Alamo Group, Inc. · NYSE:ALG
Alamo — Investor Presentation (August 2012)
27 slides from Alamo's investor presentation, August 2012
Slide 1: Investor Presentation August 2012
Investor Presentation August 2012
Slide 2: Safe Harbor
Safe Harbor This presentation contains statements that may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts and represent only the Company’s beliefs and expectations. Forwa
Slide 3: Corporate Profile
Corporate Profile • Alamo Group is a global leader in the design and manufacture of high quality agricultural equipment for farms and ranches and infrastructure maintenance equipment for governmental and industrial markets. • Our products include tractor mounted mowing and other vegetation maintenan
Slide 4: About Alamo Group
About Alamo Group • Founded in 1969 • Three Operating Divisions • North American Industrial • North American Agricultural • Europe • Corporate Headquarters – Seguin, Texas • 18 manufacturing locations in the U.S., Canada, England, France and Australia • Approximately 2,500 employees as of June 30, 2
Slide 5: Corporate Governance
Corporate Governance Alamo Group is dedicated to enhancing shareholder value over the long term in a manner that is consistent with high ethical standards and good corporate governance. We have implemented policies and procedures that are designed to support this commitment which apply to all of our
Slide 6: Sales & Earnings History
Sales & Earnings History Net Sales (U.S. $ millions) Net Earnings 700 35 600 30 500 25 400 20 300 15 200 10 100 5 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sales 246 259 279 342 368 456 504 557 455 539 604 Net Earnings 10.8 6.4 8.0 13.4 11.3 11.5 12.4 11.0 18.6 21.1 32.1 6
Slide 7: Sales by Division
Sales by Division (U.S. $ Millions) $604 700 $539 600 $455 North American Industrial $230 500 $197 400 $178 North American Agricultural 300 $181 $204 $95 200 Europe $182 $161 $170 100 0 2009 2010 2011 7
Slide 8: North American Industrial Division
North American Industrial Division • Tractor mounted mowers, street sweeping equipment, excavators, vacuum trucks, snow removal equipment and replacement parts • Equipment for maintenance on and around highways, airports, military installations, recreational areas, commercial landscape and other spe
Slide 9: Industrial Products
Industrial Products Wheeled Excavator Boom Mounted Mower Twin Side and Rear Mounted Mowers Catch Basin Cleaner Regenerative Air Street Sweeper Snowplow 9
Slide 10: North American Agricultural Division
North American Agricultural Division • Tractor powered mowers, tillage implements, post hole diggers, scraper blades, rock pickers, front- end loaders and backhoes, snow blowers, zero turn radius mowers, hayrakes and tedders, other ag implements, related replacement parts and other agricultural afte
Slide 11: Agricultural Products
Agricultural Products Flex Wing Rotary Cutter Zero Turn Radius (ZTR) Mower Tillage Implement 42 foot Rotary Cutter Swift Rake Front-End Loader 11
Slide 12: European Division
European Division • Hedge and grass cutters, front-end loaders and backhoes, mowers, cultivators, and other ag implements, vacuum trucks, jetting systems, trenchers and related replacement parts • Sold direct and through approximately 2,000 dealers and distributors • End-Users ∙ Agricultural markets
Slide 13: European Products
European Products Embankment Mower Tri-wing Rotary Cutter Hedge Mower Flail Mower Vacuum Truck Trencher 13
Slide 14: Strategic Objectives
Strategic Objectives Continuous Operational Improvement Organic Strategic Growth Acquisitions 14
Slide 15: Organic Growth
Organic Growth • Objective is to grow organically at rates in excess of core market growth rates • Organic Growth is driven by: • Product development • Geographical expansion • Cross selling opportunities • Strength of multiple distribution networks • Pricing leadership 15
Slide 16: Continuous Operational Improvement
Continuous Operational Improvement Objective is to continuously improve our operating efficiencies by: • Manufacturing consolidation • Fewer bigger plants • Capital investment focused on cost reduction • More automated processes • Global group purchasing initiatives • Take advantage of our total gro
Slide 17: Continuous Operational Improvement: Leverage Ratio
Continuous Operational Improvement Raises Profit Margins Increases Free Cash Flow 7% $50 US$ Millions 6% $40 5% $30 $20 4% $10 3% 2007 2008 2009 2010 2011 $0 2007 2008 2009 2010 2011 Operating Income as a % of Sales (1) Free Cash Flow (2) Enhances Return on Net Creates Debt Capacity for Operating As
Slide 18: Strategic Acquisitions
Strategic Acquisitions Alamo Group looks to acquire businesses or products that command or have potential to be major players in their niche markets and are complimentary to Alamo’s existing range. We target three specific types of acquisitions. • Consolidation of similar products in current markets
Slide 19: Alamo Acquisitions
Alamo Acquisitions Type of Acquisition Acquisition Target Schulte, Twose, Valu-Bilt, Market Share Consolidation Rousseau, Spearhead, Tenco, Nite-Hawk, Bush Hog Complementary Products for Schwarze, Twose, Schulte, Existing Channels Gradall, Vacall, Henke, Tenco Expanding Market Coverage & Schulte, Fa
Slide 20: Why Alamo, Why Now?
Why Alamo, Why Now? • An integrated strategy for long-term revenue and earnings growth • Leadership position in niche markets • A growing demand for agricultural attachments • Stability in government spending on infrastructure maintenance • Financial strength to support strategic objectives 20
Slide 21: A Recipe for Growth…
A Recipe for Growth… Continuous Continuous Operational Improvement Continuous Operational Improvement leads to greater efficiency and drives Operational provides financial strength to fund performance to benefit Organic Growth Improvement Strategic Acquisitions Organic Growth sustains margins, Strat
Slide 22: In North America…
In North America… $9 $300 $8 $250 US$ Millions $7 US$ Billions $6 $200 Relatively stable government $5 $150 spending on infrastructure $4 $3 $100 maintenance… $2 $1 $50 $0 $0 2007 2008 2009 2010 2011 Sources: US Census Bureau and usgovernmentspending.com. Non-Construction Capital Outlays - Regular H
Slide 23: While in Europe…
While in Europe… A Stronger Agricultural Market and Steady Government Spending Help Stabilize Demand for Alamo Group Products... €500 €140 €450 €120 Euros Millions €400 €100 Euros Billions €350 €80 €300 €60 €250 €40 €200 €20 €150 €0 2007 2008 2009 2010 2011 EU 27 Agricultural Goods Output (Euros Bil
Slide 24: Income Statement
Income Statement Six Months Ending Fiscal Year Ending 6/30/12 6/30/11 12/31/11 12/31/10 12/31/09 (in U.S. $ thousands) Revenue $ 322,920 $ 301,539 $ 603,593 $ 538,548 $ 454,825 Gross Margin $ 74,399 $ 69,292 $ 135,085 $ 116,914 $ 94,561 % of Revenue 23.0% 23.0% 22.4% 21.7% 20.8% Operating Expenses $
Slide 25: Balance Sheet
Balance Sheet Six Months Ending Fiscal Year Ending 6/30/12 6/30/11 12/31/11 12/31/10 12/31/09 (in U.S. $ thousands) Current Assets $ 334,823 $ 327,011 $ 276,123 $ 265,060 $ 263,727 Total Assets $ 436,614 $ 434,527 $ 380,935 $ 370,983 $ 379,957 Current Liabilities $ 83,435 $ 88,694 $ 75,693 $ 79,189
Slide 26: Contact Information
Contact Information Corporate Office 1627 E Walnut St., Seguin, Texas 78155 Ron Robinson, President & CEO Phone: 830-372-9615 Email: rrobinson@alamo-group.com Dan Malone, Executive Vice President & CFO Phone: 830-372-9581 Email: dmalone@alamo-group.com Bob George, Vice President, Secretary & Treasur
Slide 27: We clear the way...
A ALAMO GROUP We clear the way...