Middleby : 1Q 2024 Earnings Call

Q1 Earnings Update

May 8, 2024

MIDDLEBY SEGMENT SUMMARY

Three Industry-Leading Foodservice Platforms

2024 YTD PROFORMA REVENUE BY SEGMENT *

Food Processing

•	120+ industry-leading brands
•	Three highly synergistic foodservice segments

Commercial

64%

17%

• Technology and innovation leader
•	Differentiated go-to-market capabilities
• Proven track record of strategic M&A
•	Long-standing history of profitability and cash flow
•	Positioned to capture rapidly evolving market trends

Residential

19%

2024 YTD PROFORMA REVENUE BY REGION *

	Asia
	6%
United	Europe &
States and	Middle East
Canada	21%
69%
	Latin America
	4%

www.middleby.com	* Revenues adjusted to depict estimated results if ownership of	2
acquired businesses was effective for the entire year.

FIVE-YEAR COMPARATIVE OPERATING PERFORMANCE

SALES (BN)

	$4.0
$2.7
	+45%
2018	LTM

ADJUSTED EPS

	$9.39
$6.35
	+48%
2018	LTM
www.middleby.com

ADJUSTED EBITDA (MM)

	$875
$569
	+54%
2018	LTM

ROLLING 5-YR FREE CASH FLOW (BN)

	$2.1
$1.3
	+62%
2018	Q1 2024

ADJUSTED EBITDA MARGIN

	22.1%
20.9%
2018	LTM

LEVERAGE RATIO

2.8x
	2.4x
Q4 2018	Q1 2024	3

FINANCIAL RESULTS

Q1 2024 Financial Results

(in millions, except percentages)	Q1 '24	Q1 '23	Change
Net Sales	$926.9	$1,007.4	-8.0%
Gross Profit	346.4	378.7	-8.5%
% of Net Sales	37.4%	37.6%
Operating Income	137.1	161.0	-14.8%
Net Earnings	86.6	99.1	-12.6%
Adjusted EBITDA	185.8	210.9	-11.9%
% of Net Sales	20.0%	20.9%
LTM Bank EBITDA	901.3	894.5	0.8%
as defined in credit agreement
Operating Cash Flow	140.9	92.0	53.2%

Results Commentary

• Organic revenue growth by segment:

•	Commercial Foodservice	-4.2%
•	Residential Kitchen	-22.3%
•	Food Processing	-7.7%

• Q1 '24 organic adjusted EBITDA of 20.1%
• Q1 '24 organic adjusted EBITDA by segment:

•	Commercial Foodservice	26.1%
•	Residential Kitchen	6.3%
•	Food Processing	23.8%

www.middleby.com

4

COMMERCIAL FOODSERVICE

Q1 2024 Financial Results

(in millions, except percentages)	Q1 '24	Q1 '23	Change
Net Sales	$590.3	$613.9	-3.8%
Adjusted EBITDA	153.7	160.0	-3.9%
Adjusted EBITDA	26.0%	26.1%
as % of Net Sales
Organic Adjusted EBITDA	26.1%
as % of Net Sales
REVENUE AND GROWTH
U.S. and Canada	$426.5	-5.8%
International	163.8	1.5%

Results Commentary

• Margin remained strong versus prior year despite lower sales volumes; benefiting from manufacturing efficiencies gained through capital investments and strong disciplined cost control
• Order volumes have increased 12% in Q1 '24 over Q4 '23 with further positive trajectory in April
• Middleby earned eight of the prestigious Kitchen Innovation Awards which will proudly be displayed later in May at the National Restaurant Show

www.middleby.com

5

RESIDENTIAL KITCHEN

Q1 2024 Financial Results

(in millions, except percentages)	Q1 '24	Q1 '23	Change
Net Sales	$173.9	$220.0	-21.0%
Adjusted EBITDA	11.2	28.3	-60.4%
Adjusted EBITDA	6.4%	12.9%
as % of Net Sales
Organic Adjusted EBITDA	6.3%
as % of Net Sales
REVENUE AND GROWTH
U.S. and Canada	$107.0	-25.7%
International	66.9	-12.0%

Results Commentary

• Residential brands continue to face headwinds from the disrupted housing market
• Order volumes improved over the course of Q1 '24; April '24 showing the strongest growth over prior year
• KBIS was an overwhelming success, gaining interest with builders, designers and dealers on our latest product innovation in indoor cooking, ventilation, refrigeration and outdoor cooking
• Viking RVL Collection and NOVY were awarded Best of KBIS 2024

www.middleby.com

6

FOOD PROCESSING

Q1 2024 Financial Results

(in millions, except percentages)	Q1 '24	Q1 '23	Change
Net Sales	$162.7	$173.5	-6.2%
Adjusted EBITDA	38.1	41.3	-7.7%
Adjusted EBITDA	23.4%	23.8%
as % of Net Sales
Organic Adjusted EBITDA	23.8%
as % of Net Sales
REVENUE AND GROWTH
U.S. and Canada	$103.0	-11.9%
International	59.7	5.5%

Results Commentary

• Strong margin as compared to prior year despite lower sales volume driven by the timing of delivery of larger projects
• International revenue growth related to bakery products in Europe
• Order volumes have increased in Q1 '24 as compared to prior year
• GBT GmbH Bakery Technology was acquired in Q1 to strengthen our European presence and engineering and manufacturing expertise in high-grade industrial baking and bread lines

www.middleby.com

7

DEBT AND LIQUIDITY

Q1 2024 Leverage Ratio (in millions)

	Cash									$341.0
	Debt									$2,414.7
	Net Debt*									$2,163.1
	LTM EBITDA*									$901.3
	Total Leverage													2.4x
	Covenant Limit													5.5x
		* As defined in the credit agreement
	10-YEAR OPERATING CASH FLOW GROWTH (in 000s)
														$629	$678
						$369	$377	$525
								$423*
	$294	$304										$333
	$250

2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
									LTM

*Proforma Free Cash Flow is $355 million, excluding the termination fee received, net of taxes and deal costs of approximately $68 million.

Liquidity Commentary

• QTD operating cash flows were $141 million versus $92 million in the prior year
• Quarter-endborrowing capacity was approximately $2.8 billion
• 62% of our debt is currently at fixed interest rates, including the impact of interest rate swaps
• Bank credit facility matures in October 2026

8

EBITDA MARGIN PROGRESSION AND

TARGETS

Key Drivers	Segment	2021	2022	2023	Target
 Innovation and sales mix	Commercial	25.1%	26.2%	27.7%	30%
	Acquisition integration
	Supply-chain initiatives	Residential	20.9%	17.1%*	12.1%	25%

• Operational investments

 Price-cost	Food Processing 22.4% 22.1%	24.9%	25%

*Affected by acquisitions

Anticipated Timeline

• For Commercial Foodservice, we anticipate delivering the targeted EBITDA margins within two years
• For Residential Kitchen, we envision achieving the EBITDA margin goal in three to four years, as the timing of hitting the objective includes meaningful dependency on market conditions improving

9

STRATEGIC M&A FOCUS

Recent M&A Activity

• Middleby has completed 29 transactions since the beginning of 2020, investing in key technology initiatives and trends, which have enhanced our capabilities and offerings across all three business segments
• Many of the recent acquisitions have ongoing sales and profitability benefits yet to be realized
• Middleby is clearly positioned for additional opportunities in Commercial Foodservice, Food Processing and Residential Kitchen

Strategic Investment Themes

• Automation, IoT and Digital Controls
• Beverage Platform Expansion
• Food Processing Full-Line Solutions
• Complimentary Residential Platform Expansion
• Electrified and Ventless Cooking
• International Expansion

2020

2021

2022

2023

2024

www.middleby.com	Residential Kitchen	Food Processing	10
Commercial Foodservice