Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Investor Day (November 2022)
113 slides from Enerpac Tool's investor day presentation, Nov 16, 2022
Slide 1: Enerpac Investor Day 2022
ENERPAC RAISING? Hai INVESTOR THE BAR DAY 2022
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Statements made in this presentation that are not historical are forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. The terms “may,” “should, ”“could,” “anticipate,” “believe,” “estimate
Slide 3: Agenda
9:00 AM INTRODUCTION AND FORWARD- Bobbi Belstner TO 9:05 AM LOOKING STATEMENTS Senior Director of Investor Relations and Strategy 9:05 AM COMPANY OVERVIEW Paul Sternlieb TO 9:35 AM AND STRATEGY BRIEFING President and Chief Executive Officer 9:35 AM TARGETED VERTICAL Scott Vuchetich TO 9:55 AM GROWTH
Slide 4: Paul Sternlieb
PAUL STERNLIEB President & Chief Executive Officer 4
Slide 5: Key Takeaways
Key Takeaways 01 Premier Industrial Solutions Provider Serving a Broad and Diverse Set of Customers Globally Defined Organic Growth Strategy Focused 02 on Maximizing Shareholder Value and Capitalizing on Global Macro Trends Transformation Plan to Elevate 03 Performance, Create Resiliency, and Manage
Slide 6: Premier Industrial Solutions Provider
Premier Industrial Solutions Provider Making Complex and Often Hazardous Jobs Possible Safely and Efficiently $571M Global Headquarters Menomonee Falls, WI FY2022 Revenue $83M FY2022 Adj. EBITDA* 110+ Years of History 100+ ~2200 ~1000 ~$1.4B Countries Served Global Employees Distributors Market Cap*
Slide 7: Rebounding From COVID-19 Setbacks
Rebounding From COVID-19 Setbacks Building on a Solid Foundation Net Sales (m) Gross Profit Margin 46.5% $655 46.0% $571 $493 $529 44.7% . 44.0% FY2019* FY2020** FY2021 FY2022 FY2019 FY2020 FY2021 FY2022 Adj. Operating Profit Margin Adj. EBITDA (m) and Margin (%) $150 20.0% 12.0% 14.7% 14.1% 14.5% 1
Slide 8: New Team Supporting a New Mission
New Team Supporting a New Mission NEW NEW NEW NEW TEAM MISSION PLAN GOALS Investor Day 2022 8
Slide 9: Team in Place to Maximize Shareholder Value
Team in Place to Maximize Shareholder Value Paul Sternlieb Matt Baisley Barb Bolens Tony Colucci James Denis President and President – Middle East/North EVP and Chief Strategy Officer EVP and Chief Financial Officer EVP, General Counsel, Company Chief Executive Officer Africa/Caspian Secretary & Chi
Slide 10: New Mission Reflects Core Capabilities
New Mission Reflects Core Capabilities OUR OUR STRATEGIC MISSION VALUES PILLARS WE MAKE SAFETY TEAMWORK HARD TO DO COMPLEX, TARGET MARKET OFTEN HAZARDOUS JOBS POSSIBLE INTEGRITY AGILITY LEADERSHIP SAFELY AND SIMPLIFIED AND EFFICIENTLY OWNERSHIP STANDARDIZED PROCESSES AND OPERATIONS Investor Day 2022
Slide 11: Commitment to Strong ESG Principles Underpins All Operations
Commitment to Strong ESG Principles Underpins All Operations Sustainability Is Core Committed To Doing Right AL GO to Our Operations by All of Our Stakeholders NT and Incorporated VE ME Into Our Products RN ON Board Composition AN Refreshed to be . VIR Good for the Planet and Independent, Tenured CE
Slide 12: Ambitious Growth Strategy Centered Around Four Key Pillars
Ambitious Growth Strategy Centered Around Four Key Pillars 01 02 03 04 EXPANSION Digital Customer Driven EXPANSION in Targeted TRANSFORMATION INNOVATION in Asia Pacific Vertical Markets Investor Day 2022 12
Slide 13: Transformation Plan Powering Future Growth
Transformation Plan Powering Future Growth ASCEND Plan Enables the Growth Strategy and Optimizes Performance Through Three Key Elements: 01 Accelerated Organic Growth Go-to-Market Strategies Improved Operational Excellence and Production 02 Efficiency Through Lean Initiatives 03 Greater Efficiency a
Slide 14: Recent Accomplishments
Recent Accomplishments Our Commitments Perform Deep Dive Review of Business Implement ASCEND Transformation Plan Integrated New Added New Talent at Flatten Organization Flattened Multiple Levels in Management Team Organizational Improve Performance & Deliver Results the Organization Structure Leadin
Slide 15: History of Enerpac Tool Group
History of Enerpac Tool Group Actuant (Spin off From Applied Power) Was a Small Cap Diversified Industrial, With Enerpac as the Crown Jewel 2019 2021 PAUL STERNLIEB Joins Enerpac as CEO 2000 With Goals To: 2016-2021 • Take Organization to Next Level of Growth and Profitability • Launch a Deep Dive,
Slide 16: Globally Recognized Leader in Industrial Tools and Services
STRONG BRAND RECOGNITION Globally Recognized Leader in Industrial Tools and Services PREMIUM INDUSTRIAL TOOLS Revenue Mix HEAVY LIFTING PRODUCTS SERVICE 20% AND RENTAL Cylinders/Jacks, Pumps, Bolting Tools, Presses, Bolting, Machining Pullers, Tools, Heavy and Joint Integrity Lifting Technology (HLT
Slide 17: Enerpac's Competitive Advantage
STRENGTH BREADTH AND OF BRAND DEPTH OF PRODUCT QUALITY, PORTFOLIO DURABILITY, RELIABILITY, Enerpac’s SAFETY Competitive Advantage BREADTH OF CHANNEL PARTNER NETWORK TECHNICAL AND GLOBAL APPLICATIONS COVERAGE EXPERTISE THAT CUSTOMERS RELY UPON POSITIVE CUSTOMER/ DISTRIBUTOR EXPERIENCES Investor Day 2
Slide 18: Significant Market Opportunity >$100B
Significant Market Opportunity Industrial Tools TAM Enerpac Has Identified Large Market >$100B High-Pressure Opportunities Across Our Verticals Hydraulics TAM $20B Growth Strategy Aims to Capitalize on Enerpac SAM Targeted Market Opportunities >$4B EPAC FY22 REVENUE Positioned to Win via our Product
Slide 19: Serving Broad Array of Vertical End Markets
INFRASTRUCTURE/ MANUFACTURING CIVIL CONSTRUCTION & MACHINING INDUSTRIAL MRO Serving Broad OIL & GAS Array of Vertical POWER GENERATION End Markets MINING (WIND/NUCLEAR) Large, Fragmented Vertical RAIL Markets Provide Growth MILITARY Opportunities, Both Organic and Inorganic, and Create AEROSPACE Div
Slide 20: Offering a Wide Array of Durable and Reliable Products
Offering a Wide Array of Durable and Reliable Products Pumps Cylinders Bolting Pullers Spreaders Cutters Presses Work Holding Heavy Lifting Machining Investor Day 2022 20
Slide 21: Providing High Quality Services Our Customers Rely On
Providing High Quality Services Our Service Customers Rely On BOLTING Breakdown Primary Focus on Repairs and Maintenance ~50% ~50% Large Opportunity in Niche Services including Specialty MACHINING High Margin Services Additional Opportunities in Rental Manpower Power Generation, Wind, Rail and Indus
Slide 22: Synergistic Services Strategy
Synergistic Services Strategy STRATEGIC BUILDING BLOCKS SERVICES TO LEVERAGE ACROSS VERTICALS 01 Invest in Additional Business Process and System Improvements Integrity Leak Nitrogen Leak Assurance Sealing Sealing 02 Scale Selected High-Margin Offerings and Strengthen Position as an End-to-End Servi
Slide 23: Extensive Global Footprint
Extensive Global Footprint 24% EUROPE 14% MIDDLE EAST* SALES OF 9% ASIA $571M IN FISCAL 2022 4% S. AMERICA 4% MEXICO/CANADA 5% AUSTRALIA 40% UNITED STATES GLOBAL PLANT OFFICE OTHER HEADQUARTERS Manufacturing/Assembly Sales Office/General Office Service Center/Warehouse/Other OUR GLOBAL FOOTPRINT ALL
Slide 24: Favorable Macro Trends Provide Tailwinds for Enerpac
Favorable Macro Trends Provide Tailwinds for Enerpac AGING INFRASTRUCTURE RENEWABLE SHIFT TO DIGITAL ENERGY/SUSTAINABILITY Repairs Shift to Clean Energy Internet of Things (IoT) Replacements Government Investment Automation Government Investment Investor Day 2022 24
Slide 25: Secure Financial Position
Secure Financial Position ` STRONG BALANCE BALANCED DISCIPLINED SHEET ALLOWS CAPITAL ALLOCATION M&A PROGRAM FOR FLEXIBILITY STRATEGY Investor Day 2022 25
Slide 26: Balanced Capital Allocation Strategy
Balanced Capital Allocation Strategy Invest in Ourselves Disciplined M&A Investments in Digital, Product Innovation, R&D, Operational Excellence Improvements Maintain Our Strong Opportunistically Balance Sheet Returning Capital Target Leverage of to Shareholders 1.5x – 2.5x Board Recently Authorized
Slide 27: Disciplined M&A Program
Disciplined M&A Program Continuing Pure Play Strategy, but Looking Beyond Just Tools and Services to Solve Customer Needs in Targeted Vertical Markets Healthy Pipeline with Focus on Our 4 Key Verticals M&A Activity Focused on Expanding Solutions Offerings by Addressing Gaps in: Product Offerings | M
Slide 28: Enerpac Offers Strong Investment Potential
Enerpac Offers Strong Investment Potential 01 02 03 04 05 Leading High Gross Enhanced Organic Strong Updated Solutions Provider Margin Profile Growth Strategy Balance Sheet Financial Goals With a Broad Portfolio With Pathway Targeting Market to Support Both Organic and Reflect Management’s of Produc
Slide 29: Long-Term Goals Through FY26
Long-Term Goals >100% Through FY26 >25% Demonstrate 6-7% Commitment to Strong Growth, Margin Enhancement, and Cash Generation Organic Adj. EBITDA FCF Conversion Revenue CAGR* Margin of 25% as We Toward End of Exit FY24 Through Outlook; Lower ASCEND, With 50bps in Earlier Years Improvement in due to
Slide 30: Well-Positioned to Manage Through Uncertain Times
Well-Positioned to Manage Through Uncertain Times SERVING A STRONG BALANCE TARGET UNDERWAY WITH DIVERSE SET OF SHEET AND FOCUS DECREMENTALS IMPLEMENTATION END MARKETS ON FREE CASH OF 20–25% IN A OF ASCEND – FLOW GENERATION DOWNTURN PORTFOLIO OF SCENARIO* SELF-HELP INITIATIVES AT THE READY Investor D
Slide 31: Investor Day 2022: Raising the Bar
RAISING THE BAR ENERPAC 8 | invosior Day 2022 TOOL GROUP
Slide 32: New Team, New Mission, New Plan
Premier Industrial Solutions Provider Serving a Broad and Diverse Set of Customers Globally New Team Defined Organic Growth Strategy Focused on Maximizing Shareholder Value and New Mission Capitalizing on Global Macro Trends New Plan Transformation Plan to Elevate Performance, Create Resiliency and
Slide 33: Expansion in Targeted Vertical Markets
EXPANSION IN TARGETED VERTICAL MARKETS SCOTT VUCHETICH EVP, Marketing & President, Americas 33
Slide 34: Ambitious Growth Strategy Centered Around Four Key Pillars
Ambitious Growth Strategy Centered Around Four Key Pillars 01 02 03 04 EXPANSION in Targeted Vertical Markets Investor Day 2022 34
Slide 35: Rigorous Approach to Prioritizing Markets
Rigorous Approach to Prioritizing Markets We Reviewed Dozens of Spaces in Building our Strategic Roadmap, and Evaluated Against Three Key Criteria Size, Growth Market Enerpac & Diversity Dynamics Fit W H AT W E L O O K E D F O R : Room To Play in Core and Secular Trends and Strategic End Users That
Slide 36: Macro Trends Supporting Target Verticals
1.2E+11 1E+11 Macro Trends Supporting 8E+10 Target Verticals 6E+10 Large Capital Investments Across Wind, Rail, and Infrastructure Create 4E+10 an Opportunistic Outlook for Enerpac 2E+10 $60 $66 $100 BILLION BILLION BILLION 2028 2029 2030 0 Infrastructure 1 Category 1 Rail² 2 Category CategoryWind³
Slide 37: Targeted Expansion Opportunities
Targeted Expansion Opportunities Infrastructure Wind Rail Industrial MRO* Standalone Size/Growth Rating Size/Growth Rating Size/Growth Rating Size/Growth Rating Attractiveness SAM: SAM: Rail SAM: SAM: Market Size $550-$650M $330-$430M $140-$180M ~$1.2-$1.6B and Growth Growth Growth Growth Growth MSD
Slide 38: Positioned to Win in the Attractive Infrastructure Vertical
Positioned to Win CONSTRUCTION in the Attractive Infrastructure Vertical MAINTENANCE WHY WE BELIEVE IN THE OPPORTUNITY Strong MSD global growth with an addressable market of ~$600M Demand exacerbated by aging infrastructure in DECOMMISSIONING developed nations and new bridge construction in emerging
Slide 39: Be in the Conversation at the Beginning of the Process
Be in the Conversation at the Beginning of the Process Core Levers Addressed as Part of Our Strategy PRODUCT GO-TO-MARKET MARKETING DEVELOPMENT INVESTMENTS STRATEGY ESTABLISH ENHANCED DEVELOP SPECIAL EXAMPLE COMMERCIAL TEAMS AND CUSTOM SOLUTIONS DRIVE HIGH-VALUE SALES TO END-PRODUCT USERS IN THE US,
Slide 40: Expanding Investment in Wind Power Offers Strong Growth Potential
Expanding Investment OEM DESIGN & MANUFACTURERS in Wind Power Offers Strong Growth Potential CONSTRUCTION & WHY WE BELIEVE IN THE OPPORTUNITY INSTALLATION Underlying growth, fueled by significant investment around the world in the development of wind energy allows for a broad market of ~$330-$430M O
Slide 41: Focus on Serving the Entire Wind Lifecycle
Focus on Serving the Entire Wind Lifecycle Core Levers Addressed as Part of Our Strategy PRODUCT OPS EFFECTIVENESS/ GO-TO-MARKET MARKETING DEVELOPMENT PROCESS INVESTMENTS STRATEGY IMPROVEMENTS INVEST IN ESTABLISH A DEDICATED ENHANCE OPERATIONAL EXAMPLE GLOBAL WIND ACCOUNT PROCESSES CUSTOMIZED OFFERI
Slide 42: Opportunity to Expand into Growing Rail Market
Opportunity to Expand into Growing Rail Market WHY WE BELIEVE IN THE OPPORTUNITY $150M addressable market, growing MSD Rail represents an extremely sticky revenue opportunity in Americas and Europe Renewed focus on climate goals may lead to increased spending on climate-friendlier methods of transpo
Slide 43: Bespoke Solutions for the Needs of the Space
Bespoke Solutions for the Needs of the Space Core Levers Addressed as Part of Our Strategy PRODUCT GO-TO-MARKET MARKETING DEVELOPMENT INVESTMENTS STRATEGY ADDRESS GAPS BY EXPAND BUSINESS EXAMPLE DEVELOPING NEW PRODUCTS DEVELOPMENT FOCUS IMPROVE CHANNEL SALES BY STRENGTHENING INITIATIVES across geogr
Slide 44: Industrial MRO Vertical is Enerpac's Largest Value Pool
SCR102H, 10 Ton, 2.13 in Stroke, Hydraulic Cylinder and Hand Pump Industrial MRO Vertical is Enerpac’s Largest Value Pool WHY WE BELIEVE IN THE OPPORTUNITY Large global market of ~$1.5B in a fragmented industry growing at GDP Strong brand recognition and long-lasting relationships with distributors
Slide 45: Streamlining the Buying Journey
Streamlining the Buying Journey Core Levers Addressed as Part of Our Strategy GO-TO-MARKET MARKETING INVESTMENTS STRATEGY ESTABLISH DIGITAL IMPROVE CUSTOMER DEVELOP AND DEPLOY EXAMPLE EXCELLENCE EXPERIENCE GROW DEMAND GENERATION specific industry INITIATIVES in MRO by building a with enhanced conten
Slide 46: Multi-faceted Growth Plan to Raise the Bar in Key Verticals
Multi-faceted Growth Plan to Raise the Bar in Key Verticals Product Go-To-Market Marketing Operational Effectiveness/ Verticals Development Investments Strategy Process Improvements INFRASTRUCTURE WIND RAIL INDUSTRIAL MRO Investor Day 2022 46
Slide 47: Digital Transformation
DIGITAL TRANSFORMATION SCOTT VUCHETICH EVP, Marketing & President, Americas 47
Slide 48: Ambitious Growth Strategy Centered Around Four Key Pillars
Ambitious Growth Strategy Centered Around Four Key Pillars 01 02 03 04 Digital TRANSFORMATION Investor Day 2022 48
Slide 49: Broad Digital Ecosystem To Support Customer Needs
Broad Digital Ecosystem To Support Customer Needs ACQUIRE ENGAGE SUSTAIN SUCCESS MEANS Finding Customers Serving Those Maintaining Early in Their Customers an On-Going Buying Journey With Easy to Navigate Relationship With Targeted Messaging and Relevant Content, With Training, Technical and Effecti
Slide 50: Acquire Customers With a Multi-pronged Strategy
RIGHT TARGET ADVANCED Acquire PLATFORMS OUTREACH ANALYTICS Customers Enerpac.com, recently re-platformed to be fast, efficient and content rich Organic search strategy based on fresh, relevant content Constant feedback loop on investment and traffic generated to optimize ROI With a Hydratight.com to
Slide 51: Demand Generation in Action
PIPELINE MAINTENANCE CAMPAIGN CASE STUDY Demand Generation TOTAL ROI: 500% in Action WEB: Pageviews: 2,600 EMAIL: Delivered: 23,136 Unique Opens: 1,557 (6.7%) Click-Through Rate: 7.94% TARGETED SOCIAL: ORGANIC SOCIAL: Impressions: 36,340 Impressions: 23,136 Interactions: 180 Interactions: 578 Click-
Slide 52: Engage Customers by Solving Their Complex Problems
Engage Customers by Solving Their Complex Problems INSTRUCTIONAL MANUALS PRODUCT SAFETY & PRODUCT SELECTION TOOLS TRAINING WEBINARS & REPAIR SHEETS SUPPORT RESOURCES & VIDEOS PRODUCT MAINTENANCE & MARKETING MATERIALS IGES 7 STEP CAD FILES CERTIFICATIONS SERVICE CENTER SUPPORT IT’S NOT ENOUGH TO ACQU
Slide 53: Bolting Selector
CASE STUDY Bolting Selector • Helps Technicians Select the Right Tool and Pump Setting for Safer and More Accurate Use • Provides Engineers Selection Guides to Help Design the Most Cost-Effective Bolted Flange Investor Day 2022 53
Slide 54: Sustain a Long-term Customer Relationship by Building On-going Value
Sustain a Long-term Customer Relationship by Building On-going Value Driving Sustainable Value For Customers, Channel Partners, And Enerpac Beyond Top-line Revenue Opportunities MARKET CUSTOMER OPPORTUNITY CHALLENGES NEEDS FOR ENERPAC LABOR PRODUCTIVITY IMPROVEMENT SELL A SUITE OF PRODUCTS/ PRODUCT
Slide 55: Digital Transformation Is Powering Innovation
DIGITAL TRANSFORMATION IS POWERING INNOVATION Investor Day 2022 55
Slide 56: Innovation & Product Vitality
INNOVATION & PRODUCT VITALITY ART DONALDSON VP, Engineering 56
Slide 57: Ambitious Growth Strategy Centered Around Four Key Pillars
Ambitious Growth Strategy Centered Around Four Key Pillars 01 02 03 04 INNOVATION and Product Vitality Investor Day 2022 57
Slide 58: Philosophy on Innovation
Revamped, Customer-focused INNOVATION PROCESS REDUCED INNOVATING, Innovation Designing Solutions, Not Iterating Timeline Not Tools Philosophy Fewer, Bigger, More Idea to Concept Unit on Innovation Meaningful Launches Time Down ~25% Safety, Efficiency, and Industry Digital Ecosystem Group Moved Macro
Slide 59: Innovation Journey
Innovation Journey Foundation Evolution NPD Process Based on Product Line Centers of Excellence (COE) Product Families Shifting From Morphing to COE Structure to INDUSTRY VERTICAL FOCUS Organized the Project Management Office SOLUTIONS Product Centric New Process Engaged Operations and SOLUTIONS Foc
Slide 60: Discovering and Exploring Customer Pain Points and Unmet Needs
Discovering and Exploring Customer Pain Points and Unmet Needs COLLABORATION Across Teams Leads to Drastically Reduced IDEA-TO-CONCEPT UNIT PRODUCTION TIME PRODUCT MANAGEMENT CONCEPT ADVANCED DEVELOPMENT & DISCOVERY TEAMS ENGINEERING TEAM TEAM & SYSTEMS Solicits Ideas from Customers & INDUSTRIAL ENG
Slide 61: Areas of Focus Based on Customer Needs
Areas of Focus Based on Customer Needs CUSTOMER BENEFITS ENHANCED SAFETY Metal 3D-Printed Automated Battery-Operated Components REDUCED WEIGHT Operations Tools Solutions vs. Products BETTER ERGONOMICS Ultra Self-Contained Light-Weighting Units Miniaturization LOWER TOTAL COST OF OWNERSHIP Investor D
Slide 62: Driving to Component Suites
Driving to Component Suites • Suites of Components vs. One-Off Designs • Solutions vs. Products • Innovating vs. Iterating Common Motors | Drivers | Controllers | Micropumps | Pendants • Re-Purposing Existing Products • Economies of Scale • Driving Margin Expansion Development Speed | Reliability |
Slide 63: Enerpac Connect Ecosystem and Connected Product Strategy
Enerpac Connect® Ecosystem and Connected Product Strategy CUSTOMER BENEFITS CONNECTED TOOLS Relevant Info at the Touch of a Button Smart Cylinder Monitor Helping Users Find Information Quickly Live Data Monitoring FEATURES DATA ACQUISITION Enerpac Safety Feature Data Transfer: Wireless or USB Enerpa
Slide 64: Enerpac Connect Progress/Roadmap
Enerpac Connect Progress/Roadmap On-board Diagnostics (OBD) Enerpac Connect® Feature Launch for Smart Feature Enhancements Connected Products • Improved Customer Support Feature • Added Find Nearest Over The Air Specialized Apps Service Center Firmware (OTA) for Smart Connected Feature Launch Produc
Slide 65: Safety is a Key Component of Innovation
Safety is a Key Component of Innovation MISUSE OF PRODUCTS is the Number One Cause of Safety Issues Amongst Customers EnerSafe™ Will Offer Customers Easy Access to: SAFETY INSPECTION SERVICE OPERATOR TOOL SELECTION CRITERIA HISTORY TRAINING ALTERNATIVES NEW, WIRELESS SMART DEVICES SELF-CONTAINED, SO
Slide 66: Raising the Bar Through Innovation
Raising the Bar Through Innovation Joint Task Force of Discovery Advanced and Engineering Teams Development Team Enerpac Connect® Provides FOCUS ON SAFETY REDUCES the Future of Connected AND EFFICIENCY, FOCUSES ON DEVELOPMENT and Integrated Products, Self-Contained Units and DEVELOPING INCREASING SA
Slide 67: 10 Minute Break
10 Minute Break Investor Day 2022 67
Slide 68: Expansion in Asia Pacific
EXPANSION IN ASIA PACIFIC JAMES GASKELL President, Asia Pacific 68
Slide 69: Ambitious Growth Strategy Centered Around Four Key Pillars
Ambitious Growth Strategy Centered Around Four Key Pillars 01 02 03 04 EXPANSION in Asia Pacific Investor Day 2022 69
Slide 70: Current APAC Business
Current APAC Business AUSTRALIA SOUTHEAST ASIA 86% RoW SOUTH JAPAN KOREA EPAC REVENUES CHINA FY22 TOTAL 245 202/1311 14% APAC Employees Distribution/Branches DIVERSIFIED CUSTOMER BASE General & Specialty End-users Distribution Asset Owners National Accounts Large Contractors PREMIUM PRODUCTS MID-TIE
Slide 71: APAC Offers a Strong Regional Opportunity With Diverse Markets
APAC Offers a Strong Regional Opportunity With Diverse Markets Shift in Thinking From Country-Specific Silos to Region-Specific Opportunities Power Infrastructure Oil & Gas Mining Industrial MRO Rail OUTLOOK Ongoing Government Large and Stable Maintenance Needs Coal-fired Power Spending on Sustained
Slide 72: Strategy for Capturing Value in APAC
Strategy for Capturing Value in APAC FOCUS ON TARGETED IMPROVE SECOND VERTICAL MARKET COMMERCIAL BUSINESS SIMPLIFICATION BRAND EXPANSION EFFECTIVENESS OFFERING Investor Day 2022 72
Slide 73: Vertical Market Growth
Vertical Market Growth FOCUSED ON OUR UNDERSERVED VERTICALS INCREASED WALLET SHARE THROUGH: Rail Oil & Gas Improved Coverage Mining Industrial Improved Market Data & MRO Business Intelligence Power, Incl. Renewables Infrastructure New Talent (Industry Specialists) Defined Offering Key: Growth Opport
Slide 74: Improved Commercial Effectiveness
Improved Commercial Effectiveness Improved Territory Key Account Distributor Go-to-market Direct Selling Manager Coverage Management Performance Strategy for HLT & and Service Line and Management & OEM Focus* Management Machining Expansion* & Planning Supporting End-users Standardized Performance De
Slide 75: Business Simplification
Business Simplification Supply Chain Planning Inventory Warehouse Process & Forecasting Management & Logistics* Upgrade and Enhance ERP Manage Manufactured Product Improve Warehouse to Improve Control Inventory to Reduce Lead Processes Over Supply Chain Enhance S&OP Process Centralize Inventory of H
Slide 76: Second Brand Offers Additional Value Stream
Second Brand Offers Additional Value Stream PREMIUM SEGMENT I D M PRODUCT RANGE AND SOME CUSTOMERS A RISK PROFILE MANUFACTURING STRATEGY DRIVEN BY PRICE R Low Cannibalization Risk Reduced Inventory and Reduced Features/Life Y P Manufacturing Costs and Availability E U SIGNIFICANT VALUE PROPOSITION A
Slide 77: West Gate Project Demonstrates APAC Strategy in Action
Project Value >$1M Purchasing vs Rental Offered Better Price Control Project Included 6 Bridges With Multiple Segment Lifts Completed at the Same Commerical Time Execution Dedicated Key Account Focus Leveraging Global Expertise Flagship West Gate Project Infrastructure Project Government Backed Fund
Slide 78: Raising the Bar in the Asia Pacific Region
Raising the Bar in the Asia Pacific Region REGION-WIDE MULTIFACETED ATTRACTIVE FOCUS GROWTH INDUSTRY STRATEGY TRENDS Investor Day 2022 78
Slide 79: Paul Sternlieb and Markus Limberger
PAUL STERNLIEB President & Chief Executive Officer MARKUS LIMBERGER EVP, Operations 79
Slide 80: Transformative Plan to Power Performance
Transformative Plan to Power Performance ACCELERATE IMPROVE DRIVE GREATER ORGANIC GROWTH OPERATIONAL EFFICIENCY & GO-TO-MARKET EXCELLENCE PRODUCTIVITY STRATEGIES AND PRODUCTION IN SG&A EFFICIENCY Investor Day 2022 80
Slide 81: Rigorous Process to Power Performance for the Long Term
Rigorous Process to Power Performance for the Long Term FULL-TIME PROGRAM MANAGEMENT OFFICE COORDINATING GLOBALLY HUNDREDS OF INITIATIVES Frequently Refreshing the Funnel and Through Weekly Steering Committee Meetings by Across all Functions and Regions ADDING NEW INITIATIVES Function and Region wit
Slide 82: 80/20 Journey Underpinning ASCEND
80/20 Journey Underpinning ASCEND Initial Situation Assessment Sustainable 80/20 Profit Implementation Through 80/20 Lens and Growth Strategies Benefits to profitable growth, cash flow and operational leverage Embed in Business 80/20 IS A JOURNEY Process THAT CREATES Simplification | Segmentation Le
Slide 83: Accelerating Organic Growth Go-To-Market Strategies
Accelerating Organic Growth Go-To-Market Strategies SELECTIVE COMMERCIAL CHANNEL STRATEGIC INNOVATION EFFECTIVENESS OPTIMIZATION PRICING to Meet Broader Enhancing Sales and and Emerging Channel Coverage Market Demands Channel Simplification to Drive More Focus on the ‘80’ Channel Partners; EXAMPLE A
Slide 84: Lean Approach to Operational Excellence
Lean Approach to Operational Excellence STRATEGIC BUSINESS GLOBAL SOURCING SKU FOOTPRINT SIMPLIFICATION and Indirect Spend RATIONALIZATION RATIONALIZATION Optimization Consolidated 19% of Global Spend in Rationalized Several Thousand ‘20’ SKUs EXAMPLES One Direct Material Category, Reducing to Simpl
Slide 85: Optimizing Our SG&A
Optimizing Our SG&A OPTIMIZE GENERAL & IMPROVE SALESFORCE RATIONALIZE ADMINISTRATION COSTS EFFICIENCY LEGAL ENTITIES Through Consolidation and Spans-and-Layers and Activity Analyses to Further Simplify the Additional Shared Service to Create More Time for Customer- Business and Generate Implementati
Slide 86: Timeline for Value Enhancement
Timeline for Value Innovation FY25 Enhancement Optimize G&A Costs Though Consolidation and Shared Services Footprint Rationalization Global Strategic Legal Entity Sourcing and Indirect Rationalization Spend Optimization Channel Optimization Business Strategic Simplification Pricing Salesforce Effect
Slide 87: Powerful Impact on EPAC Performance
Powerful Impact on EPAC Performance EBITDA Contribution ~$12-18M On Track to Deliver FY23 ~40- ~$40-50M Adjusted EBITDA 50% Impact by FY25 ~$15-25M ~50-60% FY24 Cost Sales Initiatives* Growth** *Split Roughly Equally Between COGS and SG&A Investor Day 2022 **With a Meaningful Portion Linked to Strat
Slide 88: One-Time Costs Funding ASCEND
One-Time Costs Funding ASCEND Restructuring ~$10-15M ~20% $3M in FY22 Capital ~30% ~$6-$9M in FY23 Investments in Expense TOTAL SPEND ~$1-$3M in FY24 Manufacturing vs. Cash $60-65M Majority Is Cash ~50% FY22 FY23 FY24 Footprint Rationalization Third-Party Program Support Fees Incentive Costs Investo
Slide 89: Markus Limberger
Markus Limberger Joined September 2022 as EVP of Operations Leads All Enerpac Manufacturing, Distribution and Procurement Responsible for Implementation of Key Operational Aspects of ASCEND Transformation Investor Day 2022 89
Slide 90: ASCEND Enables Operational Philosophy Through Continuous Improvement
ASCEND Enables Operational Philosophy Through Continuous Improvement VERTICAL HORIZONTAL COMPLEXITY LEAN EFFORTS LEAN EFFORTS REDUCTION AND DE-COMPLICATION IN-FACTORY OPTIMIZATION MANUFACTURING CONTINUED SKU KNOWLEDGE TRANSFER RATIONALIZATION RESOURCE REGIONAL INVEST IN HIGH MAKE VS. BUY STRATEGY AL
Slide 91: Financial Framework
FINANCIAL FRAMEWORK TONY COLUCCI EVP & Chief Financial Officer 91
Slide 92: Strong Financial Position
Strong Financial Position FY22 Results BALANCE CORE SALES ADJ. EBITDA FREE CASH SHEET SHARES GROWTH MARGIN FLOW REPURCHASED 11.0% 14.5% $44M * 0.9X 3.8M NET DEBT TO OF 10M AUTHORIZATION ADJ. EBITDA** ENERPAC IS POSITIONED FOR GROWTH AND VALUE CREATION *Includes 230 bps impact of MENAC AR reserve Inv
Slide 93: Durable Business Model
Durable Business Model Net Sales (m) Gross Profit Margin Adj. Operating Profit Margin Adj. EBITDA (m) and Margin (%) $655 14.7% 14.5% 46.5% 14.1% 12.0% $571 11.5% +180 46.0% $96 $529 BPS 10.4% 10.6% $493 $83 $75 44.7% 6.0% $52 44.0% . . . . FY2019* FY2020** FY2021 FY2022 FY2019 FY2020 FY2021 FY2022
Slide 94: FY23 Guidance
NET SALES $565-585M Confirming FY23 CORE GROWTH OF 3-6% FULL YEAR Guidance ADJ. EBITDA Confirming Our Full Year Outlook Assumes Steady Foreign Exchange Rates $113-123M ASCEND EBITDA BENEFIT OF $12-18M as Stated in our Guidance Announcement on September 28, 2022 Assumes No Global Recession FREE CASH
Slide 95: Path to Profitable Organic Growth in FY26
Path to Profitable Organic Growth in FY26 +Potential Upside from >100% Disciplined M&A >25% 6-7% Organic Adj. EBITDA Margin of 25% as We Exit FCF Conversion Toward End of Revenue CAGR* FY24 Through ASCEND, With 50bps Outlook; Lower in Earlier Years Improvement in Subsequent Years due to ASCEND Costs
Slide 96: Continued Margin Expansion Levers
Continued Margin Expansion Levers Adj. EBITDA Margin >1000 Strategic bps Pricing IMPROVEMENT Operational Excellence Initiatives 14.5% 20.5% 25.0% >25% FY22* FY23 Guidance Midpoint FY25 FY26 Investor Day 2022 *Includes 230 bps impact of MENAC AR reserve 96
Slide 97: Growing Cash Generation Supports Capital Allocation Priorities
Growing Cash Generation Supports Capital Allocation Priorities Free Cash Flow (m) FCF Conversion* FY19-FY22 Capital Deployment (m) $69 284% $47 $135 $33 $44 182% $27 . 38% . . $329 $(13) -227% Capex M&A FY2019 FY2020 FY2021 FY2022 FY2019 FY2020 FY2021 FY2022 Debt Reduction Return to Shareholders Inv
Slide 98: Strengthened Balance Sheet Provides for Continued Growth
Strengthened Balance Solid Liquidity Sheet Provides for Continued Growth Investments Maintaining Target Leverage Ratio of 1.5x-2.5x Net Debt/Adj. EBITDA $600M $121M 1.8x Senior Credit Facility Cash & Equivalents*** 1.7x 0.9x 0.6x FY19* FY20* FY21* FY22** *Calculated in Accordance with the Terms of t
Slide 99: Journey to Value Creation
Journey to Value Creation DELIVER SUSTAINABLE LONG-TERM RETURNS OVER THE PLAN CYCLE DISCIPLINED CAPITAL ALLOCATION 1 2 3 4 6-7% Organic Margin FCF Balanced Capital Revenue CAGR* Expansion Conversion Allocation Strategy ASCEND Growth & Pricing ASCEND Efficiency Initiatives EBITDA Flow Through Deployi
Slide 100: Balanced Capital Allocation Strategy Supports Growth
Balanced Capital Allocation Strategy Supports Growth CAPITAL DEPLOYMENT PRIORITIES SOURCES & USES OF CAPITAL (FY23-FY26) Available Capital (m) Uses of Capital CapEx $300 ** Organic Growth Maintain Strong Investments Balance Sheet ASCEND/Internal $600 * Investments Disciplined M&A ~ $500 Return Capit
Slide 101: Disciplined M&A Program
Disciplined M&A Program DISCIPLINED 1 2 3 SET OF PROCESSES to Ensure We Screen, Identify, RETURNS Cultivate, Acquire, and Integrate GROWTH MARGIN ACCRETION Companies in a Consistent Way Established History of Shows Strong Gross Year 3 Cash ROIC Growth – GDP+ or Greater Margins at or With a Short-Ter
Slide 102: Focused M&A Criteria
Focused M&A Criteria MISSION TALENT Aligned With Our Overall Mission Targets Must Have Reasonably of Helping our Customers Strong Leadership and Perform Complex, Often Talent Throughout Hazardous Jobs Safely the Organization STRATEGIC PILLARS and Efficiently Targets Must Align With Our Strategic Pil
Slide 103: Durable Business Model Provides Stability and Fuels Strategic Priorities
Durable Business Model Provides Stability and Fuels Strategic Priorities Resilient, Cash-Generative Business Model FY26 TARGETS Continued Focus on Margin Improvement >25% Adj. EBITDA Margin 6-7% Organic Balanced Capital Revenue CAGR* Allocation Strategy >100% FCF Conversion Proven Ability to Maintai
Slide 104: New Strategy Focused on Results
New Strategy Focused on Results New Team Brings a BROADENING COMMITTED FRESH PERSPECTIVE OUR APERTURE TO OUR MISSION With a New Level of Rigor Beyond Just a Pure Play Industrial and Accountability and Stated Values Tools and Service Provider ASCEND Transformation Program Investing in Our is Laying t
Slide 105: New Team, New Mission, New Plan
Premier Industrial Solutions Provider Serving a Broad and Diverse Set of Customers Globally New Team Defined Organic Growth Strategy Focused on Maximizing Shareholder Value and New Mission Capitalizing on Global Macro Trends New Plan Transformation Plan to Elevate Performance, Create Resiliency and
Slide 106: 5 Minute Break
5 Minute Break Investor Day 2022 106
Slide 107: Q&A Investor Day 2022
laa ENERPAC @ Investor Day 2022
Slide 108: Appendix: Reconciliations
APPENDIX RECONCILIATIONS 108
Slide 109: Consolidated Core Sales
Consolidated Core Sales (In Thousands) FY2022 FY2021 % CHANGE Net Sales $571,223 $528,661 8% FX Impact - ($14,565) TOTAL $571,223 $514,096 11% Investor Day 2022 109
Slide 110: GAAP to Non-GAAP Supplemental
(In Thousands) FY2019 FY2020 FY2021 FY2022 Sales $654,758 $493,292 $528,660 $571,223 Adjusted Operating Profit Operating Profit $47,516 $24,181 $51,113 $30,660 Impairment & Divestiture Charges 22,827 (3,159) 6,198 2,413 Restructuring & Other Exit Charges 5,973 8,179 2,392 8,135 Gain on Sale of Facil
Slide 111: FY2022 Quarterly Adjusted EBITDA
FULL (In Thousands) Q1 Q2 Q3 Q4 YEAR Sales $130,903 $136,599 $151,894 $151,827 $571,223 EBITDA Earnings $3,185 $2,121 $4,061 $10,224 $19,591 Financing Costs, Net 961 755 951 1,719 4,386 Income Tax Expense (Benefit) 1,781 1,337 1,377 (94) 4,401 Depreciation & Amortization 5,175 4,986 4,822 4,617 19,6
Slide 112: Free Cash Flow
Free Cash Flow (In Thousands) FY2019 FY2020 FY2021 FY2022 Cash From Operations $53,845 $(3,159) $54,183 $51,736 Capital Expenditures $(26,755) $(12,053) $(12,019) $(8,417) Proceeds From Sale of PP&E $1,642 $708 $22,409 $1,176 Other $(1,625) $1,487 $4,599 - $27,107 $(13,017) $69,172 $44,495 Investor
Slide 113: Non-GAAP Guidance
Non-GAAP Guidance FISCAL 2023 (In Millions) LOW HIGH Reconciliation of Continued Operations GAAP Operating Profit To Adjusted EBITDA GAAP Operating Profit $64 $83 ASCEND Transformation Program Charges 23 18 Restructuring Charges 9 7 Adjusted Operating Profit $96 $108 Other Expense, Net (1) (1) Depre