First Quarter 2025 Presentation
Q1 FY25 EARNINGS
Continued Softness in Industrial Macro Environment
Latest Manufacturing PMI (Including Flash)
Source:
Industrial Production (
2.0%
|
1.5% |
1.4% |
||||||||||||||||||||||||
|
1.2% |
|||||||||||||||||||||||||
|
1.0% |
|||||||||||||||||||||||||
|
0.4% |
0.3% |
||||||||||||||||||||||||
|
0.5% |
|||||||||||||||||||||||||
|
0.2% |
|||||||||||||||||||||||||
|
0.0% |
|||||||||||||||||||||||||
|
0.0% |
|||||||||||||||||||||||||
|
-0.5% |
-0.2% |
||||||||||||||||||||||||
|
-0.4% |
-0.6% |
-0.4% |
-0.4% |
-0.5% |
-0.6% |
||||||||||||||||||||
|
-0.5% |
|||||||||||||||||||||||||
|
-1.0% |
-0.7% |
-0.7% |
-0.6% |
||||||||||||||||||||||
|
-0.8% |
-0.9% |
||||||||||||||||||||||||
|
-1.0% |
|||||||||||||||||||||||||
|
-1.5% - |
1.3% |
-1.3% |
-1.7% |
||||||||||||||||||||||
|
-2.0% |
-1.8% |
||||||||||||||||||||||||
|
Dec-22 |
Jun-23 |
Jul-23 |
Oct-23 |
Nov-23 |
Dec-23 |
Apr-24 |
Jun-24 |
Jul-24 |
Oct-24 |
Nov-24 |
|||||||||||||||
|
Jan-23 |
Feb-23 |
Mar-23 |
Apr-23 |
May-23 |
Aug-23 |
Sep-23 |
Jan-24 |
Feb-24 |
Mar-24 |
May-24 |
Aug-24 |
Sep-24 |
Source:
3
Q1 Fiscal 2025 Revenue
|
($ in millions) |
||||
|
|
|
Organic |
||
|
1Q24 |
1Q25 |
Change |
Growth* |
|
|
Industrial Tools & Service (IT&S) |
|
|
2.3% |
-1.0% |
|
IT&S Product |
|
|
1.1% |
-3.0% |
|
IT&S Service |
|
|
6.0% |
+5.6% |
|
Other (Cortland Biomedical) |
|
|
2.6% |
+2.6% |
|
|
|
|
2.3% |
-0.8% |
*Organic net sales is a non-GAAP measure and excludes the impact of foreign exchange rates, acquisitions, and dispositions identified in the accompanying reconciliations to GAAP measures.
4
Q1 Fiscal 2025 Profitability
($ in millions, except EPS)
|
YoY |
|||||
|
1Q24 |
1Q25 |
Change |
|||
|
Gross Margin |
52.3% |
51.4% |
-90bps |
||
|
Adjusted SG&A |
* |
29.0% |
29.0% |
flat |
|
|
Adjusted EBITDA |
* |
|
|
-2% |
|
|
Adjusted EBITDA Margin |
24.6% |
23.6% |
-100 bps |
||
|
* |
|
|
3% |
||
|
Adjusted EPS |
*Adjusted SG&A, adjusted EBITDA, and adjusted EPS are non-GAAP measures and exclude restructuring and other charges identified in the accompanying reconciliations to GAAP measures.
5
Strong Liquidity &
Balance Sheet
($ in millions)
|
Cash & Equivalents |
|
|
Revolver Capacity (Undrawn) |
|
|
Total Liquidity |
|
|
Total Debt |
|
|
Net Debt/Adj. EBITDA* |
0.5x |
Asset-Light Model Enables Strong FCF**
Allocation Strategy
|
Invest in Ourselves |
Disciplined M&A |
Investments in Digital, Product
Innovation, R&D, Operational
Excellence Improvements
$69
$54
$42
|
|
|
|
|
|
FY21 |
FY22 |
FY23 |
FY24 |
|
Maintain Our Strong |
Opportunistically |
|
Balance Sheet |
Returning Capital |
|
Target Leverage of |
to Shareholders |
|
1.5x - 2.5x |
~2.6M shares remaining on |
|
current 10M share |
|
|
repurchase authorization |
|
*As of |
6 |
|
|
**The Company calculates free cash flow as cash from operations, less capital expenditures. |
||
IT&S Organic Growth by Region*
|
Region |
1Q24 |
1Q25 |
FY24 IT&S
Regional Sales
APAC
13%
46%
EMEA
41%
|
*Organic revenue growth excludes the impact of foreign exchange rates, acquisitions, and dispositions. |
7 |
PEP in Action: Continued Margin Expansion
|
Strategic Efforts |
Focus Areas |
|
Accelerating Growth |
Execution and monitoring of growth strategy |
|
Optimizing Operations |
Continuous improvement projects in |
|
manufacturing and procurement |
|
|
Minimizing Inefficiencies |
Continuing to streamline SG&A through greater |
|
efficiency and productivity |
|
|
Standardizing Processes |
Driving further global standardization and |
|
simplification leveraging 80/20 framework |
|
|
Solving Challenges |
Structured problem-solving approach to determine |
|
true root-cause and implement countermeasures |
|
8
Appendix
9
FY25 Guidance
Key Assumptions:
- Targeting to outperform industry and gain market share
- No broad-based global recession
|
Depreciation & Amortization |
|
|
Interest Expense |
|
|
Adjusted Tax Rate |
~21 - 26% |
|
Cash Taxes |
|
|
Capex |
|
|
Key FX Rates |
|
N E T S A L E S
~0-2% Organic Growth
~3-6% Total Growth
F R E E C A S H F L O W
*Adjusted for one-time merger and acquisition costs.
10
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