Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q4 2024 Earnings Presentation
32 slides from Valmont Industries's earnings presentation, Feb 18, 2025
Slide 1: Q4 and Full-Year 2024 Earnings Presentation
Q4 and Full-Year 2024 Earnings Presentation February 18, 2025 © 2025 Valmont® Industries, Inc.
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements These slides (and the accompanying oral discussion) contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions made by management, considering its experience
Slide 3: CEO Opening Comments
CEO Opening Comments Avner Applbaum, President & CEO 3 February 18, 2025 | Valmont Industries, Inc.
Slide 4: Full-Year 2024 Key Highlights
Full-Year 2024 Key Highlights Focusing on Our Core: The global team’s strong performance was driven by focusing on our core strengths and prioritizing what Valmont does best Commercial and Operational Excellence Driving Value Creation: − Commercial teams deepened customer relationships, drove pricin
Slide 5: 2025 Critical Objectives to Build on Past Success
2025 Critical Objectives to Build on Past Success Catch the • Investing in new capabilities and capacity across our footprint to meet growing demand Infrastructure Wave • Capitalizing on the largest opportunities in our Utility business Position Agriculture • Demonstrating resiliency and market lead
Slide 6: Infrastructure Market Drivers
Infrastructure Market Drivers Steady-to-improving near-term demand across our markets, supported by positive long-term growth drivers Near-Term Demand Global Megatrends • Utility: Sustained and elevated capital expenditures to support power load growth, the energy transition, and grid hardening init
Slide 7: Agriculture Market Drivers
Agriculture Market Drivers Outlook for sustained long-term growth remains robust, despite short-term demand headwinds Near-Term Demand Global Megatrends • North America: Stabilizing market conditions, although expected declines in corn and soybean cash receipts likely to impact capital investment de
Slide 8: Financial Results and Outlook
Financial Results and Outlook Tom Liguori, EVP & CFO 8 February 18, 2025 | Valmont Industries, Inc.
Slide 9: Q4 2024 Financial Summary
Q4 2024 Financial Summary Dollars in millions, except per-share amounts • Operating margin expanded due to strategic pricing, improved operational Net Sales Operating Income Diluted EPS efficiencies, and disciplined +2.1% +19.7% +20.8% cost management $120.0 • Diluted EPS improved due to $3.84 highe
Slide 10: Q4 2024 Results | Infrastructure
Q4 2024 Results | Infrastructure Dollars in millions • Utility: growth was driven by pricing Sales Operating Income excellence and a favorable product +2.1% +23.6% mix, with higher distribution and substation volumes $748.3 $763.6 $122.0 • L&T: sales declined primarily due to $98.7 lighting market s
Slide 11: Q4 2024 Results | Agriculture
Q4 2024 Results | Agriculture Dollars in millions Sales Operating Income +2.3% +2.6% • North America: volumes were slightly lower, as increased storm $271.6 $278.0 $27.8 $28.5 replacement sales were offset by continued market softness; average irrigation selling prices were slightly lower • Internat
Slide 12: Full-Year 2024 Financial Summary
Full-Year 2024 Financial Summary Dollars in millions, except per-share amounts • Net sales decreased; Infrastructure sales were flat and Agriculture sales declined • Diluted EPS improvement Net Sales Operating Income Diluted EPS primarily driven by improved operating income -2.4% +10.9% +14.8% Cash
Slide 13: Providing 2025 Full-Year Financial Outlook
Providing 2025 Full-Year Financial Outlook 2025 Outlook Y/Y Key Assumptions ~(2%) to ~+3% • Capital Expenditures to be between $140 to Net Sales $4.0B to $4.2B $160 million ~(0.5%) to ~+4.5% CC1 • Effective tax rate to be slightly below 26.0% • Steel cost assumptions are aligned with Infrastructure
Slide 14: 2025 Outlook Considerations
2025 Outlook Considerations Dollars in millions, except per-share amounts Net Sales Net Sales: • Infrastructure volume growth primarily in Utility $200 • Lower steel costs will unfavorably $(40) impact Utility pricing $(50) $(25) • Agriculture volumes down as $4,100 $4,075 international growth is of
Slide 15: Capital Allocation Priorities
Capital Allocation Priorities Illustrative Use of Cash Over the Next 3-5 Years ~50% Growing Our Business • Increasing annual CapEx run rate to ~$150M in the near-term, Dividends Capital up from ~$95M Expenditures • Investments to catch the infrastructure wave and support growth Capital Expenditures
Slide 16: Q&A
Q&A 16 February 18, 2025 | Valmont Industries, Inc.
Slide 17: Appendix
Appendix 17 February 18, 2025 | Valmont Industries, Inc.
Slide 18: Committed to Long-Term Financial Targets
Committed to Long-Term Financial Targets Net Sales Operating Return on Invested Net Earnings Growth1 Margin Capital FCF Conversion Approaching MSD+ Mid-Teens High-Teens 100% • Driven by markets • Driven by strategic • Focused on a • Focused on managing with a positive growth pricing aligned discipli
Slide 19: Steel Material Index Trends
Steel Material Index Trends AMM Steel Material Index National Mills Carbon Grade Cut to Length and Coiled / Hot Rolled Plate Average • Steel index deflation impacted 2020 through 2025 YTD revenues in 2024 • Utility is most affected by steel cost changes due to the contractual pricing mechanisms and
Slide 20: Utility Industry Capital Expenditures
Utility Industry Capital Expenditures Chart represents total company spending of U.S. Investor-Owned Electric Utilities, consolidated at the parent or appropriate holding company. At the industry level, CapEx tends to be overestimated for the current, or first, year’s projection and underestimated f
Slide 21: Wireless Carrier Spending
Wireless Carrier Spending US Wireless CapEx & 5G Auction Spend (US$ billions, 2019-2026E) 140 Auction 107: C-Band (3.7 GHz) Auction 110: 3.45 GHz Band 120 100 Auction 108: 2.5 GHz Band 80 Updated from carrier public disclosures in 60 2024. 2025 – 2026 estimated Auction 105: 3.5 GHz Band 40 20 0 2019
Slide 22: Single Family Housing Starts Market Forecast
Single Family Housing Starts Market Forecast Source: CMD Forecast Data 22 February 18, 2025 | Valmont Industries, Inc. Updated: November 2024
Slide 23: U.S. Net Cash Farm Income by Year
U.S. Net Cash Farm Income by Year Source: USDA 23 February 18, 2025 | Valmont Industries, Inc. Updated: February 6, 2025
Slide 24: U.S. Drought Condition
U.S. Drought Condition Source: Drought Monitor 24 February 18, 2025 | Valmont Industries, Inc. Updated: February 13, 2025
Slide 25: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands, except per-share amounts The non-GAAP table below discloses the impacts on net earnings for fiscal 2023 from several items, including the impairment of goodwill and other intangible assets, realignment
Slide 26: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands, except per-share amounts The Company previously adjusted non-GAAP financial measures to exclude Prospera intangible asset amortization and stock-based compensation for Prospera employees, providing inv
Slide 27: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands The non-GAAP tables below disclose the impacts on operating income (loss) for fiscal 2023 from several items, including the impairment of goodwill and other intangible assets, realignment charges, and o
Slide 28: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands The Company previously adjusted non-GAAP financial measures to exclude Prospera intangible asset amortization and stock-based compensation for Prospera employees, providing investors with a clearer view
Slide 29: Reconciliation of Constant Currency
Reconciliation of Constant Currency Dollars in thousands Defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate. This approach is used for countries whose functional currency is no
Slide 30: Historical Free Cash Flow
Historical Free Cash Flow1,2 Dollars in millions 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Net cash flows from operating activities $ 272.3 $ 232.8 $ 133.1 $ 153.0 $ 307.6 $ 316.3 $ 65.9 $ 326.3 $ 306.8 $ 572.7 Net cash flows from investing activities (48.2) (53.0) (49.6) (155.4) (168.1) (10
Slide 31: Free Cash Flow Throughout the Cycle
Free Cash Flow Throughout the Cycle 2015 – 2024 Free Cash Flow (USD M) 600 raw material cost inflation Years of rapid 493 500 400 300 227 210 210 233 210 200 175 183 100 78 81 - (100) (42) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 Year Avg Historical Free Cash Flow1 Conversion by Year GAA
Slide 32: Calculation of Adjusted EBITDA and Leverage Ratio
Calculation of Adjusted EBITDA and Leverage Ratio Dollars in thousands Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt to Adjusted EBITDA may not exceed 3.5X Adjusted EBITDA (or 3.75X Adjusted EBITDA after certain material acquisitions)