Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q1 2022 Earnings Presentation
31 slides from Valmont Industries's earnings presentation, Apr 21, 2022
Slide 1: First Quarter 2022 Earnings Presentation
Valmont Industries, Inc. First Quarter 2022 Earnings Presentation April 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 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 4: 1Q 2022 Segment Summary
1Q 2022 Segment Summary • Strong broad-based market demand in all regions TOTAL 1Q 2022 SALES • Leveraging pricing strategies $980.8M; +27% Y/Y • Backlog of more than $1.8 billion, reflecting improved pricing and strong market demand INFRASTRUCTURE AGRICULTURE $680.7M; +24% Y/Y $306.6M; +33% Y/Y 69%
Slide 5: Conserving Resources, Improving Life
Conserving Resources, Improving Life® • Released our 2022 Sustainability Report and Responsibly Managing Key Resources conducted a dedicated ESG conference call • Completed 3-megawatt Ag Solar project in Brazil • Recommitted to 2025 environmental goals − Strong market for solar solutions − 9% reduct
Slide 6: New Segment Structure Supports Long-Term Strategy
New Segment Structure Supports Long-Term Strategy Operational Excellence Expanding Markets Accelerating with ESG Focus that We Serve Innovation Elevating ESG Accelerating Growth Optimizing Talent and Technology Fosters collaboration across Focus on delivering smart Resource sharing for optimal locat
Slide 7: Aaron Schapper, Group President, Infrastructure
AARON SCHAPPER GROUP PRESIDENT, INFRASTRUCTURE 7 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 8: Infrastructure Segment
Infrastructure Segment Simplifying the business to manage our portfolio to enable greater focus on higher growth opportunities Leveraging key partnerships with leading global technology providers to enable smart infrastructure Capturing opportunities from continued infrastructure investments enabled
Slide 9: Avner Applbaum, EVP & Chief Financial Officer
AVNER APPLBAUM EVP & CHIEF FINANCIAL OFFICER 9 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 10: 1Q 2022 Financial Summary
1Q 2022 Financial Summary Sales ($M) Operating Income ($M) Diluted EPS +26.6% GAAP Adjusted1 GAAP Adjusted1 +22.8% +28.2% +12.8% +19.5% $980.8 $94.8 $99.0 $3.07 $2.90 $774.9 $77.2 $77.2 $2.57 $2.57 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 • Relentless focus on price management, operational
Slide 11: 1Q 2022 Results | Infrastructure
1Q 2022 Results | Infrastructure Sales ($M) Operating Income ($M) Sales ($M) 2021 2022 23.8% Transmission, 42.3% Distribution and $ 208.4 $ 281.6 +35% Substation $680.7 $77.5 Lighting and $549.6 176.5 212.7 +21% Transportation $54.4 Coatings 74.8 82.0 +10% Telecommunications 45.6 61.4 +35% Renewable
Slide 12: 1Q 2022 Results | Agriculture
1Q 2022 Results | Agriculture Sales ($M) Operating Income ($M) Sales ($M) 2021 2022 33.5% GAAP Adjusted1 North American -3.3% 7.4% $ 128.9 $ 198.1 +54% $306.6 Irrigation $41.6 $229.7 $38.7 $37.5 $38.7 International 100.8 108.5 +8% Irrigation Agricultural 22.4 28.5 +27% Technology2 2021 2022 2021 202
Slide 13: 2022 Cash Flow Highlights
2022 Cash Flow Highlights ($M) YTD 3/26/2022 Net Cash Flows from Operating Activities $ 2.7 Net Cash Flows from Investing Activities (29.1) Net Cash Flows from Financing Activities (3.5) Net Cash Flows from Operating Activities $ 2.7 Purchase of Property, Plant & Equipment (27.1) Free Cash Flows $ (
Slide 14: Balanced Approach to Capital Allocation – 1Q 2022
Balanced Approach to Capital Allocation – 1Q 2022 GROWING OUR BUSINESS RETURNING CASH TO SHAREHOLDERS $27M N/A N/A $11M Capital Expenditures Acquisitions Share Repurchases Dividends • In line with expected 2022 • Strategic fit + market expansion • Opportunistic approach, • 10% dividend increase anno
Slide 15: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity AS OF MARCH 26, 20221 Cash $149.7M Available Credit under Revolving Credit Facility2 $565.2M Total Long-Term Debt $963.1M Cash $149.7M Shareholders’ Equity $1,504.5M Total Available Liquidity $714.9M Total Debt to Adj. EBITDA1 1.9x ► Long-term debt of $963.1M, most
Slide 16: Full Year 2022 Outlook and Key Assumptions
Full Year 2022 Outlook and Key Assumptions PREVIOUS CURRENT FY22 OUTLOOK1 FY22 OUTLOOK1 KEY ASSUMPTIONS 9% – 14% 11% – 17% Increase in Net Sales YoY Increase in Net Sales YoY • No expected foreign currency translation impact on Net Sales $11.55 – $12.30 $12.30 – $12.80 • Expect ~26.5% full year tax
Slide 17: Fundamental Market Drivers Remain Resilient
Fundamental Market Drivers Remain Resilient INFRASTRUCTURE AGRICULTURE • Long term need for critical infrastructure investment globally, • Favorable market conditions leading to increasing demand for including current and future stimulus, will continue to benefit irrigation equipment and technology
Slide 18: Summary
Summary Ability to grow sales through innovation and execution while being flexible and responding quickly to meet customer needs Increased profitability by executing on our pricing strategies and advancing operational excellence across our footprint Invested in our employees and technologies to dri
Slide 19: Q&A
Q&A 19 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 20: Appendix
APPENDIX 20 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 21: 1Q 2022 Financial Summary
1Q 2022 Financial Summary $M, except for per share amounts Net Sales 2021 2022 Change Infrastructure $ 549.6 $ 680.7 23.8% Agriculture 229.7 306.6 33.5% Intersegment Sales1 (4.4) (6.5) NM Net Sales $ 774.9 $ 980.8 26.6% Operating Income $ 77.2 $ 94.8 22.8% Adjusted Operating Income2 $ 77.2 $ 99.0 28
Slide 22: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 22 April 21, 2022 | Valmont Industries, Inc . | 1Q 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 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 24: Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings
Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings 24 April 21, 2022 | Valmont Industries, Inc . | 1Q 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: 5G Adoption and Capex Spend Forecasts
5G Adoption and Capex Spend Forecasts Source: GSM Association. 26 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 27: U.S. Net Cash Farm Income by Year
U.S. Net Cash Farm Income by Year Source: USDA, American Farm Bureau Federation 27 April 21, 2022 | Valmont Industries, Inc . | 1Q 2022 Earnings Presentation
Slide 28: Agricultural Commodity Prices
Agricultural Commodity Prices Source: World Bank 28 April 21, 2022 | Valmont Industries, Inc . | 1Q 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