Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (May 2020)
35 slides from Arcosa's investor presentation, May 11, 2020
Slide 1: Investor Presentation May 2020
Exhibit 99.1 Investor Presentation May 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: Agenda
Agenda Company overview Update on COVID-19 Long term vision and capital allocation ESG update 4 / Moving Infrastructure Forward
Slide 5: Arcosa's Value Proposition
Arcosa’s Value Proposition Experienced Low leverage and Leading businesses management team ample liquidity to serving critical with history of navigate cycles and infrastructure markets managing through pursue strategic economic cycles growth Disciplined capital Track record of executing allocation
Slide 6: Arcosa At A Glance
Arcosa At A Glance $1.81B $258M $117M Revenues Adjusted EBITDA Net Income 3 ~6,300 85+ Infrastructure-related Employees Years of Operating History Segments Arcosa spun off from its former parent company in November 2018 Revenues, Adjusted EBITDA and Net Income are for the twelve months ended 3/31/20
Slide 7: Business Overview
Business Overview Arcosa’s three segments are made up of leading businesses that serve critical infrastructure markets Markets CONSTRUCTION ENERGY TRANSPORTATION Revenues $483M $851M $485M Adj.Segment 21% 15% EBITDA 14% Margin AGGREGATES WIND TOWERS BARGES SPECIALTY UTILITY COMPONENTS MATERIALS STRU
Slide 8: Track Record of Executing on Stage Priorities
Track Record of Executing on Stage 1 Priorities We achieved double-digit increases in revenues and Adjusted EBITDA in 2019 and made progress on building our new Arcosa culture Executing on Stage 1 Priorities introduced at October 2018 Building our new Arcosa culture Investor Day Entrepreneurial an
Slide 9: 2019 Results
2019 Results Full Year Adjusted EBITDA increased 29%, driven by organic growth, acquisitions, and operating improvements Revenues ($M’s) Adjusted EBITDA ($M’s) +19% 266 +29% 1,704 1,737 241 1,462 1,460 197 187 2016 2017 2018 2019 2016 2017 2018 2019 See Adjusted EBITDA reconciliation in Appendix. 9
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights Significant balance sheet capacity will enable us to pursue disciplined growth ~0.5x Net Debt / Adjusted EBITDA at the end Q1-20, …with minimal debt maturities until 2025 well below our long term target… Net Debt / Adjusted EBITDA Debt Maturity Schedule1 Ratio since spin, en
Slide 11: Free Cash Flow and Liquidity
Free Cash Flow and Liquidity Arcosa’s business have an attractive free cash flow profile, contributing to $475M of liquidity at the end of Q1 2020 Free Cash Flow Available Liquidity at end of Q1 ($M’s) Free Cash Flow Operating Cash Flow Less CapEx, $M’s 475 115 107 Cash 201 56 5 Qtr Avg $59 20 Revol
Slide 12: Cherry Acquisition Update
Cherry Acquisition Update Cherry acquisition closed in January 2020; integration is proceeding well and financial performance exceeded our expectations in the first quarter Cherry is a leading natural and Unique platform with sustainable Integration Update recycled aggregates company competitive adv
Slide 13: Agenda
Agenda Company overview Update on COVID-19 Long term vision and capital allocation ESG update 13 / Moving Infrastructure Forward
Slide 14: Our Priorities during COVID-19 Crisis
Our Priorities during COVID-19 Crisis Arcosa has entered this period of uncertainty in a strong financial position Protect the Health and Safety of Support Critical Infrastructure Maintain Financial Flexibility to our Employees and Communities Sectors Return to Growth . The health and safety of empl
Slide 15: Q1 2020 Results
Q1 2020 Results COVID-19 had minimal impact on financial results in Q1 2020; Revenue and EBITDA both grew significantly Revenues ($M) Adjusted EBITDA ($M) +19% +29% 488.2 75.6 410.9 58.5 Q1-19 Q1-20 Q1-19 Q1-20 Margin 14.2% 15.5% See Adjusted EBITDA reconciliation in Appendix. 15 / Moving Infrastruc
Slide 16: Construction Products
Construction Products Construction demand was solid in Q1-20; balance of year will depend on duration and depth of COVID-19 slowdown 2019 Revenue Primary Market Drivers . $545M (pro- . Natural and recycled aggregates: Public infrastructure spending; state forma with and municipal fiscal health priva
Slide 17: Energy Equipment
Energy Equipment Energy Equipment backlog provides solid visibility for 2020 2019 Backlog as Primary Market Revenue of 03/31/20 Drivers . $625M . $476M . Utility structures: Grid hardening and reliability initiatives; renewable connections Wind . Wind Towers: Production Tax Credits; economic Towers
Slide 18: Transportation Products
Transportation Products Barge backlog extends through end of 2020; railcar-related demand has fallen significantly as industry orders have declined 2019 Backlog as of Primary Market Revenue 03/31/20 Drivers . $294M . $348M . Dry barges: Fleet age; dry commodity traffic (food and farm products, const
Slide 19: Capital Allocation Approach for 2020
Capital Allocation Approach for 2020 We have taken a number of actions to conserve cash in order to manage through a potential macroeconomic slowdown Strategic Growth through Return of capital Organic investments Acquisitions to shareholders . Delayed non-essential CapEx; a limited number . We will
Slide 20: Agenda
Agenda Company overview Update on COVID-19 Long term vision and capital allocation ESG update 20 / Moving Infrastructure Forward
Slide 21: Long-Term Vision for Arcosa
Long-Term Vision for Arcosa Integrate Environmental, Social, Improve and Governance Reduce long-term returns initiatives (ESG) into our the complexity and on invested capital long-term strategy Grow cyclicality of the overall in attractive markets business where we can achieve sustainable competitiv
Slide 22: Organic Investments
Organic Investments We will continue to evaluate opportunities to grow organically in attractive markets where we can build sustainable competitive advantages Aggregates and Specialty Materials investments Utility Structures organic investments Reserve acquisitions to expand in current geographies A
Slide 23: Strategic Growth through Acquisitions
Strategic Growth through Acquisitions 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 Specialty M
Slide 24: Agenda
Agenda Company overview Update on COVID-19 Long term vision and capital allocation ESG update 24 / Moving Infrastructure Forward
Slide 25: ESG Update
ESG Update Our Materiality Assessment identified 11 significant topics across our businesses; we plan to publish our initial Sustainability Report for full year 2020 Our Our People & Our Environment Products Communities Employee Health and Safety Energy Management Product Use and Quality Diversity A
Slide 26: ESG Initiatives
ESG Initiatives We have a number of initiatives underway to integrate ESG into our long term strategy Our Our People & Our Environment Products Communities . Safety Excellence program rolled out to . Instituting sustainability program to track . Leading producer of wind towers for plants environment
Slide 27: Governance Highlights
Governance Highlights Our policies are aligned with shareholder value creation Share Ownership / Board Composition Board Practices Accountability Compensation Independent Board: 8 of 9 Regular executive sessions Extensive shareholder “Pay for performance” directors are independent with independent d
Slide 28: Incentive Compensation Plans
Incentive Compensation Plans Arcosa’s incentive plans align compensation to long-term shareholder value creation while driving accountability to the business level Award Type Focus Performance Objectives Target CEO Pay: 83% at Risk(1) Adjusted EBITDA Short Term Cash 1 year operational and Incentive
Slide 29: Our Products
Our Products Arcosa’s products are used in important environmentally friendly industries Barge transportation is a clean, efficient mode of freight Wind Energy reduces carbon dioxide emissions transportation Tons of CO2 per Million Ton Miles CO2 Emissions Avoided through Wind Energy Million Metric T
Slide 30: Appendix
Appendix
Slide 31: Reconciliation of Consolidated and Combined Adjusted EBITDA
Reconciliation of Consolidated and Combined Adjusted EBITDA ($’s in millions) (unaudited) Twelve Months Three Months Ended Years Ended December 31, Ended March 31, GAAP does not define “Earnings Before Interest, Taxes, Depreciation, March 31, Depletion and Amortization” (“EBITDA”) and it should not
Slide 32: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) Twelve Months Ended (unaudited) March 31, 2020 Construction Products “Segment EBITDA” is defined as segment operating profit plus Revenues $ 483.1 depreciation, depletion, and amortization. GAAP does not define Segment EBITDA and it should
Slide 33: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow (in millions) (unaudited) GAAP does not define “Free Cash Flow” and it should not be considered as an alternative to cash flow measures defined by GAAP, including cash flow from operating activities. We use this metric to assess the liquidity of our consolidated busi
Slide 34: Reconciliation of Net Debt to Adjusted EBITDA
Reconciliation of Net Debt to Adjusted EBITDA (in millions) (unaudited) GAAP does not define “Net Debt” and it should not be considered as an alternative to cash flow or liquidity measures defined by GAAP. The Company uses Net Debt, which it defines as total debt minus cash and cash equivalents to d
Slide 35: Cherry EBITDA Reconciliation
Cherry EBITDA Reconciliation ($’s in millions) (unaudited) “EBITDA” is defined as Cherry’s net income plus interest expense, income taxes, depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles. The amounts included in the EBITDA calculation, how