Enersys · NYSE:ENS

Enersys — Investor Presentation (February 2024)

54 slides from Enersys's investor presentation, February 2024

  1. Slide 1: Investor Presentation February 2024

    Investor Presentation FEBRUARY 2024 February 2024 © 2024 EnerSys. All Rights Reserved.

  2. 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

  3. Slide 3: EnerSys at a Glance

    EnerSys at a Glance F Y 2 0 2 3 K E Y S TAT I S T I C S 1 $4.3B $322M $388M $5.34 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 3 N E T S AL E S $3.7B Business Geography Segments 6% 14% 21% 39% 47% 73% Energy Systems Am

  4. 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

  5. Slide 5: 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

  6. Slide 6: 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

  7. Slide 7: Product Portfolio Evolution

    Product Portfolio Evolution | Transformed to End-to-End Energy Solutions Provider N ET SA LES MIX H IG H L IGH T S ($B) $3.7 110 New Product Introductions $3.1 44% $2.4 3.5x Faster New Product Development Time 56% 73% 56% 75 UL Approvals 44% 27% FY'17 FY'20 FY'23 288% Engineers Increase in Maintenan

  8. Slide 8: 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

  9. 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

  10. Slide 10: 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

  11. Slide 11: 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

  12. Slide 12: 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

  13. Slide 13: 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 2021 diversity external diversity supplemental goals; Scope 3 Published and employer sustainability engagement environmental submi

  14. Slide 14: 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

  15. Slide 15: Energy Systems at a Glance

    Energy Systems at a Glance FY 2023 KEY STATISTICS1 Net Adj. Operating Global Customers Market Share Sales Earnings2 Installed Base $1.7B $86M 1M+ Multi-National North America - leading market position Systems in Operation Blue Chip Global - high growth opportunities Serving Diverse and Critical End

  16. Slide 16: 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

  17. Slide 17: Motive Power at a Glance

    Motive Power at a Glance FY 2023 KEY STATISTICS1 Installed Base Net Adj. Operating Global Global Charge Countries Sales Earnings2 Market Share Points $1.5B $179M ~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

  18. Slide 18: 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

  19. Slide 19: Specialty at a Glance

    Specialty at a Glance FY 2023 KEY STATISTICS1 Net Adj. Operating Transportation Customers Market Share3 Sales Earnings2 Installed Base3 Served $519M $39M 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

  20. Slide 20: 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 –

  21. Slide 21: 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

  22. Slide 22: 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

  23. Slide 23: 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

  24. Slide 24: FY'20 to FY'23 Financial Performance

    FY’20 to FY’23 Financial Performance N E T S AL E S AD J . O P E AR N I N G S 1 AD J . D I L U T E D E P S 1 ($B) ($M) Includes $17M IRA Includes $0.42 IRA 6.3% $3.7 3.9% $3.1 CAGR $287 $322 4.5% CAGR $4.68 $5.34 CAGR FY'20 FY'23 FY'20 FY'23 FY'20 FY'23 K EY D R IVER S • Robust demand from growing m

  25. Slide 25: FY'20 to FY'23 Bridge

    FY’20 to FY’23 Bridge AD J . D I L U T E D E P S 1 ~20% 4.5% Pro Forma CAGR CAGR Segment Performance Operational Efficiencies and Wins Headwinds • Capitalizing on high-growth end-markets • EOS waste elimination and footprint optimization • FX and interest rates • Significant price / mix achievements

  26. Slide 26: Clear Path to Achieving FY'27 Targets

    Clear Path to Achieving FY’27 Targets NET AD J . O P E R AT I N G AD J . AD J . S AL E S M AR G I N 1 EBITDA1 EPS1 FY’23 6.3% 8.7% $388M $5.34 Baseline FY’20-23 CAGR FY’27 8% - 10% 14% - 16% $850M - $950M $11.00 - $13.00 Targets FY’23-27E CAGR + reinvestment of capital for additional shareholder val

  27. Slide 27: Accelerating Growth in Diverse End Markets

    Accelerating Growth in Diverse End Markets Total EnerSys: 8% – 10% Net Sales FY’23 – 27E CAGR Energy Systems Motive Power Specialty Fast Charge & Storage CAGR 6% – 8% 5% – 7% 10% – 12% Incremental • Accelerating higher-tech • Growing automation and • Capturing market share • Demonstrates ability to

  28. Slide 28: Significant Free Cash Flow Generation

    Significant Free Cash Flow Generation F R EE C A SH F L O W 1 D R IVER S • Revenue and earnings growth $1.2B - $1.6B ‒ Improved volume and price / mix FY’24E – FY’27E ‒ EOS savings IRA Benefit ‒ Positive OpEx leverage • POC normalization – reduce $0.5B average percent of net sales from FY’20 – FY’23

  29. Slide 29: Disciplined Capital Allocation Strategy

    Disciplined Capital Allocation Strategy F U T U R E PR IO R ITIES PRIORITIES FY’20 – FY’23 ($M, cumulative) • Continue TPPL capacity investments & end-to-end solutions 1 Invest in Organic Growth (CapEx) ~$330 • Optimize EOS to drive additional operational efficiencies • Accelerate domestic-sourced l

  30. Slide 30: Strategic and Accretive M&A

    Strategic and Accretive M&A S T R AT E G I C F I LT E R S F I N AN C I AL F I LT E R S Aligns with Growth Priorities Cost and/or Revenue Synergies Accelerates Technical Evolution in Our Markets Accretive to Growth / Earnings Adds Differentiating Technology for Portfolio Transformation ROIC > WACC In

  31. Slide 31: 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

  32. Slide 32: 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

  33. Slide 33: Appendix

    Appendix February 2024 © 2024 EnerSys. All Rights Reserved. 33

  34. Slide 34: Financial Update

    Financial Update February 2024 © 2024 EnerSys. All Rights Reserved.

  35. Slide 35: Q3'24 Performance

    Q3’24 Performance $862M $130M $144M $2.56 $111M Net Sales Adj Op Adj Adj EPS1 Free Cash Earnings1 EBITDA1 Flow1 (7%) Y/Y +53% Y/Y +47% Y/Y +102% Y/Y ($77M) Y/Y Adj Op Earnings1 Adj EBITDA1 +73M Y/Y excluding Asset Securitization in Q3’23 Margin of 15.1% Margin of 16.7% Delivered Adjusted Gross Profi

  36. Slide 36: Q3'24 Results

    Q3’24 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 $920 $862 $130 Y/Y Change $85 1% price Includes $59M 9.2% 15.1% IRA benefit, (7%) volume 9.2% $29M retroactive Q3'23 Q3'24 Q3'23 Q3'24 AD J E B I T D A 1 & M AR G I N AD J D I L U T E D E P S 1 $144 $2.

  37. Slide 37: Adj EPS Bridge & Adj Op Earnings

    Adj EPS1 Bridge & Adj Op Earnings1 Q3’24 YEAR-OVER-YEAR $2.56 ($M) Net Sales AOE1 Energy Systems $373.5 $14.3 Motive Power $355.4 $52.8 $1.27 Specialty $132.6 $7.5 Corporate/Other - $55.7 Total $861.5 $130.3 2 Sales and Earnings in Line with Expectations; Estimated IRA Benefits Increased Significant

  38. Slide 38: Balance Sheet, Cash Flow and Leverage

    Balance Sheet, Cash Flow and Leverage SELECTED S E L E C T E D Q U AR T E R LY B AL AN C E S H E E T M E T R I C S 1 C AS H F L O W M E T R I C S 2 ($M) Q4’23 Q3’24 ($M) Q3’23 Q3’24 Cash and Cash $347 $333 Equivalents Cash Flow from $206 $135 Net Debt3 $736 $587 Operations Net Leverage Ratio3 1.8x 1

  39. Slide 39: Non-GAAP Reconciliations

    Non-GAAP Reconciliations February 2024 © 2024 EnerSys. All Rights Reserved. 39

  40. 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

  41. Slide 41: Non-GAAP Reconciliation

    Non-GAAP Reconciliation Q 3 ’ 2 4 & Q 3 ’ 2 3 A D J U S T E D O P E R AT I N G E A R N I N G S Quarter Ended December 31, 2023 ($ in millions) Energy Systems Motive Power Specialty Corporate and other Total Net Sales $373.5 $355.4 $132.6 $— $861.5 Operating Earnings ($18.6) $49.5 $6.0 $55.7 $92.6 In

  42. Slide 42: Non-GAAP Reconciliation

    Non-GAAP Reconciliation Q3’24 & Q3’23 ADJUSTED EBITDA Quarter ended ($ in millions) December 31, 2023 January 1, 2023 Net Earnings $76.2 $44.4 Depreciation 16.2 14.8 Amortization 6.9 7.8 Interest 11.7 17.5 Income Taxes 2.5 13.4 EBITDA 113.5 97.9 Non-GAAP adjustments 30.8 0.2 Adjusted EBITDA $144.3 $

  43. Slide 43: Non-GAAP Reconciliation

    Non-GAAP Reconciliation Q3’24 & Q3’23 ADJUSTED DILUTED EPS Quarter ended ($ in millions, except share and per share amounts) December 31, 2023 January 1, 2023 Net earnings reconciliation The following table provides the line of business allocation of the non-GAAP adjustments of items relating operat

  44. Slide 44: 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

  45. Slide 45: 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 December 31, October 1, July 2, March 31, January 1, October 2, July 3, ($ in millions, except ratios) 2023 2023 2023 2023 2023 2022 2022 Net earnings as reported $274.1 $242.4 $211.6 $175.8 $137.9 $129.9 $13

  46. Slide 46: Non-GAAP Reconciliation

    Non-GAAP Reconciliation FREE CASH FLOW Quarter ended ($ in millions) December 31, 2023 January 1, 2023 Net cash provided by (used in) operating activities $134.5 $206.1 Less Capital Expenditures (23.2) (17.9) Free Cash Flow $111.4 $188.3 Non-GAAP adjusted Net earnings $105.0 $52.3 Adjusted Free Cash

  47. Slide 47: Non-GAAP Reconciliation

    Non-GAAP Reconciliation 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 payable

  48. Slide 48: Non-GAAP Reconciliation

    Non-GAAP Reconciliation ADJUSTED GROSS PROFIT AND GROSS MARGIN Quarter ended ($ in millions) December 31, 2023 January 1, 2023 Net Sales $861.5 $920.2 Gross Profit 248.6 213.7 Inventory adjustment relating to exit activities 16.1 (0.9) Adjusted Gross Profit $264.7 $212.8 Adjusted Gross Margin 30.7%

  49. Slide 49: Non-GAAP Reconciliation

    Non-GAAP Reconciliation F Y ’ 2 3 & F Y ’ 2 2 A D J U S T E D O P E R AT I N G E A R N I N G S Twelve months ended March 31, 2023 Twelve months ended March 31, 2022 Energy Motive IRA Tax Energy Motive ($ in millions) Specialty Total ($ in millions) Specialty Total Systems Power Credits Systems Power

  50. Slide 50: Non-GAAP Reconciliation

    Non-GAAP Reconciliation F Y ’ 2 0 A D J . O P E R AT I N G E A R N I N G S Twelve months ended March 31, 2020 ($ in millions) Energy Systems Motive Power Specialty Total Net Sales $1,357.3 $1,348.2 $382.3 $3,087.8 Operating Earnings $31.0 $124.7 $34.5 $190.2 Inventory step up to fair value relating

  51. Slide 51: Non-GAAP Reconciliation

    Non-GAAP Reconciliation FY’23 & FY’22 ADJUSTED EBITDA Twelve months ended ($ in millions) March 31, 2023 March 31, 2022 Net Earnings $175.8 $143.9 Depreciation 60.4 62.6 Amortization 30.8 33.2 Interest 59.5 37.8 Income Taxes 34.8 30.0 EBITDA 361.3 307.5 Non-GAAP adjustments 26.2 32.0 Adjusted EBITDA

  52. Slide 52: Non-GAAP Reconciliation

    Non-GAAP Reconciliation FY’23 & FY’22 ADJUSTED DILUTED EPS Twelve months ended The following table provides the line of business allocation of the non-GAAP adjustments of items relating ($ in millions, except share and per share amounts) March 31, 2023 March 31, 2022 operating earnings (that are all

  53. Slide 53: Non-GAAP Reconciliation

    Non-GAAP Reconciliation FY’20 ADJ. DILUTED EPS The following table provides the line of business allocation of the non-GAAP adjustments of items relating Twelve months ended operating earnings (that are allocated to lines of business) shown in the reconciliation at left: ($ in millions, except share

  54. Slide 54: 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

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