Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (December 2018)
33 slides from Arcosa's investor presentation, Dec 12, 2018
Slide 1: Investor Presentation December 2018
Investor Presentation December 2018
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 Dallas, Tx 75201 3 / Moving Infrastructure Forward — Investor Presentation, December 2018
Slide 4: Agenda
Agenda . Company overview and long term vision . Update on Stage 1 priorities 4 / Moving Infrastructure Forward — Investor Presentation, December 2018
Slide 5: Arcosa By the Numbers
Arcosa By the Numbers A new public company with an established operating history and financial flexibility $1.4B $178M ~5,490 Revenue EBITDA Employees ~40 $91M 85+ Operating Locations Operating Profit Years of Operating History across N. America Note: Revenue, Operating Profit, and EBITDA are LTM 09
Slide 6: Arcosa Investment Case
Arcosa Investment Case Established businesses Broad infrastructure market Stage 1 priorities underway with additional potential to exposure creates to execute on our long term thrive in Arcosa’s new opportunities for growth vision structure and strategic optionality Barge recovery to provide Expecte
Slide 7: Established businesses with additional potential to thrive in Arcosa's new structure
Established businesses with additional potential to thrive in Arcosa’s new structure Markets CONSTRUCTION ENERGY TRANSPORTATION Revenue $291M $766M $381M Adj. EBITDA 27% 11% 16% margin AGGREGATES WIND TOWERS BARGES SPECIALTY UTILITY COMPONENTS MATERIALS STRUCTURES CONSTRUCTION STORAGE TANKS SITE SUP
Slide 8: Construction Products Segment Overview
Construction Products Segment Overview PRODUCTS KEY FIGURES REVENUE (LTM 9/30/18) by product type ($M) Construction site support $291M SPECIALTY CONSTRUCTION Revenue 74 AGGREGATES MATERIALS SITE SUPPORT74 (26%) 27% Natural sand, gravel Shale & clay Steel & aluminum Adjusted EBITDA and limestone base
Slide 9: Energy Equipment Segment Overview
Energy Equipment Segment Overview Products Key figures Revenue (LTM 9/30/18) by product type ($M) Storage tanks and other WIND TOWERS UTILITY STRUCTURES $766M 201 Revenue (26%) Storage 565 11% (74%) Adjusted EBITDA RESIDENTIAL/COMMERCIAL/ INDUSTRIAL SCALE & FIELD Margin AGRICULTURAL ERECTED STORAGE
Slide 10: Transportation Products Segment Overview
Transportation Products Segment Overview PRODUCTS KEY FIGURES REVENUE (LTM 9/30/18) by product type ($M) $381M Barges TANK BARGES HOPPER BARGES FIBERGLASS Revenue COVERS 157 16% (41%) Adjusted EBITDA 224 RAILCAR INDUSTRIAL & Margin (59%) RAILCAR AXLES COUPLING MINING DEVICES COMPONENTS $5B+ Componen
Slide 11: Separation providing foundation for strong future with liquidity
A separation that provides the foundation for a strong future, with liquidity and balance sheet capacity to pursue growth . ~$200M of cash at separation on November 1st Strong Available Liquidity − ~$135M of cash used to fund ACG Materials (“ACG”) acquisition Position in December . Unencumbered bala
Slide 12: Long term vision for Arcosa
Long term vision for Arcosa Improve long term returns on invested Reduce the capital complexity and cyclicality of the Grow in attractive overall business markets where we can achieve sustainable competitive advantages 12 / Moving Infrastructure Forward — Investor Presentation, December 2018
Slide 13: Environmental, social, and governance impact
Environmental, social, and governance impact Our board and leadership team are committed to ESG impact Safety and health Environment People & communities Governance Protecting the safety and We are stewards of Our people contribute to We are committed to the health of our people the environment and
Slide 14: Agenda
Agenda . Company overview and long term vision . Update on Stage 1 Priorities 14 / Moving Infrastructure Forward — Investor Presentation, December 2018
Slide 15: Arcosa's Stage 1 Priorities
At our October Investor Day, we laid out Arcosa’s Stage 1 Priorities… Grow Improve Expand Operate a flat Construction Energy Transport- and Products Equipment’s ation responsive organically and operational Products corporate through performance while organically as structure acquisitions pursuing ba
Slide 16: Continued progress on our priorities
…and we have continued to make progress on our priorities Grow .A Completed $315M acquisition of ACG, growing Construction Products revenue by ~50% Construction . Turning focus to ACG integration and using it as a platform for Products additional value-creating capital deployment C On December 6th,
Slide 17: ACG increases scale of Construction Products segment
A ACG increases the scale of Arcosa’s Construction Products segment by approximately 50%, to $450 million Adds complementary, Diversifies customer base Accelerates growth into $152M scaled specialty materials across attractive end 1 specialty materials and LTM Revenue and aggregates platforms market
Slide 18: Acquisition aligned with long term vision and Stage 1 Priorities
A The acquisition is aligned with Arcosa’s long term vision and Stage 1 Priorities Long Term Vision Stage 1 Priorities Grow Improve Expand Operate a flat Improve long Construction Energy Transport- and Products Equipment’s ation responsive Reduce the term returns organically operational Products
Slide 19: ACG is a strategic acquisition for Construction Products
A ACG is a strategic acquisition for Arcosa’s Construction Products segment Aggregates Specialty Materials Construction Site Support 19 / Moving Infrastructure Forward — Investor Presentation, December 2018
Slide 20: Adds complementary aggregates and specialty materials businesses
A Adds complementary, scaled aggregates and specialty materials businesses to Arcosa’s current platforms Operations Products Geographic Footprint • 18 active Construction • Aggregates (sand, gravel, Materials locations and limestone base) • 11 aggregate • Lightweight aggregates mines • 7 lightweight
Slide 21: Diversifies customer base across attractive end markets
A Diversifies customer base across attractive end markets and accelerates growth in specialty materials Mined and Crushed Rock Specialty Milled Specialty Processed Products Aggregate Retarder Fines Filler Coarse Food Grade Plasters Prills Rock Rock • Road construction • Bathtubs, caulk, paint, joint
Slide 22: Transaction and Financing Summary
A Transaction and Financing Summary • Purchase price of approximately $315 million funded with cash on-hand and $180M of borrowings under Arcosa’s $400 million five year, credit facility Financing • Transaction closed December 5, 2018 & Closing • Expected to be slightly accretive to earnings in 2019
Slide 23: ACG is a platform for additional value creation
A ACG is a platform for additional value creation in our Construction Products segment Operational Incremental improvements End market specialty Organic capital Bolt-on through growth product investments acquisitions shared best development practices 23 / Moving Infrastructure Forward — Investor Pre
Slide 24: Emerging barge recovery
B Emerging barge recovery 2017-2018 were well below long term averages, but signs of recovery moving into 2019 Inland Barge business Revenue $ Millions 675 Adjusted EBITDA 639 653 577 548 • Healthy returns on capital over the cycle, as Adj. EBITDA / Assets 422 403 averaged 62% from 2010-2017 • Even
Slide 25: Emerging barge recovery: book to bill
B Emerging barge recovery Recent orders have been strong, leading to announced re-opening of idled facility Inland Barge business Book to Bill ratio ($ Value of Orders Signed: $ Value of Orders Produced) . Recent book to bill ratios have 2.7 been strong, and above 1.0, in 4 of last 5 quarters 2.3 .
Slide 26: Capital Allocation Priorities
C Capital Allocation Priorities Dividend and share repurchase authorization add key elements of capital allocation strategy Organic investments Acquisitions Return of capital to shareholders . Capital expenditures averaged ~$84M . Announced ~$315M acquisition of . Announced key elements on annually
Slide 27: 2019 Guidance
2019 Guidance (does not include ACG acquisition) Transportation Products Energy Equipment Overall EBITDA expected to be higher in 2019 than 2018, Construction Products driven by barge recovery and operating improvements Corporate/ Other Revenue ($M’s) EBITDA ($M’s) 2,140 1,550- 1,704 1,650 377 1,462
Slide 28: Appendix
ARCOSA Appendix
Slide 29: EBITDA reconciliation: Arcosa
EBITDA reconciliation: Arcosa Guidance as of November 1, 2018 2019P LTM Fiscal Years ended December 31, $ Millions Low High 9/18 2017 2016 2015 Net income $81.0 $89.0 $71.6 $89.7 $123.0 $135.0 Add: Interest expense $2.0 $2.0 $0.0 $0.0 $0.0 $0.4 Provision/(Benefit) for income taxes $27.0 $29.0 $16.1
Slide 30: Adjusted EBITDA reconciliation by Arcosa Segment
Adjusted EBITDA reconciliation by Arcosa Segment LTM Fiscal Years ended December 31, $ Millions 9/18 2017 2016 2015 Construction Products Segment Operating Profit $56.5 $53.7 $59.3 $50.4 Add: Depreciation & amortization expense $20.4 $18.4 $16.0 $15.6 Adjusted EBITDA $76.9 $72.1 $75.3 $66.0 Energy E
Slide 31: Adjusted EBITDA reconciliation: Trinity's Historic Barge Segment
Adjusted EBITDA reconciliation: Trinity’s Historic Barge Segment $ Millions Fiscal Years ended December 31, 2018(P) (1) 2017 2016 2015 2014 Barge (FY14 – FY18(P)) Operating Profit $5.1 $6.4 $45.3 $117.0 $114.4 Add: Depreciation & amortization expense $7.3 $7.3 $8.4 $10.5 $9.3 Adjusted EBITDA $12.4 $
Slide 32: Adjusted EBITDA reconciliation: ACG Materials
Adjusted EBITDA reconciliation: ACG Materials $ Millions (For the Trailing Twelve Months Ended August 31, 2018) Net income (1.8) Add: Interest expense 16.6 Provision/(benefit) for income taxes (3.9) Depreciation & amortization expense 15.4 Other adjustments 5.7 Adjusted EBITDA 32.0 “Adjusted EBITDA”
Slide 33: Investor Presentation December 2018
Investor Presentation December 2018