EnerSys (ENS) investor relations material

Executive summary

• Achieved record Q1 FY2027 results with net sales of $936M, up 4.8%-5% year-over-year, driven by favorable price mix, higher volumes, and strong performance in data centers, communications, and defense, offset by softness in material handling.

• Gross margin improved by 510 bps to 33.5%, reflecting tariff refunds, production tax credits, and favorable price/mix.

• Free cash flow surged to $218M, a turnaround from negative prior year, with FCF conversion at 187%.

• Announced DOE grant and Board approval for a new U.S. lithium manufacturing facility focused on defense, with $150M DOE grant and $200M in state/local incentives.

• Returned $60M to shareholders through $50M in share repurchases and increased dividend, maintaining net leverage at 0.8x.

Financial highlights

• Net sales reached $936M, up 4.8%-5% year-over-year; gross profit was $313M, up 24%, with gross margin at 33.5%.

• Adjusted operating earnings up 47% to $179M; adjusted EBITDA up 50% to $196M; adjusted diluted EPS up 64%-65%.

• Free cash flow was $218M, with cash and equivalents at $531M.

• $30.9M in tariff refunds and $47M in IRC 45X tax credits contributed to results.

• Net leverage ratio improved to 0.8x, reflecting strong deleveraging.

Outlook and guidance

• Q2 FY27 net sales expected between $955M-$995M; adjusted diluted EPS of $3.15-$3.25 (including 45X), or $1.95-$2.05 excluding 45X, up ~25% year-over-year.

• FY27 CapEx projected at ~$70M; margin expansion expected to drive earnings growth in 1H, with topline growth in 2H.

• Full-year tax rate (as-adjusted, pre-45X) expected at 21.5%-23.5%.

• Management expects higher average selling prices in FY2027 due to lagged price adjustments for commodity inflation.

• Continued strong liquidity and capital structure to support growth and acquisitions.