Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Investor Presentation (September 2018)
34 slides from Valmont Industries's investor presentation, Sep 20, 2018
Slide 1: Forward-looking Statement Disclosure
Forward-looking Statement Disclosure These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that
Slide 2: Steve Kaniewski, President & Chief Executive Officer
STEVE KANIEWSKI PRESIDENT & CHIEF EXECUTIVE OFFICER 3 | September 2018 | Valmont Industries, Inc.
Slide 3: Valmont at a Glance
Valmont at a Glance Company Profile 2017 Mix ($M) Headquarters By Revenue3 By Operating Income 2017 Sales Market Cap Countries of Operation Manufacturing Sites Total Employees ESS Utility Irrigation Coatings 1 Includes Other of $76M. 2 As of 9’7’2018. 3 Net of intersegment sales 4 | September 2018 |
Slide 4: Valmont Business Model
Valmont Business Model Strong, Global, and Enduring Drivers Operational Focus Total Value Impact Focus Culture & Talent VALUE CREATION Niche Markets Engineering Leverage Products, Markets, and Capabilities Global Mindset/ Footprint 1 As of 12’31’2017. Source: FactSet. 5 | September 2018 | Valmont In
Slide 5: Solutions That Support Agriculture and Infrastructure Growth
Solutions That Support Agriculture and Infrastructure Growth sprinklers, drive trains, • Advanced technology • Water delivery and through Efficient Delivery of 6 | September 2018 | Valmont Industries, Inc. ENGINEERED SUPPORT STRUCTURES (ESS) UTILITY SUPPORT STRUCTURES (USS) COATINGS IRRIGATION • Lig
Slide 6: Expanding Our Total Addressable Market for ESS
Expanding Our Total Addressable Market for ESS AREAS OF OPPORTUNITY $11B GEOGRAPHIC EXPANSION ENCIES ODUCTS VICES 7 | September 2018 | Valmont Industries, Inc. Highway Safety Smart Pole Solutions Architectural Components Telecommunications Products & Components Sign Structures
Slide 7: Expanding Our Total Addressable Market for Utility
Expanding Our Total Addressable Market for Utility AREAS OF OPPORTUNITY $12B GEOGRAPHIC EXPANSION ENCIES ODUCTS VICES 8 | September 2018 | Valmont Industries, Inc. Technology Services as a Disruptor Concrete for Grid Hardening & Distribution CEC Pre-Packaged Substations Lattice Global Expansion & Ac
Slide 8: Expanding Our Total Addressable Market for Coatings
Expanding Our Total Addressable Market for Coatings AREAS OF OPPORTUNITY $3B GEOGRAPHIC EXPANSION ENCIES ODUCTS VICES 9 | September 2018 | Valmont Industries, Inc. Value-Added Services Applied Coatings Acquisitions and New Construction
Slide 9: Expanding Our Total Addressable Market for Irrigation
Expanding Our Total Addressable Market for Irrigation AREAS OF OPPORTUNITY $11B GEOGRAPHIC EXPANSION ENCIES ODUCTS VICES 10 | September 2018 | Valmont Industries, Inc. Enhanced Technology Solutions Focus on Higher Value Crops Full Service Water Management for Ag International Growth
Slide 10: Strong Peak to Trough Performance
Strong Peak to Trough Performance Sales and Operating Income1 ($M) $600 $3,304 $3,500 $3,123 $3,000 $500 $2,500 $400 $2,000 1 $256 gh $300 $1,500 $243 $200 $1,000 $100 $500 $-$- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Operating Income GAAP Operating Income 1 Excludes restructuring ch
Slide 11: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet 5-Year Historical Debt/Adjusted EBITDA1 Debt and Liquidity Profile 0.9x 2013 1.9x 2014 2.7x 2015 2.3x 2016 2.2x 2017 $457M Debt Maturities as of July 10, 2018 ($M) July bond redemption) $450 Credit Rating 2044 2054 1 Adjusted EBITDA as computed in our debt agreement
Slide 12: Capital Allocation Priorities
Capital Allocation Priorities • Working capital investment to support sales growth Support Growth & Operations of Existing Businesses • Capital expenditures $65M – $75M annually • Strategic fit – leverage. Four completed in 2018 YTD. Acquisitions • Clear path to returns exceeding cost of capital wit
Slide 13: Long-Term Company Targets
Long-Term Company Targets 1 5% organic. Acquisitions over time are necessary to achieve top end of range. 14 | September 2018 | Valmont Industries, Inc. Target Goal Revenue Growth1 5% – 10% > 10% > 10% > 1.0x Net Earnings > 12% EPS Growth ROIC FCF Conversion Operating Margin
Slide 14: Thank You
THANK YOU 15 | September 2018 | Valmont Industries, Inc.
Slide 15: Appendix
APPENDIX 16 | September 2018 | Valmont Industries, Inc.
Slide 16: ESS at a Glance
ESS at a Glance Market Drivers Product and Solutions Portfolio Lighting and Traffic Solutions Access Systems and Mining Revenue by Region Highway Safety Architectural Components Communication Structures and Components 17 | September 2018 | Valmont Industries, Inc. North America APAC EMEA Need for in
Slide 17: Utility Support Structures at a Glance
Utility Support Structures at a Glance Market Drivers Product and Solutions Portfolio Transmission Structures Substations Business Profile Distribution Poles 2017 Revenue (Mainly U.S.) Manufacturing Facilities Countries Employees Renewable Energy Solutions Inspection Services 1 Includes 3 ESS plants
Slide 18: Coatings at a Glance
Coatings at a Glance Market Drivers Product and Solutions Portfolio Galvanizing Revenue by Region Applied Coatings Value-Added Services 19 | September 2018 | Valmont Industries, Inc. North America APAC Coatings demand typically correlated to industrial production Infrastructure investments promote c
Slide 19: Irrigation at a Glance
Irrigation at a Glance | Valley® Market Drivers Product and Solutions Portfolio Center Pivots & Machines1 Control Panels Business Profile Remote Telemetry Valley SchedulingTM 2017 Revenue Facilities (Mfg., Warehouse, & Distribution) Countries Employees Global Dealerships Variable Rate Irrigation Wat
Slide 20: Leading With Innovative Products and Solutions
Leading With Innovative Products and Solutions PyraMAX™ Atmosphere™ Façade Valley SchedulingTM ICON™ Smart Panels AgSense and BaseStation3™ Valley Irrigation Exchange Drone Inspection CEC Substation Coatings Connector GalvTrac™ 21 | September 2018 | Valmont Industries, Inc.
Slide 21: 2018 Acquisitions YTD
2018 Acquisitions YTD 22 | September 2018 | Valmont Industries, Inc.
Slide 22: Broad Global Footprint is a Competitive Differentiator
Broad Global Footprint is a Competitive Differentiator 2017 Revenue by Geography 67% AMERICAS 10% EMEA 23% APAC 23 | September 2018 | Valmont Industries, Inc. #1 or #2 In All Market We Serve In Our Industries Manufacturing Facility
Slide 23: Continuing to Create Long-Term Shareholder Value
Continuing to Create Long-Term Shareholder Value Total Shareholder Return1 (As of 12/31/17) 19.4% 18.6% 16.5% 12.5% 5.2% 1-Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year VMI S&P 500 1 Source: FactSet. 24 | September 2018 | Valmont Industries, Inc. 13.4% 11.4% 9.1% 7.4% 6.2% 5.0% 10.5% 10.3% 7.7%
Slide 24: Fiscal 2017 Results
Fiscal 2017 Results 1 Please refer to Company’s Reg G table at end of document. 25 | September 2018 | Valmont Industries, Inc. Total Sales (in thousands)2017 2016 Yr-Yr Change Engineered Support Structures $ 938,102 859,115 318,891 652,430 76,300 (98,871) $ 2,745,967 $ 906,719 3.5% Utility Support S
Slide 25: 2018 Results Through June 30, 2018
2018 Results Through June 30, 2018 1 Please see Reg G reconciliation of non-GAAP financial measures to GAAP measures at end of the document. 26 | September 2018 | Valmont Industries, Inc. NET SALES U.S. Dollars in millions except per share amounts 2018 2017 Percent Change Engineered Support Structur
Slide 26: Elevating Our Commitment to Corporate Sustainability
Elevating Our Commitment to Corporate Sustainability Aggregating global data for improved measurement Green Teams in every facility Reductions in electricity consumption and landfill waste Elevating sustainability throughout our organization Enhanced global data analytics and metrics track sustainab
Slide 27: Reg G Reconciliation
Reg G Reconciliation VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS (Dollars in thousands, except per share amounts) (unaudited) The non-GAAP tables below disclose the impact on (a) diluted earnings per share of (1) tax expense attr
Slide 28: Reg G Reconciliation – Continued
Reg G Reconciliation – Continued 29 | September 2018 | Valmont Industries, Inc.
Slide 29: Reg G Reconciliation – Continued
Reg G Reconciliation – Continued VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON OPERATING INCOME REG G RECONCILIATION (Continued) Year-Ended Dec. 31, 2016 Ope rating Income Re conciliation Operating income (loss) - as reported Restructuring expenses
Slide 30: Reg G Reconciliation – Continued
Reg G Reconciliation – Continued 13 Weeks Ended June 30, 2018 13 Weeks Ended July 1, 2017 26 Weeks Ended June 30, 2018 26 Weeks Ended July 1, 2017 Operating Income Reconciliation Operating income - as reported $ 63,670 $ 78,450 $ 127,630 $ 143,106 Restructuring expenses 7,019 - 11,419 - Adjusted Ope
Slide 31: Reg G Reconciliation – Continued
Reg G Reconciliation – Continued 32 | September 2018 | Valmont Industries, Inc. VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS REGULATION G RECONCILIATION (Dollars in thousands, except per share amounts) (unaudited) The non-GAAP tab
Slide 32: Reconciliation of Adjusted EBITDA to GAAP Figures
Reconciliation of Adjusted EBITDA to GAAP Figures Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) is one of our key financial ratios in that it is the basis for determining our maximum borrowing capacity at any one time. We calculate "Further Adjusted EBITDA" by addi
Slide 33: Calculation of Free Cash Flows
Calculation of Free Cash Flows We believe that Free Cash Flow is a useful performance measure for management and useful to investors as the basis for comparing our performance with other companies. Our measure of Free Cash Flow June not be directly comparable to similar measures used by other compan
Slide 34: Calculation of Free Cash Flows
vy Calculation of Free Cash Flows We believe that Free Cash Flow is a useful performance measure for management and useful to investors as the basis for comparing our performance with other companies. Our measure of Free Cash Flow June not be directly comparable to similar measures used by other com
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