Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (March 2020)
33 slides from Arcosa's investor presentation, Mar 10, 2020
Slide 1: Investor Presentation March 2020
Exhibit 99.1 Investor Presentation March 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some statements in this presentation, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa’s estimates, expectations, beliefs, intenti
Slide 3: How to Find Us
How to Find Us OUR WEBSITE NYSE TICKER www.arcosa.com ACA HEADQUARTERS INVESTOR CONTACT Arcosa, Inc. InvestorResources@arcosa.com 500 North Akard Street, Suite 400 Dallas, Tx 75201 3 / Moving Infrastructure Forward — Investor Presentation, March 2020
Slide 4: Agenda
Agenda Company overview Financial highlights Long-term vision and capital allocation ESG update 4 / Moving Infrastructure Forward — Investor Presentation, March 2020
Slide 5: Arcosa at a Glance
Arcosa at a Glance A new public company with an established operating history and financial strength $1.74B $241M $113M Revenues Adjusted EBITDA Net Income ~6,300 85+ 3 Infrastructure-related Employees Years of Operating History Segments Arcosa separated from its former parent company and became an
Slide 6: Arcosa Overview
Arcosa Overview Provider of infrastructure-related products and solutions positioned for growth Markets CONSTRUCTION ENERGY TRANSPORTATION Revenues $440M $837M $466M Adj.Segment 21% 15% EBITDA 14% Margin AGGREGATES WIND TOWERS BARGES S P E C I A LT Y U T I L I T Y COMPONENTS MATERIALS STRUCTURES CON
Slide 7: Construction Products Segment Overview
Construction Products Segment Overview PRODUCTS KEY FIGURES REVENUE (LTM 12/31/2019) by product type ($M) Construction $440M site support SPECIALTY CONSTRUCTION Revenue AGGREGATES MATERIALS SITE SUPPORT 75 (17%) 74 Natural sand, gravel Lightweight Steel & aluminum 21% trench shoring and limestone ba
Slide 8: Energy Equipment Segment Overview
Energy Equipment Segment Overview PRODUCTS KEY FIGURES REVENUE by product type ($M) (LTM 12/31/2019) Storage tanks $837M and other WIND TOWERS UTILITY STRUCTURES Revenue 211 (25%) Storage 15% 626 Adjusted Segment EBITDA (75%) Margin RESIDENTIAL/COMMERCIAL/ INDUSTRIAL SCALE & FIELD AGRICULTURAL ERECT
Slide 9: Transportation Products Segment Overview
Transportation Products Segment Overview PRODUCTS KEY FIGURES REVENUE by product type ($M) (LTM 12/31/2019) $466M Barges FIBERGLASS TANK BARGES HOPPER BARGES Revenue COVERS 172 (37%) 14% Adjusted Segment EBITDA RAILCAR INDUSTRIAL & 294 Margin (63%) RAILCAR AXLES COUPLING MINING DEVICES COMPONENTS $5
Slide 10: First Year Progress
First Year Progress In 2019, we completed our first full year as a public company and remain encouraged by our progress and focused on the future Building our new Arcosa culture Executing well on Stage 1 Priorities introduced at spin-off Grow ✓ Completed two large-sized acquisitions, ACG Constructio
Slide 11: Agenda
Agenda Company overview Financial highlights Long-term vision and capital allocation ESG update 11 / Moving Infrastructure Forward — Investor Presentation, March 2020
Slide 12: 2019 Financial Results
2019 Financial Results Full Year Adjusted EBITDA increased 29%, driven by organic growth, acquisitions, and operating improvements Revenues ($M’s) Adjusted EBITDA ($M’s) +19% +29% 267 1,704 1,737 241 1,462 1,460 197 187 2016 2017 2018 2019 2016 2017 2018 2019 Adjusted Net Income ($M’s) Adjusted EBIT
Slide 13: Free Cash Flow Generation
Free Cash Flow Generation $273 Million of Free Cash Flow in 2019, as our ‘cash culture’ begins to show progress …leaving us with ~0.5x Net Debt / Adjusted EBITDA after the We generated $273M of Free Cash Flow in 2019... Cherry acquisition Free Cash Flow Net Debt / Adjusted EBITDA Operating Cash Flow
Slide 14: $298M Cherry Acquisition
$298M Cherry Acquisition Acquisition closed in January and integration is underway; Cherry will be a platform for additional value creation in Construction Products Expands aggregates business into Offers compelling competitive Provides levers for additional attractive Houston market, a key advantag
Slide 15: Barge Recovery Continues
Barge Recovery Continues Successfully ramped up barge business to meet the ongoing market recovery, growing revenues ~75% in 2019 Inland Barge business Backlog Value Trend ($millions) ▪ Backlog up 50% in 2019 and scheduled to deliver in 2020, 565 providing strong production visibility 454 ▪ Full yea
Slide 16: 2020 Outlook
2020 Outlook We are expecting another year of revenue and EBITDA growth, with solid fundamentals across most of our markets and backlogs providing good production visibility Positives moving into 2020 Challenges moving into 2020 ▪ Continued strength in Construction Products, led by healthy infrastru
Slide 17: Additional 2020 financial information
Additional 2020 financial information FY 2020 Guidance ▪ $95-$105M, higher than 2019’s $85M due to Cherry acquisition and organic growth Capital Expenditures projects to expand product lines and capacity ▪ We expect working capital to be roughly flat for the year, excluding any impact from Working a
Slide 18: Agenda
Agenda Company overview Financial highlights Long-term vision and capital allocation ESG update 18 / Moving Infrastructure Forward — Investor Presentation, March 2020
Slide 19: Long-Term Vision for Arcosa
Long-Term Vision for Arcosa Integrate Environmental, Social, Improve and Governance Reduce long-term returns initiatives (ESG) into our the complexity and on invested capital long-term strategy Grow cyclicality of the overall in attractive markets business where we can achieve sustainable competitiv
Slide 20: Capital Allocation Since Spin-Off
Capital Allocation Since Spin-Off Disciplined capital allocation is a key component of advancing our long-term vision Organic Strategic Growth through Return of capital investments Acquisitions to shareholders ▪ $85M of Capital ▪ $640M of acquisitions since spin ▪ $25M returned to Expenditures in sh
Slide 21: Strategic Growth through Acquisitions
Strategic Growth through Acquisitions We have deployed more than $600M on Construction Products acquisitions since the time of the spin, due to favorable long-term fundamentals and acquisition opportunities Attractive fundamentals of Aggregates Growth of Construction Products segment and Specialty M
Slide 22: Organic investments
Organic investments We are allocating capex to grow in attractive markets where we can build sustainable competitive advantages Aggregates and Specialty Materials investments Utility Structures organic investments Reserve acquisitions to expand in current geographies Adjacent product lines Greenfiel
Slide 23: Agenda
Agenda Company overview Financial highlights Long-term vision and capital allocation ESG update 23 / Moving Infrastructure Forward — Investor Presentation, March 2020
Slide 24: ESG Update
ESG Update Our Materiality Assessment identified 11 significant topics across our businesses; we plan to publish our initial Sustainability Report for full year 2020 Our Our People & Our Environment Products Communities Employee Health and Safety Energy Management Product Use and Quality Diversity A
Slide 25: Incentive Compensation Plans
Incentive Compensation Plans Arcosa’s incentive plans align compensation to long-term shareholder value creation while driving accountability to the business level Award Type Focus Performance Objectives Target CEO Pay: 83% at Risk(1) Adjusted EBITDA Short Term 1 year operational and Incentive Cash
Slide 26: Additional ESG Information
Additional ESG Information We have a number of initiatives already underway to integrate ESG into our long term strategy Our Our People & Our Environment Products Communities ▪ Safety Excellence program rolled out to ▪ Instituting sustainability program to track ▪ Leading producer of wind towers for
Slide 27: Our Products
Our Products Arcosa’s products are used in important environmentally friendly industries Barge transportation is a clean, efficient mode of freight Wind Energy reduces carbon dioxide emissions transportation Tons of CO2 per Million Ton Miles CO2 Emissions Avoided through Wind Energy Million Metric T
Slide 28: Appendix
Appendix
Slide 29: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Consolidated and Combined Adjusted EBITDA and Adjusted Net Income ($’s in millions) Year Ended Full Year 2020 (unaudited) December 31, Guidance(1) 2016 2017 2018 2019 Low High GAAP does not define “Earnings Before Interest, Taxes, Depreciation, Revenues $1,704.0 $1,462.4 $1,460.4 $
Slide 30: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) Three Months Ended Year Ended (unaudited) December 31, December 31, 2019 2018 2019 2018 Construction Products “Segment EBITDA” is defined as segment operating profit plus Revenues $ 102.2 $ 65.6 $ 439.7 $ 292.3 depreciation, depletion, and
Slide 31: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow (unaudited) GAAP does not define “Free Cash Flow” and it should not be considered as an alternative to cash flow measures defined by GAAP, including cash flow from operating activities. We use this metric to assess the liquidity of our consolidated business. We prese
Slide 32: Reconciliation of Net Debt to Adjusted EBITDA
Reconciliation of Net Debt to Adjusted EBITDA (unaudited) The Company uses the term “Net Debt” to determine the extent to which the Company’s outstanding debt obligations would be satisfied by its cash and cash equivalents on hand. Management believes this metric is useful to investors in determinin
Slide 33: Cherry EBITDA Reconciliation
Cherry EBITDA Reconciliation ($’s in millions) (unaudited) “EBITDA” is defined as Cherry’s net income plus interest expense, income taxes, depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles. The amounts included in the EBITDA calculation, how