Mueller Water Products · NYSE:MWA
Mueller Water Products — Investor Presentation (February 2013)
34 slides from Mueller Water Products's investor presentation, Feb 25, 2013
Slide 1: Investor Presentation
e Mueller Water Products) |i Investor Presentation February 25, 2013
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company presents adjusted operating income (loss), adjusted operating margin, adjusted EBITDA, adjusted BITDA margin, adjusted net income (loss), adjusted net income (loss) per diluted share, free cash flow, net debt and net debt leverage as non-GAAP measures. ‘Adjust
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address acti , events or developments that we intend, expect, plan, project, believ
Slide 4: Our Business
eller Water Products Our Business $1.1 billion LTM net sales (as of Dec. 31, 2012)” FY2012 Primary End Markets Net Sales $1B" Portfolio includes: Fire hydrants Valves Metering syst Piping component systems Leak detection Residential Pipe condition assessment Conszetion residential Specified in 100 l
Slide 5: Investment Highlights
Investment Highlights Leading North American provider of water infrastructure and flow control aeaics and services Increasing investment and improved operating efficiencies needed in water infrastructure industry Leading brands in water infrastructure and one of the largest installed bases of valves
Slide 6: Business Performance: Long-Term Targets
eller Water Products Business Performance: Long-Term Targets ‘Mueller Co. base business organic growth of 5% - 10%+ in normalized end market conditions Emerging technology products and services >20% ‘Mueller Co. adjusted EBITDA margins of 20%+ in normalized end market conditions nerging y ices adjus
Slide 7: Broad Product Portfolio
jueller Water Products: Broad Product Portfolio (5 in mittions) Mueller Co. S)ANVIL Est. 1857 Est. 1999 (1850) Pe | sors sea — = os 546 sta suo s0 wa sence > tte QS nee com eae, Butterfly, ‘Systems fangers Busey Sie Mangers ae said Noe: late are Lm ended Ose, 212 Uy stoping inane cn crite 12} Depeci
Slide 8: Water Transmission Solutions
Water Transmission Solutions Mueller Water Products manufactures and markets products and services that are used in the transmission, distribution and measurement of safe, clean drinking water and in water treatment facilities. Inept ana papa (© MuclerCo, © Anilnteratinal
Slide 9: Fire Hydrants, Valves, Butterfly and Brass Water Products
6 6 # FIRE BUTTERFLY & BRASS WATER HYDRANTS | GATE VALVES BALL VALVES PRODUCTS a a a @ ACIPCO a ] A.Y. McDonald ts DeZURIK | Ford Meter Box af McWane a g a
Slide 10: Strategy and Objectives
jueller Water Products: Strategy and Objectives Maintain leadership positions with customers and end users ° brand 0 network + Devetopi products + i i and services + Implemented Lean Six Sigma + Divested U.S. Pipe Continue to enhance operational & organizational excellence * Strengthened balance she
Slide 11: Our End Markets
Mueller Water Products Our End Markets
Slide 12: Historical Housing Starts
Historical Housing Starts toes owing Sate 959-201) ‘Year Over Year hangein Houshold Formation (SAAR) New household formation illion in 2012, above the ton: average of 1.2 mi ing te 50K in 2009-2010 Source: U.S. Census Bureau
Slide 13: Non-Residential Construction
Non-Residential Construction Non-Residential Construction Actual/Forecast AIA Architecture Billings Index (Diffus ion Index, national billings, seasonally adjusted) rage invite Panasonic Consieten x Jan-03 Jan-05 Jan-07 Jan09 Jan-11. Jan-13 PEPETEPEPECERTOTUTERETTE EE se rao on a ar ‘eta of bury 2,
Slide 14: Anvil Highlights
Mueller Water Products Anvil Highlights | fay E ar Pcs “i ior 1 i =
Slide 15: Anvil Key Products
Anvil Key Products Percent of t Segment | Vet satesit) (Market Drivers Key Competitor nical: Grooved, Victaulic, Ward, Erico, lron/Steel Fittings, Staple Wisconsin, Bonney Non-Residential Hangers, Pipe Nipples, Bull Forge, Westbrook Mechanical, Inausc 75% Buildin Plugs & Fire Protecti Construction F
Slide 16: Significant Market Opportunities
e Mueller Water Products) |i Significant Market Opportunities
Slide 17: The Market Opportunity Is Significant And Growing
jueller Water Products: The Market Opportunity Is Significant And Growing Future Drink Repair and Replacement Market Infrastructure E: + Valves and hydrants typically replaced at same time as pipes Water nditure Needs‘) ASCE graded drinking water Storage ‘Treatment infrastructure a D-(?) S008 s7aii8
Slide 18: Funding Water Infrastructure
eller Water Products Funding Water Infrastructure Stronger EPA regulations should lead to increased investment + At least 40 cities under consent decrees — Atlanta — Washington, D.C. — Baltimore City and County — Kansas City = Cincinnati Municipal Bond Market + Jan - Dec 2012 new issuances up 29% ov
Slide 19: Funding Water Infrastructure Repair
eller Water Products Funding Water Infrastructure Repair Operations sit Other Loans/Debe x Grants Other 7% OK 90% funded at local level’) + From 2008 - 2010, average annul residential water rates increased about + 63% of American voters willing to pay more to upgrade water systems'®)
Slide 20: Significant Growth Opportunities
Significant Growth Opportunities Investing in Smart Metering and Leak Detection/Condition Assessment Technology Expect demand for Advanced Metering Infrastructure (AMI) to grow 20%/year through 2015 in water market* Leak detection and pipe condition assessment technology will help water utilities pr
Slide 21: Opportunities: AMI/Smart Metering
eller Water Products Opportunities: AMI/Smart Metering OPPORTUNITY | SOLUTION IMERS. COMPETITORS Smart Meterin (Mueller sysreNs) ; = ig Mueller systems) ‘American Water sensus + Advanced Meterin + Two-way mesh Bentonville, AR pilicsidaaieks 20% of network NEPTUNE out $200 Charlotte County, FL puetus
Slide 22: Opportunities: Pipe Condition Assessment and Leak Detection
eller Water Products Opportunities: Pipe Condition Assessment and Leak Detection OPPORTUNITY SOLUTION END USERS COMPETITORS Pipe Condition Assessment and Leak echolo ICS Las Vegas, NV D i seca) New Orleans, LA + Constrained + Pioneered acoustic, . municipal budgets non-invasive leak Port Authority o
Slide 23: Actions & Business Results
SG VA Actions & Business Results
Slide 24: Management Actions / Initiatives
Management Actions / Initiatives pests six plants since FY2006 sted two non-core assets of Anvil in FY2010 Drei aus: Pips pe in FY2012 Reduce costs and improve operating leverage Lowered lat implemented ean i Sipe and other manufacturing improvements {continuous impro + Gonslidated dlstrbution cente
Slide 25: History of Strong Financial Performance
eller Water Products History of Strong Financial Performance see appendices for GAAP reconciliation) @ (Sin mittions) NET SALES ADJUSTED EBITDA & ‘ADJ. EBITDA tam 255) 294 306 ord 122% sou! Syg S81 320 ox 10% sez 361 Ho sao 05 $47 ae 5455s BESEERER ERR
Slide 26: Consolidated Non-GAAP Results
jueller Water Products: Consolidated Non-GAAP Results First Quarter Fiscal $ in millions (except per share amounts) Net sales $245.1 $215.4 Adj. operating income $7.6 $6.3 Adj. operating margin 3.1% 2.9% Adj. net loss per diluted share ($0.02) ($0.04) Adj. EBITDA $22.4 $21.3 Adj. EBITDA margin 9.1%
Slide 27: Debt Structure
eller Water Products Debt Structure Net debt leverage of 4.3x as of December 31, 2012 Debt maturities with no paniticant required principal payments before 2017 No financial maintenance covenants with bee availability at the oo a $22.5 million or 10.0% of facility ° Se 1 million of excess ee (as mea
Slide 28: Why Invest in MWA?
Why Invest in MWA? Water industry has fundamentally strong long-term dyna + Driven for new and upgraded infrastructure > Knee suppliers to end markets Strong competitive position + Leading brand position with large installed base + Leading municipal specification positions : ive distributi ind stron
Slide 29: Appendix
La;
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP
Mueller Water Products Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 31: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 32: Segment Results and Reconciliation of Non-GAAP to GAAP
Mueller Water Products Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts)
Slide 33: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (Sinton. except per share amounts) Cong opener 5 em Name PaCS Copetogentoes sous ss soe so “itd pragma TD ‘Sra tne to), soe ome
Slide 34: Questions
SSN —, 2 / Lia asks ete ants Vy JE 4 SS VA Ge. Questions
Mueller Water Products — Investor Presentation (February 2013) on 6ix