Arcosa, Inc. · NYSE:ACA
Arcosa — Q3 2021 Earnings Presentation
26 slides from Arcosa's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Earnings Conference Call
Third Quarter 2021 Earnings Conference Call November 4, 2021
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: Key messages from today's call
Key messages from today’s call • Portfolio transformation advances as we celebrate third year as an independent company • Double digit growth in Q3 revenues and Adjusted EBITDA, led by Construction Products and Engineered Structures. Contributions from recent acquisitions and broad-based pricing and
Slide 5: Arcosa's Value Proposition
Arcosa’s Value Proposition Leading Experienced Healthy balance Disciplined capital Track record of businesses management sheet and ample allocation process executing on serving critical team with history liquidity to to grow in strategic priorities infrastructure of managing navigate cycles attracti
Slide 6: 3-Year Transformation
1 3-Year Transformation 6 / Moving Infrastructure Forward
Slide 7: Strong track record for growth since spin-off three years ago
Strong track record for growth since spin-off three years ago Growth has been accompanied by margin expansion as we have improved operations and business mix Quarterly Adjusted EBITDA, total Company ($M) 82.0 +21% CAGR 46.4 Arcosa emerges as independent public company on November 1, 2018 Q3-18 Q3-19
Slide 8: Today, Arcosa is a less cyclical and more resilient company
Today, Arcosa is a less cyclical and more resilient company Nearly 60% of Q3 Adjusted EBITDA came from less cyclical, more stable, and higher margin Construction Products as we continue to transform our portfolio Adjusted EBITDA, excluding Corporate Costs Adjusted Segment EBITDA Margin, Q3-21 ($M) (
Slide 9: Arcosa's Long-Term Vision
Arcosa’s 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-ter
Slide 10: Q3 2021 Results
2 Q3 2021 Results 10 / Moving Infrastructure Forward
Slide 11: Q3-2021 Financial Results
Q3-2021 Financial Results Double digit growth in revenues and Adjusted EBITDA, led by Construction Products and Engineered Structures Revenues Net Income Adjusted EBITDA Adjusted ($M) ($M) ($M) +14% Decline in Adjusted Net Income primarily due to higher depreciation and 559.1 amortization from recen
Slide 12: Segment Results: Construction Products
Segment Results: Construction Products Recent acquisitions, strong organic growth, and attractive fundamentals drive 48% increase in Adjusted Segment EBITDA Revenues Aggregates & Specialty Materials Adjusted Segment EBITDA ($M) Construction Site Support ($M) +55% +48% 227.4 54.6 25.1 146.9 36.8 18.1
Slide 13: Segment Results: Engineered Structures
Segment Results: Engineered Structures Proactively raising prices to manage inflationary pressures from higher steel prices Revenues Utility, Wind Towers, and Related Structures Adjusted Segment EBITDA ($M) Storage Tanks and Other ($M) +12% +13% 250.1 32.3 222.6 28.5 60.7 41.1 181.5 189.4 Q3-20 Q3-2
Slide 14: Segment Results: Transportation Products
Segment Results: Transportation Products Adjusted Segment EBITDA declined primarily due to a 41% decrease in barge revenues, resulting from weak order levels since the onset of the pandemic and rising steel prices Revenues Barges Adjusted Segment EBITDA ($M) Steel Components ($M) -32% -72% 120.7 22.
Slide 15: Balance Sheet Highlights
Balance Sheet Highlights Leverage within long-term target and liquidity position remains healthy after executing on $541M of construction materials acquisitions in 2021 Net Debt / Adjusted EBITDA Liquidity Ratio at end of period ($M) 2.3 338 Long term target of 2.0 - 2.5x 1.9 Cash 66 • No material n
Slide 16: Updated 2021 Outlook
3 Updated 2021 Outlook 16 / Moving Infrastructure Forward
Slide 17: Near-Term Outlook
Near-Term Outlook Construction Products and Engineered Structures end markets remain well positioned for growth, with some offsetting impacts from barge and wind tower CONSTRUCTION PRODUCTS ENGINEERED STRUCTURES % of LTM Adjusted EBITDA1 Positive Outlook Positive Outlook Strong construction activi
Slide 18: Well-positioned to benefit from potential federal infrastructure stimulus
We believe our businesses are well-positioned to benefit from the potential passage of federal infrastructure stimulus • Reauthorization of the Fixing America’s Surface Transportation Act (FAST Act) at a higher level of spending • Potential PTC extension for new wind farm development • Proposed spen
Slide 19: 2021 Outlook
2021 Outlook Adjusted EBITDA guidance range tightened to $272-$280M from previous range of $270-290M, primarily reflecting reduced wind tower profitability for the fourth quarter Transportation Products Adjusted EBITDA, total Company 284 ($M’s) 272-280 25 241 78 • Full year 2021 expected Adjusted EB
Slide 20: We continue to make progress on our ESG journey
We continue to make progress on our ESG journey For Arcosa, building a culture of ESG starts with foundational steps achieved through stakeholder engagement, cross-functional collaboration, and planning Major ESG Milestones Ordered most recent activity first Effective November 1st, increased female
Slide 21: Appendix
Appendix
Slide 22: Additional Financial Guidance for 2021
Additional Financial Guidance for 2021 Commentary Corporate ~$13-14M in Q4, excluding non-recurring items related to acquisitions and integration of ~$2M costs Tax rate We expect a full year 2021 tax rate of ~22% Capital $90-100M in 2021 (~$65M of maintenance capex + $25-35M of growth projects
Slide 23: Non-GAAP Measures
Non-GAAP Measures Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 24: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Twelve Months Three Months Ended Nine Months Ended Full Year Ended September 30, September 30, 2021 Guidance September 30, 2021 2020 2021 2020 Low High 2021 Net income $ 23.7 $ 31.2 $ 60.4 $ 96.1 $ 64.0 $ 69.0 $
Slide 25: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Nine Months Ended Twelve Months Ended September 30, September 30, September 30, 2021 2020 2021 2020 2021 Construction Products Operating Profit $ 26.8 $ 20.8 $ 60.5 $ 61.9 $ 73.3 Add: Depreciation, depletion,
Slide 26: Reconciliation of Net Debt to Adjusted EBITDA
Reconciliation of Net Debt to Adjusted EBITDA ($’s in millions) (unaudited) As of Pro Forma September December 31, December 31, December 31, March 31, June 30, 2021 September 30, 2018(1) 2018 2019 2020(1) 2021(1) (1) 30, 2021(2) Total debt excluding debt issuance costs $ 0.4 $ 185.5 $ 107.3 $ 254.5