WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

(WAB)
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Westinghouse Air Brake Technologies : Financial Results & Company Highlights Presentation - Q2 2022

08/05/2022 | 06:46am EDT

S E C O N D Q U A R T E R 2 0 2 2

Wabtec Financial Results & Company Highlights

Forward looking statements & non-GAAP financial information

This communication contains "forward-looking" statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the impact of acquisitions by Wabtec, statements regarding Wabtec's expectations about future sales and earnings and statements about the impact of evolving global conditions on Wabtec's business. All statements, other than historical facts, including statements regarding synergies and other benefits from acquisitions; statements regarding Wabtec's plans, objectives, expectations and intentions; and statements regarding macro-economic conditions and evolving production and demand conditions; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue," "target" or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs, inflation, supply chain disruptions, foreign currency exchange, and industry consolidation; (2) changes in the financial condition or operating strategies of Wabtec's customers; (3) unexpected costs, charges or expenses resulting from acquisitions and potential failure to realize synergies and other anticipated benefits of acquisitions, including as a result of integrating acquired targets into Wabtec; (4) inability to retain and hire key personnel; (5) evolving legal, regulatory and tax regimes; (6) changes in the expected timing of projects; (7) a decrease in freight or passenger rail traffic; (8) an increase in manufacturing costs; (9) actions by third parties, including government agencies; (10) the severity and duration of the evolving COVID-19 pandemic and the resulting impact on the global economy and, in particular, our customers, suppliers and end-markets, (11) potential disruptions, instability, and volatility in global markets from the imposition of economic sanctions on Russia resulting from the invasion of Ukraine; (12) cybersecurity and data protection risks and (13) other risk factors as detailed from time to time in Wabtec's reports filed with the SEC, including Wabtec's annual report on Form 10-K, periodic quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC. The foregoing list of important factors is not exclusive. Any forward-looking statements speak only as of the date of this communication. Wabtec does not undertake any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

This presentation as well as Wabtec's earnings release and 2022 financial guidance mention certain non-GAAP financial performance measures, including adjusted gross profit, adjusted operating expenses, adjusted income from operations, adjusted interest and other expense, adjusted operating margin, adjusted income tax expense, adjusted effective tax rate, adjusted earnings per diluted share, EBITDA and adjusted EBITDA, net debt and operating cash flow conversion rate. Wabtec defines EBITDA as earnings before interest, taxes, depreciation and amortization. Wabtec defines operating cash flow conversion as net cash provided by operating activities divided by net income plus depreciation and amortization including deferred debt cost amortization. While Wabtec believes these are useful supplemental measures for investors, they are not presented in accordance with GAAP. Investors should not consider non-GAAP measures in isolation or as a substitute for net income, cash flows from operations, or any other items calculated in accordance with GAAP. In addition, the non-GAAP financial measures included in this presentation have inherent material limitations as performance measures because they add back certain expenses incurred by the company to GAAP financial measures, resulting in those expenses not being taken into account in the applicable non-GAAP financial measure. Because not all companies use identical calculations, Wabtec's presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Included in this presentation are reconciliation tables that provide details about how adjusted results relate to GAAP results. Wabtec is not presenting a quantitative reconciliation of its forecasted GAAP earnings per diluted share to forecasted adjusted earnings per diluted share as it is unable to predict with reasonable certainty and without unreasonable effort the impact and timing of restructuring-related expenses and the outcome of certain regulatory, legal and tax matters; the financial impact of these items is uncertain and is dependent on various factors, including the timing, and could be material to Wabtec's Consolidated Statement of Earnings.

2

W A B T E C

Today's participants

P R E S E N T E R SI N V E S T O R R E L A T I O N S

RAFAEL SANTANA

JOHN OLIN

KRISTINE KUBACKI

President & Chief

Executive Vice President

Vice President,

Executive Officer

& Chief Financial Officer

Investor Relations

2

W A B T E C

2Q 2022 overview

S A L E S

$2.05B Up 1.8% YoY

M A R G I N (2)

16.7% GAAP: 12.9%

A D J U S T E D O P E R A T I N G

P E R S H A R E (2)

$1.23

A D J U S T E D E A R N I N G S

GAAP: $0.91

O P E R A T I O N S (1)

$263M

C A S H F L O W F R O M

B A C K L O G

$23.23B

2 Q 2 0 2 2 H I G H L I G H T S

Strong Freight Segment growth … partially offset by lower Transit Segment revenue

Delivered 1.5 pts of adjusted margin expansion … driven by strong improvement in Freight segment

Adj. EPS up 16.0% YoY … driven by strong margin expansion and positive mix … partially offset by higher input costs

Returning capital to shareholders … executed $103M share buyback and paid $27M in dividends

Backlog provides improved multi-year visibility … up $1.70B YoY and up $2.27B excluding FX impacts

M A R G I N E X P A N S I O N , A D J E P S G R O W T H A N D G R O W I N G B A C K L O G

4 (1) Year-over-year benefit from securitization of accounts receivable was $36 million

  1. Adjusted numbers represent non-GAAP financial measures, see Appendix for additional details and reconciliations

W A B T E C

2022 Market assumptions

F R E I G H T

NA Carloads

↔/-

Locomotive & Railcar

+

Unparkings

International Freight

+

Volumes

NA Railcar Production

++

Mining Commodities

++

T R A N S I T

Infrastructure

+

Investment

Global Ridership

+

20.2%

N O R T H A M E R I C A N

F R E I G H T C A R L O A D S

3.2%

5.1%

(0.1%)

(6.4%)

(4.9%)

(3.7%)

(3.3%)

(17.7%)

2Q20

3Q20

4Q20

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

Source: Association of American Railroads

A V G . N O R T H A M E R I C A N

Y T D 2 0 2 2 F R E I G H T V O L U M E S

P A R K E D L O C O M O T I V E S

9.3%

5.1%

1.0%

2018

2019

2020

2021

2022

YTD

Source: Wabtec

(4.3%)

(4.7%)

5

Brazil

China

India

South Africa Kazakhstan

Sources: China, Kazakhstan, India Ministry of Railways, Brazil: ANTT, South Africa

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Wabtec Corporation - Westinghouse Air Brake Technologies Corporation published this content on 05 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2022 10:45:01 UTC.


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Financials (USD)
Sales 2022 8 379 M - -
Net income 2022 779 M - -
Net Debt 2022 3 319 M - -
P/E ratio 2022 23,9x
Yield 2022 0,64%
Capitalization 16 807 M 16 807 M -
EV / Sales 2022 2,40x
EV / Sales 2023 2,22x
Nbr of Employees 25 000
Free-Float 76,7%
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Rafael O. Santana President, Chief Executive Officer & Director
John A. Olin Chief Financial Officer & Executive Vice President
Albert J. Neupaver Chairman
Erich Gebhardt Chief Technology Officer & Executive VP
Gregory Sbrocco Senior Vice President-Global Operations
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