ANDY ROSE – PRESIDENT JOE HAYEK – CFO 2020 JEFFERIES INDUSTRIALS CONFERENCE AUGUST 5, 2020
S A F E H A R B O R S T A T E M E N T Worthington Industries wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act") . Statements by the Company which are not historical information constitute "forward looking statements" within the meaning of the Act. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. Factors that could cause actual results to differ materially include risks, uncertainties and impacts described from time to time in the Company's filings with the Securities and Exchange Commission, including those related to COVID-19 and the various actions taken in connection therewith, which could also heighten other risks. 2
COVID-19 PANDEMIC RESPONSE PLAN Proactive measures taken to ensure a safe workplace, manage operational costs and maintain financial flexibility Health & Safety • Established cross-functional COVID-19 taskforce and implemented governance structure involving regular updates at business unit, corporate, and Board levels • Implemented best practices to keep workforce safe including additional cleaning and sanitizing, work from home, and physical distancing for employees needing to be onsite Operational cost management • Hiring freeze for non-critical roles • Rightsizing the workforce to match the current demand environment, mostly through furloughs but also with some permanent reductions • Reducing discretionary spend including travel Financial flexibility • Maintain a strong balance sheet with $650M of liquidity as of May 31, 2020* and no funded debt maturities until 2024 • Deferral of non-essential and non-growth oriented capital expenditures • Positioned to emerge from pandemic well capitalized and as a stronger company 3 * Liquidity includes $500M in undrawn revolving credit facilities and $147M of cash as of 05/31/20
V I S I O N T O B E T H E TRANSFORMATIVE PARTNER F O R O U R C U S T O M E R S , A POSITIVE FORCE I N O U R C O M M U N I T I E S A N D E A R N EXCEPTIONAL RETURNS 4
NET SALES OF $3.1 BILLION FISCAL YEAR 2020 4,500 56 7,500 6 5
MANUFACTURED 83MM CYLINDERS & • ACCESSORIES • (FY20) SOLD IN 90+ COUNTRIES • • • • • • LARGEST PURCHASER OF FLAT ROLL STEEL BEHIND AUTOMAKERS 6
$3.1B TRAILING 12 MONTH NET SALES OPERATING/EQUITY INCOME BY SEGMENT TTM * NET SALES BY END-MARKETS $207.0 MILLION 39% 16% 18% 4% 3% 5% 12% 22% 10% 39% 32% Automotive Construction Steel Cylinders WAVE / Other / JVs Industrial Consumer Products Agriculture Heavy Truck Oil & Gas Equipment Other * Excludes restructuring and impairment and $23.1M gain related to the sale of WAVE’s foreign assets 7
STEEL PROCESSING PROFILE A U T O SALES BY END MARKET TTM 5/31/20 $1.9B Wholly-Owned A G R I C U L T U R E Consolidated JVs Unconsolidated JVs Automotive 53% 27 FACILITIES in North America (8 wholly owned / 19 JV Owned) C O R E P R O D U C T S Other C O N S T R U C T I O N 15% Carbon flat rolled steel processing - Broad range of metal products in sheet, coil and strip configurations, as well as a number of processing capabilities from specialty coatings Construction 19% and annealing, to pickling, slitting and blanking. Heavy Truck Tailor welded products – Offering tailored products for 6% Agriculture lightweight and safety critical components through 55% 7% owned JV (TWB). Capability to process multiple types of H E A V Y T R U C K materials offering tailored blanks, tailor welded coils, aluminum tailor welded blanks, and hot formed tailor welded blanks. 8
PRESSURE CYLINDERS PROFILE SALES BY SBU TTM 5/31/20 $1.1B Industrial Products 16 FACILITIES 48% in North America and Europe Oil & Gas Equipment 10% C O R E P R O D U C T S Consumer Products 42% Industrial Products - Broad line of pressure cylinders and cryogenic vessels, tanks and trailers for industrial gas storage and transportation Consumer Products – Market-leading brands with products for jobsite, home and outdoor activities Oil & Equipment - Custom solutions for energy storage, processing and transportation 9
WAVE (50% JV) PROFILE CONTRIBUTION TO WI EQUITY INCOME ($M) $78 $71 $54 $33 6 facilities in North America FY05 FY10 FY15 FY20* * FY20 excludes $23.1M gain related to the sale of WAVE’s foreign assets C O R E P R O D U C T S M A R K E T S Sustainable revenue and EBITDA OVER Produ duct Price growth with creative fabricated $800M architectural metal components, focusing on superior customer value, in dividends paid industry leading manufacturing, and to Worthington in past 10 years Servi vice Ope perati ations talent development resulting in low cost since FY 2011 construction and enterprise efficiencies 1 0
SUCCESSFUL JOINT VENTURES Serving automotive and construction end markets OVER • Successful JV portfolio built with trusted partners who help make a $1.0B business better versus the alternative of going solo • JVs managed to produce regular cash dividends that closely approximate earnings in dividends Business Ownership Created Architectural and acoustical grid received WAVE 50% 1992 ceilings Serviacero Steel processing in Mexico 50% 2007 from JVs in past 10 years since ArtiFlex Automotive tooling and stamping 50% 2011 FY 2011 Metal framing for commercial ClarkDietrich 25% 2011 construction 1 1
GROWTH STRATEGY Working together using technology, analytics and automation enables us to deliver… Successful innovation, transformation, and acquisitions that drive value for customers and earn exceptional returns for our shareholders. All with Our Philosophy at the center. 1 2
COMPLEMENTARY VALUE DRIVERS ARE WELL ESTABLISHED ACQUISITIONS TRANSFORMATION INNOVATION Broad based business system Innovation as a discipline: Focus on the core: focused on: • • New product development Consolidate higher value add markets • Data-driven decision making • • Product design & engineering Build out product offerings with adjacencies • Optimizing value streams and • Voice of customer & market research eliminating waste • Target industries/sectors we know • Incorporating advanced technologies • Discovering new capabilities through • Focus on higher margin / high cash agile teams flow businesses • One system, driven by everyone, not • Strong target evaluation process, due just a central tiger team diligence and integration to achieve synergies 1 3
VALUE DRIVERS IN ACTION: TRANSFORMATION Data driven LEAN events to improve our businesses Example of Transformation project at core steel facility What we did to drive improvements: ✓ Analyzed historical forecasts and shipment data Issue: Sales & operations planning receiving inaccurate information resulting in buying unneeded material and taking line time away from ✓ Standardized processes for demand planning other orders ✓ Controlled process for purchasing new material within facility ✓ Improved collaboration between commercial, supply chain, RM & WIP Days of Inventory (DOI) purchasing & operations functions WHAT WE ACHIEVED: 96% 21 DOI $5M D A Y S On-time delivery Reduction in RM & Working capital WIP from Dec - Aug (4% improvement) freed up PRODUCTIVITY: FINISHED GOODS tons/scheduled hour CYCLE TIME: from 87 to 109 from 9 days to 6 days Pre-Transformation Post-Transformation 1 4
VALUE DRIVERS IN ACTION: INNOVATION Creating innovative solutions to meet the needs of customers and expand into new markets Cannabis Extraction Cylinders • Need for cleaner alternative to traditional steel 100# tank identified • Voice of customer work conducted to understand need and size opportunity • Repurposed existing assets and production line, minimizing capital investment and increasing speed to market • Product team focused on identifying opportunities to develop additional premium products for this rapidly growing market 1 5
VALUE DRIVERS IN ACTION: M&A Pressure Cylinders has experienced meaningful earnings growth over the past 10 years driven by 16 acquisitions CYLINDERS OPERATING INCOME* ($M) CYLINDERS SALES ($M) $81 $1,149 $1,001 $58 $30 $468 2010 2015 2020 2010 2015 2020 *excludes restructuring and non-recurring charges. 1 6
FINANCIAL GOALS • GROW EBITDA & FREE CASH FLOW EVERY YEAR • 10%+ RETURN ON CAPITAL • RAISE MARGINS • REDUCE EARNINGS VOLATILITY • BALANCED CAPITAL ALLOCATION • MODEST LEVERAGE / AMPLE LIQUIDITY (INVESTMENT GRADE) • RIGOROUS CAPITAL DISCIPLINE 1 7
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