Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Investor Day (June 2022)
99 slides from Columbus Mckinnon's investor day presentation, Jun 23, 2022
Slide 1: Unlocking CMCO's Potential
Unlocking CMCO’s Potential CMCO 2022 Investor and Analyst Day June 23, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement These slides, and the accompanying oral discussion (together, this “presentation”), contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning: future sa
Slide 3: Executive Management
Executive Management David Wilson Greg Rustowicz Bert Brant Appal Chintapalli President & Senior Vice President, Finance Senior Vice President, President, Chief Executive Officer & Chief Financial Officer Global Manufacturing EMEA & APAC Operations Alan Korman Mark Paradowski Mario Ramos Terry Schad
Slide 4: Agenda
Agenda START: 9:00 AM EASTERN Welcome Deb Pawlowski Investor Relations Unlocking CMCO’s Potential David Wilson President & Chief Executive Officer Digital Enablement Mark Paradowski SVP & Chief Digital Officer Operational Excellence Bert Brant SVP, Global Manufacturing Operations Innovation & Organi
Slide 5: Unlocking CMCO's Potential
Unlocking CMCO’s Potential CMCO 2022 Investor and Analyst Day June 23, 2022
Slide 6: Unlocking the Potential of CMCO
David J. Wilson President & Chief Executive Officer Unlocking the Potential of CMCO Moving Beyond the Blueprint
Slide 7: Strategic Planning Framework
Strategic Planning Framework Internal Factors PURPOSE External Factors why we exist VALUES what’s important to us VISION what we want to be STRATEGY where to compete and how to win STRATEGY MAP what we need to do STRATEGIC DEPLOYMENT PROCESS targets and initiatives PRIORITIZED ROADMAP a plan and seq
Slide 8: Where It Starts
Where It Starts Columbus McKinnon’s Purpose, Vision, Mission and Core Values PURPOSE CORE VALUES Together we create intelligent motion solutions that move the world forward and improve lives VISION To become the global leader in safe and productive Intelligent Motion Solutions MISSION We provide exp
Slide 9: © 2022 COLUMBUS MCKINNON CORPORATION
© 2022 COLUMBUS MCKINNON CORPORATION
Slide 10: Our Strategy
Our Strategy Transform CMCO from a legacy cyclical industrial company to a top-tier, secular growth, intelligent motion solutions company STRATEGIC PRIORITIES • Strengthen and build upon CMCO’s core • Invest in high-growth, high margin platforms • Increase exposure to high growth, secular end market
Slide 11: Unlocking CMCO's Potential
Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO CMBS GROWTH FRAMEWORK TRANSFORMATION Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value 11 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 12: Columbus McKinnon Business System
Columbus McKinnon Business System Strategic Framework and Core Competencies 1. People & Values 6. Customer Experience 7. Product Development 2. Strategic Planning 8. Operational Excellence 3. Marketing 9. Financial Acumen 4. Product Management 10. End-to-End Digital 5. Programmatic M&A Columbus McKi
Slide 13: CMBS Cascading Levels Example
CMBS Cascading Levels Example Playbook for Standard Work and Processes Level 1 Strategic Framework Level 2 Core Competencies Level 3 Key Processes • Programmatic M&A Level 4 • Strategy Alignment Tools / Enablers • Target Identification • Screening & Outreach • Diligence Playbook • M&A Pipeline • Val
Slide 14: Implementation Runway
Implementation Runway CMBS Tracker* FY22 FY23 FY24 FY25 FY26 FY27 ~6% 62% Complete Align Value-Add or Underway Sub-Processes ~32% ~35% Develop CMBS / PMO Office ~27% Cascade, Incorporate Enablers, Develop “Best-in-Class” Sub-Processes Creating sustainable Complete Alignment Phase competitive advanta
Slide 15: Our Core Growth Framework
Our Core Growth Framework Re-Imagine & Increase TAM Expand SAM within TAM Grow Share of SAM Maintain Share of SAM & Enable Growth with Market Disciplined Approach to Organic and Strategic Growth Initiatives 15 © 2022 COLUMBUS MCKINNON CORPORATION TAM: Total Addressable Market; SAM: Serviceable Addre
Slide 16: Megatrends and Market Dynamics
Megatrends and Market Dynamics “Outside-in” Evaluation Driven By: Vertical Markets CAGR* Automation • Productivity and consistency • Minimizing human dependency Material Handling ~8% & • Skilled labor shortage Life Science & Pharma ~8% Digitization • Reshoring Food & Beverage ~7% • Shift in demograp
Slide 17: Industrial Automation Landscape
Industrial Automation Landscape Assessing Opportunities for Growth Description Level of granularity at Market of the screen which we apply the screen size 1 Size & expected Product/ End-market/ All of industrial $1.8T growth rate solution vertical automation 2 Propensity for Product/ End-market/ App
Slide 18: Intelligent Motion in Material Handling
Intelligent Motion in Material Handling Industrial Automation Market Screening Opportunities Operating margin, % Size of bubble = TAM 30 25 Automated Specialty Mobile Conveyors ($4B) Robots ($1B) Automated Storage & Retrieval System ($16B) 20 15 Lifting ($8B) Precision Actuation ($3B) Automated Guid
Slide 19: CMCO's Lifting Core as Defined in FY21
CMCO’s “Lifting” Core as Defined in FY21 Aggregated CMCO with $809M of FY20 Revenue ~25% Size of Bubble = TAM Operating Income Margin ~20% ~15% CMCO Core ($11B) ~10% Legacy OI Margin 0% 1% ~5% ~10% ~15% ~20% Legacy Rev CAGR Historical* Revenue CAGR CMCO was Growing at Just 1% Under Normal Market Con
Slide 20: Reassessed the Core
Reassessed the Core Revealed Two High-growth, High-margin Positions and Increased TAM ~25% Size of Bubble = TAM Operating Income Margin ~20% Linear Motion ($3B) Controls Automation ~15% ($3B) Lifting ($8B) ~10% 0% -1% ~5% ~10% ~15% ~20% Historical* CMCO Revenue CAGR Increasing Focus to Address Under
Slide 21: Reimagined the Core in FY22
Reimagined the Core in FY22 Successful Additions of Dorner & Garvey Through M&A ~25% Size of Bubble = TAM Operating Income Margin ~20% Specialty Conveyors ($4B) Precision Actuation Long Term Growth Projections** ($3B) Controls Automation ~15% Lifting ~2.5% ($3B) Linear Motion ~6.0% Controls Automati
Slide 22: Market Leadership and Market Share
Market Leadership and Market Share Global Market Position by Product Line SERVICEABLE ADDRESSABLE MARKET (SAM) AND MARKET SHARE BY PRODUCT CATEGORY Product Estimated SAM CMCO Estimated Global Categories ($B) (~$M) Market Share Market Position Lifting $2.4 $550 23% High Conveyance $1.5 $160 11% Mediu
Slide 23: Transformation Drives Profitable Growth
Transformation Drives Profitable Growth Targeting $1.5 Billion in Revenue in Fiscal 2027 and ~21% EBITDA Margin ($M) Strategic Plan Expected to Deliver > 10% Revenue Growth and Top-Quartile Earnings Profile 23 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 24: Strategic Growth Initiatives
Strategic Growth Initiatives Organic Initiatives Deliver $250M of Growth Over The Planning Period PRODUCT DEVELOPMENT: Lifting • Next generation platforms • Solutions focus on attractive vertical markets • Automation Automation, monitoring & diagnostics Linear Motion COMMERCIAL DEVELOPMENT: • New ch
Slide 25: M&A Strategic Priorities
M&A Strategic Priorities Programmatic M&A Delivers $325M Over the Planning Period INCREASE EXPOSURE TO ATTRACTIVE END MARKETS • Advance leadership position in key technology areas • Extend global reach in targeted vertical markets ADD LEADING SERVICE & AFTERMARKET CAPABILITIES Speciality Automation
Slide 26: Critical Enablers
Unlocking CMCO’s Potential Critical Enablers Global Functions Americas EMEA & APAC Finance Products Products Human Resources Solutions Solutions Legal Platforms & Technologies Digital Technology Marketing Lifting Solutions Conveyor Solutions Product Development Linear Motion Solutions Automation & C
Slide 27: Business Model Transformation
Business Model Transformation Growth Strategy Substantially Advances Underlying Portfolio FUTURE Revenue Growth Rate Specialty FY22 Conveying Linear Motion Linear Automation Motion 13% 10% Automation Specialty Conveying 16% FY21 Lifting Solutions Linear Motion Lifting & Automation Solutions 61% Lift
Slide 28: Digital Enablement
Mark Paradowski Senior Vice President & Chief Digital Officer Digital Enablement
Slide 29: CMCO's Digital Evolution
CMCO’s Digital Evolution Transformation is Advancing CONFIGURE Global Website Global Partner Portal Global Employee Intranet Configure, Price, Quote (CPQ) ENABLE Today 2019 Product Information Management (PIM) Share Product Information INFORM Global Web Global ERP Redesign HR Information System Cust
Slide 30: End-to-End Digital Transformation
End-to-End Digital Transformation Transformation from Demand Creation to Fulfillment Digitally Transforming All Steps in the Customer Journey 30 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 31: Global Demand Generation and Lead Management
Global Demand Generation and Lead Management Digital Enablement of Demand Generation Enhanced Demand Generation Drives Lead and Sales Opportunities 31 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 32: Best-in-Class CPQ Capabilities
Best-in-Class CPQ Capabilities Compass™ Offering CMCO’s Expansive Lifting Solutions Portfolio Industry Leading eCommerce and CPQ Capabilities 32 © 2022 COLUMBUS MCKINNON CORPORATION *Lifting Solutions: Lifting, Linear Motion, Automation Platforms
Slide 33: CPQ Tools Deliver Improved Customer Experience
CPQ Tools Deliver Improved Customer Experience Configure Price Quote Tools Increase Customer Loyalty and Operational Efficiencies ✓ Quotes developed in minutes vs. 1 business day COMPASS™ REVENUE COVERAGE FOR LIFTING SOLUTIONS* ✓ Order entry/acknowledgement in minutes vs. 1 business day Non “Compass
Slide 34: Partner Portal
Partner Portal Single Global Portal to Provide Full Digital Engagement CMCO Channel Multiple Configure, Key Features Partner Portals Price, Quote Tools • Dashboards • Order Placement • Quote Management • Configure-Price-Quote • Lead/CRM Integration • Product Catalog • Case Management • Marketing Mat
Slide 35: ERP Business Systems Roadmap
ERP Business Systems Roadmap Phases and Timing COMPLETED % OF REVENUE ON SAP 93% 76% FACILITIES 62% 64% 35% Americas 22% US - 2 Canada EMEA FY22 FY23 FY24 FY25 FY26 FY27 Germany – 3 France – 2 FY23 FY24 FY25 FY26 FY27 Spain – 2 Support Operations Full Retirement Finish Americas Conveyor Future UK –
Slide 36: Operational Excellence
Bert Brant Senior Vice President, Global Manufacturing Operations Operational Excellence
Slide 37: Operations Strategy
Operations Strategy OPERATIONS FRAMEWORK STRATEGIC PRIORITIES • Mitigate supply chain disruptions to improve customer experience • Accelerate factory footprint optimization initiatives to reduce labor & overhead costs • Capital investments in productivity to improve capacity, quality & safety • Adva
Slide 38: Operational Performance
Operational Performance Significant Progress Achieved with Operational Excellence Initiatives GROSS MARGIN PROGRESSION GROSS MARGIN LEVERS ~40% Simplification • Material Productivity 36.1% • Factory Simplification Activities 35.4% 34.8% • Labor Productivity 33.9% 34.1% Pricing Accretive Acquisitions
Slide 39: Customer Experience
Customer Experience Addressing Supply Chain Challenges to Return to Mid-90s % OTD ORDERS VS. ON-TIME-DELIVERY 120 • Improved accuracy on delivery 93% 108 Proactive dates Communication • Advanced notification on order 90% 100 status 80% 77% 78% 80 Support • First call resolution improvements 72% 70%
Slide 40: Factory Performance
Factory Performance Attacking All Elements of Costs FY22 COGS STRATEGY TO REDUCE COGS Direct Labor • Factory simplification in regions with best-cost labor Direct Labor • Productivity improvements from purchase of 12% automated equipment Overhead Overhead • Factory optimization to leverage overhead
Slide 41: Material Productivity
Material Productivity Delivering Further Material Cost Reductions Against Strong Headwinds ($M) MATERIAL PRODUCTIVITY SAVINGS KEY CONSIDERATIONS Significant inflationary headwind offsetting 10 $9 tactical savings 9 $8 $8 8 • Freight 1 $7 7 1 6 1 6 • Electronics 2 $5 5 1 1 4 • Metals 7 2 3 2 5 5 1 St
Slide 42: Factory Performance
Factory Performance Progress Made in DL & Overhead Cost Reductions with More to Come FY22 OVERHEAD DIRECT LABOR AND OVERHEAD (OH) AS A PERCENT OF COGS Variable OH 50% 19% 43% Direct Labor 45% 12% 40% 37% Fixed OH 15% 35% 14% Labor • Footprint 28% Overhead 45% 30% 12% simplification • Continued 25% 2
Slide 43: Footprint Simplification
Footprint Simplification Drives Direct Labor and Overhead Cost Improvements NUMBER OF CMCO FACTORIES ACCELERATE FACTORY FOOTPRINT: SIMPLIFICATION AND OVERHEAD COST REDUCTION 25 22 20 20 2 (3) • FY18 to FY22 reduced total footprint by 32% 2 6 (4) +5 (4) 16 • FY22 added 5 facilities through acquisitio
Slide 44: Productivity Investments
Productivity Investments Capital Expenditures with Strong ROIs $M CAPEX FY23 ESTIMATED CAPEX AS A PERCENT OF REVENUE $30M 3.1%* $50 2.5% Centers of 2.6% Excellence $40 1.9% $37.5 2.1% $10 IT $3 1.3% $30 1.6% $30 1.1% 1.1% NPD $4 $20 0.6% Productivity $12 $12 0.1% $8 Safety & $10 $9 Sustaining -0.4%
Slide 45: Investments in Centers of Excellence
Investments in Centers of Excellence Replace Fully Depreciated, Manual Equipment with State-of-the-art Machines ~50% Cycle Time Reduction Fewer Machining Steps New Capital Investments Drive Productivity and Improve Overhead Absorption 45 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 46: Working Capital and Delivery Management
Working Capital and Delivery Management Monthly SIOP Process Provides Discipline and Ingrains Performance Data Demand Operational / Executive Collection/ Projection Reconciliation Supply SIOP KPI Review Build and Alignment Planning Consensus INVENTORY, AND ON TIME DELIVERY % BY INVENTORY TURNS CUSTO
Slide 47: Innovation & Organic Growth
Mario Ramos Senior Vice President, Global Product Development & Marketing Innovation & Organic Growth
Slide 48: Strategic Growth Initiatives
Strategic Growth Initiatives Product Development: Lifting • Next generation platforms • Solutions focus on attractive vertical markets • Automation, monitoring & diagnostics Automation Linear Motion Commercial Development: • Develop new channel partners in strategic vertical markets • End-user busin
Slide 49: Accelerating Organic Growth and Returns
Accelerating Organic Growth and Returns PRODUCT DEVELOPMENT INVESTMENT RETURNS ON PRODUCT DEVELOPMENT* STRATEGIC INITIATIVES (and as a % of total sales) INCREMENTAL REVENUE Calculation: (and as a % of total sales) NPD N-3 & VAVE Gross Profit Product Development Investments 85 35 3.1% 3.4% 3.0% 2.9%
Slide 50: FY22 Success Stories
FY22 Success Stories Strategic Plan Initiatives Delivering Results TANDEM HOISTS LINEAR ACTUATOR WITH INTELLI-MOTION™ • Growing market share in tandem hoists by providing • First linear actuator with an integrated variable configurable options, improving lead times, frequency drive documentation & o
Slide 51: 5-Year Revenue Plan
5-Year Revenue Plan Categories of Revenue Growth ($M) REVENUE FY22 to FY27E Strategic Plan Expected to Deliver >10% Revenue Growth and Realize 1st Quartile Performance 51 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 52: Voice of Customer Activities
Voice of Customer Activities Market Led & Customer Centric CMBS Processes MARKET DYNAMICS: CUSTOMER INSIGHTS: CUSTOMER EXPERIENCE: • Market size • Identify customer’s high value problems • Buying factors by region & technology • CAGR • Validate the value proposition • Net Promoter Score (NPS) • Vert
Slide 53: Organic Incremental Revenue by Strategic Vertical Markets
Organic Incremental Revenue by Strategic Vertical Markets ($M) $250 Growth Initiatives Targeting Secular Vertical Markets to Drive ~$250M in New Revenue by FY27 53 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 54: Intelli-Connect
Intelli-Connect™ STRATEGIC INTENT NEXT STEPS Increase Uptime Aftermarket Expansion • Quick and easy programming and setup • Easy access to order spare parts • Proactive monitoring & diagnostics • High value services through remote • Reduced recovery time access Improve Safety Fleet Management • No n
Slide 55: Electric Chain Hoist 2.0 Modular Platform
Electric Chain Hoist 2.0 Modular Platform STRATEGIC INTENT PRODUCT LINE SIMPLIFICATION Market Expansion • Consolidation of 5 platforms • New features targeting expansion of market share (~300 bps) • Modular design allowing feature adds depending on application requirements Best in Class • Easiest ho
Slide 56: AquaPruf
AquaPruf® STRATEGIC INTENT BUSINESS IMPACT Market Opportunity • Expands our serviceable addressable market • Redesign of Sanitary Conveyor Line • Patented features protect the unique value • Highest level of sanitation, 3A certified proposition of the new product • Targeting red meat, poultry and da
Slide 57: Commercial Development
Commercial Development FOCUS ON STRATEGIC VERTICAL M ARKETS CHANNEL EXPANSION AND DIGITAL TOOLS Pharma Food & Bev Infrastructure Warehouse & E-commerce GEOGRAPHIC EXPANSION • Western USA Region • EMEA expansion beyond Germany • Southeast Asia “Easy to Do Business With” Select, Configure, Price, Quot
Slide 58: Break
INTELLIGENT MOTION PURPOSE IN MOTION
Slide 59: Unlocking CMCO's Potential
Unlocking CMCO’s Potential CMCO 2022 Investor and Analyst Day June 23, 2022
Slide 60: Platform Spotlight: Precision Conveyance
Terry Schadeberg President, Americas Platform Spotlight: Precision Conveyance
Slide 61: Reimagined Our Core: Why Precision Conveyance?
Reimagined Our Core: Why Precision Conveyance? AN ATTRACTIVE M ICROSEGMENT IN INDUSTRIAL PLATFORM ACCELERATES PROFITABLE GROWTH… AUTOMATION… ✓ $4B TAM growing at ~7.5% CAGR ✓ Proven track record of double-digit organic growth and ✓ Strong secular growth drivers an attractive pipeline of initiatives
Slide 62: What is Precision Conveyance?
What is Precision Conveyance? PRECISION CONVEYANCE DELIVERS INDIVIDUAL ITEMS BENEFITS OF PRECISION CONVEYANCE …to the Exact Right Place ✓ Greater process productivity …at the Exact Right Time and ✓ Increased reliability and uptime ✓ Reduced labor and footprint …in the Exact Right Orientation ✓ Impro
Slide 63: Precision Conveyance – Fully Integrated Industrial Automation
Precision Conveyance – Fully Integrated Industrial Automation 63 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 64: What is Accumulation?
What is Accumulation? Increasing productivity by balancing automated production lines STANDARD PRODUCTION LINE WITHOUT ACCUMULATION TABLES Bottleneck Conveyor Max. Production: 240 BPM 180 BPM 240 BPM 240 BPM 300 BPM Depalletizer Filler Capsuler Labeler Packer 171 BPM 159 BPM 152 BPM 140 BPM 130 BPM
Slide 65: Accumulation – Improving Productivity & Throughput
Accumulation – Improving Productivity & Throughput 65 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 66: Product Portfolio
Product Portfolio No Competitor has the Differentiation and Breadth of Conveyor Technology LOW PROFILE CONVEYORS SANITARY CONVEYORS Industry leading platform for Designed to meet the highest precise, small product movement levels of food safety LARGE SCALE CONVEYORS ACCUMULATING CONVEYORS Ergonomic
Slide 67: Meat Pie Manufacturer
Meat Pie Manufacturer A Case Study for Precision Conveyance CUSTOMER CHALLENGE CONVEYANCE SOLUTION ISSUE: Manual placement of meat pies on • Achieved breakeven in 11 months baking trays: • Consistent throughput • Repetitive motion safety concerns • Eliminated virtually all waste • High staff turnove
Slide 68: Chilean Wine Producer
Chilean Wine Producer A Case Study for Accumulation CUSTOMER CHALLENGE ACCUMULATION SOLUTION • 5-machine production line Infinity Accumulator after the filler/corker: • Multiple product sizes and configurations • Increased throughput by 15.5% • Not achieving production goals • Raised output to 186 b
Slide 69: Market Dynamics
Market Dynamics FOOD & E-COMMERCE/ INDUSTRIAL LIFE SCIENCES CPG BEVERAGE W&D AUTOMATION Consumption-driven Rapid innovations and Significant growth in Rapid market volume Broad growth from demand with focus on consumable products number of brands, SKUs growth driving adoption more widespread use of
Slide 70: Channel Strategy and M&A Pipeline
Channel Strategy and M&A Pipeline Go-to-market Strategy and Expanded Solutions Offering Opportunities Abound MULTI-CHANNEL SALES STRATEGY ROBUST M&A PIPELINE IN PLACE Key M&A Objectives 30% 41% Distributor 60% Enhance Technology Expand in 40% Offering / Enter New Attractive Markets Direct Automation
Slide 71: Precision Conveyance Platform Growth Vectors
Precision Conveyance Platform Growth Vectors GEOGRAPHIC EXPANSION Leverage CMCO global reach to enter new geographic markets CONTROLS & LINEAR M OTION PLATFORMS Enhance CMCO automation and linear motion platforms to sell through conveyance channels NEW PRODUCT / TECHNOLOGY Robust product pipeline to
Slide 72: Linking Talent & Culture to Strategy
Adrienne Williams Senior Vice President & Chief Human Resources Officer Linking Talent & Culture to Strategy
Slide 73: Strategic Priorities
Strategic Priorities People, Values and Culture Framework ATTRACT ENGAGE AND RETAIN • Bench strength • Increased employee communication • Next generation leaders • Engagement survey action planning • Critical talent • Market competitive pay • Pay equity analysis DEVELOP REWARD • Grow cross functiona
Slide 74: Attract
Attract Attract Critical Competencies for Transformation Project Technical / Operational Vertical Management Digital Excellence Markets • Enterprise solution • Digital demand • Food & Beverage • Product delivery delivery generation • Life Sciences • Organizational agility • LEAN processes • Process
Slide 75: Develop
Develop Multi-faceted Approach to Development TALENT ASSESSMENTS LEADERSHIP DEVELOPMENT • Caliper • Tiered leadership program • Hogan • eCornell certificate programs • 360o reviews • New leader assimilation CAREER PLANNING SUCCESSION PLANNING • Mapped career progression • Multi-level talent reviews
Slide 76: Engage and Retain
Engage and Retain Improving our Understanding to Drive Organizational Change ENGAGEMENT: “INSIDE-OUT” EVALUATION – SIGNIFICANTLY ENHANCED TALENT Partnered with Workforce Science Associates (WSA) RETENTION PLAN Career Leadership Growth Work Pay & Benefits Environment • Established baseline assessment
Slide 77: Total Rewards
Total Rewards Evolving to Meet the Needs of a Changing Workforce While Aligning with CMCO Objectives and Values Health & Wellness LEVERAGING MARKET-LEADING CARRIER AND VENDOR RELATIONSHIPS AREAS OF FOCUS • Utilizing HR technology to ensure pay is competitive and fair • Health care delivery solutions
Slide 78: Talent Requirements for Future Strategy
Talent Requirements for Future Strategy Expect Workforce Evolution Shift in Team Member Mix Driving Change 120% ~$285K ~$350K • Significantly shift manufacturing Sales per Employee Sales per Employee 100% resources to strategic roles and locations 15% +23% 22% ~23% improvement in • Target vertical m
Slide 79: Diversity, Equity, & Inclusion
Diversity, Equity, & Inclusion Supports the Entire HR Framework DIVERSITY • Key recruitment metrics aligned to performance goals • Increased representation in leadership positions EQUITY • Pay equity analysis INCLUSION • Inclusion training throughout leadership • Employee Resources Groups Of our Glo
Slide 80: Financial Strategy & Targets
Greg Rustowicz Senior Vice President, Finance & Chief Financial Officer Financial Strategy & Targets
Slide 81: Key Financial Assumptions
Key Financial Assumptions FY2027 Targets Growing Sales by >10% CAGR • Organic growth of ~5% driven by go-to-market structure and strategic initiatives SALES • Inorganic growth of ~6% from programmatic M&A inclusive of market growth • No material changes to current market conditions Expanding Gross M
Slide 82: Financial Targets
Financial Targets ($M) SALES & ADJUSTED EBITDA & ADJUSTED GROSS MARGIN ADJUSTED EBITDA MARGIN $2,000 $1,800 ~40% 550 28.0% 39.0% $1,600 36.1% $1,500 34.8% 35.4% ~21% 450 23.0% $1,400 33.8% 34.1% $325 34.0% $1,200 350 15.7% 15.4% ~$315 18.0% 15.1% $1,000 13.7% 11.9% $80 29.0% 250 13.0% $800 $600 $1,1
Slide 83: Revenue Bridge
Revenue Bridge ($M) REVENUE FY22 TO FY27E Strategy Expected to Deliver >10% Revenue Growth 83 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 84: Adjusted EBITDA Margin Bridge
Adjusted EBITDA Margin Bridge ($M) ADJUSTED EBITDA MARGIN FY22 to FY27E ~21% ~19% Actions Pricing & In Process Freight $309M Recovery Backlog at 3/31/22 Expanding Adjusted EBITDA Margins ~550 bps Driven by Cost Actions & Scale 84 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 85: Capital Allocation Priorities
Capital Allocation Priorities GROWTH New product development Invest in growth initiatives and CapEx Decreasing Priority Acquisitions Continue programmatic M&A BALANCE SHEET De-lever the balance sheet Manage capital structure responsibly Fund pension contributions above Terminate plans when feasible
Slide 86: Free Cash Flow and Net Leverage
Free Cash Flow and Net Leverage ($M) FREE CASH FLOW GENERATION / NET DEBT / NET LEVERAGE CONVERSION* 1000.0 200 350% 309% 3.5x 3.00 180 300% 900.0 2.6x 2.7x 160 800.0 160 250% 2.0x 700.0 1.7x 2.00 140 200% 630 150% 147% 600.0 1.1x 120 150% 118% 0.6x 104% 98% 1.00 97 500.0 100 87 59% 100% 396 400.0 8
Slide 87: CMCO Peer Group Comparison
CMCO Peer Group Comparison Industrial Peers vs. Motion Control Peers (Based on Avg. TTM Ending 3/31/22) YOY SALES GROWTH GROSS M ARGIN^ ADJ. EBITDA EBITDA TRADING M ARGIN M ULTIPLE* Motion Control 22.4% 33.3% 18.8% 11.3x Target: ~21% CMCO 39.5% 36.1% 15.4% 19% 9.3x Legacy Industrial 16.3% 22.8% 10.3
Slide 88: Key Takeaways: Beyond the Blueprint
David J. Wilson President & Chief Executive Officer Key Takeaways: Beyond the Blueprint
Slide 89: Our Strategy
Our Strategy Transform CMCO from a legacy cyclical industrial company to a top-tier, secular growth, intelligent motion solutions company STRATEGIC PRIORITIES • Strengthen and build upon CMCO’s core • Invest in high-growth, high margin platforms • Increase exposure to high growth, secular end market
Slide 90: Unlocking CMCO's Potential
Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO CMBS GROWTH FRAMEWORK TRANSFORMATION Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value 90 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 91: Business Model Transformation
Business Model Transformation Growth Strategy Substantially Advances Underlying Portfolio FUTURE Revenue Growth Rate Specialty FY22 Conveying Linear Motion Linear Automation Motion 13% 10% Automation Specialty Conveying 16% FY21 Lifting Solutions Linear Motion Lifting & Automation Solutions 61% Lift
Slide 92: Beyond the Blueprint
Beyond the Blueprint STRATEGIC PLAN TO TRANSFORM COLUMBUS MCKINNON INTO A GLOBAL INTELLIGENT MOTION ENTERPRISE ✓ Advances CMCO to achieve target ~$1.5 billion in revenue and ~$315 million of EBITDA in FY27 ✓ Evolves the enterprise from cyclical industrial to top-tier, secular growth, intelligent mot
Slide 93: Q&A Session
ONO Q&A Session INTELLIGENT MOTION PURPOSE IN MOTION
Slide 94: Unlocking CMCO's Potential
Unlocking CMCO’s Potential CMCO 2022 Investor and Analyst Day June 23, 2022
Slide 95: Supplemental Information
COX Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 96: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Fiscal Year 2018 2019 2020 2021 2022 GAAP net income (loss) $ 22,065 $ 42,577 $ 59,672 $ 9,106 $ 29,660 Add back (deduct): Income tax expense (benefit) 27,620 10,321 17,484 970 8,786 Interest and debt expense 19,733 17,144 14,234 12,081 20,126 Investme
Slide 97: Free Cash Flow & Free Cash Flow Conversion Reconciliation
Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands) Fiscal Year 2017 2018 2019 2020 2021 2022 Cash from operations $ 60,450 $ 69,661 $ 79,499 $ 106,795 $ 98,890 $ 48,881 Capital expenditures (14,368) (14,515) (12,288) (9,432) (12,300) (13,104) Free cash flow (FCF) $ 46,082 $ 5
Slide 98: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Fiscal Year 2017 2018 2019 2020 2021 2022 GAAP net income $ 8,984 22,065 $ 42,577 $ 59,672 $ 9,106 $ 29,660 Add back (deduct): Amortization of intangibles 8,105 15,552 14,900 12,942 12,623 25,283 Adjusted net income and dilut
Slide 99: Unlocking CMCO's Potential
Unlocking CMCO’s Potential CMCO 2022 Investor and Analyst Day June 23, 2022