2019 William Blair Growth Stock Conference - Bill Johnson - President and Chief Executive Officer Rich Sheffer - Vice President Investor ...
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2019 William Blair Growth
Stock Conference
Bill Johnson – President and Chief Executive Officer
Rich Sheffer – Vice President Investor Relations, Risk Management and Treasurer
June 6, 2019
© Welbilt, Inc.
Safe Harbor Statement
Certain statements in this presentation constitute “forward-looking statements” within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. Statements contained in this presentation that are not historical
facts are forward-looking statements and include, for example, descriptions of the Company’s operating and
strategic plans, the Company’s growth objectives, and any assumptions on which those plans or objectives are
based. Such forward-looking statements involve known and unknown risks and uncertainties, and our actual results
could differ materially from future results expressed or implied in these forward-looking statements. The forward-
looking statements included in this presentation are based on our current beliefs and expectations and speak only
as of the date hereof. These statements are not guarantees or indicative of future performance. Important
assumptions, risks, uncertainties and factors that could cause actual results to differ materially from those forward-
looking statements are described in more detail under the caption "Risk Factors" in our most recent Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange
Commission. We do not intend, and, except as required by law, we undertake no obligation, to update any of our
forward-looking statements after the date of this presentation to reflect any future events or circumstances. Given
these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking
statements.
2
Investor Day 2019 © Welbilt, Inc.
Welbilt at a Glance (NYSE: WBT)
March 2016 Florida (US) ~$2.3B $1.6B ~5,400 5,000+
Spin-off Date Corporate HQ Market-Cap1 2018 Revenue Global Employees Distributors/Dealers
2018 REVENUE BREAKDOWN
2% 3%
11% 6% Commercial Kitchen 9%
7% Operators:
Restaurants Dealers, Distributors,
19% Americas
8% Business & Industry Buying Groups
End
Region EMEA Healthcare
29% Channel3 Key Accounts 4
8% Market2 60%
Travel & Leisure 59% Other General Markets
APAC Retail Other Chains
70% 9% Education
Other
Global Leader in Professional Foodservice Equipment and Systems
1 As of 5/9/2019; 2 Estimate for WBT Americas; 3 Reflects gross sales for 2018. Includes all third-party product 3
sales. 4 Large end customers. Investor Day 2019 © Welbilt, Inc.
Leverage Market Trends to Drive Growth
Global Demand for Key Trends Driving Growth
Commercial Food Service Equipment1 ($B)
Rapid urbanization and increasing consumption
~$40B 2-3% Industry of processed food and beverage in emerging markets
Long-term
Expected CAGR
NORTH
$15-$16 2-3% Shift to convenience via E-commerce
AMERICA
EUROPE $9-$10 1-2%
Focus on health and food safety, and traceability
APAC $9-$10 3-4%
Automation and digital technologies to address labor
RoW $5-$6 2-3% costs and traceability
2019E
Through Brand Preference Strategy and Correctly Investing in these Key Trends, We Can Grow 1-2% Above Market
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1 Source: Industry reports and Company estimates.
Investor Day 2019 © Welbilt, Inc.
Key Strategic Messages
01 02 03 04 05
Leading brands that Operational Further improve the Uniquely meet Disciplined capital
are preferred due to excellence to deliver customer's experience customers' systems allocation strategy
innovation leadership, even higher customer by effectively going to needs via investments focused on de-levering
enabled by deep satisfaction at "best market as a portfolio in automated the balance sheet and
customer cost" of brands, making us controls, system driving higher margins
relationships easy to do business solutions and cross- and strong shareholder
with connectivity across returns
our products
effectively leveraging
our broad line and
global footprint
Winning the Battle for Customer Preference and Creating a Better Customer Experience in a Cost Effective Manner
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Investor Day 2019 © Welbilt, Inc.
2021 Targets
1-2% 3.25x-3.75x
Organic Revenue Growth Leverage
above End-Market Growth Ratio1
~500 bps
FCF Conversion
Margin Expansion 1.0x
(i.e., $75M Run-rate Savings) Net Earnings
by 2H21
1 Long-term steady state ratio. Leverage ratio is defined as Net Debt (total debt less cash and cash equivalents
and short term investments with cash and short term investments netting limited to $150M and adjustments 6
included as permitted by our credit facility) divided by Adj. Operating EBITDA. Investor Day 2019 © Welbilt, Inc.
Our Transformation is Well Underway
WHAT GOT US HERE WHERE WE ARE GOING
• 2015: ~15% Adj. Operating EBITDA Margin • 2018: Entered into high growth hot beverage • We have a strong foundation to deliver our
market through acquisition of Crem, a leading strategies
• 2016: Following a history of strategic and manufacturer of professional coffee machines
transformative acquisitions, Manitowoc • Expanded leading brands
Foodservice spins-off from The Manitowoc • 2018-2019: Appointed new President & CEO • Portfolio approach
Company and launches a right sizing and (Oct 2018) and new EVP & CFO (Apr 2019);
• Technology foundation
simplification program continue to attract and develop industry-leading
talent • Global footprint
• 2017: Begin to integrate digital strategy (e.g.,
FitKitchen, KitchenConnect) • 2019: Completed operational review of • With a clear path to profitable growth
businesses identifying ~500 bps run-rate • Ready to implement 500 bps plan
• 2017: Manitowoc Foodservice changes name to improvement in Adj. Operating EBITDA Margin
Welbilt • Disciplined value pricing
by end of 2021
• Target 1-2% organic growth above industry
• Embedding operational excellence
Strategic Review Identified Strong Foundation with Significant Opportunity for Enhanced Profitable Growth
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Investor Day 2019 © Welbilt, Inc.
Competitive Differentiator #1
Full Line of Product Offerings that Command #1 or #2 Market Positions
SYSTEM SOLUTIONS AFTERMARKET PARTS
Beverage Equipment
Refrigeration & Combi, Conveyor &
Prep. Stations High-speed Ovens
Walk-in Ranges, Grills, Induction
Refrigeration Steamers, Kettles & Skillets
Ice-cube Commercial Fryers,
Machines Hot Holding
Cold Products Hot Products Parts & Service
(~35% - 40% Revenue) (~40% - 45% Revenue) (~15% - 20% Revenue)
Benefits: Strong Foundation and Opportunity with Every Customer to Expand Wallet Share
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Investor Day 2019 © Welbilt, Inc.
Competitive Differentiator #2
Leverage Our Leading Brands by Going to Market as a Portfolio
STORING COOKING HOLDING & DISPLAYING DISPENSING & SERVING
Cross Portfolio Service Brands
Benefits: Growth, Scale and Easy-to-do-Business with
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Investor Day 2019 © Welbilt, Inc.
Competitive Differentiator #3
Technology that Connects Kitchen Operations and Improves Customer Experience
Solution Offering
Full Range of Products Digital FitKitchen
with Common User Services Process &
Interfaces Automation
Establishing a Connected Welbilt Experience and Becoming the Digital Leader in the Industry
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Investor Day 2019 © Welbilt, Inc.Competitive Differentiator #4
Deep Customer Relationships Spanning Decades
Large Chain Customers typically Designated as “Key Accounts” 2018 Top 5 Global Chain Customers
45+ year average relationship
% of FY18 # of
Customer
Revenue Years1
End Customer 1 9.4% 56
End Customer 2 4.9% 59
End Customer 3 2.8% 29
End Customer 4 2.1% 37
End Customer 5 2.0% 21
2018 Top 5 N.A. Buying Group Customers
% of FY18 # of
Customer
Revenue Years1
Buying Group Customer 1 6.3% 31
US Channel Partners Typically Referred to as “General Market” Buying Group Customer 2 5.9% 10
Buying Group Customer 3 4.7% 10
Buying Group Customer 4 2.8% 30
Buying Group Customer 5 2.5% 24
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1 Source: Company estimates.
Investor Day 2019 © Welbilt, Inc.Competitive Differentiator #5
Leverage Our Brands, Technology and Relationships via a Leading Global Footprint
• 53 locations in 16
countries
Manufacturing Facilities by Region
• Full-line of hot and AMERICAS EMEA APAC
cold products and
systems are sold in
100+ countries
• Worldwide network
of 5,000+ dealers
and distributors
• Unique product
manufacturing in
local markets to
support global
2018 Revenue by Region
customers
70% 19% 11%
Benefits: Growth, Scale-based Advantage in R&D and Global Accounts
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Investor Day 2019 © Welbilt, Inc.Summary
Core Strengths and Sustainable Competitive Differentiators
STRENGTHS & DIFFERENTIATORS TARGET OUTCOMES
1. Brands that are #1 or #2
2. Go-to-market as a portfolio Win the battle for customer
3. Technology-driven solutions and
connectivity
preference at least cost
4. Deep customer relationships
5. Global footprint that scales up our
relationships and R&D
Industry leading growth with
6. Operating principles:
• Sustainability and safety rising EBITDA margin
• Operations excellence
Driving Continuous Improvement in Performance for Our Customers
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Investor Day 2019 © Welbilt, Inc.Welbilt Production System (WPS) | Continuous Improvement is Embedded in Our Culture
Future Focus Areas
Global Network Continue to right size operations footprint and
Optimization move assembly closer to end-markets
Operational Introduce WPS across all plants and implement
Excellence / Lean Lean in all operations
Sourcing & Supply
Implement a strategic sourcing process
Chain Excellence
Operations Simplify business operations following 80/20
Simplification methodology
Quality Drive quality excellence throughout production
Excellence and new product introduction process
Safety
Continue to develop world-class safety culture
Excellence
Quality and Lean Are at the Heart of WPS Today
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Investor Day 2019 © Welbilt, Inc.Transformation Program: Staged Path to “Least Cost” Structure to Achieve Strategies for Preference
& Differentiation
24 Months of Execution
CATEGORY WHAT’S ADDRESSED WAVE 1 WAVE 2 WAVE 3 WAVE 4
Procurement • Unit cost for all externally procured components Procurement Procurement Procurement Procurement
N.A. Manufacturing • Labor cost
N.A. Mfg. Site #1 N.A. Mfg. Site #3 N.A. Other Mfg. Sites N.A. Other Mfg. Sites
• Indirect labor cost
• Overhead cost (incl. materials consumption and indirect
spend on site) N.A. Mfg. Site #2 N.A. Mfg. Site #4
• Expedited freight spend
• Product quality
• Technical support
N.A. KitchenCare N.A. KitchenCare N.A. KitchenCare
• Warranty service efficiency
• Labor cost (customer service, marketing)
EMEA & APAC EU Mfg. Core Site EMEA Distribution
• EMEA freight cost
• Labor cost (customer service, marketing)
N.A. S&M • Non-labor cost (trade shows, advertising, SPIFFs) N.A. S&M N.A. S&M
• Alignment of compensation programs
• Brand engineering (both NPI and sustaining)
Engineering Engineering
• Central engineering
• Restructuring G&A (e.g., standardized processes, shared
G&A service centers)
G&A Transformation G&A Transformation
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Investor Day 2019 © Welbilt, Inc.Transformation Program: Investing to Deliver Run-Rate Savings
• Costs will be incurred through mid 2021; savings realization begins Target Run-Rate Savings of $75M by
to ramp in 2020 End of 2021 ($M)
• $70-80M total cost with an expected payback period of 1 year
• Combination of Restructuring and Transformation Program costs (in $75
SG&A); minimal incremental capital vs. run-rate (e.g., ~2% of sales)
• Targeting $75M in run-rate savings by 2H21 (following completion of
Wave 4: ~500 bps run-rate improvement in Adj. Op. EBITDA Margin)
• Program developed in Waves; Wave 1 starting now to include 2
$30
plants, direct material sourcing opportunities and SG&A efficiencies
• 2019 Impacts: Restructuring and Transformation Program costs
$25-30M; ~$3M savings already reflected in guidance $3
2019 2020 2021
Disciplined Management of Transformation Program with Clear Opportunities
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Investor Day 2019 © Welbilt, Inc.INVESTMENT SUMMARY | CLEAR PATH TO PROFITABLE GROWTH
CONTINUOUS IMPROVEMENT IS Leading brands that are preferred due to innovation leadership, enabled
EMBEDDED IN OUR CULTURE by deep customer relationships
Operational excellence to deliver even higher customer satisfaction at
"best cost"
Further improve the customer's experience by effectively going to market
as a portfolio of brands, making us easy to do business with
Uniquely meet customers' systems needs via investments in automated
controls, system solutions and cross-connectivity across our products
effectively leveraging our broad line and global footprint
Disciplined capital allocation strategy focused on de-levering the balance
sheet and driving higher margins and strong shareholder returns
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Investor Day 2019 © Welbilt, Inc.Capital Allocation Framework | Use of Cash from Operations
Actual 2016-2018 Target 2019-2021 COMMENTARY
$125M/year1 ~$150M/year • Cash from Operations is after Restructuring and
Transformation Program costs of $25-30M/year
M&A: 10-15%
• M&A: priority is to get momentum on operational
Capex: 20-25% improvements, while we de-lever; smaller bolt-ons
M&A: 58% are possible
• Capital spending of $30-40M/year focused on plant
level operational improvements, IT (workflow and
ERP harmonization)
Debt Reduction: 40-50%
Capex: 17% • Gross debt reduction of $60-80M/year, Net Debt
reduction greater
Debt Reduction: 8%
• Some cash expected to build on balance sheet off-
Cash Build: 17% Cash Build: 15-20%
shore
Near-term Priority is Optimization Program and De-leveraging; Some Bolt-on, Accretive Acquisitions Possible
1Cash from Operations adjusted to include the “Cash receipts on beneficial interest in sold receivables” as 18
disclosed in the Statement of Cash Flows within the Cash From Investing Activities section. Investor Day 2019 © Welbilt, Inc.Q&A Session
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