Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q2 2022 Earnings Presentation
31 slides from Valmont Industries's earnings presentation, Jul 21, 2022
Slide 1: Second Quarter 2022 Earnings Presentation
Valmont Industries, Inc. Second Quarter 2022 Earnings Presentation July 21, 2022 © 2022 Valmont® Industries, Inc.
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements 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 f
Slide 3: Steve Kaniewski, President & Chief Executive Officer
STEVE KANIEWSKI PRESIDENT & CHIEF EXECUTIVE OFFICER 3 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 4: 2Q 2022 Summary
2Q 2022 Summary • Higher volumes driven by strong broad-based market demand • Maintaining pricing strategy and discipline to capture value delivered TOTAL 2Q 2022 SALES • Seventh consecutive quarter of double digit, year-over-year sales growth $1,135.5M; +27% Y/Y • Record global backlog of $2.0 bill
Slide 5: ConcealFab Acquisition Expands Presence in Global Telecom Market
ConcealFab Acquisition Expands Presence in Global Telecom Market ConcealFab Overview • ConcealFab is a leader in the 5G infrastructure and passive intermodulation (PIM) mitigation solutions for telecommunications • Early innovator in 5G and small cell infrastructure • First-to-market innovative solu
Slide 6: Conserving Resources, Improving Life
Conserving Resources, Improving Life® Committed to 2025 environmental goals and four aligned United Nations Sustainability Development Goals Sustainable Manufacturing Expansion Better Projects Award Recipient New spun concrete manufacturing facility in Bristol, Awarded the annual Better Projects Awa
Slide 7: Avner Applbaum, EVP & Chief Financial Officer
AVNER APPLBAUM EVP & CHIEF FINANCIAL OFFICER 7 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 8: 2Q 2022 Financial Summary
2Q 2022 Financial Summary Sales ($M) Operating Income ($M) Diluted EPS +26.9% GAAP Adjusted1 GAAP Adjusted1 +43.7% +35.2% +22.1% +20.9% $1,135.5 $3.70 $118.7 $122.9 $3.53 $894.6 $90.9 $3.06 $82.6 $2.89 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 • Higher volumes and a relentless focus on prici
Slide 9: 2Q 2022 Results | Infrastructure
2Q 2022 Results | Infrastructure Sales ($M) Operating Income ($M) Sales ($M) 2021 2022 % 23.9% GAAP Adjusted1 Transmission, Distribution and $ 220.5 $ 295.8 +34% 37.5% 24.9% Substation (TD&S) $765.0 Lighting and $617.6 $84.6 $84.6 215.2 246.7 +15% Transportation (L&T) $67.7 $61.6 Coatings 80.3 90.3
Slide 10: 2Q 2022 Results | Agriculture
2Q 2022 Results | Agriculture Sales ($M) Operating Income ($M) Sales ($M) 2021 2022 % 34.0% GAAP Adjusted1 North American $ 156.0 $ 203.5 +30% Irrigation $377.8 38.3% 45.0% $282.0 $62.2 International $58.0 125.9 174.3 +38% Irrigation $42.0 $42.9 Agricultural 28.5 30.2 +6% Technology2 2021 2022 2021
Slide 11: 2Q 2022 Cash Flow Highlights
2Q 2022 Cash Flow Highlights ($M) YTD 6/25/2022 Net Cash Flows from Operating Activities $ 68.0 Net Cash Flows from Investing Activities (87.8) Net Cash Flows from Financing Activities 0.6 Net Cash Flows from Operating Activities $ 68.0 Purchase of Property, Plant & Equipment (49.7) Free Cash Flows
Slide 12: Balanced Approach to Capital Allocation
Balanced Approach to Capital Allocation 2022 YTD Capital Deployment: $122M GROWING OUR BUSINESS RETURNING CASH TO SHAREHOLDERS $50M $39M $10M $22M Capital Expenditures Acquisitions Share Repurchases Dividends • In line with expected 2022 • Acquired ConcealFab to expand • Opportunistic approach, • 10
Slide 13: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity As of June 25, 2022 Cash $154.6M Available Credit under Revolving Credit Facility2 $534.4M Total Long-Term Debt $995.6M Cash $154.6M Shareholders’ Equity $1,553.2M Total Available Liquidity $689.0M Total Debt to Adj. EBITDA1 1.8x ► Long-term debt of $995.6M, mostly
Slide 14: Full Year 2022 Outlook and Key Assumptions
Full Year 2022 Outlook and Key Assumptions PREVIOUS CURRENT 2022 OUTLOOK1 2022 OUTLOOK1 $3.9B – $4.1B ~ $4.2B KEY ASSUMPTIONS Net Sales Net Sales • Significant momentum supported by the long-term, global market drivers across our businesses 11% – 17% 20% – 21% Increase in Net Sales YoY Increase in N
Slide 15: Fundamental Market Drivers Remain Resilient
Fundamental Market Drivers Remain Resilient INFRASTRUCTURE AGRICULTURE • Long term need for critical infrastructure investment globally, • Favorable market conditions, including elevated grain commodity supported by current and future stimulus prices and farmer sentiment are leading to increasing de
Slide 16: Summary
Summary Ability to grow sales through innovation and execution while adapting and responding quickly to meet customer needs Financial strength and flexibility by executing on our pricing strategies and advancing operational excellence across our footprint Investing in our employees and technology to
Slide 17: Q&A
Q&A 17 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 18: Appendix
APPENDIX 18 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 19: 2Q 2022 Financial Summary
2Q 2022 Financial Summary $M, except for per share amounts Net Sales 2022 2021 Change YTD 2022 YTD 2021 Change Infrastructure $ 765.0 $ 617.6 23.9% $ 1,445.7 $ 1,167.3 23.8% Agriculture 377.8 282.0 34.0% 684.3 511.6 33.8% Intersegment Sales1 (7.3) (5.0) NM (13.6) (9.4) NM Net Sales $ 1,135.5 $ 894.6
Slide 20: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 20 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 21: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 21 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 22: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 22 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 23: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 23 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 24: Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings
Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings (Dollars in thousands, except per share amounts) 24 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 25: Historical Segment Financials
Historical Segment Financials 2021 2020 Q1 Q2 Q3 Q4 FY FY Sales: Infrastructure segment $ 549,646 $ 617,604 $ 634,283 $ 693,568 $ 2,495,101 $ 2,261,804 Agriculture segment 229,664 281,965 240,331 276,757 1,028,717 645,831 Total 779,310 899,569 874,614 970,325 3,523,818 2,907,635 Intersegment Sales:
Slide 26: Infrastructure Investment and Jobs Act (IIJA)
Infrastructure Investment and Jobs Act (IIJA) Infrastructure Investment and Jobs Act Spending Breakdown (In Order - Most to Least) Previously-Passed Transportation Funding | $650B Roads, Bridges and Related Programs | $111B Energy, Power and Electric Grid Reliability | $107.5B Freight and Passenger
Slide 27: 5G Adoption and Capex Spend Forecasts
5G Adoption and Capex Spend Forecasts Source: GSM Association. 27 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 28: U.S. Net Cash Farm Income by Year
U.S. Net Cash Farm Income by Year Source: USDA, American Farm Bureau Federation 28 July 21, 2022 | Valmont Industries, Inc. | Q2 2022 Earnings Presentation
Slide 29: 2012-2021 Historical Free Cash Flow
2012-2021 Historical Free Cash Flow1 ($M) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net cash flows from operating activities $ 197.1 $ 396.4 $ 174.1 $ 272.3 $ 232.8 $ 133.1 $ 153.0 $ 307.6 $ 316.3 $ 65.9 Net cash flows from investing activities (136.7) (131.7) (256.9) (48.2) (53.0) (49.6) (1
Slide 30: Strong Free Cash Flow throughout the Cycle
Strong Free Cash Flow throughout the Cycle 2012 – 2021 Free Cash Flow1 ($M) Years of rapid raw material cost inflation 350 300 290 250 227 210 210 200 175 143 150 100 101 10-yr Avg. $143M 100 78 81 GAAP 1.28X 50 Adj. 0.84X - (50) (42) (100) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 10 Year A
Slide 31: Calculation of Adjusted EBITDA and Leverage Ratio
Calculation of Adjusted EBITDA and Leverage Ratio 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 (or 3.75X Adjusted EBITDA after certain material acquisitions) of the prior four quarte