Modine Manufacturing Company · NYSE:MOD
Modine Manufacturing — KeyBanc Capital Markets Conference (May 2019)
25 slides from Modine Manufacturing's conference presentation, May 2019
Slide 1: Modine Manufacturing Company Investor Presentation May 2019
Modine Manufacturing Company Investor Presentation May 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” and other similar “forward-looking” statements, as d
Slide 3: Business Overview
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Slide 4: Modine at a Glance
Modine at a Glance A Diversified Industrial Company with a Well Positioned Product Portfolio Modine Manufacturing Company has been FY’19 Sales by Geographic Region leading the way in thermal management since 1916. We design, manufacture and 11% Americas test heat transfer products for a wide EMEA 38
Slide 5: End-Markets Profile
End-Markets Profile FY’19 Sales - Vehicular Thermal Solutions 41% CIS & BHVAC 25% Auto 8% Automotive 23% 40% 2% 3% Commercial Vehicle 8% 25% Off-Highway 29% Other FY’19 Sales - Commercial & Industrial Solutions 30% 7% Commercial HVAC&R 21% 18% Data Center 72% Industrial (Power & 14% 32% Off-Highway
Slide 6: Best-in Class Thermal Management Solutions
Best-in Class Thermal Management Solutions Vehicular Thermal Commercial & Building Solutions Industrial Solutions HVAC Systems (VTS) (CIS) (BHVAC) $1,352M (59%) $708M (32%) $212M (9%) FY’19 NET SALES FY’19 NET SALES FY’19 NET SALES ---------------------- ---------------------- ----------------------
Slide 7: Product Overview
Product Overview Segment Product Offerings Powertrain Cooling / Engine Products VTS • Radiators • Charge-air-Coolers (and Liquid cooled) • Oil Coolers (Air and Liquid cooled) • Exhaust Gas Recirculation Coolers (EGRCs) • Battery Cooling & Heating • Cooling Modules • Coils CIS – Heat Exchanger/Microc
Slide 8: Customer Profile
VTS CISCustomer Profile BHVAC Effinity™ Heating Atherion® Ventilation DeltaChill™ FreeCool School Systems 8
Slide 9: Financial Highlights and Outlook
Financial Highlights and Outlook Net sales FY’19 Results $2,500 • Net sales up 5% to $2.2 billion $2,000 • Adjusted operating income up 10% to $1,500 $131.9 million • Adjusted EPS up $.03 to $1.57 $1,000 FY16 FY17 FY18 FY19 FY20 • Free cash flow of $29.4 million Adjusted OpInc $150 decreased $23.8 m
Slide 10: Strategy Review
Strategy Review
Slide 11: Strengthen, Diversify and Grow
Strengthen, Diversify and Grow • Become a diversified, global industrial thermal management company GOALS • Diversify end markets and reduce customer concentration • Improve the operating margin, cash flow and valuation Strengthen • Optimize global manufacturing capabilities • Globalize organization
Slide 12: Strategic Transformation
Strategic Transformation Strengthen, Diversify & Grow Created New Global Completed Strategic Announced Organization Launched Portfolio Strategic Review of Structure Acquired Strengthen Diversify Assessment Modine’s Exceeded the $40- Luvata HTS & Grow Implemented Automotive 50 million of gross (Nov 2
Slide 13: Segment Profile
Segment Profile Industrial VTS CIS BHVAC Auto CV/OH FY2019 Revenue Growth Auto +3% CV/OH +7% +5% +11% Adj. OpInc Growth (-17%) +42% +31% OpInc Margin 6% (-150 bps) 8% (+200 bps) 14% (+200 bps) CapEx (% sales) $56M (3%) $16M (1%) $1M (<1%) Market Dynamics Engine - Leader Competitive Position Powertra
Slide 14: Divestment of Auto Business
Divestment of Auto Business • Proceeding with a formal sale process – Automotive sales account for approximately 25% of total company revenues, representing more than $500M – Automotive margins are generally lower than the VTS segment margins as a whole – Approximately 40-50% of total company capita
Slide 15: Next Steps
Next Steps • Remain focused on the process with a goal of Automotive Sale driving maximum value for our shareholders • Organic and inorganic investment in key products and markets Balanced Approach • Repayment of debt to maintain strong balance to Capital Allocation sheet • Opportunistic share repur
Slide 16: Appendix
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Slide 17: Vehicular Thermal Solutions (59%)
Vehicular Thermal Solutions (59%) FY 2019 Sales by End Market • 18 manufacturing facilities around the globe 8% • Focused significant resources on strategic review of our product portfolio 23% 40% Automotive • Diversified revenue mix across major end-markets Commercial Vehicle Off-Highway • Strength
Slide 18: Commercial & Industrial Solutions (32%)
Commercial & Industrial Solutions (32%) FY 2019 Sales by End Market 7% • 16 manufacturing facilities in North America, Europe 21% Commercial HVAC&R and Asia Data Center • Primary products include Coils, Coolers and Industrial (Power & Other) Coatings 72% • CIS is a pioneer in bringing microchannel t
Slide 19: Building HVAC Systems (9%)
Building HVAC Systems (9%) FY 2019 Sales by End Market 2% • 4 manufacturing facilities in North America and 19% United Kingdom Commercial HVAC • Complementary business that provides Data Center diversification to Modine’s vehicular segment 79% Other • Strong financials due to product differentiation
Slide 20: GAAP Income Statement
GAAP Income Statement (In millions, except per share amounts) Better FY19 FY18 (Worse) Net sales $ 2,212.7 $ 2,103.1 $ 109.6 Cost of sales 1,847.2 1,746.6 (100.6) Gross profit 365.5 356.5 9.0 SG&A expenses 244.1 245.8 1.7 Restructuring expenses 9.6 16.0 6.4 Impairment charges 0.4 2.5 2.1 Loss on sal
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted financial results (unaudited) (In millions, except per share amounts) Three months ended March 31, Twelve months ended March 31, 2019 2018 2019 2018 Operating income $ 18.5 $ 27.2 $ 109.7 $ 92.2 Restructuring expenses (a) 8.9 4.5 9.6 16.0 Strategy consulting fees (b
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment adjusted operating income and margin (In millions) Years ended March 31, Years ended March 31, Vehicular Thermal Solutions 2019 2018 Commercial and Industrial Solutions 2019 2018 Operating income $ 64.8 $ 84.2 Operating income $ 53.4 $ 28.5 Restructuring expenses (a
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted operating income and margin Years ended March 31, (In millions) 2019 2018 2017 2016 Operating income $ 109.7 $ 92.2 $ 42.3 $ 37.1 Restructuring expenses 9.6 16.0 10.9 16.6 Strategy consulting fees 7.1 3.7 - - (a) Environmental and legal charges 3.2 1.4 1.9 1.6 (b) L
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free cash flow (In millions) Years ended March 31, 2019 2018 2017 2016 Net cash provided by operating activities $ 103.3 $ 124.2 $ 41.7 $ 72.4 Capital expenditures (73.9) (71.0) (64.4) (62.8) Free cash flow $ 29.4 $ 53.2 $ (22.7) $ 9.6 Forward-Looking Non-GAAP Financial Meas
Slide 25: Thank You
Thank You
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