Mueller Water Products · NYSE:MWA
Mueller Water Products — Investor Presentation (May 2024)
33 slides from Mueller Water Products's investor presentation, May 8, 2024
Slide 1: Where Intelligence Meets Infrastructure - Investor Presentation
Where Intelligence Meets Infrastructure® Investor Presentation May 8, 2024
Slide 2: Non-GAAP Measures
Non-GAAP Measures In an effort to provide investors with additional information regarding the Company’s results as determined by accounting principles generally accepted in the United States (“GAAP”), the Company also provides non-GAAP information that management believes is useful to investors. The
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements that address activities, events or developments that the Company intends, expects, plans, projects, believes or a
Slide 4: Mueller Water Products at a Glance (NYSE: MWA)
Mueller Water Products at a Glance (NYSE: MWA) History Highlights (1) Geography (2) Segments (2,3) (% of Consolidated Net Sales) (% of Consolidated Net Sales) • Founded more than 165 years ago $1.24B $236.8M Net Sales Adjusted EBITDA • Spun off from Walter (LTM Q2FY24) (LTM Q2FY24) United States Wat
Slide 5: Why Invest in Mueller
Why Invest in Mueller Growth strategies, capital investments and operational initiatives enable us to deliver further sales and adjusted EBITDA growth DRIVING GROWTH BENEFITING MODERNIZING ACCELERATING SUPPORTING WITH A STRONG FROM LONG- MANUFACTURING PRODUCT STRATEGIC COMPETITIVE TERM END AND DRIVI
Slide 6: ESG is Core to Mueller
ESG is Core to Mueller During Q2, MSCI upgraded Mueller to its highest ESG rating of AAA (1) Environmental Social Governance Products Mitigate our environmental Foster a strong company Promote sound governance 90% of 2023 net sales impact focusing on culture by emphasizing that acts in the best inte
Slide 7: Products and Markets
Products and Markets
Slide 8: Uniquely Positioned to Address Opportunities with Utilities
Uniquely Positioned to Address Opportunities with Utilities with its Leading Infrastructure Products and Installed Base • Water-focused Leading company Product Positions with in Key more Categories Product than 90%(1)of Broad Portfolio of Products and Solutions with consolidated net sales associated
Slide 9: Water Utilities Are Facing Many Challenges
Water Utilities Are Facing Many Challenges Implications for Utilities Aging • Unrealistic for U.S. water utilities and local governments to bridge the gap 2.3 million 53 years Infrastructure between their current capital spending miles of drinking water Average age of failing and projected need for
Slide 10: Aging Pipe Infrastructure and Water Main Breaks
Aging Pipe Infrastructure and Water Main Breaks Utah State Study on Water Main Break Rates in U.S. and Canada (1) • Surveyed more than 800 water utilities with nearly 400,000 miles of water mains in the U.S. and Canada, representing approximately 17% of the estimated total length • U.S. and Canada h
Slide 11: U.S. Water Infrastructure Requires Substantial Long-term Investment
U.S. Water Infrastructure Requires Substantial Long-term Investment Repair & Replacement Market U.S. Water Infrastructure CAPEX and Investment Gap • Restoring existing water systems and expanding them to serve a growing • Spending on Water & Wastewater CAPEX in U.S. is >$50 billion (5) population th
Slide 12: Water Utilities and Water Infrastructure Funding
Water Utilities and Water Infrastructure Funding Water Utilities in North America Sources of Funding for U.S. Utilities • >50,000 water utilities and >14,000 wastewater utilities in U.S. • For U.S. utilities, 96% of funding at state/local government level (3) and Canada (1) − Majority of utilities h
Slide 13: Need for More Digital Products and Solutions Expected to Accelerate
Need for More Digital Products and Solutions Expected to Accelerate Aging Infrastructure and Non-Revenue Water “Bluefield • Average age of water pipes has increased to 45 years in 2020 from 25 years in 1970 (2) projects that • 260,000 water main breaks per year with distribution pipes (3) total glob
Slide 14: Broad-line of Connected Products that Close the Loop
Broad-line of Connected Products that “Close the Loop” with Water Network Administrators & Assets Products and solutions help address critical needs for water utilities, including Echologics' pipe condition assessment services and fixed leak detection solutions, advanced meters and communication equ
Slide 15: Large Capital Projects
Large Capital Projects • Benefits include accelerating product development, driving operational efficiencies, reducing duplicative expenses, increasing revenue, expanding capabilities for American-made products and advancing our sustainability environmental initiatives • Capital expenditures as a pe
Slide 16: Financial Performance
Financial Performance
Slide 17: Q2 FY2024 Consolidated Results
Q2 FY2024 Consolidated Results (1,2) Gross Profit ($M) Adj. EBITDA ($M) Adj. Net Income Net Sales ($M) % of Net Sales % of Net Sales per Diluted share +33.3% y/y +70.9% y/y +6.2% y/y +114.3% y/y +750 bps +890 bps $353.4 $130.4 $82.2 $332.9 $0.30 $97.8 36.9% 23.3% $48.1 29.4% $0.14 14.4% Q2 FY2023 Q2
Slide 18: Free Cash Flow (YTD Q2 FY2024)
Free Cash Flow (YTD Q2 FY2024) • Increased YTD Q2 net cash provided by operating $70.0 $62.2 activities by $84.4M to $62.2M compared with prior $60.0 year period $50.0 $40.0 − Increase primarily result of higher net income and $30.0 improvements in working capital compared with the prior year, $20.0
Slide 19: Fiscal 2024 Outlook
Fiscal 2024 Outlook (1) • Consolidated net sales expected to be Fiscal 2024 Metrics (1) between flat and down 2% y/y -2% to 0% − Believe municipal and new residential construction Consolidated Net Sales Growth y/y ($1,250.2M to $1,275.7M) end markets will continue to be healthy in second half of the
Slide 20: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Capital structure and net leverage position provide flexibility to support strategic priorities, including capital investments, acquisitions and returning cash to shareholders through quarterly dividend and repurchases • Moody’s: Ba1 Corporate Rating, Ba1 Notes Rat
Slide 21: Balanced and Disciplined Capital Allocation
Balanced and Disciplined Capital Allocation Capital Allocation Priorities Cash Allocation Over Past 5 Years (FY19 to FY23)* • Strong balance sheet, liquidity and cash flow supporting our strategies $245M to Shareholders • Maintaining balanced approach to capital - $175M dividends - $70M share repurc
Slide 22: Investment Highlights
Investment Highlights DRIVING GROWTH WITH A STRONG COMPETITIVE POSITION AND BROAD PORTFOLIO OF PRODUCTS AND SOLUTIONS BENEFITING FROM LONG-TERM END MARKET DYNAMICS SUPPORTED BY AGING WATER INFRASTRUCTURE MODERNIZING MANUFACTURING AND DRIVING OPERATIONAL EXCELLENCE TO DELIVER GROSS MARGIN EXPANSION A
Slide 23: Supplemental Data
Supplemental Data
Slide 24: Historical Financial Performance
Historical Financial Performance • Over last five years, delivered net sales and adjusted EBITDA CAGRs of 6.8% and 2.3%, respectively • Prior to pandemic, delivered net sales and adjusted EBITDA CAGRs of 6.5% and 8.3%, respectively Consolidated Net Sales Consolidated Adjusted EBITDA (1) $ in million
Slide 25: Historical Free Cash Flow
Historical Free Cash Flow • Over the past 5 years, generated $550.8M $180.0 in cash provided by operating activities and $156.7 $160.0 delivered $231.5M of Free Cash Flow after $140.3 $140.0 investing $319.3M in capital expenditures • In fiscal 2023… $120.0 $109.0 $100.0 $92.5 $ in Millions − Increa
Slide 26: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2024 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 205.8 $ 147.6 $ — $ 353.4 Gross profit $ 77.2 $
Slide 27: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2024 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 44.3 Income tax expense (3) 14.6 Interest expe
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 157.2 $ 175.7 $ — $ 332.9 Gross profit $ 37.2 $
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 21.3 Income tax expense (3) 6.7 Interest expen
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2024 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 347.1 $ 262.7 $ — $ 609.8 Gross profit $ 123.8 $
Slide 31: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2024 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 58.6 Income tax expense (3) 17.2 Other expense 1
Slide 32: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 322.8 $ 324.9 $ — $ 647.7 Gross profit $ 83.8 $ 1
Slide 33: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 43.8 Income tax expense (3) 13.6 Interest expens
Mueller Water Products — Investor Presentation (May 2024) on 6ix