Increased fiscal 2027 targets to deliver a
16-18% adjusted EBITDA margin and a 10-13% three-year compound
average growth rate (CAGR) in revenue
RACINE,
Wis., Sept. 11, 2024 /PRNewswire/ -- Modine
(NYSE: MOD), a diversified global leader in thermal management
technology and solutions, today hosted an Investor Day at its
global headquarters in Racine,
Wisconsin. Members of the executive management team provided
an update to the company's strategy to transform the company and
drive sustainable shareholder value. Guided by the company's
ongoing commitment to 80/20, management outlined its strategy to
evolve its portfolio to compound shareholder value by focusing on
high-growth, high-margin businesses for sustainable growth and
returns.
The company presented the following during the event:
- A compound average revenue growth target of 10 to 13 percent
for the three-year period from fiscal 2024 through fiscal 2027,
excluding any incremental acquisitions
- A fiscal 2027 adjusted EBITDA margin target of 16 to 18
percent
- Plans to leverage its deep thermal management expertise and
mission-critical products to drive multi-year growth powered by
strong, secular mega-trends
- An outline of how it is elevating the tenets of 80/20 to
continually improve its business mix, including re-segmenting the
business to align the product groups to improve product and market
focus
- A strategy to evolve its portfolio of products to compound
shareholder value by focusing on high-growth, high-margin
businesses for sustainable growth and returns
"Today we presented an updated strategy, building on our deep
legacy in thermal management to evolve our portfolio of highly
engineered, mission-critical solutions for sustainable growth,"
said Modine President and Chief Executive Officer,
Neil D. Brinker. "The deliberate
actions we have taken to reposition Modine for a brighter future
are working, as we significantly outperformed the financial goals
we set during our initial Investor Day in June 2022. Our new financial targets are
supported by our commitment to 80/20, which drives our strategic
resource allocation and daily decision making. By focusing on and
investing in our greatest opportunities, we will continue to evolve
our portfolio mix in response to strong secular mega-trends
including high-performance computing, electrification and the need
for clean, healthy indoor air quality."
Fiscal 2027 Financial Targets
- Three-year revenue CAGR of 10 percent to 13 percent
- Adjusted EBITDA margin of 16 percent to 18 percent
"I have never been more excited about Modine's future as we
continue to invest in our business and execute on our strategies,"
added Modine Executive Vice President and Chief Financial Officer,
Mick Lucareli. "The actions taken
over the past three years have resulted in strong margin
improvements and revenue growth, while providing a solid foundation
for the future. We will leverage 80/20 throughout our organization,
driving improvements in our business mix through both operational
and commercial excellence, while allocating capital to our highest
return opportunities to compound shareholder value."
A webcast replay of the event will be available on the Investor
Relations section of the Company's website
at www.modine.com.
Forward-Looking Statements
This press release contains statements, including information
about future financial performance and market conditions,
accompanied by phrases such as "believes," "estimates," "expects,"
"plans," "anticipates," "intends," "projects," and other similar
"forward-looking" statements, as defined in the Private Securities
Litigation Reform Act of 1995. Modine's actual results,
performance or achievements may differ materially from those
expressed or implied in these statements because of certain risks
and uncertainties, including, but not limited to those described
under "Risk Factors" in Item 1A of Part I of the Company's Annual
Report on Form 10-K for the year ended March
31, 2024 and under Forward-Looking Statements in Item 7 of
Part II of that same report and in the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30,
2024. Other risks and uncertainties include, but are not
limited to, the following: the impact of potential adverse
developments or disruptions in the global economy and financial
markets, including impacts related to inflation, energy costs,
supply chain challenges or supplier constraints, logistical
disruptions, tariffs, sanctions and other trade issues or
cross-border trade restrictions; the impact of other economic,
social and political conditions, changes and challenges in the
markets where we operate and compete, including foreign currency
exchange rate fluctuations, increases in interest rates or
tightening of the credit markets, recession or recovery therefrom,
restrictions associated with importing and exporting and foreign
ownership, public health crises, and the general uncertainties,
including the impact on demand for our products and the markets we
serve from regulatory and/or policy changes that have been or may
be implemented in the U.S. or abroad, including those related to
tax and trade, climate change, public health threats, and military
conflicts, including the current conflicts in Ukraine and in the Middle East and heightened tensions in the Red
Sea; the overall health and pricing focus of our customers; our
ability to successfully realize anticipated benefits, including
improved profit margins and cash flow, from our strategic
initiatives and our application of 80/20 principles across our
businesses; our ability to be at the forefront of technological
advances and the impacts of any changes in the adoption rate of
technologies that we expect to drive sales growth; our ability to
accelerate growth organically and through acquisitions and
successfully integrate acquired businesses; our ability to
effectively and efficiently manage our operations in response to
sales volume changes, including maintaining adequate production
capacity to meet demand in our growing businesses while also
completing restructuring activities and realizing benefits thereof;
our ability to fund our global liquidity requirements efficiently
and comply with the financial covenants in our credit agreements;
operational inefficiencies as a result of product or program
launches, unexpected volume increases or decreases, product
transfers and warranty claims; the impact on Modine of any
significant increases in commodity prices, particularly aluminum,
copper, steel and stainless steel (nickel) and other purchased
components and related costs, and our ability to adjust product
pricing in response to any such increases; our ability to recruit
and maintain talent in managerial, leadership, operational and
administrative functions and to mitigate increased labor costs; our
ability to protect our proprietary information and intellectual
property from theft or attack; the impact of any substantial
disruption or material breach of our information technology ("IT")
systems; the impact of a material weakness identified in our
internal controls related to IT system access in Europe on our financial reporting process;
costs and other effects of environmental investigation, remediation
or litigation and the increasing emphasis on environmental, social
and corporate governance matters; our ability to realize the
benefits of deferred tax assets; and other risks and uncertainties
identified in our public filings with the U.S. Securities and
Exchange Commission. Forward-looking statements are as of the date
of this release, and we do not assume any obligation to update any
forward-looking statements.
About Modine
At Modine, we are Engineering a Cleaner, Healthier World™.
Building on more than 100 years of excellence in thermal
management, we provide trusted systems and solutions that improve
air quality and conserve natural resources. More than 11,000
employees are at work in every corner of the globe, delivering the
solutions our customers need, where they need them. Our Climate
Solutions and Performance Technologies segments support our purpose
by improving air quality, reducing energy and water consumption,
lowering harmful emissions, and enabling cleaner running vehicles
and environmentally friendly refrigerants. Modine is a global
company headquartered in Racine,
Wisconsin (U.S.), with operations in North America, South
America, Europe, and
Asia. For more information about
Modine, visit www.modine.com.
Forward-looking Non-GAAP Financial Measure
Adjusted EBITDA margin is not a measure defined in generally
accepted accounting principles (GAAP). This non-GAAP measure
is not, and should not be viewed as, a substitute for the
applicable GAAP measure, and may be different from similarly-titled
measures used by other companies. Adjusted EBITDA margin
represents adjusted EBITDA as a percentage of net sales. The
Company defines adjusted EBITDA as net earnings excluding interest
expense, the provision or benefit for income taxes, depreciation
and amortization expenses, other income and expense, restructuring
expenses, impairment charges, and certain other gains or charges.
The Company believes that adjusted EBITDA margin provides a
relevant measure of profitability and earnings power and views it
as being useful in assessing operating performance by excluding
certain items that it believes are not representative of its core
business.
The Company's fiscal 2027 target for adjusted EBITDA margin
excludes the impact of certain cash and non-cash expenses or gains.
These expenses and gains may be significant and include items such
as restructuring expenses (including severance and equipment
transfer costs), acquisition and integration costs, impairment
charges and certain other items. Estimates of these expenses
and gains for fiscal 2027 are not available due to the low
visibility and unpredictability of these items.
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/modine-updates-multi-year-strategy-at-investor-day-302244436.html
SOURCE Modine