Fiscal 2013 Fiscal 2013 Third Quarter Earnings Earnings June 19, 2013 June 19, 2013
Safe Harbor Statements in this presentation that are not historical are considered “forward-looking statements” and are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. This includes statements differ significantly from expectations. This includes statements pertaining to, among other things, the planned divestiture of the Electrical segment, the potential timing thereof, and the prospects and expected financial results of Actuant after the planned transaction Those factors are contained in Actuant’s Securities and transaction. Those factors are contained in Actuant s Securities and Exchange Commission filings. All estimates of future performance are as of June 19 2013 All estimates of future performance are as of June 19, 2013. In this presentation certain non-GAAP financial measures may be used Please see the supplemental financial schedules at the end of used. Please see the supplemental financial schedules at the end of this presentation, accompanying the Q3 Fiscal 2013 earnings press release, or refer to the Investors section of Actuant’s website (www.actuant.com) for a reconciliation to the appropriate GAAP measure measure. 2
Third Quarter Snapshot • Announced intent to divest Electrical segment, reflected as discontinued operations for all periods • Inflection in operating results with EPS from continuing operations up 22% year-over-year to $0.62 • Consolidated core sales down 2%, sequentially improved from -5% in Q2 with Energy and Industrial reporting solid core sales growth • EBITDA margin of 19.6%, level with the prior year despite core sales decline • Repurchased 0.2 million shares of common stock R h d 0 2 illi h f t k for approximately $5 million 3
Third Quarter EPS Reconciliation F' 2012 F' 2013 GAAP Dil t d EPS GAAP Diluted EPS $0 45 $0.45 ($1 24) ($1.24) Debt refinancing costs $0.15 - Non cash Electrical writedown Non-cash Electrical writedown - $2.00 $2.00 Adjusted EPS $0.60 $0.76 Electrical operating results p g $0.09 $ $0.14 $ Adjusted continuing EPS $0.51 $0.62 4
Income Taxes (1) Consolidated Effective Income Tax Rate Q1 Q2 Q3 Q4 Full Year Fiscal 2013 16.3% 15.7% 7.7% Fiscal 2012 21.8% 22.7% 22.0% 16.9% 20.8% Lower Actuant Effective Tax Rate on a “Continuing Operations Basis” Due to Changes in the “Country of Origin” Mix of Pre-Tax Earnings (1) Continuing operations, excluding refinancing costs 5
Core Sales Trend (1) Year-over-Year Year over Year Sales (US$ in millions) Core Sales Rate of Change $400 20% 15% 13% $350 8% 10% 6% 5% 3% $300 1% 0% -2% -5% -5% $250 -5% -10% $200 -15% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Sequential Year Over Year Improvement with Solid Growth in Energy Sequential Year-Over-Year Improvement with Solid Growth in Energy and Industrial (1) Continuing operations 6
Operating Profit Margin Trend (1) (basis points) 300 250 240 220 200 200 100 30 30 0 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 -20 -50 (100) ( 00) (200) -220 220 (300) -280 Significant Improvement in Year-Over-Year Margin Trends g p g (1) Continuing operations 7
Industrial Segment • Core growth of 2% with demonstrated Financial Snapshot success with growth initiatives (US$ in millions) including strong Integrated Solutions 3rd Quarter and bolting sales. y-o-y 2013 2013 2012 2012 change h • Europe and China still impacted by Sales $111 $110 1% weak economic environment, although Op Income $32.4 $30.7 6% comparisons become easier. Op Margin 29.1% 27.9% 120 bps • Profit margins highest in last two years on higher volumes, lower incentive compensation and other costs. Sales Trend Core Sales Change Sales $120 20% 19% 15% 13% $100 11% 10% $80 7% 5% 5% 2% 2% $60 1% 0% $40 -5% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 8
Energy Segment Financial Snapshot • Double digit growth in Cortland’s deep water umbilical, ropes and cables. (US$ in millions) 3rd Quarter � Non-energy markets (e.g. y-o-y defense) continue to be weak. defense) continue to be weak 2013 2013 2012 2012 change h Sales $99 $96 3% • Hydratight core sales up due to global Op Income $19.7 $18.5 7% oil & gas MRO activity despite tough comparisons to robust NA nuclear Op Margin 19.9% 19.2% 70 bps maintenance in prior year. • Margins higher due primarily to Sales Trend volume. Core Sales Change Sales $110 30% 28% 28% $100 23% 27% 20% $90 14% $80 12% 10% $70 5% 4% $60 0% -1% $50 $40 -10% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 9
Engineered Solutions Segment • Europe truck demand inflected with Financial Snapshot year-over-year sales growth. (US$ in millions) 3rd Quarter • Difficult comparisons for NA truck, y-o-y agriculture and global off highway agriculture and global off-highway 2013 2013 2012 2012 change change equipment. Sales $134 $137 -2% Op Income $12.8 $18.5 -31% • Continued weak Europe auto. Op Margin 9.5% 13.5% (400) bps • Lower volume, unfavorable mix and Lower volume, unfavorable mix and restructuring costs result in year-over- year margin decline. Sales Trend Sales Core Sales Change $150 10% 5% $130 0% -2% 0% $110 -5% -9% -10% -10% $90 -11% -12% -15% -14% $70 -17% -20% 20% $50 -25% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 10
Third Quarter Cash Flow / Net Debt (US$ in millions) ( ) Free Cash Flow (1) Net Debt Reconciliation EBITDA $82 Net Debt - Feb 28, 2013 $304 Capital Expenditures (7) Share repurchases 5 Cash Interest Cash Interest (1) (1) FX/Other FX/Other (1) (1) Free Cash Flow (77) Cash Taxes (12) Working Capital/Other 15 Net Debt - May 31, 2013 $231 Free Cash Flow Free Cash Flow $77 $77 Net Debt/EBITDA (2) 0.8X Net Debt/Capitalization 18% All Time Strongest Balance Sheet & Liquidity (1) Includes cash flow from Electrical segment (2) Includes pro-forma adjustment for full year impact of recent acquisitions, 11 includes Electrical EBITDA as proceeds not yet received
Well Positioned within Secular Growth Markets Key Trends Key Trends Natural Resources / Energy Demand Global Infrastructure Food/Farm Productivity Sustainability • Global power generation • Emerging market build-out • Population growth and oil & gas maintenance • Mining / resources • Transportation • Affluence / protein diets • New installations N i t ll ti • Emission reduction E i i d ti • Bridges, tunnels • Biofuels solutions • Demanding technology & • Rail • Agriculture equipment methods (deep water, oil • Alternative energy (wind) • Construction equipment • Efficient seeding sands, natural gas) • Energy efficiency (power technology • Alternative energy Alternative energy gen) gen) (nuclear, wind) Key Products / Technology • Joint Integrity solutions • Integrated solutions – • Instrumentation & controls • EGR, turbocharger and heavy lift technologies heavy lift technologies other air flow values other air flow values • Nuclear maintenance tools N l i t t l • PTO drivelines PTO d i li • Hydraulic cylinders • Mining safety & productivity • Pipeline connectors • Seeding systems MRO solutions • Concrete tensioning • Heavy lift rope / slings • Flexible shafts • Truck cab-tilt & latch • Seismic exploration cables 12
High Growth Market Opportunities • Secular growth trends tie in well to the high growth markets including China, India, Brazil, Middle East and South Africa among others Africa, among others. • Energy, Industrial and Engineered Solutions have ample high growth market opportunities. • Currently represents small portion of total sales – sizable opportunity for expansion. ROW 20% 20% NA 50% Europe 30% 30% 13
Fiscal 2013 Guidance Update (1) (US$ in millions except EPS) Fourth Quarter Full Year Change Change Fiscal Fiscal Change Change Q4 2013 from PY 2013 from PY $320 - 330 0% - 2% $1,275 -1,285 flat Sales Diluted EPS (1) $0.48 - 0.53 0%- 10% $1.85 -1.90 1% - 4% Fourth Quarter Assumptions: Fourth Quarter Assumptions: • Core sales growth of approximately -1% to +1% • Margin expansion • Tax rate approximately 25% • Free cash flow of $75-$85 million • Excludes future acquisitions, divestitures and stock repurchases Excludes future acquisitions, divestitures and stock repurchases (1) Continuing operations, excluding 2012 debt refinancing costs. Quarters may not add to full year due to rounding. 14
Fiscal 2014 Initial Outlook (1) (US$ in millions except EPS) (US$ in millions except EPS) Fiscal Fiscal 2013 2014 Change g Sales $1,275- 1,285 $1,315-1,340 3% - 5% Diluted EPS Diluted EPS $1 85 $1.85 - 1.90 1 90 $1 95 2 05 $1.95 -2.05 5% 5% - 10% 10% Assumptions: • Excludes future acquisitions divestitures and share repurchases • Excludes future acquisitions, divestitures and share repurchases • Full year core sales growth of 3-5% • Key FX rates – approximately $1.30/1€ and $1.55/1£ • Margin expansion of 50-75 basis points Margin expansion of 50 75 basis points • ~19-20% effective tax rate • Shares outstanding 76-77 million • Free cash flow ~$175 million; ~110% conversion of net earnings ; g (1) Continuing operations 15
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