Mueller Water Products · NYSE:MWA
Mueller Water Products — Q2 2023 Earnings Presentation
26 slides from Mueller Water Products's earnings presentation, May 9, 2023
Slide 1: Where Intelligence Meets Infrastructure - Earnings Conference Call
Where Intelligence Meets Infrastructure® Earnings Conference Call 2023 Second Quarter Ended March 31, 2023 May 9, 2023 These slides are not intended to be a stand-alone presentation, but are for use in conjunction with the earnings call
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 by accounting principles generally accepted in the United States (“GAAP”), the Company also provides non-GAAP information that management believes is useful to inve
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 federal securities laws. All statements that address activities, events or developments that the Company intends, expects, plans, projects, believes or a
Slide 4: Second Quarter Highlights
Second Quarter Highlights • Increased consolidated net sales by 7.2% compared with the prior year − Strong performance at Water Management Solutions and higher pricing across most product lines more than offset lower volumes at Water Flow Solutions compared with the prior year − Continue to benefit
Slide 5: ESG Is Core to What We Do
ESG Is Core to What We Do Released this week, our 2022 ESG Report demonstrates progress against our key targets and shows our continued commitment to report transparently and in line with leading frameworks. Environment Social Products Governance • Disclosed index in line with • Fostered an inclusiv
Slide 6: Consolidated GAAP Results
Consolidated GAAP Results Gross Profit ($M) SG&A ($M) Operating Income ($M) Net Sales ($M) % of Net Sales % of Net Sales % of Net Sales +5.4% y/y +10.7 y/y -3.8% y/y +7.2% y/y -50 bps. -60 bps. -110 bps. $332.9 $64.2 $310.5 $34.2 $97.8 $58.0 $32.9 $92.8 19.3% 29.4% 18.7% 11.0% 9.9% 29.9% Q2 FY2022 Q
Slide 7: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results (1) Adj. Operating Income ($M) Adj. EBITDA ($M) Adj. Net Income per Diluted Share % of Net Sales % of Net Sales -3.4% y/y -4.9% y/y -6.7% y/y -110 bps. -190 bps. $0.15 $34.8 $33.6 $50.6 $0.14 $48.1 11.2% 10.1% 16.3% 14.4% Q2 FY2022 Q2 FY2023 Q2 FY2022 Q2 FY2023 Q2 FY202
Slide 8: Water Flow Solutions Segment Results
Water Flow Solutions Segment Results Adj. Operating Income ($M) (1) Adj. EBITDA ($M) (1) Net Sales ($M) % of Net Sales % of Net Sales -57.1% y/y -46.4% y/y -14.5% y/y -950 bps. -870 bps. $183.9 $35.4 $42.9 $157.2 19.2% 23.3% $23.0 $15.2 14.6% 9.7% Q2 FY2022 Q2 FY2023 Q2 FY2022 Q2 FY2023 Q2 FY2022 Q2
Slide 9: Water Management Solutions Segment Results
Water Management Solutions Segment Results Adj. Operating Income ($M) (1) Adj. EBITDA ($M) (1) Net Sales ($M) % of Net Sales % of Net Sales +170.3% y/y +107.3% y/y +38.8% y/y +890 bps. +740 bps. $175.7 $31.9 $39.6 18.2% 22.5% $126.6 $19.1 $11.8 15.1% 9.3% Q2 FY2022 Q2 FY2023 Q2 FY2022 Q2 FY2023 Q2 F
Slide 10: Free Cash Flow
Free Cash Flow • Net cash used in operating activities for YTD Q2 FY2023 was $22.2M compared with net cash provided by operating activities of $0.8M in the prior-year period $5.0 − Decrease was primarily due to higher accounts payable turnover $0.0 $0.8 partially offset by higher collections of rece
Slide 11: Balance Sheet and Liquidity
Balance Sheet and Liquidity Continue to have plenty of capacity to support our strategic priorities, including acquisitions • Moody’s: Ba1 Corporate Rating, Ba1 Notes Rating, Stable Outlook Debt Maturities Credit Rating • S&P: BB Corporate and Notes Ratings, Stable Outlook $500 • $450M of 4.0% Senio
Slide 12: Key Updates: Second Quarter Performance, End Markets and Full-Year 2023 Outlook
Key Updates: Second Quarter Performance, End Markets and Full-Year 2023 Outlook
Slide 13: Second Quarter Performance
Second Quarter Performance • Second quarter adjusted EBITDA margin was in line with our expectations with a 40 bps. sequential improvement • Water Management Solutions achieved more than a 22% adjusted EBITDA margin for the quarter − Manufacturing performance at Albertville hydrant facility improved
Slide 14: End Markets
End Markets Municipal Repair and Replacement End Market (60-65% of 2022 Consolidated Net Sales) (1) • During the quarter, saw continued strength in the municipal repair and replacement market with municipalities benefiting from healthy budgets, especially at larger municipalities • Beginning to see
Slide 15: Full-Year Fiscal 2023 Outlook
Full-Year Fiscal 2023 Outlook • Reiterating annual guidance for 2023 consolidated net sales and adjusted EBITDA growth − Consolidated net sales increase between 6% and 8% and adjusted EBITDA increase between 10% and 14% (1) • Continue to anticipate that higher pricing will drive top-line growth this
Slide 16: Key Takeaways
Key Takeaways • Impressed with team members’ dedication and perseverance in navigating the challenging external environment as they focus on driving operational improvements, prioritizing customer service and executing our strategic initiatives to grow and optimize our business beyond 2023 • Excited
Slide 17: Q&A
Q&A
Slide 18: Supplemental Data
Supplemental Data
Slide 19: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 157.2 $ 175.7 $ — $ 332.9 Gross profit $ 37.2 $
Slide 20: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 21.3 Income tax expense (2) 6.7 Interest expen
Slide 21: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 183.9 $ 126.6 $ — $ 310.5 Gross profit $ 57.0 $
Slide 22: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Three months ended March 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 23.6 Income tax expense (2) 7.1 Interest expen
Slide 23: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 322.8 $ 324.9 $ — $ 647.7 Gross profit $ 83.8 $ 1
Slide 24: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2023 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 43.8 Income tax expense (2) 13.6 Interest expens
Slide 25: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 338.8 $ 244.0 $ — $ 582.8 Gross profit $ 109.1 $
Slide 26: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2022 Water Water Flow Management Solutions Solutions Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 43.0 Income tax expense (2) 13.3 Interest expens
Mueller Water Products — Q2 2023 Earnings Presentation on 6ix