Lindsay Corporation · NYSE:LNN
Lindsay — Investor Presentation (January 2018)
38 slides from Lindsay's investor presentation, Jan 25, 2018
Slide 1: Advancing Innovation to Solve Global Challenges
ADVANCING INNOVATION TO SOLVE GLOBAL CHALLENGES Investor Presentation January 2018
Slide 2: Safe-Harbor Statement
Safe-Harbor Statement This presentation contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, financial results and planned financing. Yo
Slide 3: Global Provider of Differentiated Market Solutions
Global Provider of Differentiated Market Solutions INFRASTRUCTURE IRRIGATION •Founded in 1955 •Manufacturing Leading Brands in 7 Countries •Custom Turnkey Irrigation Solutions delivered to over 90 countries •Global Provider of Road Safety Solutions •1,400 Employees Worldwide
Slide 4: Addressing an Increasing Global Population through Sustainability and Innovation
Addressing an Increasing Global Population through Sustainability and Innovation 47% 34% 19% Lindsay Revenue by Source (FY 2017) U.S. Irrigation International Irrigation Infrastructure
Slide 5: Five Year Financial Overview
Five Year Financial Overview ($ in millions, except per share amounts) FY13 FY14 FY15 FY16 FY17 Revenue 690.8$ 617.9$ 560.2$ 516.4$ 518.0$ Gross Profit 194.8$ 171.0$ 156.3$ 148.6$ 145.0$ Gross Margin 28.2%27.7%27.9%28.8%28.0% Operating Income 107.1$ 78.4$ 50.7$ 34.4$ 40.2$ Operating Margin 15.5%12.7
Slide 6: First Quarter FY18 Results
First Quarter FY18 Results ($ in millions, except per share amounts) Q1 - FY18 Q1 - FY17 % Change Revenue 124.5$ 110.4$ 13% Gross Profit 32.4$ 28.4$ 14% Gross Margin 26.0%25.7%0.3 pts Operating Expenses 26.2$ 25.6$ 2% Operating Income 6.2$ 2.7$ 127% Operating Margin 5.0%2.5%2.5 pts Net Income 3.2$ 0
Slide 7: First Quarter FY18 Segment Results
First Quarter FY18 Segment Results ($ in millions) Q1 - FY18 Q1 - FY17 % Change Revenue North America Irrigation 67.8$ 52.8$ 28% International Irrigation 35.6$ 37.1$ -4% Irrigation 103.4$ 89.9$ 15% Infrastructure 21.2$ 20.5$ 3% Operating Income Irrigation 7.9$ 5.1$ 52% Infrastructure 3.3$ 3.0$ 11% O
Slide 8: Long-Term Financial Goals
Long-Term Financial Goals These figures exclude acquired companies in the year of acquisition. Goal FY17 FY16 5-Year Average Revenue Growth 10-15% 0% -5% 0% Operating Margin 9-14% 8% 7% 10% ROIC 9-15% 7% 6% 11%
Slide 9: Strategic Investment-Led Growth
Strategic Investment-Led Growth 2001 – 2005 Entered into International irrigation in Europe, Brazil, South Africa and China Acquired BSI Acquired Snoline 2006 2008 Acquired Watertronics Acquired Structures & Signals China Factory Started 2009 2010 Acquired M2M Manufacturing and Technology Acquired I
Slide 10: Long-Term Irrigation Market Drivers
Long-Term Irrigation Market Drivers Water Use Efficiency Food Requirements Environmental Improvement Biofuels
Slide 11: Irrigation Segment Revenues
Irrigation Segment Revenues Revenue (in millions) 2017 2016 % Change U.S. $ 242.6 $262.2 -7% International 175.4 159.4 10% Total $418.0 $421.6 -1% $217 $375 $256 $259 $370 $475 $626 $540 $451 $422 $418 $0 $100 $200 $300 $400 $500 $600 $700 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 12: 2050: A Third More Mouths to Feed
2050: A Third More Mouths to Feed “Feeding the world population of 9.1 billion by 2050 would require raising overall food production by some 70%” –FAO, How to Feed the World by 2050, Rome 2009
Slide 13: Water Stress by Country
Water Stress by Country ratio of withdrawals to supply Low stress (<10%) Low to medium stress (10-20%) Medium to high stress (20-40%) Hight stress (40-80%) Extremely high stress (>80%) This map shows the average exposure of water users in each country to water stress, the ratio of total withdrawals
Slide 14: Most Common Method of Irrigation is Gravity/Furrow
Most Common Method Of Irrigation is Gravity/Furrow I Gravity/Furrow Irrigation uses twice as much water as Mechanized Irrigation
Slide 15: Modern Mechanized Irrigation Greatly Enhances Water Efficiency
Modern Mechanized Irrigation Greatly Enhances Water Efficiency Low Elevation Spray Application (LESA) Low Energy Precision Application (LEPA)
Slide 16: Global Leader in Large Addressable Market
Global Leader in Large Addressable Market -$5.0B (est.) 50% 35% 15% Global Ag Irrigation Equipment Market Mechanized Micro Spray Micro Drip 40% 32% 13% 3% 2% 1% 1% 8% Estimated Global Market Share (Mechanized) Valmont Lindsay Reinke T&L Alkhorayef/Pierce Vodar Fockink Others Mgmt. estimate
Slide 17: Single Source Provider of Custom Turnkey Integrated Value-Adding Technology
Single Source Provider of Custom Turnkey Integrated Value-Adding Technology Strength & Reliability
Slide 18: Award-winning Innovation
Award-winning Innovation FieldSENTRY 2004 American Society of Agricultural and Biological Engineers AE50 FieldNET 2007 American Society of Agricultural and Biological Engineers AE50 FieldNET 2007 Irrigation Association New Ag Product of the Year FieldNET 2009 SIMA Innovation Award FieldNET 2014 Irri
Slide 19: Industry Leading Technology Solutions
Industry Leading Technology Solutions FieldNETby Lindsay™ Industry’s only unified remote monitoring and control platform integrating pivots, laterals, drip and pumping stations GrowsmartPrecision VRI™ Industry’s only fully integrated variable rate irrigation (VRI) solution with GPS control of indivi
Slide 20: FieldNET Advisor: The Smartest Irrigation Solution
FieldNETAdvisor: The Smartest Irrigation Solution Helps growers make faster, better- informed irrigation decisionsusing trusted crop and irrigation science and patented and proprietary technologies. Leverages a massive amount of data that was previously difficult to manage. Seamlessly integrates int
Slide 21: The U.S. Solution – Acres Irrigated by Method
21 The U.S. Solution – Acres Irrigated by Method 21 1998, 2003, 2008 & 2013 Farm and Ranch Irrigation Surveys, USDA, National Agricultural Statistics Service, USDA published Farm and Ranch Irrigation Survey http://www.agcensus.usda.gov/ 35% 50% 11% 4% 41% 44% 9% 6% 2013 (55 Million Acres) 14% of Cro
Slide 22: Irrigated Cropland – U.S.
Irrigated Cropland –U.S. Source: 2012 Census of Agriculture USDA, National Agricultural Statistics Service, 2013 Farm & Ranch Irrigation Survey Acres of Irrigated Land as Percentage of Land in Farms Acreage: 2012 Western States 20%of Cropland Irrigated Eastern States 8%of Cropland Irrigated
Slide 23: Primary U.S. Market Drivers – Commodities and Net Farm Income
Primary U.S. Market Drivers – Commodities and Net Farm Income Net Farm Income and net cash income, 2000 – 2017F U.S. corn price received by farms and production
Slide 24: Large International Market Opportunity
Large International Market Opportunity 420 381 303 306 205 117 83 63 32 37% 14% 44% 3% 5% 6% 2% 21% 12% INDIA U.S. CHINA RUSSIA BRAZIL AUS/NZ UKRAINE MEXICO SOUTH AFRICA Cultivated Land Acres vs. Irrigated Land Acres Total Cultivated Land Irrigated Land MMs Acres
Slide 25: Conversion Opportunity for Mechanized Irrigation
Conversion Opportunity for Mechanized Irrigation 88% 9% 3% 646 Million Acres Irrigated Gravity Flow Mechanized Other- Low Volume Source: FAO Aquastat
Slide 26: Increasing Global Population and Food Security Needs Driving International Market Opportunity
Increasing Global Population and Food Security Needs Driving International Market Opportunity #1 China #2 U.S. #3 Brazil #1 China #2 Russian Fed. #3 India #1 U.S. #2 Brazil #3 Argentina #1 India #2 China #3 Russian Fed 2.4 acres / hectare. Source: FAOStat2014 Data Country Total 000’s United States o
Slide 27: U.S. Yield vs. Developing Economies
U.S. Yield vs. Developing Economies - 40 80 120 160 200 1980 1985 1990 1995 2000 2005 2010 2015 USA - Irrigated China Russia Brazil Corn Yields 1980-2015 BU/Acre
Slide 28: Worldwide Replacement Opportunity
Worldwide Replacement Opportunity Aftermarket Sales Opportunity •260,000+pivots in North America •Penetrating Installed base with FieldNETConversions and Controls •High-to-low pressure retrofits
Slide 29: Expanding Infrastructure Solutions through Innovation
Expanding Infrastructure Solutions through Innovation The Road Zipper System™ –construction, managed lanes and bridges and tunnels NEW MASH Compliant Road Safety Solutions
Slide 30: Long-Term Infrastructure Market Drivers
Long-Term Infrastructure Market Drivers Improve Road Safety Environmental Concerns Global Population Growth
Slide 31: Infrastructure Segment Revenues
Infrastructure Segment Revenues Revenue (in millions) FY17 FY16 % Change Infrastructure $ 99.9 $94.8 5% $65 $100 $81 $100 $109 $76 $65 $78 $109 $95 $100 $0 $20 $40 $60 $80 $100 $120 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 32: Congestion / Safety are increasing concerns globally
Congestion / Safety –are increasing concerns globally Traffic Congestion costs $160 Billion to Urban Areas Annually: •6.9 Billionof lost hours in traffic •3.1 Billiongallons of fuel wasted
Slide 33: Road Zipper System provides safety and reduces congestion
Road Zipper System®provides safety and reduces congestion •Saving lives everyday •Improved air pollution •Decreased travel times •Increased fuel efficiency •Over 200Road Zipper projects completed •200 Milesof Barrier and dozens of Machines in use Globally •More than 30 Milesof Barrier owned by Linds
Slide 34: Healthy Balance Sheet and Reliable Cash Flow Generation
Healthy Balance Sheet and Reliable Cash Flow Generation •Reinvestment for Organic Growth •Dividend Increases ($ in millions)Nov 30, 2017Nov 30, 2016% ChangeCash and cash equivalents109.5$ 103.1$ 6% Current assets296.2$ 274.9$ 8% Current liabilities90.1$ 84.6$ 7% Net working capital206.1$ 190.3$ 8% L
Slide 35: Capital Allocation – A Balanced Approach
Capital Allocation –A Balanced Approach .Targeted cash balance of $60-75 million, including international accounts .To support cyclical and seasonal fluctuations in working capital and projected capital expenditures .$115 million in Senior Notes maturing on 2/19/30 at annual interest rate of 3.82% .
Slide 36: Summary
Summary •Favorable Long-term market drivers •Unique market position leveraging a diversified business model with solid risk management •Reliable cash generation •Leveraging expanded global scale to enhance long-term margin opportunities
Slide 37: Our Strategic Value Creation Framework
Our Strategic Value Creation Framework Global Expansion •Manufacturing and Sales in Targeted Regions •Distribution Centers CheckMark.png Increase Market Share •Integrated Value-Added Technology Across Segments •Innovative Product Line Expansion •Enhanced Dealer Performance Acquisitions •Synergistic
Slide 38: Lindsay Corporation
LINDSAY CORPORATION ZIMMATIC" - ((\GROWSsMART <elecsys OOnannoan pronucts (‘ = eae Quo inc sszisns &FIELDNET BY LINDSAY @QwarertRonics ©LAKOS "AUNDEAY EOMPANY