Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (August 2021)
38 slides from Arcosa's investor presentation, August 2021
Slide 1: Investor Presentation
Investor Presentation August 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some statements in this presentation, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa’s estimates, expectations, beliefs, intenti
Slide 3: How to Find Us
How to Find Us OUR WEBSITE NYSE TICKER www.arcosa.com ACA HEADQUARTERS INVESTOR CONTACT Arcosa, Inc. InvestorResources@arcosa.com 500 North Akard Street, Suite 400 Dallas, Tx 75201 3 / Moving Infrastructure Forward
Slide 4: Table of Contents
Table of Contents 1 2 3 4 Company Financial Long-Term ESG Update Overview Highlights Vision and Capital Allocation 4 / Moving Infrastructure Forward
Slide 5: Company Overview
1 Company Overview 5 / Moving Infrastructure Forward
Slide 6: Arcosa's Value Proposition
Arcosa’s Value Proposition Leading Experienced Strong balance Disciplined capital Track record of businesses management sheet and ample allocation process executing on serving critical team with history liquidity to to grow in strategic priorities infrastructure of managing navigate cycles attractiv
Slide 7: Arcosa at a Glance
Arcosa at a Glance $1.9B Revenues $78M Net Income $265M Adjusted EBITDA ~6,410 Employees 85+ Years of Operating History Arcosa spun off from its former parent company in November 2018. 3 Infrastructure-related Segments Revenues, Adjusted EBITDA and Net Income are for the twelve months ended 6/30/202
Slide 8: Business Overview
Business Overview Arcosa’s three segments are made up of leading businesses that serve critical infrastructure markets Adj.Segment Segments Revenues EBITDA & Margin CONSTRUCTION $654M $146M NATURAL & SPECIALTY CONSTRUCTION 22% RECYCLED MATERIALS SITE SUPPORT AGGREGATES ENGINEERED $881M $116M UTILITY
Slide 9: Track Record of Executing on Stage 1 Priorities
Track Record of Executing on Stage 1 Priorities We have achieved double-digit growth in revenues and Adjusted EBITDA since spin and made progress on building our new Arcosa culture Executing on Stage 1 Priorities introduced at October 2018 Investor Day Completed 5 large acquisitions (ACG, Cherry,
Slide 10: $150M Acquisition of Southwest Rock Products Completed in August
$150M Acquisition of Southwest Rock Products Completed in August Leading Arizona pure-play aggregates producer serving the greater Phoenix metro area that will help accelerate the growth of our Construction Products segment Strategic Rationale $36M $14M Scaled regional aggregates platform that ali
Slide 11: Phoenix AZ is One of the Fastest Growing Megaregions
Phoenix AZ is One of the Fastest Growing Megaregions Sizable Aggregates Phoenix is one of the top 11 aggregates markets by Market Demand volume in the United States ~$6 billion approved investment at Phoenix Sky Harbor Large-Scale Capital airport and ~$53 billion estimated funding required for Inves
Slide 12: Construction Materials Platform Represents more than 50% of Adjusted EBITDA
Construction Materials Platform Represents more than 50% of Adjusted EBITDA Disciplined capital allocation strategy investing ~$1.3B since spin to grow Construction Products and reduce overall cyclicality of our portfolio We have continued to build out a world-class …and accelerating the portfolio s
Slide 13: Financial Highlights
2 Financial Highlights 13 / Moving Infrastructure Forward
Slide 14: Recent Financial Results
Recent Financial Results Strong financial performance since spin with Adjusted EBITDA expansion outpacing revenue growth driven by organic expansion, acquisitions, and operating improvements Revenues Adjusted EBITDA ($M’s) +30% ($M’s) +42% 1,936 1,904 284 265 1,737 241 1,460 187 2018 2019 2020 TTM 2
Slide 15: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Our balance sheet remains healthy with over $300M of available liquidity and no material near-term debt maturities Focus on driving a disciplined ‘cash culture’…. ... has supported significant organic & acquisition investment, while maintaining a healthy balance sheet Fre
Slide 16: COVID-19 Update
COVID-19 Update We prioritize the health and safety of our people The health and safety of our employees, communities, and other stakeholders is our highest priority. We have put safeguard measures in place at our plants and office locations to meet or exceed the standards set forth by CDC guideline
Slide 17: Q2-2021 Financial Results
Q2-2021 Financial Results Revenues and Adjusted EBITDA were in line with last year’s record results as growth in Construction Products was offset by year-over-year weakness in Transportation Products Revenues Net Income Adjusted Adjusted EBITDA ($M) ($M) ($M) +3% Decline in Adjusted Net Income 515.1
Slide 18: Near-Term Outlook
Near-Term Outlook Construction Products and Engineered Structures end markets remain well positioned for growth, with offsetting impacts from barge and wind tower near-term expectations ENGINEERED STRUCTURES Engineered Structures CONSTRUCTION Positive Outlook Construction Products % of LTM Adjusted
Slide 19: 2021 Outlook
2021 Outlook 2021 on pace to meet or exceed 2020’s strong results, despite cyclically depressed barge and rail components businesses Revenues Adjusted EBITDA $M’s $M’s 1,950 – 2,050 284 270-290 1,936 1,737 241 1,460 187 2018 2019 2020 2021 2018 2019 2020 2021 Guidance Guidance See Adjusted EBITDA re
Slide 20: Long-Term Vision and Capital Allocation
3 Long-Term Vision and Capital Allocation 20 / Moving Infrastructure Forward
Slide 21: Our Long-Term Vision
Our Long-Term Vision Grow in attractive markets Reduce the complexity Improve long-term Integrate Environmental, where we can achieve and cyclicality of the returns on invested Social, and Governance sustainable competitive overall business capital initiatives (ESG) into our advantages long-term str
Slide 22: Repositioning Arcosa Around More Stable Infrastructure Products
Repositioning Arcosa Around More Stable Infrastructure Products Our performance highlights our progress in creating a more stable base of revenue and profit, anchored around core infrastructure products Adjusted Segment Adjusted Segment 2018 EBITDA LTM June 2021 EBITDA1 ($M’s) ($M’s) Natural aggre
Slide 23: Construction Products
Construction Products We have deployed more than $1.3B on Construction Products acquisitions since the time of the spin, due to favorable long-term fundamentals and acquisition opportunities Attractive fundamentals of Aggregates and • Scaled entry into attractive Phoenix metropolitan area with Speci
Slide 24: StonePoint Materials Highlights
StonePoint Materials Highlights We completed the acquisition on April 9 and are now focused on integration and continuing to grow our expanded aggregates platform StonePoint Key Figures Operations Strategic Rationale Limestone Premier, scaled aggregates platform that ~$125M ~$30M 3 quarries in T
Slide 25: Engineered Structures
Engineered Structures In 2020, we invested in 3 acquisitions plus organic growth to build on our strong position in transmission and distribution structures CAPITAL DEPLOYED DESCRIPTION IN 2020 March 2020 acquisition of HSI, a leading traffic $33M Traffic structures manufacturer structures Octob
Slide 26: Engineered Structures
Engineered Structures With our acquisitions, we have expanded our product offering in the $3B transmission and distribution markets, as well as entered new large markets tied to infrastructure growth END MARKETS AND PRODUCT LINES RENEWABLE ELECTRICITY POWER TRANSMISSION & $3B+ GENERATION $1.2B DISTR
Slide 27: ESG Update
4 ESG Update 27 / Moving Infrastructure Forward
Slide 28: Arcosa Sustainability
Arcosa Sustainability We continue to integrate ESG into our business through our strategic planning process, ESG-focused initiatives, and innovative continuous improvement projects Safety: Arcosa team members achieved a 56% reduction in our Total Recordable Incident Rate (TRIR) in 2020. Our ARC 100
Slide 29: Long-term Vision: ESG Update
Long-term Vision: ESG Update We are committed to developing reportable metrics and establishing meaningful goals in areas important to our stakeholders Our People Our Environment Employee Health & Safety Energy Management Diversity Air Quality Talent Management GHG Emissions Community Relations Wate
Slide 30: Long-term Vision: ESG Update
Long-term Vision: ESG Update As we integrate ESG initiatives into our long-term strategy, our operations teams have taken an active role in pursuing initiatives that promote environmental responsibility Arcosa’s Meyer Utility Structures’ Arcosa Marine is sponsoring a Arcosa’s Construction Products g
Slide 31: Our products are used in important, environmentally friendly industries
Our products are used in important, environmentally friendly industries Arcosa operates in multiple industries which contribute to environmental protection Arcosa Wind Towers Arcosa Marine builds barges Arcosa’s Recycled Arcosa’s Meyer Utility Arcosa’s Steel produces steel towers to for the fuel-sav
Slide 32: Appendix
Appendix
Slide 33: Additional Financial Guidance for 2021
Additional Financial Guidance for 2021 Commentary Corporate ~$13-14M per quarter in Q3 and Q4, excluding non-recurring items related to acquisitions and costs integration ~$2M per quarter in Q3 and Q4 of acquisition and integration-related costs that are excluded from the above range Tax rate
Slide 34: Non-GAAP Measures
Non-GAAP Measures Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 35: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Twelve Months Three Months Ended Full Year 2021 Ended Year Ended December 31, June 30, Guidance June 30, 2021 2020 2021 2020 2019 2018 Low High Net income $ 20.8 $ 33.3 $ 78.4 $106.6 $113.3 $ 75.7 $ 65.0 $ 77.0 A
Slide 36: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Twelve Months Three Months Ended Ended June 30, June 30, 2021 2020 2021 Construction Products Operating Profit $ 17.9 $ 24.3 $ 67.3 Add: Depreciation, depletion, and amortization expense(1) 22.5 13.9 72.0 Segment EBITDA 40.4 38.
Slide 37: Reconciliation of Free Cash Flow and Net Debt to Adjusted EBITDA
Reconciliation of Free Cash Flow and Net Debt to Adjusted EBITDA ($’s in millions) (unaudited) Twelve Months Year Ended Ended December 31, June 30, 2020 2019 2018 2021 Cash Provided by Operating Activities $ 259.9 $ 358.8 $ 118.5 $ 190.7 Capital Expenditures (82.1) (85.4) (44.8) (80.0) Free Cash Flo
Slide 38: Reconciliation of Southwest Rock and StonePoint Pro forma Adjusted EBITDA
Reconciliation of Southwest Rock and StonePoint Pro forma Adjusted EBITDA (in millions) (unaudited) Reconciliation of Southwest Rock Pro Forma Adjusted EBITDA Reconciliation of StonePoint Pro Forma Adjusted EBITDA Twelve Months Ended Twelve Months Ended May 31, 2021 Net Income $ 11.7 December 31, Ma