Slide 1: Third Quarter 2023 Earnings Conference Call
THIRD QUARTER 2023 EARNINGS CONFERENCE CALL MOVING INFRASTRUCTURE FORWARD | NOVEMBER 2, 2023
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 Arcosa, Inc. INVESTOR CONTACT 500 North Akard Street, Suite 400 InvestorResources@arcosa.com Dallas, TX 75201 3 I MOVING INFRASTRUCTURE FORWARD I 2023
Slide 4: Third Quarter 2023 Highlights
THIRD QUARTER 2023 HIGHLIGHTS • Adjusted EBITDA growth of 24%, outpacing revenues, led by Construction and Transportation Products • Pricing remained strong across our Construction Products portfolio and a recovery in volumes benefitted natural aggregates • Significant Adjusted Segment EBITDA and ma
Slide 5: Arcosa's Value Proposition
ARCOSA’S VALUE PROPOSITION LEADING EXPERIENCED HEALTHY BALANCE DISCIPLINED CAPITAL TRACK RECORD businesses serving management team sheet and ample allocation process to of executing on critical with history of liquidity to navigate grow in attractive strategic priorities as infrastructure managing t
Slide 6: Strategic Update
01 STRATEGIC UPDATE
Slide 7: Arcosa's Long-Term Vision
ARCOSA’S LONG-TERM VISION Grow in attractive markets Reduce the complexity and Improve long-term Integrate Environmental, where we can achieve cyclicality of the overall returns on invested capital Social, and Governance (ESG) sustainable competitive business initiatives into our long-term advantage
Slide 8: Strategic Transformation
STRATEGIC TRANSFORMATION Today Arcosa is a less cyclical and more resilient company Construction Products has Increased to Actionable Strategic Progress to Position Portfolio for Approximately 60% of Adjusted EBITDA Long-Term Growth Adjusted EBITDA, excluding Corporate ($M) • Divestiture of storage
Slide 9: Q3 2023 Results
Q3 2023 RESULTS N S|
Slide 10: Q3 2023 Consolidated Results
Q3 2023 CONSOLIDATED RESULTS Double-digit revenue and Adjusted EBITDA growth led by Construction and Transportation Products, normalizing for the storage tank divestiture Revenues ($M) Net Income ($M) Adjusted EBITDA ($M) -2% -2% 603.9 591.7 +10% 90.8 89.4 +24% 65.8 18.7 +7% 35.9 33.7 0.4 1.7 538.1
Slide 11: Q3 2023 Segment Results: Construction Products
Q3 2023 SEGMENT RESULTS: CONSTRUCTION PRODUCTS Adjusted EBITDA increased on strong price momentum and reduced inflationary cost pressures Revenues ($M) Adjusted Segment EBITDA ($M) +7% +9% 262.1 58.7 244.2 34.3 53.9 27.4 216.8 227.8 Q3-22 Q3-23 Q3-22 Q3-23 EBITDA Margin: Aggregates & Specialty Mater
Slide 12: Q3 2023 Segment Results: Engineered Structures
Q3 2023 SEGMENT RESULTS: ENGINEERED STRUCTURES Normalizing for storage tanks divestiture, Adjusted Segment EBITDA declined due to product mix headwinds and operational challenges in utility structures Revenues ($M) Adjusted Segment EBITDA ($M) -20% -45% 277.0 45.8 65.8 222.5 +5% 18.7 25.4 -6% 211.2
Slide 13: Q3 2023 Segment Results: Transportation Products
Q3 2023 SEGMENT RESULTS: TRANSPORTATION PRODUCTS Adjusted Segment EBITDA reached a three-year high with significant margin expansion demonstrating enhanced operating leverage on higher volumes Revenues ($M) Adjusted Segment EBITDA ($M) +30% 107.1 +271% 18.2 82.7 39.8 31.8 67.3 4.9 50.9 Q3-22 Q3-23 Q
Slide 14: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Flexible balance sheet and ample liquidity to support disciplined capital allocation strategy Net Debt / Adjusted EBITDA (ratio at end of period) Liquidity ($M) Long term target of 2.0 - 2.5x 2.1 633 155 1.2 • $100M of borrowings on Spun 1.0 debt free $600M revolver that Cas
Slide 15: 2023 Outlook
03 2023 OUTLOOK
Slide 16: 2023 Guidance
2023 GUIDANCE Strong revenue and Adjusted EBITDA growth expected for full year 2023 Revenues ($M) Adjusted EBITDA ($M) 2,250 - 2,300 +11% 355 - 370 +30% 2,243 325 189 47 Includes $22M gain from land 2,054 278 sale in Q1 for Construction Products FY-22 2023 Guidance FY-22 2023 Guidance Margin, excl.
Slide 17: Growth Businesses Outlook
GROWTH BUSINESSES OUTLOOK Demand outlook is attractive with additional tailwinds from increased infrastructure spending Construction Products Engineered Structures Infrastructure spending is on the rise as indicated by increased FY2022 state Forecasted Utility CAPEX driven by increased federal infra
Slide 18: Wind Towers Outlook
WIND TOWERS OUTLOOK 2023 is a transition year for wind towers as we ramp production and invest in our New Mexico facility to prepare for the expected multi-year upcycle Long-Term Recovery in Wind Industry Expected in 2024 and Beyond Four Manufacturing Facilities to Support U.S. Energy Transition 10-
Slide 19: Inland Barge Outlook
INLAND BARGE OUTLOOK Outlook for dry barge replacement cycle remains intact Aging Fleet and Underinvestment in Replacement Support Positive Outlook for New Hopper Barge Construction Hopper Barge Fleet Age2 Annual Industry Deliveries Since ‘053 (in Years) (# Hopper Barges) • Annual industry deliverie
Slide 20: ESG Accomplishments
ESG ACCOMPLISHMENTS We published our 2022 Sustainability report that details the initiatives in place to integrate ESG into our long-term strategy Highlights from Our 2022 Sustainability Report • 30% reduction in our TRIR1 in 2022 and 72% reduction since 2019 SAFETY PEOPLE ENVIRONMENT • ARC 100 driv
Slide 21: Appendix
APPENDIX
Slide 22: Guidance Summary for 2023
GUIDANCE SUMMARY FOR 2023 COMMENTARY • $2.25B to $2.30B range for full year 2023 REVENUE • 2022 full year revenue was $2.05B, excluding $189M from the storage tanks business • $355M to $370M range for full year 2023 ADJUSTED • Includes estimated AMP tax credits for wind towers of $17M to $22M, subje
Slide 23: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 24: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Full Year September 30, 2023 Guidance 2023 2022 Low High Net income $ 35.5 $ 32.0 $ 154.8 $ 160.0 Add: Interest expense, net 5.0 8.6 23.0 24.0 Provision for income taxes 7.5 8.6 31.7 37.5 Depre
Slide 25: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Year Ended Twelve Months Ended September 30, December 31, September 30, 2023 2022 2018 2022 2023 Construction Products Operating Profit $ 30.3 $ 27.6 $ 50.4 $ 96.5 $ 138.3 Add: Depreciation, depletion, and amo
Slide 26: Reconciliation of Freight-Adjusted Revenues for Construction Products
Reconciliation of Freight-Adjusted Revenues for Construction Products ($’s in millions) (unaudited) Three Months Ended September 30, 2023 2022 Construction Products Revenues $ 262.1 $ 244.2 Less: Freight revenues 30.4 31.2 Freight-Adjusted Revenues $ 231.7 $ 213.0 Adjusted Segment EBITDA(1) $ 58.7 $
Slide 27: Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow
Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow ($’s in millions) (unaudited) As of Pro Forma September 30, December 31, December 31, December 31, December 31, December 31, September 30, 2018(1) 2018 2019 2020(1) 2021(1) 2022(1) 2023 Total debt excluding debt issuance costs $ 0.4 $
Slide 28: Reconciliation of Historical Adjusted EBITDA for Storage Tanks Businesses
Reconciliation of Historical Adjusted EBITDA for Storage Tanks Businesses (in millions) (unaudited) Three Months Year Ended Ended December 31, September 30, 2022 2022 Storage tanks business: Operating Profit $ 16.6 $ 230.1 Add: Depreciation and amortization expense 1.5 5.2 EBITDA 18.1 235.3 Impact o
Slide 29: Arcosa Contact Details
500 N. Akard Street, Suite 400 Dallas, Texas 75201 (972) 942-6500 ir.arcosa.com