Arcosa, Inc. · NYSE:ACA
Arcosa — Q2 2022 Earnings Presentation
28 slides from Arcosa's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings Conference Call
Second Quarter 2022 Earnings Conference Call MOVING INFRASTRUCTURE FORWARD | August 4, 2022
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Some statements in this presentation, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa’s estimates, expectations, beliefs, intenti
Slide 3: How to Find Us
HOW TO FIND US OUR WEBSITE NYSE TICKER www.arcosa.com ACA HEADQUARTERS Arcosa, Inc. INVESTOR CONTACT 500 North Akard Street, Suite 400 InvestorResources@arcosa.com Dallas, TX 75201 3 I MOVING INFRASTRUCTURE FORWARD I 2022
Slide 4: Second Quarter 2022 Highlights
SECOND QUARTER 2022 HIGHLIGHTS • Double-digit revenue and Adjusted EBITDA growth in all three segments contributed to record second quarter results • Strong results led by our growth businesses within Construction Products and Engineered Structures, supported by solid execution in our cyclical busin
Slide 5: Arcosa's Value Proposition
ARCOSA’S VALUE PROPOSITION LEADING EXPERIENCED HEALTHY BALANCE DISCIPLINED CAPITAL TRACK RECORD businesses serving management team sheet and ample allocation process to of executing on critical with history of liquidity to navigate grow in attractive strategic priorities as infrastructure managing t
Slide 6: Strategic Update
01 STRATEGIC UPDATE
Slide 7: Arcosa's Long-Term Vision
ARCOSA’S LONG-TERM VISION Grow in attractive markets Reduce the complexity and Improve long-term Integrate Environmental, where we can achieve cyclicality of the overall returns on invested capital Social, and Governance sustainable competitive business initiatives (ESG) into our long- advantages te
Slide 8: Strategic Transformation
STRATEGIC TRANSFORMATION Today Arcosa is a less cyclical and more resilient company, and the announced sale of our storage tanks business enhances our capacity to further expand in our focused growth areas Construction Products has Increased to Actionable Strategic Progress to Position Portfolio for
Slide 9: Completed $75 Million Acquisition of RAMCO in May 2022
COMPLETED $75 MILLION ACQUISITION OF RECYCLED AGGREGATES MATERIALS COMPANY (“RAMCO”) IN MAY 2022 Expands Arcosa’s recycled aggregates platform into southern California at an attractive valuation, building on our existing platforms in Dallas-Fort Worth and Houston, Texas BUSINESS PROFILE STRATEGIC RA
Slide 10: Q2 2022 Results
02 Q2 2022 RESULTS
Slide 11: Q2 2022 Consolidated Results
Q2 2022 CONSOLIDATED RESULTS Adjusted EBITDA increased 26%, outpacing revenue growth in the second quarter and resulting in record margin Revenues ($M) Net Income ($M) Adjusted EBITDA ($M) +26% +41% 99.2 +17% 40.9 602.8 1.9 78.9 515.1 29.1 8.3 39.0 20.8 Q2-21 Q2-22 Q2-21 Q2-22 Q2-21 Q2-22 Adjusted M
Slide 12: Segment Results: Construction Products
SEGMENT RESULTS: CONSTRUCTION PRODUCTS Organic growth and recent acquisitions drove 21% increase in Adjusted Segment EBITDA, with consistent margin Revenues ($M) Adjusted Segment EBITDA ($M) +20% +21% 245.9 54.4 29.7 204.5 45.1 23.0 216.2 181.5 Q2-21 Q2-22 Q2-21 Q2-22 Aggregates & Specialty Material
Slide 13: Segment Results: Engineered Structures
SEGMENT RESULTS: ENGINEERED STRUCTURES Led by utility structures, strong market demand and solid execution drove significant outperformance Revenues ($M) Adjusted Segment EBITDA ($M) +11% +30% 268.6 49.5 242.5 61.9 50.9 38.0 191.6 206.7 Q2-21 Q2-22 Q2-21 Q2-22 Utility, Wind Towers, and Related Struc
Slide 14: Segment Results: Transportation Products
SEGMENT RESULTS: TRANSPORTATION PRODUCTS Revenue and Adjusted Segment EBITDA increased, while margins held flat, as improved steel components volumes offset reduced barge volumes Revenues ($M) Adjusted Segment EBITDA ($M) +29% +29% 88.3 7.5 68.2 34.5 5.8 19.2 49.0 53.8 Q2-21 Q2-22 Q2-21 Q2-22 Barges
Slide 15: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Balance sheet and liquidity remained strong following the $75M acquisition of RAMCO in the second quarter Net Debt / Adjusted EBITDA (ratio at end of period) Liquidity ($M) 394 Long term target of 2.0 - 2.5x 2.1 2.0 1.9 Cash 77 Spun debt free with 0.5 0.5 • No material near-
Slide 16: Updated 2022 Outlook
03 UPDATED 2022 OUTLOOK
Slide 17: Outlook for 2022
OUTLOOK FOR 2022 Strong outlook for growth businesses, offsetting cyclical challenges from wind towers and barge Expect ~27% Increase in Adjusted EBITDA from …Based on Attractive Fundamentals Driving Organic Expansion Growth Businesses in 2022… and Full Year Contributions from Acquisitions Adjusted
Slide 18: Cyclical Businesses
CYCLICAL BUSINESSES In 2022, our cyclical businesses are expected to be at ~25% of their combined 2018 Adjusted EBITDA levels, but long-term fundamentals remain supportive Outlook for Dry Barge Replacement Cycle Remains Intact New builds for N.A. Railcar Market Forecasted to Increase Fleet age is In
Slide 19: Updated 2022 Outlook
UPDATED 2022 OUTLOOK Increasing our Adjusted EBITDA guidance range, which reflects annual growth of 18% from 2021 Adjusted EBITDA ($M) +18% 325 - 345 290 - 305 • Strong first-half performance and increased 284 283 confidence in the second half 241 • Raising Adjusted EBITDA range for our 187 cyclical
Slide 20: ESG Update
ESG UPDATE We continue to take actions to integrate ESG in our long-term strategy and culture Arcosa Marine Products Joins Green Marine Highlights from Our 2021 Sustainability Report • 60% reduction in our TRIR1 since 2019 • Green Marine is the largest voluntary SAFETY • ARC 100 driving positive and
Slide 21: Appendix
APPENDIX
Slide 22: Additional Financial Guidance for 2022
ADDITIONAL FINANCIAL GUIDANCE FOR 2022 COMMENTARY • We expect full year 2022 revenues of between $2.2 and $2.3 billion compared to previous guidance range of $2.1 to REVENUE $2.2 billion CORPORATE • ~$14-15M per quarter for the remainder of the year, excluding one-time items related to acquisition a
Slide 23: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 24: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 39.0 $ 20.8 $ 59.2 $ 36.7 Impact of acquisition and divestiture-related expenses, net of tax(2) 1.9 8.3 2.6 10.0 Adjusted Net
Slide 25: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Six Months Ended Year Ended Twelve Months Ended June 30, June 30, December 31, June 30, 2022 2021 2022 2021 2021 2020 2019 2018 2022 Construction Products Operating Profit $ 28.1 $ 17.9 $ 44.8 $ 33.7 $ 83.2 $
Slide 26: Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow
Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow ($’s in millions) (unaudited) As of Pro Forma September 30, December 31, December 31, December 31, December 31, March 31, June 30, 2018(1) 2018 2019 2020(1) 2021(1) 2022(1) 2022(2) Total debt excluding debt issuance costs $ 0.4 $ 185.5
Slide 27: Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses
Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses (in millions) Year Ended Full Year 2022 Guidance (unaudited) December 31, 2018 2019 2020 2021 Low High Consolidated Adjusted EBITDA(1) $ 186.5 $ 240.7 $ 283.7 $ 283.3 $ 325.0 $ 345.0 Add: Corporate Adjusted EBITDA(1) 32.0 43.7 48.2
Slide 28: Reconciliation of Southwest Rock and RAMCO Pro forma Adjusted EBITDA
Reconciliation of Southwest Rock Pro forma Adjusted EBITDA Reconciliation of RAMCO Pro forma Adjusted EBITDA (in millions) (in millions) (unaudited) (unaudited) Twelve Months Ended Twelve Months Ended May 31, 2021 February 28, 2022 Net Income $ 11.7 Net Income $ 5.9 Add: Add: Interest expense, net 0