Investor Presentation - s21.q4cdn.coms21.q4cdn.com/.../Investor-Presentation-180507-(1).pdf · Top 5 Global End Customers. Long Standing Customer Relationships with large End Customers

© Welbilt, Inc.© Welbilt, Inc.

Investor Presentation

May 7, 2018


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 express or 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.

Agenda1. Welbilt Introduction2. Global Foodservice Equipment Industry 3. Strategy4. Financials


Welbilt at a Glance

4

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

End Markets: All commercial kitchen operatorsChannels: 3500+ distributors & dealersEmployees: Approx. 5,400 globallyPresence: 46 locations in 14 countries Capabilities: World class design, manufacturing,

parts & service

2017 Revenue $1.45B

72% Americas

17% EMEA

11% APAC

by Region

by End Market1 by Channel2

Other 2%

Retail 8%

Business & Industry 10%

Education 6%

Healthcare 8%

Travel & Leisure 8%

Restaurants58%

Other General Markets 5%

Key Accounts 22%

Other Chains 6%

Dealers,Distributors,Buying Groups64%

1Estimate for WBT Americas 2Reflects gross sales for 2017. Includes all third party product sales.

Dealers,Distributors,

Buying Groups

67%


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

5

1902 1945 1971 1995 20152008 20161966 1993 1997

1851 1910 1994 1995 1999 2000 2002 2004 20081982

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

1995Berisford acquires Welbilt Corp. in the United States

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

1982Frymaster joins the portfolio

1989Cleveland Range and Merco join the portfolio

1994Lincoln joins the portfolio

2000Berisford changes its name to Enodis

1998-1999Convotherm and Delfield join the portfolio

2008The Manitowoc Company acquires Enodis

1966Manitowoc Ice begins producing ice-machines

1995MTW acquires Kolpak

2000Merrychef and Multiplex join the portfolio

2016Manitowoc Foodservice spins-off from The Manitowoc Company

2015MFS launches its FitKitchen® (“Food Inspiring Technology”) initiative

2017Manitowoc Foodservice changes its name to Welbilt

2018Crem joins the portfolio


Full Line Product Offering with Leading Brands that command #1 or #2 market share positions

6

CommercialFryers, Hot Holding

Beverage Equipment

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

Walk-inRefrigeration

Refrigeration &Prep. Stations

Ranges, Grills, Induction Steamers, Kettles & Skillets

Combi, Conveyor & High Speed Ovens

Ice-cubemachines

System Solutions Aftermarket Parts


Top 5 Global End Customers

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

7

Large End Customers typically designated as “Key Accounts”

US Channel Partners typically referred to as “General Market”

2017

Customer % of FY17 Revenue

# ofYears¹

End Customer 1 7.7% 55End Customer 2 3.8% 28End Customer 3 3.0% 58End Customer 4 2.3% 36End Customer 5 2.1% 51

2017

Customer % of FY17 Revenue

# ofYears¹

Dealer Customer 1 6.1% 30Dealer Customer 2 4.5% 9Dealer Customer 3 4.4% 9Dealer Customer 4 2.8% 29Dealer Customer 5 2.4% 23

Top 5 North America Buying Group Customers

Over 45 years average relationship with our top 5 end customers and

20 years average relationship with our top 5 dealer customers

1Source: Company estimates.


2018U.S. Foodservice Equipment Needs1

Stable Revenue Base from Significant Replacement Demand and Large Installed Base

8

Predictable product replacement cycles support stable Welbilt revenue

Provides recurring, higher margin revenue and aids in maintaining customers

Over 75% of demand expected to be driven by replacement and renovations in 2018,

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 needProvides a stable source of recurring revenue

1 Foodservice Equipment and Supplies

Replacement51%

New Construction12%

Eco Friendly5%Site Expansion/

Add’l Dayparts6%

Renovations26%


Awards & Recognitions for Leading Product Innovations

9




SteadilyGrowing

FoodserviceIndustry

Positive Industry Fundamentals

11

Population & Income Growth

Health & Safety

New Concepts & New Markets


Changing parameters for the Foodservice Equipment Market

12

Growing World PopulationPopulation tripled since 1950s;set to reach 9 billion by 2050

Augmenting per Capita IncomeExpected to exhibit continuedgrowth over 2015-2030 period

Enduring Customer Growth

Positive outlook for GM and QSRs with relatively

low volatility

Progressing Customer NeedsHigher focus on

customized & connected solutions, design, services

Changing Competitive LandscapeConsolidating industry with new

entrants and growing digital focus

Growing Global Competition Competition for and from new

markets e.g. Brazil, India, Nigeria

Increasing Consumer Choices

New / innovative dining concepts sought beyond

the mainstream

Evolving Consumer Lifestyles

Nutrition & safety top of mind, growing

customization demand

CAGR* 2.5%

CAGR* 2.9%

20.2 20.7 21.2 21.8 22.4 23.1

2015 2016 2017 2018 2019 2020*CAGR = Compound Annual Growth Rate

Global Industry Development [in $ bn]


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

13

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, 2017 Restaurant Industry Forecast


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 “Woman was sickened by

E. coli after eating contaminated lettuce”April 18, 2018

“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

“Here’s what it costs restaurants when a foodborne illness outbreak occurs”April 18, 2018

“Hotel Ice Machines Could Be Making You Sick”February 14, 2018


Foodservice Operator Cost Pressures Are Fueling Demand for Innovation

15

TargetedInnovative

Product Solutions & Systems withShort Payback

Increasing Labor Cost

Increasing Real Estate Cost

Increasing Energy Cost

Need for Waste Avoidance


Product Solutions Deliver Short Payback For Operators

16

Solution Performance Benefit to the Operator Typical Payback

Multiplex Fresh Blender

Next Generation – Self serve beverage station. Combines core MFS technologies: ice machine, beverage dispensing , blending and automated cleaningSingle piece of equipment to do multiple beverages vs. multiple pieces of equipment to do one beverage

Fully Automated self beverage station.Dispense, blend and serve – in the same cup serves hundreds of beverages per dayReduces waste and saves laborDrives 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 secondsVentless countertop oven with easy plug-n-play installation

Speed of service to meet consumer demand in all segmentsFlexibility to cover any part of the day with high quality foodEasy to use small footprint with big productionCertified ventlessAllows menu expansion to drive incremental revenue & profitability

An average of 150 food items sold a day provides an

operator payback as short as 3 monthsDue 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 flexibleDelivers the highest quality, most-even cooking results possibleThe new standard for flexible, reliable self-cleaningRobust, high quality and reliabilityReduced 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

© Welbilt, Inc.© Welbilt, Inc.17

Digital – Welbilt’s view of the future

We’re designing the kitchen of the future to drive continuous improvements in performance for our customers. As their partners in navigating a new digital world, we will help them leverage data to optimize their processes and bottom line, improve the guest experience they deliver, and over time provide a platform that will enable them to continually adapt to our changing world.

OPTIMIZE TODAY’S BUSINESS MODEL

PERFECT TOMORROW’SCUSTOMER EXPERIENCE

TRANSFORMTHE FUTURE

Current State Future Vision


KitchenConnect – Re-envisioning the relationship customers have with Welbilt products and services

KITCHENCONNECTKITCHENCONNECT

PLATFORM

APPLICATIONS

INDIVIDUAL APPLIANCE

MENUALERTS

Developing functionality and management capability to deploy individual and sets of applications to individual product categories

Individual applications for individual product categories

KITCHENCONNECT

Unified complete application suites across all individual

product categories

Complete individual Systems

Unified complete application suites and establish

interconnectivity throughout the entire kitchen

Complete unifiedSystems


Drive ThroughOptimization

Inventory Management

Kitchen Management and Control

In Store Traffic Analytics

Front of House Optimization

Back of HouseSystems 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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1.5

1.2 1.6

1.0

1.6

20

Identify Areas and Processes for Improvement• Equipment choice & Design• Identifies pathway for Innovation• Connected Kitchen – System & Solution• Station Adjacencies • Right Size Equipment• Prep and Production Processes• Labor Balancing• Cost Per Square Foot

FitKitchen® Identifies Areas of Focus

Flexible, Modular Equipment to adjust with building footprints

Scale Equipment thru-put based on sales volumes

Multi-Functional Equipment

All Driven by Integrated Connected Kitchen

Right Size Storage and Prep Spaces based on Sales Volumes

Improve SOS and Reduce Labor

Maximize Vertical Storage Spaces

Integrate New Technology to Improve Prep Process

Eliminate Complexity

Introduce a Craft Beverage Program




Vision, Mission & Values Set the Ambition

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VisionWe are the global leader in professional foodservice equipment and systems.

MissionWe 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.

ValuesINTEGRITY – PASSION – TEAMWORK – ENTREPRENEURSHIP – ACCOUNTABILITY


Clear Strategic Objectives and Thrusts ...

23

Strategic Objectives Strategic Thrusts

AchievingProfitable 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

CreatingInnovative 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

DrivingOperational 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

24

2015EBITDA1

Margins “Mid-teens”

Purchasing &Supply Chain

Simplification

LeanMfg.

New Productsand Systems

Right-Sizing 80/20

PLS & CLS

The “1000 BPS Challenge” of gap closure is a multi-year journey.

Plant Rationalization

HeadcountReductions

KitchenCareImprovements

Product Costs& Platforms

Achieved2016

EBITDA1

Margin Ambition

“Mid-to-high twenties

still to go“

Achieved2017

= Later Stage

“Runway Remaining”:Stage of Initiative Progress

= Mid Stage

= Early Stage

1 See Welbilt’s 2018 Q1 earnings release for the reconciliations from GAAP to non-GAAP measures.

Guidance Range2018


2018 Priorities

25

Deliver profitable growth and operational excellence objectives1

Drive new product and new system solutions to fuel sales growth2

Delever the balance sheet3

Execute and integrate acquisitions4


Crem International Overview

Note: Financials converted from SEK into $ with SEK / USD FX rate 2017 average of 0.1172 – actual US GAAP accounts may differ 26

2017 Revenue: ~SEK 767 M~US$90 M

Manufacturing Plants: 3Technology Centers: 3Sales Offices: 6Employees: ~400

Customers: 900+ in 80 countries

Installed Base: 700K+

Complete Coffee Offering Strong Brands

Geographic Footprint Served Markets

Hotels, Restaurants,

Catering

Office Coffee

Services

Convenience Stores

Espresso machines

Filter machines

Instant, liquid, freestanding

Aftermarket

Manual

Automatic

Manual

Automatic




2018 First Quarter Results

28

US$ in millions (except per share data) 2018 Q1 2017 Q1 Δ

- Organic Net Sales1 $340.1 $328.0 +3.7%

- FX translation impact2 $10.3 --- +3.1%

Net sales $350.4 $328.0 +6.8%

Adjusted Operating EBITDAAdjusted Operating EBITDA margin1

$55.315.8%

$53.016.2%

+4.3%(40 bps)

Amortization expense $7.9 $7.8

Interest expense $20.3 $23.2

Adjusted other expense – net3,4 $0.7 $1.8

Effective tax rate 2.3% 29.6%

Adjusted Net Earnings1,3,4 $21.8 $10.6 +105.7%

Adjusted Diluted EPS1,3,4 $0.15 $0.08 +87.5%

Delivers sales and EPS growth over prior year1

1 See Welbilt’s 2018 Q1 earnings release for the reconciliations from GAAP to non-GAAP measures.2 Reflects percentage impact of adjusting items between net sales and Organic Net Sales.3 2018 Q1 is adjusted for the $7.8 million impact of hedging the purchase price for the Crem International acquisition.4 Prior year presentation adjusted for $0.3 million of periodic pension costs that have been reclassified from Selling, general and administrative expenses to Other expense – net in accordance with the adoption of accounting guidance in Accounting Standards Update 2017-07.


11 Consecutive Quarters of YOY Adjusted Operating EBITDA1 Growth

29

1 See Welbilt’s 2018 Q1 earnings release for the reconciliations from GAAP to non-GAAP measures.2 Amounts presented for the years 2014, 2015 and 2016 and the respective quarters within those years do not include the impact of adoption of accounting guidance in Accounting Standards Update (“ASU”) 2017-07 related to the presentation of net periodic pension and postretirement benefit costs. The impact of this ASU results in the reclassification of certain costs from “Selling, general and administrative expenses” to “Other expense – net” in the consolidated statement of operations.

$62.6 $47.7

$29.4

$62.5 $68.5 $69.3

$229.7

$50.1

$63.8 $76.3 $69.8

$260.0

$53.0

$66.9 $81.9 $75.1

$276.9

$55.3

$0

$50

$100

$150

$200

$250

$300

Q1 Q2 Q3 Q4 FY/YTD

Adju

sted

Ope

ratin

g EB

ITDA

1(in

$ m

illio

ns)

2014 2015 2016 2017 20182 22


2018 Full-Year Guidance Details

30

Organic Net Sales growth

Between 1% to 4%

- General market remains stable in 1H, improves in 2H- Continued recovery of large chains, rollouts of new products- Incremental sales from initial FitKitchen® system rollouts

Adjusted Operating EBITDA margin

Between 19.5% to 21.0%

- Simplification & Right-Sizing (+200 to +300 bps)- Volume/Mix (0 to +150 bps)- Net Pricing (+50 to +150 bps)- Material Cost Inflation (-50 to -100 bps)- SG&A Investments/Compensation/Other (-150 to -250 bps)

Adjusted Diluted EPS

Between $0.80 and $0.90 per share

- Effective tax rate of 26% to 28%- Assumes 141.6 million fully diluted shares outstanding- Includes $0.02 from Crem International acquisition, inclusive of integration costs

(excludes restructuring, gains or losses from impairment or disposal of assets, acquisition transaction costs and debt extinguishment expenses)


31

Appendix: Additional Materials


2018 First Quarter Results - GAAP

32

US$ in millions (except % and per share data) 2018 Q1 2017 Q1 Δ

Net sales $350.4 $328.0 +6.8%

Earnings from operations margin 11.9% 10.8% +110 bps

Interest expense $20.3 $23.2

Other expense – net1 $8.5 $1.8

Effective tax rate 2.3% 29.6%

Net earnings $12.5 $5.0 +150.0%

Diluted EPS $0.09 $0.04 +125.0%

1 Prior year presentation adjusted for $0.3 million of periodic pension costs that have been reclassified from Selling, general and administrative expenses to Other expense – net in accordance with the adoption of accounting guidance in Accounting Standards Update 2017-07.


2018 Adjusted Operating EBITDA by Quarter

33

(US$ in millions) Q1 Q2 Q3 Q4 2018-YTD

Net earnings $12.5 $12.5

Incomes taxes 0.3 0.3

Other expense - net 8.5 8.5

Loss on early extinguishment of debt --- ---

Interest expense 20.3 20.3(Gain) from impairment or disposal of assets – net (0.1) (0.1)

Restructuring expense 0.4 0.4

Separation expense 0.1 0.1

Amortization expense 7.9 7.9

Depreciation expense 4.2 4.2

Transaction costs1 1.2 1.2

Adjusted Operating EBITDA $55.3 $55.3

Adjusted Operating EBITDA margin2 15.8% 15.8%

1 Transaction costs include professional services and other direct acquisition costs in connection with the acquisition of Crem.2 Adjusted Operating EBITDA margin is calculated by dividing Adjusted Operating EBITDA by net sales.


2017 Adjusted Operating EBITDA by Quarter

34

(US$ in millions) Q1 Q2 Q3 Q4 FY2017

Net earnings $5.0 $30.1 $33.1 $65.8 $134.0

Incomes taxes 2.1 (0.2) 11.9 (29.0) (15.2)

Other expense – net1 1.8 3.3 3.0 2.4 10.5

Loss on early extinguishment of debt 3.2 0.2 1.0 --- 4.4

Interest expense 23.2 21.0 21.7 21.0 86.9(Gain) loss from impairment or disposal of assets – net 0.4 (0.6) (3.9) 0.1 (4.0)

Restructuring expense 4.6 1.1 2.8 2.3 10.8

Separation expense 0.9 0.3 0.3 0.1 1.6

Amortization expense 7.8 7.7 7.9 7.8 31.2

Depreciation expense 4.0 4.0 4.1 4.6 16.7

Adjusted Operating EBITDA $53.0 $66.9 $81.9 $75.1 $276.9

Adjusted Operating EBITDA margin2 16.2% 18.0% 21.5% 20.5% 19.2%

1 Adjusted for periodic pension costs that have been reclassified from Selling, general and administrative to Other expense – net in accordance with the adoption of accounting guidance in Accounting Standards Update 2017-07.2 Adjusted Operating EBITDA margin is calculated by dividing Adjusted Operating EBITDA by net sales.


2018 Adjusted Net Earnings and Adjusted Diluted Net Earnings per Share by Quarter

35

(US$ in millions) Q1 Q2 Q3 Q4 2018-YTD

Net earnings $12.5 $12.5(Gain) from impairment or disposal of assets – net (0.1) (0.1)

Restructuring expense 0.4 0.4

Separation expense 0.1 0.1

Loss on early extinguishment of debt --- ---


Tax effect of adjustments2 (0.1) (0.1)

Adjusted Net Earnings $21.8 $21.8

(US$) Q1 2018-YTD

Diluted earnings per share $0.09 $0.09(Gain) from impairment or disposal of assets – net per share --- ---

Restructuring expense per share --- ---

Separation expense per share --- ---Loss on early extinguishment of debt per share --- ---


Tax effect of adjustments per share2 --- ---

Adjusted Diluted Net Earnings Per Share $0.15 $0.15

1 Transaction costs include a loss related to a foreign currency hedge of the acquisition purchase price and professional services and other direct acquisition costs in connection with the acquisition of Crem.2 The tax effect of adjustments is determined using the statutory rates for the countries comprising such adjustments.


2017 Adjusted Net Earnings and Adjusted Diluted Net Earnings per Share by Quarter

36

(US$ in millions) Q1 Q2 Q3 Q4 FY2017

Net earnings $5.0 $30.1 $33.1 $65.8 $134.0(Gain) loss from impairment or disposal of assets – net 0.4 (0.6) (3.9) 0.1 (4.0)

Restructuring expense 4.6 1.1 2.8 2.3 10.8

Separation expense 0.9 0.3 0.3 0.1 1.6

Loss on early extinguishment of debt 3.2 0.2 1.0 --- 4.4

Tax Cuts and Jobs Act --- --- --- (32.0) (32.0)

Tax effect of adjustments1 (3.5) (0.4) (1.5) (0.5) (5.9)

Adjusted Net Earnings $10.6 $30.7 $31.8 $35.8 $108.9

(US$) Q1 Q2 Q3 Q4 FY2017

Diluted earnings per share $0.04 $0.21 $0.24 $0.47 $0.95(Gain) loss from impairment or disposal of assets – net per share --- --- (0.03) --- (0.03)

Restructuring expense per share 0.03 0.01 0.02 0.02 0.08

Separation expense per share 0.01 --- --- --- 0.01Loss on early extinguishment of debt per share 0.02 --- 0.01 --- 0.03

Tax Cuts and Jobs Act --- --- --- (0.23) (0.23)

Tax effect of adjustments per share1 (0.02) --- (0.01) --- (0.04)

Adjusted Diluted Net Earnings Per Share $0.08 $0.22 $0.23 $0.26 $0.77

1 The tax effect of adjustments is determined using the statutory rates for the countries comprising such adjustments.


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Investor Presentation - s21.q4cdn.coms21.q4cdn.com/.../Investor-Presentation-180507-(1).pdf · Top 5 Global End Customers. Long Standing Customer Relationships with large End Customers