Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Q2 2020 Earnings Presentation
17 slides from Enerpac Tool's earnings presentation, Mar 19, 2020
Slide 1: Fiscal 2020 Second Quarter Earnings
Fiscal 2020 Second Quarter Earnings March 19, 2020 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not historical are considered “forward-looking statements” and are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. Those factors are contained in
Slide 3: COVID-19 and Oil & Gas Volatility
COVID-19 and Oil & Gas Volatility COVID-19 Impact to sales in the quarter: ~$2M Operating profit impact : ~$1M China operations effectively idled for half of the quarter but are slowly coming back online Supply chain currently stable – Our team has found quick solutions to maintain material
Slide 4: Second Quarter 2020 Summary
Second Quarter 2020 Summary Market Update North America – core industrial tools Middle East – service in the Caspian region Asia – China and S. Korea (COVID-19 impact) Europe – Stability and slight growth in several countries Impact on Core Sales Growth Consolidated: down 10% - products do
Slide 5: Second Quarter 2020 Strategy Progress
Second Quarter 2020 Strategy Progress Organic Growth New Product Development 3 new product families NPVI +10% Coverage / Vertical market focus Acquisitions HTL acquisition completed in the quarter Completes our bolting product line Bolt Torque Equipment Enhances our European rental cap
Slide 6: Second Quarter 2020 Comparable Results
Second Quarter 2020 Comparable Results (US$ in millions except EPS) NET SALES* • Core sales decreased 10% - product (-4%) and service (-28%) • IT&S sales (11%) $160 12.4% 12.0% • Anticipated year-over-year service decline in Middle East and Asia • Continued global economic uncertainty $133 • COVID-1
Slide 7: Net Sales Waterfall
Net Sales Waterfall* (US$ in millions) $165 $160 $2 $160 $12 $155 Planned strategic exits, the stronger dollar, COVID-19 and $150 general market softness (primarily in North America and the $2 $145 $147 Middle East) resulted $3 in lower sales year- over-year $140 $11 $135 $2 $133 $130 $125 Q2 '19 Ne
Slide 8: Adjusted EBITDA Waterfall
Adjusted EBITDA Waterfall* (US$ in millions) $24 $23 $22 $1.0 $3.0 $21 Adjusted EBITDA $1.8 decreased year-over- $20 year primarily due to $19 $0.3 COVID-19 and $19.8 $3.3 product/service $18 volume decreases, $17 partially offset by 12.3% 13.3% restructuring $16 savings $0.4 $15 $16.0 $14 $13 $12 Q
Slide 9: Balance Sheet
Balance Sheet (US$ in millions) ($31) Improvement in use of cash in Q2 fiscal 2020 vs Q2 fiscal 2019 • $36 million improvement in working capital • $4 million less in capital expenditures Q2 cash balance $163 million Acquisition of HTL ($9) Repurchased ~503,000 shares since quarter end 2019 2020 Q2
Slide 10: Strategic Vision: Achieving EBITDA Margin Expansion
Achieving EBITDA Margin Expansion – Next 5 Years Fiscal 2019 Fiscal 2020 Fiscal 2021-2024 Incremental Profit EBITDA ~25% Incremental Profit on on Growth Growth Footprint Optimization ~275-325bps** Based on actions taken Restructuring Run Rate / Strategic Vision in fiscal 2020-2024 Structural ~150-
Slide 11: Conclusion – Prioritizing Capital Allocation
Conclusion – Prioritizing Capital Allocation Reduce Debt and Maintain a Strong Balance Sheet Given the volatility in the market, our current capital allocation priorities are focused on Invest in Ourselves to Drive Organic Growth maintaining a strong balance sheet and financial flexibility as well a
Slide 12: Q&A
Q&A
Slide 13: Appendix
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Slide 14: Second Quarter 2020 GAAP vs Non-GAAP Reconciliation
Second Quarter 2020 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) Less Net Impairment & Purchase Divestiture Restructuring Accounting GAAP Gains Charges Charges Adjusted Sales $133.4 $133.4 Operating Prof it $8.6 $0.8 ($1.9) ($0.2) $9.9 Income Taxes $0.8 $0.2 ($0.3) ($0.0) $0.9 Net In
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA Free Cash Flow Q2 Q2 2020 2019 Q2 Q2 Net Earnings $7 $1 0 2020 2019 Net Financing Costs $5 $7 Income Taxes ($2) $4 Cash From Operations $ (6) $ (22) Depreciation & Amortization $5 $4 Capital Expenditures $ (4) $ (8) Restructuring
Slide 16: Adjusted Operating Profit Waterfall
Adjusted Operating Profit Waterfall* (US$ in millions) $21 $19 $1.0 Adjusted Operating $3.5 $1.8 Profit decreased $17 year-over-year primarily due to $0.3 $3.3 $15 $16.0 COVID-19 and volume/productivity partially offset by $13 restructuring savings $3.2 $11 $9 $9.9 $7 $5 Q2 '19 Operating FX Translat
Slide 17: Tool Group
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