Eaton Corporation, Plc · NYSE:ETN

Eaton — Q1 2024 Earnings Presentation

24 slides from Eaton's earnings presentation, Apr 30, 2024

  1. Slide 1: First Quarter 2024 Earnings Release

    First Quarter 2024 Earnings Release Craig Arnold & Olivier Leonetti | April 30, 2024 © 2024 Eaton. All rights reserved. 1

  2. Slide 2: Forward-looking statements and non-GAAP financial information

    Forward-looking statements and non-GAAP financial information This presentation or the comments we make on our call today contain forward-looking statements concerning, among other matters, full year and second quarter 2024 adjusted earnings per share, organic revenue growth and segment operating ma

  3. Slide 3: Highlights

    Highlights Adjusted earnings per share of $2.40, up 28% versus 1Q23, a Q1 record. Q1 record segment margins of 23.1%, up 340 bps versus 1Q23. Order growth of 7% in Electrical and 2% in Aerospace on a rolling 12-month basis. Electrical and Aerospace backlog up 27% and 11% in 1Q24 with book-to-bill ra

  4. Slide 4: Key drivers of Eaton's long term growth outlook

    Key drivers of Eaton’s long term growth outlook Key Markets Commercial Data Residential Legacy Megatrends Buildings Center Industrial Buildings Utility Aerospace e-Mobility Vehicle Electrification Energy Transition Digitalization Infrastructure Spending Reindustrialization Green Regulations © 2024 E

  5. Slide 5: Megaprojects momentum continues, surpassing $1 trillion

    Megaprojects momentum continues, surpassing $1 trillion 42 Megaproject announcements in Q1’2024 totaling $130B+ $1.2T 54% of projects are related to federal government incentives (IRA, IIJA, CHIPS) in cumulative North America Only 16% of these projects have started mega projects construction – multi

  6. Slide 6: Nonresidential construction starts less than $1B also reaching new heights

    Nonresidential construction starts less than $1B also reaching new heights Dodge Nonresidential Project Starts <$1B • Nonresidential project starts <$1B projected to exceed >$500B in 2024, up ~56% since 2021 Indexed Growth, 2021 = 100 200 • Nonresidential project starts up 10% YTD • Since 2021, mega

  7. Slide 7: Industrial markets supported by reindustrialization, sustainability and productivity

    Industrial markets supported by reindustrialization, sustainability and productivity Industrial Facilities End Market – Indexed Growth Key Drivers: Americas Industrial Facilities Market • Reindustrialization supported by government stimulus programs (IRA, IIJA, CHIPS) are driving increased North Ame

  8. Slide 8: Eaton offers the broadest portfolio of industrial solutions

    Eaton offers the broadest portfolio of industrial solutions Transformer Enclosure Low-voltage switchgear Cable tray Switchboard Motor control Safety center grating Panelboard Industrial and emergency Brightlayer Industrial suite software lighting • Remote monitoring application • Asset performance m

  9. Slide 9: Data Center end market continuing to gain steam, resetting expectations

    Data Center end market continuing to gain steam, resetting expectations Prior View (3Q’23 Earnings) Current View Data Centers End Market – Indexed Growth Data Centers End Market – Indexed Growth Global Product Addressable Market Global Product Addressable Market 2022 2023 2024 2025 2022 2023 2024 20

  10. Slide 10: Financial Summary

    Financial Summary (M) 1Q ‘24 1Q ‘23 V ‘23 Sales $5,943 $5,483 8% Segment Operating Profit 1,371 1,082 27% Segment Operating Margin 23.1% 19.7% 340 bps Adjusted Earnings 966 753 28% Adjusted EPS $2.40 $1.88 28% $5,943M Q1 Quarterly Record Sales Sales Growth: $1,371M Q1 Quarterly Record Segment operat

  11. Slide 11: Electrical Americas Segment

    Electrical Americas Segment (M) 1Q ‘24 1Q ‘23 V ‘23 Sales $2,690 $2,294 17% Operating Profit 785 525 50% Operating Margin 29.2% 22.9% 630 bps All-time record sales, operating profit and margin. Sales Growth: Orders up 8% on a rolling 12-month basis. Organic 17% Forex -- Backlog up 31% year-over-year

  12. Slide 12: Electrical Global Segment

    Electrical Global Segment (M) 1Q ‘24 1Q ‘23 V ‘23 Sales $1,500 $1,500 -- Operating Profit 274 274 -- Operating Margin 18.3% 18.3% -- Orders up 4% on a rolling 12-month basis. Sales Growth: Backlog up 12% year-over-year. Organic 1% Forex (1%) Book-to-bill ratio of 1.1 on a rolling 12-month basis. Tot

  13. Slide 13: Aerospace Segment

    Aerospace Segment (M) 1Q ‘24 1Q ‘23 V ‘23 Sales $871 $803 9% Operating Profit 201 180 12% Operating Margin 23.1% 22.5% 60 bps Q1 record sales, operating profit and margin. Sales Growth: Orders up 2% on a rolling 12-month basis. Organic 9% Forex -- Backlog up 11% year-over-year. Total 9% Book-to-bill

  14. Slide 14: Vehicle Segment

    Vehicle Segment (M) 1Q ‘24 1Q ‘23 V ‘23 Sales $724 $739 (2)% Operating Profit 116 107 8% Operating Margin 16.0% 14.5% 150 bps Sales Growth: Strong operational performance producing Organic (3)% higher profit on lower sales year-over-year. Forex 1% Total (2)% © 2024 Eaton. All rights reserved. 14

  15. Slide 15: eMobility Segment

    eMobility Segment (M) 1Q ‘24 1Q ‘23 V ‘23 Sales $158 $147 7% Operating Profit (4) (4) -- Operating Margin (2.7)% (2.7)% -- Sales Growth: New program launches & ramp-ups through Organic 7% remainder of 2024 driving significant outgrowth versus the market. Forex -- Total 7% © 2024 Eaton. All rights re

  16. Slide 16: Electrical and Aerospace backlogs remain robust and growing

    Electrical and Aerospace backlogs remain robust and growing Electrical Sector Historical Backlog Aerospace Segment Historical Backlog ($ blns) ($ blns) $11.3 $12.00 $4.00 $3.50 $3.4 $10.00 $3.00 $8.00 $2.50 $6.00 $2.00 $1.50 $1.4 $4.00 $2.8 $1.00 $2.00 $0.50 $0.00 $0.00 Q4 '19 Q4 '20 Q4 '21 Q4 '22 Q

  17. Slide 17: Eaton's 2024 end market growth assumptions

    Eaton’s 2024 end market growth assumptions % of Total 2023 % of Total 2023 Eaton Sales Eaton Sales Data Centers & Distributed IT 14% Commercial Aerospace 9% Utility 11% Electric Vehicles 3% Industrial Facilities 12% Defense Aerospace 6% Commercial & Institutional 20% ICE Light Vehicles 4% Machinery

  18. Slide 18: 2024 Organic Growth and Operating Margin Guidance

    2024 Organic Growth and Operating Margin Guidance Organic Growth Guidance Operating Margin Guidance Segment Electrical Americas 10 – 12% 27.8 – 28.2% Electrical Global 2.5 – 4.5% 19.4 – 19.8% Aerospace 9 – 11% 23.3 – 23.7% Vehicle (4) – 0% 16.3 – 16.7% eMobility 25 – 35% 1 – 2% Eaton 7 – 9% 22.8 – 2

  19. Slide 19: 2024 Guidance

    2024 Guidance 2nd Quarter Outlook 2024 FY Outlook Updated Guidance Adjusted Earnings Per Share $2.52 – $2.62 $10.20 – $10.60 Organic Revenue 6.5 – 8.5% 7 – 9% Segment Operating Margins 22.4 – 22.8% 22.8 – 23.2% Operating Cash Flow N/A $4.0B – $4.4B Free Cash Flow N/A $3.2B – $3.6B Share Repurchases

  20. Slide 20: Summary

    Summary Robust project activity tied to megatrends continued in Q1 • Reindustrialization, data centers markets and infrastructure spending were strong contributors We delivered a strong first quarter of financial results on both revenue and profit • Outstanding execution across our businesses and fu

  21. Slide 21: © 2024 Eaton. All rights reserved.

    © 2024 Eaton. All rights reserved. 21

  22. Slide 22: Appendix

    Appendix © 2024 Eaton. All rights reserved. 22

  23. Slide 23: 2024 Guidance – Additional Modeling Assumptions

    2024 Guidance – Additional Modeling Assumptions 2nd Quarter Outlook 2024 FY Outlook Currency Translation ~$0 ~$0 Corporate Expenses ~flat with 2Q23 $700M Tax Rate on Adjusted Earnings 16.5 – 17.5% 17 – 18% Capex N/A $800M © 2024 Eaton. All rights reserved. 23

  24. Slide 24: © 2024 Eaton. All rights reserved.

    © 2024 Eaton. All rights reserved. 24

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