Core & Main, Inc. · NYSE:CNM
Core & Main — Q3 2023 Earnings Presentation
21 slides from Core & Main's earnings presentation, Dec 5, 2023
Slide 1: Fiscal 2023 Third Quarter Results
Fiscal 2023 Third Quarter Results DECEMBER 5, 2023
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS Cautionary Note Regarding Forward-Looking Statements This presentation and accompanying discussion may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, all st
Slide 3: Today's Presenters
TODAY’S PRESENTERS Steve LeClair Mark Witkowski Robyn Bradbury Chief Executive Officer Chief Financial Officer VP, Finance & Investor Relations © Core & Main All Rights Reserved. Confidential and Proprietary Information. 3
Slide 4: Business Update
Business Update STEVE LECLAIR
Slide 5: Business Update
BUSINESS UPDATE Cash Flow & End Markets Pricing Margins Capital Allocation ▪ Municipal repair & replacement ▪ Roughly flat price contribution to ▪ Gross margins continue to ▪ Exceptional operating cash flow activity remains stable net sales growth in Q3 normalize at a slower pace than performance in
Slide 6: Driving Sustainable Growth Through M&A
DRIVING SUSTAINABLE GROWTH THROUGH M&A Enviroscape Granite Water Works Lee Supply Company Status Closed November 2023 Signed November 2023 Signed November 2023 # of Locations 1 1 4 Pennsylvania, South Carolina Geography Ohio Minnesota & West Virginia Geosynthetics & Pipes, Valves & Fittings Pipes, V
Slide 7: Annual Value Creation Targets
ANNUAL VALUE CREATION TARGETS +2 – 4% +2 – 4% +2 – 4% 30 – 50 bps 60 – 70% Market Volume Organic Above Growth from Adjusted Operating Growth Market Volume Acquisitions EBITDA Margin Cash Flow Growth Enhancement Conversion Fire Storm Strategic Pricing Sourcing Private Operational Meters Protection Dr
Slide 8: Financial Results
Financial Results MARK WITKOWSKI
Slide 9: Q3 2023 Financial Results
Q3 2023 FINANCIAL RESULTS ($ in Millions, Except Per Share Amounts) Net Sales Gross Profit $1,818 $1,827 1% $500 $494 $1,405 (1%) +29% $371 +35% % Margin 26.4% +110 bps 27.5% (50 bps) 27.0% Q3'21 Q3'22 Q3'23 Q3'21 Q3'22 Q3'23 Adjusted EBITDA(1) Diluted Earnings Per Share $275 $260 $0.65 $0.65 (5%) $
Slide 10: Cash Flow & Balance Sheet
CASH FLOW & BALANCE SHEET ($ in Millions) Operating Cash Flow Net Debt Leverage(3) 1.7x Q3’22 Q3’23 Y-o-Y $ 1.5x Adjusted EBITDA(1) $275 $260 ($15) Working Capital (58) 167 $225 Q3'22 Q3'23 Cash Interest (15) (19) (4) Liquidity Cash Taxes(2) (45) (21) 24 ABL Facility Available Cash & Cash Equivalent
Slide 11: Guidance Update
GUIDANCE UPDATE Key Metric FY23 Outlook Considerations ▪ Expect FY23 net sales growth to range from flat to +1% Net Sales $6,650 - $6,750 ̶ Municipal demand expected to remain stable through Q4 ($ in Millions) ̶ New residential lot development growth expected to improve sequentially and benefit from
Slide 12: Appendix
Appendix
Slide 13: Core & Main at a Glance
CORE & MAIN AT A GLANCE Key Business Highlights Branch Footprint ▪ Leading U.S. specialty distributor focused on water, wastewater, storm Corporate HQ drainage and fire protection products, and related services ▪ Highly fragmented $40 billion addressable market(1) ▪ 1 of only 2 national distributors
Slide 14: Product & Service Offering
PRODUCT & SERVICE OFFERING © Core & Main All Rights Reserved. Confidential and Proprietary Information. 14
Slide 15: Balanced Mix Across End Markets
BALANCED MIX ACROSS END MARKETS (1) (1) (1) Municipal 39% Non-Residential 39% Residential 22% Repair & Replacement Expansion of Service New Development Repair & Replacement New Lot Development Repair & Replacement ▪ Improvements to or ▪ Expansion of infrastructure ▪ New development of water, ▪ Impro
Slide 16: Well-Positioned to Win Within Complex Industry
WELL-POSITIONED TO WIN WITHIN COMPLEX INDUSTRY Differentiated Industry Our Competitive Advantages ▪ Local regulation and specification needs; Highly Complex strong participation in governing / Industry Expertise Size & Unique Scalability Specification & regulating bodies Regulation Deep knowledge of
Slide 17: Our Approach to M&A
OUR APPROACH TO M&A Driving Sustainable Growth Through M&A… …Leveraging Our Disciplined Approach October 2017 June 2018 July 2018 August 2018 January 2019 February 2019 July 2019 ▪ Significant opportunity to fill existing geographies and Maximize product lines or expand into new geographies and prod
Slide 18: Critical Investments from the Infrastructure Investment & Jobs Act
CRITICAL INVESTMENTS FROM THE INFRASTRUCTURE INVESTMENT & JOBS ACT $55B $50B $110B $25B to expand access to clean to protect against droughts, floods, to repair roads and bridges to create more modern, drinking water heat and wildfires, in addition to major and support major resilient and sustainabl
Slide 19: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Capital Allocation Framework Organic Growth & Expect future capital expenditures to average ~0.5% Operational Initiatives of net sales Normalized Maintain a robust M&A pipeline and a disciplined approach. Expect continued M&A focused on Operating Cash Flow Priority Uses
Slide 20: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES ($ in Millions) Adjusted EBITDA & Adjusted EBITDA Margin Three Months Ended Nine Months Ended Twelve Months Ended October 29, 2023 October 30, 2022 October 31, 2021 October 29, 2023 October 30, 2022 October 29, 2023 October 30, 2022 Net income attributable to Core
Slide 21: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES ($ in Millions) Net Debt Leverage As of October 29, 2023 October 30,2022 Senior ABL Credit Facility due July 2026 - 90 Senior Term Loan due July 2028 1,466 1,481 Total Debt $ 1,466 $ 1,571 Less: Cash & Cash Equivalents (101) - Net Debt $ 1,365 $ 1,571 Twelve Month