Westinghouse Air Brake Technologies Corporation · NYSE:WAB
Westinghouse Air Brake Technologies — Q1 2024 Earnings Presentation
27 slides from Westinghouse Air Brake Technologies's earnings presentation, Apr 24, 2024
Slide 1: Wabtec Financial Results & Company Highlights
FIRST QUARTER 2024 Wabtec Financial Results & Company Highlights
Slide 2: Forward Looking Statements & Non-GAAP Financial Information
FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL INFORMATION This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigati
Slide 3: Today's Participants
WABTEC TODAY’ S PARTICIPANTS RAFAEL JOHN KYRA SANTANA OLIN YATES President & Executive Vice President & Vice President, Chief Executive Officer Chief Financial Officer Investor Relations
Slide 4: 1Q 2024 Overview
WABTEC 1Q 2024 OVERVIEW 1Q 2024 HIGHLIGHTS SALES $2.50B Up 13.8% YOY Increased sales were driven by strong growth in the Freight Segment … higher Equipment deliveries and Services growth Operating margin benefited from sales growth, improved gross OPERATING 16.5% 19.8% margin and lower SG&A/Engineer
Slide 5: 2024 Market Expectations
WABTEC NORTH AMERICAN AVG NORTH AMERICAN 2024 MARKET FREIGHT CARLOADS ACTIVE LOCOMOTIVES 2.8% EXPECTATIONS 1.8% FAVORABLE / FREIGHT UNFAVORABLE NA Carloads +/↔ -3.3% Active Locomotive Fleet ↔ -4.6% 2Q23 3Q23 4Q23 1Q24 1Q21 1Q22 1Q23 1Q24 International Freight Source: Association of American Railroad
Slide 6: Executing on Our Value Creation Framework
WABTEC EXECUTING ON OUR VALUE CREATION FRAMEWORK DRIVERS OF RECENT PORTFOLIO GROWTH WINS Accelerate innovation of scalable technologies Won multi-year order for over $270 million in Africa Grow and refresh expansive global installed base Mining orders $260 million ... aftermarket continues to be str
Slide 7: Wabtec's Path to Zero Emissions Locomotives
WABTEC WABTEC’S PATH TO ZERO EMISSIONS LOCOMOTIVES DEVELOP BEST-IN-CLASS ZERO ENABLE TRANSITION TOWARD NEAR ZERO EMISSIONS EMISSIONS TECHNOLOGY Step 1 - Fleet Renewal through Step 2 – Enable Wabtec Engines for Battery Electric (FLEXDRIVE) Tier 4 & Mods Alternative Fuels Wabtec Advantage: Fleet repla
Slide 8: 1Q 2024 Financial Summary
WABTEC 1Q 2024 FINANCIAL SUMMARY I N CREASED S AL E STitle Chart , M ARGI N E XP AN SION AN D E P S GRO WT H Chart Title SALES OP INCOME / OP MARGIN EPS 3 600 2 $1.89 $2.50B $495M 1.8 +47.7% 2.5 $2.19B 500 1.6 $1.53 YOY $412M 19.8% 1.4 +64.5% $1.28 2 400 16.5% $360M YOY 1.2 16.4% 1.5 300 $276M 1 $0.
Slide 9: 1Q 2024 Sales
WABTEC 1Q 2024 SALES (in millions) PRODUCT LINE 1Q24 YOY 1Q KEY DRIVERS Equipment $526 30.2% EQUIPMENT Higher mining sales and locomotive deliveries Components $293 13.6% COMPONENTS Digital Intelligence $176 (5.9%) Increased demand for industrial products, higher international sales and the year-ove
Slide 10: 1Q 2024 Consolidated Gross Profit
WABTEC 1Q 2024 CONSOLIDATED GROSS PROFIT ($ in millions) GAAP Adjusted 1Q KEY DRIVERS 2023 GROSS PROFIT $665 $669 VOLUME % Gross Profit Margin 30.3% 30.5% Higher Freight and Transit segment sales Volume ↑ ↑ MIX/PRICING Significant favorable mix between & within the Freight segment and Mix/Pricing ↑
Slide 11: 1Q 2024 Consolidated Operating Income
WABTEC 1Q 2024 CONSOLIDATED OPERATING INCOME ($ in millions) GAAP Adjusted 2023 OP INCOME $276 $360 % Operating Margin 12.6% 16.4% Gross Profit 150 152 SG&A (18) (20) Engineering 3 3 Amortization 1 - 2024 OP INCOME $412 $495 % Operating Margin 16.5% 19.8% OP MARGIN BENEFITED FROM HIGHER SALES, INCRE
Slide 12: 1Q 2024 Freight Segment Performance
WABTEC 1Q 2024 FREIGHT SEGMENT PERFORMANCE Chart SALESTitle OP INCOME / OP MARGIN Chart Title 12-MONTH BACKLOG 2 500 6 $5.67B $1.82B(2) 1.8 $439M 450 $4.95B 1.6 $1.56B 24.1% 5 400 $368M 1.4 350 20.2% 4 1.2 $296M 300 19.0% 1 250 $226M 3 0.8 200 14.5% 2 0.6 150 0.4 100 1 0.2 50 0 0 0 2023 2024 2023 2
Slide 13: 1Q 2024 Transit Segment Performance
WABTEC 1Q 2024 TRANSIT SEGMENT PERFORMANCE Chart SALESTitle OP INCOME / OP MARGIN Chart Title 12-MONTH BACKLOG 800 100 2.5 $673M(1) 90 $86M $2.04B 700 $638M $82M $1.98B 80 $74M 12.7% 2 600 $70M 12.9% 70 11.0% 500 11.0% 1.5 60 400 50 300 40 1 30 200 20 0.5 100 10 0 0 0 2023 2024 2023 2 0 2 4 Category
Slide 14: Resilient Business Allows for Execution on Financial Priorities
WABTEC RESILIENT BUSINESS ALLOWS FOR EXECUTION ON FINANCIAL PRIORITIES FOCUSED ON CASH CONVERSION ( 1 ) DISCIPLINED CAPITAL ALLOCATION CASH FROM OPS $19M Change in cash Strong balance sheet and financial position … liquidity of $2.13B (3) 1Q 2024 1Q 2023 Share $334M $175M repurchases Share repurchas
Slide 15: 2024 Updated Financial Guidance
WABTEC 2 0 2 4 U p d a t e d F i n a n c i a l G u i d a n c e (1,2) PRIOR GUIDANCE UPDATED GUIDANCE REVENUES REVENUES $10.05B to $10.35B $10.25B to $10.55B ADJUSTED EPS ADJUSTED EPS $6.50 to $6.90 $7.00 to $7.40 C A S H C O N V E R S I O N (3) C A S H C O N V E R S I O N (3) >90% >90% KEY ASSUMPTIO
Slide 16: Key Takeaways
WABTEC KEY TAKEAWAYS 5 - Y E A R O U T L O O K (1) MSD CORE ORGANIC GROWTH CAGR 01 Strong revenue growth, margin expansion, increased earnings, and improved cash flow to start the year 02 250 – 300 BPS MARGIN EXPANSION Positive productivity driven by continuous cost improvement combined with realiza
Slide 17: Income Statement
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION APPENDIX A ( 1 of 2) INCOME CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 STATEMENT (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended March 31, 2024 2023 Net sales $ 2,497 $ 2,19
Slide 18: Income Statement (Cont.)
APPENDIX A ( 2 of 2) INCOME STATEMENT (CONT.) WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended March 31, 2024 2023 Segment Informat
Slide 19: Balance Sheet
APPENDIX B BALANCE SHEET WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, 2024 December 31, 2023 In millions Cash, cash equivalents and restricted cash $ 639 $ 620 Receivables, net 1,541 1,684 Inventories, net 2,356 2,284 Other current asset
Slide 20: Cash Flow
APPENDIX C CASH FLOW WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 2024 2023 In millions Operating activities Net income $ 277 $ 173 Non-cash expense 126 124 Receivables 121 (51) Inventories (85) (188) Account
Slide 21: EPS and Non-GAAP Reconciliation (1 of 2)
APPENDIX D (1 of 2) EPS AND NON-GAAP RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comp
Slide 22: EPS and Non-GAAP Reconciliation (2 of 2)
APPENDIX D (2 of 2) EPS AND NON-GAAP RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comp
Slide 23: EBITDA Reconciliation
APPENDIX E EBITDA RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP f
Slide 24: Sales by Product Line
APPENDIX F SALES BY PRODUCT LINE WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SALES BY PRODUCT LINE (UNAUDITED) Three Months Ended March 31, In millions 2024 2023 Freight Segment Equipment $ 526 $ 404 Components 293 258 Digital Intelligence 176 187 Services 829 707 Total Freight Segment $ 1,824 $
Slide 25: Segment Gross Margin & Operating Margin Reconciliation
APPENDIX G SEGMENT GROSS MARGIN & OPERATING MARGIN RECONCILIATION WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF REPORTED RESULTS TO ADJUSTED RESULTS - BY SEGMENT (UNAUDITED) Three Months Ended March 31, 2024 2023 Income from Income from In millions Gross Profit Operations Gross P
Slide 26: Segment Sales Reconciliation
APPENDIX H SEGMENT SALES RECONCILIATION WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF CHANGES IN NET SALES - BY SEGMENT (UNAUDITED) Three Months Ended March 31, Freight Transit Consolidated 2023 Net Sales $ 1,556 $ 638 $ 2,194 Acquisitions 36 - 36 Foreign Exchange 1 4 5 Organic 2
Slide 27: Cash Conversion Reconciliation
APPENDIX I CASH CONVERSION RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. N
Westinghouse Air Brake Technologies — Q1 2024 Earnings Presentation on 6ix