Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Investor Presentation (January 2023)
38 slides from Valmont Industries's investor presentation, Jan 11, 2023
Slide 1: Valmont Industries, Inc. Investor Presentation January 2023
© 2023 Valmont ® Industries, Inc. Valmont Industries, Inc. Investor Presentation January 2023
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward - Looking Statements Jan 2023 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, uncertaintie
Slide 3: Our Purpose: Conserving Resources. Improving Life.
3 Jan 2023 01 02 03 04 Join Our Purpose: Conserving Resources. Improving Life. ® Solving customers’ challenges by providing unique products and solutions , enhanced with technical innovation and aligned to long - term secular growth drivers Executing our strategy and delivering sustainable, long - t
Slide 4: Valmont Snapshot
Valmont Snapshot (NYSE: VMI) 4 Delivering Innovative Solutions for Infrastructure and Agriculture Markets Jan 2023 $2,224 $1,012 3Q 2022 YTD Sales 3 ($M) 3Q 2022 YTD Operating Income 4 ($M) Omaha, NE Headquarters $3.5B 2021 Net Sales $7B Market Cap 1 100+ Countries of Operation 2 85 Manufacturing Si
Slide 5: Expansive Footprint Serves Global Customer Base
Expansive Footprint Serves Global Customer Base Operational Excellence Enhances Localization and Creates Flexibility Jan 2023 5 72% 14% 14% Americas EMEA APAC 2021 Sales by Geography | Valmont Industries, Inc.
Slide 6: Infrastructure Segment: Delivering Safety, Security and Reliability
Market Drivers Infrastructure Segment | Delivering Safety, Security and Reliability 6 Jan 2023 1,802 2,224 3Q 2021 YTD 3Q 2022 YTD Sales 1 • Strong engineering capabilities • Cross - sharing of commercial, operational and development resources • Breadth of product offerings • Unparalleled response t
Slide 7: Agriculture Segment: Enabling Growers to do More with Less
Agriculture Segment | Enabling Growers to do More with Less 7 Jan 2023 1 Technology sales are reported as a subset of total Agriculture segment sales 2 Includes intersegment sales. 3 Adjusted Operating Income; Please see Company’s Reg G table at end of presentation. Product Lines 3Q 2022 YTD Sales %
Slide 8: Delivering Sustainable, Long-Term Profitable Growth
Elevating Delivering Sustainable, Long - Term Profitable Growth 8 Jan 2023 Accelerating Innovating Growth by Expanding Markets that We Serve • Growing services and technology in both segments while also reducing cyclicality • Focusing on high - growth sectors such as Telecommunications and Renewable
Slide 9: Operational Excellence Drives Sustainable Solutions
Elevating | Operational Excellence Drives Sustainable Solutions Jan 2023 Infuse Lean Thinking Into Our Culture; Use Continuous Improvement As Our Enabler 9 Enablers Strategic Priorities Operational Excellence with ESG Focus Enhanced Organizational Structure Culture of Lean Excellence Focus on Disrup
Slide 10: Sustainability is in our DNA
Jan 2023 | Valmont Industries, Inc. 10 Sustainability is in our DNA • We have lived our corporate purpose for 76 years • Our purpose connects what businesses we are in, how we deliver value to customers, how we innovate , and how we manage key resources • Our team members are solving essential socie
Slide 11: Delivering on ESG Commitments
Jan 2023 11 Elevating | Delivering on ESG Commitments Source: 2022 Valmont Sustainability Report | Valmont Industries, Inc.
Slide 12: Expanding the Markets We Serve
Accelerating | Expanding the Markets We Serve Expanding Our Total Addressable Market by Proactively Capturing Industry Trends Jan 2023 12 MARKET GROWTH NEW PRODUCTS & SERVICES GEOGRAPHIC EXPANSION 2021 VALMONT SHARE $ 3.5B New Products & Services Market Growth Geographic Expansion • Renewable Energy
Slide 13: Well Positioned for Solar Growth
Accelerating | Well Positioned for Solar Growth 13 Jan 2023 Increased Renewable Energy Demand is Catapulting Solar Growth VALMONT SOLAR AG SOLAR • 2018 – Convert Italia acquisition • Focus on distributed generation projects • Key international markets have more pronounced barriers to entry and favor
Slide 14: Targeting Megatrends with Technology
Innovating | Targeting Megatrends with Technology 14 Our Products and Solutions, Enhanced by Innovative Technology, are Addressing Global Megatrends Jan 2023 INFRASTRUCTURE AGRICULTURE Valmont Technology Automation, AI, ML, Smart, Lean, Agile Digitalization Enabling digital transformation for us and
Slide 15: Industry Leading Ag Technologies
Innovating | Industry Leading Ag Technologies 15 Jan 2023 Focusing on Technology Services to help Farmers D o More With Less ROI for a tech - enhanced pivot is as soon as Year One The Challenge Extreme weather, availability of labor and constraints on water are challenges faced by customers. Growers
Slide 16: Valmont Business Model Drives Strong Results
16 Jan 2023 ~10% CAGR Total Shareholder Return Over Past 15 Years 1 Value Creation 1 Total Shareholder Return Annual CAGR from Dec 31 2007 to Dec 30 2022; Source: FactSet Valmont Business Model Drives Strong Results Committed to Focus Areas Establishes our priorities and ensures we are doing the rig
Slide 17: Growing Through Strategic M&A
Agriculture Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Agriculture Agriculture Agriculture Infrastructure 2018 2018 2018 2018/2019 2019 2019 2020 2021 2021 2022 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Accelerating | Growing Through Strategic M&A 17 Jan 2023 Cr
Slide 18: Strong Peak to Trough Performance
Strong Peak to Trough Performance 18 Ability to Execute During Economic Uncertainty Jan 2023 1 Excludes restructuring charges, impairments and significant one - time adjustments. Please see Company’s Reg. G table at end of pr esentation. Trough Trough Peak $2,746 $2,757 $2,767 $2,895 $3,502 $267 $20
Slide 19: Capital Allocation Framework
Capital Allocation Framework 19 Disciplined and Balanced Capital Allocation Driving Shareholder Value Jan 2023 GROWING OUR BUSINESS RETURNING CASH TO SHAREHOLDERS 30% Capital Expenditures 39% Acquisitions 19% Share Repurchases 12% Dividends • Investments to support strategic growth initiatives, digi
Slide 20: Strong Balance Sheet and Ample Liquidity
Strong Balance Sheet and Ample Liquidity 20 Jan 2023 Cash $166M Total Long - Term Debt $935M Shareholders’ Equity $1,573M Total Debt to Adj. EBITDA 1 1.5x Available Credit under Revolving Credit Facility 2 $595M Cash $166M Total Available Liquidity $761M As of September 24, 2022 ► Long - term debt m
Slide 21: 2012-2021 Historical Free Cash Flow
Jan 2023 21 2012 - 2021 Historical Free Cash Flow 1 1 Adjusted earnings for purposes of calculating FCF conversion may not agree to the adjusted net earnings. The difference is du e to cash restructuring, debt refinancing, or other non - recurring expenses which were settled in cash in the year of o
Slide 22: Strong Free Cash Flow throughout the Cycle
Jan 2023 22 Years of rapid raw material cost inflation GAAP 0.43X 1.04X 0.55X 5.66X 1.00X 0.65X 0.80X 1.44X 1.49X (0.21X) Adj. N/A 0.98X 0.53X 1.71X 1.25X 0.48X 0.62X N/A 1.31X (0.19X) 2012 – 2021 Free Cash Flow 1 ($M) 100 290 101 227 175 78 81 210 210 (42) 143 (100) (50) - 50 100 150 200 250 300 35
Slide 23: Strong Free Cash Flow Generation
GAAP 100% 65% 80% 144% 149% (21%) Adj. 125% 48% 62% N/A 131% (19%) Strong Free Cash Flow Generation 23 1 We use the non - GAAP measure of FCF, which we define as GAAP net cash flows from operating activities reduced by capex. We believ e that FCF is a useful performance measure for management and us
Slide 24: Our Financial Targets
Our 3 – 5 Year Financial Targets 24 13 - 15% EPS Growth 1 7% - 12% Revenue Growth 1 >1.0x Net Earnings FCF Conversion Key Assumptions • Greater near to medium term focus on funding growth with R&D • FCF conversion long - term over the cycle • Acquisitions over time are necessary to achieve top end o
Slide 25: Our Purpose: Conserving Resources. Improving Life.
25 Jan 2023 01 02 03 04 Join Our Purpose: Conserving Resources. Improving Life. ® Solving customers’ challenges by providing unique products and solutions , enhanced with technical innovation and aligned to long - term secular growth drivers Executing our strategy and delivering sustainable, long -
Slide 26: Thank You
THANK YOU Jan 2023 26 | Valmont Industries, Inc.
Slide 27: Appendix
APPENDIX 27 Jan 2023 | Valmont Industries, Inc.
Slide 28: Reconciliation of Non-GAAP Financial Measures: Operating Income
28 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures Operating Income Reconciliation Operating income - as reported $ 255,722 $ 138,779 $ (70,968) $ 323,533 Stock-based compensation - Prospera — 7,523 — 7,523 Prospera intangible asset amortization — 4,935 — 4,935 Adjuste
Slide 29: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
29 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact of 1) the nonrecurring impairment of long - lived assets for the offshore and other steel structures reporting unit (SM) 2) intangible asset amortization and stock - base
Slide 30: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
30 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact of 1) the intangible asset amortization and stock - based compensation recognized on the Prospera subsidiary, 2) a write off a receivable following arbitration of a comme
Slide 31: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
31 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, and tradenames, ( 2) restructuring costs and non - recurring asset impairments (b) operating income from
Slide 32: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
32 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact on (a) diluted earnings per share of (1) debt refinancing expenses (2) impairment of goodwill and tradename (3) restructuring and related asset impairment costs (4) non -
Slide 33: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
33 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact of intangible asset amortization ( Prospera ) and stock - based compensation recognized for the Prospera employees on fiscal 2022 results. We believe the adjustments for
Slide 34: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
34 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact of 1) the nonrecurring impairment of long - lived assets for the offshore and other steel structures reporting unit (SM) 2) intangible asset amortization and stock - base
Slide 35: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
35 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact of 1) the intangible asset amortization and stock - based compensation recognized on the Prospera subsidiary, 2) a write off a receivable following arbitration of a comme
Slide 36: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
36 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, and tradenames, ( 2) restructuring costs and non - recurring asset impairments (b) operating income from
Slide 37: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
37 Reconciliation of Non - GAAP Financial Measures to Reported Financial Measures The non - GAAP tables below disclose the impact on (a) diluted earnings per share of (1) debt refinancing expenses (2) impairment of goodwill and tradename (3) restructuring and related asset impairment costs (4) non -
Slide 38: Calculation of Adjusted EBITDA and Leverage Ratio
38 Calculation of Adjusted EBITDA and 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 qua
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