ENPRO INDUSTRIES INVESTOR PRESENTATION Q2 2020
FORWARD-LOOKING STATEMENTS Statements made in the course of this presentation that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: impacts from the COVID-19 pandemic and governmental responses to limit the further spread of COVID- 19, including impacts on the company’ s operations, and the operations and businesses of its customers and vendors, including whether the company’s operations and those of its custo mers and vendors will continue to be treated as “essential” operations under government orders restricting business activities or, even if so treat ed, whether site-specific health and safety concerns might otherwise require certain of the company’s operations to be halted for some period of time; uncerta inty with respect to the duration and severity of these impacts from the COVID-19 pandemic, including impacts on the general economy; other economic conditions in the markets served by EnPro’s businesses, some of which are cyclical and experience periodic downturns; prices and availability o f its raw materials; the impact of fluctuations in relevant foreign currency exchange rates; unanticipated delays or problems in introducing new products; announcements by competitors of new products, services or technological innovations; changes in pricing policies or the pricing policies of competitors; the impact of the acquisition of LeanTeq on its existing customer relationships; and the amount of any payments required to satisfy contingent liabilities related to discontinued operations of its predecessors, including liabilities for certain products, environmental matters, employee benefit obligations and other matters. EnPro’s filings with the Securities and Exchange Commission, including its most recent Form 10 -K, describe these and other risks and uncertainties in more detail. EnPro does not undertake to update any forward-looking statements made in the course of this presentation to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based. We own a number of direct and indirect subsidiaries and, from time to time, we may refer collectively to EnPro and one or more of our subsidiaries as “we” or to the businesses, assets, debts or affairs of EnPro or a subsidiary as “ours.” These and similar references are for convenience only and should not be construed to change the fact that EnPro and each subsidiary is an independent entity with separate management, operations, obligations and affairs. This presentation also contains certain non-GAAP financial measures (*) as defined by the Securities and Exchange Commission. A reconciliation of non-GAAP measures to the most directly comparable GAAP equivalents is included as an appendix to this presentation. 2
BUSINESS OVERVIEW
WHO IS ENPRO? As a leading provider of highly-engineered solutions for mission critical applications… …we apply our deep expertise in applications engineering and materials science to develop solutions for our customers' most complex challenges 4
ATTRACTIVE PORTFOLIO OF BUSINESSES COMPANY OVERVIEW (NYSE: NPO) 2019 REVENUE CONTRIBUTION Headquarters Charlotte, NC SALES BY SEGMENT SALES BY CHANNEL Manufacturing Facilities 27 primary 25% SEALING PRODUCTS AFTERMARKET Global Employees 5,000+ 42% ENGINEERED PRODUCTS OE Customers 50,000+ 58% 75% FINANCIAL OVERVIEW Market-Cap 1 $1.1B SALES BY GEOGRAPHY LTM Revenue 2 $1.2B 10%3% NORTH AMERICA LTM Adj. EBITDA (Margin) 2,3 $176M (14.8%) EUROPE 25% 2019 Aftermarket Rev. 58% 62% ASIA Dividend Yield 1 1.9% ROW Leading Provider of Highly-Engineered Solutions for Mission Critical Applications with #1-3 Market Positions 1 As of 6/8/20; 2 LTM as of 3/31/20; 3 Refer to appendix for Non-GAAP reconciliation; Note: Excludes Fairbanks Morse, w hich is now reported as a discontinued operation 5
ENPRO’S SEGMENTS ENGINEERED PRODUCTS SEALING PRODUCTS $903M $287M LTM 3/31/20 REVENUE LTM 3/31/20 REVENUE 19% 15% LTM 3/31/20 ADJ. EBITDA MARGIN LTM 3/31/20 ADJ. EBITDA MARGIN REVENUE COMPOSITION (2019) REVENUE COMPOSITION (2019) 38% STEMCO 65% GGB 33% GARLOCK 35% CPI 29% TECHNETICS KEY PRODUCT OFFERINGS: KEY PRODUCT OFFERINGS: • • Semiconductor Cleaning and Restoration Metallic Plain Bearings • Services Composite Plain Bearings • Pharmaceutical Hygienic Components • Reciprocating Compressor Products: • Hydrodynamic Seals • Monitoring Systems • High-Performance Metal Seals • Sealing Components • Brush Seals • Valves • Felt Metal & Acoustic Material • Lubrication Systems • Edge-Welded Bellows • Wheel End Seals • Gaskets & Packing 6
LEVERAGING OUR STRENGTHS FOR MISSION CRITICAL PRODUCTS STRENGTHS PRODUCTS • Semiconductor fab systems Leadership in high-value niche markets with established, • Aircraft engine seals & landing gear premium brands bearings • Petroleum/chemical refinery process SEALING sealing PRODUCTS Supporting mission-critical applications in highly demanding • Class 8 truck wheel ends and extreme operating environments • Isolation seals for pipelines • Nuclear reactor pressure vessel seals Low-cost relative to applications served; value-based pricing leverage • Polymer-metal plain bearings for automotive applications Applying manufacturing know-how and trade secrets; • Composite plain bearings for fluid power significant application and technical expertise applications ENGINEERED • Wear parts for large reciprocating PRODUCTS compressors Embedded with our customers; substantial switching costs • Compressor lubrication systems and barriers to entry • Emission reduction products 7
HIGHLY-ENGINEERED SOLUTIONS FOR OUR CUSTOMERS' MOST COMPLEX CHALLENGES SEMICONDUCTOR PHARMACEUTICAL Market • • Increased demand for semiconductor logic Increased pharmaceutical demand due to and memory: greater life expectancy • • Artificial Intelligence Emerging middle-class demand for safer Macroeconomic • foods and medicines Automation and robotics Growth Drivers • Product safety regulations • Autonomous vehicles • 5G • • Advanced cleaning and restoration services Sanitary components, including gaskets, tubing and single-use products • Services increase process yield and reduce • maintenance cost Critical to ensuring the safety of products EnPro’s Focus • • As node sizes continue to get smaller, Demand continues to increase due to process becomes more critical as process greater regulation and overall demand yields are impacted more severely by growth for pharmaceuticals foreign particles 8
STRONG AFTERMARKET MIX ENABLED BY LONG-STANDING RELATIONSHIPS WITH DIVERSIFIED BLUE-CHIP CUSTOMER BASE 58% Aftermarket / 42% OEM 2019 Sales 9
ENPRO MISSION AND VISION HIGHLY ENGINEERED PRODUCTS AND SERVICES THAT PROVIDE DIFFERENTIATED PERFORMANCE DERIVED FROM MATERIALS SCIENCE EXPERTISE, MANUFACTURING KNOW- HOW, AND TRADE SECRETS WE ARE A PURPOSE-DRIVEN COMPANY WITH STRONG VALUES, A FORWARD-THINKING OPERATING DUAL-BOTTOM LINE CULTURE ENABLING HUMAN PHILOSOPHY, AND A WAY OF DEVELOPMENT THROUGH THE WAY WE WORK WORKING THAT DRIVES BEST-IN- CLASS VALUE CREATION OVER THE LONG TERM. COMMITMENT TO SOCIALLY AND ENVIRONMENTALLY RESPONSIBLE PRACTICES 10
UPDATE ON CURRENT BUSINESS ENVIRONMENT
EARLY ACTIONS TAKEN TO PROTECT OUR PEOPLE, BUSINESS, AND COMMUNITY Protecting Our People Protecting our Business Protecting our Community • • • Suspended all non-essential travel Aggressive cost management Distributed thousands medical grade initiatives (N95) masks to doctors and hospitals • Implemented flexible work options, in the United States and Europe where feasible • Discretionary spending reductions • Expanded IT infrastructure to enable • Connected institutions with EnPro working remotely and virtual meetings • Capital expenditure reductions suppliers to source difficult to find • Restricted visitors to EnPro facilities materials like infrared thermometers • Headcount reduction plans, as needed • Trained employees in enhanced and masks cleaning and disinfecting protocols • Working capital management to • Enabled employees to access urgent • Provided supplemental PPE at ensure efficient accounts receivable medical supplies for themselves and facilities processing with our customers their families’ immediate need within • Implemented safe operating COVID-19 afflicted areas procedures such as temperature • Temporarily suspended buybacks scanning, use of masks, and social distancing • Created a dedicated internal website for updates on the actions we are taking, status of all of facilities, and FAQ’s We Have Taken Numerous Actions to Maintain our Business Operations and Ensure the Safety of Our Employees 12
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