Ayna on Industrials: State of the Union, Looking Back at 2022

Exhibit 2

Performance varied across companies, too. When we arranged individual companies into quartiles based on TSR, we measured a gap of 7,000 basis points between top- and bottom-quartile performers. Top-performing companies increased EBITDA margin by 19 points (versus a decrease of 286 points for bottom performers) and reduced the ratio of net debt to EBITDA by 0.2 (versus an increase of 0.2 for bottom performers).

The Ayna Awards for Industrials Excellence in 2022

Ayna.AI analyzed company, micro-vertical, and sector performance to identify specific companies that excelled in shareholder returns, operational performance, and multiples improvement in 2022. We are pleased to recognize these excellent industrial companies with Ayna Awards (see Table 1):

• Salmon Award for 29 companies that swam upstream defied the micro-vertical odds to deliver top-tier shareholder returns, roughly 13,000 basis points above bottom performers in top-quartile micro-verticals
• Raptor Award for four companies that soared high by improving their multiples by more than 1.5 times even as the industrial sector’s multiples declined by 30 percent overall
• Hard Hat Award for 31 companies demonstrating operational excellence: top-quartile performance across revenue growth (about 4,800 basis points above the sector average), EBITDA margin expansion (about 890 basis points above the sector average), and FCF margin expansion (approximately 810 points above the sector average)
• Ascensionist Award for 14 companies that rose above expectations by beating consensus estimates on revenue, EBITDA margin, EBITDA per share, FCF per share, and ROE—resulting in delivery of total shareholder returns about 960 points higher than for the sector overall‍
• Accumulator Award for four companies—Albemarle, Enphase, Graphic Packaging, and Visteon—that each met the criteria for two of the other awards in 2022

Table 1

While 2022 was a tough year for public markets, especially the industrial sector, there were winners and losers. Top-quartile companies on shareholder returns focused on revenue growth, EBITDA margin, and FCF margin. Ayna Awards exhibit how multiple companies were able to beat the overall industrial sector and micro-vertical performance on returns, valuations, operational performance, and more.

In the report, we also take a deeper dive into the analysis of individual companies (in the final chapter’s “case studies”) which gives further insight into the kinds of activities that enabled companies to soar above peers’ performance and analysts’ expectations.