Zurn Elkay Water Solutions Corporation · NYSE:ZWS
Zurn Elkay Water Solutions — Q4 2022 Earnings Presentation
14 slides from Zurn Elkay Water Solutions's earnings presentation, Feb 8, 2023
Slide 1: Fourth Quarter 2022 Financial Results
Fourth Quarter 2022 Financial Results February 8, 2023
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the federal securities laws that involve risks and uncertainties. Forward-looking statements include statements we make con
Slide 3: Performance Update
Performance Update Q4 Results ✓ Q4 net sales increased +46% year over year Strategic Developments ✓ Core sales(1) -3% … Elkay adds ~$115M of sales ✓ Increased authorized ✓ FCF(1) of $84M in the quarter share buy back to $500M ✓ Adjusted EBITDA(1) margin of 19.0% ✓ $25M deployed to share buy back in
Slide 4: Update on Capital Allocation Strategy
Update on Capital Allocation Strategy Dividend Share Repurchase Leverage Acquisitions $0.07/share At least $100M of Maintaining net Maintaining quarterly dividend share repurchase in debt leverage in capacity for CY23 1.0x – 2.0x range strategic bolt on acquisitions Maximizing Shareholder Value 4 |
Slide 5: Strategic Plan – Sustainability + Resilience
Strategic Plan – Sustainability + Resilience Pure Play: Water and Environmental Zurn Elkay Business System Superior Value Creation Core Incremental Acquisitions ➢ Mu l t i b i l l i o n D o l l a r Growth Margins ➢ Customer Ma r k e t s Satisfaction Flexible Business Model ➢ Leading Brand Positions
Slide 6: Drinking Water Crisis in U.S. Schools
Drinking Water Crisis in U.S. Schools There is no safe level of lead Unsafe drinking water Awareness Growing ✓ The EPA has set the maximum contaminant level goal for ✓ 56% of US population drink water from ✓ No federal regulation to require lead and drinking water at lead service lines water testing
Slide 7: Safe Drinking Water for Students
Safe Drinking Water for Students Elkay Market ElkayLeading DrinkingDrinking Water Solution Water Highlights MARKET LEADER ELKAY FILTRATION ✓#1 manufacturer of bottle fillers ✓Historically ~70% of bottle fillers sold as filtered units ✓90% spec share ✓Opportunity to focus on filtration and ✓Winning b
Slide 8: Combined Zurn Elkay Sustainability Report
Combined Zurn Elkay Sustainability Report Combined Zurn Elkay Continued progress report to be issued in on our ESG coming weeks initiatives Current year report includes ✓ Initial year of TCFD reporting ✓ Combined Zurn Elkay metrics ✓ Progress on our goals set in the prior year ✓ 7 new goals focused
Slide 9: Sustainably Inspired
ENVIORNMENTAL BENEFIT OF ELKAY BOTTLE FILLERS Sustainably Inspired SUSTAINABLE INVESTING IN COMMUNITY PRODUCTS OUR PEOPLE DONATIONS 850 100% $2M Products with EPA Of associates are Of cash/in-kind WaterSense shareholders of donations made Certification Zurn Elkay in 2022 WASTE SUSTAINABLE INVESTING
Slide 10: 4Q Zurn Elkay 2022 Results
4Q Zurn Elkay 2022 Results Consolidated Results (1) Non-GAAP measure defined, reconciled, and discussed in the earnings release included in the Form 8-K filed with the Securities and Exchange Commission February 7, 2023. 10 |
Slide 11: Zurn Elkay Leverage and Debt
Zurn Elkay Leverage and Debt Net Debt Leverage Ratio (1) Total Debt ($ millions) 2.5x 1,500 2.1x 2.1x 2.0x 1,149 1,118 2.0x 1.9x 1,000 1.9x 1.5x 1.5x 500 540 539 538 537 536 1.4x 1.0x 0 Dec-19 Dec-20 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Dec-19 Dec-20 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 (1) Net Debt Lev
Slide 12: Zurn Elkay Outlook
Zurn Elkay Outlook CY ‘22 Pro Forma Sales - $90 0 CY23 + 299 $1,490 ✓ Total sales to be between $1,500 million and $1,550 million … pro forma full year outlook assumes: $1,282 ✓ Non-residential sales growth +4% to +6% 1490 ✓ Residential sales growth -20% to -10% 1282 ✓ Total Adjusted EBITDA(1) betwe
Slide 13: Zurn Elkay Outlook – cont'd
Zurn Elkay Outlook – cont’d CY23 ✓ Interest expense of ~$44 million ✓ Stock compensation expense of ~$47 million ✓ Depreciation & amortization of ~$90 million ✓ Adjusted tax rate ~28.0 – 29.0% ✓ Diluted shares outstanding of ~180 million shares (pre 2023 share repurchases) March Quarter (Q1) ✓ Inter
Slide 14: Thank You
Thank You
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