Modine Outlines Multi-12 months Technique at Investor and Analyst Day

Modine’s government management workforce unveiled methods to speed up income progress and drive important margin enchancment

RACINE, Wis., June 22, 2022 /PRNewswire/ — Modine Manufacturing Firm (NYSE: MOD), a diversified world chief in thermal administration know-how and options, at the moment hosted an Investor and Analyst Day at The New York Inventory Change in New York, NY. Members of the manager administration workforce offered the Firm’s technique to remodel the Firm and drive elevated shareholder worth. Guided by the Firm’s dedication to 80/20, administration detailed multi-phased plans to enhance margins and money flows whereas additionally accelerating income progress.

Modine Outlines Multi-12 months Technique at Investor and Analyst Day

Emblem (PRNewsFoto/Modine Manufacturing Firm)

The highlights of the occasion included:

  • The Firm offered common annual income progress targets of 6 to eight % within the subsequent two years, and eight to 10 % within the following three years, together with a renewed deal with acquisitions.

  • The Firm offered adjusted EBITDA margin targets of 10 to 12 % inside the subsequent two years, reaching 13 to fifteen % over the following 5 years.

  • The Firm’s two new reporting segments – Efficiency Applied sciences and Local weather Options – will handle the enterprise round six verticals to drive a extra centered and environment friendly group.

  • Modine’s refreshed management workforce brings intensive world industrials expertise with confirmed observe information of execution and worthwhile progress to guide their respective companies.

  • Modine already possesses the capabilities, merchandise and options to profitably develop market share in key markets. The reallocation of capital and assets will enable the Firm to prioritize beforehand under-resourced areas of the enterprise and unlock important worth.

  • The 80/20 strategy is the governing philosophy for the whole group. It’s a systemic manner of analyzing the enterprise, focusing assets and emphasizing the very best return alternatives.

  • Modine expects its multi-phased transformation will end in a extra capital environment friendly and better margin enterprise centered on faster-growing markets supported by world megatrends.

“Right now we offered our technique that builds upon a legacy of greater than 100 years of innovation to remodel Modine for a extra sustainable future,” mentioned Modine President and Chief Govt Officer, Neil D. Brinker. “Our initiatives to refocus the group are already properly underway and are yielding improved outcomes. With our new section construction and refreshed administration workforce, we’ve got tremendously simplified the enterprise and created a high-performance group. Our solidified basis will enable us to extend our share in focused markets by specializing in confirmed applied sciences and merchandise the place we’ve got the appropriate to win, shifting capital to companies that have been beforehand underfunded, whereas additionally bettering companies which might be performing under our goal margins. All of those efforts will result in an acceleration of worthwhile progress for a extra sustainable future as we shift our legacy deal with merchandise to techniques options, promote geographic growth and consider opportunistic M&A to enrich our applied sciences. I’m extremely enthusiastic about our future and the workforce we’ve got in place for the following chapter in Modine’s wealthy historical past.”

Fiscal 2024 Monetary Targets

  • Income CAGR of 6 % to eight %

  • Adjusted EBITDA margin of 10 % to 12 %

  • Capital expenditures of ~3 % of income

  • Free money movement 3 % to five % of income

  • Internet leverage ratio goal of 1.5x-2.5x

Fiscal 2027 Monetary Targets

  • Income CAGR of 8 % to 10 %

  • Adjusted EBITDA margin of 13 % to fifteen %

  • Capital expenditures of ~3 % of income

  • Free money movement 6 % to eight % of income

  • Internet leverage ratio goal of 1.5x-2.5x

“I’ve by no means been extra enthusiastic about Modine’s future as we consider the alternatives out there to us over the following a number of years,” added Modine Govt Vice President and Chief Monetary Officer, Mick Lucareli. “The actions we’re taking at the moment will enable Modine to ship stronger income progress, higher margins, larger returns on capital and to drive important worth for all Modine stakeholders.”

A webcast replay of the occasion will likely be out there on the Investor Relations part of the Firm’s web site at www.modine.com.

Ahead-Trying Statements

This press launch incorporates statements, together with details about future monetary efficiency and market circumstances, accompanied by phrases comparable to “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” and different comparable “forward-looking” statements, as outlined within the Non-public Securities Litigation Reform Act of 1995. Modine’s precise outcomes, efficiency or achievements could differ materially from these expressed or implied in these statements due to sure dangers and uncertainties, together with, however not restricted to these described beneath “Threat Elements” in Merchandise 1A of Half I of the Firm’s Annual Report on Kind 10-Okay for the 12 months ended March 31, 2022, and beneath Ahead-Trying Statements in Merchandise 7 of Half II of that very same report. Different dangers and uncertainties embody, however aren’t restricted to, the next: the influence of the COVID-19 pandemic on the nationwide and world economic system, our enterprise, suppliers, clients, and workers; the general well being and pricing focus of Modine’s clients; our skill to efficiently execute our strategic and operational plans, together with making use of 80/20 rules to our enterprise; our skill to successfully and effectively modify our price construction in response to gross sales quantity will increase or decreases and full restructuring actions and understand advantages thereon; our skill to adjust to the monetary covenants in our credit score agreements and to fund our world liquidity necessities effectively; operational inefficiencies on account of program launches, surprising quantity will increase or decreases, and product transfers; financial, social and political circumstances, modifications and challenges within the markets the place Modine operates and competes, together with overseas forex change price fluctuations, inflation, tariffs and sanctions (and potential commerce warfare impacts ensuing from tariffs, sanctions or retaliatory actions), provide chain disruptions and provider constraints, together with semiconductor shortages and logistic and transportation challenges, modifications in rates of interest or tightening of the credit score markets, recession, restrictions related to importing and exporting and overseas possession, public well being crises, and the final uncertainties concerning the influence of regulatory and/or coverage modifications, together with these associated to tax and commerce, the COVID-19 pandemic, the navy battle in Ukraine and different issues, which have been or could also be carried out within the U.S. or overseas; the influence on Modine of any important will increase in commodity costs, significantly aluminum, copper, metal and stainless-steel (nickel) and different bought parts and associated prices, and our skill to regulate product pricing in response to any such will increase; the character of and Modine’s important publicity to the vehicular business and the dependence of this business on the well being of the economic system; Modine’s skill to recruit and keep expertise in managerial, management, operational and administrative capabilities; Modine’s skill to guard its proprietary data and mental property from theft or assault; the influence of any substantial disruption or materials breach of our data know-how techniques; prices and different results of environmental investigation, remediation or litigation; and different dangers and uncertainties recognized by the Firm in public filings with the U.S. Securities and Change Fee. Ahead-looking statements are as of the date of this launch, and the Firm doesn’t assume any obligation to replace any forward-looking statements.

About Modine

Modine, with fiscal 2022 revenues of $2.1 billion, focuses on thermal administration techniques and parts, bringing extremely engineered heating and cooling parts, unique tools merchandise, and techniques to diversified world markets. Modine is a world firm headquartered in Racine, Wisconsin (USA), with operations in North America, South America, Europe and Asia. For extra details about Modine, go to www.modine.com.

Ahead-looking Non-GAAP Monetary Measures

Adjusted EBITDA, adjusted EBITDA margin and free money movement aren’t measures outlined in usually accepted accounting rules (GAAP).  These non-GAAP measures are utilized by administration to judge the Firm’s general monetary efficiency.  These measures aren’t, and shouldn’t be considered as, an alternative to the relevant GAAP measures, and could also be completely different from similarly-titled measures utilized by different firms.  The Firm defines adjusted EBITDA as internet earnings excluding curiosity expense, the availability or profit for earnings taxes, depreciation and amortization bills, different earnings and expense, restructuring bills, impairment fees, and sure different beneficial properties or fees.  Adjusted EBITDA margin represents adjusted EBITDA as a share of internet gross sales.  The Firm believes that adjusted EBITDA and adjusted EBITDA margin present related measures of profitability and earnings energy.  The Firm views these monetary metrics as being helpful in assessing working efficiency by excluding sure objects that it believes aren’t consultant of its core enterprise. The Firm defines free money movement as internet money supplied by working actions much less expenditures for property, plant and tools. This measure presents money generated from operations through the interval that’s out there for strategic capital selections.

The Firm’s future projections for non-GAAP monetary measures are based mostly on administration’s expectations of future monetary outcomes. For instance, adjusted EBITDA consists of expectations for curiosity expense, the availability for earnings taxes, depreciation and amortization expense. Adjusted EBITDA additionally excludes sure money and non-cash bills or beneficial properties. These bills and beneficial properties could also be important and embody objects comparable to restructuring bills (together with severance prices and plant consolidation and relocation bills), impairment fees and sure different objects.  Estimates of those bills and beneficial properties aren’t out there as a result of low visibility and unpredictability of this stuff.

Kathleen Powers 
(262) 636-1687 
[email protected]

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SOURCE Modine Manufacturing Firm

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