Fiscal 2018 Fourth Quarter Earnings September 26, 2018
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. Those factors are contained in Actuant’s Securities and Exchange Commission filings. All estimates of future performance are as of September 26, 2018. Actuant’s inclusion of these estimates or targets in the presentation is not an update, confirmation, affirmation or disavowal of the estimates or targets. In this presentation certain non-GAAP financial measures may be used. Please see the supplemental financial schedules at the end of this presentation or accompanying the Q4 Fiscal 2018 earnings press release for a reconciliation to the appropriate GAAP measure. 2
Fourth Quarter 2018 Highlights • Solid results in Q4 – Adjusted EPS growth by 105% YOY – Core sales growth of 10% – Operating Profit expansion of 65% – Cash flow very positive +$74 million, 18 th consecutive year of +100% conversion * EPS and EBITDA exclude restructuring charges, impairment & divestiture charges, and other special items. 3
Fiscal 2018 – Executing on Our Objectives Core growth above market • Restructure commercial processes and invest in our selling efforts • Significantly step up new product development activities Driving world-class operations and • Commercial effectiveness & share capture service • Product innovation • Improve our facilities and operational efficiency • Goal Zero – safety • Optimized cost position Disciplined capital deployment • Organic growth: products, services and people • Strategic acquisitions • Opportunistic share repurchases Portfolio Management • Reposition portfolio and take action on businesses which do not fit strategically or lack profitability 4
Fourth Quarter 2018 Highlights • Share expansion and improved product vitality – 12 new tool product introductions / 30 for the full year – Hydratight sales +7% for the quarter – 6 new component platform launches / 29 for the full year • New Products +10% of total tool and component sales • Portfolio Management – Anticipated sale of Cortland Fibron – offshore O&G systems • New Segment Structure in 2019 – Industrial Tools & Services – Engineered Components & Systems 5
Fourth Quarter 2018 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) Less Impairment One-Time Tax Restructuring & & Divestiture Benefit, Net of Accelerated Debt GAAP Charges Tax Reform Issuance Costs Adjusted Sales $301.4 $301.4 Operating (Loss) Profit ($38.6) ($70.1) ($0.7) $32.2 Income Taxes ($8.5) $7.2 $1.8 $1.3 $1.8 Net (Loss) Income ($37.7) ($62.9) $1.8 ($0.3) $23.7 Effective tax rate -18% 7% Diluted EPS ($0.62) ($1.03) $0.02 ($0.00) $0.39 • Impairment & divestiture charges include: – Net asset write-down and currency translation realization for Cortland Fibron (UK) – Net asset write-down for Precision-Hayes International • Restructuring largely Energy-related 6
Fourth Quarter 2018 Comparable Results (1) (US$ in millions except Diluted EPS) F' 2017 F' 2018 Change Sales $276 $301 9% Adjusted Operating Profit $20 $32 65% 7.1% 10.7% +360 bps Adjusted Diluted EPS $0.19 $0.39 105% (1) Excluding restructuring, impairment & divestiture charges 7
Core Sales Trend Year-over-Year Sales (US$ in millions) Core Sales $350 15% 10% 10% $300 6% 4% 5% 3% $250 0% 0% $200 -5% Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Double digit year-over-year growth in Industrial, Energy and off-highway equipment Energy maintenance grows for first time since Q3 ’16 8
Adjusted Operating Profit Margin Trend (1) Year-Over-Year Margin % Basis Point Change 12% 400 360 300 10% 200 8% 120 100 6% 20 0 20 4% -100 2% -200 (250) 0% -300 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Fourth consecutive quarter of year-over-year margin improvement (1) Excluding impairment & divestiture and restructuring 9
Industrial Segment • Solid growth in Tools/Enerpac across all Financial Snapshot verticals resulting from focused (US$ in millions) commercial efforts and an overall strong 4th Quarter 1 economic environment y-o-y 2018 2017 change • Heavy Lifting Technology core sales Sales $111.6 $100.3 11% showed meaningful improvement while Adj Op Profit (1) $26.6 $24.1 10% concrete tensioning related core sales were up modestly Adj Op Margin (1) 23.8% 24.0% (20) bps • Margins reflect expected incrementals on (1) Excludes impairment & restructuring charges of $24 and $0.1, respectively, in fiscal 2018. standard tools, partially offset by incentive compensation expense Sales Trend Sales Core Sales $120 12% 10% 10% $100 9% 8% $80 6% 5% 4% 4% 4% $60 2% $40 0% Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 10
Energy Segment Financial Snapshot • Stability in oil prices has driven better end market macros leading to improved (US$ in millions) customer activity 4th Quarter y-o-y • Hydratight marked its first quarter of 2018 2017 change growth in eight quarters, capturing Sales $77.4 $68.6 13% revenue on maintenance projects Adj Op Profit (1) $3.3 ($3.7) 189% • Upstream/offshore activity improves Adj Op Margin (1) 4.3% -5.4% 970 bps while growth in non-oil & gas markets continues to provide opportunities (1) Excludes restructuring charges of $0.7 and $1.9 in fiscal 2018 and 2017, respectively. Also excludes impairment & divestiture charges of $46 and $117 in fiscal 2018 and 2017, respectively. • Margins positively impacted by flow through on incremental sales and prior Sales Trend year one-time items which did not repeat Sales Core Sales $100 20% 15% 10% $80 0% -1% -8% -10% -12% $60 -20% -25% $40 -30% Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 11
Engineered Solutions Segment • Activity continues to be solid in Financial Snapshot agriculture, on/off highway and truck (US$ in millions) verticals 4th Quarter 1 y-o-y • Europe and Americas grew at double- 2018 2017 change digits. China truck continues to be a Sales $112.3 $106.8 5% headwind Adj Op Profit (1) $7.6 $6.1 25% • Strong margin improvement from Adj Op Margin (1) 6.8% 5.7% 110 bps favorable mix of products, leverage on higher sales volumes and price (1) Excludes restructuring charges of $(0.1) in 2017. actions taken in Q3 Sales Trend Sales Core Sales $140 25% 20% 20% 20% $120 15% $100 10% 10% 7% $80 6% 5% $60 0% Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 12
Fourth Quarter 2018 Cash Flow / Net Debt (US$ in millions) Free Cash Flow Net Debt Reconciliation Adjusted EBITDA $43 Net Debt - May 31, 2018 $351 Capital Expenditures (2) FX/Other 5 Cash Interest (11) Free Cash Flow (74) Cash Taxes (3) Trade Working Capital 21 Net Debt - Aug 31, 2018 $282 Non-trade WC / Other 26 Net Debt/EBITDA (1) 1.9 Free Cash Flow $74 (1) Proforma EBITDA adjusted for acquisitions/divestitures and excluding restructuring and impairment & divestiture charges. Good working capital management Net debt leverage lowest level since Q1 2015 13
Fiscal 2018 – Full Year Results in Summary (1) (US$ in millions except EPS) Original F' 2017 F' 2018 Change 2018 Sales $1,096 $1,183 $1.1 -1.13B 8% Adj. EBITDA $122 $145 $140 - 150 19% 11.1% 12.3% +120 bps EPS $0.83 $1.09 $1.05 -1.15 31% Free Cash Flow $68 $100 47% $85-95 Core Sales Industrial 5% 7% 4 - 6% Energy -23% -1% (5)% to Flat Eng. Solutions 6% 10% Flat to +3% Consolidated -4% 6% Flat to +2% Favorable sales growth relative to original guidance largely from ES Incremental EBITDA relative to incremental sales was 26% (1) Excludes restructuring charges, one time tax items, impairment & divestiture charges. 14
New Product and Program Launches Tools Components Tensioner Pump – ZUTP III High force tensioners utilizing new valve New Roof & Trunk technology System Hydraulic power and control BMW 8 Series Torque Wrench Pump XC-TW Cordless torque wrench pump CC-Pilot System New Off Highway application for operator interface and control Industrial Cutters Six families of heavy duty hydraulic & electrical cutters, ranging from cable cutters to bar cutters and chain cutters 2018 Introductions 2018 Introductions 12 in 4th Quarter 6 in 4th Quarter 30 New Product Families in 2018 29 New Products in 2018 15
Macro Industry Dynamics • General economic factors – solid growth rates, with inflationary concerns – Global GDP expansion Industrial Tools & Services • – Positive activity continues in tool sales, distributor optimism, retail demand – Maintenance growth dynamics – Oil and Gas, Wind, Nuclear … • Off-Highway Mobile Equipment – Strong demand in all sectors: Agriculture, Construction Equipment and Mining • On-Highway – China on-highway truck stabilized at lower industry volumes – European truck sales stable – projecting modest slowdown 16
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