EnerSys · NYSE:ENS
EnerSys — Investor Presentation (June 2024)
51 slides from EnerSys's investor presentation, June 2024
Slide 1: Investor Presentation June 2024
Investor Presentation JUNE 2024 June 2024 © 2024 EnerSys. All Rights Reserved.
Slide 2: Forward Looking Statements
Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements in this presentation that are based on Management’s current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our a
Slide 3: EnerSys at a Glance
EnerSys at a Glance F Y 2 0 2 4 K E Y S TAT I S T I C S 1 $4.1B $450M $507M $8.35 10K+ Market Cap2 Adj. Operating Earnings3 Adj. EBITDA3 Adj. Diluted EPS3 Customers G L O B AL FAC I L I T Y B AS E 4 F Y 2 0 2 4 N E T S AL E S $3.6B Business Geography Segments 6% 15% 22% 44% 72% 41% Energy Systems Am
Slide 4: Well-Positioned for Long-Term Profitable Growth
Well-Positioned for Long- Term Profitable Growth Provider of highly differentiated energy solutions with 1 full suite of technologies for diverse end markets Strategically aligned with megatrends in 2 large and growing markets Resilient business model positioned for strong cash 3 flow generation, pr
Slide 5: Energized Leadership Team Focused on Execution and Accountability
Energized Leadership Team Focused on Execution and Accountability Dave Shaffer Patrice Baumann Andi Funk Jamie Gebbia Joe Lewis Mark Matthews President and CEO Chief Integrated EVP and CFO VP Corporate and Business Chief Legal and President, Joined: 2005 Supply Chain Officer 2018 Development Complia
Slide 6: Empowering Our Team to Innovate and Deliver Differentiated Solutions
Empowering Our Team to Innovate and Deliver Differentiated Solutions MISSION VISION Providing people everywhere with Serving the global community accessible power to help them with mission-critical work and live better stored energy solutions VAL U E S - D R I V E N C U LT U R E Safety & Our Continu
Slide 7: Executing Our Strategic Vision | Significantly Transformed Portfolio
Executing Our Strategic Vision | Significantly Transformed Portfolio • Improved new product TO D AY • Established vision- • Integrated Alpha and development time driven culture NorthStar acquisitions • Expanded product Innovating, Optimizing, • Built teams to execute • Deepened capabilities lines an
Slide 8: Product Portfolio Evolution | Transformed to End-to-End Energy Solutions Provider
Product Portfolio Evolution | Transformed to End-to-End Energy Solutions Provider N ET SA LES MIX ($B) H IG H L IGH T S 1 $3.6 $3.1 110 New Product Introductions 45% $2.4 56% 3.5x Faster New Product Development Time 73% 55% 75 44% 27% UL Approvals FY'17 FY'20 FY'24 Maintenance-free, Systems, and Ser
Slide 9: Business Segments
Business Segments ENERGY SYSTEMS NEW VENTURES Power conversion, power distribution, Energy storage and management and energy storage solutions systems for demand charge s New • Communication Networks stem reduction, utility back-up power, Sy Elite Service s V • Data Centers and dynamic fast charging
Slide 10: Foundational Core Modular Platforms
Foundational Core Modular Platforms E N E R G Y S TO R AG E POWER ELECTRONICS Lithium-ion • Advanced, high-efficiency power conversion • Maintenance-free • High voltage power transfer with power • Longer cycle life ems Ne line communication for 5G small cells • Fastest charge rate st Servic w V Sy E
Slide 11: Addressing Global Megatrends in Attractive and Diverse End Markets
Addressing Global Megatrends in Attractive and Diverse End Markets Energy • Modernizing energy grids, storage, and distribution Transition • Shifting market to EVs ~$30B+ Serviceable Energy • Increasing resiliency of electrical infrastructure and grid Addressable Market1 Security • Growing need for
Slide 12: Leveraging Our Sustainable Competitive Advantages
Leveraging Our Sustainable Competitive Advantages Deep Customer Domain Modular Resilient Operational Relationships Expertise Technology Business Model Excellence Customer-centric Product and company Only fully integrated Large, diverse end- Continuous improvement end-to-end solutions differentiation
Slide 13: Strategic Priorities Driving Long Term Growth
Strategic Priorities Driving Long Term Growth Increasing Higher Value Solutions • Customer-centric NPIs (volume and mix) Innovate • State-of-the-art technology Compounding Value Creation • Organic hardware and software • Fast Charge and Storage (FC&S) • Scalable projects across Energy Systems, Motiv
Slide 14: Our Sustainability Journey
Our Sustainability Journey Announced Established Scope 1 and full-time Scope 2 Sustainability Launched carbon Target date for Team; joined inaugural Published neutrality Published 2021 diversity external diversity supplemental goals; Scope 3 Published 2023 and employer sustainability engagement envi
Slide 15: Committed to a Sustainable Future
Committed to a Sustainable Future SUSTAINABILITY OF ENVIRONMENTAL OUR PEOPLE SUSTAINABILITY PRODUCTS AND SERVICES STEWARDSHIP AND COMMUNITY GOVERNANCE • Driving profitability and growth, • Tracking emissions metrics • Committed to embedding DEI in • Assigned Board-level oversight with focus on energ
Slide 16: Energy Systems at a Glance
Energy Systems at a Glance FY 2024 KEY STATISTICS1 Net Adj. Operating Global Customers Market Share Sales Earnings2 Installed Base $1.6B $87M 1M+ Multi-National North America - leading market position Systems in Operation Blue Chip Global - high growth opportunities Serving Diverse and Critical End
Slide 17: Well-Positioned to Grow in Attractive Addressable Market
Well-Positioned to Grow in Attractive Addressable Market DRIVERS $400B+ M AR K E T D Y N AM I C S Total Global Network Resilient Power Everywhere Infrastructure Market • Network expansion and capex funded build programs • Ongoing operational ~$20B+ maintenance of networks and facilities Serviceable
Slide 18: Motive Power at a Glance
Motive Power at a Glance FY 2024 KEY STATISTICS1 Installed Base Net Adj. Operating Global Global Charge Countries Sales Earnings2 Market Share Points $1.5B $215M ~500K 121 ~22% Solutions Utilized by Electric Forklifts, Mining, and Other Commercial Electric-Powered Vehicles B R AN D S / P R O D U C T
Slide 19: Well-Positioned to Grow at or Above Market
Well-Positioned to Grow at or Above Market DRIVERS F U T U R E S TAT E Fully-Automated Warehouse Electrification • Decarbonization ~$6.8B • Environmental health and safety Serviceable • Lower cost of operation vs. ICE • Lithium technology enablement Addressable Market Automation • Operational effici
Slide 20: Specialty at a Glance
Specialty at a Glance FY 2024 KEY STATISTICS1 Net Adj. Operating Transportation Customers Market Share3 Sales Earnings2 Installed Base3 Served $536M $31M 1.8M 700+ 30% Trucks U.S. OEM Truck Market T R A N S P O R TAT I O N A E R O S PA C E A N D D E F E N S E 40% Key Innovations Revenue by Key Innov
Slide 21: Positioned to Further Capture Share in Large and Attractive Markets
Positioned to Further Capture Share in Large and Attractive Markets DRIVERS M AR K E T D Y N AM I C S High-Density Resilient Power • Increasing fleet electronic loads – Vehicle tracking systems ~$3.1B • Currently 9% of SAM • 31% OEM – Audio / infotainment / GPS – Stop - start Serviceable • 30% OES –
Slide 22: Powering the Future through Energy Management Capabilities
Powering the Future through Energy Management Capabilities S M AR T E N E R G Y L O AD & E N E R G Y E C O S Y S T E M System Input System Output EV-Pedestal 150kW Commercial Solar Fast Charge & Storage 600kW Lithium-Ion Batteries Commercial Buildings and Multi-Family Units Grocery Stores Grid Peak
Slide 23: Accelerating Innovation with Fast Charge and Storage
Accelerating Innovation with Fast Charge and Storage E N D - TO - E N D S O L U T I O N KEY BENEFITS • Smart energy and load management ecosystem for reliable fast charging solutions • Solar panel integration in decentralized system enables power in rural areas • Modularity allows growth with the ma
Slide 24: Significant Opportunity in Attractive and Growing Market
Significant Opportunity in Attractive and Growing Market TAR G E T M AR K E T M AR K E T P U B L I C D C C H AR G E R S 1 OPPORTUNITY $217B U.S. CHARGER DEMAND 2 27.5 (M) 1.3 Global Public DCFC Hardware 0.7 Spend Estimate 2022 – 2030 0.6 0.5 0.5 0.1 0.1 0.1 0.0 $7.5B+ Residential Retail & On-the-Go
Slide 25: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy F U T U R E PR IO R ITIES PRIORITIES FY’21 – FY’24 ($M, cumulative) • Continue TPPL capacity investments & end-to-end solutions • Optimize EOS to drive additional operational efficiencies 1 Invest in Organic Growth (CapEx) ~$320 • Accelerate domestic-sourced l
Slide 26: Bren-Tronics Acquisition
Bren-Tronics Acquisition E X PA N D S P R E S E N C E I N C R I T I C A L D E F E N S E A P P L I C AT I O N S HIGHLIGHTS • Legacy of innovation since 1973 and strong relationship with DOD • Highly complementary portfolio of products for military and defense • Strong engineering and product developm
Slide 27: U.S. Lithium Battery Gigafactory
U.S. Lithium Battery Gigafactory E N A B L I N G L O N G - T E R M G R O W T H W I T H R E L I A B L E D O M E S T I C S U P P LY • Optimizes lithium-ion cell sizing for EnerSys battery solutions to meet customer needs • Scale and flexibility with large production capacity and ability to create cust
Slide 28: Looking Ahead: Q1'25 and FY'25 Guidance
Looking Ahead: Q1’25 and FY’25 Guidance1 AS S U M P T I O N S Q1’25 Q1’25 FY’25 • Slightly lower volume on normal seasonality Net Sales $860M – $900M $3,675M – $3,825M FY’25 • MP and Spec healthy demand • Telco/Broadband steady improvements but not Adj. Diluted EPS2 $1.93 – $2.03 $8.55 – $8.95 back
Slide 29: Progress Toward FY'27 Targets
Progress Toward FY’27 Targets F I N A N C I A L A N D O P E R AT I O N A L G O A L S R E M A I N A C H I E VA B L E FY’24 Actual UPSIDE FY’23 FY’25 FY’272 Actual Guidance Targets • Driving maintenance-free sales $3.6B • Investing in capacity flexibility -3% CAGR $3,675M – 8% – 10% • ES margin reset
Slide 30: Compelling Investment Thesis
Compelling Investment Thesis 1 2 3 Strategically positioned in Transformed company expanding markets driven Invigorated leadership delivering innovative by global megatrends team executing a clear solutions and defining the strategy for accelerated future of energy transition earnings growth Playing
Slide 31: Appendix
Appendix June 2024 © 2024 EnerSys. All Rights Reserved. 31
Slide 32: Inflation Reduction Act (IRA) Enables…
Inflation Reduction Act (IRA) Enables… B AC K G R O U N D ENERSYS COMMITMENT AN N U AL B E N E F I T S 1 $369B in New Tax Credits Accelerating Lithium Strategy Recorded as reduction to COGS • Law in effect 1/1/23 - 12/31/32 with • Invest in U.S. domestic energy growth ‒ Securing domestic lithium cel
Slide 33: Financial Update
Financial Update June 2024 © 2024 EnerSys. All Rights Reserved.
Slide 34: Q4'24 & FY'24 Performance
Q4’24 & FY’24 Performance Net Adj Op Adj Adj Free Cash Sales Earnings1 EBITDA1 EPS1 Flow1 $911M $109M $124M $2.08 $109M Q4’24 (8%) Y/Y +2% Y/Y +5% Y/Y +14% Y/Y ($3M) Y/Y $3.6B $450M $507M $8.35 $371M FY’24 (3%) Y/Y +40% Y/Y +31% Y/Y +56% Y/Y +$180M Y/Y Adj Gross Margin1 of 28.0% in Q4 & FY’24 up 310
Slide 35: Q4'24 and FY'24 Results
Q4’24 and FY'24 Results ($M, except EPS) N E T S AL E S AD J O P E R AT I N G E AR N I N G S 1 & M AR G I N $3,709 $3,582 $450 $990 $911 $322 Y/Y Change 12.6% Y/Y Change +4% price $107 $109 8.7% Flat price (7%) volume Flat FX 10.8% 12.0% (7%) volume (1%) FX Q4'23 Q4'24 FY'23 FY'24 Q4'23 Q4'24 FY'23
Slide 36: Adj EPS Bridge & Adj Op Earnings
Adj EPS1 Bridge & Adj Op Earnings1 Q4’24 YEAR-OVER-YEAR $2.08 ($M) Net Sales AOE1 $1.82 Energy Systems $369 $17.4 Motive Power $395 $58.1 Specialty $147 $8.5 Corporate/Other - $25.2 Total $911 $109.2 2 Sales and earnings in line with expectations; continued volume impact from telco/broadband spendin
Slide 37: Adj EPS Bridge & Adj Op Earnings
Adj EPS1 Bridge & Adj Op Earnings1 FY’24 YEAR-OVER-YEAR $8.35 ($M) Net Sales AOE1 Energy Systems $1,590 $87.0 $5.34 Motive Power $1,456 $214.6 Specialty $536 $31.4 Corporate/Other - $117.2 Total $3,582 $450.2 2 Full year earnings growth driven by positive price/mix cost recapture and IRA benefits $M
Slide 38: Balance Sheet, Cash Flow and Leverage
Balance Sheet, Cash Flow and Leverage S E L E C T E D B AL AN C E S H E E T M E T R I C S 1 S E L E C T E D C AS H F L O W M E T R I C S 2 ($M) Q4’23 Q4’24 ($M) Q4’23 Q4’24 FY’23 FY’24 Cash and Cash Equivalents $347 $333 Cash Flow from $144 $137 $280 $457 Net Debt3 $736 $511 Operations Net Leverage
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations June 2024 © 2024 EnerSys. All Rights Reserved. 39
Slide 40: Reconciliations of GAAP to Non-GAAP Financial Measures
Reconciliations of GAAP to Non-GAAP Financial Measures This presentation contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles, ("GAAP"). EnerSys' management uses the non-GAAP financial measures “adjusted Net earnings”, “adju
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q 4 F Y ’ 2 4 A D J U S T E D O P E R AT I N G E A R N I N G S June 2024 © 2024 EnerSys. All Rights Reserved. 41
Slide 42: Non-GAAP Reconciliation
Non-GAAP Reconciliation F Y ’ 2 4 A D J U S T E D O P E R AT I N G E A R N I N G S June 2024 © 2024 EnerSys. All Rights Reserved. 42
Slide 43: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED EBITDA June 2024 © 2024 EnerSys. All Rights Reserved. 43
Slide 44: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q4 FY’24 ADJUSTED DILUTED EPS June 2024 © 2024 EnerSys. All Rights Reserved. 44
Slide 45: Non-GAAP Reconciliation
Non-GAAP Reconciliation FY’24 ADJUSTED DILUTED EPS June 2024 © 2024 EnerSys. All Rights Reserved. 45
Slide 46: Non-GAAP Reconciliation
Non-GAAP Reconciliation L E V E R A G E R AT I O B Y Y E A R Fiscal year ended March 31, (1) The $51.7 million adjustment to EBITDA in fiscal 2023 primarily related to $26.4 million of non-cash stock ($ in millions, except ratios) 2023 2022 2021 2020 2019 2018 compensation, $22.4 million of restruct
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation L E V E R A G E R AT I O B Y Q U A R T E R Last twelve months ended March 31, December 31, October 1, July 2, March 31, January 1, October 2, July 3, ($ in millions, except ratios) 2024 2023 2023 2023 2023 2023 2022 2022 Net earnings as reported $269.1 $274.1 $242.4 $211.6 $1
Slide 48: Non-GAAP Reconciliation
Non-GAAP Reconciliation FREE CASH FLOW June 2024 © 2024 EnerSys. All Rights Reserved. 48
Slide 49: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED GROSS PROFIT AND GROSS MARGIN June 2024 © 2024 EnerSys. All Rights Reserved. 49
Slide 50: Key Performance Indicator
Key Performance Indicator P R I M A R Y O P E R AT I N G C A P I TA L As part of managing the performance of our business, we monitor the level of primary operating capital, and its ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts payab
Slide 51: Thank you.
Thank you. For more information visit us at www.enersys.com EnerSys Global Headquarters EnerSys EMEA EnerSys Asia 2366 Bernville Road EH Europe GmbH 152 Beach Road Reading, PA 19605 | USA Baarerstrasse 18 Gateway East Building #11- 08 Tel. +1-610-208-1991 6300 Zug Singapore +1-800-538-3627 Switzerla