Mueller Water Products · NYSE:MWA
Mueller Water Products — Investor Presentation (February 2024)
30 slides from Mueller Water Products's investor presentation, February 2024
Slide 1: Where Intelligence Meets Infrastructure - Investor Presentation
Where Intelligence Meets Infrastructure® Investor Presentation February 2024
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures In an effort to provide investors with additional information regarding the Company’s results as determined by accounting principles generally accepted in the United States (“GAAP”), the Company also provides non-GAAP information that management believes is useful to inve
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements that address activities, events or developments that the Company intends, expects, plans, projects, believes or a
Slide 4: Mueller Water Products at a Glance (NYSE: MWA)
Mueller Water Products at a Glance (NYSE: MWA) History Highlights (1) Geography (2) Segments (2,3) (% of Consolidated Net Sales) (% of Consolidated Net Sales) • Founded more than 165 years ago $1.22B $202.7M Net Sales Adjusted EBITDA • Spun off from Walter (LTM Q1FY24) (LTM Q1FY24) United States Wat
Slide 5: Why Invest in Mueller
Why Invest in Mueller Growth strategies, capital investments and operational initiatives enable us to deliver further sales and adjusted EBITDA growth DRIVING GROWTH BENEFITTING MODERNIZING ACCELERATING SUPPORTING WITH A STRONG FROM LONG- MANUFACTURING PRODUCT STRATEGIC COMPETITIVE TERM END AND DRIV
Slide 6: ESG is Core to Mueller
ESG is Core to Mueller Environmental Social Governance Products Mitigate our environmental Foster a strong company Promote sound governance 90% of 2023 net sales impact focusing on culture by emphasizing that acts in the best interests related to products and emissions, water and waste, diversity, e
Slide 7: Products and Markets
Products and Markets
Slide 8: Uniquely Positioned to Address Opportunities with Utilities
Uniquely Positioned to Address Opportunities with Utilities with its Leading Infrastructure Products and Installed Base • Water-focused Leading company Product Positions with in Key more Categories Product than 90%(1)of Broad Portfolio of Products and Solutions with consolidated net sales associated
Slide 9: Water Utilities Are Facing Many Challenges
Water Utilities Are Facing Many Challenges Implications for Utilities Implications for Mueller • Unrealistic for U.S. water utilities and • Municipal repair and replacement local governments to bridge the gap remains a tailwind Aging between their current capital spending Infrastructure • More detai
Slide 10: U.S. Water Infrastructure Requires Substantial Long-term Investment
U.S. Water Infrastructure Requires Substantial Long-term Investment Repair & Replacement Market U.S. Water Infrastructure CAPEX and Investment Gap • Restoring existing water systems and expanding them to serve a growing • Spending on Water & Wastewater CAPEX in U.S. is >$50 billion (4) population th
Slide 11: Aging Infrastructure Increasing Water Main Breaks
Aging Infrastructure Increasing Water Main Breaks Aging of Pipe Infrastructure Water Main Break Rates Increasing (4) • Average age of water pipes has increased to 45 years in 2020 from 25 years • According to a study by Steven Folkman at Utah State University in 1970 (1) that surveyed nearly 200,000
Slide 12: Water Utilities and Water Infrastructure Funding
Water Utilities and Water Infrastructure Funding Water Utilities in North America Sources of Funding for U.S. Utilities • >50,000 water utilities and >14,000 wastewater utilities in U.S. • For U.S. utilities, 96% of funding at state/local government level (3) and Canada (1) − Majority of utilities h
Slide 13: Need for Digital Water Solutions Expected to Accelerate
Need for Digital Water Solutions Expected to Accelerate Aging Infrastructure and Non-Revenue Water “Bluefield • Average age of water pipes has increased to 45 years in 2020 from 25 years in 1970 (2) projects that • 240,000 water main breaks per year with 27% increase in break rates since 2012 (3,4)
Slide 14: Broad-line of Connected Products that Close the Loop
Broad-line of Connected Products that “Close the Loop” with Water Network Administrators & Assets Products and solutions help address critical needs for water utilities, including Echologics' pipe condition assessment services and fixed leak detection solutions, advanced meters and communication equ
Slide 15: Large Capital Projects
Large Capital Projects • Benefits include accelerating product development, driving operational efficiencies, reducing duplicative expenses, increasing revenue, expanding capabilities for American-made products and advancing our sustainability environmental initiatives • Expect capital expenditures
Slide 16: Financial Performance
Financial Performance
Slide 17: Q1 FY2024 Consolidated Results
Q1 FY2024 Consolidated Results (1,2) Gross Profit ($M) Adj. EBITDA ($M) Adj. Net Income Net Sales ($M) % of Net Sales % of Net Sales per Diluted share -7.4% y/y +1.4% y/y -18.6% y/y 0.0% y/y +410 bps +350 bps $314.8 $93.2 $44.2 $44.8 $0.13 $0.13 $86.3 $256.4 29.6% 33.7% 14.0% 17.5% Q1 FY2023 Q1 FY20
Slide 18: Free Cash Flow (Q1 FY2024)
Free Cash Flow (Q1 FY2024) • Increased net cash provided by operating activities by $80.0 $74.4M to $67.9M compared with prior year quarter $67.9 $70.0 − Increase driven by improvements in working capital compared with prior $60.0 year, including smaller increase in inventories, higher receivables c
Slide 19: Fiscal 2024 Outlook
Fiscal 2024 Outlook (1) • Expectations for consolidated net sales to decrease between 2% and 6% as compared with Fiscal 2024 Metrics (1) the prior year Consolidated Net Sales Growth y/y -2% to -6% − Takes into account first quarter performance and recent Adjusted EBITDA Growth y/y +3% to +7% pricing
Slide 20: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Ample capacity to support our strategic priorities, including acquisitions • Moody’s: Ba1 Corporate Rating, Ba1 Notes Rating, Stable Outlook Debt Maturities Credit Rating • S&P: BB Corporate and Notes Ratings, Stable Outlook $500 • $450M of 4.0% Senior Notes (matur
Slide 21: Balanced and Disciplined Capital Allocation
Balanced and Disciplined Capital Allocation Capital Allocation Priorities Cash Allocation Over Past 5 Years (FY19 to FY23)* • Strong balance sheet, liquidity and cash flow supporting our strategies $245M to Shareholders • Maintaining balanced approach to capital - $175M dividends - $70M share repurc
Slide 22: Investment Highlights
Investment Highlights DRIVING GROWTH WITH A STRONG COMPETITIVE POSITION AND BROAD PORTFOLIO OF PRODUCTS AND SOLUTIONS BENEFITTING FROM LONG-TERM END MARKET DYNAMICS SUPPORTED BY AGING WATER INFRASTRUCTURE MODERNIZING MANUFACTURING AND DRIVING OPERATIONAL EXCELLENCE TO DELIVER GROSS MARGIN EXPANSION
Slide 23: Supplemental Data
Supplemental Data
Slide 24: Historical Financial Performance
Historical Financial Performance • Over last five years, delivered net sales and adjusted EBITDA CAGRs of 6.8% and 2.3%, respectively • Prior to pandemic, delivered net sales and adjusted EBITDA CAGRs of 6.5% and 8.3%, respectively Consolidated Net Sales Consolidated Adjusted EBITDA (1) $ in million
Slide 25: Free Cash Flow (Fiscal 2023)
Free Cash Flow (Fiscal 2023) • Increased net cash provided by operating activities for fiscal 2023 by $56.7M to $109.0M compared $109.0 $110.0 with prior year primarily due to improvements in $100.0 working capital $90.0 $80.0 • Lowered capital expenditures to $47.6M in fiscal $70.0 2023, bringing c
Slide 26: Strong Balance Sheet with Significant Flexibility
Strong Balance Sheet with Significant Flexibility • Reduced debt by $1.1B since March 31, 2006, and approximately $650M since September 30, 2008 • Total debt of $447.4M and total cash of $216.7M leading to net debt leverage of 1.1x at Dec. 31, 2023 • $379.1M of total liquidity, including $162.4M of
Slide 27: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 141.3 $ 115.1 $ — $ 256.4 Gross profit $ 46.
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 14.3 Income tax expense (3) 2.6 Other expen
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 165.6 $ 149.2 $ — $ 314.8 Gross profit $ 46.
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended December 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 22.5 Income tax expense (3) 6.9 Interest ex
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