDA ($M | 6/30) 2Q20 2Q19 YTD 2Q20 YTD 2Q19 COMMENTARY Net income (loss) $26.2 $(18.9) $(242.7) $(93.3) a) Represents costs incurred in the refinancing and pay down of the Company’s long-term debt. Includes $99.0M wri
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of segment EBIT to adjusted EBITDA by region (A) Earnings From Continuing Operations Before Interest and Taxes (C) EBITDA Adjustments ($M | 6/30) 2Q20 2Q19 YTD 2Q20 YTD 2Q19 ($M | 6/30) 2Q20 2Q19 YTD 2Q20 YTD 2Q19 Americas $95.5 $101.1 $157.0 $188.1 America
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Organic Net Sales and Free Cash Flow Reconciliation of Net Sales to Organic Net Sales ($M | 6/30) 2Q20 2Q19 % Organic % YTD 2Q20 YTD 2Q19 % Organic % Americas $484.7 $575.1 (15.7) (14.0) $951.4 $1,129.7 (15.8) (14.5) APAC 322.8 323.3 (0.2) 3.6 546.7 582.
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: Second Quarter Operating Interest Income tax Net earnings Diluted Non-GAAP Adjusted ($M, except EPS | QTD 6/30/2020) Net Sales profit Other deductions, net expense, net expense (loss) EPS(1) EBITDA(2) GAAP
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: YTD Second Quarter Operating Loss on Debt & Other Interest Income tax Net earnings Diluted Non-GAAP Adjusted ($M, except EPS | YTD 6/30/2020) Net Sales profit deductions, net expense, net expense (loss) EP