Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (August 2020)
36 slides from Arcosa's investor presentation, Aug 7, 2020
Slide 1: Investor Presentation August 2020
Exhibit 99.1 Investor Presentation August 2020
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 INVESTOR CONTACT Arcosa, Inc. InvestorResources@arcosa.com 500 North Akard Street, Suite 400 Dallas, Tx 75201 3 / Moving Infrastructure Forward
Slide 4: Table of Contents
Table of Contents 1342 Company Update on Long-Term ESG Update Overview COVID-19 Vision and Capital Allocation 4 / Moving Infrastructure Forward
Slide 5: Company Overview
1 Company Overview 5 / Moving Infrastructure Forward
Slide 6: Arcosa's Value Proposition
Arcosa’s Value Proposition Leading Experienced Low leverage Disciplined capital Track record of businesses management and ample allocation process executing on Stage serving critical team with history liquidity to to grow in 1 priorities in first infrastructure of managing navigate cycles attractive
Slide 7: Arcosa at a Glance
Arcosa at a Glance $1.9B Revenues $119M Net Income $272M Adjusted EBITDA ~6,500 Employees 85+ Years of Operating History Arcosa spun off from its former parent company in November 2018. 3 Infrastructure-related Segments Revenues, Adjusted EBITDA and Net Income are for the twelve months ended 6/30/20
Slide 8: Business Overview
Business Overview Arcosa’s three segments are made up of leading businesses that serve critical infrastructure markets Adj.Segment Markets Revenues EBITDA Margin NATURAL & SPECIALTY CONSTRUCTION CONSTRUCTION RECYCLED $516M 22% MATERIALS SITE SUPPORT AGGREGATES UTILITY STORAGE ENERGY WIND TOWERS $869
Slide 9: Track Record of Executing on Stage Priorities
Track Record of Executing on Stage 1 Priorities We have achieved consecutive double-digit increases in quarterly revenues and Adjusted EBITDA since Q1-19 and made progress on building our new Arcosa culture Executing on Stage 1 Priorities introduced at October 2018 Investor Day Building our new Co
Slide 10: Recent Financial Results
Recent Financial Results Full Year Adjusted EBITDA increased ~45% since spin outpacing revenue growth and driven by organic growth, acquisitions, and operating improvements Revenues Adjusted EBITDA ($M’s) +29% ($M’s) +46% 1,879 267 272 1,737 1,704 241 1,462 1,460 197 187 2016 2017 2018 2019 LTM 6/20
Slide 11: Balance Sheet Highlights
Balance Sheet Highlights Significant balance sheet capacity will enable us to pursue disciplined growth ~0.4x Net Debt / Adjusted EBITDA at the end Q2-20, well below …with minimal debt maturities until 2025 our long-term target… Net Debt / Adjusted EBITDA Debt Maturity Schedule Ratio since spin, end
Slide 12: Free Cash Flow and Liquidity
Free Cash Flow and Liquidity Arcosa’s business have an attractive free cash flow profile, contributing to $522M of liquidity at the end of Q2 2020 Free Cash Flow Available Liquidity, End of Q2 $M’s $M’s 522 115 107 Cash 148 56 56 6 Qtr Avg $58 Revolver During Q2, we repaid a 374 precautionary $100 C
Slide 13: Cherry Acquisition Update
Cherry Acquisition Update Cherry acquisition closed in January 2020; integration is proceeding well and financial performance has exceeded our expectations year-to-date Cherry is a leading natural and Unique platform with sustainable Integration Update recycled aggregates company competitive advanta
Slide 14: Capital Allocation to Grow in Adjacent Infrastructure Products
Capital Allocation to Grow in Adjacent Infrastructure Products In 2020, we have invested in 3 acquisitions plus organic growth to build on our strong position in transmission and distribution structures CAPITAL DEPLOYED DESCRIPTION IN 2020 . March 2020 acquisition of HSI, a leading traffic $26M Traf
Slide 15: Update on COVID-19
2 Update on COVID-19 15 / Moving Infrastructure Forward
Slide 16: COVID-19 Update
COVID-19 Update We prioritize the health and safety of our people The health and safety of our employees, communities, and other stakeholders is our highest priority. We have put safeguard measures in place at our plants and office locations to meet or exceed the standards set forth by CDC guideline
Slide 17: Q2 2020 Financial Results
Q2 2020 Financial Results COVID-19 had minimal impact on year-to-date financial results as we generated record revenue and EBITDA in Q2-2020 2nd Quarter, ended June 30 ($M’s) Year-to Date, ended June 30 ($M’s) Revenues Adjusted EBITDA Revenues Adjusted EBITDA +15% +23% +17% +26% 498.5 78.7 986.7 154
Slide 18: Near-Term Impacts on our Markets
Near-Term Impacts on our Markets Construction Products and Energy Equipment end markets have remained healthy, while Transportation Products has seen a significant decline in new order activity from the COVID-related slowdown Near-Term Outlook by Segment Energy Equipment . Positive Outlook % of Q2 A
Slide 19: Capital Allocation Approach for 2020
Capital Allocation Approach for 2020 We are managing cash tightly in the face of macroeconomic uncertainty, but we are still pursuing selective investments to execute on our long-term growth strategies Return of capital Organic investments Strategic growth through acquisitions to shareholders . Dela
Slide 20: Long-Term Vision and Capital Allocation
3 Long-Term Vision and Capital Allocation 20 / Moving Infrastructure Forward
Slide 21: Our Long-Term Vision
Our Long-Term Vision Grow in attractive markets Reduce the complexity Improve long-term Integrate Environmental, where we can achieve and cyclicality of the returns on invested Social, and Governance sustainable competitive overall business capital initiatives (ESG) into our advantages long-term str
Slide 22: Positive Long-Term Fundamentals
Positive Long-Term Fundamentals We remain confident in the long-term fundamentals of our key markets Long-Term Outlook . Long-term fundamentals remain strong in our key Texas and Gulf Coast geographies, driven by Construction projected population growth, fiscal health, and major infrastructure proje
Slide 23: Repositioning Arcosa for the Long-Term
Repositioning Arcosa for the Long-Term Our second quarter performance highlights our progress since 2018 in creating a more stable base of revenue and profit, anchored around core infrastructure products Adjusted Segment Adjusted Segment Q2-2018 EBITDA Q2-2020 EBITDA ($M’s) ($M’s) . Natural aggregat
Slide 24: Long-Term Vision: Construction Products Progress
Long-Term Vision: Construction Products Progress We have deployed more than $600M on Construction Products acquisitions since the time of the spin, due to favorable long-term fundamentals and acquisition opportunities Attractive fundamentals of Aggregates Growth of Construction Products segment and
Slide 25: Long-Term Vision: Energy Equipment Progress
Long-Term Vision: Energy Equipment Progress We have continued executing on our long-term strategy for Energy Equipment despite short term COVID- 19 uncertainty Invest to expand into attractive Leverage combined platform Build the foundation for growth product lines to accelerate growth 2018-2019 202
Slide 26: Expansion into Adjacent Infrastructure-Related Product Lines
Expansion into Adjacent Infrastructure-Related Product Lines With our acquisitions, we have expanded our product offering in the $3B transmission and distribution markets, as well as entered new large markets tied to infrastructure growth END MARKETS AND PRODUCT LINES RENEWABLE ELECTRICITY POWER TRA
Slide 27: ESG Update
4 ESG Update 27 / Moving Infrastructure Forward
Slide 28: Long-term Vision: ESG Update
Long-term Vision: ESG Update We are committed to developing reportable metrics and establishing meaningful goals in areas important to our stakeholders Our People Our Environment Employee Health & Safety Energy Management Diversity Air Quality Talent Management GHG Emissions Community Relations Wate
Slide 29: Long-term Vision: ESG Update
Long-term Vision: ESG Update As we integrate ESG initiatives into our long-term strategy, our operations teams have taken an active role in pursuing initiatives that promote environmental responsibility Arcosa’s Meyer Utility Structures’ Arcosa Marine is sponsoring a Arcosa’s Construction Products g
Slide 30: Our products are used in important, environmentally friendly industries
Our products are used in important, environmentally friendly industries Arcosa operates in multiple industries which contribute to environmental protection Arcosa Wind Towers Arcosa Marine builds barges Arcosa’s Recycled Arcosa’s Meyer Utility Arcosa’s Steel produces steel towers to for the fuel-sav
Slide 31: Appendix
Appendix
Slide 32: Non-GAAP Measures
Non-GAAP Measures Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. We adjust EBITDA for certain items that are not reflectiveofthe normal earnings of our business (“Adjusted EBITDA”). GAAP
Slide 33: Reconciliation of Consolidated and Combined Adjusted EBITDA
Reconciliation of Consolidated and Combined Adjusted EBITDA ($’s in millions) (unaudited) Twelve Months Year Ended Ended Three Months Ended Six Months Ended December 31, June 30, June 30, June 30, 2016 2017 2018 2019 2020 2020 2019 2020 2019 Revenues $1,704.0 $1,462.4 $1,460.4 $1,736.9 $1,878.6 $ 49
Slide 34: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Six Months Ended LTM June 30, June 30, June 30, 2020 2019 2020 2019 2020 Construction Products Operating Profit $ 24.3 $ 17.5 $ 41.1 $ 28.8 $ 65.0 Add: Depreciation, depletion, and amortization expense 13.9 9.
Slide 35: Reconciliation of Free Cash Flow and Net Debt to Adjusted EBITDA
Reconciliation of Free Cash Flow and Net Debt to Adjusted EBITDA ($’s in millions) (unaudited) Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, 2019 2019 2019 2019 2020 2020 Cash Provided by Operating Activities$ 125.0 $ 16.2 $ 77.8 $ 139.8 $ 41.5 $ 78.8 Capital Ex
Slide 36: Cherry EBITDA Reconciliation
Cherry EBITDA Reconciliation ($’s in millions) (unaudited) For the Trailing Twelve Months Ended September 30, 2019: Net income $28.5 Add: Interest expense 0.1 Provision for income taxes 1.2 Depreciation & amortization expense 7.1 EBITDA $36.9 36 / Moving Infrastructure Forward