Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q2 2017 Earnings Presentation
12 slides from Valmont Industries's earnings presentation, Jul 20, 2017
Slide 1: Forward-looking Statement Disclosure
2 These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks. uncertainties and other factors that could cause the actual results of
Slide 2: Second Quarter Highlights
3 Net Sales grew 11% with increases in all segments except Energy and Mining Operating income grew 9% Operating income as a percent of sales of 11.0% in 2017 compared to 11.2% in 2016 Diluted earnings per share increase 8.6% from $1.85 to $2.01 Reconfirm fiscal 2017 earnings guidance of slightly abo
Slide 3: Financial Highlights - Second Quarter
4 NET SALES Dollars in millions except per share amounts 2017 2016 Percent Change Engineered Support Structures $217.6 $203.9 6.7% Utility Support Structures 184.6 151.2 22.1% Coatings 79.8 75.3 5.9% Energy & Mining 77.2 80.7 (4.3)% Irrigation 188.3 152.3 23.6% Intersegment Sales (34.8) (23.2) NM Ne
Slide 4: Financial Highlights - Operating Income
5 Dollars in millions Operating Income 2Q 2017 Operating Income2Q 2016 Increase /Decrease Operating Income Percent 2Q 2017 Operating Income Percent 2Q 2016 Engineered SupportStructures $20.2 $20.8 (2.9%) 9.3% 10.2% Utility Support Structures 20.2 17.6 14.8% 10.9% 11.6% Coatings 12.1 14.0 (13.6%) 15.
Slide 5: Engineered Support Structures
6 Engineered Support Structures – 2nd Qtr. 2016 Net Sales $195.8 Volume 9.1 Pricing/Mix 0.3 Acquisitions - Currency Translation (4.1) 2017 Net Sales $201.1 Slightly lower lighting and traffic sales in North America. EMEA markets remain sluggish due to lack of infrastructure investment Wireless commu
Slide 6: Utility Support Structures
7 Utility Support Structures – 2nd Qtr. 2016 Net Sales $151.2 Volume 18.5 Pricing/Mix 13.9 Acquisitions - Currency Translation - 2017 Net Sales $183.6 Significant sales and volume increases. Some of the sales increase reflect customer pricing tied to steel cost increases Operating income increased d
Slide 7: Coatings
8 Coatings – 2nd Qtr. 2016 Net Sales $63.4 Volume (3.1) Pricing/Mix 4.8 Acquisitions - Currency Translation (0.5) 2017 Net Sales $64.6 Sales decreased in North America, less external and higher intercompany volumes Volumes increase in Asia-Pacific region—pricing recovery also achieved Reduced operat
Slide 8: Energy and Mining
9 Energy and Mining – 2nd Qtr. 2016 Net Sales $79.3 Volume (3.1) Pricing/Mix 1.8 Acquisitions - Currency Translation (0.8) 2017 Net Sales $77.2 Access and Offshore sales decreased slightly Operating income increased with lower SG&A expense Outlook for unfavorable second-half comparisons—further weak
Slide 9: Irrigation
10 Irrigation – 2nd Qtr. 2016 Net Sales $150.5 Volume 29.2 Pricing/Mix 3.8 Acquisitions - Currency Translation 2.7 2017 Net Sales $186.2 International markets benefit from projects and stronger Latin American demand North America sales increased on stabilizing markets and uptick in markets outside t
Slide 10: Balance Sheet – 2nd Qtr.
2Q 2017 Actual Credit Rating 11 Balance Sheet – 2nd Qtr. 2017 Goal: Maintain Investment-grade rating; Keep Debt/EBITDA from 1.5 to 2.5x Cash At 7/1/2017 $448M ($350M Ex. US) Total Debt $755M Debt/Adjusted EBITDA* 2.25 Adjusted S&P BBB+ Negative Moody’s Baa3 Stable * See the Company’s calculation at
Slide 11: Valmont – Calculation of Adjusted EBITDA & Leverage Ratio
Valmont – Calculation of Adjusted EBITDA & Leverage Ratio 12 Last 4 fiscal quarters (June 26, 2016 to July 1, 2017) Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt/Adjusted EBITDA may not exceed 3.5X Adjusted EBITDA of the prior four qua
Slide 12: Valmont - Calculation of Adjusted EBITDA & Leverage Ratio
Valmont - Calculation of Adjusted EBITDA & Leverage Ratio Certain of our debt agreements con ants that require us to maintain Certain coverage ratios. Our Debt/Adjusted EBITDA may not exceed Adjusted EBITDA ofthe prior four quarters. See “Leverage Ratio" below. Tm? 7/1/2017 Net earnings attributable