Modine Manufacturing Company · NYSE:MOD
Modine Manufacturing — Q1 FY2016 Earnings Presentation
23 slides from Modine Manufacturing's earnings presentation, Jul 31, 2015
Slide 1: First Quarter Fiscal 2016
First Quarter Fiscal 2016 July 31, 2015 8:00 a.m. CDT
Slide 2: Agenda
Agenda Introduction Kathy Powers VP, Treasurer and Investor Relations First Quarter Highlights and Tom Burke Segment Review President and Chief Executive Officer Financial Overview Mick Lucareli and Outlook VP, Finance and Chief Financial Officer Summary Tom Burke Q&A Tom Burke and Mick Lucareli 2
Slide 3: 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 4: First Quarter Highlights and Segment Review
First Quarter Highlights and Segment Review Tom Burke President and Chief Executive Officer
Slide 5: FY2016 – First Quarter Highlights
FY2016 – First Quarter Highlights • Sales of $346 million, down 2%, excluding currency – Sales growth in Europe and Building HVAC, excluding currency – Sales declines in Americas and Asia • Adjusted operating income of $14.2 million, in line with our expectations – Unfavorable currency conditions –
Slide 6: Q1 FY2016 - Americas
Q1 FY2016 - Americas Americas Market Outlook (Fiscal 2016) ($ in millions) Q1 Q1 Better / North America YOY Change 2016 2015 (Worse) Heavy Duty Truck +5% to +10% Net sales $ 159.1 $ 176.8 $ (17.7) Medium Duty Truck Flat Automotive +2% to +5% Gross profit 26.7 31.6 (4.9) Agriculture -20% to -25% % of
Slide 7: Q1 FY2016 - Europe
Q1 FY2016 - Europe Europe Market Outlook (Fiscal 2016) ($ in millions) Q1 Q1 Better / 2016 2015 (Worse) YOY Change Net sales $ 131.2 $ 158.6 $ (27.4) Automotive +3% to +8% Gross profit 15.1 22.2 (7.1) % of net sales 11.5% 14.0% (250 bp) Commercial Vehicle +5% to +10% SG&A expenses 9.5 11.5 2.0 % of
Slide 8: Q1 FY2016 - Asia
Q1 FY2016 - Asia Asia Market Outlook (Fiscal 2016) ($ in millions) Q1 Q1 Better / 2016 2015 (Worse) YOY Change Net sales $ 19.3 $ 20.8 $ (1.5) Asia Excavator -20% Gross profit 3.5 3.6 (0.1) % of net sales 18.1% 17.2% 90 bp China Automotive +5% to +10% SG&A expenses 3.1 2.7 (0.4) % of net sales 16.2%
Slide 9: Q1 FY2016 – Building HVAC
Q1 FY2016 – Building HVAC Building HVAC Market Outlook (Fiscal 2016) ($ in millions) Q1 Q1 Better / 2016 2015 (Worse) YOY Change Net sales $ 41.3 $ 40.7 $ 0.6 N.A. Heating +3% to +5% Gross profit 11.4 9.9 1.5 % of net sales 27.7% 24.3% 340 bp N.A. Ventilation/Cooling +5% SG&A expenses 9.3 6.7 (2.6)
Slide 10: Financial Overview and Outlook
Financial Overview and Outlook Mick Lucareli Vice President, Finance and Chief Financial Officer
Slide 11: Q1 FY2016 vs. Prior Year
Q1 FY2016 vs. Prior Year ($ in millions, except per share amounts) • Difficult YOY comparisons, but consistent with Q1 Q1 Better / our expectations 2016 2015 (Worse) • Considerable market and FX challenges Net sales $ 346.1 $ 392.5 $ (46.4) Cost of sales 289.1 324.8 35.7 • Sales down $6.2M, or 2% on
Slide 12: Cash Flow & Net Debt
Cash Flow & Net Debt ($ in millions) Q1 Q1 ($ in millions) 6/30/15 3/31/15 2016 2015 Operating cash flow $ (0.1) $ 2.5 Cash $ 60.7 $ 70.5 Capital expenditures (16.0) (12.4) Debt 151.5 148.7 Restructuring payments 3.1 2.4 Net Debt $ 90.8 $ 78.2 Free Cash Flow $ (13.0) $ (7.5) • As anticipated, free c
Slide 13: FY2016 Guidance
FY2016 Guidance FY 2016 Guidance Assumptions Flat to 5% decrease • EUR = 1.10 USD; USD = 3.30 BRL Net Sales from prior year • Includes approximately $100M of negative currency impact Adjusted • Excludes restructuring costs $65 to $70 million Operating Income • Includes approximately $3M of negative
Slide 14: Q&A
Q&A
Slide 15: Appendix
Appendix
Slide 16: Americas (44% of Net Sales)
Americas (44% of Net Sales) • Seven manufacturing facilities – announced plans to FY 2015 Sales Mix close Washington, Iowa plant • Diversified revenue mix across major end-markets 17% 18% • Segment well positioned for future success based on Heavy Truck improved manufacturing footprint and cost stru
Slide 17: Europe (38% of Net Sales)
Europe (38% of Net Sales) • Seven manufacturing facilities serving Europe FY 2015 Sales Mix • Recently consolidated manufacturing operations in Germany, restructuring winding down 5% 5% 5% • Managing launch activity mainly in oil cooler and liquid Construction charge air cooler (LCAC) products Truck
Slide 18: Asia (5% of Net Sales)
Asia (5% of Net Sales) • Five manufacturing facilities serving China, India, FY 2015 Sales Mix Japan and Korea (2 Joint Ventures) • Strategic focus on creating new business opportunities with local customers 15% • Diversifying our business model; high current Construction/Ag 48% exposure to excavato
Slide 19: Building HVAC (13% of Net Sales)
Building HVAC (13% of Net Sales) • Five facilities serving North America, United FY 2015 Sales Mix Kingdom and South Africa • Complementary business that provides Commercial Heating 11% diversification to Modine’s vehicular segments Commercial Ventilation • Strong financials due to product different
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Modine Manufacturing Company Adjusted operating income and earnings per share (unaudited) (In millions, except per share amounts) Three months ended June 30, 2015 2014 Operating income $ 11.6 $ 24.1 (a) Restructuring expenses 2.6 0.8 Adjusted operating income $ 14.2 $ 24.9 N
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment adjusted operating income and margin ($ in millions) Three months ended June 30, Americas (unaudited) 2015 2014 Operating income $ 9.3 $ 15.9 Restructuring expenses 2.7 0.5 Adjusted operating income $ 12.0 $ 16.4 Net sales $ 159.1 $ 176.8 Adjusted operating margin 7.
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment adjusted operating income and margin ($ in millions) Years ended March 31, Americas (unaudited) 2011 2012 2013 2014 2015 Operating income $ 44.8 $ 58.2 $ 50.4 $ 49.6 $ 33.4 Restructuring expenses - - - 1.2 2.7 Impairment charges 1.0 - 1.8 1.2 7.8 Brazil legal reserve
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment adjusted operating income and margin ($ in millions) Years ended March 31, Asia 2011 2012 2013 2014 2015 Operating (loss) income $ (3.1) $ (2.5) $ (8.8) $ (3.3) $ 0.3 Impairment charges 0.3 - - - - Adjusted operating (loss) income (2.8) (2.5) (8.8) (3.3) 0.3 Net sale
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