Modine Manufacturing Company

Investor Presentation
December 2015

Forward-Looking Statements
This presentation contains statements, including information about future financial performance and market conditions,
accompanied by phrases such as believes, estimates, expects, plans, anticipates, intends, and other similar
forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results,
performance or achievements may differ materially from those expressed or implied in these statements because of certain
risks and uncertainties, including, but not limited to, those described under Risk Factors in Item 1A of Part I of the
company's Annual Report on Form 10-K for the year ended March 31, 2015 and under Forward-Looking Statements in Item
7 of Part II of that same report and in the companys Quarterly Report on Form 10-Q for the quarters ended June 30, 2015
and September 30, 2015. Other risks and uncertainties include, but are not limited to, the following: the overall health and
price-down focus of Modines customers, particularly in light of remaining market challenges; the ability of the company to
successfully implement its Strengthen, Diversify and Grow strategic transformation; uncertainties regarding the costs and
benefits of Modines restructuring activities in our Americas and Europe segments, including the activities associated with
the closure of Modines facility in Washington, Iowa; operational inefficiencies as a result of program launches, unexpected
volume increases and product transfers; the effects of the fire at Modines Airedale facility, including inefficiencies associated
with Airedales operations in temporary sites, timely, continued recovery of insurance proceeds, and disruptions associated
with Airedales relocation into its rebuilt facility; economic, social and political conditions, changes and challenges in the
markets where Modine operates and competes, including currency exchange rate fluctuations (particularly the value of the
euro, Brazilian real and British pound relative to the U.S. dollar), tariffs, inflation, changes in interest rates, recession,
restrictions associated with importing and exporting and foreign ownership, and in particular the economic and market
conditions in Brazil and China and the remaining economic uncertainties in certain markets in Western Europe, Russia and
North America; the impact on Modine of any significant increases in commodity prices, particularly aluminum and copper,
and our ability to pass these prices on to customers and/or successfully hedge the associated risk; Modine's ability to
successfully execute its strategic and operational plans; the nature of and Modines significant exposure to the vehicular
industry and the dependence of this industry on the health of the economy; costs and other effects of environmental
remediation or litigation; and other risks and uncertainties identified by the company in public filings with the U.S. Securities
and Exchange Commission. The company does not assume any obligation to update any forward-looking statements.

Modine Overview
A Global Leader In Thermal Management Technology And Solutions
Ticker: NYSE: MOD
EGR Cooler

Condenser

Oil Cooler

Liquid Charge Air

Cooler

Founded: 1916 in Racine, WI

2015 Sales: $1.5 billion
Employees: 6,900 Worldwide
Global Footprint: HQ in Racine, WI with
operations in North America, South America,
Europe, Asia and Africa
Markets: Vehicular (Powertrain & Engine) and
Industrial (Building HVAC & Coils)

Data Center Chiller

Copper Coil

Diverse, Global End Markets & Customer Profile

Corporate Headquarters
Racine, WI
9 Locations serving
North America

European Headquarters
Bonlanden, Germany
11 Locations serving Europe

Asian Headquarters
Shanghai, China
5 Locations and 2 JVs
serving Asia customers
& markets

FY15 Sales

So Paulo, Brazil
(Americas)
Johannesburg, South Africa
(Building HVAC)

Investment Highlights
Product Portfolio
Positioned to Leverage
Current Market Trends

Leader in thermal management technology and solutions

Over 2,200 patents innovations have set industry standards
Products well positioned for global energy efficiency and emissions trends

Strong Core Vehicular

Business and Growing
Industrial Business

Strong core position in vehicular market ability to leverage

innovations/capabilities across portfolio
Industrial business maintains higher margin profile and poised for growth in
coming years

Focused Management
Team Executing
Transformation Strategy

Disciplined
Management, Flexible
Balance Sheet, & New
Repurchase Program

Focused organic growth of high margin businesses

Industrial acquisitions of at least $100 million
Cost reductions: $40-$50M within 18 months
Operating margin expansion from 4-5% to 7-8% by end of FY18
Reduced customer concentration, capital intensity and cyclical exposure

Management disciplined in cost management and productivity efforts

Low risk balance sheet well positioned to leverage strong financial position
to grow
New share repurchase program of $50 million authorized in October 2015

Well Positioned for Global Market Trends

Global Market Trends

Increase Energy
Efficiency
Reduce
Greenhouse Gas
Emissions
Recover / Reuse
Waste Heat

Modine Products
Increase fuel efficiency
Reduce vehicular emissions
Leverage waste heat recovery
technology
Improve efficiency of
HVAC&R equipment
Reduce A/C refrigerant
charge requirements

Improve Indoor
Air Quality
6

Strong Product Portfolio

Vehicular 84%

Powertrain
Cooling (PTC)
MAINTAIN strong
market position

Cooling module
Radiator
Charge air cooler
Oil cooler
Condenser

Industrial 16%

Engine (EPG)

Coils

Building HVAC

PRIORITIZE
investment for
growth

EXECUTE growth
and consolidation
strategy

EXPAND product
offering and reach

Copper RTPF coils

Stainless steel
RTPF coils
Aluminum
microchannel
condensers and
evaporators

Gas unit heaters

Packaged
ventilation
Air handlers
Chillers
Precision A/C
Geothermal

Oil cooler
Charge air cooler
EGR cooler
Condenser

MODINE CONFIDENTIAL PLEASE DO NOT COPY OR DISTRIBUTE

Vehicular (Powertrain & Engine) Market Overview

Market Size
Powertrain cooling
Engine Products

$12-14B
$5-6B

5-Year Unit Growth Rates

Powertrain Cooling
2 - 5%
Engine
5 - 10%

Sales by Product Group (FY'15)

Sales by Geography (FY'15)

Vehicular Position and Strategy

Leverage and optimize powertrain cooling
Capitalize on engine cooling growth trends
Industry Trends and Drivers

Modine Priorities

Powertrain cooling
Focus on fuel economy is driving the
need for higher efficiency and lower
weight products
Customers demand global support
Engine products
New heat exchangers are required for
fuel economy and emissions standards
Customers are looking for innovation
to create their own competitive
advantage

Address underperformers in
global product portfolio
Accelerate low cost
manufacturing footprint,
leverage global production scale
Optimize supply chain
management
Focus product development on
supporting lower fuel economy
standards and emission targets

Industrial (BHVAC & Coils) Market Overview

Market Size
Building HVAC
$3.0-3.3B
Coils
$2.0-2.5B
5-Year Unit Growth Rates
Building HVAC
5-10%
Coils
4-7%

Sales by Product Group (FY'15)

Sales by Geography (FY'15)

10

Industrial (BHVAC & Coils) Position & Strategy

Strive to be recognized as the most trusted brand in HVAC & Coils
providing integrated thermal solutions, differentiated through innovation
Industry Trend and Drivers
Building HVAC
Increased focus on energy efficiency
and total cost of ownership
Demand for free-cooling and full
product line solutions
Large install base creates barrier to
entry
Long-term distributor relations
Coils
Increased emphasis on energy
efficiency
Smaller OEMs value product design
services from Coils provider as they
typically lack heat exchanger expertise

Modine Priorities
Drive organic growth through
expanded product offering and
geographic reach
Develop and maintain strong
relationships with specifiers
Achieve and maintain large
installed base to leverage
replacement business
Pursue inorganic growth through
strategic acquisitions

11

Transformation Goals
Diversify

Strengthen

Organic and inorganic investment

in BHVAC, Coils, and other
Industrial applications

Optimize global
manufacturing capabilities
Execute global procurement
project
Operational & SG&A
expense reductions

GOALS:
Reduced customer concentration
and cyclical exposure
Increase share of high margin
business
Shift mix:

GOALS:
Cost reductions: $40-$50M
within 18 months
Operating margin expansion
from 4-5% to 7-8% by end
of FY18

FY15

FY18

Vehicular

84%

60-70%

Industrial

16%

30-40%

Grow

Utilize balance sheet to aggressively pursue Industrial acquisitions and

expand share in vehicular growth areas
GOALS:
Acquire at least $100 million in incremental Industrial revenue
Expand target leverage ratio (net debt/EBITDA) between 1.5 and 2.5x
12

Our Journey to Strengthen, Diversify & Grow

Reorganization
Phase
2005 - 2007

Continuous
improvement Modine Operating
System (MOS)
New product/
matrix
organizational
structure

Four Point Plan

2007 - 2011

Rationalized
product portfolio by
divesting of
underperforming
businesses

Lowered annual
operating costs
by $16M

Reduced assets
by $30M

Reduced global
manufacturing
footprint from 34
manufacturing
plants to 25
(currently 24, going
to 22)

Consolidated
German
manufacturing
operations

Refinanced and
recapitalized the
balance sheet

Lowered SG&A by
one third

Strengthen,
Diversify &
Grow
2015 - 2018

European
Restructuring
2012 - 2015

Strengthen- target $4050M in cost savings

over 18 months,
expand operating
margins to 7-8%

Diversify- increase
investment in Industrial
business, with target
portfolio of 60-70%
Vehicular, 30-40%
Industrial

Grow- target $100M in

incremental Industrial
revenue and net
leverage ratio of 1.5 to
2.5x

13

Financial Review
Highlights FY13 vs. FY 15
Revenue up 9% (+11% excluding FX impact)
Gross margin up 130 bps
Adjusted operating income* up $23 million or 55%
Significant earnings growth despite unfavorable FX
impact and weak conditions in some end-markets
Closed McHenry, Ill. facility and announced plans to
close plant in Washington, Iowa

Fiscal 2016 Guidance (provided 10/30/15)

Revenue down 2-7%, or flat to up 5% excluding

approximately $110 million negative FX impact

Adjusted operating income of $65 to $70 million,

up 6% to 13% on a constant currency basis

Adjusted EPS of $0.75 to $0.82

Expect earnings growth despite FX and market

challenges in fiscal 2016

Financial Highlights
($ in millions, except per share amounts)

FY Ended
March 31,

2013

2014

2015

Revenues

$1,376

$1,478

$1,496

Gross margin

15.2%

16.1%

16.5%

Adjusted operating
income*

$42

$61

$65

Adjusted operating
margin*

3.1%

4.1%

4.3%

Adjusted EPS*

$0.40

$0.73

$0.63

ROACE*

6.0%

8.7%

7.8%

Net debt-to-capital*

34.3%

15.3%

17.8%

* See Appendix for Non-GAAP reconciliations

14

Conclusion
Robust product portfolio positioned to leverage current market
trends to increase fuel economy, reduce vehicular emissions,
improve indoor air quality and increase energy efficiency
Strong core vehicular business and growing industrial with
strategies to capitalize on industry trends and drivers
Focused and experienced management team with proven track
record executing transformation strategy to Strengthen, Diversify
and Grow the business
Disciplined management, flexible balance sheet, & new $50M
share repurchase authorization

15

Appendix

Americas (44% of Net Sales)

FY 2015 Sales Mix

Seven manufacturing facilities announced plans to

close Washington, Iowa plant

Diversified revenue mix across major end-markets

Segment well positioned for future success based on

improved manufacturing footprint and cost structure

17%

Heavy Truck
Medium Truck

18%

6%
12%

Light Vehicle

New growth opportunities with off-highway and

automotive customers

Ag/Construction

20%

Service

Key customers: CAT, Deere, Navistar, Daimler

Trucks North America (DTNA), MAN, AGCO, CNH

SA Aftermarket

11%
16%

NA Coils/Industrial/Other

($ in millions) (Unaudited)

FY Ended
March 31,

2013

2014

2015

$692.3

$688.3

$666.9

Adjusted operating
income*

52.2

52.0

47.1

Adjusted operating
margin*

7.5%

7.6%

7.1%

Net sales

* See Non-GAAP reconciliations

17

Europe (38% of Net Sales)

FY 2015 Sales Mix

Seven manufacturing facilities serving Europe

Recently consolidated manufacturing operations in

Germany, restructuring winding down

Managing launch activity mainly in oil cooler and liquid

charge air cooler (LCAC) products

Key customers: VW, Daimler, MAN

($ in millions)

FY Ended
March 31,

2013

2014

2015

$498.0

$584.4

$578.2

Adjusted operating
income*

15.7

30.8

24.5

Adjusted operating
margin*

3.2%

5.3%

4.2%

Net sales

* See Non-GAAP reconciliations

18

Asia (5% of Net Sales)

Five manufacturing facilities serving China, India,

Japan and Korea (2 Joint Ventures)

Strategic focus on creating new business

opportunities with local customers

Diversifying our business model; high current

exposure to excavator market

More stringent emissions standards in China is

shifting longer-term focus to local commercial
vehicle customers

Key customers: Volvo CE, CAT, Hyundai Heavy

Industries, Ashok Leyland, Renault

FY 2015 Sales Mix

($ in millions)

FY Ended
March 31,

2013

2014

2015

Net sales

$59.5

$71.5

$81.2

Operating (loss)
income

(8.8)

(3.3)

0.3

(14.8%)

(4.7%)

0.3%

Operating margin

19

Building HVAC (13% of Net Sales)

Five facilities serving North America, United

Kingdom, South Africa and the Middle East

Complementary business that provides

diversification to Modines vehicular segments

Strong financials due to product differentiation,

manufacturing efficiencies and brand strength

Pursuing growth opportunities based on energy

efficiency and other green initiatives
Ventilation, geothermal and data center cooling
Completed Barkell acquisition in Q4 fiscal 2014

FY 2015 Sales Mix

($ in millions)

FY Ended
March 31,

2013

2014

2015

$139.3

$146.5

$186.3

Adjusted operating
income*

10.0

9.9

19.1

Adjusted operating
margin*

7.2%

6.8%

10.2%

Net sales

* See Non-GAAP reconciliations

20

Non-GAAP Reconciliations
Adjusted operating income and margin
($ in millions)
Years ended March 31,
2013

2014

2015

Operating income (loss)

Restructuring related expenses
Impairment charges
Gain on sale of wind tunnel
Brazil legal reserve
Loss from Airedale fire
Adjusted operating income

Net sales

$ 1,376.0

$ 1,477.6

$ 1,496.4

3.1%

4.1%

4.3%

Adjusted operating margin

(0.6)
17.0
25.9
42.3

Adjusted EPS

52.7
4.7
7.8
(3.2)
3.2
65.2

Years ended March 31,

2013

Net earnings (loss) per share attributable

to Modine shareholders - diluted
U.S. tax valuation allowance reversal
Restructuring related expenses
Impairment charges
Gain on sale of wind tunnel
Brazil legal reserve
Loss from Airedale fire
Adjusted EPS - diluted

37.2
20.4
3.2
0.5
61.3

(0.52)
0.36
0.56
0.40

2014
$

2.72
(2.50)
0.43
0.07
0.01
0.73

2015
$

0.44
0.08
0.11
(0.07)
0.07
0.63

21

Non-GAAP Reconciliations
ROACE (Return on Average Capital Employed)
($ in millions)

Years ended March 31,

2013

Operating income (loss)

Restructuring related expenses
Impairment charges
Gain on sale of wind tunnel
Brazil legal reserve
Loss from Airedale fire

Adjusted operating income

Tax applied at 30% rate
Minority interest

(0.6)

2014
$

37.2

17.0

20.4

25.9

3.2

2015
$

52.7
4.7
7.8
(3.2)
3.2

0.5

42.3

61.3

65.2

(12.7)

(18.4)

(19.6)

(1.4)

(1.5)

(1.0)

Adjusted net operating profit after tax (NOPAT)

28.2

41.4

44.6

Average capital employed (see below)

468.0

475.5

570.5

ROACE = NOPAT / Average capital employed

6.0%

Capital employed (debt + Modine shareholder's equity):

Beginning of fiscal year
$
June 30
September 30
December 31
End of fiscal year
Average capital employed (a)

468.0

489.2

8.7%

429.3

7.8%

589.2

490.9

440.0

604.5

465.7

460.0

582.0

465.1

459.2

572.0

429.3

589.2

504.7

475.5

570.5

22

Non-GAAP Reconciliations
Net debt-to-capital
($ in millions)
Years ended March 31,
2013
Total debt
Less: cash and cash equivalents
Net debt
Total equity
Capital
Net debt-to-capital

163.6
23.8
139.8
268.3
408.1
34.3%

2014
$

164.4
87.2
77.2
428.6
505.8
15.3%

2015
$

148.7
70.5
78.2
360.6
438.8
17.8%

23

Non-GAAP Reconciliations
Segment adjusted operating income and margin
($ in millions)
Years ended March 31,
Americas (unaudited)

2013

2014

2015

Operating income
Restructuring expenses
Impairment charges
Brazil legal reserve
Adjusted operating income

50.4
1.8
52.2

49.6
1.2
1.2
52.0

33.4
2.7
7.8
3.2
47.1

Net sales

692.3

688.3

666.9

Adjusted operating margin

7.5%

7.6%

7.1%

Years ended March 31,

Europe

2013

2014

2015

Operating income (loss)

Restructuring expenses
Impairment charges
Gain on sale of wind tunnel
Adjusted operating income

(25.4)
17.0
24.1
15.7

9.6
19.2
2.0
30.8

25.7
2.0
(3.2)
24.5

Net sales

498.0

584.4

578.2

Adjusted operating margin

3.2%

5.3%

4.2%

24

Non-GAAP Reconciliations
Segment adjusted operating income and margin
($ in millions)
Years ended March 31,
Building HVAC

2013

2014

2015

Operating income
Loss from Airedale fire
Adjusted operating income

10.0
10.0

9.4
0.5
9.9

19.1
19.1

Net sales

139.3

146.5

186.3

Adjusted operating margin

7.2%

6.8%

10.2%

25