Modine Manufacturing Company · NYSE:MOD
Modine Manufacturing — Q4 FY2023 Earnings Presentation
19 slides from Modine Manufacturing's earnings presentation, May 25, 2023
Slide 1: Fourth Quarter Fiscal 2023
FOURTH QUARTER FISCAL 2023 MAY 25, 2023
Slide 2: Presenters
NEIL BRINKER President and Chief Executive Officer MICK LUCARELI Executive Vice President and Chief Financial Officer KATHY POWERS Vice President, Treasurer, and Investor Relations 2
Slide 3: Forward Looking Statement
Forward Looking Statement This presentation contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” “projects,” and other similar “forward-looking” state
Slide 4: Record Quarter, Record Year
INTRODUCTION Record Quarter, Record Year Q4 FY23 Fiscal Year 2023 Net Sales Adjusted EBITDA Net Sales Adjusted EBITDA $618.1 Million $65.5 Million $2.3 Billion $212.1 Million Up 8% Up 16% Up 12% Up 34% Free Cash Flow Adjusted EPS Free Cash Flow Adjusted EPS $24.1 Million $0.67 $56.8 Million $1.95 Up
Slide 5: Fiscal Year 2023: Climate Solutions
CLIMATE SOLUTIONS ▪ Full year revenue gains in all product groups ▪ Data Centers up 60% in part due to product expansions into North Fiscal Year 2023 America ▪ Expecting another year of double-digit revenue growth for Data Centers in FY24 ▪ Improved Adjusted EBITDA margin of 14.6% by 370 bps ▪ Achie
Slide 6: Fiscal Year 2023: Performance Technologies
PERFORMANCE TECHNOLOGIES ▪ Full year revenue increases across all product groups ▪ Largest gain in sales of air-cooled products to genset (stationary power) customers Fiscal Year 2023 ▪ Strong margin improvement, full year adjusted EBITDA margin of 7.6%, up 140 bps from prior year ▪ Fourth quarter a
Slide 7: Climate Solutions Q4 results
CLIMATE SOLUTIONS (In millions) Net Sales 55% Data Centers $263.0 ▪ Strong chiller orders and growth from NA $259.5 expansion; co-location and hyperscale providers -9% HVAC&R ▪ Mostly driven by anticipated lower heating sales due market softness and unfavorable weather -6% Heat Transfer Products ▪ S
Slide 8: Performance Technologies Q4 results
PERFORMANCE TECHNOLOGIES (In millions) Net Sales 25% Advanced Solutions $364.1 ▪ Higher electric vehicle product sales in NA and Europe $322.5 9% Liquid-Cooled Applications ▪ Strong demand from commercial vehicle and automotive customers 13% Air-Cooled Applications Q4 FY22 Q4 FY23 ▪ Improved sales t
Slide 9: Financial Review
FINANCIAL REVIEW (In millions) Net Sales Adjusted EBITDA & (In millions) Q4 FY23 Q4 FY22 EBITDA Margin* $618.1 Net Sales $618.1 $574.4 $65.5 $574.4 Gross Profit 112.2 95.2 $56.7 % of net sales 18.2% 16.6% 10.6% SG&A expenses 60.9 53.5 9.9% % of net sales 9.9% 9.3% Q4 FY22 Q4 FY23 Q4 FY22 Q4 FY23 Ope
Slide 10: Cash Flow and Metrics
CASH FLOW AND METRICS Cash Flow and Metrics Free Cash Flow $56.8 million Net Debt (as of March 31) $285.6 million Leverage Ratio (as of March 31) 1.4x Capital Expenditures $50.7 million Modine Maintains Strong Balance Sheet & Liquidity ▪ Strong free cash flow in the quarter; $24M, primarily due to h
Slide 11: Fiscal 2024 Outlook
FISCAL 2024 OUTLOOK Metrics Guidance Comments FY24 Modine Global Sales Outlook Net sales +4% to +10% $2.4B to $2.5B Adjusted EBITDA* $240M to $260M +13% to +23% Climate Solutions Data Centers +15% – 25% Introducing Full Year Revenue and Adjusted EBITDA Outlook HVAC & Refrigeration +2% – 10% Heat Tra
Slide 12: Appendix
APPENDIX 12
Slide 13: Q4 GAAP Income Statement
Q4 GAAP INCOME STATEMENT (In millions) Q4 Q4 2023 2022 Net sales $ 618.1 $ 574.4 Cost of sales 505.9 479.2 Gross profit 112.2 95.2 Selling, general & administrative expenses 60.9 53.5 Restructuring expenses 2.8 21.1 Operating income 48.5 20.6 Interest expense (6.0) (3.8) Other expense - net (0.3) (0
Slide 14: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Modine Manufacturing Company Adjusted financial results (unaudited) (In millions, except per share amounts) Three months ended March 31, Twelve months ended March 31, 2023 2022 2023 2022 Net earnings $ 90.3 $ 8.5 $ 153.6 $ 86.3 Interest expense 6.0 3.8 20.7 15.6 (Benefit) pr
Slide 15: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (a) Restructuring expenses include employee severance-related expenses and equipment transfer costs. The fiscal 2023 restructuring expenses primarily relate to targeted headcount reductions within the Climate Solutions and Performance Technologies segments. The fiscal 2022 r
Slide 16: Segment Adjusted EBITDA and margin
NON-GAAP RECONCILIATIONS Segment Adjusted EBITDA and margin (unaudited) (In millions) Three months ended March 31, Twelve months ended March 31, Climate Solutions 2023 2022 2023 2022 Operating income $ 34.2 $ 32.0 $ 124.1 $ 73.4 Depreciation and amortization expense 5.7 6.1 21.7 23.6 Restructuring e
Slide 17: Free cash flow and net debt
NON-GAAP RECONCILIATIONS Modine Manufacturing Company Free cash flow (unaudited) (In millions) Three months ended March 31, Twelve months ended March 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 39.6 $ 4.1 $ 107.5 $ 11.5 Expenditures for property, plant and equipment (15.5) (9
Slide 18: Net sales - constant currency
NON-GAAP RECONCILIATIONS Net sales - constant currency (unaudited) (In millions) Three months ended March 31, 2023 2022 Effect of Exchange Rate Net Sales - Net Sales Changes Constant Currency Net Sales Climate Solutions $ 263.0 $ 8.3 $ 271.3 $ 259.5 Performance Technologies 364.1 9.8 373.9 322.5 Seg
Slide 19: Fiscal 2024 guidance adjusted EBITDA basis
NON-GAAP RECONCILIATIONS The Company’s fiscal 2024 guidance includes adjusted EBITDA, which is a non-GAAP financial measure. The full-year fiscal 2024 guidance for adjusted EBITDA is based upon the Company’s estimates for interest expense of approximately $23 to $25 million, a provision for income t
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