Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (November 2024)
37 slides from Arcosa's investor presentation, Nov 12, 2024
Slide 1: Moving Infrastructure Forward | November 2024 Investor Presentation
MOVING INFRASTRUCTURE FORWARD | NOVEMBER 2024 INVESTOR PRESENTATION EXHIBIT 99.1
Slide 2: Forward Looking Statements
2 I MOVING INFRASTRUCTURE FORWARD I 2024 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
Slide 3: How to Find Us
HOW TO FIND US OUR WEBSITE www.arcosa.com NYSE TICKER ACA HEADQUARTERS Arcosa, Inc. 500 North Akard Street, Suite 400 Dallas, TX 75201 INVESTOR CONTACT InvestorResources@arcosa.com 3 I MOVING INFRASTRUCTURE FORWARD I 2024
Slide 4: Table of Contents
01 03 04 OVERVIEW FINANCIAL HIGHLIGHTS 02 OUTLOOK TABLE OF CONTENTS 4 I MOVING INFRASTRUCTURE FORWARD I 2024 STRATEGIC TRANSFORMATION
Slide 5: Overview
OVERVIEW 01
Slide 6: Arcosa's Value Proposition
ARCOSA’S VALUE PROPOSITION FOCUSED on margin expansion and cash flow generation EXPERIENCED management team with history of managing through economic cycles LEADING businesses serving critical infrastructure markets TRACK RECORD of executing on strategic priorities DISCIPLINED CAPITAL allocation pro
Slide 7: Arcosa at a Glance
ARCOSA AT A GLANCE Revenue, net income, and Adjusted EBITDA are for the twelve months ended 9/30/2024. See Adjusted EBITDA reconciliation in Appendix. Headcount is as of 12/31/2023. Net Income(1) Adjusted EBITDA Infrastructure-related Segments Employees Years of Operating History OUR THREE BUSINESS
Slide 8: Business Overview
BUSINESS OVERVIEW ENGINEERED STRUCTURES TRANSPORTATION PRODUCTS(1)CONSTRUCTION PRODUCTS (1) Arcosa completed the divestiture of its Steel Components business on August 16, 2024. Financial results for the business are included in continuing operations to date of sale. Revenues and Adjusted Segment EB
Slide 9: Strategic Transformation
STRATEGIC TRANSFORMATION 02
Slide 10: Arcosa's Long-Term Vision
10 I MOVING INFRASTRUCTURE FORWARD I 2024 ARCOSA’S LONG-TERM VISION Reduce the complexity and cyclicality of the overall business Integrate Environmental, Social, and Governance (ESG) initiatives into our long-term strategy Improve long-term returns on invested capital Grow in attractive markets whe
Slide 11: Significant progress advancing our long-term vision
Construction Products 33% Engineered Structures 38% Transportation Products 29% We have made significant progress advancing our long-term vision 11 I MOVING INFRASTRUCTURE FORWARD I 2024 1Pro Forma 9/30/2024 for the acquisitions of Stavola and Ameron and the divestiture of Steel Components. See Adju
Slide 12: ~$2.7 billion of investment in Construction Products acquisitions
~$2.7 billion of investment in Construction Products acquisitions as we seek to expand our growth platforms 12 I MOVING INFRASTRUCTURE FORWARD I 2024 ONGOING INVESTMENT IN OUR CONSTRUCTION PRODUCTS PLATFORM Q4 2024Q2 2022Q3 2021Q2 2021Q3 2020Q1 2020Q4 2018KEY ACQUISITIONS Natural Aggregates Recycled
Slide 13: Completed Acquisition of Stavola and Sale of Steel Components
Enhances Arcosa’s overall profitability and financial profile Extends footprint into the nation’s largest MSA with a scaled and vertically integrated aggregates and FOB asphalt operation COMPLETED THE ACQUISITION OF STAVOLA (OCTOBER 1) AND SALE OF STEEL COMPONENTS (AUGUST 16) 13 I MOVING INFRASTRUCT
Slide 14: $1.2B Acquisition of Stavola
$1.2B ACQUISTION OF STAVOLA, A LEADING PROVIDER OF CONSTRUCTION MATERIALS OPERATING IN THE NORTHEAST BY THE NUMBERS COMPANY HIGHLIGHTS Operates third largest quarry in production in the region, allowing it to serve both external customers and internal asphalt demand Founded in 1948 with over 75 year
Slide 15: Stavola Expands Construction Products' Geographic Footprint
15 I MOVING INFRASTRUCTURE FORWARD I 2024 STAVOLA EXPANDS AND DIVERSIFIES CONSTRUCTION PRODUCTS’ GEOGRAPHIC FOOTPRINT Our Aggregates Business Now Serves 13 of the 50 Largest MSAs Natural Aggregates Recycled Aggregates Asphalt Stavola Locations Incremental Presence from Stavola Construction Products
Slide 16: Stavola Extends Footprint into Nation's Largest MSA
STAVOLA EXTENDS ARCOSA’S FOOTPRINT INTO THE NATION’S LARGEST MSA 16 I MOVING INFRASTRUCTURE FORWARD I 2024 Infrastructure 75–85% Residential 10–20% Non-residential 5–15% Aggregates Demand Asphalt Demand Infrastructure 80–90% Residential 5–10% Non-residential 5–10% Stavola’s Core Markets Are Over-Ind
Slide 17: Stavola Enhances Scale and Margin of Construction Products
Construction Products Pro Forma1 Construction Products LTM REVENUE LTM ADJUSTED EBITDA LTM ADJ. EBITDA MARGIN 24.6% 26.9% $254 $354 $1,032 $1,315 EXPANDS CONSTRUCTION PRODUCTS WITH HIGH VALUE-ADDED AGGREGATES AND A VERTICALLY INTEGRATED AND COMPLEMENTARY ASPHALT OPERATION Acquisition of Stavola enha
Slide 18: Completed Acquisition of Ameron Pole Products for $180 Million
APRIL 2024 – COMPLETED ACQUISITION OF AMERON POLE PRODUCTS FOR $180 MILLION • Provides entry into the complementary steel and concrete lighting pole market • Expands product offerings in traffic and telecom structures businesses • Margin accretive to both Engineered Structures segment and Arcosa ove
Slide 19: Other Strategic Portfolio Actions in 2024
OTHER STRATEGIC PORTFOLIO ACTIONS IN 2024 19 I MOVING INFRASTRUCTURE FORWARD I 2024 Completed the sale of our Steel Components business to Stellex Capital Management on August 16 Steel Components had LTM 9/30/2024 revenues of $124 million and operates under the brands McConway & Torley, Standard
Slide 20: Outlook
OUTLOOK 03
Slide 21: 2024 Guidance Increased
Updated guidance range to reflect the acquisition of Stavola (October 1) and divestiture of steel components (August 16) See full year 2024 Adjusted EBITDA guidance reconciliation in Appendix. (1) Margin excludes the gain on land sale in 2023 and the steel components business from both periods 2024
Slide 22: Market Outlook
MARKET OUTLOOK CONSTRUCTION PRODUCTS ENGINEERED STRUCTURES TRANSPORTATION PRODUCTS 22 I MOVING INFRASTRUCTURE FORWARD I 2024 • Infrastructure spending up due to increased federal funding from IIJA and healthy state DOT budgets • $350B of IIJA funds for highways and bridges through 2026 – roughly one
Slide 23: Construction Products Market Outlook
CONSTRUCTION PRODUCTS MARKET OUTLOOK 23 I MOVING INFRASTRUCTURE FORWARD I 2024 Source: USGS – National Minerals Information Center Aggregates industry has positive fundamentals and beneficial pricing dynamics Texas is an important market for aggregatesAggregates pricing is consistently positive ■ In
Slide 24: Engineered Structures Market Outlook
ENGINEERED STRUCTURES MARKET OUTLOOK 24 I MOVING INFRASTRUCTURE FORWARD I 2024 (1) The C Three Group (August 2024); (2) Wood Mackenzie, Q3 2024 Market Outlook The utility transmission and wind tower business outlook remains positive with a robust communication infrastructure buildout expected over t
Slide 25: Transportation Products Market Outlook
Total U.S. and Canada Electric Transmission: Reported CAPEX ($B) TRANSPORTATION PRODUCTS MARKET OUTLOOK 25 I MOVING INFRASTRUCTURE FORWARD I 2024 (1) The Waterways Journal: Mississippi River System Barge Fleet Survey, 2024 Positive outlook as fleet replacement needs sustain market recovery for barge
Slide 26: Financial Highlights
04 Xo FINANCIAL HIGHLIGHTS
Slide 27: Strong Track Record of Growth and Margin Expansion
STRONG TRACK RECORD OF GROWTH AND MARGIN EXPANSION WHILE TRANSFORMING PORTFOLIO (1)Margin excludes the gain on land sale in 2023. See Adjusted EBITDA and Adjusted Segment EBITDA reconciliations in Appendix. 27 I MOVING INFRASTRUCTURE FORWARD I 2024 73 92 138 180 199 223 25482 129 116 125 149 22 145
Slide 28: Q3 2024 Consolidated Results
Q3 2024 CONSOLIDATED RESULTS See Adjusted Net Income and Adjusted EBITDA reconciliations in Appendix. REVENUES ($M) ADJUSTED EBITDA ($M) 551.9 626.8 39.8 Q3-23 13.6 Q3-24 591.7 640.4 +14% +8% NET INCOME($M) Robust earnings growth and margin expansion led by Construction Products and Engineered Struc
Slide 29: Disciplined Cash Culture and Track Record of Deleveraging
29 I MOVING INFRASTRUCTURE FORWARD I 2024 $M’s Ratio at year end Spun debt free with $200M of cash Sale of Storage Tanks for $275M 6 construction bolt- ons totaling ~$120M, including expansion in Florida DISCIPLINED ‘CASH CULTURE’ AND TRACK RECORD OF DELEVERAGING FOLLOWING PAST ACQUISITIONS Free Cas
Slide 30: Appendix
APPENDIX
Slide 31: Guidance Summary for 2024
GUIDANCE SUMMARY FOR 2024 ADJUSTED EBITDA COMMENTARY CAPITAL EXPENDITURES OTHER • $435M to $450M range for full year 2024, including $8M from the divested steel components business • 2023 full year Adjusted EBITDA was $368M, including $22M from the land sale gain in the first quarter and $21M from t
Slide 32: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 33: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income 33 Moving Infrastructure Forward (1) Includes the impact of the fair value markup of acquired long-lived assets, subject to final purchase price adjustments. (2) Expenses associated with acquisitions and divestitures, including the cost impac
Slide 34: Reconciliation of Adjusted Segment EBITDA
34 Moving Infrastructure ForwardI MOVING INFRASTRUCTURE FORWARD I 2024 Reconciliation of Adjusted Segment EBITDA (1) Includes the impact of the fair value markup of acquired long-lived assets, subject to final purchase price adjustments. (2) Expenses associated with acquisitions and divestitures, in
Slide 35: Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow
35 Moving Infrastructure ForwardI MOVING INFRASTRUCTURE FORWARD I 2024 Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow ($’s in millions) (unaudited) (1) These periods include pro forma adjustments for acquisitions completed during the period, as previously disclosed. (2) Adjusted EB
Slide 36: Reconciliation of Stavola, Ameron, and Steel Components Adjusted EBITDA
36 Moving Infrastructure ForwardI MOVING INFRASTRUCTURE FORWARD I 2024 Reconciliation of Stavola, Ameron, and Steel Components Adjusted EBITDA (in millions) (unaudited) Twelve Months Ended June 30, 2024 $ 71.8Net Income Add: 0.8Interest expense, net —Provision for income taxes 18.9Depreciation, depl
Slide 37: N. Akard Street, Suite Dallas, Texas 75201 (972) -6500 ir.arcosa.com
500 N. Akard Street, Suite 400 Dallas, Texas 75201 (972) 942-6500 ir.arcosa.com