Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q2 2019 Earnings Presentation
20 slides from Valmont Industries's earnings presentation, Jul 24, 2019
Slide 1: Valmont Industries, Inc. Second Quarter 2019 Earnings Presentation
Valmont Industries, Inc. Second Quarter 2019 Earnings Presentation July 24, 2019
Slide 2: 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 3: 2Q 2019 Segment Revenue and Market Drivers
2Q 2019 Segment Revenue and Market Drivers TOTAL 2Q 2019 REVENUE: $700.9M $258.7M $209.8M $98.4M $155.2M Engineered Support Utility Support Coatings Irrigation Structures Structures N.A.: $102.8M | International: $52.4M 36.9% of Sales 29.9% of Sales 14.0% of Sales 22.1% of Sales MARKET DRIVERS • Gro
Slide 4: 2Q 2019 Summary
2Q 2019 Summary $M, except for per share amounts Revenue Operating Income Diluted EPS +2.7% 0.0% (9.9%) +30.1% (4.0%) $70.7 $700.9 $63.7 $63.7 $63.7 $682.4 $1.90 $1.90 $1.98 $1.46 2019 2018 GAAP Adjusted 1 GAAP Adjusted 1 2019 2018 2019 2018 • Sales growth driven by North American • Improved profita
Slide 5: 2Q Results | Engineered Support Structures
2Q Results | Engineered Support Structures ($M) Key Statistics Revenue Operating Income 2018 Revenue1 $246.0 Volume 5.6 $257.5 $20.8 $246.0 $18.4 Pricing/Mix 8.1 $13.0 Acquisitions 6.5 Currency Translation (8.7) 2019 Revenue1 $ 257.5 2019 2018 2019 2018 2018 Adj COMMENTARY • Segment sales growth led
Slide 6: 2Q Results | Utility Support Structures
2Q Results | Utility Support Structures ($M) Key Statistics Revenue Operating Income 2018 Revenue1 $196.5 Volume (6.2) $209.1 $196.5 $20.8 $22.3 Pricing/Mix 9.2 $16.0 Acquisitions 10.8 Currency Translation (1.2) 2019 Revenue1 $ 209.1 2019 2018 2019 2018 2018 Adj COMMENTARY • Higher revenues led by a
Slide 7: 2Q Results | Coatings
2Q Results | Coatings ($M) Key Statistics Revenue Operating Income 2018 Revenue1 $74.5 Volume (6.0) $81.1 $74.5 $15.1 $14.9 Pricing/Mix 3.7 Acquisitions 10.7 Currency Translation (1.8) 2019 Revenue1 $ 81.1 2019 2018 2019 2018 COMMENTARY • Higher global sales led by general economic growth, recent ac
Slide 8: 2Q Results | Irrigation
2Q Results | Irrigation ($M) Key Statistics Revenue Total Operating Income 2018 Revenue1 $160.7 $111.6 $27.7 Volume (6.2) $100.8 $21.5 Pricing/Mix 0.6 $52.4 $49.1 Acquisitions 0.5 Currency Translation (2.4) North America International 2019 2018 2019 Revenue1 $ 153.2 2019 2018 COMMENTARY • North Amer
Slide 9: YTD Cash Flow Highlights
YTD Cash Flow Highlights 2019 YTD Cash Flow | FCF Reconciliation Cash and Debt Highlights YTD YTD ($M) Net Cash Flows from Operating Activities $ 6/29/19 113.4 $ 6/30/18 53.7 $256.9M Net Cash Flows from Investing Activities (115.6) 24.1 ($159.3M ex-U.S.) Cash at 06/29/2019 Net Cash Flows from Financ
Slide 10: Capital Allocation | A Balanced Approach
Capital Allocation | A Balanced Approach ($M) 2019 YTD Capital Deployment • Working capital investment to support investments in people, technology and systems Capital • 2Q spending driven by 4 factory expansions to support Expenditures Growing Our $82 strong global market demand Business • Total Ca
Slide 11: 2019 Financial Guidance and Key Assumptions
2019 Financial Guidance and Key Assumptions 2019 Full Year Financial Outlook and Key Metrics KEY ASSUMPTIONS PRIOR CURRENT • Revenue growth: evenly divided between organic Diluted and completed EPS $8.30 - $8.90 $8.10 - $8.70 acquisitions Revenue • Raw material inflation Growth1 7% – 8% 6% – 7% expe
Slide 12: Valley Insights Anomaly Detection
Valley InsightsTM Anomaly Detection Example of Insight Leading to Efficiency • Issue was determined to be a Aerial View of Field plugged sprinkler nozzle Highest Temperature • Problem automatically detected via early season Valley Insights utilizing the Prospera AI algorithm • Problem sprinkler dete
Slide 13: Summary of 2019 Outlook
Summary of 2019 Outlook 01 02 03 04 05 Financial outlook Commodity price Expect margin Remain Continuing a revisions driven improvements improvement in committed to balanced capital by lower providing infrastructure price discipline allocation international irrigation tailwind; businesses in the and
Slide 14: Appendix
APPENDIX 14 | July 24, 2019 | Valmont Industries, Inc. | Q2 2019 Earnings Presentation
Slide 15: Second Quarter and YTD 2019 Financial Summary
Second Quarter and YTD 2019 Financial Summary $M, except for per share amounts Gross Sales 2Q 2019 2Q 2018 Change YTD 2019 YTD 2018 Change Engineered Support Structures $ 258.7 $ 250.7 3.2% $ 489.0 $ 475.7 2.8% Utility Support Structures 209.8 197.7 6.1% 453.8 407.6 11.3% Coatings 98.4 91.6 7.4% 185
Slide 16: Calculation of Adjusted EBITDA & Leverage Ratio
Calculation of Adjusted EBITDA & Leverage Ratio Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt/Adjusted EBITDA may not exceed 3.5X Adjusted EBITDA (or 3.75X Adjusted EBITDA after certain material acquisitions) of the prior four quarters
Slide 17: Summary of Effect of Significant Non-recurring Items on Reported Results
Summary of Effect of Significant Non-recurring Items on Reported Results 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 tables bel
Slide 18: Summary of Effect of Significant Non-recurring Items on Reported Results
Summary of Effect of Significant Non-recurring Items on Reported Results For the Second Quarter Ended June 30, 2018 Engineered Infrastructure Utility Support Other/ Segment Operating Income Reconciliation Products Structures Coatings Irrigation Corporate Operating income - as reported $ 12,965 $ 20,
Slide 19: Summary of Effect of Significant Non-recurring Items on Reported Results
Summary of Effect of Significant Non-recurring Items on Reported Results Thirteen Twenty-six Weeks Ended Weeks Ended Operating Income Reconciliation June 30, 2018 June 30, 2018 Operating income - as reported $ 63,670 $ 127,630 Restructuring expenses 7,019 11,419 Adjusted Operating Income 70,689 139,
Slide 20: Summary of Effect of Significant Non-recurring Items on Reported Results
Summary of Effect of Significant Non-recurring Items on Reported Results For the Second Quarter Ended June 29, 2019 Engineered Utilty Calculation of Changes in Net Support Support Coatings Irrigation TOTAL* Sales Structures Structures 2019 Net Sales, as reported $ 258,748 $ 209,829 $ 98,406 $ 155,18