EnerSys · NYSE:ENS

EnerSys — Q2 2023 Earnings Presentation

35 slides from EnerSys's earnings presentation, Nov 9, 2022

Slide 2: Forward Looking Statements
Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements on this call that are based on Management’s current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual re
Slide 4: Q2’23 Results
Q2’23 Results ($ millions, except EPS) Q2’23 Key Takeaways • Second highest quarterly revenue (in a seasonally slow Q2) Net Sales $899 • +19% y/y at Constant Currency “CC” (Y / Y Growth) 13.7% • ~($45M) y/y FX pressure • TPPL revenue approx +30% y/y Adj. Operating Earnings & $65.4 7.3% • $1.4B backl
Slide 5: Record Backlog Drives Long-Term Growth
Record Backlog Drives Long-Term Growth ORDER GROWTH & MACRO CONDITIONS DRIVING RECORD BACKLOG ($ millions) 1600 ~$1,420 1200 ~$1,035 800 ~$600 400 0 Q2'21 Ending Q2'22 Ending Program Wins Organic Volume Price Advance Ordering Supply Chain Q2'23 Ending Delays • Backlog >2x higher than historical leve
Slide 6: Inflation Reduction Act (IRA)
Inflation Reduction Act (IRA) F U N D I N G A L L O C AT I O N S A L I G N W I T H E N E R S Y S T E C H N O L O G Y • Lithium / TPPL / Other products in our product mix may qualify depending on energy density Manufacturing tax credit for Potential Annual Tax Direct Financial battery cells credits J
Slide 7: Technology Advancements
Technology Advancements POWERING THE FUTURE, EVERYWHERE FOR EVERYONE CPUC Network Fast Charge & Storage NexSys® Customer Day Wireless Technology Powering Program Upgraded on-site demo, Advancing both TPPL Interactive demos, seminars and Developing autonomous near-production grade system and Lithium
Slide 8: Q2’23 Business Segment Performance
Q2’23 Business Segment Performance Net Sales Adj. Op Segment Overview ($ million) Margin • $835M backlog; +55% y/y, rev/earnings tailwind as supply chains ease $437 3.8% • Q2 revenue growth driven by broadband and data center Energy Systems +18.2% y/y +150 bps y/y • CPUC related TPPL & Li products r
Slide 9: Our Sustainability Strategy
Our Sustainability Strategy $ 4 M A N N U A L C A P I TA L A L L O C AT I O N O V E R T H E N E X T 5 Y E A R S ENVIRONMENTAL STEWARDSHIP OUR PEOPLE AND COMMUNITY SUSTAINABILITY GOVERNANCE Energy Female Targeting a Leadership TCFD-aligned 25% by 2030 20% by 2025 report in 2022 Multicultural Assessin
Slide 10: Focusing on What We Can Control
Focusing on What We Can Control 1 Pricing – continue to execute pricing increases commensurate with cost increases 2 Redesign – redesign products for component supply constraints (e.g., chips) 3 Operating Efficiencies – reduce costs through EOS Profitable Growth – retain leading market position & gr
Slide 12: Q2’23 Results
Q2’23 Results Net Sales Adj Operating Earnings & Margin Y/Y Change $899 $899 +9% price +10% volume (5%) FX, ~($45m) $65 $ millions $ millions $61 $65 $791 7.8% 7.2% 7.3% Q2'22 Q1'23 Q2'23 Q2'22 Q1'23 Q2'23 Adj EBITDA & Margin Adj Diluted EPS $1.15 $1.11 $86 $86 $1.01 $79 $ millions 9.9% 9.5% 9.5% Q2
Slide 13: Q2’23 Segment Financial Highlights
Q2’23 Segment Financial Highlights $MILLIONS; % AND BPS Y/Y GROWTH Net Sales Adj. Op Earnings Adj. Op Margin Volume +14% Price +9% Energy Systems $437 FX (5%) $16.4 3.8% ---------------------------- +94% +150 bps Reported +18% Volume +3% Price +9% Motive Power $338 FX (7%) $39.7 11.7% --------------
Slide 14: Price/Mix - Cost Recapture Gaining Traction
Price/Mix - Cost Recapture Gaining Traction Price/Mix – Cost Recapture (q/q, $ millions) Price/Mix – Cost Recapture (y/y, $ millions) 90 Ongoing price $160 Further price/mix recapture initiatives recapture anticipated 45 anticipated to push $80 in FY’23 recapture higher 0 $- -45 ($80) -90 ($160) Q2'
Slide 15: Adj EPS Bridge
Adj EPS Bridge Q2’23 SEQUENTIAL AND YEAR-OVER YEAR Costs beginning to stabilize Price/mix catching up Note: See appendix for non-GAAP reconciliation. $M USD AA November 2022 © 2022 EnerSys. All Rights Reserved. 15
Slide 16: Disciplined & Balanced Capital Allocation
Disciplined & Balanced Capital Allocation Capital Allocation FY’18 – FY’22 FY’23 YTD Healthy Balance Sheet (cumulative) Priorities $ millions $ millions • 2 – 3x target leverage Invest in Organic • ~$300M cash and cash equivalents 1 Growth (CapEx) ~$390 ~$40 • Strong cash generation outpaced by stra
Slide 17: Recession Playbook
Recession Playbook I M PA C T & A C T I O N S T O M I T I G AT E S L O W D O W N Key Takeaways: LoB Resilience 1. Slowdown not evident yet, but being vigilant All • Extensive backlog & pent-up demand buffers impact • Supply chain normalizing provides mix benefit 2. Company has deep history of discip
Slide 18: Looking Ahead
Looking Ahead Guidance Assumptions EPS • Volumes increase on seasonal recovery adj. diluted $1.20 - $1.30 • Pricing actions outpace costs (Q3’23) • Euro remains at Q2’23 levels CapEx • Continued capacity investments $100m (FY’23) • Includes $40m H1’F23 spend • Continued strong customer demand in div
Slide 20: Motive Power
Motive Power R E V E N U E H I S T O R I C A L LY T R E N D S W I T H G D P Americas MP Net Sales vs US GDP % Motive Power Strengths $140,000 vs Prior Cycles: 6% • Bolstered by movements from increased $120,000 4% automation & electrification of ICE forklifts $100,000 2% • Higher margin NexSys® main
Slide 21: Q2’23 Results
Q2’23 Results ($ millions) Q2 F'22 Q1 F'23 Q2 F'23 NET SALES $791.4 $899.0 $899.4 Adj. GROSS PROFIT $178.8 (23%) $185.5 (21%) $196.4 (22%) Adj. OP EARNINGS $ $61.4 $64.8 $65.4 Adj. OP EARNINGS % 7.8% 7.2% 7.3% Adj. EPS $1.01 $1.15 $1.11 Note: See appendix for non-GAAP reconciliation. November 2022 ©
Slide 22: Q2’23 Net Sales by Segment & Region, Q/Q
Q2’23 Net Sales by Segment & Region, Q/Q ($ millions, Except per Share Amounts) Fav/(Unfav) Q1'23 Q2'23 $ % Energy Systems $409 $437 $28 7% Motive Power $368 $338 ($30) -8% Specialty $123 $124 $2 2% Total Net Sales $899 $899 $0.4 0.1% 0% Organic, 2% Price, 0% Acquisitions, -2% Fx Fav/(Unfav) Q1'23 Q
Slide 23: Q2’23 Net Sales by Segment & Region, Y/Y
Q2’23 Net Sales by Segment & Region, Y/Y ($ millions) Fav/(Unfav) Q2'22 Q2'23 $ % Volume Price M&A Fx Energy Systems $370 $437 $67 18% 14% 9% - -5% Motive Power $321 $338 $17 5% 3% 9% - -7% Specialty $101 $124 $24 23% 19% 7% - -3% Total Net Sales $791 $899 $108 14% 10% 9% - -5% Fav/(Unfav) Q2'22 Q2'
Slide 24: Q2’23 Adj Operating Earnings by Segment
Q2’23 Adj Operating Earnings by Segment ($ millions) Fav/(Unfav) Year Over Year Q2'22 Q2'23 $ % Adj. Operating Earnings Energy Systems $8.5 $16.4 $7.9 94% 2.3% 3.8% Motive Power $41.0 $39.7 ($1.4) -3% 12.8% 11.7% Specialty $11.9 $9.3 ($2.6) -22% 11.8% 7.5% Total Adj. Operating Earnings $61.4 $65.4 $
Slide 25: Q2’23 Adj Net Earnings & EPS
Q2’23 Adj Net Earnings & EPS ($ millions, except per share amounts) Fav/(Unfav) Q2'22 Q2'23 $ % Adj. Operating Earnings $61.4 $65.4 $4.0 7% As % Net Sales 7.8% 7.3% (0.5)Pts. Book Tax Rate 16% 17% Adj. Net Earnings $43.5 $45.6 $2.1 5% As % Net Sales 5.5% 5.1% (0.4)Pts. Adj. EPS diluted $1.01 $1.11 $
Slide 26: Balance Sheet & Other Highlights
Balance Sheet & Other Highlights ($ millions) FY'22 Q2'23 YTD Cash & Cash Equivalents $402.5 $294.4 Net Debt (Gross Debt − Investments) $1,018.1 $1,045.5 Net Cash from Operations ($65.6) ($70.3) Capital Expenditures ($74.0) ($39.7) Leverage Ratio (per US Credit Agreement) 2.5X 2.9X Primary Working C
Slide 35: Thank you.
Thank you. For more information visit us at www.enersys.com World Headquarters EnerSys EMEA EnerSys Asia 2366 Bernville Road EH Europe GmbH 152 Beach Road Reading, PA 19605 USA Baarerstrasse 18 Gateway East Building #11- 08 +1 610-208-1991 / +1 800-538-3627 6300 Zug Switzerland Singapore 189721 / +6

EnerSys — Q2 2023 Earnings Presentation on 6ix

EnerSys — Q2 2023 Earnings Presentation

Slide 1: Q2’23 Financial Results

Slide 2: Forward Looking Statements

Slide 3: Business Update

Slide 4: Q2’23 Results

Slide 5: Record Backlog Drives Long-Term Growth

Slide 6: Inflation Reduction Act (IRA)

Slide 7: Technology Advancements

Slide 8: Q2’23 Business Segment Performance

Slide 9: Our Sustainability Strategy

Slide 10: Focusing on What We Can Control

Slide 11: Finance Update

Slide 12: Q2’23 Results

Slide 13: Q2’23 Segment Financial Highlights

Slide 14: Price/Mix - Cost Recapture Gaining Traction

Slide 15: Adj EPS Bridge

Slide 16: Disciplined & Balanced Capital Allocation

Slide 17: Recession Playbook

Slide 18: Looking Ahead

Slide 19: Appendix

Slide 20: Motive Power

Slide 21: Q2’23 Results

Slide 22: Q2’23 Net Sales by Segment & Region, Q/Q

Slide 23: Q2’23 Net Sales by Segment & Region, Y/Y

Slide 24: Q2’23 Adj Operating Earnings by Segment

Slide 25: Q2’23 Adj Net Earnings & EPS

Slide 26: Balance Sheet & Other Highlights

Slide 27: Non-GAAP Reconciliations

Slide 28: Non-GAAP Reconciliation

Slide 29: Non-GAAP Reconciliation

Slide 30: Non-GAAP Reconciliation

Slide 31: Non-GAAP Reconciliation

Slide 32: Non-GAAP Reconciliation

Slide 33: Non-GAAP Reconciliation

Slide 34: Non-GAAP Reconciliation

Slide 35: Thank you.