Mueller Water Products · NYSE:MWA
Mueller Water Products — Oppenheimer 17th Annual Industrial Growth Conference 2018
30 slides from Mueller Water Products's conference presentation, May 8, 2018
Slide 1: Where Intelligence Meets Infrastructure - Oppenheimer 17th Annual Industrial Growth Conference
Where Intelligence Meets Infrastructure OppenheimerF E B R U A R Y 2 013 1 7th Annual Industrial Growth Conference May 9, 2018 M U E L L E R W A T E R P R O D U C T S . C O M
Slide 2: Non-GAAP Financial Measures, Forward-Looking Statements and Reclassified Financials
NON-GAAP Financial Measures, Forward-Looking Statements and Reclassified Financials Non-GAAP Financial Measures In an effort to provide investors with additional information regarding its results as determined under GAAP, the Company also provides non-GAAP information that management believes is use
Slide 3: Mueller Water Products at a Glance
Mueller Water Products at a Glance History LTM Financials . Founded 160 years ago as of March 31, 2018 ($ in Millions) . Spun off from Walter Industries in 2006 Net sales $ 870.6 . Listed on NYSE (MWA) June 1, 2006 Infrastructure $ 783.2 90.0% . Divested U.S. Pipe (2012) and Anvil (2017) Technologie
Slide 4: Focused Strategy and Execution Driving Results
Focused Strategy and Execution Driving Results Where Intelligence Meets Infrastructure® Committed to delivering sustainable and efficient solutions for our customers and the work they do by bridging the gap between intelligence and infrastructure, helping our customers deliver the most important wat
Slide 5: Investment Highlights
Investment Highlights . . Leading brand and municipal market specification positions Strong Competitive . Large installed base of iron gate valves and fire hydrants Position . Comprehensive distribution network and strong end-user relationships Low-cost manufacturing operations using lost foam proce
Slide 6: Products and Markets
Products and Markets
Slide 7: Our Leading Product Positions
Our Leading Product Positions PRODUCT PRODUCT PRODUCT PRODUCT #1 POSITION #1 POSITION #1 POSITION #2 POSITION Company estimates based on internal analysis and information from trade associations and distributor networks, where available. M U E L L E R W A T E R P R O D U C T S . C O M M A Y 2018 7
Slide 8: Bringing Value to our Customers
Bringing Value to our Customers . Providing valued products and services to over 50,000 municipalities and utilities . Utilizing proprietary smart technologies to help our customers actively diagnose, monitor and control the delivery of drinking water . Developing new technology offerings which util
Slide 9: U.S. Water Infrastructure Requires Substantial Long-Term Investment
U.S. Water Infrastructure Requires Substantial Long-Term Investment Future Drinking Water Infrastructure Repair & Replacement Market (4) . Expenditure Needs Restoring existing water systems and expanding them to serve a growing population through 2050 will require a $1.7 trillion investment (1) . AS
Slide 10: Funding Water Infrastructure Repair
Funding Water Infrastructure Repair Historical Water Rates Compared to Other Utilities(1) 600 CPI Utilities (NSA 1982-1984 = 100) 500 400 300 200 100 0 UTILITY SOURCES OF FUNDING . 1984 1957 1960 1963 1966 1969 1972 1975 1978 1981 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 1954 Majority
Slide 11: Focus on Manufacturing Excellence Driving Organic Growth
Focus on Manufacturing Excellence Driving Organic Growth . Infrastructure has strong adjusted EBITDA margins (27.5% in FY2017) providing a manufacturing base for future growth . Enhanced operational initiatives driving ongoing productivity improvements to facilitate innovation, increase new product
Slide 12: Strong Need for Intelligence in Water Infrastructure
Strong Need for Intelligence in Water Infrastructure Black & Veatch 2016 Strategic Directions in the U.S. Water Industry “Smart metering is a highly successful way of accurately identifying water loss.” Water Conservation Non-Revenue Water Customer Service Focus . . . 43% of U.S. experiencing Up to
Slide 13: Technologies Bringing Intelligence to Water Infrastructure
Technologies Bringing Intelligence to Water Infrastructure Intelligent Water TechnologyTM is Mueller’s full-line of innovative solutions, products and services that actively diagnose, monitor and control the delivery of safe, clean drinking water to consumers and businesses Smart Metering Leak Detec
Slide 14: Financial Performance
Financial Performance
Slide 15: Focused Execution Driving Results
Focused Execution Driving Results Pursued Strategic Generated Free Improved Productivity and Opportunities Cash Flow Reduced Costs . . . Leveraged Mueller brand to drive Produced strong record of free Reorganized the Company around organic growth cash flow generation driven by product value streams
Slide 16: History of Strong Financial Performance
History of Strong Financial Performance . Delivered 13% cumulative net sales growth since fiscal 2013 years (3% CAGR) . Driven 60% cumulative adjusted EBITDA growth with 580 bps. improvement in adjusted EBITDA margin since fiscal 2013 (1) Consolidated Net Sales Consolidated Adjusted EBITDA and ($ in
Slide 17: Q2 2018 Consolidated Financial Highlights
Q2 2018 Consolidated Financial Highlights . Increased consolidated net sales 16.8% with strong growth at both Infrastructure Second Quarter 2018 2017 (+16.2%) and Technologies (+22.1%) driven by higher volumes as well as higher pricing at Infrastructure Net sales $ 233.2 $ 199.7 . Grew adjusted oper
Slide 18: Strong Balance Sheet with Significant Flexibility
Strong Balance Sheet with Significant Flexibility ■ Net debt leverage less than 1x, down from a peak of more than 6x ■ Debt structure as of March 31, 2018 included $477 million Term Loan B with 4.6% weighted- average effective interest rate and $225 million ABL Agreement with no outstanding borrowin
Slide 19: Balanced and Disciplined Capital Allocation
Balanced and Disciplined Capital Allocation Strategic Shareholders Balance Sheet Investments . . . Driving organic growth Increased dividend 25% in Reduced debt by more through capital investments February 2018 which is the than $1 billion since March and acquisitions fourth increase in the last 31,
Slide 20: Investment Highlights
Investment Highlights . . Leading brand and municipal market specification positions Strong Competitive . Large installed base of iron gate valves and fire hydrants Position . Comprehensive distribution network and strong end-user relationships Low-cost manufacturing operations using lost foam proce
Slide 21: Supplemental Data
Supplemental Data
Slide 22: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended March 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 211.1 $ 22.1 $ — $ 233.2 Gross profit $ 71.4 $ 3.1 $ — $ 74.5 Selling, general and a
Slide 23: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended March 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.2 Income tax expense (1) 14.2 Interest expense, net (1) 5.2 Pension costs other
Slide 24: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended March 31, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 181.6 $ 18.1 $ — $ 199.7 Gross profit $ 59.0 $ (6.5) $ — $ 52.5 Selling, general and
Slide 25: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Quarter ended March 31, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 73.3 Income from discontinued operations (after tax) (68.6) Income tax expense (1)
Slide 26: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Six months ended March 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 371.2 $ 40.3 $ — $ 411.5 Gross profit $ 123.9 $ 6.0 $ — $ 129.9 Selling, general
Slide 27: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Six months ended March 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 65.3 Income tax benefit (1) (25.6) Interest expense, net (1) 10.4 Pension costs
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Six months ended March 31, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 327.9 $ 39.0 $ — $ 366.9 Gross profit $ 106.6 $ (2.3) $ — $ 104.3 Selling, genera
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
SEGMENT RESULTS AND RECONCILIATION OF NON-GAAP TO GAAP PERFORMANCE MEASURES Six months ended March 31, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 80.0 Income from discontinued operations (after tax) (69.9) Income tax expense (
Slide 30: Questions
Questions
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