Q EARNINGS CALL OCTOBER 25, 2018

Transcription

1 Q EARNINGS CALL OCTOBER 25, 2018

2 IMPORTANT INFORMATION Forward Looking Statements These slides contain (and the accompanying oral discussion will contain) forward looking statements. All statements other than statements of historical fact or relating to present facts or current conditions are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company s customers and suppliers, competitor responses to the Company s products and services, the overall market acceptance of such products and services, increases in the Company s cost structure, the rate of economic development and growth in emerging markets, the Company s exposure to fluctuations in currencies, the Company s ability to successfully implement its strategic initiatives to increase cost savings and improve operating margins, the integration of acquisitions and other factors disclosed in the Company s periodic reports. Such risks and other factors that may impact management s beliefs and assumptions are more particularly described in the Company s Form 10-K filed with the Securities and Exchange Commission (the SEC ) on February 28, 2018 under the caption Risk Factors. Consequently such forward-looking statements should be regarded as the Company s current plans, estimates and beliefs. The forward looking statements in these slides are made only as of the date hereof. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except to the extent required by law. All of the Company s forward-looking statements should be considered in light of these factors. Non-GAAP Financial Measures These slides contain financial measures which have not been calculated in accordance with generally accepted accounting principles in the United States ( U.S. GAAP ), including Adjusted EBITDA, Adjusted Net Income and Free Cash Flow. These non-gaap financial measures should be considered only as supplemental to, and not as an alternative to, financial measures prepared in accordance with U.S. GAAP. Please refer to the appendix of this presentation for a reconciliation of Adjusted EBITDA, Adjusted Net Income and Free Cash Flow to the most directly comparable U.S. GAAP financial measures. We believe that the inclusion of Adjusted EBITDA is useful to provide additional information to investors about certain material non-cash items, as well as items considered to be one-time or non-recurring to the operations of the business. We believe the presentation of Adjusted Net Income enhances our investors overall understanding of the financial performance and cash flow of our business. We believe the presentation of Free Cash Flow is useful to investors because it measures the operating cash flow of the Company, excluding the capital that is spent to continue and improve business operations, such as investment in the Company's existing business. Our use of the terms Adjusted EBITDA, Adjusted Net Income and Free Cash Flow may vary from that of others in our industry. This presentation should be read in conjunction with Management s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements presented within our Form 10- K filed with the SEC on February 28,

3 Q FINANCIAL RESULTS Sales of $308.3 million decreased 2% versus prior year; flat on a constant currency basis Operating earnings (GAAP) increased 11% to $33.2 million; Adjusted EBITDA (non-gaap) decreased 1% to $56.6 million Diluted EPS (GAAP) increased to $0.21, up from $0.17 in Q3 2017; Diluted adjusted EPS (non-gaap) decreased 2% to $0.43 Free Cash Flow of $24.2 million versus $(0.3) million prior year Orders decreased 16% versus the prior year; decreased 15% on a constant currency basis Total Backlog of $263 million versus $294 million prior year Q3 Financial Highlights Sales (1) EBITDA Net Income EPS Free Cash Flow $314.7 $285.4 flat $313.7 $310.4 $308.3 (1%) 18.2% 18.4% $57.3 $56.6 (1%) (2%) $31.0 $30.7 $0.44 $0.43 $(0.3) +25M $24.2 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q (1) Q sales of $313.7 million are on a constant currency basis. Note: See Non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-gaap measure to its most directly comparable US GAAP measure.

4 YTD 2018 FINANCIAL RESULTS Sales of $946.8 million increased +4% versus prior year; +2% on a constant currency basis Operating earnings (GAAP) increased +16% to $91.5 million; Adjusted EBITDA (non-gaap) increased +5% to $174.8 million Diluted EPS (GAAP) increased to $0.50, up from $(0.03); Diluted adjusted EPS (non-gaap) increased +7% to $1.30 Free Cash Flow of $38.9 million versus $(12.3) million prior year Orders decreased 5% versus the prior year; decreased 7% on a constant currency basis Voluntary debt payments totaling $75 million through Q Financial Highlights Sales (1) EBITDA Net Income EPS Free Cash Flow $285.4 $ % $946.8 $310.4 $ % $ % 18.5% $174.8 $ % $93.3 $ % $1.30 $(12.3) +51M $8.3 $38.9 YTD 17 YTD 18 YTD 17 YTD 18 YTD 17 YTD 18 YTD 17 YTD 18 YTD 17 YTD 18 4 (1) YTD 2018 sales of $929.1 million are on a constant currency basis. Note: See Non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-gaap measure to its most directly comparable US GAAP measure.

5 ORDERS Q3 18 Results YTD Results Orders (Fx) Orders (Fx) $322.3 $273.4 $269.6 (15%) (16%) $983.6 $937.0 $919.2 (5%) (7%) Q3'17 Q3'18 Q3'17 Q3'18 Commentary: Order weakness in every region with the exception of North America in Q3 Backlog down 6% in constant currency versus year end down 8% cc versus prior year Medical grew double digits offset by softness in most other end markets Commentary: Order growth in India offset by declines in all other regions Tough prior year comparable in MDCS and APPT equipment Medical and Custom Molders up double digits, offset by declines in all other end markets 5

6 CONSOLIDATED RESULTS Q3 '18 Results YTD Results Sales ($M) (Fx Adj) $314.7 $313.7 $308.3 flat (2%) Sales ($M) (Fx Adj) $909.3 $946.8 $ % +2% $57.3 $56.6 (1%) $166.9 $ % EBITDA EBITDA 6 QTD '17 QTD '18 YTD '17 YTD '18 EBITDA% +20 bps 18.2% 18.4% EBITDA% 18.4% 18.5% Q3 Sales mix: Commentary YTD Sales mix: Organic Acquisition Fx As-reported - - (2%) (2%) Note: Sales growth rate commentary is on a constant currency basis. Year-to-date sales growth driven by double-digit growth in China and India Strong YTD consumables performance Q3 sales impacted by single-digit decline in North America Electronics and Medical end markets down single digits for the quarter; however, remain up double digits for the year Organic Acquisition Fx As-reported +2% - +2% +4% +10 bps

7 MELT DELIVERY & CONTROL SYSTEMS Q3 '18 Results YTD Results Sales ($M) (Fx Adj) $108.1 $110.3 $ % +1% Sales ($M) (Fx Adj) $349.4 $320.3 $ % +5% $33.1 $33.1 flat $106.0 $ % EBITDA EBITDA EBITDA% Q3'17 Q3'18 YTD '17 YTD ' % 30.4% (20) bps EBITDA% 33.1% 32.0% Commentary Q3 and year-to-date growth driven primarily by China and Europe Margin compression driven by mold base manufacturing consolidation and unfavorable mix of high complexity hot runner projects; YTD margins impacted by NPE costs in Q2 (110) bps 7 Q3 and year-to-date double-digit growth in the Electronics and Medical end markets, partially offset by single-digit decline in Automotive

8 FLUID TECHNOLOGIES Q3 '18 Results YTD Results Sales ($M) (Fx Adj) $30.7 $33.2 $ % +6% Sales ($M) (Fx Adj) $98.2 $90.2 $ % +5% EBITDA $6.7 $ % EBITDA $19.5 $ % EBITDA% Q3'17 Q3'18 YTD '17 YTD ' % 22.7% +90 bps EBITDA% 21.6% 22.5% Commentary Solid growth continues in all major geographies (North America, Europe and China) Q3 and year to date margin expansion driven by increased volumes +90 bps 8 Automotive, Industrial and Electronics end markets all posted strong Q3 and year to date growth versus the prior year

9 ADVANCED PLASTICS PROCESSING TECHNOLOGIES Q2' Q3 '18 17 Results YTD Results Sales ($M) (Fx Adj) $175.9 $170.2 $166.9 (3%) (5%) Sales ($M) (Fx Adj) $498.8 $499.2 $496.9 flat flat EBITDA $23.1 $22.6 (2%) EBITDA $60.5 $ % Q3'17 Q3'18 EBITDA% 13.1% 13.5% +40 bps YTD '17 YTD '18 EBITDA% 12.1% 12.4% +30 bps 9 Commentary Q3 sales impacted by declines in North America and Europe Double-digit year-to-date growth in India, offset by a decline in North America and Europe Margin expansion driven by favorable aftermarket mix and certain discretionary cost reductions

10 FREE CASH FLOW Dollars in millions Q3 17 Q3 18 Adjusted EBITDA $57.3 $56.6 Less (Non-discretionary items): Maintenance/Growth Capex (net) (5.3) (9.2) YTD 17 YTD 18 $166.9 $174.8 (23.8) (16.6) +/- Net Working Capital (16.2) (5.0) (50.6) (36.6) All Other (1.3) (5.7) Interest (10.3) (10.0) (45.0) (30.4) Cash Taxes (8.1) (8.8) (21.4) (22.0) FCF Before Restructuring $16.1 % of EBITDA 28.1% $ % $ % $ % Less (Discretionary Restructuring Expenditures): Capex (net of disposals) (3.8) Severance payments (2.1) One time costs (10.5) - (2.7) (3.0) (6.8) (8.9) (30.3) - (13.4) (11.2) 10 Free Cash Flow (1)(2) ($0.3) Credit Metrics: Net Debt / EBITDA Interest Coverage (1) YTD 2017 excludes cash from financing activities including $27.6 million of refinancing costs (2) YTD 2017 includes proceeds of $10.9 from the sale leaseback transaction of our Canadian property $ x 3.1x 4.4x 5.8x $(12.3) $38.9

11 2018 GUIDANCE Annual Guidance Sales Growth Fx tailwind Adjusted EBITDA % (full year) Free Cash Flow Restructuring Costs (included in FCF) Net Debt Leverage Supplemental Guidance Information: Capex Interest Expense (P&L) Cash Interest (Cash Flow) Non-GAAP Tax Provision (P&L) Cash Taxes (Cash Flow) Diluted Shares Outstanding Changes to previous guidance 2018 ~2% ~1% 18.2%-18.4% $80M - $90M ~$55M Under 3.0x ~$45M ~$45M ~$45M ~$38M ~$34M ~72.5 million shares Previously 2.0% to 4.0% 18.5%-19.1% 11

12 FAKUMA & NEW PRODUCTS Fakuma trade show - Friedrichshafen, Germany October imflux (subsidiary of P&G) exclusive partnership agreement announced Debut of imflux adaptive control technology integrated on Milacron injection molding machines EU launch of Quantum T injection molding machine Global launch of Mold-Masters ThinPAK hot runner (thinwall packaging) EU launch of Mold-Masters F3000 & F8000 automotive hot runner line up European launch of Melt-CUBE EVO medical hot runner Fusion G2 F3000 Quantum T ThinPAK Melt-CUBE 12

13 Q WRAP UP Margin progression and Free Cash Flow generation continues Q3 margins up 20 basis points, YTD up 10 basis points Over $50M in free cash flow improvement versus the prior year on track to meet annual goal Consumables was 65% of total sales (versus 64% in 2017) European restructuring wind down on track last machine to ship Q4 On track for $100M of voluntary debt payments in 2018 $25M payment made on 2/28/18, 4/30/18 and 7/31/18 $25M payment on track for Q4 13

14 APPENDIX 14

15 ADJ. EBITDA & ADJ. NET INCOME RECONCILIATIONS 15

16 ADJ. EBITDA & ADJ. NET INCOME RECONCILIATIONS 16

17 OPERATING EARNINGS TO ADJ. EBITDA RECONCILIATION 17

18 OPERATING EARNINGS TO ADJ. EBITDA RECONCILIATION 18

19 ADJ. DILUTED EPS & FREE CASH FLOW RECONCILIATIONS 19