Mueller Water Products · NYSE:MWA
Mueller Water Products — Investor Presentation (September 2013)
35 slides from Mueller Water Products's investor presentation, Sep 5, 2013
Slide 1: Investor Presentation September 2013
Investor Presentation September 2013
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company reports its financial results under accounting principles g generally accepted in the United States “GAAP”), as well as through the use of non-GAAI (loss), adjusted operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted
Slide 3: Forward-Looking Statements
eller Water Products Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address acti , events or developments that we intend, expect,
Slide 4: Mueller Water Products: Our Business
jueller Water Products: Our Business $1.1 billion LTM net sales (as of June 30, 2013) FY2012 Primary End Markets 1 Portfolio includes: Net Sales $1B + Fire hydrants Valves + Metering systems Piping component systems + Leak detection Pipe condition assessment Residential Construction* Ey + Specified
Slide 5: Mueller Water Products Investment Highlights
ueller Water Products Investment Highlights Why Invest in Mueller Water Products Leading North American provider of water infrastructure and flow control aeaics and services Expected improved results due to net eu) operating leverage as end markets re intelligent water technology offerings for diagn
Slide 6: Business Performance: Long-Term Targets
jueller Wate: hoducts: Business Performance: Long-Term Targets Mueller Co. base business organic growth of 5% - 10%+ in normalized end market conditions Metering and leak detection products and services >20% Mueller Co. edlused EBITDA margins of 25%+ in normalized end market conditic Metering and le
Slide 7: Broad Product Portfolio
Mueller Water Products Broad Product Portfolio (5 in mitions) Mu Co. S/ANVIL Est. 1857 Est. 1999 (1850) Pversuss | $726 $383 NNEONE $37 945 sta ss sz ‘seams ieee Cast ron Fiuigs & Fitings Couplings PRODUCT PORTFOLIO ; sie im cote” Metering . (Bp riz vaves q if — part Leak ve: lait wen 9% 209 (9 abot
Slide 8: Water Transmission Solutions
Water Transmission Solutions i , eee Mueller Water Products manufactures and markets products and services that are used in the transmission, distribution and of safe, clean drinking water and in water treatment facilities.
Slide 9: Mueller Co. products and competitors
6 6 # FIRE BUTTERFLY & BRASS WATER HYDRANTS | GATE VALVES BALL VALVES PRODUCTS a a a a) ACIPCO a ] A.Y. McDonald ts DeZURIK | Ford Meter Box af McWane a g a
Slide 10: Anvil Highlights
Mueller Water Products Anvil Highlights y | #10 w I E Y Cc Y | b y i nce y
Slide 11: Anvil Key Products
Anvil Key Products eae Market Drivers Products Key Competitor Mechanical: Grooved, Iron/Steel Victaulic, Ward, Erico, Fittings, Staple Hangers, Pipe Wisconsin, Bonney seat re ml Non-Residential | Nipples, Bull Plugs Forge, Westbrook & Fire Protecti Building Construction Fire Protection: O-Lets, Vict
Slide 12: Strategy and Objectives
jueller Water Products: Strategy and Objectives Maintain leadership positions with customers and end users ° brand 0 network + Devetopi products + i i and services Continue to enhance operational & organizational excellence * Strengthened balance sheet + Consolidated plants + Implemented Lean Six Si
Slide 13: Our End Markets
Uf — Seu Our End Markets
Slide 14: Historical Housing Starts
Historical Housing Starts ngs 1989- une 2013) eed males Year-Over-Year Change in Houshold Formation (12MMA) ERGEE Coe EC ERRERESE SCE eT eel “ta haiittiantetii:s:s BEE Poe bP Ee Ee EE New household formation will be the key to driving housing start demand back to normal levels Source: U.S. Census Bu
Slide 15: Non-Residential Construction
Mueller Water Proc 3 Non-Residential Construction AIA Architectural Billing index Diisonindex Sbeegomion) Non-Residential Construction (Real $ in Bilions) Sess S SS 33335 38 source: 5 seu: Arc nsit of ates ” Data as of august 21, 2013 The non-residential construction market remains stable
Slide 16: Significant Market Opportunities
/ ] Significant Market Opportunities
Slide 17: The Market Opportunity Is Significant And Growing
jueller Water Products: The Market Opportunity Is Significant And Growing Future Drinking Water Repair and Replacement Market etructurel Expenditure Need) Valves and pears typically replaced at same time as pij ASCE graded drinking water infrastructure a D() At least 40 water systems under consent ‘
Slide 18: Funding Water Infrastructure Repair
eller Water Products Funding Water Infrastructure Repair / openon / wm | pom Majority of utilities have service connection fees silly gu) cancindhress Wianmcl tice ut $5,0 YTD through July 2013 new capital municipal bond issuances up 6% over the same period in 201 sere From 2010 - 2012, residential
Slide 19: Significant Growth Opportunities
Significant Growth Opportunities EA Aging Water Infrastructure Research Program National Geological Survey Mueller Water Products Operational efficiencies Budget constraints + Need to prioritize capital spending Water Conservation + 26 states in drought condition + 240,000 water main breaks per year
Slide 20: Opportunities: AMI/Smart Metering
eller Water Products Opportunities: AMI/Smart Metering ACTIONS SOLUTION OMERS COMPETITORS Smart Metering ‘American Water = SEnNSUS + Acquired Arkion Systems + Two-way mesh Bentonville, AR in 2009 and merged it network y Meters to Charlotte County, FL NEPTUNE farm solar Syste + Enhanced AMI system Ch
Slide 21: Opportunities: Leak Detection and Pipe Condition Assessment
eller Water Products Opportunities: Leak Detection and Pipe Condition Assessment ACTIONS * Acquired Echologics in 2010 + Leverage Mueller brand + Developed fixed transmission main leak detection solution + International opportunities SOLUTION echologics * Acoustic, non- invasive leak detection and p
Slide 22: Actions & Business Results
Actions & Business Results
Slide 23: Management Actions / Initiatives
Management Actions / Initiatives + Divested U.S. Pipe in FY2012 + Divested two non-core assets of Anvil in FY2010 : Implemented Lean Six Sigma and other manufacturing improvements production capacity without footprint expansion : toe ered Uber costs + Closed six plants since FY2006 + Consolidated di
Slide 24: History of Strong Financial Performance
eller Water Products History of Strong Financial Performance see appendices for GAAP reconciliation) @ (Sin mittions) NET SALES ADJUSTED EBITDA & ‘ADJ. EBITDA tam 255) 294 306 ord 122% sou! Syg S81 320 ox 10% sez 361 Ho sao 05 $47 ae 5455s BESEERER ERR
Slide 25: Consolidated Non-GAAP Results
Water Products Consolidated Non-GAAP Results Third Quarter Fiscal 1 $ in millions (except per share amounts) Net sales $299.4 $275.9 Adj. operating income $33.1 $26.4 Adj. operating margin 11.1% 9.6% Adj. net income per diluted share $0.08 $0.05 Adj. EBITDA $47.7 $41.4 Adj. EBITDA margin 15.9% 15.0%
Slide 26: Debt Structure
Water Products Debt Structure Net debt leverage of 3.6x at June 30, 2013 Net debt of $532 million at June 30, 2013 Debt maturities with no significant required principal payments before 2017 No financial maintenance covenants with excess availability at the greater of $22.5 million or 0.0% of facili
Slide 27: Why Invest in MWA?
Why Invest in MWA? Water industry has fundamentally strong long-term dynamics + Driven for new and upgraded infrastructure + Limited number of suppliers to end markets Strong competitive position Leading brand position with large installed base Leading municipal specification positions : g end-user
Slide 28: Supplemental Data
V4 Ye ee ee Supplemental Data
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP
Mueller Water Products Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 31: Segment Results and Reconciliation of Non-GAAP to GAAP
Mueller Water Products Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 32: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 33: Segment Results and Reconciliation of Non-GAAP to GAAP
Mueller Water Products Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 34: Segment Results and Reconciliation of Non-GAAP to GAAP
Mueller Water Products Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinrilon. except per share amounts)
Slide 35: Questions
LA ee Questions
Mueller Water Products — Investor Presentation (September 2013) on 6ix