Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Wells Fargo Industrials Conference 2022
29 slides from Enerpac Tool's conference presentation, May 5, 2022
Slide 1: Wells Fargo Industrials Conference, May 2022
Wells Fargo Industrials Conference, May 2022
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: A Global Leader in Industrial Tools and Services
A Global Leader in Industrial Tools and Services Global leader in high 110 Menomonee Falls, WI ~2,100 100+ 100+ precision tools, controlled YEARS OF HEADQUARTERS EMPLOYEES YEARS OF LEADERSHIP # OF COUNTRIES force products and solutions for precise heavy HISTORY TEAM EXPERIENCE SOLD INTO lifting. Pro
Slide 4: Wide Array of Durable and Reliable Products
Wide Array of Durable and Reliable Products Heavy Lift Bolting Cylinders Presses Pumps Work Holding Pullers Spreaders Cutters 4
Slide 5: Global Breadth of Business
Global Breadth of Business Enerpac Tools and Services benefit from having a diverse geographic customer base 36% Geographic diversification of sales United States Australia reduces overall 5% exposure to regional Mexico/Canada economic downturns 5% Sales of Opportunities for South America 3% $529m i
Slide 6: Extensive Global Distribution
Extensive Global Distribution Global distribution network is a competitive advantage • One of the most robust 1,500+ 3,500+ 100+ distribution networks in the competitive space distributors points of sale countries • Application experts with hands-on product demonstrations • Local access to world- cl
Slide 7: Growth Opportunities in Broad Vertical Markets
Growth Opportunities in Broad Vertical Markets 13 VERTICAL END MARKETS Large, fragmented vertical Power Gen/ Civil Construction Wind markets provide growth opportunities, both organic Oil & Gas Off-Highway and inorganic Vehicle Repair Industrial MRO On-Highway Vehicle Repair Manufacturing and Machin
Slide 8: Select Vertical Market Opportunities - Infrastructure
Select Vertical Market Opportunities - Infrastructure Where We Participate ▪ Roads and Bridges ▪ Rail ▪ Commercial Construction ▪ Electrical Distribution ▪ Water ▪ Airports ▪ Port Facilities Premium Product Offering ▪ Known for precision, durability, and safety ▪ Strong brand recognition within lift
Slide 9: Select Vertical Market Opportunities – Power Gen/Wind
Select Vertical Market Opportunities – Power Gen/Wind Where We Participate ▪ Manufacturing ▪ Transport ▪ Installation ▪ Maintenance ▪ Decommissioning Premium Product Offering ▪ Known for precision, durability, and safety ▪ Strong brand recognition within lifting, positioning and torque and tension ▪
Slide 10: Driving Organic Growth: New Product Development
Driving Organic Growth: New Product Development NEW PRODUCT DEVELOPMENT KEY OBJECTIVES OF ENERPAC NPD ▪ Enerpac Connect and our connected product ▪ Create value for end users by simplifying the “job strategy integral to all new products to be done,” leveraging deep VOC insight ▪ Develop and launch h
Slide 11: Enabling Technology
Enabling Technology Enerpac ConnectTM • SmartID tags and Connect app are foundations for the future of Smart Tools, IoT data, and closer ‘connection’ with our customers • Ultimately, opportunities to drive growth in digital future • Initial foundation built, with additional features over time such a
Slide 12: Strategy Update – Announced ASCEND
Strategy Update – Announced ASCEND ASCEND Transformation Program ▪ Completed a deep-dive review of the business and markets, where we looked at all aspects of our business ▪ Spent the last several months evaluating commercial opportunities, operations and footprint, support functions and organizatio
Slide 13: ASCEND Initiatives
ASCEND Initiatives ASCEND has three key broad initiatives: 1 Accelerating organic growth go- 2 Improving operational excellence 3 Driving greater efficiency and to-market strategies and production efficiency by productivity in SG&A by better utilizing a Lean approach leveraging resources to create a
Slide 14: Return on Invested Capital – Deploying Capital to Create Long-Term Sustainable Returns
Return on Invested Capital – Deploying Capital to Create Long-Term Sustainable Returns Goal of enhancing Enerpac’s position as a premier industrial tools and services company and its commitment to sustainable shareholder value Invest in Ourselves to Disciplined M&A within creation Drive Organic Grow
Slide 15: Strategy Update – Announced Share Repurchase
Strategy Update – Announced Share Repurchase Share Repurchase Program ▪ Board of Directors has approved a new share repurchase program of up to 10 million shares, which replaces the previous program that was paused during COVID-19 ▪ Reauthorization and intent to repurchase shares remains an importan
Slide 16: Selective, Disciplined M&A
Selective, Disciplined M&A Investing in strategic acquisitions through a disciplined process to capture new growth opportunities DISCIPLINED DRIVING GROWTH STRONG STRATEGY THROUGH M&A BALANCE SHEET ▪ Commitment to pure-play ▪ Goal is to become larger, ▪ Will maintain strong industrial tools and serv
Slide 17: Significant Opportunities for Value Creation
Significant Opportunities for Value Creation Strong Business Model built on well recognized brands, robust global distribution, and broad reach of end markets Pure-Play Industrial Tools Strategy to drive core growth above market and expand BEST IN margins CLASS RETURNS Disciplined Capital Deployment
Slide 18: Q2 Updates
Q2 Updates
Slide 19: Q2 Market Update
Q2 Market Update Overview ▪ Strong top line, breaking our typical Q2 seasonality driven by broad based improvement in demand ▪ Continued to actively manage supply chain and logistics challenges ▪ Took previously announced pricing actions in January to offset on-going inflationary pressures ▪ COVID c
Slide 20: Q2 Regional Update
Q2 Regional Update Americas / Europe ▪ Another quarter of solid year-over-year core growth in the Americas ▪ Modest year-over-year core sales growth in Europe ▪ Key Verticals ▪ General industrial markets showed solid signs of activity in North America; Power Generation and Rail were also favorable ▪
Slide 21: Q2 Regional Update
Q2 Regional Update Middle East/North Africa/Caspian (MENAC) ▪ Solid year-over-year core growth ▪ Spike in oil & gas activity due to underinvestment the past few years ▪ Maintenance work on certain sites is being pushed out to leverage the high oil prices ▪ COVID related travel restrictions remain in
Slide 22: Second Quarter 2022 Comparable Results
Second Quarter 2022 Comparable Results (US$ in millions except EPS) 13.4% NET SALES $131 $137 12.0% • Core sales growth of 16% $121 9.5% • IT&S product sales 15% • Other product 35% • Service 13% • Unfavorable impact of FX ~$3M ADJUSTED EBITDA* Q2 2021 Q1 2022 Q2 2022 Q2 2021 Q1 2022 Q2 2022 • Incre
Slide 23: Q2 Net Sales Waterfall
Q2 Net Sales Waterfall* (US$ in millions) $140 $135 $3.3 $136.6 $3.3 $130 We remain encouraged $11.9 by the level of product $125 volume that we saw during the quarter as our end markets $120 continue to recover, $2.6 $120.7 despite on-going supply chain and logistical $115 challenges $110 $105 Q2 F
Slide 24: Q2 IT&S Product Net Sales
Q2 IT&S Product Net Sales IT&S Total Product Net Sales (including Acquisitions from date of purchase) With continued (excluding Strategic Exits) strong demand, 2015-2019 (pre-COVID) 2022 Actual we broke our normal Q2 seasonal trend Millions ($) this quarter, with Q2 net sales exceeding Q1 Sep Oct No
Slide 25: Q2 Adjusted EBITDA Waterfall
Q2 Adjusted EBITDA Waterfall* (US$ in millions) $24 $22 $0.3 $2.0 $2.5 $20 $1.3 Adjusted EBITDA $18 $3.0 benefited primarily $7.1 from higher volume, $16 $16.4 price/mix/cost and $14 lower SG&A partially $12 offset by the year- $0.3 over-year decrease $10 $11.5 12.3% in service 13.3% $8 mix/utilizat
Slide 26: Q2 Operations Update
Q2 Operations Update Supply Chain ▪ Supply chain challenges continued during the second quarter; prior to crisis in Ukraine, saw some signs of improvement ▪ Russia/Ukraine conflict has created incremental supply chain concerns ▪ Electrical component shortages continued and expected to remain a large
Slide 27: Q2 Liquidity – Positioned for Success
Q2 Liquidity – Positioned for Success (US$ in millions) $8 $210 $133 $127 2.1 $1 $175 $175 $115 Q2 2021 Q1 2022 Q2 2022 0.7 0.6 $(8) Q2 2021 Q1 2022 Q2 2022 Q2 2021 Q1 2022 Q2 2022 Q2 2021 Q1 2022 Q2 2022 Free Cash Flow Cash Balance Gross Debt TTM Financial Leverage* Free Cash Flow (FCF) Leverage •
Slide 28: Expectations for Fiscal 2022
Expectations for Fiscal 2022* Updating our Fiscal 2022 Full Year Guidance*: ▪ Net Sales in the range of $560 million to $580 million We continue to be ▪ Nearly half of the change due to the strengthening of the US Dollar cautious as we enter the back half of fiscal ▪ Challenging macroeconomic enviro
Slide 29: Enerpac Tool Group
ENERPAC (7) TOOL GROUP
Enerpac Tool Group — Wells Fargo Industrials Conference 2022 on 6ix