Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (November 2023)
31 slides from Lci Industries's investor presentation, Nov 8, 2023
Slide 1: LCI Industries Investor Presentation November 2023
LCI Industries Investor Presentation May 2022 1 LCI INDUSTRIES INVESTOR PRESENTATION November 2023
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of manag
Slide 3: LCI at a Glance
LCI AT A GLANCE A leading supplier of highly engineered components primarily to the OEMs of RVs, buses, trailers, trucks, boats, trains, manufactured housing, and their related aftermarkets * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most directly
Slide 4: LCI at a Glance
LCI AT A GLANCE Over the last three decades, LCI has strategically diversified operations into the RV adjacent market, aftermarket and marine industry; leaning into outdoor lifestyle movement * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most direct
Slide 5: LCI Overview: Industry-Leading Brands and Core Competencies
LCI OVERVIEW Industry-Leading Brands and Core Competencies 7 Core Competencies Metal Fabrication & Welding Lamination Glass Fabrication Cut & Sew Power & Motion Systems Electronics Plastics Forming Applicable Across a Number of Customer Segments Recreational Vehicle Marine Transit & School Bus Eques
Slide 6: LCI Overview
LCI OVERVIEW 6 Since LCI was founded, we have always focused on the following: • Experienced leadership team with substantial industry knowledge • Centralized base in Indiana keeps leadership close with team members, supporting cohesive culture • 100,000+ retail customer interactions each month thro
Slide 7: Key Strategic Opportunities
KEY STRATEGIC OPPORTUNITIES Our long-term growth is guided by execution against four strategic pillars: 7 INNOVATION AS A CULTURE QUALITY LEADERSHIP & CULTURE CUSTOMER EXPERIENCE
Slide 8: Leadership & Culture
LEADERSHIP & CULTURE We strive to drive superior returns to all of our teams...our PEOPLE, our CUSTOMERS and our SHAREHOLDERS 8 Striving to Lead • A passion to win, coupled with a robust growth strategy, drives us to be a leader in every market we enter • Strong cultural underpinning has helped redu
Slide 9: Innovation as a Culture
INNOVATION AS A CULTURE Constant innovation continues to drive long-term content expansion Continued focus on innovation has resulted in a record number of product introductions in the last 10 years 9 Independent Suspension Furrion® 18K Chill Cube Air Conditioner Solera® 3000 Off-Grid Series Solar a
Slide 10: Improving the Customer Experience for All
Improving the Customer Experience for all • Proven, always-on listening methodology connecting end user feedback to the Lippert team to create meaningful and desired improvements to products, processes, and services • Supporting over one million interactions through Care Center while maintaining a 4
Slide 11: Dedication to Quality
DEDICATION TO QUALITY Reputation for safe and reliable products enabling continued market share growth • Quality of our products leads to strong customer relationships, helping us win new business and increase our market share Focus on automation to maintain quality while supporting profitability •
Slide 12: ESG Focus Areas
ESG FOCUS AREAS Driving long-term value creation through progress on ESG initiatives. Commitment to Sustainability Data monitoring and clean energy investment • Disclosure of scope 1 and 2 greenhouse gas emissions and data on energy consumption, waste management and recycling; CSR reported with refe
Slide 13: Our Business
OUR BUSINESS
Slide 14: North American RV OEM Net Sales: Growth Drivers & Trends
North American RV OEM Net Sales 2018 2019 2020 2021 2022 $0M $800M $1,600M $2,400M $3,200M 14 Growth Drivers & Trends RV OEM Key Drivers • Growth within the outdoor lifestyle continuously fuels long term outlook • North American RV OEM revenues down 53% YTD through September 2023 vs the same period
Slide 15: Marine OEM: Growth Drivers & Trends
Content per Wholesale Unit • Content per power boat of $1,359 for Q3 2023 • Decline of 23% over the comparable prior year period driven by current dealer inventory levels, inflation, and rising interest rates impacting retail consumers 15 North American Marine OEM Net Sales 2018 2019 2020 2021 2022
Slide 16: Aftermarket: Growth Drivers & Trends
16 Growth Drivers & Trends Key Drivers • Represents one of the strongest value drivers for LCI due to long runway for growth, counter-cyclicality, strong margin profile, and premium brands • Innovation driving ongoing portfolio expansion through sophisticated products, catering to the new generation
Slide 17: International Business & Other Adjacencies: Growth Drivers & Trends
17 Growth Drivers & Trends INTERNATIONAL BUSINESS & OTHER ADJACENCIES Key Drivers • International: ◦ Inventories are replenishing as supply chain constraints ease, enabling European customers to begin meeting pent-up demand ◦ Leveraging popular European products for introduction in North American ma
Slide 18: Financial Overview
Free Cash Flow* ($M) $68 $37 $211 $174 -$210 $472 2017 2018 2019 2020 2021 2022 $(250)M $0M $250M $500M EBITDA* ($M) $269 $266 $276 $321 $511 $682 2017 2018 2019 2020 2021 2022 $0M $200M $400M $600M $800M Diversification and content expansion enabling market share gains and strong cash generation FI
Slide 19: Q3 2023 Financial Performance
Operating Margin 7.7% 4.8% Third Quarter 2022 Third Quarter 2023 (in th ou sa nd s) Consolidated Net Income $61,392 $25,887 Third Quarter 2022 Third Quarter 2023 (in th ou sa nd s) EBITDA* $119,822 $78,859 Third Quarter 2022 Third Quarter 2023 Q3 2023 FINANCIAL PERFORMANCE * Additional information r
Slide 20: Expanding Addressable Markets
EXPANDING ADDRESSABLE MARKETS $11 billion in combined growth opportunity through various markets as we expand our footprint and diversify offerings Unlocking value through diversification: (1) Amounts in millions. "Market Opportunity" amounts represent Management's estimate of the size of the addres
Slide 21: Growth Strategy
GROWTH STRATEGY Prioritizing ample liquidity and investments back into the company Balanced Capital Allocation Strategy • Reduce leverage • Investment in the business, with focus on automation projects • Execute strategic acquisitions and divestitures • Return capital to shareholders Continue Execut
Slide 22: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility FINANCIAL OVERVIEW Healthy balance sheet with ample liquidity enables execution of strategic priorities Third Quarter 2023 Third Quarter 2022 Cash and Cash Equivalents $31M $23M Remaining Availability under Revolving Credit Facility $179M $369M Net Debt/E
Slide 23: Capital Deployment Strategy
Capital Deployment Strategy FINANCIAL OVERVIEW Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchases Target net debt / EBITDA leverage of 1.5x Future
Slide 24: Acquisition Strategy
Over 50 acquisitions in the last 20 years • Majority of last 20 acquisitions focused outside of North American RV industry Looking for: • Great leadership • Product innovation • Consistency with our core manufacturing disciplines • Niche markets • Favorable competitive landscape Typical synergies to
Slide 25: Appendix
APPENDIX
Slide 26: Consolidated Financials
Consolidated Financials APPENDIX ($ in millions except per share data) 2016 2017 2018 2019 2020 2021 2022 Net Sales $ 1,679 $ 2,148 $ 2,476 $ 2,371 $ 2,796 $ 4,473 $ 5,207 Operating Profit $ 201 $ 214 $ 199 $ 200 $ 223 $ 398 $ 553 % of Sales 12.0% 10.0% 8.0% 8.4% 8.0% 8.9% 10.6% Net Income $ 130 $ 1
Slide 27: Balance Sheet
Balance Sheet APPENDIX *Debt increase in 2019, 2020, and 2021 due to funding recent acquisitions and liquidity for COVID-19 shutdowns. ($ in millions) 2016 2017 2018 2019 2020 2021 2022 Cash & Equivalents $ 86 $ 26 $ 15 $ 35 $ 52 $ 63 $ 47 Accounts Receivable 57 82 122 200 269 320 214 Inventory 189
Slide 28: EBITDA Reconciliation of Non-GAAP Measures
EBITDA Reconciliation of Non-GAAP Measures APPENDIX EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization e
Slide 29: Leverage Ratio (Net Debt to EBITDA) Reconciliation
Leverage ratio (net debt to EBITDA) Reconciliation of Non-GAAP Measures APPENDIX The Leverage Ratio (or Net Debt to EBITDA ratio) is a non-GAAP measure of the use of debt. The Leverage Ratio is calculated by dividing the total of long-term indebtedness, plus current portion of long-term debt, less c
Slide 30: Free Cash Flow Reconciliation of Non-GAAP Measures
Free cash flow Reconciliation of Non-GAAP Measures APPENDIX Free cash flow is a non-GAAP measure of liquidity, calculated by subtracting capital expenditures from net cash flows provided by operating activities. The Company considers free cash flow to be a profitability and liquidity measure that pr
Slide 31: Industry Statistics Summary
APPENDIX LCl Industries Industry Statistics Summary TOTAL RECREATIONAL VEHICLES (RV) TOTAL Wholesale Units Retail Units @ Dealer Inventory Impact Month um YD Tw Month YI LW L 40,497 0% 39% 600.240. 569,748 9% 569,748 16,097 30,492 30.492 53,361. 16% 53.351. 16% 607,661 28,179 “13% 665,469 25,172 25,
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