Investor Presentation - s21.q4cdn.coms21.q4cdn.com/.../2017/Investor-Presentation-170215.pdf · Investor Presentation . February 15, ... Full-line of hot/cold products & systems

© Welbilt, Inc. © Welbilt, Inc.

Investor Presentation

February 15, 2017


Safe Harbor Statement

2

Any statements in this presentation regarding our business that are not

historical facts are “forward-looking statements”. These statements are

based on the current expectations of the management of the company and

our future results could differ materially from any implied projections or

forward-looking statements made today. Our actual results may be affected

by many important factors, including risks and uncertainties identified in our

press releases and in our SEC filings. We do not undertake any obligation to

publicly update or revise any forward-looking statement, whether as a result

of new information, future events, or other circumstances.

© Welbilt, Inc. © Welbilt, Inc. © Welbilt, Inc. © Welbilt, Inc.

Agenda 1. Welbilt Introduction 2. Global Foodservice Equipment Industry 3. Strategy 4. Financials


Our heritage in the industry stretches back over a century, and our experience and expertise has grown tremendously over the years

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1902 1945 1971 1995 2015 2008 2016 1966 1993 1997

1851 1910 1994 1995 1999 2000 2002 2004 2008 1982

Berisford WELBILT 1929 Henry and Alexander Hirsch establish the Welbilt Stove Co.

1995 Berisford acquires Welbilt Corp. in the United States

1955 Welbilt acquires Detroit-Michigan Stove Co (parent company of Garland) to become Welbilt Corp.

1982 Frymaster joins the portfolio

1989 Cleveland Range and Merco join the portfolio

1994 Lincoln joins the portfolio

2000 Berisford changes its name to Enodis plc.

1998-1999 Convotherm and Delfield join the portfolio

2008 The Manitowoc Company acquires Enodis

1966 Manitowoc Ice begins producing ice-machines

1995 MTW acquires Kolpak

2000 Merrychef and Multiplex join the portfolio

2016 Manitowoc Foodservice spins-off from The Manitowoc Company…

2015 MFS launches its fitKitchen (“food inspiring technology”) initiative

2017 …and now, we are Welbilt


Welbilt at a Glance

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Offering: Full-line of hot/cold products & systems

End Markets: All commercial kitchen operators Channels: 3000+ distributors & dealers Employees: Approx. 5,500 globally Presence: 36 locations in 12 countries Capabilities: World class design, manufacturing,

parts & service

2016 Revenue $1.5B

73% Americas

16% EMEA

11% APAC

by Region

by End Market1 by Channel2

Other 2%

Retail 8%

Business & Industry 10%

Education 6%

Healthcare 8%

Travel & Leisure 8%

Restaurants 58%

Other General Markets 7%

Key Accounts 22%

Other Chains 4%

Dealers, Distributors, Buying Groups 64%

1Estimate for WBT Americas 2Reflects gross sales for 2016. Includes all third party product sales.

Dealers, Distributors,

Buying Groups

67%


Full Line Product Offering with Leading Brands ...

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Commercial Fryers, Hot Holding

Beverage Equipment

12 brands that command #1 or #2 market share positions

Cold products (~40-45% revenue) Hot products (35-40% revenue) Parts & Service (~15-20% revenue)

Walk-in Refrigeration

Freezers & Prep. Stations

Commercial Ranges, Grills, and Induction

Combi- and High Speed Ovens

Ice-cube machines

System Solutions

http://www.manitowocbeverage.com/us


... and a Broad Range of Supporting Services for our Channel Partners and End Customers

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University

Finance Solutions

StarChef Program

KitchenCare®


Top 5 Global End Customers

Long Standing Customer Relationships with large End Customers as well as US Channel Partners

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Large End Customers typically designated as “Key Accounts”

US Channel Partners typically referred to as “General Market”

2016

Customer % of FY16 Revenue

# of Years¹

End Customer 1 8.1% 54 End Customer 2 3.8% 27 End Customer 3 3.2% 57 End Customer 4 2.0% 35 End Customer 5 1.8% 30

2016

Customer % of FY16 Revenue

# of Years¹

Dealer Customer 1 7.5% 29 Dealer Customer 2 6.9% 8 Dealer Customer 3 5.7% 8 Dealer Customer 4 3.6% 28 Dealer Customer 5 3.1% 26

Top 5 North America Dealer Customers

Over 40 years average relationship with our top 5 end customers and

20 years average relationship with our top 5 dealer customers

1Source: Company estimates.


2017 U.S. Foodservice Equipment Needs1

Stable Revenue Base from Significant Replacement Demand and Large Installed Base

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Predictable product replacement cycles support stable Welbilt revenue

Provides recurring, higher margin revenue and aids in maintaining customers

2/3 of demand expected to be driven by replacement and renovations in 2017,

supporting stable revenue base

~15-20% of revenue generated by stable KitchenCare aftermarket

parts and service offering

KitchenCare

KitchenCare protects, services, and maintains foodservice equipment throughout the product lifecycle

Each new piece of Welbilt equipment comes with KitchenCare warranty Multiple levels of support available, depending on customer need Provides a stable source of recurring revenue

1 Foodservice Equipment and Supplies

Replacement 44%

New Construction 19%

Eco Friendly 5% Site Expansion/

Add’l Dayparts 9%

Renovations 23%


Awards & Recognitions for Leading Product Innovations

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Steadily Growing

Foodservice Industry

Positive Industry Fundamentals

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Population & Income Growth

Health & Safety

New Concepts & New Markets


Increasing Global Population & Income

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300

400

500

600

700

2000 2005 2010 2015 2020 2025 2030

Inde

x (1

950

= 10

0)

Trend Growth Line, 1950– 2000 GDP per Capita (Constant US$)

0

2

4

6

8

10

1950 1970 1990 2010 2030 2050

Glo

bal P

opul

atio

n (b

illio

ns)

The global population has tripled since the 1950s and is expected to reach over 9 billion by 2050

Global per capita income is expected to exhibit continued growth over the 2015-2030 period

Eating-out culture is growing, driven by: • Increasing disposable

incomes • Hectic lifestyles

Global Population Growth

Global per capita income Growth

Source: Global Monitoring Report, UN Statistical Yearbooks and Publications, IMF International Financial Statistics, IMF World Economic Outlook and IMF Staff Estimates.

Source: U.S. Census Bureau, International Data Base, July 2015 Update


46 Years of Restaurant-Industry1 Sales Demonstrate Non-Cyclicality of Foodservice Industry

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Real (inflation-adjusted) percentage growth

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1971 1976 1981 1986 1991 1996 2001 2006 2011 2016

1 National Restaurant Association defines restaurant industry as encompassing all meals prepared away from home including all takeout meals and beverages. Source: National Restaurant Association, 2016 Restaurant Industry Forecast


The Rise of New Dining Concepts & Untapped Markets

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New Dining Concept Growth Untapped Markets – Room to Grow

Build Your Own Format # of Chain Restaurants per 1M People1

0 25 50 75 100

Brazil

China

USA

1) Euromonitor, May 2016, based on full service restaurant units

Revenue 2015 13%

2015 9.1% $4.4B

2015 53.6% $200M

Source: 2016 Technomic Inc. Top 500 Chain Restaurant Report


Global Health & Food Safety Concerns also Drive Foodservice Equipment Demand

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• Food safety a top priority

• Professional foodservice equipment facilitates proper food handling and reduces the risk of infection

• Environmental sustainability

• Reduction of unusable portions and waste

• Preventing premature food spoilage

“Americans' Spending on Dining Out Just Overtook Grocery Sales” April 14, 2015

“Celebrity Chefs Hope to Press Congress on Food Waste” May 25, 2016

“Food Shippers in the U.S. Face New Rules” April 5, 2016

“Food safety: Five things to watch out for” May 23, 2016

“4 surprising ways warmer temperatures will change our food” April 5, 2016

“New salmonella outbreak in chicken resists antibiotics” October 8, 2013


Foodservice Operator Cost Pressures Are Fueling Demand for Innovation

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Targeted Innovative

Product Solutions & Systems with Short Payback

Increasing Labor Cost

Increasing Real Estate Cost

Increasing Energy Cost

Need for Waste Avoidance


Product Solutions Deliver Short Payback For Operators

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Solution Performance Benefit to the Operator Typical Payback

Multiplex Blend-in-Cup®

Combines core MFS technologies: ice machine, beverage dispensing , blending and automated cleaning Single piece of equipment to do multiple beverages vs. multiple pieces of equipment to do one beverage

Dispense, blend and serve – in the same cup serves hundreds of beverages per day Reduces waste and saves labor Drives incremental revenue & profitability

An average of 70 drinks per day provides an

operator payback as short as 6 months

Merrychef eikon® e2s

Up to 15x faster than conventional cooking methods: Toasted sandwich in 50 seconds Ventless countertop oven with easy plug-n-play installation

Speed of service to meet consumer demand in all segments Flexibility to cover any part of the day with high quality food Easy to use small footprint with big production Certified ventless Allows menu expansion to drive incremental revenue & profitability

An average of 150 food items sold a day provides an

operator payback as short as 3 months Due to versatility of Merrychef technology, further savings and quicker ROI can be obtained from removal of multiple appliances that Merrychef eikon e2s replaces

Convotherm 4

Multi-use and flexible foundation of the kitchen Superior menu versatility with unwavering quality Simplifies & optimizes kitchen operations

Extremely flexible Delivers the highest quality, most- even cooking results possible The new standard for flexible, reliable self-cleaning Robust, high quality and reliability Reduced operating costs

An average of 150 food items sold a day provides an operator payback as short as 4 months Due to versatility of Convotherm technology, further savings and quicker ROI can be obtained from removal of multiple appliances that Convotherm 4 replaces


kitchenconnect Will Drive Further Benefits Through Digitalization & Analytics

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Comprehensive In-Field Support The Heart of the Kitchen

Functions to Help Streamline...

Demand Driven Ventilation

Other building systems Lighting

Refrigeration Menu

Management and Recipe Downloads

Installations and Roll Outs

Alerts & Actions Predictive & Preventive Maintenance

Repairs / Smart Dispatch

Start-ups

Capex -> Opex New Business Models


Drive Through Optimization

Inventory Management

Kitchen Management and Control

In Store Traffic Analytics

Front of House Optimization

Back of House Systems Optimization

Labor Productivity Enhancement

Equipment Connectivity, Analytics and Remote Management

fitKitchen Takes a Systems Approach and Will Drive Toward Optimization of the Entire System – Kitchen 4.0 as in Industry 4.0

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2,736

1,894

6,112 4,810

751

3,925

Non-Tracked Non-AddressedHot Side Cold SideBeverage Aftermarket

Positive Fundamentals and Industry-Specific Drivers Will Provide Steady Foodservice Equipment Industry Growth

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Global Industry Size (2016)1

US$ Million Total Industry: $20,228 M Tracked Industry: $17,493 M


Global Industry Development (2014 – 2019)2 US$ Million

16,064 16,728 17,493 18,122 18,819

19,556

2014 2015 2016 2017 2018 2019

CAGR* 4.4% CAGR* 3.8%

*CAGR = Compound Annual Growth Rate





Vision, Mission & Values Set the Ambition

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Vision We are the global leader in professional foodservice equipment and systems.

Mission We create value for customers, employees and shareholders by integrating food, technology and people to build and deliver the highest quality, innovative products and systems, offer best-in-class global service, and enable healthy and safe food experiences.

Values INTEGRITY – PASSION – TEAMWORK – ENTREPRENEURSHIP – ACCOUNTABILITY


Clear Strategic Objectives and Thrusts ...

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Strategic Objectives Strategic Thrusts

Achieving Profitable Growth

• Strive for # 1 or #2 market share in every segment addressed • Grow organically short term, buy and build mid-term to outgrow market • Right-size and simplify to improve profitability

Creating Innovative Products & Solutions

• Create game-changing product & system solutions in the entire kitchen • Actively address product competitiveness and lifecycle extensions • Move to global platforms to enhance cost position

Driving Operational Excellence

• Move assembly closer to end markets and localize products • Use strategic sourcing to streamline vendor base • Drive lean manufacturing principles throughout the organization

Guaranteeing Customer Satisfaction

• Grow KitchenCare parts & service to a bigger proportion of total business • Enhance process and delivery planning • Develop next generation distribution

Developing Great People

• Provide incentive schemes that motivate and drive performance • Identify, develop and grow key talent • Make Welbilt the employer of choice in our industry


...are the Levers that will Bridge the Gap to our Margin Ambition

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EBITDA Margin

Ambition “Mid- to

high-twenties”

2015 EBITDA Margins

“Mid-teens”

Product Cost & Platforms

Business Simplification

Parts & Service

New Products and Systems

Business Right Sizing

Lean Manufacturing & Supply Chain

The “1000 BPS Challenge”…

...gap closure is a multi-year journey.


2017 Priorities

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Deliver profitable growth and operational excellence objectives 1

Drive new product and new system solutions to fuel sales growth 2

Delever the balance sheet 3

Develop acquisition pipeline 4




2016 Fourth Quarter Results

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US$ in millions 2016 Q4 2015 Q4 Δ

Organic net sales in constant currency1 $387.7 $369.0 +5.1%

- FX translation impact (9.0) --- (2.5%)

Organic net sales1 $378.7 $369.0 +2.6%

Adjusted Operating EBITA margin1 17.3% 16.5% +80 bps

Amortization expense ($7.7) ($7.8)

Net interest income (expense) ($24.7) $1.9

Other income $0.5 $19.9

Effective tax rate 30.7% (4.0%)

Adjusted net earnings1 $22.8 $75.2 (69.7%)

Adjusted EPS1 $0.16 $0.55 (70.9%)

Operational improvements delivering solid margin growth

1 Non-GAAP measures. See Appendix for GAAP presentation and reconciliations of non-GAAP measures.


2016 Full Year Results

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US$ in millions 2016 FY 2015 FY Δ

Organic net sales in constant currency1 $1,483.0 $1,454.9 +1.9%

- FX translation impact (26.4) --- (1.8%)

Organic net sales1 $1,456.6 $1,454.9 +0.1%

Adjusted Operating EBITA margin1 16.7% 13.4% +330 bps



Other income (expense) ($9.1) $22.1

Effective tax rate 24.1% 20.0%

Adjusted net earnings1 $87.1 $168.9 (48.4%)

Adjusted EPS1 $0.62 $1.23 (49.6%)

Completed 1/3 of “1000 bps margin journey”

1 Non-GAAP measures. See Appendix for GAAP presentation and reconciliations of non-GAAP measures.


Simplification and Right-Sizing Initiatives Key to Margin Improvement

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Focus on operational initiatives that are aimed at long-term profit growth and improved customer service and satisfaction

Started implementation of an aggressive program to right-size the business and drive efficiency

Simplification

80:20 product and customer line simplification and rationalization

Improved manufacturing efficiency and productivity improvements

KitchenCare operating improvements

Right-Sizing

Plant rationalizations to address 20% manufacturing overcapacity (15% of 20% addressed to far)

Headcount reductions (completed)

Savings expected by end of 2017:

~$100 million • $12 million in 2015 • $57 million in 2016 • Balance in 2017


2017 Full-Year Guidance Details

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Organic sales growth in constant currency Down 1% to up 2%

Adjusted operating EBITDA margin

Between 18.5% to 20% range (excludes separation, restructuring and asset impairment expenses)

Amortization expense Between $30 and $33 million

Depreciation expense Between $16 and $19 million

Interest expense Between $85 and $90 million

Effective tax rate Between 29% and 32%

Adjusted diluted EPS Between $0.65 and $0.75 per share range (excludes separation, restructuring and asset impairment expenses)

Capital expenditures Between $23 and $28 million

Debt paydown Between $100 and $120 million


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Appendix: Additional Materials


2016 Fourth Quarter Results - GAAP

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US$ in millions 2016 Q4 2015 Q4 Δ Net sales $378.7 $391.7 (3.3%)

Earnings from operations margin 14.5% 10.4% +410 bps



Other income $0.5 $19.9

Effective tax rate 30.7% (4.0%)

Net earnings $21.4 $65.1 (67.1%)

Diluted EPS $0.15 $0.48 (68.8%)


2016 Full Year Results - GAAP

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US$ in millions 2016 FY 2015 FY Δ Net sales $1,456.6 $1,570.1 (7.2%)

Earnings from operations margin 13.7% 10.2% +350 bps



Other income (expense) ($9.1) $22.1

Effective tax rate 24.1% 20.0%

Net earnings $79.5 $157.1 (49.4%)

Diluted EPS $0.57 $1.15 (50.4%)


2016 Fourth Quarter Organic Net Sales in Constant Currency

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(US$ in millions) 2016 Q4 2015 Q4

Net sales $378.7 $391.7

Less: Kysor Panel Systems sales --- (23.1)

Plus: Welbilt Thailand sales --- 0.4

Organic net sales $378.7 $369.0

Foreign currency translation 9.0 ---

Organic net sales in constant currency $387.7 $369.0


2016 Full Year Organic Net Sales in Constant Currency

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(US$ in millions) 2016 FY 2015 FY

Net sales $1,456.6 $1,570.1

Less: Kysor Panel Systems sales --- (122.1)

Plus: Welbilt Thailand sales --- 6.9

Organic net sales $1,456.6 $1,454.9

Foreign currency translation 26.4 ---

Organic net sales in constant currency $1,483.0 $1,454.9


2016 Adjusted Operating EBITA by Quarter

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(US$ in millions) Q1 Q2 Q3 Q4 FY2016

Net earnings $18.1 $15.1 $24.9 $21.4 $79.5

Incomes taxes 4.6 4.1 7.1 9.5 25.3

Other (income) expense, net 2.4 3.6 3.6 (0.5) 9.1

Interest (income) on notes with MTW, net 0.1 --- --- --- 0.1

Interest expense 8.5 27.0 25.0 24.7 85.2

Asset impairment expense --- --- 1.7 1.6 3.3

Restructuring expense 1.3 0.3 0.6 0.3 2.5

Separation expense 3.0 1.3 1.4 0.8 6.5

Amortization expense 7.8 7.9 7.8 7.7 31.2

Adjusted Operating EBITA $45.8 $59.3 $72.1 $65.5 $242.7

Adjusted Operating EBITA margin1 14.1% 16.1% 18.8% 17.3% 16.7% 1 Adjusted Operating EBITA margin is calculated by dividing the dollar amount of Adjusted Operating EBITA by net sales.


2015 Adjusted Operating EBITA by Quarter

38


Net earnings $14.0 $36.9 $41.1 $65.1 $157.1

Incomes taxes 6.5 17.0 18.3 (2.5) 39.3

Other (income) expense, net (0.4) (0.2) (1.6) (19.9) (22.1)

Interest (income) on notes with MTW, net (4.7) (4.6) (4.2) (2.3) (15.8)

Interest expense 0.3 0.4 0.3 0.4 1.4

Asset impairment expense --- --- --- 9.0 9.0

Restructuring expense 0.7 (0.2) 0.8 3.3 4.6

Separation expense --- 0.5 1.0 3.7 5.2

Amortization expense 7.8 7.9 7.9 7.8 31.4

Adjusted Operating EBITA $24.2 $57.7 $63.6 $64.6 $210.1

Adjusted Operating EBITA margin1 7.0% 14.2% 15.0% 16.5% 13.4% 1 Adjusted Operating EBITA margin is calculated by dividing the dollar amount of Adjusted Operating EBITA by net sales.


2016 Adjusted Net Earnings and Adjusted Net Earnings per Share by Quarter

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Net earnings $18.1 $15.1 $24.9 $21.4 $79.5

Asset impairment expense --- --- 1.7 1.6 3.3

Restructuring expense 1.3 0.3 0.6 0.3 2.5

Separation expense 3.0 1.3 1.4 0.8 6.5

Tax effect of adjustments (1.5) (0.7) (1.2) (1.3) (4.7)

Adjusted net earnings $20.9 $16.0 $27.4 $22.8 $87.1

(US$) Q1 Q2 Q3 Q4 FY2016

Diluted earnings per share $0.13 $0.11 $0.18 $0.15 $0.57

Asset impairment expense per share --- --- 0.01 0.01 0.02

Restructuring expense per share 0.01 --- 0.01 --- 0.02

Separation expense per share 0.02 0.01 0.01 0.01 0.05

Tax effect of adjustments per share (0.01) --- (0.01) (0.01) (0.04)

Adjusted net earnings per share $0.15 $0.12 $0.20 $0.16 $0.62


2015 Adjusted Net Earnings and Adjusted Net Earnings per Share by Quarter

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Net earnings $14.0 36.9 $41.1 $65.1 $157.1

Asset impairment expense --- --- --- 9.0 9.0

Restructuring expense 0.7 (0.2) 0.8 3.3 4.6

Separation expense --- 0.5 1.0 3.7 5.2

Tax effect of adjustments (0.2) (0.2) (0.7) (5.9) (7.0)

Adjusted net earnings $14.5 $37.0 $42.2 $75.2 $168.9

(US$) Q1 Q2 Q3 Q4 FY2015

Diluted earnings per share $0.10 $0.27 $0.30 $0.48 $1.15

Asset impairment expense per share --- --- --- 0.07 0.07

Restructuring expense per share --- --- 0.01 0.02 0.03

Separation expense per share --- --- 0.01 0.03 0.04

Tax effect of adjustments per share --- --- (0.01) (0.05) (0.06)

Adjusted net earnings per share $0.10 $0.27 $0.31 $0.55 $1.23


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Documents

Investor Presentation - s21.q4cdn.coms21.q4cdn.com/.../2017/Investor-Presentation-170215.pdf · Investor Presentation . February 15, ... Full-line of hot/cold products & systems