Mueller Water Products · NYSE:MWA
Mueller Water Products — Investor Presentation (February 2020)
30 slides from Mueller Water Products's investor presentation, Feb 25, 2020
Slide 1: Investor Presentation February & March 2020
Where Intelligence Meets Infrastructure® Investor Presentation February & March 2020
Slide 2: Non-GAAP Financial Measures
NON-GAAP Financial Measures In an effort to provide investors with additional information regarding the Company’s results as determined under GAAP, the Company also provides non-GAAP information that management believes is useful to investors. These non-GAAP measures have limitations as analytical t
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 activities, events or developments that the Company intends, expects, plans
Slide 4: Mueller Water Products at a Glance
Mueller Water Products at a Glance HISTORY LTM FINANCIALS END MARKETS* FISCAL YEAR 2019 • Founded 160 years ago as of December 31, 2019 <10% Natural gas utilities % of • Spun off from Walter $ in millions Total Industries in 2006 Net sales $987.9 60-65% • Listed on NYSE (MWA) Repair and replacement
Slide 5: Investment Highlights
Investment Highlights • Leading brand and municipal market specification positions • Large installed base of iron gate valves and fire hydrants STRONG COMPETITIVE POSITION • Comprehensive distribution network and strong end-user relationships • Low-cost manufacturing operations using lost foam proce
Slide 6: Focused Strategy and Execution Driving Results
Focused Strategy and Execution Driving Results 6
Slide 7: Products and Markets
Products and Markets (MUELLER) ©"
Slide 8: Our Leading Product Positions
Our Leading Product Positions FIRE IRON GATE BUTTERFLY BRASS HYDRANTS VALVES VALVES PRODUCTS PRODUCT PRODUCT PRODUCT PRODUCT #1 POSITION #1 POSITION #1 POSITION #2 POSITION A.Y. McDonald ACIPCO DeZURIK Ford Meter Box McWane Company estimates based on internal analysis and information from trade asso
Slide 9: Mueller is Uniquely Positioned to Address Opportunities with Utilities
Mueller is Uniquely Positioned to Address Opportunities with Utilities with its Leading Infrastructure Products and Installed Base 9
Slide 10: U.S. Water Infrastructure Requires Substantial Long-Term Investment
U.S. Water Infrastructure Requires Substantial Long-Term Investment FUTURE DRINKING WATER INFRASTRUCTURE REPAIR & REPLACEMENT MARKET EXPENDITURE NEEDS(4) • Restoring existing water systems and expanding them to serve a growing TREATMENT population through 2050 will require a $1.7 trillion investment
Slide 11: Funding Water Infrastructure Repair
Funding Water Infrastructure Repair Water Utilities in North America Sources of Funding for U.S. Utilities • >50,000 water utilities and >14,000 wastewater utilities in U.S. • For U.S. utilities, 96% funded at state and local government level(2) (1) and Canada • Majority of utilities have service co
Slide 12: Strong Need for Digital Water Solutions
Strong Need for Digital Water Solutions Black & Veatch 2018 Strategic Directions in the U.S. Water Industry “The true value of digital water emerges when we move from data harvesting to data science. Collecting information is good. Using data to make better decisions and plan for a safe and abundant
Slide 13: Broad-line of Technology-enabled Products
Broad-line of Technology-enabled Products • Currently have a number of products addressing these segments, including Echologics' pipe condition assessment services and fixed leak detection solutions, advanced meters and communication equipment, smart hydrants, pressure and water quality monitors, an
Slide 14: Modernizing Manufacturing Facilities
Modernizing Manufacturing Facilities • Major projects driving capital spending above historical levels to deliver above-market sales growth by broadening our product capabilities and expand gross margins as we modernize facilities, equipment and processes • In addition to operational efficiencies, m
Slide 15: Chattanooga Large Casting Foundry (LCF)
Chattanooga Large Casting Foundry (LCF) • Large casting foundry expansion adjacent to Chattanooga foundry is first of three major capital projects to be completed • Anticipate LCF will begin producing product with our own castings by the end of the second quarter of this year • Benefits from expansi
Slide 16: Large Valve Opportunity
Large Valve Opportunity • Historically, Mueller’s focus has been on small valves, which are less than 12 inches, as they are used much more frequently for water distribution • Increased population density and urbanization are driving a greater need for large valve sizes • Although today the market f
Slide 17: Financial Performance
Financial Performance (MUELLER) ©"
Slide 18: History of Strong Financial Performance
History of Strong Financial Performance • Over last three years (FY16 to FY19), delivered 6.5% net sales CAGR with 8.3% adjusted EBITDA CAGR • FY20 annual guidance for consolidated net sales and adjusted EBITDA growth expected to be at the high end of the ranges provided with Q1FY20 earnings • Adjus
Slide 19: Strong Balance Sheet with Significant Flexibility
Strong Balance Sheet with Significant Flexibility • Reduced debt by $1.1 billion since March 31, 2006 and $650 million since September 30, 2008 • Capital structure and net leverage position provide flexibility to support acquisitions and shareholders • Total debt of $446.4 million and cash and cash
Slide 20: Balanced and Disciplined Capital Allocation
Balanced and Disciplined Capital Allocation • Strategic investments largest use of cash including Cash Allocation since December 31, 2016 capital investments to modernize our manufacturing END MARKETS* operations and enhance the technological fundamentals in our business, and acquisitions to $185M t
Slide 21: Investment Highlights
Investment Highlights • Leading brand and municipal market specification positions • Large installed base of iron gate valves and fire hydrants STRONG COMPETITIVE POSITION • Comprehensive distribution network and strong end-user relationships • Low-cost manufacturing operations using lost foam proce
Slide 22: Questions
Questions (MUELLER) ©"
Slide 23: Supplemental Data
Supplemental Data (MUELLER) ©"
Slide 24: Q1 2020 Consolidated Financial Highlights
Q1 2020 Consolidated Financial Highlights • Net sales increased 10.3% to $212.6 million driven by the First Quarter 2020 2019 acquisition of Krausz, as well as higher pricing and increased shipment volumes at Infrastructure Net sales $ 212.6 $ 192.8 • Gross profit increased 20.8% to $72.6 million, w
Slide 25: Full-Year 2020 Outlook
Full-Year 2020 Outlook* Expectations for full-year 2020, which reflect the current business environment and outlook, are as follows: • Municipal spending growing in the low-single digit range, residential construction growing in the low-single digit range and natural gas distribution growing in the
Slide 26: Segment Results and Reconciliation of Non-GAAP to GAAP Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Quarter ended December 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 192.8 $ 19.8 $ — $ 212.6 Gross profit $ 68.2 $ 4.4 $ — $ 72.6 Selling
Slide 27: Segment Results and Reconciliation of Non-GAAP to GAAP Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Quarter ended December 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.3 Income tax expense (1) 3.1 Interest expense, net (1) 7.4 Walter
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Quarter ended December 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 172.0 $ 20.8 $ — $ 192.8 Gross profit $ 56.8 $ 3.3 $ — $ 60.1 Selling
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Quarter ended December 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net loss $ (21.0) Income tax expense (1) (5.9) Interest expense, net (1) 5.5 Walt
Slide 30: Where Intelligence Meets Infrastructure®
Where Intelligence Meets Infrastructure®
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