Q1 2024 RESULTS
PRESENTATION
May 2, 2024
Disclaimer
Forward-Looking Statements
This presentation contains "forward-looking statements." All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks and uncertainties, which may cause the actual results or performance of the Company to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the second quarter 2024 and full year 2024, (2) our ability to recognize the expected savings from, and the timing and impact of, our existing and anticipated cost reduction actions, and our ability to optimize our portfolio and operational footprint (3), the amount of our obligations and nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Honeywell in connection with our spin-off, (4) risks related to our recently completed acquisitions including our ability to achieve the targeted amount of annual cost synergies and successfully integrate the acquired operations (including successfully driving category growth in connected offerings), (5) the ability of the conditions to the closing of the Snap One transaction being timely satisfied and the consummation of the transaction, (6) the ability of Snap One and/or Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities, (7) the ability of Snap One and/or Resideo to achieve the targeted amount of synergies and the related valuation implications described in this presentation, (8) the accretive nature of the transaction to Resideo's non-GAAP EPS in the first full year of ownership and the growth and margin profile of the combined businesses, (9) the ability to accelerate brand strategy as a result of the transaction, (10) the ability to integrate the Snap One business into Resideo and realize the anticipated strategic benefits of the transaction, including the anticipated operational and strategic benefits of the transaction, and (11) the other risks described under the headings "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" in our Annual Report on Form 10-K for the year ended December 31, 2023 and other periodic filings we make from time to time with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those envisaged by our forward-looking statements. Except as required by law, we undertake no obligation to update such statements to reflect events or circumstances arising after the date of this presentation and we caution investors not to place undue reliance on any such forward looking statements.
Use of Non-GAAP Measures
This presentation includes certain "non-GAAP financial measures" as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G. Management believes the use of such non- GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP.
We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this presentation. A reconciliation of the forecasted range for Adjusted EBITDA and Adjusted Net Income per diluted share for the second quarter of 2024 and for the fiscal period ending December 31, 2024 are not included in this presentation due to the number of variables in the projected range and because we are currently unable to quantify accurately certain amounts that would be required to be included in the U.S. GAAP measure or the individual adjustments for such reconciliation. In addition, we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
2 © 2024 Resideo Technologies, Inc
Resideo Q1 2024 Highlights
- Revenue at mid-point and Adjusted EBITDA at higher end of outlook
- Continued Products and Solutions gross margin and Adjusted EBITDA margin expansion
- Progress on cost reductions with lower OPEX y/y and additional actions announced
- Executing on portfolio repositioning and operational optimization across multiple fronts
REVENUE | ADJUSTED EBITDA | CASH FROM OPERATIONS | |||||||
$1.5B for Q1 2024 | $137M for Q1 | 2024 | $2M for Q1 2024 | ||||||
-4% Y/Y | -1% Y/Y | +$6M Y/Y | |||||||
3 © 2024 Resideo Technologies, Inc
Snap One Provides Multiple Value Creation Levers
Complementary | Enhanced Integrator | Meaningfully Expands | Significant Identified | |||
Capabilities Expand | Value Proposition | ADI Proprietary | Business and | |||
Differentiated Market | Product Opportunity | Financial Synergies | ||||
Position |
4 © 2024 Resideo Technologies, Inc
Products and Solutions Q1 2024 Highlights
- Revenue growth in First Alert and stabilizing HVAC channel inventory largely offset Genesis divestiture and ongoing headwinds from higher interest rates and slower housing turnover
- Continued progress on new product introductions and new product pipeline
- Strong profitability performance driven by improved gross margin and OPEX reductions
- Expanding partnerships in energy management and home builder channels
REVENUE | GROSS MARGIN | ADJUSTED EBITDA | |||||
$620M for Q1 2024 | 39.5% for Q1 2024 | $140M for Q1 2024 | |||||
+180 bps Y/Y | +9% Y/Y | ||||||
-6% Y/Y | |||||||
5 © 2024 Resideo Technologies, Inc
ADI Global Distribution Q1 2024 Highlights
- Softer market demand across video and residential security categories more than offset growth in fire and data communications
- Growth in exclusive brands, up 7% y/y, and e-commerce sales, up 1% y/y, with expanding customer engagement in digital channel
- Gross margin and overall profitability impacted by waning inflationary benefits and slower market activity
REVENUE | GROSS MARGIN | EXCLUSIVE BRANDS | |||||
$866M for Q1 2024 | 18.0% for Q1 2024 | SALES GROWTH | |||||
-3% Y/Y | -120 bps Y/Y | +7% Y/Y | |||||
6 © 2024 Resideo Technologies, Inc
Q1 2024 Financial Summary
($ in millions, except per share) | Q1 2024 | Q1 2023 | % change Y/Y |
Net Revenue | 1,486 | 1,549 | -4% |
P&S Revenue | 620 | 658 | -6% |
ADI Revenue | 866 | 891 | -3% |
Gross Margin | 26.9% | 27.0% | -10bps |
P&S Gross Margin | 39.5% | 37.7% | +180bps |
ADI Gross Margin | 18.0% | 19.2% | -120bps |
Operating Profit | 128 | 138 | -7% |
Net Income | 43 | 57 | -25% |
EPS - Diluted | 0.29 | 0.38 | -24% |
Adjusted EPS - Diluted | 0.47 | 0.51 | -8% |
Adjusted EBITDA | 137 | 138 | -1% |
P&S Adjusted EBITDA | 140 | 128 | 9% |
ADI Adjusted EBITDA | 58 | 70 | -17% |
7 © 2024 Resideo Technologies, Inc
Resideo Key Financial Trends
Revenue | -4% | |
$M | Y/Y | |
$1,700 |
$1,600
$1,500
$1,400 $1,300 $1,200 $1,100
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Adjusted EPS | -8% |
Y/Y | |
$0.90 $0.75
$0.60
$0.45
$0.30
$0.15
$0.00
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Adjusted EBITDA | -1% | |
$M | Y/Y | |
$200 |
$150
$100
$50
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Operating Cash Flow | +$6M | |
$M | Y/Y | |
$300 $250 $200 $150 $100
$50 $0 ($50) ($100)
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Q1 2024 HIGHLIGHTS
- Market headwinds persist across both businesses, impacting revenue growth
- Continued positive trends in Products and Solutions gross margin offsetting gross margin headwinds at ADI
- Strategic cost initiatives delivered $13M y/y reduction in OPEX, excluding restructuring
- Operating cash flow in-line with our expectations, remain on target for >$320M for 2024
8 © 2024 Resideo Technologies, Inc
Products and Solutions Financial Trends
P&S Revenue | -6% | P&S Gross Margin | +180 | |||||||||||||||||||
$M | Y/Y | bps | ||||||||||||||||||||
$800 | 44% | |||||||||||||||||||||
$700 | 40% | |||||||||||||||||||||
$600 | 36% | |||||||||||||||||||||
$500 | 32% | |||||||||||||||||||||
$400 | 28% | |||||||||||||||||||||
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 | Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 | |||||||||||||||||||||
$M | P&S Adjusted EBITDA | +9% |
Y/Y | ||
$200 | ||
$150
$100
$50
$0
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Q1 2024 HIGHLIGHTS
- Revenue down 6% y/y but essentially flat excluding Genesis sale impact
- Strong performance in First Alert and stabilizing conditions in U.S. HVAC distribution channel partially offset weaker EMEA and continued security headwinds
- Gross margin improved by 180 basis points y/y despite modest volume declines; cost savings and efficiency efforts driving expansion
- OPEX down 9% y/y, adjusting for restructuring, driving growth in Adjusted EBITDA
9 © 2024 Resideo Technologies, Inc
ADI Global Distribution Financial Trends
ADI Revenue | -3% | ADI Gross Margin | -120 | ||
$M | Y/Y | bps | |||
$1,000 | 20% | ||||
$900 | 18% | ||||
$800 | 15% | ||||
$700 | 13% | ||||
$600 | 10% | ||||
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 | Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 | ||||
ADI Adjusted EBITDA | -17% | |
Y/Y | ||
$M | ||
$80 |
$60
$40
$20
$0
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Q1 2024 HIGHLIGHTS
- Revenue down 3% y/y driven by softer residential security and video categories, partially offset by growth in fire category
- Daily sales trends improved as the quarter progressed
- E-commercesales up 1% y/y and were 21% of Q1 2024 sales
- Exclusive brand sales grew by 7% y/y to record level
- Gross margin and Adjusted EBITDA down y/y due to reduced inflationary benefits and softer demand environment
10 © 2024 Resideo Technologies, Inc
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Resideo Technologies Inc. published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 20:59:14 UTC.