Eagle Materials Inc · NYSE:EXP
Eagle Materials — Investor Presentation (September 2023)
22 slides from Eagle Materials's investor presentation, September 2023
Slide 1: Company Overview: Evolution and Outlook, Fiscal Year 2024
Company Overview Evolution and Outlook Fiscal Year 2024 Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
Slide 3: Eagle Materials Company Overview
Eagle Materials Company Overview ▪ Founded in 1963 as a subsidiary of Centex Corp. Revenue (FYE March 31, $ in millions) ▪ Completed the IPO in 1994 and stock began trading $2,148 on the NYSE $1,862 $1,623 ▪ In 2004, Centex spun off Centex Construction Products which became Eagle Materials Inc. (NYS
Slide 4: Who We Are
Who We Are We Manufacture Necessities Not Luxuries • Our two major product lines are Portland Operating Earnings + DD&A by Segment cement (“Heavy” materials) and gypsum for FYE Mar-23 ($ in millions) wallboard (“Light” materials), today proportionately 50/50 Gypsum Wallboard $374 • Both building pro
Slide 5: Eagle Materials: Financial Evolution
Eagle Materials: Financial Evolution In Millions, Annual at March Year-End Revenue Operating Earnings + DD&A $2,387 $810 Heavy $579 Light $109 2011 2023 2011 2023 (Trough) (Trough) Through investments and acquisitions, we’ve grown from a Our operating earnings + DD&A have continued to show a balance
Slide 6: Comparative on Peer Profit Margins
Comparative on Peer Profit Margins Pre-Tax Margin % (Latest Fiscal Year) Pre-Tax Margin % (10-Year Average)1 30.0 27.4 30.0 21.0 20.0 17.7 17.8 20.0 14.1 15.0 14.1 10.8 11.5 10.0 8.9 9.6 10.0 1.7 – – Eagle Heavy Peers Light Peers Eagle Heavy Peers Light Peers EBITDA Margin % (Latest Fiscal Year) EBI
Slide 7: Comparative on Peer Return on Capital
Comparative on Peer Return on Capital Return on Equity % (Latest Fiscal Year) Return on Equity % (10-Year Average)1 39.8 40.0 40.0 30.2 30.0 30.0 21.4 20.0 16.0 20.0 14.3 11.8 12.5 10.5 8.8 10.0 8.4 10.0 6.5 2.7 – – Eagle Heavy Peers Light Peers Eagle Heavy Peers Light Peers Return on Invested Capit
Slide 8: Comparative on Peer Cash Flow Metrics
Comparative on Peer Cash Flow Metrics Free Cash Flow Yield % (Latest Fiscal Year) Free Cash Flow Yield % (10-Year Average)1 10.0 10.0 7.9 8.0 8.0 6.5 6.3 5.9 6.0 6.0 4.4 4.0 4.0 3.5 2.4 2.8 2.3 2.0 2.0 1.4 2.0 0.5 – – Selected Heavy Peers Selected Heavy Eagle Heavy Peers Light Peers Eagle Heavy Peer
Slide 9: End-Use Applications
End-Use Applications US Building Code and Specification Driven Cement is the essential The water binding material in concrete molecule US End-Use imbedded in which has • Unrivaled strength, durability, Cement Segments Wallboard gypsum longevity and resilience wallboard • Energy efficiency Applicatio
Slide 10: Cement US Heartland System
Cement US Heartland System Strategic Geographic Focus, Manufacturing Away from US Coastlines (Imports) Plants and Capacities1 (ST2 thousands) Texas Lehigh (50%) 720 Illinois Cement 1,100 Mountain Cement 800 Nevada Cement 550 Central Plains Kansas City 1,300 Central Plains Tulsa 900 Fairborn Cement 9
Slide 11: US Cement Consumption and Clinker Capacity
US Cement Consumption and Clinker Capacity Million Metric Tons 120,000 US Clinker Capacity 100,000 New capacity -- and capacity expansion -- is 80,000 constrained due to regulation (NESHAP) 60,000 Imports will be required 40,000 again to meet demand 20,000 0 2017 2018 2019 2020 2021 2022 Public Resi
Slide 12: Gypsum Wallboard and Paperboard System
Gypsum Wallboard and Paperboard System US Sunbelt Strategic Geographic Focus West of Mississippi River Natural Gypsum Gypsum, CO East of Mississippi River 700 MMSF Synthetic Gypsum Duke, OK 1,300 MMSF Albuquerque, NM Georgetown, SC 425 MMSF 900 MMSF Bernalillo, NM Lawton, OK 550 MMSF 390,000 tons pa
Slide 13: Gypsum Wallboard
Gypsum Wallboard US Demand is Closely Linked with Housing 1400 48 New Home Sales (000) 1200 42 Wallboard Shipments (BSF) 36 1000 30 800 24 600 18 400 12 200 6 0 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 Source: Census Bureau, Gypsum Association 13
Slide 14: Eagle Materials Strategy Since 2010
Eagle Materials Strategy Since 2010 Strategy and Investment Directions Results ✓ Tripled Cement capacity through Heavy Side acquisitions Growth Cement and ✓ Achieved scale materiality • Cement ✓ Largest US-only player Con/Agg • Aggregates ✓ Bolt-on aggregates acquisitions ✓ Remained profitable each
Slide 15: Macroeconomic Fundamentals
Macroeconomic Fundamentals Future Determinants of Profitability Favorable for Eagle Businesses Heavy Side Light Side Winning US Heartland Strategy, Reasons Why Future Cycles May Different Than International Be More Favorable Than Past + Supply + Demand + Substitutes + Structure + Sustainability + Im
Slide 16: Eagle Materials Capital Allocation
Eagle Materials Capital Allocation $3.0 Billion Over the Last Five Years Light-Side Improvement ▪ Capital Allocation Priorities Remain Unchanged Heavy-Side Growth and — Investments in Profitable Strategic Growth Improvement Opportunities — Investments to Maintain and Improve Existing Share Assets Re
Slide 17: Well-Managed Capital Structure
Well-Managed Capital Structure Net Debt/Adj. EBITDA Below 2x (with Exception of Temporary Increase For the Kosmos Acquisition) Kosmos Acquisition 3.1x Plan was implemented to quickly reduce leverage post-acquisition 1.5x 1.5x 1.5x 1.4x 1.4x 1.3x 1.3x 1.3x FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Slide 18: Environmental: CO2 Measurement and Disclosure
Environmental CO2 Measurement and Disclosure CO2e/ton cementitious product Notwithstanding our growth in CO2e as reported cement (we grew our asset 0.86 base 3x over recent years) … 0.84 … we have continued to make 0.82 significant progress in reducing our per unit CO2 emissions – 0.80 on our journe
Slide 19: CO2e/ton Cementitious Product Goals and Aspirations
CO2e/ton Cementitious Product, CO2e as reported Progress, 2030 Goals and Longer-Term Aspirations Phase 1 Phase 2 Phase 3 0.9 0.8 0.7 0.6 Product Mix Shift to 100% Limestone 0.5 Cement for all Net Zero Aspiration: With the development 0.4 construction grades, and Process in conjunction with and comme
Slide 20: Appendix
Eagle Materials Appendix
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $ in millions, Fiscal Year Ending March 31 FY 21 FY 22 FY 23 We present Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) from Continuing Operations and Adjusted EBITDA from Net Earnings, as reported $ 339 $ 374 $ 462 Continuing Operations to prov
Slide 22: Net Debt to Adjusted EBITDA Reconciliation
Net Debt to Adjusted EBITDA Reconciliation $ in millions, Fiscal Year Ending March 31 GAAP does not define “Net Debt” and it should FY 21 FY 22 FY 23 not be considered as an alternative to cash flow or liquidity measures defined by GAAP. We Total debt, excluding debt issuance costs $ 1,015 $ 950 $ 1
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