4 th Quarter 2018 Earnings Conference Call February 7, 2019
Forward-looking statements Non-GAAP financial measures Certain ratios related to our Revolving Credit Facility of Earnings During this presentation, we make certain forward-looking before Interest, Income Taxes, Depreciation and Amortization statements concerning plans and expectations for Carlisle (“EBITDA”), Free Cash Flow, Net Debt, Net Debt to EBITDA Companies Incorporated. We caution you that actual events ratio, and Net Debt to Capital Ratio are not measures of liquidity or results may differ materially from our plans and or financial condition under US GAAP. Our Revolving Credit expectations. See our Form 10-Q for third quarter 2018 filed Facility allows us to exclude non-cash impairment charges in the with the Securities and Exchange Committee, these slides computation of EBITDA. See slide 16 and the appendix to this and the remarks in the conference call and webcast, the presentation for a reconciliation of these measures to the most fourth quarter and full year 2018 financial results 8-K and directly comparable GAAP measures. Throughout this release, and our Form 10-K to be filed for 2018 for risks and presentation each non-GAAP measure is denoted with an *. uncertainties which could cause actual results to differ materially from current expectations. 4th Quarter 2017 Earnings Call 2
Executing on Vision 2025 Plan • Exceeded organic revenue growth target of 5% for Q4 and FY • Demonstrated sustained price leadership, driving over 20% increase in operating income • Realized FY COS savings and benefits of 1.6%, in line with our targeted 1-2% of annual sales • Announced the acquisition of Petersen Aluminum Corporation, which closed Jan 11, 2019, and completed the sale of Carlisle FoodService Products in Mar 20, 2018 • Returned approximately $550M to shareholders through share repurchases and dividends YTD ◦ $459.8M cash repurchases of shares ◦ $93.5M of dividends 4th Quarter 2017 Earnings Call 3
2018 Q4 Highlights Record Q4 revenue, up 8.8% Financial Summary • 5.3% organic revenue growth Q4 '18 Q4 '17 Δ (in millions, except per share amounts) ◦ Strong organic growth at CIT and CFT $1,077.3 $990.5 +8.8% Revenues ◦ Solid price realization at CCM, CBF, CFT $114.6 $93.4 +22.7% Operating income • 4.3% acquisition growth Income from continuing operations, $89.1 $108.9 -18.2% net of tax Diluted EPS from continuing • Unfavorable FX and adoption of ASC 606 $1.49 $1.73 -13.9% operations revenue recognition standard each had a Items affecting comparability $0.09 $(0.65) -113.8% negative 0.4% impact Operating income increased 22.7% Solid operating margin improvement at • Higher volume, price realization, and savings CIT and CFT from COS 23rd consecutive quarter of year-over- • Partially offset by raw material, freight and labor-related costs and accelerated year sales growth restructuring costs at CBF 4th Quarter 2017 Earnings Call 4
2018 Q4 Revenue Bridge +4.3% -0.4% $1,077.3 Organic Revenue by Segment +5.3% -0.4% Construction Materials +2.8% Interconnect Technologies +12.7% Fluid Technologies +5.8% Brake & Friction +4.9% $990.5 Q4 '17 Organic Revenue Acquisitions FX Q4 '18 Recognition (in millions) 4th Quarter 2017 Earnings Call 5
2018 Q4 Operating Margin Bridge -0.5% +1.3% -1.7% +2.3% -0.2% 10.6% 9.4% Q4 '17 Price/Volume COS Acquisitions Raw Materials/ Restructuring/ Q4 '18 Other Operating Rationalization Costs Costs 4th Quarter 2017 Earnings Call 6
2018 Q4 EPS Bridge +$0.14 -$0.25 +$0.21 -$0.51 +$0.10 $1.73 $1.49 +$0.07 Q4 '17 Volume Price COS Raw Material, Tax Items Share Q4 '18 Freight & Labor Repurchase Related Costs 4th Quarter 2017 Earnings Call 7
Carlisle Construction Materials Price / Three Months Ended December 31, Acquisition Exchange Volume Effect Rate Effect 2018 2017 Change $ Change % Effect (in millions) $ 676.3 $ 618.7 $ 57.6 9.3% 6.6% 2.8% (0.1)% Revenues $ 97.3 $ 87.7 $ 9.6 10.9% Operating income 14.4% 14.2% +20bps Operating margin percentage $ 0.5 $ 5.8 Items affecting comparability Q4 Notable Commercial Items: • ◦ Strong demand in North American non-residential construction markets ◦ $15.9M of price realization through excellent price discipline ◦ 40% growth in new product sales ◦ Announced acquisition of Petersen Aluminum Corporation • Operating Income: ◦ Driven by price, COS savings and lower items affecting comparability ◦ Partially offset by rising raw material, freight and labor related costs ◦ Met year one deal model Accella synergies of $10M 4th Quarter 2017 Earnings Call 8
Carlisle Interconnect Technologies Three months ended December 31, Price / Acquisition Exchange Volume Effect Rate Effect 2018 2017 Change $ Change % Effect (in millions) $ $ $ 11.1% 0.7% 10.6% (0.2)% 231.6 208.5 23.1 Revenues $ $ $ 52.1% 33.3 21.9 11.4 Operating income 14.4% 10.5% +390bps Operating margin percentage $ $ 2.2 3.9 Items affecting comparability • Q4 Notable Commercial Items: ◦ Strong finish to 2018 ◦ Aerospace/higher content per plane driving growth ◦ MedTech and Test & Measurement pipeline still strong ◦ Revenue Recognition of -$4.4M of sales, or -2.1% • Operating Income: ◦ Strong leverage on sales driven by higher volume, lower facility rationalization and restructuring costs, and COS ◦ Offset partially by unfavorable mix and labor-related costs 4th Quarter 2017 Earnings Call 9
Carlisle Fluid Technologies Three Months Ended December 31, Price / Acquisition Exchange Volume Effect Rate Effect 2018 2017 Change $ Change % Effect (in millions) $ $ $ 4.3% — % 5.8% (1.5)% 82.4 79.0 3.4 Revenues $ $ $ 224.3% 12.0 3.7 8.3 Operating income 14.6% 4.7% +990bps Operating margin percentage $ $ 0.4 3.5 Items affecting comparability • Q4 Notable Commercial Items: ◦ Strength in General Industrial market ◦ Powder sales up over 20% ◦ Solid demand in U.S. and Europe ◦ Pricing gains of 1.5% • Operating Income: ◦ Excellent operating income performance ◦ Executing on discipline around cost controls, vertical integration and COS initiatives 4th Quarter 2017 Earnings Call 10
Carlisle Brake & Friction Three Months Ended December 31, Price / Acquisition Exchange Volume Effect Rate Effect 2018 2017 Change $ Change % Effect (in millions) $ $ $ 3.2 % — % 4.9% (1.7)% 87.0 84.3 2.7 Revenues $ (7.1) $ (1.2) $ (5.9) (491.7)% Operating income (8.2)% (1.4)% -680bps Operating margin percentage $ $ 9.1 2.1 Items affecting comparability • Q4 Notable Commercial Items: ◦ Construction, Ag, Mining markets moderated but stable ◦ Price recovery of 4.0% offset raw material headwinds ◦ Sales pipeline for carbon products growing • Operating Income: ◦ Accelerated footprint consolidation drove operating loss as expected ◦ Footprint consolidation largely complete ◦ Price and COS positive drivers 4th Quarter 2017 Earnings Call 11
Focused on Capital Structure Optimization • Cash on hand of $803.6M as of 12/31/18 Debt Maturity Schedule • $1B available under revolver • $93.5M capital returned to shareholders Senior Note FY18 in quarterly dividends $600M 3.75% • Utilized $459.8M of cash to repurchase Senior Senior shares FY18 Note Note $400M ◦ 2.7M shares remaining under authorization as $350M Senior 3.5% of 12/31/18 Note 3.75% $250M • Net debt to cap ratio of 23%* 5.125% • Net debt to EBITDA of 1.1x* 2020 2022 2024 2027 • EBITDA to interest of 11.2x* 4th Quarter 2017 Earnings Call 12
Cash Flow $450 $350 (in millions) $250 $150 $50 -$50 -$150 Q4 '17 FY '17 Q4 '18 FY '18 Operating Cash Flow Capital Expenditures Free Cash Flow * Q4 '17 FY '17 Q4 '18 FY '18 Operating Cash Flow $159.1 $458.7 $236.6 $339.2 Capital Expenditures $(54.1) $(159.9) $(24.6) $(120.7) Free Cash Flow * $105.0 $298.8 $212.0 $218.5 4th Quarter 2017 Earnings Call 13
2019 Outlook FY 2019 Restructuring, facility FY2019 Corporate Expense ~$75-$80M rationalization acquisition/ Revenue D&A ~$200M divestiture related items CapEx ~$110-$125M FCF Conversion ~100% Growth y/y 1Q19 FY19 Net Interest Expense ~$55-60M HSD/LDD ~$5-7 ~$5-7 Tax Rate ~25% CCM MSD ~$5-6 ~$14-16 CIT MSD ~$0-1 ~$1-3 CFT LSD ~$0-1 ~$1-2 CBF ~$0-1 ~$1-2 Corporate HSD ~$10-15 ~$23-27 Total CSL 4th Quarter 2017 Earnings Call 14
Appendix 4th Quarter 2017 Earnings Call 15
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