Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q2 2021 Earnings Presentation
23 slides from Vertiv's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Results
Second Quarter 2021 Results July 28, 2021 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 in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes, without l
Slide 3: Second quarter 2021 key messages
Second quarter 2021 key messages Demand continues to be strong with second quarter 2021 net sales up 25.3% and orders up 24.4% from second quarter 2020 Second quarter adjusted operating profit of $134M up $31M (+30%) and adjusted operating margin up 40 bps from second quarter 2020 Second quarter fre
Slide 4: Market environment
Market environment Vertiv SEGMENT Sales AMERICAS APAC EMEA Exposure1 Apr-21 Jul-21 Apr-21 Jul-21 Apr-21 Jul-21 CLOUD / HYPERSCALE ~20% COLOCATION ENTERPRISE / ~50% SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS ~20% COMMERCIAL & INDUSTRIAL ~10% Note: 1Sales Revenue FY2020 estimated by customer segme
Slide 5: Demand and growth investment update
Demand and growth investment update CUSTOMER DEMAND GROWTH INVESTMENTS • Overall market demand remains robust. Second IT Channel Acceleration: quarter orders up ~25% compared to same period last year. • Seeing revenue growth in all regions • Continued strength in cloud and colocation markets • Activ
Slide 6: Pricing and supply chain update
Pricing and supply chain update PRICING MATERIAL & FREIGHT INFLATION CONTRIBUTION MARGIN % $ increase from prior year $ increase from prior year Implied in updated July guidance Spot Buys & Expedites Market Inflation Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY ’20 Q1 Q2 Q3 Q4 • Targeting ~$65M full year pricing • Ex
Slide 7: Second quarter 2021 financial results
Second quarter 2021 financial results $Millions Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 25.3% Up 30% Up 40 bps Up $0.15 Down ($21M) Organic +20.4% 0.31 62 1,260 134 10.2% 10.6% 1,006 103 41 0.16 2Q 2020 2Q 2021 2Q 2020 2Q 2021 2Q 2020 2Q 2021 2Q 2020 2Q 2
Slide 8: Second quarter 2021 segment results
Second quarter 2021 segment results $Millions Americas ➢ Sales growth strong across all product groups led by critical infrastructure and solutions demand Net sales ➢ Supply chain headwinds challenge contribution margins. Up 16.5% Fixed cost reductions offset impact of 2020 COVID cost Up 23.3% Up 50
Slide 9: Second quarter 2021 free cash flow & liquidity
Second quarter 2021 free cash flow & liquidity $Millions • Liquidity of $1,140M at quarter end ➢ 2.2x net leverage 7 (20) • Cash interest lower due to lower interest rates and debt paydown 31 • Cash taxes higher driven by timing and (18) 62 higher expected full year 2021 earnings compared to 2020 (7
Slide 10: Third quarter 2021 financial guidance
Third quarter 2021 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Up 10% Up ~135% Up 670 bps Up $0.23 Organic +8% 1,280 1,162 160 12.5% $0.28 68 5.8% $0.05 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020
Slide 11: Updated full year 2021 financial guidance
Updated full year 2021 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Up 14% vs. 2020 Up 75% vs. 2020 Up 420 bps vs. 2020 Up $1.30 vs. 2020 Up $137M vs. 2020 (+12% organic) Up $5M v
Slide 12: Full year guidance bridge to prior guidance
Full year guidance bridge to prior guidance $Millions adjusted operating profit • Additional pricing actions implemented to offset commodity and logistics inflation • Fixed cost reductions (excluding R&D) 15 implemented to partially offset transitory (35) supply chain headwinds 30 • Incremental sale
Slide 13: Second quarter 2021 key messages
Second quarter 2021 key messages Demand continues to be strong with second quarter 2021 net sales up 25.3% and orders up 24.4% from second quarter 2020 Second quarter adjusted operating profit of $134M up $31M (+30%) and adjusted operating margin up 40 bps from second quarter 2020 Second quarter fre
Slide 14: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 15: Non-GAAP financial measures - second quarter results
Non-GAAP financial measures - second quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin adjusted operating profit (loss) ($M | 2nd QUARTER) 2Q21 2Q20 D ($M | 2n
Slide 16: Non-GAAP financial measures – second quarter results (cont.)
Non-GAAP financial measures – second quarter results (cont.) Second quarter 2021 reflects midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M,
Slide 17: Non-GAAP financial measures – third quarter guidance
Non-GAAP financial measures – third quarter guidance Third quarter 2021 reflects midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M, except E
Slide 18: Fourth quarter 2021 financial guidance
Fourth quarter 2021 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Up 4% Up ~28% Up 260 bps Up $0.05 Organic +4% 1,306 1,360 $0.34 194 14.2% $0.29 152 11.6% Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020
Slide 19: Non-GAAP financial measures –fourth quarter guidance
Non-GAAP financial measures –fourth quarter guidance Fourth quarter 2021 reflects midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M, except
Slide 20: Non-GAAP financial measures – updated full year guidance
Non-GAAP financial measures – updated full year guidance Full year 2021 at midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Loss on Operating profit Interest extinguishment Change in Income
Slide 21: Adjusted operating profit bridge: full year 2021 guidance
Adjusted operating profit bridge: full year 2021 guidance $Millions 40 (60) 50 (40) (45) 600 14 185 21 456 342 92 Operating margin % 7.8% 10.4% 12.0% FY 2020 Restructuring SPAC FY 2020 Organic Fixed cost FX Growth 2020 Inflation net Productivity, FY 2021 adjusted reserve and transaction pro-forma vo
Slide 22: Full year 2021 inflation and pricing evolution
Full year 2021 inflation and pricing evolution $Millions favorable / (unfavorable) vs. prior year • Reflects the year over year February Guidance April Guidance July Guidance change in contribution (adj. OP = $575M) (adj. OP = $595M) (adj. OP = $600M) margin attributable to Material and freight infl
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