Advanced Drainage Systems, Inc. · NYSE:WMS
Advanced Drainage Systems — Investor Day (November 2018)
103 slides from Advanced Drainage Systems's investor day presentation, Nov 15, 2018
Slide 1: Advanced Drainage Systems Investor Day Presentation
Advanced Drainage Systems Investor Day Presentation November 15, 2018
Slide 2: Forward Looking Statements and Non-GAAP Financial Metrics
Forward Looking Statements and Non-GAAP Financial Metrics Certain statements in this presentation may be deemed to be forward-looking statements. Such statements include, but are not limited to, statements regarding the anticipated timing for the issuance of additional historic and future financial
Slide 3: Agenda
SUBJECT SPEAKER Introduction Mike Higgins, VP of Corporate Strategy & Investor Relations Business Overview Scott Barbour, President and CEO Sales Growth Margin Expansion Financial Overview Scott Cottrill, EVP and CFO Cash Flow Generation Closing Remarks Scott Barbour, President and CEO Q&A ADS Manag
Slide 4: Key Definitions
Key Definitions Term Definition HDPE Thermoplastic made from high-density polyethylene N-12 Pipe ADS’ dual wall HDPE pipe PP Thermoplastic made from polypropylene HP Pipe ADS’ high-performance PP pipe Single Wall Corrugated HDPE pipe Dual Wall HDPE or PP pipe with a corrugated exterior and smooth in
Slide 5: Business Overview
Business Overview Scott Barbour, President and CEO
Slide 6: Leadership Team in Attendance
Leadership Team in Attendance Scott Barbour President and CEO Scott Cottrill EVP, CFO Bob Klein EVP, Sales & Marketing Ron Vitarelli EVP, Innovation and R&D Darin Harvey EVP, Supply Chain Kevin Talley EVP, Chief Administrative Officer Ewout Leeuwenburg SVP, International Mike Higgins VP, Corporate S
Slide 7: Investor Day Themes
Investor Day Themes ADS is an industrial growth story with a large market opportunity and long runway for growth Sales Growth Margin Expansion ADS has significant margin upside potential and action plans in place to achieve superior results Cash Flow Generation Successful execution will result in si
Slide 8: Innovative water management solutions
ADS provides innovative water management solutions, protecting a precious natural resource, while keeping millions of pounds of plastic out of landfills each year Innovative Management of a Precious Resource ADS’ solutions are managing billions of gallons of storm water runoff, protecting bodies of
Slide 9: Management of a Precious Resource and Recycling Commitment
>100,000 gallons Management of a Precious Resource Recycling Commitment to Sustainability Our portfolio of innovative products help communities efficiently and safely manage storm and waste water ADS’ solutions are aiding in protecting regional water supplies, allowing for cost-effective use of land
Slide 10: Innovative Water Management Solutions
Innovative Water Management Solutions ADS has demonstrated its commitment to management of a precious resource as a complete solutions provider
Slide 11: Comprehensive Portfolio of Products Driving Solutions
Comprehensive Portfolio of Products Driving Solutions Conveyance Capture Storage Treatment StormTech® Arc Chambers Duraslot® Nyloplast© FLEXSTORM® Geosynthetics Water Quality Single Wall N-12® HP Triple Wall PolyFlexTM AdvanEDGE® Our leading product position in the storm water management industry al
Slide 12: Superior Product Attributes
Superior Product Attributes 100-year design service life Superior Performance Our products perform better, are easier to install and are more cost effective than traditional materials 3x faster installation Easier Installation Reduced labor and equipment Lighter weight and longer length 20% less ins
Slide 13: Sales, Distribution and Logistic Capabilities
Sales, Distribution and Logistic Capabilities 48 US & Canada Manufacturing Facilities Company-Owned Fleet 700 Trucks & 1,200 Trailers Our vast capabilities allow us to serve the customer 30 US & Canada Distribution Centers ADS also partners with 3,000+ distribution partners, including 300+ Field Sal
Slide 14: Market + Product Portfolio + Sales Team = Growth
Market + Product Portfolio + Sales Team = Growth <1% <10% HDPE & PP Share of Storm Sewer Market Domestic Sales Revenue Mix by Product 88% 70% 62% 12% 25% 29% 5% 9% Our pipe products have been displacing traditional materials across an expanding range of end markets and our Allied Products allow us t
Slide 15: Storm Water Market: Large Addressable Opportunity
Storm Water Market: Large Addressable Opportunity NON-RESIDENTIAL INFRASTRUCTURE RESIDENTIAL AGRICULTURE Storm Water Market Opportunity $6 Billion Market Size ~$3 Billion Market Size ~$1 Billion Market Size ~$0.2 Billion Market Size ~$2 Billion Market sizes based on management estimates.
Slide 16: End Markets: Non Residential
End Markets: Non Residential - ~$3B market % of ADS Domestic Sales FY15 – FY18 CAGR Non-Residential Construction Market ADS Storm Water Market ADS Share Key Products HP N-12 StormTech Nyloplast Water Quality Highlights Material conversion is most advanced in this market, which has a high level of ap
Slide 17: End Markets: Residential
End Markets: Residential - ~$2B market % of ADS Domestic Sales FY15 – FY18 CAGR Residential Construction Market ADS Storm Water Market ADS Share Key Products Highlights Sales are split 50/50 in retail channel (i.e., Home Depot, Lowe’s) and new residential construction development (single-family, mul
Slide 18: End Markets: Infrastructure
End Markets: Infrastructure - ~$1B market Infrastructure Construction Market ADS Key Products N-12 Highlights Focus on gaining key new approvals with state DOTs, transportation authorities and local agencies Market is heavily reliant on public funding, with increasing importance on public-private pa
Slide 19: End Markets: Agriculture
End Markets: Agriculture - ~$0.2B market Agriculture Market ADS ADS Share Key Products Highlights Single Wall Fittings Flexible Dual Wall % of ADS Domestic Sales FY15 – FY18 CAGR Storm Water Market Drainage market is focused on row crops, primarily soybeans and corn Reinventing ADS’ agriculture busi
Slide 20: International Markets
International Markets Canada Exports Mexico Leading HDPE producer in Canada, with large opportunity for conversion Business is evenly split between agriculture and construction markets Accelerating construction market share by executing our Market Share Model and selling the complete storm water sol
Slide 21: ADS' Distinct Market Leadership
ADS’ Distinct Market Leadership Leading player in the storm water management industry with a track record of gaining market share Consistent above-market growth driven by material conversion strategy and complete solutions package Best-in-class sales force, technical expertise and distribution & log
Slide 22: Investor Day Themes
Investor Day Themes Cash Flow Generation Margin Expansion Sales Growth
Slide 23: Pillars of Accelerating Growth
Pillars of Accelerating Growth Pipe Growth Allied Products Growth Innovation and Product Development
Slide 24: Pipe Product Growth
Pipe Product Growth FY15 FY18 Execute Market Share Model Capture large diameter opportunity with HP pipe Win in key regions: FL, TX, CA Domestic Pipe Sales Mix Domestic HP Pipe Sales Growth FY15-FY18 CAGR: > 25% FY15-FY18 CAGR: 2.7% Domestic Pipe Sales Growth 6% (12%) FY15-FY18 CAGR See appendix for
Slide 25: Execution of the Market Share Model
Execution of the Market Share Model Products allowed to be used and specified Products specified on the plans for use in engineered construction projects Knowledge of projects to bid through our salespeople, field engineers and distributor partners Utilizing field sales professionals and distributor
Slide 26: Approvals
Approvals Many Approvals Few Approvals Most Approvals Some Approvals Storm Approvals by State Involves working with local agencies and State DOT’s Technical Engineering team leverages research, studies and relationships to drive: Industry standards to allow use of materials Regulatory approvals for
Slide 27: Acceptance
Acceptance Involves building relationships with civil and other private consulting engineering firms Goal is project identification and specification of storm water solutions package on plans, early in the process 40+ Engineers & Technicians 50+ Field Engineers Structural Calculations Design Layouts
Slide 28: Coverage
Coverage Focus is on increasing contact and relationships with contractors and distributors to develop market knowledge 300+ Field Sales Professionals 3,000+ Distributor Partners US & Canada Manufacturing Facilities Company-Owned Fleet 700 Trucks & 1,200 Trailers Customer 30 US & Canada Distribution
Slide 29: Win Rate
Win Rate Selling projects vs. taking orders Project tracking to ensure products are specified High coverage sales model Customer Design Solutions Inserta-Tee Configurator StormTech Design Tool Installation Cost Calculator FlexStorm Configurator Nylo Configurator Project Tracking Conceptual In Design
Slide 30: Market & Share by Diameter
Market & Share by Diameter ADS Large Diameter Sales by Product Type Large Diameter Market Opportunity $545M $640M $915M 12” – 24” Diameter 30” – 60” Diameter Market share and size based on management estimates.
Slide 31: Key Regions: Winning in Florida, Texas, and California
Key Regions: Winning in Florida, Texas, and California Win $210M Approval/ Acceptance $260M Estimated Storm Water Pipe Market Size Market Share Model Stage Approval $330M Market sizes based on management estimates.
Slide 32: Florida Case Study
Florida Case Study Since HDPE approval in 2012, Florida sales have grown at a 20.0% CAGR Approvals Florida DOT issued 100-year design service life approval for HDPE (N-12; April 2012) and PP (HP; January 2014). Acceptance Heavy promotion of N-12, HP and approvals focused on key metro areas and targe
Slide 33: Key Market Growth: Texas and California
Key Market Growth Political advocacy - NEW Improving presence in key markets (Houston, Dallas, San Antonio, Austin) Promoting HP approval - NEW Growing StormTech, Water Quality and Nyloplast sales Growth Strategies Texas Growth Strategies Political advocacy - NEW Increase sales coverage Building con
Slide 34: Pillars of Accelerating Growth
Pillars of Accelerating Growth Pipe Growth Allied Products Growth Innovation and Product Development
Slide 35: Allied Products Growth
Allied Products Growth Allied products give ADS the ability to sell the complete water management solutions package Makes ADS a preferred partner with distribution and contractors Regulatory tailwinds and awareness of large storm events driving large and growing market opportunity for ADS to capital
Slide 36: Allied Products Market Size
Allied Products Market Size Storm Water Market > 36” Structures 40% < 36” Structures 25% Water Quality 15% Retention/ Detention 20% Opportunity with Current Portfolio $2B Storm Pipe & Fittings Retention/ Detention Structures Water Quality Trenchless Technology Reuse Products Soil Stabilization Other
Slide 37: Storm Water Regulatory & Weather Tailwinds
Storm Water Regulatory & Weather Tailwinds ADS has a portfolio of engineered, high-performing and sustainable solutions to manage water resources Increased runoff driven by development is increasing demand for storm water management systems Weather-related events are growing in frequency, creating a
Slide 38: Water Management Solutions Package
Pipes used to move storm water away from developed sites to be discharged Pipes & Fittings Structures Water Management Solutions Package Structures used to collect and direct storm water and move it to underground conveyance system Managed infiltration and recharging of storm water that mitigates er
Slide 39: Structures
Structures Structures collect and direct storm water runoff to the underground storm water conveyance system Product selection driven by approvals, acceptance, price, availability and ease of use ADS Solutions: Nyloplast Catch Basins, Duraslot Slotted Drain Precast Concrete Structures ADS 2% Concret
Slide 40: Nyloplast
Nyloplast Nyloplast structures are made from PVC with a ductile iron grate Focus is on increasing penetration in out-of-pavement applications and increasing win rate when specified Less man-power required for installation Flexible solution built for any application More corrosion resistant than prec
Slide 41: Retention / Detention
Competing Products Retention / Detention Retention / Detention storage manages the infiltration and recharge of storm water while mitigating erosion and flooding Product selection driven by storage cost per cubic foot and footprint ADS Solutions: StormTech Chambers, N-12 or HP Pipe 11% Plastic Chamb
Slide 42: StormTech: A Leading Player in Retention / Detention
StormTech: A Leading Player in Retention / Detention Allows for efficient infiltration and recharge of storm water Maximizes land use and value Opportunities to strengthen market position through innovation and acquisitions for broader project penetration Ease of transport and installation Large sto
Slide 43: Water Quality
Water Quality Products that remove trash, debris and pollutants before storm water is introduced into a larger system Highly variable product selection by location, state and regulatory environment ADS Products: Barracuda, BayFilter and BaySeparator Separators Filters Low Impact Development Plastic
Slide 44: Water Quality Markets
Water Quality Markets Separators Filters Low Impact Development Partnership, Innovation or Acquisition Opportunity Barracuda BayFilter Removes sediment and hydrocarbons High Flow; Driver is cost per cubic foot per second Removes sediment, hydrocarbons, metals, phosphorus and nitrogen High Flow; Driv
Slide 45: Why Solutions Are Important
Why Solutions Are Important Pipe Manufacturer Solutions Provider $50K Opportunity $150K Opportunity Providing solutions increases our share of wallet with our customers Opportunity amounts above are for illustrative purposes only and may not be indicative of actual project value.
Slide 46: Pillars of Accelerating Growth
Pillars of Accelerating Growth Pipe Growth Allied Products Growth Innovation and Product Development
Slide 47: Innovation and Product Development
Innovation and Product Development Market-Leading Product Portfolio to Drive Future Growth Advancing Core Products Lead the storm water industry with PRODUCT INNOVATION Provide ECONOMIC SOLUTIONS for our customers while ensuring the SAFETY of our employees
Slide 48: Innovation Focus: Water Management Solutions
Innovation Focus: Water Management Solutions Higher stiffness >48” pipe to further grow market share Profile and weight optimization for current diameters Polypropylene recycling and material characterization Structures Pipes Retention & Detention Water Quality New products to further market penetra
Slide 49: Commitment To Innovation
Commitment To Innovation Product Introductions More than 50 years of industry-revolutionizing innovation StormTech Chamber Single Wall HP Pipe Nyloplast N-12 Dual Wall 1987 1996 2000 2001 2017 Barracuda Water Quality N-12 Recycled Content 2009 1967 We continue to innovate and expand our new products
Slide 50: New Products Growth Trend
New Products Growth Trend Allied Products: StormTech MC3500, MC4500, CH160; FLEXSTORM; InsertaTee; Water Quality Units Sales - $(millions) % of Consolidated Net Sales CAGR > 15% CAGR > 25%
Slide 51: Sales Growth Summary
Sales Growth Summary Continue executing proven market share model and conversion strategy Lead the storm water industry with product innovations that address customer needs Capture significant growth opportunity for large diameter HP pipe Win in the key regions – FL, TX and CA More deeply penetrate
Slide 52: Minutes
ADVANCED DRAINAGE SYSTEMS, INC. 15 Minutes
Slide 53: Investor Day Themes
Investor Day Themes Cash Flow Generation Margin Expansion Sales Growth
Slide 54: ADS Business Model
ADS Business Model SALES TRADE DELIVERY DISTRIBUTION & LOGISTICS CONVERSION RAW MATERIAL Initiatives in place to drive ~200 basis points of margin improvement by FY21
Slide 55: Raw Material Strategy
Raw Material Strategy 40% SALES TRADE DELIVERY DISTRIBUTION & LOGISTICS CONVERSION RAW MATERIAL Optimize our material blending to reduce cost and maximize throughput while meeting industry standards for pipe performance
Slide 56: HDPE Recycled Material Consumption
HDPE Recycled Material Consumption FY18 – FY21 CAGR Recycled Pellets: 27% Virgin HDPE: 5% Increasing mix of recycled pellet material to displace recycled flake material will improve production rate and reduce scrap. Investments in GLP recycling facilities are required in order to increase consumptio
Slide 57: New Recycling Investments
New Recycling Investments High Efficiency Blending Pelletizing Capacity Capacity Expansion Investing in blending equipment for recycled material used to produce optimized pelletized material Investing in pelletizing equipment to convert recycled HDPE flake material into pelletized material Investing
Slide 58: Impact of Pelletizing
Impact of Pelletizing RECYCLED MATERIAL FLAKE MATERIAL PIPE EXTRUSION PELLETIZED MATERIAL Throughput for pelletized material is 7% to 10% better than flake material
Slide 59: Polypropylene Cost Initiatives
Investments in tooling to optimize profile design and material content Develop additional sources for polypropylene material purchases Polypropylene Cost Initiatives Products Current Activity HP StormTech® Beginning Development Work Engage polymer chemistry expertise to evaluate additives and expand
Slide 60: Conversion Improvement Strategy
Conversion Improvement Strategy 25% SALES TRADE DELIVERY DISTRIBUTION & LOGISTICS CONVERSION RAW MATERIAL Through SPP, drive continuous improvement within four wall manufacturing while optimizing manufacturing network
Slide 61: Conversion Improvement Strategy
Conversion Improvement Strategy Continuous Improvement Startups & Changeovers Machine Maintenance & Upgrades Automation Network Rationalization Integrated Supply Chain Planning Tooling & Capacity Investments Manufacturing Network Optimization Inside the Four Walls
Slide 62: Inside the Four Walls: Continuous Improvement
Reduce Downtime Hours by 25% Reduce Scrap by 15% Automate downstream operations on 8 - 10 lines Inside the Four Walls: Continuous Improvement 3 Year Focus Productivity Goals Startups & Changeovers Machine Maintenance and Upgrades Downstream Automation +3% +6% $7M Savings Productivity data shown abov
Slide 63: Startups & Changeovers
Startups & Changeovers Standardize Changeover Process 3 Year Focus Goals Travel Tooling Process Improvements $125M Asset Develop Test Rollout People Dedicated resources Process Scorecard approach implemented Technology Enhancements to tracking tools Continued Rollout of Standardized Process Equipmen
Slide 64: Standardized Changeovers: West Plants
Standardized Changeovers: West Plants Plants Results Actions Created standardized changeover process Focused training and changeover teams Improved visibility on key metrics that drive changeover improvements Equipment improvements to reduce changeover times Focus Production Lines Down 23%
Slide 65: Machine Maintenance & Upgrades
Machine Maintenance & Upgrades Initiatives in place targeting improvements in productivity IRR >20% IRR >20% IRR 18% Upgrade Production Lines Improve Product Labeling Enhance Equipment Controls
Slide 66: Downstream Automation
Downstream Automation Rate Improvement Better Quality Packaging 33% Headcount Reduction Per Day, Per Machine 3 Year Focus Goals Downstream Pipe Handling Palletizing / Packaging for Small Diameter Pipe Fittings Molding Process Improve Safety Reduce Headcount Prepare for Future Workforce Composition 2
Slide 67: Network Optimization
Network Optimization Network Rationalization Integrated Supply Chain Planning Tooling & Capacity Investments Focus Goals Building the Right Inventory in the Right Place at the Right Time Improve safety performance Prepare for labor challenges Simplify management Increase inventory velocity Improve e
Slide 68: Network Rationalization
Network Rationalization Adding capacity to support growing markets Shuttering facilities servicing underperforming markets Consolidating small facilities into large facilities to gain efficiency Actions Results Square footage, with an increase in pounds produced 13% $7M Reduction in fixed cost footp
Slide 69: Integrated Supply Chain Planning
Integrated Supply Chain Planning Pipe Demand Planning Strategy Invested in Arkieva planning software to predict demand and tie inventory to demand trends 3 Year Focus Goals Rollout Planning Strategy to Allied Products SKU Rationalization On-Time-In-Full Customer Service Service the customer as effic
Slide 70: Tooling Investments
Tooling Investments One-Time Investment in Tooling ($13M) Increased Capacity $6M Improved Efficiency $3M Freight & Operational Savings $1M IRR >20% Annual Savings Reducing bottlenecks and increasing production capacity for high-growth products
Slide 71: HP Capacity Addition
HP Capacity Addition Added capacity relieves pressure in SE, NE and MW PA ● ● OH ● ● NC ● ● GA ● ● FL ● ● Production capacity added December 2017 and September 2018 Before Additional Capacity After Additional Capacity > 95% 80% - 95% < 80% Capacity Key
Slide 72: Florida Case Study: Focused Factory
Florida Case Study Winter Garden, FL Product: HP Sebring, FL Product: N-12 Focused Factory Strategy Concentrate production of key products in single location Streamline inventory stocking and service Improve production efficiency Results Pounds Produced Fewer Changeovers Inter-Plant Pounds Shipped i
Slide 73: Logistics & Transportation
Logistics & Transportation 15% SALES TRADE DELIVERY DISTRIBUTION & LOGISTICS CONVERSION RAW MATERIAL Optimize the use of our fleet assets and national footprint to provide high-quality, cost effective and efficient service to customers
Slide 74: Logistics & Transportation: Thinking Differently in FY19
Logistics & Transportation: Thinking Differently in FY19 Offsetting inflationary transportation costs through: Implementing Order Minimums Incorporating Diesel Cost in Pricing Pricing Policy Changes: Charging for Value Added Services Improving Asset Utilization Minimize Common Carrier costs and Incr
Slide 75: Logistics & Transportation Initiatives
Logistics & Transportation Initiatives People Process Technology Increase driver capacity Internal driver development programs Delivery-centric vs. Driver-centric model Optimize fleet composition and increase velocity of trips per day Centralize planning and dispatching Optimize inter-plant freight
Slide 76: Margin Improvement from Strategic Initiatives
Margin Improvement from Strategic Initiatives SALES TRADE DELIVERY DISTRIBUTION & LOGISTICS CONVERSION RAW MATERIAL ~200 bps
Slide 77: Margin Expansion Initiatives
Margin Expansion Initiatives FY19 FY20 FY21 HDPE Pelletizing and Blending PP Recycling Program PP Sourcing HP Product Enhancements Startups & Changeovers Machine Maintenance and Upgrades Downstream Automation Tooling, Capacity and Network Optimization Pricing Policy Changes People, Process & Technol
Slide 78: Margin Expansion Summary
Drive down costs through more efficient supply chain planning, logistics, and transportation services Invest in GLP recycling capacity and increase mix of recycled pellet material to improve raw material cost position and production rate Align production capacity and invest in tooling to drive capac
Slide 79: Financial Overview
Financial Overview Scott Cottrill, EVP and CFO
Slide 80: Investor Day Themes
Investor Day Themes Cash Flow Generation Margin Expansion Sales Growth
Slide 81: Free Cash Flow and Leverage
3x Leverage Free Cash Flow and Leverage $700M to $450M Free Cash Flow Leverage Ratio & Debt Capacity See appendix for definitions and reconciliations of Non-GAAP items. 2x Leverage Generated $285M of free cash flow since FY15; Strong balance sheet capacity to provide significant flexibility
Slide 82: Growth & Profitability Accelerated by Strategic Initiatives
Growth & Profitability Accelerated by Strategic Initiatives 15.8% 18% to 19% Execute market share model Large diameter growth with HP Winning in Key Regions Allied product growth Innovation Recycled material consumption Continuous improvement Network optimization Labor availability Wage pressures Tr
Slide 83: Working Capital Initiatives
Initiatives Working Capital Initiatives Working Capital % of Sales 24.8% Low 20%s Days Sales Outstanding (DSO) Days Payable Outstanding (DPO) Days Inventory Outstanding (DIO) Customer Terms & Incentives Electronic Presentment & Payment P2P Process Improvement Vendor Terms Strategic Sourcing S&OP Pro
Slide 84: Building Shareholder Value
Building Shareholder Value Sales Growth Margin Expansion Balanced Approach to Creating Shareholder Value Disciplined Capital Allocation
Slide 85: Capital Allocation and Deployment Priorities
FY19 – FY21 Cumulative Total Capital Allocation and Deployment Priorities $450M to $700M Capital Deployment Priorities CapEx Investing in Strategic Priorities Strategic Acquisitions ROIC > WACC Dividends Share Repurchases See appendix for definitions and reconciliations of Non-GAAP items. 1 2 3 4
Slide 86: Capital Expenditures
Capital Expenditures Capital Spending FY19 - FY21 Strategic Priorities Examples Recycling Investments Integrated Supply Chain Planning Network Capacity Continuous Improvement Pelletizing Capacity Expansion Arkieva Planning Software Tooling Investments HP and Polyflex Capacity Downstream Automation D
Slide 87: Focused Acquisition Strategy
Qualitative Financial Strategic Focused Acquisition Strategy See appendix for definitions and reconciliations of Non-GAAP items. Widening Aperture Dedicated Resources Disciplined Process Focused on core markets Fits our Market Share Model Focused in North America Leverages our distribution model Foc
Slide 88: Key Highlights
Key Highlights Solid track record of growth and profitability, supported by favorable end market dynamics Balanced approach to creating shareholder value through sales growth, margin expansion and disciplined capital allocation Working capital initiatives combined with margin expansion expected to a
Slide 89: FY21 Financial Targets
FY21 Financial Targets Organic Sales Growth 4% to 6% CAGR Driven by execution of the market share model, large diameter growth, winning in key regions, allied product growth and innovation Adj. EBITDA Margin 18% to 19% Driven by continuous improvement, network optimization, recycled material strateg
Slide 90: Closing Remarks
Closing Remarks Scott Barbour, President and CEO
Slide 91: ADS' Distinct Market Leadership
ADS’ Distinct Market Leadership Leading player in the storm water management industry with a track record of market share gains Consistent above-market growth driven by material conversion strategy and complete solutions package Best-in-class sales force, technical expertise and distribution & logis
Slide 92: Investor Day Themes
Investor Day Themes Cash Flow Generation Successful execution will result in significant cash generation over the next several years Margin Expansion ADS has significant margin upside potential and action plans in place to achieve superior results ADS is an industrial growth story with a large marke
Slide 93: Advanced Drainage Systems, Inc.
ADVANCED DRAINAGE SYSTEMS, INC.
Slide 94: Advanced Drainage Systems, Inc.
ADVANCED DRAINAGE SYSTEMS, INC.
Slide 95: Get Social With Us!
Get Social With Us! LinkedIn Facebook Twitter Google+ YouTube Links to ADS social media sites are available at the ADS Website
Slide 96: Featured Projects: LaGuardia Airport
Featured Projects Skanska Walsh was hired to manage the $8BN rebuilding of LaGuardia Airport, including new terminals, roads, retail shops, restaurants and garages. Along with the aboveground work, an underground stormwater drainage system was constructed using ~10 miles of two types of thermoplasti
Slide 97: Featured Projects: Amazon
Featured Projects Over 172,000 feet (32+ miles) of ADS pipe products have been installed in a multitude of Amazon distribution centers, warehouses and call centers across the country, including CA, CO, CT, MI, MD, OH and UT. ADS pipes lightweight construction, strength and durability made it an obvi
Slide 98: Featured Projects: UPS Lathrop
Featured Projects At UPS’s warehouse facility in Lathrop, CA, the site required an existing retention pond to be replaced with additional parking space for UPS trucks. The site had very poor clays with minimal infiltration capabilities, so a very large amount of underground storage was required unde
Slide 99: Featured Projects: Daytona Speedway
Featured Projects One key part of the Daytona Speedway’s $400MM construction project was the improvement to nearby roads that would enable the smooth flow of ~100,000 spectators before and after a race or event. Existing storm water ditches were replaced by a closed drainage system with wide sidewal
Slide 100: Financial Definitions
Financial Definitions Adjusted EBITDA: Net income before interest, income taxes, depreciation and amortization, stock-based compensation, non-cash charges and certain other expenses. Reconciliation provided on slide 102. Adjusted EBITDA Margin: Adjusted EBITDA calculated as a percentage of net sales
Slide 101: Historical Financial Performance
Historical Financial Performance Net Sales Adjusted EBITDA & Margin CAGR 4% Dollars in millions. *FY19 Net Sales and Adjusted EBITDA is based on mid-point of guidance. See appendix for definitions and reconciliations of Non-GAAP items. ADS has a strong track record of revenue growth and margin expan
Slide 102: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation
Slide 103: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation
Advanced Drainage Systems — Investor Day (November 2018) on 6ix