Slide 1: 2Q CY20 June Quarter Financial Results
2Q CY20 JUNE QUARTER FINANCIAL RESULTS July 29, 2020
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT This presentation and discussion contains certain forward-looking statements that are subject to the Safe Harbor and Cautionary language contained in the press release we issued on July 28, 2020, as well as other factors that co
Slide 3: 2Q CY20 Performance Update
2Q CY20 PERFORMANCE UPDATE Consolidated Rexnord • 2Q reported and core net sales decreased (12%) year over year • Adjusted EBITDA(1) decreased by (7%) to $103 million – margin expanded by 120 bps year over year to 23.0% • 1H CY20 net sales decreased (5%) year over year, Adjusted EBITDA decreased (2%
Slide 4: RBS: Our Sustainable, Competitive Advantage
RBS: OUR SUSTAINABLE, COMPETITIVE ADVANTAGE Culture Matters • Common language, everyday, everywhere • People, Plan, Process, Performance • Engagement drives years of daily compounding of Continuous Improvement • Ecosystem of giving back, volunteerism, diversity and inclusion Strengthen business port
Slide 5: Differentiated Investments in Growth
DIFFERENTIATED INVESTMENTS IN GROWTH Invest in digital transformation of enterprise (DiRXN) • Replace manual processes with digital to improve customers’ experience and operating efficiencies • Expand omni-channel go-to-market models Convert voice of customer into differentiated digital product solu
Slide 6: Capital Allocation Update
CAPITAL ALLOCATION UPDATE Maintaining net debt leverage ratio in 2x – 3x range • Leverage ratio maintained at 1.9x during June quarter Committed to $0.08 / share quarterly common stock dividend = 1.0% current yield • Annual increases in dividend rate are anticipated Allocating $75 million to $150 mi
Slide 7: 2Q CY20 Summary
2Q CY20 SUMMARY $ millions 2Q CY20 2Q CY19 Change Net Sales $449 $508 (12%) Growth from: Core (1) (12%) Acquisitions 1% Translation (1%) Adjusted EBITDA (1) $103 $111 (7%) % of Sales 23.0% 21.8% 120 bps (1) Non-GAAP measure defined, reconciled, and discussed in the earnings release included in the F
Slide 8: 2Q CY20 Platform Results
2Q CY20 PLATFORM RESULTS $ millions 2Q CY20 2Q CY19 Change PMC Net Sales $274 $330 (17%) Growth from: Core (1) (15%) • 8020 product line simplification reduced sales growth by 190 bps Acquisitions 0% Translation (2%) • Adjusted EBITDA decremental margin was 26% Adjusted EBITDA (1) $59 $74 (20%) % of
Slide 9: September Quarter Planning Guideposts
SEPTEMBER QUARTER PLANNING GUIDEPOSTS Remainder of 2020 likely to remain challenged by macro declines ➢ “Controlling the controllable” – while retaining capacity to fully participate in recovery Key 3Q CY20 (September-quarter) guideposts • Sales decline of 12%-17% year over year • Segment Adjusted E
Slide 10: Cash Flow Outlook
CASH FLOW OUTLOOK Current 9-month interim period 2020 free cash flow expectations • Capital expenditures of approximately $25 million includes SCOFR 3.0 • Cash restructuring of $15-17 million includes SCOFR 3.0 • Cash interest payments of approximately $42 million • Cash tax payments of $40-45 milli
Slide 11: Cash Flow & Balance Sheet
CASH FLOW & BALANCE SHEET (1) Net Debt Leverage is defined as the ratio of total debt less cash to pro forma L12M Adjusted EBITDA. (2) Free Cash Flow is defined as Cash from Operations less Capital Expenditures, and is a Non-GAAP measure defined, reconciled, and discussed in the earnings release inc
Slide 12: Appendix
REXNORD APPENDIX
Slide 13: Rexnord's Underlying Return on Invested Capital
REXNORD’S UNDERLYING RETURN ON INVESTED CAPITAL(1) 2006 LBO change-of-control premium resulted $ millions Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 in $1.723 billion of goodwill & intangibles Total Debt 1,265 1,251 1,149 1,473 1,224 1 Adjust debt by unamortized portion of intangible assets Goodwill Intangi