Eagle Materials Inc · NYSE:EXP
Eagle Materials — Investor Presentation (2020)
17 slides from Eagle Materials's investor presentation, 2020
Slide 1: Company Overview: Evolution and Outlook
Company Overview Evolution and Outlook 2020 Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
Slide 3: Eagle Materials Company Overview
Eagle Materials Company Overview § Founded in 1963 as a subsidiary of Centex Corp. Revenue (FYE March 31, $ in millions) • In 2004, Centex spun off Centex Construction $1,387 $1,211 $1,451 Products which became Eagle Materials Inc. $1,211 $1,066 $1,143 (NYSE: EXP) $898 § Two primary business lines:
Slide 4: Comparative on Building Products EBITDA Margins
B Be ois ac e C on a sc Se Bui Roo ad l e 0.0% 10.0% 20.0% 30.0% 40.0% Sk le c de r fin g C yli t In s F S o m n e te ir up p a C r io stS pl n BM h a r C o u y, I y m n C pi on c rce c. Fo St o n ep , In o c C ts c un U k o , . da F H rp In tio C P o ld o ra c. n a v Ind i n tio Si Bu co u g s n te
Slide 5: Eagle Materials: Two Major Business Lines
Eagle Materials: Two Major Business Lines Financial Evolution In Millions, Annual at March Year-End 2011 (Trough) 2020 (Latest) Revenue Heavy (Cement+Con/Agg) $270 $933 From a balanced sales contribution a decade Light (Wallboard+Paperboard) 309 668 ago to a 50% greater heavy contribution today Oper
Slide 6: Eagle Materials Capital Allocation
Eagle Materials Capital Allocation $1.7 Billion Over the Last Three Years 52% Heavy-Side Growth and Improvement Heavy-Side (e.g., Cement Acquisitions) Growth and Improvement Light-Side 41% Return of Cash to Shareholders Improvement 7% Light-Side Improvement (e.g., Paperboard Expansion) Share Repurch
Slide 7: Cement US Heartland System
Cement US Heartland System Strategic Geographic Focus, Away from US Coastlines (Imports) Plants and Capacities1 (ST2 thousands) Texas Lehigh (50%) 720 Illinois Cement 1,100 Mountain Cement 800 Nevada Cement 550 Central Plains Kansas City 1,300 Central Plains Tulsa 900 Fairborn Cement 980 Kosmos Ceme
Slide 8: US Cement Consumption and Clinker Capacity
US Cement Consumption and Clinker Capacity PCA, Million Metric Tons 120,000 US Clinker Capacity 100,000 New capacity -- and 80,000 capacity expansion -- is constrained due to 60,000 regulation (NESHAP) 40,000 Imports will be required again to meet demand 20,000 0 2016 2017 2018 2019 2020 2021 2022 2
Slide 9: Gypsum Wallboard and Paperboard System
Gypsum Wallboard and Paperboard System US Sunbelt Strategic Geographic Focus Gypsum, CO 700 MMSF Duke, OK 1,300 MMSF Albuquerque, NM Georgetown, SC 425 MMSF 900 MMSF Bernalillo, NM Lawton, OK 550 MMSF 390,000 tons paperboard Total Wallboard Design Capacity ~ 4 Billion SF 9
Slide 10: Gypsum Wallboard: US Demand is Closely Linked with Housing
Gypsum Wallboard US Demand is Closely Linked with Housing 1,400 48 New Home Sales (000) 42 1,200 Wallboard Shipments (BSF) 36 1,000 30 800 24 600 18 400 12 200 6 0 0 1980 1985 1990 1995 2000 2005 2010 2015 Source: Census Bureau, Gypsum Association 10
Slide 11: Eagle is a Low Cost Producer
Eagle is a Low Cost Producer Using Less Resources to Make Commodity Products ü Operational Execution ü Process Management ü Low-Cost Focused Innovation ü Smart Design and Scale ü Technology and Engineering ü Sustained Maintenance Sustained Innovation Focus on Cost Reduction Significant, Sustained an
Slide 12: Eagle Materials Strategy Since 2010
Eagle Materials Strategy Since 2010 Strategy and Investment Directions Results Heavy Side ü Tripled Cement capacity through Aggressive Growth acquisitions Cement, plus • Cement ü Achieved scale materiality Con/Agg ü Largest US-only player ü Remained profitable each year throughout the deepest and lo
Slide 13: Total Leverage
Total Leverage Cash Generation Enables Investment and Provides Flexibility 3.1x 2.0x 1.4x 1.5x 1.5x 1.5x 1.3x 1.3x FY14 FY15 FY16 FY17 FY18 FY19 FY20 9/30/2020 Leverage defined as Gross Debt/EBITDA 13
Slide 14: Significant Return of Cash to Shareholders
Significant Return of Cash to Shareholders $ Millions $400 Nearly $2 billion in cash has been returned to shareholders while Eagle has expanded productive capacity and earnings power $300 $200 $100 $0 MAR '01 MAR '20 Dividends Paid Stock Repurchases 14
Slide 15: Outlook
Outlook Future Determinants of Profitability Favorable for Eagle Businesses Heavy Side Light Side Winning US Heartland Strategy, Reasons Why Future Cycles May Different Than International Be More Favorable Than Past + Supply + Demand + Substitutes + Structure + Sustainability + Imports + Logistics 1
Slide 16: Appendix
E-izs Materials Appendix
Slide 17: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $ in millions, Fiscal Year Ending March 31 “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. We adjust EBITDA for certain FY14 FY15 FY16 FY17 FY18 FY19 FY20 items that are not reflective of the normal Adjusted EBITDA Rec