Slide 1: Second Quarter Fiscal Year 2020 Financial Results
SECOND QUARTER FISCAL YEAR 2020 FINANCIAL RESULTS October 30, 2019
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT This presentation and discussion contains certain forward-looking statements that are subject to the Safe Harbor and Cautionary language contained in the press release we issued on October 29, 2019, as well as other factors that
Slide 3: Strategic Update
STRATEGIC UPDATE Consolidated Rexnord • 2Q net sales decrease (1%) year over year, core growth(1) flat • Adjusted EBITDA(1) increases 3% year over year to $118 million • Simplification initiative reduces sales growth by approximately 150 bps year over year Water Management • 2Q net sales increase +5
Slide 4: DiRXN Momentum Building
DiRXN MOMENTUM BUILDING Process & Motion Control Water Management • Rapid transition to digital interactions • inSpec adoption continues to expand • 1HFY20 web visits up four-fold • 1HFY20 usage up ~50% • 2 of 3 quotes & orders now automated • 1HFY20 project value 75% > entire FY19 • Connected produ
Slide 5: Financial Update
FINANCIAL UPDATE Second Quarter Fiscal Year 2020 • Adjusted EBITDA(1) of $118 million increased +3% year over year • Net sales decreased (1%) year over year • Acquisitions increased sales by +1% • Foreign currency translation decreased sales by (2%) • Core sales(1) were flat year over year • Diluted
Slide 6: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK • Core sales growth(1) in low single-digit percentage range(2), net of 8020 PLS impact • 8020 PLS (product line simplification) to be 150-200 bps headwind • Adjusted EBITDA(1) in $460 - $467 million range(2) FY 2020 Adjusted EBITDA Outlook $millions Low High Previous Range (
Slide 7: 2Q FY20 Summary
2Q FY20 SUMMARY 2Q FY20 2Q FY19 Change Net Sales $521 $525 (1%) Growth from: Core (1) 0% Acquisitions 1% Translation (2%) Adjusted EBITDA (1) $118 $115 3% % of Sales 22.7% 21.9% 80 bps (1) Non-GAAP measure defined, reconciled, and discussed in the earnings release included in the Form 8-K filed with
Slide 8: Process & Motion Control
PROCESS & MOTION CONTROL 2Q FY20 2Q FY19 Change End-Market Outlook Assumed in Guidance Industrial Distribution Net Sales $337 $349 (3%) US & Canada Growth from: Europe Core (1) (2%) Rest of World Acquisitions 1% Translation (2%) Food & Beverage: Global Commercial Aerospace: Global Adjusted EBITDA (1
Slide 9: Water Management
WATER MANAGEMENT 2Q FY20 2Q FY19 Change Net Sales $184 $176 5% End-Market Outlook Assumed in Guidance Growth from: Nonresidential Construction: US & Canada Core (1) 4% Commercial & Industrial Acquisitions 1% Institutional Translation 0% Residential Construction: US & Canada Adjusted EBITDA (1) $51 $
Slide 10: Cash Flow & Balance Sheet
CASH FLOW & BALANCE SHEET Free Cash Flow ($ millions) (1) Net Debt Leverage Ratio (2) Total Debt ($ millions) (3) 250 3.5x 2,500 200 2,000 3.1x 3.0x 150 1,500 2.7x 100 213 1,000 188 2.5x 1,595 141 1,328 1,228 1,255 1,251 50 500 58 73 2.1x 2.1x 2.0x 2.0x 0 0 Mar-17 Mar-18 Mar-19 Jun-19 Sep-19 Mar-17
Slide 11: Rexnord Corporation
10/29/2019 Rexnord Corporation 11
Slide 12: Appendix
REXNORD APPENDIX
Slide 13: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK Core sales % growth(1) + Low Single Digit (net of 150-200 bps PLS impact) Adjusted EBITDA(1) $460 - $467 million Free Cash Flow(1) > Net Income Depreciation & Amortization(2) ~ $ 85 million Interest Expense (LIBOR < 3%) ~ $ 62 million Effective Tax Rate(3) ~ 26% Capital Expe
Slide 14: If-Converted Incremental Shares
IF-CONVERTED INCREMENTAL SHARES Incremental Shares Mandatory Convertible Preferred Details Average Common from Conversion Offering Size ($millions) $ 402.5 Stock Price (millions) Dividend Rate 5.75% < $ 20.99 19.18 Annual Dividend ($millions) $ 23.1 $ 20.99 19.18 Mandatory Conversion Date 11/15/2019
Slide 15: Calculating 2Q FY20 Diluted Adjusted EPS
CALCULATING 2Q FY20 DILUTED ADJUSTED EPS Second Quarter Ended ($ mil li ons , exce pt per-sha re amounts) 9/30/2019 Base Methodology Adjusted Net Income (1) $ 57.6 Weighted-Average Number of Shares: Diluted (thousands) 107,941 Adjusted Earnings Per Share: Diluted (Base Method) (1) $ 0.53 If-Converte