Kennametal details new multi-year growth plan at Investor Day
- 4-6% organic sales growth CAGR
- 20-23% adjusted EBITDA margin
- 12-14% adjusted return on invested capital
- $100 million cost savings initiative
- None.
Company provides updates on growth, margin expansion and innovation initiatives
"For 85 years, Kennametal has been an industry leader in solving the cutting and wear-resistance challenges of our customers," said Rossi. "More recently, we invested in modernizing our manufacturing facilities to drive productivity, deliver greater customer service and bring higher value-add products to market faster. In addition, we enhanced our Commercial Excellence process to drive share gain and add new revenue streams in underserved areas of our diverse end markets. Today, this process is enabling share gain in end markets like Aerospace & Defense, which gives us confidence in our ability to deliver above market growth as we apply this process to other targeted end markets."
At today's event, Kennametal communicated the following growth and financial targets through fiscal year 2027:
- 4
-6% Organic sales growth CAGR - 20
-23% Adjusted EBITDA Margin - 20
-25% Adjusted earnings per diluted share (EPS) CAGR - 12
-14% Adjusted return on invested capital (ROIC) - Free operating cash flow (FOCF) of greater than
100% of adjusted net income
The Company also announced a
Rossi added, "Taken together, the growth and productivity initiatives within our plan give me confidence that we will drive long-term value for shareholders. We will also continue to execute a balanced capital allocation strategy to maximize shareholder value while funding the growth plan laid out today. We remain committed to returning cash to shareholders and executing a disciplined M&A and organic investment strategy to support and accelerate our growth."
The presentation and webcast recording from Kennametal's 2023 Investor Day will be available on the Company's Investor Relations website following the conclusion of the event.
Certain statements in this release may be forward-looking in nature, or "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal's outlook for organic sales, adjusted EBITDA margin, adjusted EPS, adjusted ROIC and FOCF for fiscal 2024 through 2027 and our expectations regarding future growth and financial performance are forward-looking statements. Any forward-looking statements are based on current knowledge, expectations and estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: uncertainties related to changes in macroeconomic and/or global conditions, including as a result of increased inflation and
Reconciliations to the most directly comparable GAAP financial measures for the following forward-looking non-GAAP financial measures for the fiscal years of 2024 through 2027 have not been provided, including but not limited to: organic sales growth, adjusted EBITDA margin, adjusted EPS, adjusted ROIC, FOCF and adjusted net income. The most comparable GAAP financial measures are sales growth, EBITDA margin, EPS, return on invested capital, net cash flow from operating activities, and net income attributable to Kennametal, respectively. Because the non-GAAP financial measures on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors - including, but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, gains or losses on the potential sale of businesses or other assets, restructuring costs, asset impairment charges, gains or losses from early extinguishment of debt, the tax impact of the items above and the impact of tax law changes or other tax matters - reconciliations to the most directly comparable forward-looking GAAP financial measures are not available without unreasonable effort.
About Kennametal
With over 80 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace and defense, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 8,700 employees are helping customers in nearly 100 countries stay competitive. Kennametal generated
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SOURCE Kennametal Inc.