Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — 18th Annual D.A. Davidson Diversified Industrials Conference (September 2019)
26 slides from Valmont Industries's conference presentation, Sep 19, 2019
Slide 1: Valmont Industries, Inc. Investor Presentation
Valmont Industries, Inc. I nvestor Presentation 18 th Annual D.A. Davidson Diversified Industrials Conference September 19, 2019
Slide 2: Forward-looking Statement Disclosure
Forward - looking Statement Disclosure These slides contain (and the accompanying oral discussion will contain) “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 . Such statements involve known and unknown risks, uncertainties and other factors
Slide 3: Steve Kaniewski, President & Chief Executive Officer
STEVE KANIEWSKI PRESIDENT & CHIEF EXECUTIVE OFFICER 3 | September 2019 | Valmont Industries, Inc.
Slide 4: Valmont at a Glance
Valmont at a Glance Delivering Solutions For Agriculture and Infrastructure Development 4 | September 2019 | Valmont Industries, Inc. Headquarters Omaha, NE 2018 Sales $ 2.76B Market Cap $3.1B 1 Countries of Operation 23 Manufacturing Sites 87 Total Employees >10,000 Company Profile 2018 Mix ($M) ES
Slide 5: Valmont Business Model
Valmont Business Model 12.1% Total Compounded Annualized Return Over the Past 15 Years 1 5 | September 2019 | Valmont Industries, Inc. Strong, Global, and Enduring Drivers Competitive Strengths Growth Discipline Total Value Impact Focus Niche Markets Leverage Products, Markets, and Capabilities VALU
Slide 6: Solutions Supporting Agriculture and Infrastructure Growth
Solutions Supporting Agriculture and Infrastructure Growth 6 | September 2019 | Valmont Industries, Inc.
Slide 7: Mark Jaksich, EVP & Chief Financial Officer
7 | September 2019 | Valmont Industries, Inc. MARK JAKSICH EVP & CHIEF FINANCIAL OFFICER
Slide 8: Strong Peak to Trough Performance
Strong Peak to Trough Performance $1,787 $1,976 $2,662 $3,030 $3,304 $3,123 $2,619 $2,522 $2,746 $2,757 $238 $178 $263 $382 $473 $358 $238 $256 $266 $269 $ 202 $- $100 $200 $300 $400 $500 $600 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sales O
Slide 9: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet Maintain Investment Grade Rating; Target Debt/EBITDA of 1.5 - 2.5x 9 | September 2019 | Valmont Industries, Inc. Debt and Liquidity Profile 5 - Year Historical Debt/Adjusted EBITDA 1 S&P BBB+ Stable Moody’s Baa3 Stable Fitch BBB - Stable Credit Rating 1.9x 2.7x 2.3x
Slide 10: Capital Allocation: A Balanced Approach
Capital Allocation | A Balanced Approach Aligned with Capital Allocation Commitments Announced in 2014 ($M) $49 $82 $38 $16 Capital Expenditures Acquisitions Share Repurchases Dividends 2019 YTD Capital Deployment 1 Capital Expenditures • Working capital investment to support investments in people,
Slide 11: Long-Term Financial Targets Focused on Growth
Long - Term Financial Targets Focused on Growth 11 | September 2019 | Valmont Industries, Inc. Financial Target Long - Term Goal Revenue Growth 1 EPS Growth > 10% ROIC > 10% FCF Conversion > 1.0 x Net Earnings Operating Margin > 12% 1 5% organic. Acquisitions over time are necessary to achieve top e
Slide 12: 2019 Financial Outlook
2019 Financial Outlook 2019 Annual Financial Guidance and Key Metrics Diluted EPS $ 8.10 – $ 8.70 Revenue Growth 1 6% – 7% Operating Margin Improvement 10 - 40 bps Global Effective Tax Rate ~ 25.0% Capital Expenditures $90M - $100M 1 Additional 2019 acquisitions not included in guidance 12 | Septemb
Slide 13: Why Valmont?
Why Valmont? 13 | September 2019 | Valmont Industries, Inc. Expanding Our View of Addressable Market to Leverage Existing Global Platform Management Team Reshaping the Organization to Align with Growth Long - Term, Enduring Growth Drivers Across All Segments Incorporating Technology Into All Product
Slide 14: Appendix
APPENDIX 14 | September 2019 | Valmont Industries, Inc.
Slide 15: Engineered Support Structures at a Glance
Engineered Support Structures at a Glance 15 | September 2019 | Valmont Industries, Inc. Market Drivers Strategic Addressable Market Expansion Product and Solutions Portfolio Transportation Communication Construction Systems • Need for increased transportation spend • Explosion of demand on wireless
Slide 16: Utility Support Structures at a Glance
Utility Support Structures at a Glance 16 | September 2019 | Valmont Industries, Inc. Strategic Addressable Market Expansion Transmission Structures Distribution Poles Substations Renewable Energy Solutions Inspection Services Product and Solutions Portfolio Reliability, grid hardening, regulatory i
Slide 17: Coatings at a Glance
Coatings at a Glance Market Drivers Galvanizing Applied Coatings Value - Added Services Strategic Addressable Market Expansion Product and Solutions Portfolio • Coatings demand typically correlated to industrial production • Infrastructure investments promote coatings demand • Cost of corrosion is a
Slide 18: Irrigation at a Glance | Valley
Irrigation at a Glance | Valley ® 18 | September 2019 | Valmont Industries, Inc. Market Drivers Center Pivots & Machines 1 Control Panels Remote Telemetry Variable Rate Irrigation Water Management Product and Solutions Portfolio Strategic Addressable Market Expansion Long - term: Constraints on fres
Slide 19: 2009-2018 Historical Free Cash Flow
2009 - 2018 Historical Free Cash Flow 1 10 Year Average FCF is $ 154M ; Last 5 Years Has Averaged $ 132M 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net cash flows from operating activities $ 349.5 $ 152.2 $ 149.7 $ 197.1 $ 396.4 $ 174.1 $ 272.3 $ 232.8 $ 133.1 $ 153.0 Net cash flows from inve
Slide 20: Strong Free Cash Flow Throughout The Cycle
Strong Free Cash Flow Throughout The Cycle Years of rapid raw material cost inflation GAAP 2.03X 1.23X 0.29X 0.43X 1.04X 0.55X 5.66X 1.01X 0.67X 0.86X 1.38X Adj. 2.03X 1.23X 0.41X 0.43X 0.98X 0.53X 1.71X 1.27X 0.49X 0.66X 0.97X Historical FCF Conversion by Year 1 2009 – 2018 Free Cash Flow 1 ($M) 1
Slide 21: Reg G Reconciliation
Reg G Reconciliation 21 | September 2019 | Valmont Industries, Inc.
Slide 22: Reg G Reconciliation - Continued
Reg G Reconciliation - Continued 22 | September 2019 | Valmont Industries, Inc. Segment Operating Income Reconciliation Engineered Support Structures Utility Support Structures Coatings Irrigation Other/ Corporate Operating income - as reported 34,776$ 64,766$ 55,325$ 97,722$ (50,309)$ Impairment of
Slide 23: Reg G Reconciliation - Continued
Reg G Reconciliation - Continued 23 | September 2019 | Valmont Industries, Inc. VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OF EFFECT OF SIGNIFICANT NON - RECURRING ITEMS ON OPERATING INCOME REG G RECONCILIATION (Continued)
Slide 24: Reg G Reconciliation - Continued
Reg G Reconciliation – Continued VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OF EFFECT OF SIGNIFICANT NON - RECURRING ITEMS ON OPERATING INCOME REG G RECONCILIATION (Continued) 1 Other non - recurring charges (pre - tax) in 2015 are the $17,000 provision for a Utility commercial settlement and
Slide 25: Reg G Reconciliation - Continued
Reg G Reconciliation - Continued 25 | September 2019 | Valmont Industries, Inc. VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OF EFFECT OF SIGNIFICANT NON - RECURRING ITEMS ON REPORTED RESULTS (Dollars in thousands, except per share amounts) (unaudited) The non - GAAP tables below disclose the i
Slide 26: Reconciliation of Adjusted EBITDA to GAAP Figures
Reconciliation of Adjusted EBITDA to GAAP Figures 1 Other non - recurring transactions in 2015 are the $7,003 allowance for doubtful accounts recorded in the Irrigation segment and the $17,000 accrual recorded for the utility commercial settlement. 2 Cash restructuring expenses are an allowed add -