Advanced Drainage Systems, Inc. · NYSE:WMS
Advanced Drainage Systems — Morgan Stanley 6th Annual Sustainable Futures Conference 2021
32 slides from Advanced Drainage Systems's conference presentation, Jun 9, 2021
Slide 1: Advanced Drainage Systems Investor Presentation
Advanced Drainage Systems Investor Presentation Morgan Stanley 6th Annual Sustainable Futures Conference June 2021
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation may be deemed to be forward-looking statements. These statements are not historical facts but rather are based on the Company’s current expectations, estimates and projections regarding the Company’s business, operations and other fa
Slide 3: Put Simply: Our Promise
PUT SIMPLY /// OUR PROMISE To protect and manage water, the world’s most precious resource, safeguarding our environment and communities.
Slide 4: Innovative Water Management Solutions
Capture Conveyance Storage Treatment Innovative Water Management Solutions Advancing quality of life through sustainable solutions to water management challenges. Precipitation River
Slide 5: FY21 Sustainability Highlights
Environmental 2nd largest plastic recycler in North America 510M+ pounds of plastic diverted from landfills every year 670M pounds of Greenhouse Gas avoided annually, which amounts to taking 64,000 cars off the road Operational Focus on safety: Reduce our TRIR to 2.5 by FY 2025 Driving continuous im
Slide 6: FY21 Sustainability Highlights
FY21 Sustainability Highlights Environmental Operational Social & Governance
Slide 7: Differentiated Recycling Capabilities
Differentiated Recycling Capabilities Virgin HDPE Recycled HDPE Virgin PP Recycled PP Other Vertically integrated recycling operations that process over 510 million pounds of plastic annually, making ADS the 2nd largest plastic recycler in North America Track record of refining raw material processi
Slide 8: Distinct Market Leader
Distinct Market Leader Leading player in the stormwater and onsite-septic wastewater management industry with a track record of gaining market share. Consistent above-market growth driven by material conversion strategy and complete solutions package. Best-in-class sales force, technical expertise a
Slide 9: Key Themes
Key Themes ADS is an industrial growth story with a large market opportunity and long runway for growth Sales Growth Margin Expansion ADS has significant margin upside potential and action plans in place to achieve superior results Cash Flow Generation Successful execution will result in significant
Slide 10: Advanced Drainage Systems at a Glance
Advanced Drainage Systems at a Glance Provide clean water management solutions to communities and deliver unparalleled service to our customers. Driving market share gains through material conversion strategy by displacing traditional materials to ADS’ cost effective, lighter and recycled products P
Slide 11: Well positioned for favorable dynamics in residential end market
ADS is well positioned to capitalize on favorable dynamics in the residential end market Domestic End Market Exposure Non-Residential 45% Residential 39% Agriculture 9% Infrastructure 7% FY21 Sales Retail 22% Single & Multi-family Housing 32% Onsite-Septic 46% Favorable dynamics in new construction,
Slide 12: Well positioned to capitalize on horizontal construction growth
ADS is well positioned to capitalize on horizontal construction growth ADS is benefitting from growth in horizontal construction, ex. warehouses, distribution centers, data centers, and developments that follow the residential buildout Market indicators point to a recovery from COVID-19 lows ~70% of
Slide 13: Material Conversion Accelerating Growth
Material Conversion Accelerating Growth HDPE & PP Other Materials Share of Storm Sewer Market Footnotes: Market share data based on management estimates. ADS Products Outperform Traditional Materials Reduced labor and equipment due to lighter weight and longer length Installs 3x Faster Fewer deliver
Slide 14: Market Share Model Accelerates Conversion
Market Share Model Accelerates Conversion Proven market share model leverages best-in-class sales force, technical expertise, and distribution & logistics network to deliver above-market growth and position ADS as the supplier of choice Win Rate Coverage Acceptance Approvals Works closely with local
Slide 15: On-site Septic Wastewater Solutions Overview
On-site Septic Wastewater Solutions Overview On-site septic wastewater industry is an estimated $1.2 billion ~30% of new North American single-family homes utilize on-site septic systems Replacement systems make up ~1/3 of overall demand Plastic leachfield and septic tanks driving conversion from tr
Slide 16: Services, Products and Customer Support
Services More than a product company – we are a solutions provider. We bring our products right to the jobsite and in fewer truckloads. Products From water capture to conveyance, storage and treatment our comprehensive suite of products are designed to meet customer needs for the entire lifecycle of
Slide 17: Comprehensive Portfolio of Products Driving Solutions
Capture Conveyance Storage Treatment Comprehensive Portfolio of Products Driving Solutions Our leading product position in the storm water and on-site septic wastewater management industries allow us to sell the whole package Nyloplast Duraslot Single Wall Triple Wall PolyFlex AdvanEDGE InsertaTee F
Slide 18: Sales, Distribution and Logistics Capabilities
Sales, Distribution and Logistics Capabilities Our vast sales and engineering force and distribution footprint coupled with our company owned fleet ensures we have the right products at the right site at the right time to meet customer needs Our vast capabilities allow us to serve the customer ADS a
Slide 19: Why Solutions Are Important
Why Solutions Are Important Providing solutions increases our share of wallet with our customers Pipe Manufacturer Solutions Provider ADSTM Barracuda® Stormwater Separator Opportunity amounts above are for illustrative purposes only and may not be indicative of actual project value.
Slide 20: Supply Chain Overview
Supply Chain Overview MDDS
Slide 21: ADS Business Model
/IADS Raw Material ADS Business Model Conversion Distribution & Logistics Trade Delivery Sales
Slide 22: Driving Continuous Improvement Initiatives
Driving Continuous Improvement Initiatives Focused on driving continuous improvement initiatives throughout footprint Reducing scrap, downtime and change-overs to increase production rate Increase production pounds per head Centralized planning processes and scheduling techniques to increase product
Slide 23: Capacity Expansion Initiatives
Capacity Expansion Initiatives Invested in new large diameter pipe production line (30” to 60”) to alleviate capacity constraints in South and Midwest Full production capability in 2021 Increases regional production capacity for large diameter pipe Startup with a focus on safety, quality and efficie
Slide 24: Southeast Capacity Expansion Initiatives
Southeast Capacity Expansion Initiatives New production lines, tooling sets and improved raw material system Investments increase capacity as well as drive labor and productivity efficiencies Full production capability in 2022 Increases regional production capacity in a strong, growing market, with
Slide 25: Fiscal 2021 Financial Results
Fiscal 2021 Financial Results 25
Slide 26: Q4 Fiscal 2021 Financial Performance
Q4 Fiscal 2021 Financial Performance 26 +190 bps (USD, in millions) +19.7% $72.1 $15.4 $3.1 ($2.0) $9.2 $94.5 Revenue Adj. EBITDA ($3.8) $371 $444 19.4% 21.3% ADS Legacy +$12.7M $0.5
Slide 27: Fiscal 2021 Financial Performance
Fiscal 2021 Financial Performance 27 +700 bps (USD, in millions) +18.5% $361.9 $58.1 $59.4 ($5.5) $87.6 $567.0 Revenue Adj. EBITDA $3.7 $1,674 $1,983 21.6% 28.6% ADS Legacy +$115.7M $1.8
Slide 28: Free Cash Flow and Capital Structure
Free Cash Flow and Capital Structure 28 Free Cash Flow (¹) Note: all figures in USD, $mm. Figures may not add due to rounding. Operating Cash Flow less capital expenditures. Inventory, Trade Receivables, Accounts Payable Advisory, legal, and consulting fees related to acquisition of Infiltrator Wate
Slide 29: Fiscal Year 2022 Guidance
Fiscal Year 2022 Guidance 29 Fiscal 2022 Expectations
Slide 30: Reconciliations
/IADS Reconciliations ‘Three Months Ended March 31,2027 Warch 30,2020 Tntersegment Net Nat Sales Font Tnersegmeat Net—_‘Nat Sales Font et Sues Sales Exental Customers ot Sales Sales Bernal v Ban cays Br OW 23S Ty 8 ET ie aur TSH 40 as919 Sst 25197 mam = 9157 = 9437 = 3B oa SLL 08 unos = onors xm ers
Slide 31: Reconciliations
Reconciliations 31 Includes expenses directly related to our response to the COVID-19 pandemic, including adjustments to our pandemic pay program and expenses associated with our 3rd party crisis management vendor. Includes derivative fair value adjustments, foreign currency transaction (gains) loss
Slide 32: Reconciliations
Reconciliations ‘Three Months Ended Fiscal Year Bade (downs n honcand) Tor s ted Gross Prost 5 5300 § ESOP and stoc-based compensation expense [SOP spacial dnd compensation : 19 reated expenses , : COV -19 rete Inventory stp uprated to Instr Water Technologie acgustion : " ‘Total Gross Profit Tar So
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