Mueller Water Products · NYSE:MWA

Mueller Water Products — D.A. Davidson 18th Annual Diversified Industrials & Services Conference (September 2019)

34 slides from Mueller Water Products's conference presentation, Sep 18, 2019

1. Slide 1: D.A. Davidson 18th Annual Diversified Industrials & Services Conference

   Where Intelligence Meets Infrastructure® D.A. Davidson 18th Annual Diversified Industrials & Services Conference September 18, 2019

2. 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 under GAAP, the Company also provides non-GAAP information that management believes is useful to investors. These non-GAAP measures have limitations as analytical t

3. 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 Private Securities Litigation Reform Act of 1995. All statements that address activities, events or developments that we intend, expect, plan, project, b

4. Slide 4: Mueller Water Products at a Glance

   Mueller Water Products at a Glance HISTORY LTM FINANCIALS END MARKETS* FISCAL YEAR 2018 • Founded 160 years ago as of June 30, 2019 <10% % of Natural gas • Spun off from Walter $ in millions Total utilities Industries in 2006 Net sales $955.4 • Listed on NYSE (MWA) Infrastructure $859.8 90.0% June 1

5. Slide 5: 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

6. Slide 6: Investment Highlights

   Investment Highlights • Leading brand and municipal market specification positions • Large installed base of iron gate valves and fire hydrants STRONG COMPETITIVE POSITION • Comprehensive distribution network and strong end-user relationships • Low-cost manufacturing operations using lost foam proce

7. Slide 7: Products and Markets

   Products and Markets (MUELLER) ©"

8. Slide 8: Our Leading Product Positions

   Our Leading Product Positions FIRE IRON GATE BUTTERFLY BRASS HYDRANTS VALVES VALVES PRODUCTS PRODUCT PRODUCT PRODUCT PRODUCT #1 POSITION #1 POSITION #1 POSITION #2 POSITION A.Y. McDonald ACIPCO DeZURIK Ford Meter Box McWane Company estimates based on internal analysis and information from trade asso

9. Slide 9: Mueller is Uniquely Positioned to Address Utility Pain Points

   Mueller is Uniquely Positioned to Address Utility Pain Points 9

10. Slide 10: Krausz Industries

    Krausz Industries Krausz is a leader in pipe repair couplings, grips and clamps with a suite of products that can address virtually any water and wastewater pipe connection or repair scenario Broad Portfolio of Products HYMAX Coupling HYMAX Grip HYMAX Versa HYMAX Clamp Two-bolt wide-range Two-bolt w

11. Slide 11: 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 EXPENDITURE NEEDS(4) • Restoring existing water systems and expanding them to serve a growing TREATMENT population through 2050 will require a $1.7 trillion investment

12. Slide 12: 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 Utility Sources of Funding 0 • Majority of utilities have service connection fees and/or capital recovery charges, with median fees of about $6,400(3)

13. Slide 13: Focus on Manufacturing Excellence Driving Organic Growth

    Focus on Manufacturing Excellence Driving Organic Growth • Infrastructure has strong adjusted EBITDA margins (26.7% over last twelve months) providing a base for future growth • Enhanced operational initiatives driving ongoing productivity improvements to facilitate innovation, increase new product

14. Slide 14: Strong Need for Intelligence in Water Infrastructure

    Strong Need for Intelligence in Water Infrastructure Black & Veatch 2018 Strategic Directions in the U.S. Water Industry “The true value of digital water emerges when we move from data harvesting to data science. Collecting information is good. Using data to make better decisions and plan for a safe

15. Slide 15: 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

16. Slide 16: Financial Performance

    Financial Performance (MUELLER) ©"

17. Slide 17: Focused Execution Driving Results

    Focused Execution Driving Results PURSUED STRATEGIC GENERATED CASH FLOW IMPROVED PRODUCTIVITY AND OPPORTUNITIES REDUCED COSTS • Leveraged Mueller brand to drive • Strong history of cash flow • Divested Anvil and U.S. Pipe organic growth generation driven by improvements in operating results and • Re

18. Slide 18: History of Strong Financial Performance

    History of Strong Financial Performance Delivered 31% cumulative net sales growth (4.6% CAGR) with 91% cumulative increase in adjusted EBITDA (11.3% CAGR) between 2013 and LTM Q3FY19 leading to adjusted EBITDA margin improvement >600 bps. since 2013 (1) Consolidated Net Sales Consolidated Adjusted E

19. Slide 19: Q3 2019 Consolidated Financial Highlights

    Q3 2019 Consolidated Financial Highlights • Net sales increased 9.6% to $274.3 million driven by the acquisition of Krausz and a 4.6% increase in organic net Third Quarter 2019 2018 sales as we benefitted from both higher pricing and shipment volumes Net sales $ 274.3 $ 250.2 • Delivered a 90 basis

20. Slide 20: Full-Year 2019 Outlook

    Full-Year 2019 Outlook* Expectations for full-year 2019, which reflect the current business environment and include the results of Krausz Industries, are as follows: • Growth in all end markets during the fourth quarter of 2019 with municipal spending growth in the mid-single digit range, residentia

21. Slide 21: Strong Balance Sheet with Significant Flexibility

    Strong Balance Sheet with Significant Flexibility • Total debt of $446.2 million and cash and cash equivalents of $140.7 million, after Krausz Industries acquisition, which closed in Q1 FY19 • Net debt leverage was 1.6x at June 30, 2019 • $136 million of excess availability under the ABL at June 30,

22. Slide 22: Balanced and Disciplined Capital Allocation

    Balanced and Disciplined Capital Allocation STRATEGIC INVESTMENTS SHAREHOLDERS BALANCE SHEET • Driving growth through capital • Returned $173 million of cash to • Reduced debt by $1.1 billion since investments and acquisitions with shareholders since December March 31, 2006 and $650 million prioriti

23. Slide 23: Investment Highlights

    Investment Highlights • Leading brand and municipal market specification positions • Large installed base of iron gate valves and fire hydrants STRONG COMPETITIVE POSITION • Comprehensive distribution network and strong end-user relationships • Low-cost manufacturing operations using lost foam proce

24. Slide 24: Questions

    Questions (MUELLER) ©"

25. Slide 25: Supplemental Data

    Supplemental Data (MUELLER) ©"

26. Slide 26: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Quarter ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 250.2 $ 24.1 $ — $ 274.3 Gross profit $ 92.7 $ 4.5 $ — $ 97.2 Selling, ge

27. 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) Quarter ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 33.7 Income tax expense (1) 8.9 Interest expense, net (1) 4.2 Walter Ene

28. 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) Quarter ended June 30 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 224.1 $ 26.1 $ — $ 250.2 Gross profit $ 83.4 $ (8.9) $ — $ 74.5 Selling, g

29. 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) Quarter ended June 30 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 15.3 Loss on early extinguishment of debt 6.2 Gain on settlement of inter

30. 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) Nine months ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 636.3 $ 64.8 $ — $ 701.1 Gross profit $ 221.4 $ 10.7 $ — $ 232.1 Sell

31. Slide 31: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Nine months ended June 30, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 23.6 Income tax expense (1) 6.9 Interest expense, net (1) 15.6 Walte

32. Slide 32: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Nine months ended June 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 595.3 $ 66.4 $ — $ 661.7 Gross profit $ 207.3 $ (2.9) $ — $ 204.4 Sel

33. Slide 33: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures

    Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Nine months ended June 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 80.6 One-time impacts from tax legislation (35.1) Loss on early exti

34. Slide 34: Where Intelligence Meets Infrastructure

    Where Intelligence Meets Infrastructure®

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