8-K
WORTHINGTON ENTERPRISES, INC. (WOR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 10, 2021
WORTHINGTON INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
| Ohio | 1-8399 | 31-1189815 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
200 Old Wilson Bridge Road, Columbus, Ohio 43085
(Address of Principal Executive Offices) (Zip Code)
(614) 438-3210 (Registrant's telephone number, including area code)
Not Applicable (Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Shares, without par value | WOR | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).
| Emerging growth company | ☐ |
|---|---|
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Item 7.01. Regulation FD Disclosure.
Worthington Industries, Inc. (the “Company”) will host a Virtual Investor & Analyst Day event on November 10, 2021. Presentations by the Company’s executive management team will provide an overview of the Company’s operations, financial performance and long-term growth strategy. The Virtual Investor & Analyst Day event will begin at approximately 9:30 a.m., Eastern Standard Time (“EST”). The Virtual Investor & Analyst Day event will be webcast live and available for replay on the Investor Relations section of the Company’s website at https://ir.worthingtonindustries.com. The slides to be used in the Company’s presentation at the Virtual Investor & Analyst Day event are furnished in this Current Report on Form 8-K, pursuant to this Item 7.01, as Exhibit 99.1 in two parts – Exhibit 99.1.1 contains Part I and Exhibit 99.1.2 contains Part II -- and are incorporated herein by reference. The slides will also be available on the Investor Relations section of the Company’s website at https://ir.worthingtonindustries.com prior to the commencement of the Virtual Investor & Analyst Day event and will remain on the Company’s website during the Virtual Investor & Analyst Day event and thereafter.
In addition, Joseph B. Hayek, Vice President and Chief Financial Officer of the Company, will present at Baird’s 2021 Virtual Global Industrial Conference on November 11, 2021 beginning at approximately 9:05 a.m., EST. Mr. Hayek’s presentation on behalf of the Company will be webcast live and available for replay on the Company’s website at https://ir.worthingtonindustries.com. Slides containing information concerning the Company which will be used by Mr. Hayek in connection with his presentation are furnished in this Current Report on Form 8-K, pursuant to this Item 7.01, as Exhibit 99.2, and are incorporated herein by reference. The slides will also be made available on the Company’s website at https://ir.worthingtonindustries.com prior to the commencement of Mr. Hayek’s presentation at Baird’s 2021 Virtual Global Industrial Conference and will remain on the Company’s website during Mr. Hayek’s presentation and thereafter.
Item 9.01. Financial Statements and Exhibits.
(a) through (c): Not applicable.
(d) Exhibits:
The following exhibits are included with this Current Report on Form 8‑K:
| Exhibit No. | Description | |
|---|---|---|
| 99.1 | 99.1.1 | Slides used in Worthington Industries, Inc. Presentation at Investor Day on November 10, 2021 (furnished pursuant to Item 7.01) – Part 1 \[Slide Number 1 through Slide Number 33\] |
| 99.1.2 | Slides used in Worthington Industries, Inc. Presentation at Investor Day on November 10, 2021 (furnished pursuant to Item 7.01) – Part 2 \[Slide Number 34 through Slide Number 89\] | |
| 99.2 | Slides used in Worthington Industries, Inc. Presentation at Baird’s 2021 Virtual Global Conference on November 11, 2021 (furnished pursuant to Item 7.01) | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WORTHINGTON INDUSTRIES, INC. | ||
|---|---|---|
| Date: November 10, 2021 | By: | /s/Patrick J. Kennedy |
| Patrick J. Kennedy, Vice President -<br><br><br>General Counsel and Secretary |
Investor & Analyst Day November 10, 2021
Agenda 2
Safe Harbor Worthington Industries wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by the Company which are not historical information constitute "forward looking statements" within the meaning of the Act. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. Factors that could cause actual results to differ materially include risks, uncertainties and impacts described from time to time in the Company's filings with the Securities and Exchange Commission, including those related to COVID-19 and the various actions taken in connection therewith, which could also heighten other risks. 3
Andy Rose Worthington Overview & Strategy 4
5
Net sales of $3.6 billion TTM 08/31/21 8,000 7 53 5,100 6
7 New reporting segments announced starting fiscal 2022 Segments better align businesses around the attractive end-markets they serve and provide investors with greater insights into performance
KEY INVESTMENT HIGHLIGHTS 8 Business segments aligned around diverse and attractive end-markets with market leading positions Actively pursuing growth through innovation, transformation, and acquisitions Multiple new product launches complete and pending 4 acquisitions announced calendar year to date Balanced approach to capital allocation focused on investing for growth and rewarding shareholders Dividend paid since becoming a public company in 1968 Opportunistically reduced share count by 30% over past 10 years Solid free cash flow and ample liquidity to continue executing on strategy Worthington offers an attractive investment opportunity balancing growth and rewarding shareholders
$3.6 billion of sales in trailing Twelve Month ended 08/31/21 9 Net Sales by End-Market $3.6 Billion Adjusted EBIT* by Segment $516.7 Million *EBIT adjusted to exclude restructuring and impairment
Joint Ventures
10 Used to strategically develop new products, capabilities or expand geographically while limiting our risk
Built with trusted partners who help make a business better versus the alternative of going solo 10 Successful history of complementary Over $1.0B in dividends received from JVs in past 10 years since start of FY 2012 Primarily serving the building products and automotive end markets
Growth Strategy Working together using technology, analytics and automation enables us to deliver… Successful innovation, transformation, and acquisitions that drive value for customers and earn exceptional returns for our shareholders. All with Our Philosophy at the center. 11
Becoming A Global Leader in the Electrical Steel Lamination Market Acquisition Overview Tempel is a manufacturer of highly-engineered electrical steel laminations used for electric motors, transformers, and generators Purchase price of approximately $255 million cash plus the assumption of certain liabilities – expected to close Dec. 2021 Will become part of Worthington’s Steel Processing segment whose experience and relationships in the auto industry will position Tempel to further penetrate the growing hybrid and electric vehicle market Tempel Steel – Business Overview Founded in 1945 and headquartered in Chicago, Illinois Five global manufacturing facilities with ~1,500 employees, serving a diversified customer base worldwide Proven, high performing executive team with extensive industry experience will continue to run the business Net revenue of approximately $377 million and adjusted EBITDA of $35 million, excluding estimated inventory holding gains, during TTM 09/30/21 12 Worthington to become a global leader in the fast growing electrical steel lamination market that includes transformers, machine motors and electric vehicle motors. Announced agreement to acquire Tempel Steel on Nov.1, 2021
Corporate Citizenship & Sustainability Long history of keeping employees safe, practicing good citizenship and protecting the environment For more details, please see our 2021 Citizenship & Sustainability Report located on the “Sustainability Report” page of our website at: www.WorthingtonIndustries.com 13
Company has established a DEI Leadership Council Efforts led by Director of DEI Comprehensive DEI strategy focuses on four pillars: Workforce Workplace Community Partnerships Raising awareness and providing mentorship opportunities with Employee Resource Groups Diversity, Equity & Inclusion 14
Geoff Gilmore Strategic Pillars - Value Drivers & Enablers 15
ACCOUNTABILITY ALIGNED & COMMUNICATED ASPIRATIONAL GOALS UTILIZING KEY VALUE DRIVERS SPECIFIC AREAS OF FOCUS CLEAR STRATEGIC VISION ALL Leaders must have a credible plan 16
Growth Strategy Value Drivers & enablers Working together using technology, analytics and automation enables us to deliver…
Successful innovation, transformation, and acquisitions that drive value for customers and earn exceptional returns for our shareholders.
All with Our Philosophy at the center. 17
18
19 Leveraging transformation, enablers drive sustained improvements
20 Smart factory vision Connected, flexible, adaptive lean manufacturing system that can learn, self-optimize, and run autonomously freeing up our employee's time and empowering them to create more value for shareholders
21 Situation: Inconsistent and disconnected systems used by operations and maintenance at facilities did not provide right information to make the right decisions at the right time
What we did: Established cross-functional agile team focused on Smart Factory vision Implemented Lean Execution System, shop floor data collection and mobile apps connecting machines, people and processes
What we achieved: Created data-rich environment to enhance decision making and build towards Industry 4.0 Established single source of truth for data to run facilities and empower employees
Smart Factory Vision
22 Utilizing Machine Sensoring and Analytics for Predictive Maintenance Situation: Despite regularly planned maintenance there can be unpredictable outages on machines that require costly unplanned down time and rework
Vision: Improve overall plant reliability by utilizing automation, analytics, and advanced technologies to enable better decisions making and to transform the maintenance function from reactive to proactive
What we did: Partnered with company to install remote sensors and monitoring solution Piloted on critical machinery and after success have now installed over 60 sensors across the company
What we achieved: Receive alerts with maintenance recommendations when potential issues are detected Reduced unplanned machine downtime Reduced rework and increased productivity for maintenance team
Prevented
350+ Hours
Unplanned machine downtime Avoided
$1 Million
in potential lost earnings
23 Utilizing Manufacturing- Automation and Robotics Solutions Prevented
350+ Hours
Unplanned machine downtime Avoided
$1 Million
in potential lost earnings Situation: Fittings for cylinders at our Westerville, OH facility were being manually placed on each cylinder before being robotically welded into place
What we did: Evaluated process for further automation Implemented robotic technology with vision systems to fully automate the placement of fittings
What we achieved: Freed up 6 full time employees that could be redeployed to other areas Empowered employees to identify opportunities for further automation even when part of the process is already automated
Steve Caravati Consumer Products 24
25 OUTDOOR LIVING *Andrea: New images? Consumer Products I Segment 25
TOOLS 26 *Andrea: New images? Consumer Products I Segment
27 *Andrea: New images? Consumer Products I Segment CELEBRATIONS
Consumer Products I market leading brands 28 Market leading brands sold primarily through big-box retailers Net Sales Adj. EBITDA ($ Millions)
29 Consumer need identified to know how much fuel was remaining in hand torch and camping gas cylinders Concept designed and manufacturing outsourced to enable quick speed to market Available at 24 retailers nationwide under Bernzomatic and Coleman brands MEET YOUR NEW FUEL COMPANION. The Digital Fuel Gauge will help ensure you’re never left on empty. Consumer Products I innovation Digital Fuel Gauge for portable cylinders 29
Consumer Products I M&A Growth Strategy 30 OUTDOOR LIVING Expand from the core by acquiring targets whose products more broadly enhance outdoor entertaining and reflect the increased blurring of indoor/outdoor spaces OWN THE BACKYARD OASIS TOOLS
Consumer Products I m&a – General Tools & instruments 31 Acquired General Tools & Instruments in January 2021 expanding our reach in tools and outdoor living Environmental Heath & Safety Home Repair & Remodeling Precision Measurement & Layout Lawn & Garden Specific Purpose Tools Market leader for feature-rich, specialized tools – Over 1,200 products Expands product offering in niche tools and outdoor living Deepens relationships with long-term customers including big box retailers and online sales Proven new product development process with demonstrated agility and speed to market Management team with expertise in managing a global supply chain Solid platform ripe for growth through innovation, new product development and bolt-on acquisitions Attractive financial returns $115 million purchase price $68.2 million in revenue, $15.2 million Adjusted EBITDA (CY20) Financed with existing cash
Consumer Products I MANAGEMENT & CAPABILITIES Journey 32 Business Unit leadership team with experience from Blue-Chip Companies
Consumer Products I sales history 33 Sales have grown significantly over the past decade due to both price and volume increases combined with M&A Pricing Desk Implemented 250 $0 50 $600 150 350 100 200 300 400 450 500 550 2012 $337 Revenue (millions) 2020 2013 2014 2015 2016 $315 2017 $342 2018 2021 $449 $359 2019 $356 $409 $413 $524 $354 M&A 10.0% CAGR 2.6% CAGR
Eric Smolenski Building Products 34
Building products I segment 35 Broad array of market-leading commercial and residential building products primarily sold through distributors. Equity earnings of WAVE and ClarkDietrich joint-ventures reported as part of Building Products EBIT. Products *Represents pro-rata share of JV’s Net Sales *FY20 Adj. EBITDA excludes $23.1M gain related divestiture of WAVE’s foreign operations Net Sales Adj. EBITDA* ($ Millions) FY21 Net Sales Adj. EBITDA Contribution $402.0M $30.0M $185.9M* $78.9M $223.3M* $24.6M
36 Building products I market leading jvs WAVE ClarkDietrich Leader framing suspension ceiling systems 50% owned joint-venture with 29-year operating history Strong brand (Armstrong) and distribution Worthington’s steel buying and processing expertise Highly profitable business with consistent earnings growth Significant portion of sales to renovation markets 6 facilities operating in the U.S. Leader commercial steel framing 25% owned joint-venture formed in 2011 through the combination of two established market leaders - ClarkWestern Building Systems and Dietrich Metal Framing Building solutions provider for commercial steel framing distributors, contractors, owners and architects offering drywall & structural systems 13 facilities operating in the U.S.
37 Delivering Essential Building Solutions to Create Better Spaces Building products I portfolio of Essenital Building Solutions Broad Array of Essential Building Solutions
Market Leading Positions Well-Know Brands
Reputation for Innovation Voice of customer Labor savings Technology
38 Building products I portfolio of Essenital Building Solutions Delivering Essential Building Solutions to Create Better Spaces Broad Array of Essential Building Solutions
Market Leading Positions Well-Know Brands
Reputation for Innovation Voice of customer Labor savings Technology
39 Building products I portfolio of Essenital Building Solutions Delivering Essential Building Solutions to Create Better Spaces Broad Array of Essential Building Solutions
Market Leading Positions Well-Know Brands
Reputation for Innovation Voice of customer Labor savings Technology
40 Building products I portfolio of Essenital Building Solutions Delivering Essential Building Solutions to Create Better Spaces Broad Array of Essential Building Solutions
Market Leading Positions Well-Know Brands
Reputation for Innovation Voice of customer Labor savings Technology
41 Building products I portfolio of Essenital Building Solutions Delivering Essential Building Solutions to Create Better Spaces Broad Array of Essential Building Solutions
Market Leading Positions Well-Know Brands
Reputation for Innovation Voice of customer Labor savings Technology
Building products I Innovation 42 Making our products “smarter” to enable our customers to operate more efficiently – reducing emissions Ad promoting the SmartLid in LPGas Magazine SmartLid Monitoring Solution Collaborated with Otodata, industry leader in remote monitoring, to develop and launch lid with gas level monitor housed underneath a protective system & heating tank lid Need for real time monitoring of propane fuel levels in tanks identified Enables remote monitoring of propane fuel levels which helps gas marketers to more efficiently deploy propane filling trucks SmartLid provides easy installation, a monitor that’s protected from the elements, and reliable signal strength, which takes this solution a step beyond what currently exists in the market Drives value for customers by providing reliable connectivity to products that have traditionally been offline “[Monitoring] saves us money in the long run, and really helps with routing customers.” - WOR customer in the Pacific Northwest Territory
Doug Cadle WAVE 43
Established in 1860 $937 million in sales 2020 15 plants in North America 2,800 employees Market leader; strongest brand Established in 1955 $3.2 billion sales in fiscal 2021 53 facilities in 7 countries 7,600 employees Leading global diversified metals manufacturing company Established in 1992 29-year-old 50/50 JV leveraging the strength of both partners $343 million in sales in calendar 2020 6 U.S. plants 460 employees North American market leader in ceiling suspension systems and integrated solutions Go to market 44 Building products I WAVE – bringing together the best of both Steel procurement and supply chain management
45 WAVE has a consistent track record of delivering earnings growth through innovating to make the jobs of their customers easier Building products I WAVE: WINNING FORUMLA Net Sales ($M) High margin business 40%+ EBITDA margins
Building products I WAVE: HOW WE WIN – CUSTOMER FOCUS 46 Providing creative solutions to customers to address their need for speed and lower their total cost Pre-Engineered Ceiling Construction Bringing value through our expertise Addressing market challenges with value creating solutions Demand Creation Integrated Time + Labor Savings Solutions Addressing compressed construction schedules Healthy Building Innovation Segment Specific Designs Ceiling solutions to meet air purification needs Required performance for emerging markets
WAVE | DRYWALL CEILING FRAMING Simple Soffit TM 47 The Faster. Easier. Better way to Build Soffits Opportunity: Average 20% of building space is soffits Concentration of soffits in common areas Challenges faced by Contractors: 68% Building soffits require more skill 50% Current skilled labor is hard to find 94% Open to try new framing solutions Simpler handling means less on-site material, storage, and waste Schedule compression save the actual installation time by up to 50% Cost savings up to 50% on the total cost to build Reducing installation time, tools and people required, reducing safety hazards High quality components with benefits of Pre-Fabrication What we did: Notched drywall grid main beam that provides quick, click and go installation technology to create precise soffit for every project. What we Achieved:
Building products I WAVE: HOW WE WIN – CUSTOMIZED SOLUTIONS 48 Providing creative solutions to customers to address their need for speed and lower their total cost Dimensional Flexibility Connected Manufacturing Painting & Coatings Expertise Digitalized controls for superior quality Aligning with changing design trends Growing demand for special dimensions components Specification Strength, Speed to Serve, Reduction of Waste
Building products I WAVE 49
50 Building products I POISED For Future Growth Building Upon Market Leading Positions
Focused M&A Cultivation
Driving Innovation Delivering Essential Building Solutions to Create Better Spaces
Timo Snoeren Sustainable Energy Solutions 51
Sustainable energy solutions I the Bankable Sustainable Mobility Solutions Partner Valves, Pressure Regulator, Filters, etc. High-pressure cylinders, bundles and containers for CNG and Hydrogen applications
> $800B Global hydrogen market potential (2050)
$3.4B CNG / RNG / H2 tank market size (2025)
~450K CNG / H2 passenger cars outfitted to date
~2,230 CNG / H2 buses & trucks outfitted to date
>1 million L Storage and transport capacity enabled
$135M $11.6M
FY21 Revenue Adj. EBITDA
Full-scale provider of all gas-containment solutions: cylinders, systems & components SEGMENT HIGHLIGHTS Onboard fueling systems for CNG and Hydrogen applications (light, medium and heavy-duty vehicles) Sources: Market&Market, BloombergNEF WORTHINGTON 52
Hydrogen/CNG Ecosystem Well positioned in the Hydrogen / CNG ecosystem with a full line of pressure vessel storage and transport solutions ranging from T1 to T4 giving our customers a range of options depending on their requirements. Applications Main competitive advantages One-stop shop / turnkey solutions Full range of storage types (T1 to T4) and components giving our customers a range of options depending on their requirements.
Excellent track record Global leader in high pressure vessels 100 years of pressure-vessel expertise; 200 years of heavy manufacturing experience.
Trusted customer and partner relationships In the light- and heavy-duty vehicle markets – working with major OEMs Tier-1 suppliers for 14 years
Sustainable Products and processes Cradle2Cradle Product Certifications
Long-term collaborations with international research hubs HyCenta, Technical University Graz, Montan University Leoben
European Knowledge Base Component design center, two composite cylinder engineering centers, steel cylinder excellence cluster Sustainable energy solutions I COMPETITIVE POSITIONING 53
54 CO2 reduction for new buses & trucks: 15% from 2025 30% from 2030 from 2026 65% of busses & 15% of trucks must be clean CO2 reduction for new cars: 15% by 2025 37.5% by 2030 228 live global hydrogen projects (126 in Europe)
$300B in investment through 2030 Sources: European Commission (EU 2019/1242, EU 2019/1161, EU 2019/631) ; Hydrogen Insights 2021 (McKinsey & Companies): Goldman Sachs Sustainable energy solutions I MEGA trends + Market drivers
Hydrogen can decarbonize resistant sectors such as heavy-duty transport and transit as well as many industrial processes Move from geological dependency to technologically driven energy - locally produced hydrogen reduces dependency on fossil fuel imports Hydrogen can store energy produced by renewable sources 24/7 – avoiding “use it or lose it” scenarios From clean to cleaner: CNG began the clean energy transition that will leverage hydrogen for the long term Sustainable energy solutions I Positioned Today for Tomorrow The hydrogen economy is scaling up and will become cost-competitive with fossil fuels soon, and more cost effective in the middle and long term 55
56 Heavy Duty Vehicles Solid track record with IVECO for Type-3 onboard CNG fueling systems Belgian bus maker Van Hool’s supplier for Type-3 onboard H2 fueling systems with PTEC components South America customer place first order for Type-4 behind-cab heavy duty truck onboard fueling systems Leading European, Middle East and Asian coach + bus makers selected WI for top-of-bus Type 3 + 4 onboard H2 fueling systems
Sustainable energy solutions I KEY WINS Gas Transport Exclusive supplier of ACE India Container systems for CNG.
Important Projects of Common European Interest (IPCEI) – Blue Danube Hydrogen produced via wind and LOHC hydrogenation in SE Europe will be transported along the Danube via conventional tanker ships. Distribution over land will take place via H2 Gas compression containment solutions. Sustainable energy solutions I GLOBAL STRATEGY / LOCAL IMPLEMENTATION – Blue danube
30 ft. containment system with composite cylinders (Type 2-4) for transportation of H2 at 500 BAR. Approved for rail, road, and water
150 containers Total demand
$87M Total Potential 2025-2032 OUR CONTRIBUTION Similar IPCEIs developing across the EU Success in the local Austrian market will provide the foundation for success across the EU. 57
Jeff Klingler Steel Processing 58
Net Sales Steel Processing I Segment 59 High value-add steel processing Broad range of metal products in sheet, coil and strip configurations as well as processing capabilities including cold reduction, specialty coatings, annealing, pickling, slitting and blanking Laser welding solutions Laser welded solutions for lightweight and safety critical components to automotive and other markets. Capability to process steel and aluminum. AGRICULTURE Steel Processing Sales by End-Market FY22 Q1 08/31/21 Largest End Markets Adj. EBITDA ($ Millions) Automotive Construction
60 Focused on reducing risks for our customers to help make their businesses stronger Our Engineering staff offers materials support and innovation with knowledge experts on new steel technologies, grades and testing so customers get the best product available for their needs Consistent quality control across downstream operations of cold reduction, galvanizing, configured blanking, pickling and levelling processes Steel pricing is complex and volatile. We offer pricing solutions to ensure our customers do not put their profit margin at risk due to raw material volatility Supply chain strength –With to the depth of our resources and strength of our expertise we can minimize downstream impacts Value creation – we have proven examples of working with our customers across the board to reduce costs related to materials, supply chains or processes. Steel Processing I Value Added partner to customers
Steel Processing I automotive industry Outlook 61 Auto sales expected to continue at pre-COVID levels through 2023 A portion of 2020 pent-up demand spills into 2022 Average vehicle age passes 12 years Fleet buyers return Builds rise to average of 16.7 million through 2028 Fully restocking inventory due to 2021 shortages expected to extend into 2022 Detroit 3 builds (8 million units) represent 50% share through 2023 Builds of battery electric continue vehicles continues to rise Source: IHS Global and internal WI data Auto builds expected to rise to average of 16.7 million through 2028
Steel Processing I Positioned to support auto production trends
62 Global transition to electric and hybrid vehicles is accelerating and should create additional opportunities Source: IHS Global data North America Europe Greater China Projected vehicle production by propulsion system – 2021 vs. 2030
63 Complements our laser welding joint-venture, TWB, by adding new capabilities to support the growing demand for tailor welded blanks and light weighting technology Attractive financial returns $105 million purchase price $170.5 million in revenue, $20.5 million Adjusted EBITDA (CY20) Financed with existing cash BlankLight is at the forefront of aluminum tailored blanks and an industry leader in curvilinear tailored blanks Expands TWB’s capabilities adding curvilinear and aluminum welded blanks Increases capacity at TWB with the addition of 3 facilities allowing for network optimization Adds heavy gauge blanking facility in Bowling Green, KY for steel processing expanding our geographic reach Broadens relationships with existing key automotive customers
Steel Processing I Shiloh u.s. BlankLight Acquisition
Becoming a global leader in the Electrical steel market Tempel expands our product offerings adding highly engineered, precision-stamped, electrical steel laminations. The acquisition will immediately make us a market leader in the rapidly growing electrical steel market that includes transformers, machine motors, and electric vehicle motors 64 Market leader in precision engineered electrical steel lamination components for high growth end markets Entry into rapidly growing electrical steel market Key industry trends driving higher growth for electric motors and transformers Enhances existing automotive offerings and will position Tempel to further penetrate growing hybrid and EV markets based on Worthington’s experience and relationships Adds new end-market exposure to the important electricity infrastructure and distribution markets Global manufacturing footprint with 5 facilities to support customer needs
Attractive financial returns Purchase price of approximately $255 million cash plus assumption of certain liabilities $377 million in revenue, $35 million adjusted EBITDA excluding estimatedinventory holding gains (TTM 09/30/21) Expected to close in December 2021
65 As the world transitions to renewable energy and electric vehicles, demand for electric motors and transformers will grow significantly
66 Net Sales by End-Market (CY 2020) Tempel serves diverse and attractive end-markets which are projected to grow faster than GDP Source: McKinsey & Company Projected Global Growth Through 2025
TEMPEL’S GLOBAL FOOTPRINT ALLOWS IT TO SERVE CUSTOMERS WORLDWIDE Global Operations Global manufacturing capabilities allow Tempel to partner with its customers worldwide and adjust to changing production needs U.S. – Chicago, IL Mexico – Monterrey, Nuevo Leon China – Changzhou, Jiangsu India – Chennai, Tamil Nadu Canada – Burlington, Ontario U.S. – Levittown, PA U.S. – Buena Park, CA Europe 67
Joe Hayek Financial 68
Financial goals 69 increase margins / DECREASE ASSET INTENSITY Reduce earnings volatility Modest leverage / ample liquidity (investment grade) Balanced capital allocation Rigorous capital discipline 69
70 Earnings leverage as consumer products & building products grow *Adjusted for restructuring and non-recurring items and excludes the impact of inventory holding gains/losses. See supplemental data schedules in appendix for reconciliation of adjustments
Earnings leverage as consumer products & building products grow *Adjusted for restructuring and non-recurring items and excludes the impact of inventory holding gains/losses. See supplemental data schedules in appendix for reconciliation of adjustments Adjusted EBITDA Margin % Excluding Inventory gains/losses 71
Solid free cash flow which will benefit when working capital levels normalize Net PPE & Operating Working Capital ($ millions) 72 $1,138 $1,171 $1,072 $1,152 $1,356 Free Cash Flow ($ millions)
Strong capital structure & liquidity Strong balance sheet with investment grade credit ratings and significant liquidity available enables financial flexibility to support strategy and shareholder returns $ Millions Debt Maturity Public Bond 4.30% *Revolving Credit facility undrawn as of 08/31/21 € Private Placement 1.56% € Private Placement 1.82% € Private Placement 1.90% 73 Corporate credit ratings: BBB / Baa3 $500
Balanced Capital allocation strategy 74 Strong cash flows and significant liquidity support balanced approach to capital allocation focused on growth and rewarding shareholders Reinvest in the business to create value and support growth FY2021 CapEx of $82.2 million Focus on core businesses and selectively grow into new markets Focus on higher margin / high cash flow businesses Dividend paid quarterly since becoming a public company in 1968 Eleven consecutive years of dividend increases Opportunistic approach has reduced share count 30% over past 10 years since start of FY 2012 8.3 million shares remaining on authorization Over $3 billion of capital deployed in past 10 years since start of FY2012
($ millions) Growth Rewarding Shareholders *Information based on financials since FY 2012 through FY 2021
Recent transactions that will improve financial performance and strengthen liquidity 75 Engineered Cabs Nov. 2019
North American Cryogenic Oct. 2020
Oil & Gas Equipment Jan. 2021
Structural Composites Industries Mar. 2021
LPG fuel storage in Poland May 2021
Divested loss-making Engineered Cabs business – Nov. 2019
Divested non-core, loss-making North American Cryogenic assets for proceeds of $21 million – Oct. 2020
Divested non-core, loss-making Oil & Gas Equipment business – Jan. 2021
Divested loss-making Structural Composites Industries business for proceeds of $20 million – Mar. 2021
Divested non-core LPG fuel storage business in Poland for consideration of $6 million – May 2021
Acquired General Tools & Instruments for $115 million – Jan. 2021
Acquired German valve and component company, PTEC Pressure Technology, for $11 million – Jan. 2021
Acquired certain assets of Shiloh Industries U.S. BlankLight business for $105 million – Jun. 2021 General Tools & Instruments for $115 million Jan. 2021
PTEC Pressure Technology, German valve and components, for $11 million Jan. 2021
Shiloh Industries U.S. BlankLight business for $105 million Jun. 2021
Divested Acquired
KEY INVESTMENT HIGHLIGHTS 76 Business segments aligned around diverse and attractive end-markets with market leading positions Actively pursuing growth through innovation, transformation, and acquisitions Multiple new product launches complete and pending 4 acquisitions announced calendar year to date Balanced approach to capital allocation focused on investing for growth and rewarding shareholders Dividend paid since becoming a public company in 1968 Opportunistically reduced share count by 30% over past 10 years Solid free cash flow and ample liquidity to continue executing on strategy Worthington offers an attractive investment opportunity balancing growth and rewarding shareholders
Supplemental Data 77
Consolidated FINANCIAL Results *Adjusted for restructuring and non-recurring items. See supplemental data schedules in appendix for reconciliation of adjustments. 78
Consumer products Financials 79 *excludes restructuring and non-recurring charges.
building products Financials 80 *excludes restructuring and non-recurring charges, includes results from Unconsolidated JV’s WAVE and ClarkDietrich. FY20 Adj EBITDA & EBIT excludes a $23.1M gain for the sale of WAVE’s foreign assets.
Sustainable Energy Solutions Financials 81 *excludes restructuring and non-recurring charges.
STEEL PROCESSING Financials 82 *excludes restructuring and non-recurring charges, includes results from Unconsolidated JV Serviacero
Supplemental Data 83 Adjusted EBITDA / Free Cash Flow
Supplemental Data 84 Consolidated Adjusted EPS *FY2019 reflected a pre-tax restructuring gain of $1 million ($0.01/share). FY2020 reflected a pre-tax restructuring and non-recurring charges of $71 million ($0.98/share). FY2021 reflected pre-tax restructuring charges of $120 million ($1.84/share). 3M FY2021 reflected pre-tax restructuring charges of $61 million ($0.88/share). 3M FY2022 reflected pre-tax restructuring benefits of $6 million ($0.09/share).
Supplemental Data 85 Reconciliation OF ADJUSTED eBit & EBITDA - fy21 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
Supplemental Data 86 Reconciliation OF ADJUSTED eBit & ebitda - fy20 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
Supplemental Data 87 Reconciliation OF ADJUSTED eBit & EBITDA – fy22 Q1 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
Supplemental Data 88 Reconciliation OF ADJUSTED eBit & EBITDA – fy21 Q1 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
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Worthington Industries Joe Hayek – Chief Financial Officer 2021 Virtual Global Industrials Conference November 11, 2021
Safe Harbor Worthington Industries wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by the Company which are not historical information constitute "forward looking statements" within the meaning of the Act. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. Factors that could cause actual results to differ materially include risks, uncertainties and impacts described from time to time in the Company's filings with the Securities and Exchange Commission, including those related to COVID-19 and the various actions taken in connection therewith, which could also heighten other risks. 2
Net sales of $3.6 billion TTM 08/31/21 8,000 7 53 5,100 3
Corporate Citizenship & Sustainability Long history of keeping employees safe, practicing good citizenship and protecting the environment For more details, please see our 2021 Citizenship & Sustainability Report located on the “Sustainability Report” page of our website at: www.WorthingtonIndustries.com 4
5 New reporting segments announced starting fiscal 2022 Segments better align businesses around the attractive end-markets they serve and provide investors with greater insights into performance
$3.6 billion of sales in trailing Twelve Month ended 08/31/21 6 Net Sales by End-Market $3.6 Billion Adjusted EBITDA* by Segment $604.3 Million *EBITDA adjusted to exclude restructuring and impairment
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8 Utilizing Machine Sensoring and Analytics for Predictive Maintenance Situation: Despite regularly planned maintenance there can be unpredictable outages on machines that require costly unplanned down time and rework
Vision: Improve the reliability of our equipment by utilizing automation, analytics, and advanced technologies to enable better decision making and enable our maintenance function to be proactive rather than reactive
What we did: Partnered with a start-up company to install remote sensors and a monitoring solution Piloted the solution on critical machinery and after some success we have now installed over 60 sensors across the company
What we achieved: We receive alerts with maintenance recommendations when potential issues are detected We have reduced unplanned machine downtime We reduced rework and increased productivity allowing our maintenance team to be more strategic
Prevented
350+ Hours
Unplanned machine downtime Avoided
$1 Million
in potential lost earnings TRANSFORMATION
9 Consumer need identified to know how much fuel was remaining in hand torch and camping gas cylinders Concept designed and manufacturing outsourced to enable quick speed to market Available at 24 retailers nationwide under Bernzomatic and Coleman brands MEET YOUR NEW FUEL COMPANION. The Digital Fuel Gauge will help ensure you’re never left on empty. Digital Fuel Gauge for portable cylinders 9 INNOVATION
Becoming a global leader in the Electrical steel market Planned acquisition of Tempel expands our product offerings adding highly engineered, precision-stamped, electrical steel laminations. The acquisition will immediately make us a market leader in the rapidly growing electrical steel market that includes transformers, machine motors, and electric vehicle motors 10 Market leader in precision engineered electrical steel lamination components for high growth end markets Entry into rapidly growing electrical steel market Key industry trends driving higher growth for electric motors and transformers Enhances existing automotive offerings and will position Tempel to further penetrate growing hybrid and EV markets based on Worthington’s experience and relationships Adds new end-market exposure to the important electricity infrastructure and distribution markets Global manufacturing footprint with 5 facilities to support customer needs
Attractive financial returns Purchase price of approximately $255 million cash plus assumption of certain liabilities $377 million in revenue, $35 million adjusted EBITDA excluding estimatedinventory holding gains (TTM 09/30/21) Expected to close in December 2021
11 As the world transitions to renewable energy and electric vehicles, demand for electric motors and transformers will grow significantly
12 Net Sales by End-Market (CY 2020) Tempel serves diverse and attractive end-markets which are projected to grow faster than GDP Source: McKinsey & Company Projected Global Growth Through 2025
Global Operations Global manufacturing capabilities allow Tempel to partner with its customers worldwide and adjust to changing production needs U.S. – Chicago, IL Mexico – Monterrey, Nuevo Leon China – Changzhou, Jiangsu India – Chennai, Tamil Nadu Canada – Burlington, Ontario U.S. – Levittown, PA U.S. – Buena Park, CA Europe 13 Tempel’s global footprint allows it to serve customers worldwide
Financial goals 14 increase margins / DECREASE ASSET INTENSITY Reduce earnings volatility Modest leverage / ample liquidity (investment grade) Balanced capital allocation Rigorous capital discipline 14
Balanced Capital allocation strategy 15 Strong cash flows and significant liquidity support balanced approach to capital allocation focused on growth and rewarding shareholders Reinvest in the business to create value and support growth FY2021 CapEx of $82.2 million Focus on core businesses and selectively grow into new markets Focus on higher margin / high cash flow businesses Dividend paid quarterly since becoming a public company in 1968 Eleven consecutive years of dividend increases Opportunistic approach has reduced share count 30% over past 10 years since start of FY 2012 8.3 million shares remaining on authorization Over $3 billion of capital deployed in past 10 years since start of FY2012
($ millions) Growth Rewarding Shareholders *Information based on financials since FY 2012 through FY 2021
Consolidated FINANCIAL Results *Adjusted for restructuring and non-recurring items. See supplemental data schedules in appendix for reconciliation of adjustments. 16
KEY INVESTMENT HIGHLIGHTS 17 Business segments aligned around diverse and attractive end-markets with market leading positions Actively pursuing growth through innovation, transformation, and acquisitions Multiple new product launches complete and pending 4 acquisitions announced calendar year to date Balanced approach to capital allocation focused on investing for growth and rewarding shareholders Dividend paid since becoming a public company in 1968 Opportunistically reduced share count by 30% over past 10 years Solid free cash flow and ample liquidity to continue executing on strategy Worthington offers an attractive investment opportunity balancing growth and rewarding shareholders
Supplemental Data 18
Consumer Products I market leading brands 19 Market leading brands sold primarily through big-box retailers Net Sales Adj. EBITDA ($ Millions)
Consumer products Financials 20 *excludes restructuring and non-recurring charges.
Building products I segment 21 Broad array of market-leading commercial and residential building products primarily sold through distributors. Equity earnings of WAVE and ClarkDietrich joint-ventures reported as part of Building Products EBIT. Products *Represents pro-rata share of JV’s Net Sales *FY20 Adj. EBITDA excludes $23.1M gain related divestiture of WAVE’s foreign operations Net Sales Adj. EBITDA* ($ Millions) FY21 Net Sales Adj. EBITDA Contribution $402.0M $30.0M $185.9M* $78.9M $223.3M* $24.6M
building products Financials 22 *excludes restructuring and non-recurring charges, includes results from Unconsolidated JV’s WAVE and ClarkDietrich. FY20 Adj EBITDA & EBIT excludes a $23.1M gain for the sale of WAVE’s foreign assets.
Sustainable energy solutions I the Bankable Sustainable Mobility Solutions Partner Valves, Pressure Regulator, Filters, etc. High-pressure cylinders, bundles and containers for CNG and Hydrogen applications
> $800B Global hydrogen market potential (2050)
$3.4B CNG / RNG / H2 tank market size (2025)
~450K CNG / H2 passenger cars outfitted to date
~2,230 CNG / H2 buses & trucks outfitted to date
>1 million L Storage and transport capacity enabled
$135M $11.6M
FY21 Revenue Adj. EBITDA
Full-scale provider of all gas-containment solutions: cylinders, systems & components SEGMENT HIGHLIGHTS Onboard fueling systems for CNG and Hydrogen applications (light, medium and heavy-duty vehicles) Sources: Market&Market, BloombergNEF WORTHINGTON 23
Sustainable Energy Solutions Financials 24 *excludes restructuring and non-recurring charges.
Net Sales Steel Processing I Segment 25 High value-add steel processing Broad range of metal products in sheet, coil and strip configurations as well as processing capabilities including cold reduction, specialty coatings, annealing, pickling, slitting and blanking Laser welding solutions Laser welded solutions for lightweight and safety critical components to automotive and other markets. Capability to process steel and aluminum. AGRICULTURE Steel Processing Sales by End-Market FY22 Q1 08/31/21 End Markets Adj. EBITDA ($ Millions) Automotive Construction
STEEL PROCESSING Financials 26 *excludes restructuring and non-recurring charges, includes results from Unconsolidated JV Serviacero
Supplemental Data 27 Adjusted EBITDA / Free Cash Flow
Supplemental Data 28 Consolidated Adjusted EPS *FY2019 reflected a pre-tax restructuring gain of $1 million ($0.01/share). FY2020 reflected a pre-tax restructuring and non-recurring charges of $71 million ($0.98/share). FY2021 reflected pre-tax restructuring charges of $120 million ($1.84/share). 3M FY2021 reflected pre-tax restructuring charges of $61 million ($0.88/share). 3M FY2022 reflected pre-tax restructuring benefits of $6 million ($0.09/share).
Supplemental Data 29 Reconciliation OF ADJUSTED eBit & EBITDA - fy21 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
Supplemental Data 30 Reconciliation OF ADJUSTED eBit & ebitda - fy20 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
Supplemental Data 31 Reconciliation OF ADJUSTED eBit & EBITDA – fy22 Q1 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
Supplemental Data 32 Reconciliation OF ADJUSTED eBit & EBITDA – fy21 Q1 *The table above presents summarized financial information for our reportable segments for the periods indicated, as well as a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income (loss) for purposes of measuring segment profit.
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