A O Smith : Investor Presentation
AOS
Investor Presentation
Leading Provider of Innovative Solutions in Water Heating & Treatment
Winter 2024
Forward Looking Statements
This presentation contains statements that we believe are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "continue,"
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Company Overview
Powerful Investment Thesis
1
2
3
Leading with
Capitalizing
Leading
innovative
on global
North American
products
megatrends in a
water heater and
that drive
large and growing
boiler producer
technology and
market supported
with stable and
meet
by regulatory
consistent
sustainability
changes
replacement
needs
demand
4
Compelling
brand awareness
in emerging markets with attractive growth and margin expansion opportunities
5
Leveraging
strong balance
sheet for
organic
and inorganic growth while returning capital
to shareholders
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A. O. Smith Snapshot
Leveraging 150 Years of Innovation to Continue Delivering Growth
25%
Segment Revenue
Headquarters
Milwaukee, WI
2023 Revenue ~$3.9B
North America
Global Employees
~12,000
Rest of World
75%
Mfg. Facilities
27
Products
Countries Served
~80
• Water Heaters: Tank, Tankless, Heat Pump
• Boilers: Residential and Commercial
Sales CAGR1
4%
• Water Treatment: Water Softeners and Filtration
EPS CAGR1
7%
Leading Brands
Gross Margin
39%
Water
EBIT Margin
19%
Heaters
& Boilers
Avg. 5-year FCF
104%
Conversion
Water
Treatment
1 2018 - 2023
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Our Company Vision
Vision
To be the leading provider of innovative, highly efficient and differentiated solutions used to heat and treat water, creating exceptional long-term value for our global customers and stakeholders in a socially responsible manner.
Strategy
Deliver profitable growth by…
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Building on 150 Years of Innovation…
Foundation of Innovation
Expansion to Water
1874 - 1927
1927 - Today
1874
1948
2001
C.J. Smith and Sons machine shop founded in Milwaukee, WI
Entered market for coil-type instantaneous commercial water heaters
Acquired State Industries, nearly doubling water heater business and entering retail market segment
1904
A.O. Smith incorporated
1921
Developed world's 1st automated automobile frame assembly plant oil pipelines
1925
Introduced 1st high-pressure vessel used to refine oil
1927
Developed method of producing large-diameter steel line pipe, key in launching natural gas and transcontinental oil pipelines
1936
A. O. Smith patents the process of glass-lining a water heater tank. This concept became the standard of the industry.
1954
Introduced first glass-lined commercial water heater
1961
Opened first international water heater and boiler plant in Canada
1972
Water heater division opens its first European operation
1974
Introduction of Conservationist line of residential water heaters
1995
Entered China market with three joint ventures including residential water heaters
2006
Completed acquisition that added American, Whirlpool, GSW & John Wood brands
2008
Entered India water heater market
2011
Acquired Lochinvar, manufacturer of high efficiency condensing boilers
2016
Acquired Aquasana and entered the North America Water Treatment market
2021
Acquired Giant, a Canadian water heater manufacturer
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Delivering Long-term Outperformance and Value Creation
10-Year Performance
Market-cap
+$7.6B
14.6%
A.O. Smith Annualized TSR1
S&P 500 Annualized TSR1
12.7%
+290.9%
+229.9%
+175.6%
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
AOS
S&P 500
S&P 500 Industrials
1 Includes dividends. As of 2/15/2024 Source FactSet
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Strategy, Portfolio and Culture that Preceded Global Mega Trends
Energy Efficiency & Decarbonization
Clean Water
Rising Consumer Class in Emerging Markets
Global Investment in Clean Energy ($B)1
Sanitation & Drinking Water Index (0 - 100)2
GDP ($T)3
Share of Global GDP3,4
1,617
1,407
1,226 1,258
1,740
84 86
54
60
20
4.0%
5.9%
9.8%
CAGR
CAGR
CAGR
55.2
45.3
23.6
17.7
19% 20%
8%
15%
30%
10
3.7
5.9
21%
2019
2020
2021
2022
2023
Renewable Power
Energy Efficiency
Grids
Electric Vehicles
Other End Use
Nuclear
Battery Storage
Low-Emission Fuels & CCUS
US
China
India
2012
2022
US + EU27
China
India
2023
2028
2023 2050
China India US + EU27
1 Source:
International Energy Agency (2023);
2 Source: Yale Center for Environmental Law & Policy Environmental Performance Index (2022);
3 Source: IMF (2023);
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4 Source:
PwC (2017).
Our Core Business:
North America
Water Heaters & Boilers
Stable and Profitable Core Business
Supports Growth Opportunities
Expanding Organic Growth in China
Laying the Groundwork in India
Invest and Grow Global Water Treatment
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Disclaimer
A.O. Smith Corporation published this content on 14 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 12:13:15 UTC.