EnerSys (ENS) Bank of America Securities 2024 Leveraged Finance Conference summary

Strategic transformation and business evolution

• Transitioning from an industrial battery company to an industrial technology company, with a focus on maintenance-free and lithium battery solutions.

• Revenue from traditional flooded lead-acid batteries has declined from 75% in 2017 to 45% today, with continued movement toward advanced battery technologies.

• Four business segments: Energy Systems, Motive Power, Specialty, and an emerging fast charging storage segment.

• New CEO, Shawn O'Connell, to take over in May 2025, following Dave Shaffer's retirement.

• Emphasis on innovation, customer-centric solutions, and supporting decarbonization and ESG goals.

Market opportunities and product development

• Serving diverse markets: telecommunications, data centers, utilities, logistics, warehousing, transportation, aerospace, and defense.

• Fast charging storage business launched, targeting commercial real estate and retail, with systems enabling peak shaving and grid demand management.

• Lithium-ion and TPPL (thin plate pure lead) batteries are key growth areas, with ongoing product development for lighter, more efficient solutions.

• Automation and connectivity trends, such as 6G buildout and robotics, present significant growth opportunities.

• Largest provider of batteries to the U.S. government and strong relationships in defense and aerospace.

Operational efficiency and financial discipline

• Annual CapEx typically $80–$120 million, expected to rise with gigafactory construction.

• $47 million in operating expense reductions achieved through manufacturing optimization.

• Strong cash generation from legacy lead-acid business supports investment in new technologies.

• Focus on expanding margins and compounding value creation through hardware, software, and operational improvements.