Atkore Inc. · NYSE:ATKR
Atkore — Atkore International Group — Investor Presentation (September 2020)
36 slides from Atkore's investor presentation, Sep 9, 2020
Slide 1: Investor Presentation & Company Overview
Investor Presentation & Company Overview September 9, 2020 1
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains forward-looking statements that are subject to known and unknown risks and uncertainties, many of which are beyond our control. All statements other than statements of historical fact included in this presentation are forward-looking statements. Forwa
Slide 3: Atkore: a Compelling Investment
Atkore: a Compelling Investment A values-based organization with a focus on continuous improvement driven by the Atkore Business System Strong track record of earnings growth, increasing free cash flow and excellent return on capital With a commitment to quality, service and safety, we produce infra
Slide 4: Our Foundation is the Atkore Business System
Our Foundation is the Atkore Business System 4
Slide 5: Atkore at a Glance
Atkore at a Glance A leading manufacturer of electrical, mechanical, and safety infrastructure solutions 1959 2016 Harvey, IL ~3,900 65 Founded IPO (NYSE: ATKR) Headquarters Employees Global Facilities FY2019 Financial Highlights FY2019 Net Sales Breakdown, $1.9B Change $ Millions (except per share
Slide 6: Strong Earnings Growth, Cash Flow and ROC%
Strong Earnings Growth, Cash Flow and ROC% Adjusted EBITDA1, $M Free Cash Flow1, $M Return on Capital1 (ROC), % +13% CAGR +15% CAGR +1,360 bps 324 207 17.0 317 16.3 15.4 272 175 235 12.2 228 140 10.7 114 164 107 97 2.7 FY2015 FY2016 FY2017 FY2018 FY2019 TTM FY2015 FY2016 FY2017 FY2018 FY2019 TTM FY2
Slide 7: History of Positively Managing Input Costs
History of Positively Managing Input Costs Input Cost Volatility Solid Financial Results Indexed Prices of Key Input Cost Categories1 Annual Price vs. Cost Benefit to Adjusted EBITDA, $M 39 FY2017 FY2018 FY2019 FY2020 YTD 30 190 180 170 8 160 0 150 FY2017 FY2018 FY2019 FY2020 YTD 140 - 9 months Reve
Slide 8: Our Products Are All Around You Everyday
Our Products Are All Around You Everyday Wire Basket Cable Related Segment Armored Cable Tray & Fittings Electrical Raceway Mechanical Products & Solutions Flexible Electrical Conduit Electrical & Liquidtight Conduit Prefabrication Cable Tray, Industrial Flexible Ladder & Fittings Electrical Conduit
Slide 9: U.S. Construction Market Sales Breakdown
U.S. Construction Market Sales Breakdown % of Atkore FY19 Net Sales U.S. Construction End-Market Review By End Market 68% Commercial & . Key sub-categories1: Industrial • Offices & Data Centers • Warehouses & Regional Serve a diversified Distribution Facilities • Retail mix of end-markets Other Intl
Slide 10: U.S. Construction Forecasted Market Trends
U.S. Construction Forecasted Market Trends Consensus Construction Forecast1 Market Observations & Trends Calendar 2021 Estimated Nonresidential Total Market % Change vs. 2020 by Data Provider Positive market trends in data centers, Associated Construct Dodge FMI IHS Markstein Moody’s Wells Builders
Slide 11: Electrical Raceway Segment: Quick Facts
Electrical Raceway Segment: Quick Facts: FY 2019 Q3 FY20 Key Brands: Net Sales, $M $1,443.5 $286.0 Adjusted EBITDA, $M $292.6 $57.5 Adjusted EBITDA Margin, % 20.3% 20.1% MARKET AND MARKET POSITION Electrical products that deploy, isolate and protect a structure’s electrical circuitry from the origin
Slide 12: Mechanical Products & Solutions Segment: Quick Facts
Mechanical Products & Solutions Segment: Quick Facts: FY 2019 Q3 FY20 Key Brands: Net Sales, $M $474.3 $99.5 Adjusted EBITDA, $M $70.0 $12.2 Adjusted EBITDA Margin, % 14.8% 12.3% MARKET AND MARKET POSITION Mechanical products and services that frame, support and secure In-line component parts in a b
Slide 13: Levers to Drive Organic Growth
Levers to Drive Organic Growth Recent Example & Highlights Organic Growth Drivers Commercialized over 30 new products in the past two years Drove high single digit revenue growth in Electrical Global Raceway “Focused Product Categories” in FY2019 Category Expansion Digital Focused Expanding global d
Slide 14: M&A Strategy Focused on Profitable Growth
M&A Strategy Focused on Profitable Growth Bolt-On Acquisition Playbook Quick Facts: Target Profile Strategy Value Creation Spent $285 million of cash on . Privately held small to . Strategic fit from a product . Leverage global spend for medium sized businesses or category perspective, or key raw ma
Slide 15: Strong Financial Profile Ready for the Future
Strong Financial Profile Ready for the Future Net Debt to TTM Adjusted EBITDA Debt Structure Debt Structure, $M As of 6/26/20 Cash and Cash Equivalents $237.3 2.9x 2.8x 2.6x Senior Secured 1st Term Loan Matures 2023 $846.1 2.2x 2.1x 2.1x Total Debt $846.1 1.9x Total Net Debt $608.8 Note: Undrawn Ass
Slide 16: Focused on Environment, Social & Governance
Focused on Environment, Social & Governance We seek to utilize sustainable business principles and processes that achieve a balance between profitability and protection of all stakeholders, while reducing our impact on the environment and climate. Our Focus 32% 14% People and Community: We seek to p
Slide 17: Stable Business Model Supports Future Growth
Stable Business Model Supports Future Growth Disciplined Operational Focus Driven by the Atkore Business System Not a commodity company; proven track record of Input Cost Management successfully managing input cost changes and value selling Leading market share in key product categories with a Marke
Slide 18: Third Quarter 2020
Third Quarter 2020 Earnings Presentation As Presented on August 4, 2020 18
Slide 19: Financial Results & Business Update
Financial Results & Business Update Strong operating results and excellent cash generation in the third quarter 2020 Key Items Delivered Net Income of $24.1M and Adjusted EBITDA1 of $63.7M in the quarter Net sales declined 22.0%, and decremental margin impacts performed better than expectations Ende
Slide 20: Q3 Income Statement Summary
Q3 Income Statement Summary Y/Y % Q3 2020 Q3 2019 Y/Y Change ($’s in millions) Change Net Sales $384.9 $493.5 ($108.6) (22.0%) Operating Income $41.6 $59.2 ($17.6) (29.7%) Net Income $24.1 $36.6 ($12.5) (34.1%) Adjusted EBITDA1 $63.7 $88.5 ($24.8) (28.0%) Adjusted EBITDA Margin2 16.6% 17.9% (130 bps
Slide 21: Consolidated Atkore Q3 2020 Bridges
Consolidated Atkore Q3 2020 Bridges Q3 Net Sales Bridge Net Sales Growth $494M Volume/Mix (20.7%) $5 $385M Price (1.8%) $103 $10 $1 Acquisitions/Divestitures +1.0% FX/Other (0.5%) Total (22.0%) 2019 Volume/Mix Price M&A FX/Other 2020 Q3 Adjusted EBITDA Bridge Highlights $88M Decremental adjusted EBI
Slide 22: Electrical Raceway Q3 Highlights
Electrical Raceway Q3 Highlights Solid execution and performance with Adjusted Q3 Q3 Y/Y EBITDA margins of 20.1% in the quarter 2020 2019 Change ($’s in millions) Volume declines were mixed between different Net Sales $286.0 $373.2 (23.4%) product categories and geographies; experienced better than
Slide 23: Mechanical Products & Solutions Q3 Highlights
Mechanical Products & Solutions Q3 Highlights Net sales declined 17.5%; large renewable energy Q3 Q3 Y/Y projects and demand for recreational equipment, 2020 2019 Change ($’s in millions) partially offset declines in volume associated with overall market conditions Net Sales $99.5 $120.6 (17.5%) Adj
Slide 24: Key Balance Sheet & Cash Flow Metrics
Key Balance Sheet & Cash Flow Metrics ($’s in millions) As of 6/26/2020 Debt & Liquidity Review Cash and cash equivalents $237.3 Senior secured term loan of $846.1M (net of Total Debt $846.1 deferred financing costs) due in December 2023 Net Debt $608.8 No scheduled principal payments prior to matur
Slide 25: Cash and Leverage Ratio Trends
Cash and Leverage Ratio Trends Cash & Cash Equivalents, $M +$137M vs. Prior Year 237.3 164.1 123.4 137.2 100.7 75.9 51.5 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Leverage Ratio1: Net Debt to TTM Adj. EBITDA Reduced by 0.7x 2.9 2.8 2.6 2.2 2.1 2.1 1.9 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1
Slide 26: Financial Outlook Summary
Financial Outlook Summary Information is as presented on August 4, 2020 Given continued uncertainty and challenging market conditions, our primary operating assumption for Q4 is a net sales decline of approximately 15% versus prior year Outlook Summary Outlook Items for Changes to Prior FY2020 YTD F
Slide 27: Our New Logo and Tagline
Our New Logo and Tagline Building Better Together. It’s more than a tagline. It’s how we think, how we conduct business and is a true commitment to our employees, customers, suppliers, shareholders and society that we will build better together. 27
Slide 28: Appendix
A Atkore APPENDIX 28
Slide 29: Segment Adjusted Information
SegmentAdjusted Information Earnings Per Share Reconciliation Three months ended June 26, 2020 June 28, 2019 Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA (in thousands) Net sales EBITDA Margin Net sales EBITDA Margin Electrical Raceway $ 286,046 $ 57,455 20.1 % $ 373,229 $ 76,721 20.6 % Mechani
Slide 30: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation Consolidated Atkore International Group Inc. Three Months Ended Fiscal Year Ended September 30, September 30, (in thousands, except per share data) June 26, 2020 June 28, 2019 2019 2018 Net income $ 24,078 $ 36,550 $ 139,051 $ 136,645 Stock-based compensati
Slide 31: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore International Group Inc. Three Months Ended Fiscal Year Ended June 26, June 28, September September September September September (in thousands) 2020 2019 30, 2019 30, 2018 30, 2017 30, 2016 30, 2015 Net income $ 24,078 $ 36,550 $ 139,
Slide 32: Trailing Twelve Month Adjusted EBITDA
Trailing Twelve Month Adjusted EBITDA Consolidated Atkore International Group Inc. TTM Three months ended June 26, June 26, March 27, December September (in thousands) 2020 2020 2020 27, 2019 30, 2019 Net income $ 144,058 $ 24,078 $ 39,193 $ 34,790 $ 45,997 Interest expense, net 42,801 9,421 10,564
Slide 33: Net Debt and Leverage Ratio Reconciliation
Net DebtAdjusted to Total Earnings Debt Per and Share Leverage Reconciliation Ratio Consolidated Atkore International Group Inc. June 26, March 27, December September June 28, March 29, December ($ in thousands) 2020 2020 27, 2019 28, 2019 2019 2019 28, 2018 Short-term debt and current maturities of
Slide 34: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Consolidated Atkore International Group Inc. Nine months ended (in thousands) June 26, 2020 June 28, 2019 Net cash provided by operating activities $ 156,019 $ 120,179 Capital expenditures $ (25,590) $ (21,611) Free Cash Flow: $ 130,429 $ 98,568 Trailing Twelve Months F
Slide 35: Return on Capital Calculation
Return on Capital Calculation Consolidated Atkore International Group Inc. Trailing Fiscal Year Ended Twelve Months June 26, September 30, September 30, September 30, September 30, September 30, (in thousands) 2020 2019 2018 2017 2016 2015 Income (Loss) Before Taxes $ 189,275 $ 184,669 $ 166,352 $ 1
Slide 36: Thank You!
Thank You! atkore.com 16100 South Lathrop Avenue, Harvey, IL 60426
Atkore International Group — Investor Presentation (September 2020) on 6ix