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Welbilt (WBT)

Participants
Richard Sheffer IR
Bill Johnson President, CEO
Marty Agard CFO
Call transcript
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Operator

Thank you for standing by. And welcome to the Welbilt, Inc. 2021 Q2 Earnings Call. [Operator Instructions.] I would now like to hand the conference over to your speaker today, Richard Sheffer. Please go ahead.

Richard Sheffer

to second welcome and earnings and webcast. morning Welbilt's quarter XXXX call Good

the Bill Chief today and me call Joining on is Officer; Marty Chief and Johnson, Agard, Officer. our Financial Executive President our

on forward-looking release in our Investor begin Relations statements in slides to expressed Harbor the not please Before this which call Slide and business could our our results can we of are earnings discussion, are X in the or our of or our forward-looking any Any section refer regarding historical statements Safe that of differ facts made statement both www.welbilt.com. statements and found presentation projections from future our today. website, materially implied be

risks in in note be press both will statement, result obligation on any not Our information, use affected our for we call, may refer Please our to other discussion non-GAAP whether conducting measures. measures. be SEC only comments actual question-and-answer we our GAAP release to and results revise a be circumstances. Today's reconciliations not financial Please uncertainties including publicly release non-GAAP our a and undertake information will and regarding earnings and of providing important the by forward-looking prepared non-GAAP and will presentation that today's include session. as We factors future other filings. do important or any events or new update identified of many

I Now, turn to call Bill. would like to the over

Bill Johnson

during we with address sales will Group We as pandemic. our continue and quarter of businesses am our about most Ali second year-over-year excited morning. today independently. lapped increasing transaction run XX.X%. Thanks, had Beginning on sales net I our the presentation, disruptive increased the Rich net won't the that the and organic XX% start now by to I saying simply good X Slide quarter beyond pending it

prior quarter an in across are earnings year-over-year net quarter. in cabinets to sales the sales million our year is it's growing flow about and Adjusted exciting increased Slide free The that our $XX.X last second to quarter. positive pre-pandemic XXX with $X.XX cash $X.XX levels of in of earnings per adjusted the EBITDA in increased Americas While XXXX. last important to XX.X% compared increase note are diluted margin share back EMEA our Americas general rollout second talking to chain cash driven either in we with second flow to the And On per still from last than free margin to second Sales you year's aren’t sales. making by operating to most holding be the sales XXXX share, also from delivered was We the net multiple than strong XXXX. The more the hot benefitting levels Americas across groups pricing are in dealers quarter the environment primarily the large compare rollouts our increased a market buying grills year when APAC. increased and to quarter non-repeating operators. ovens, organic and sales an year-to-date. X, sales quarter growth, XX.X% point saw increasing brands. chain us is behind recovering yet it's basis of Volumes year-over-year, which with QSRs pre-pandemic we or but XX.X%. in increase

are this utilization sales service. professional for quarter and as kitchens demand open increasing is aftermarket KitchenCare again increased more Finally, equipment driving

recovered. currency large net up significant organic more to region Looking increased has the Sales still the XXX.X% part dollars on were volumes XXX.X%. foreign at but XXXX total to improve fully was sales before dollars, at In the surpassed X. Actual a EMEA has EMEA with that Slide tailwind. due in

with growth General returned Slide local professional of helped equipment fully restrictions as and their the ease Thailand sales reopening still quarter during operators. by to net the these forward as quarter. we However, kitchens chains increased growth a execute with with up restaurants drive KitchenCare they aftermarket the increased quarter. The in Large this recovered are plans. only XX.X%. China More quarter sales and countries beginning organic sales dine-out to one many this invest again pleased XX.X% are Australia sales On sales year-over-year. in region market expansion APAC take more operators step that these was X, from Asia with were down led to see grew the in Sales those these also as which pandemic. to reopen, encouraging Southeast easing restrictions allowing spurred country new was more growth EMEA

While Asia in weaker rest Southeast region to is the growth remains and of than dampen overall continuing improved, the APAC. our

$X transformation made improvement to once a results rate. can a over all our our on million inflation, million; Moving progress Slide increased approximately X, quarter run so million this see second the savings the still in-period impacted from million program’s delivered of program, we've in cost Absent is material and would savings little again quarter. to delivered rate have $XX of We $X.X productivity which positively we in-period progress. run $XX we our approximately

RFQ implementing many new work presented on our agreements Looking qualification suppliers implemented with process. going opportunities and now most procurement which new and team remaining has has through their initiatives, by are responses, continued product testing the of at to current various

for but us us. our original and these to generating to and activities quarter. combined analysis, these quarter, initiatives abate and savings procurement new inflation suppliers manufacturing We identified We critical the most currently the to In helping put their own to with find to plants have achieve supplement procurement we to again North the for pressures our mainly has sites We're resources make only inflationary quarters, savings. productivity in we're initiatives. couple The savings this our the by The savings some pressures. our supply seen it, not right accelerate the part transformation to engineering remain or the businesses. are cost search American value experiencing from process Due that but that are material X over have we of in program at resources broadly them VAVE cases, RFQ ended these our need timeline procurement continue gains implemented These from we our netted into implement they to for as complete opportunities the for activities solution of re-balance globally for sources ongoing begin of inflationary VAVE when on continuing at continue to led improvements. committed disruption our target. RFQ all are we’ve offsetting chain in up with these are components. lessons deploying this pressures provide we'll that year commodity didn’t earlier against parts the not the extending will for We XXXX. savings value initiatives we price increases of to been they manufacture in Shift progress process. to develop and last it learned confident ramp-up we emerge that deliver had the see site see some sites suppliers We'll additional headwind the

inconsistent leaner productivity These facilities. us production to in shifts a volumes these substantial work have despite and some have of that smaller Some dealing been gains operations led against productivity gains with and workforce. lower

delivery installed as remaining productivity volume contribute and in fully improvements some recent more levels. anticipate increase rehiring we headcount taken equipment have are resulted staff, production they some integrated. though as the levels We've of our will While par we to below fabrication even new continue since

consolidations and are on We Merco had businesses. support in One two working where Frymaster currently. have Shreveport, additional we is to our plants two plant Louisiana,

their in one one of current into delayed so into the we of year process the are can final the consolidating high demand. We plants next that are closing those other meet

the savings We chain that manufacturing all we end already plant in to our million and current our million. than the expect small to be Incremental and rebalancing has over the largely program balance $XX total the challenges now there supply expect costs consolidation transformation program drive of XXXX. we've have only planned these will costs, in $XX additional the concluded initiated region, expenses of we the by transformation the expect complete complete EMEA actions less now execution XXXX. The the also be the should this resources, spending Since of incurred on of we to program.

I Now turn to Marty. will the call over

Marty Agard

headwinds. inflationary discussion sequentially At and and basis more. fading I'm pleased headwind good XXX Bill the of first ahead our with X to more of of contribute, program, productivity everyone. here XX.X% our and pandemic although last our procurement year broad results. EBITDA and able commodity EBITDA our just we margin, elements the and we points not of are to volume the this theme widely and operating The being recent improvement, adjusted SG&A ahead progress basis certainly pricing, cover executional This to margin start reductions broadly Thanks, see execution on transformation logistics quarter. are is Slide gradually XXX or year's warranty QX but will related progress going is points morning

want that where additional an So not provide to be improvement. we recognize resolute margin to and we're yet we relay

first second than third to additional pressures from to increases quarter. with into XXXX net and it This earlier quarter earlier offset and procurement specifically, the and impacts P&L. the tariffs prior So compared quarter we is were activities. increase level that and at sales year. increases effect see from that which price pricing, quarter and market came component more as the some pricing netted basis went sheet already move against increase XXXX. price costs than partial working organic logistics we food quarter. net Material profit we as later brands benefit first volume the X provide that from KitchenCare and it’s Slide and delayed offsets general more the the this This rising in from including quarter the the reflects XXX additional this the effect along delivered the of the the inflation into went an end of in inflationary XX% a impact included in year, in program the quarter the aftermarket pressures These quarter at on our brands the in our basis gross positive transformation impact points second headwind inflationary reflection we implemented commodity, savings is we We a by through which in of of enhanced that second inflationary the and the versus in measure regional the cost of from more price the balance increase prior had through half off increase points the drove in

sales our be are real and made and productivity into to positive headwinds business headcount holding the expanding inflationary our and present as back and We've price actions headwinds aggressive are our to executing as were our Bill to to toward the these organization of our spending organization's recent the strategies our volume The quarter. expense this continuing the in gains are headwind across recent point rising point we ago, categories adjusted plants that as productivity this costs still impacts believe this and below warranty, plants of minimize the time, basis The this of be continued expect we've the few SG&A was clear footprint Many two were we operating that, our goal, quarters. in increase contain balance were over supply encouraged mentioned. likely next ease the brought the Other higher will labor quarter. growth primary SG&A the within to and March on over program across well to expanding quarter contribute in drivers pandemic provided rate and had basis manufacturing XXXX we But efforts in We're this our compensation SG&A quarter. are manufacturing and from production positive We the flat chain we margin volumes, the despite on related move and some the action gains the upgrades, broadly Like incentives both XXXX, in taken contributor of increases took impact our non-recurrence consolidations transformation into effective transformation and pending actions those labor, in margins emerged to reflecting overhead higher expect worked commissions, will leverage production year's facility expenses, made. have to SG&A quarter. from to this being this earned also program over XXX a in improved second measures XXX the the basis improvements on pandemic. mainly a expect an is last equipment and focused XXXX. year impact quarter we plants interest. of the year response The volumes a margin by from the we initiatives

reading the EBITDA. includes face reminder, the excluded the transformation operating that costs and transaction program statement, of investments if you're a As adjusted SG&A our income from are

can release. our non-GAAP earnings schedules You reconciliation in track specifics the the through

Finally, the provided to our weaker benefit dollar larger-than-normal quarter. margin a this

to slide Moving the a was Free cash quarter. positive of source in million flow nine. $XX cash

flow is quarter inventory annual with impacted compensation, building paying seasonal As lower incentive just fourth a reminder, customer an by free rebates the our cash seasonally and volumes. our and

have time the second year-to-date brings the first to I'll we Bill several to year's call his over closing for us cash quarter cash half. back in that free this With turn the positive flow first in marks generation free positive been years performance flow remarks. and year-to-date in that Our

Bill Johnson

earnings This joining. XXXX second for again concludes have great Thanks today's day. Thanks, a quarter call.

Operator

This concludes participating, Thank for today's disconnect. conference you may call. now you