Arcosa, Inc. · NYSE:ACA
Arcosa — Investor Presentation (November 2020)
38 slides from Arcosa's investor presentation, Nov 6, 2020
Slide 1: Investor Presentation November 2020
Exhibit 99.1 Investor Presentation November 2020
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 12 34 Company Update on Long-Term ESG Update Overview COVID-19 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 Low leverage Disciplined capital Track record of businesses management and ample allocation process executing on Stage serving critical team with history liquidity to to grow in 1 priorities in first 2 infrastructure of managing navigate cycles attracti
Slide 7: Arcosa at a Glance
Arcosa at a Glance $1.9B Revenues $117M Net Income $280M Adjusted EBITDA ~6,500 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 9/30/20
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 NATURAL & $547M $125M SPECIALTY CONSTRUCTION CONSTRUCTION RECYCLED 23% MATERIALS SITE SUPPORT AGGREGATES $882M $120M UTILITY STORAGE EN
Slide 9: Track Record of Executing on Stage Priorities in First Years
Track Record of Executing on Stage 1 Priorities in First 2 Years We have achieved consecutive double-digit increases in quarterly revenues and Adjusted EBITDA since Q1-19 and made progress on building our new Arcosa culture Executing on Stage 1 Priorities introduced at October 2018 Investor Day Co
Slide 10: Recent Financial Results
Recent Financial Results Full Year Adjusted EBITDA increased ~50% since spin outpacing revenue growth and driven by organic growth, acquisitions, and operating improvements Revenues Adjusted EBITDA ($M’s) +32% ($M’s) +50% 1,924 280 267 1,704 1,737 241 1,462 1,460 197 187 2016 2017 2018 2019 LTM 9/20
Slide 11: Free Cash Flow and Liquidity
Free Cash Flow and Liquidity Arcosa’s business have an attractive free cash flow profile, contributing to $563M of liquidity at the end of Q3 2020 Free Cash Flow Available Liquidity, End of Q3 $M’s $M’s 563 115 107 Cash 189 93 Avg since Q1 2019 56 56 = $63M, or 210% of Net Income Revolver 374 Capaci
Slide 12: Balance Sheet Highlights
Balance Sheet Highlights Strong cash flow generation has supported over $800 million in acquisitions in first two years, while keeping leverage low ~0.5x Net Debt / Adjusted EBITDA at the end Q3-20, pro-forma …with minimal debt maturities until 2025 for Strata acquisition, well below our long-term t
Slide 13: Strata Materials Acquisition
Strata Materials Acquisition We acquired Strata Materials for $87M in October 2020, a leading provider of recycled aggregates in the Dallas- Fort Worth market, building on the $298M acquisition of Cherry completed earlier this year Recycled Aggregates Natural Aggregates • ~80% of Revenue • ~20% of R
Slide 14: Strata Materials Investment Highlights
Strata Materials Investment Highlights Expands ability to serve DFW customers with a Leverages Cherry’s Gains access to permitted complementary product operating and commercial locations in key growth offering that includes both expertise to drive areas of DFW market natural and recycled incremental
Slide 15: Additional Capital Allocation to Grow in Engineered Structures
Additional Capital Allocation to Grow in Engineered Structures In 2020, we have 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 $26M Traf
Slide 16: Update on COVID-19
2 Update on COVID-19 16 / Moving Infrastructure Forward
Slide 17: COVID-19 Update
COVID-19 Update We prioritize the health and safety of our people The health and safety of our employees, communities, and other stakeholders is our highest priority. We have put safeguard measures in place at our plants and office locations to meet or exceed the standards set forth by CDC guideline
Slide 18: Q3 2020 Financial Results
Q3 2020 Financial Results COVID-19 had minimal impact on year-to-date 2020 financial results as we have grown EBITDA 21% and expanded margins; order and inquiry activity mostly positive in Q3, with the exception of liquid barges 3rd Quarter, ended September 30 ($M’s) Year-to Date, ended September 30
Slide 19: Near-Term Outlook
Near-Term Outlook Construction Products and Energy Equipment end markets have remained healthy throughout the pandemic; the liquid barge market has been the most impacted by the COVID-related downturn Near-Term Outlook by Segment Energy Equipment . Positive Outlook % of YTD Adjusted EBITDA (excludin
Slide 20: Capital Allocation Approach for 2020
Capital Allocation Approach for 2020 We are managing cash tightly in the face of macroeconomic uncertainty, but we are still pursuing selective investments to execute on our long-term growth strategies Return of capital Organic investments Strategic growth through acquisitions to shareholders . Dela
Slide 21: Long-Term Vision and Capital Allocation
3 Long-Term Vision and Capital Allocation 21 / Moving Infrastructure Forward
Slide 22: 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 23: Positive Long-Term Fundamentals
Positive Long-Term Fundamentals We remain confident in the long-term fundamentals of our key markets Long-Term Outlook . Long-term fundamentals remain strong in our key Texas and Gulf Coast geographies, driven by Construction projected population growth, fiscal health, and major infrastructure proje
Slide 24: Repositioning Arcosa for the Long-Term
Repositioning Arcosa for the Long-Term Our third quarter performance highlights our progress since 2018 in creating a more stable base of revenue and profit, anchored around core infrastructure products Adjusted Segment Adjusted Segment Q3-2018 EBITDA Q3-2020 EBITDA ($M’s) ($M’s) . Natural aggregate
Slide 25: Long-Term Vision: Construction Products Progress
Long-Term Vision: Construction Products Progress We have deployed more than $730M on Construction Products acquisitions since the time of the spin, due to favorable long-term fundamentals and acquisition opportunities Attractive fundamentals of Aggregates Growth of Construction Products segment and
Slide 26: Cherry Acquisition Update
Cherry Acquisition Update Cherry acquisition closed in January 2020; integration is proceeding well and financial performance has exceeded our expectations year-to-date Cherry is a leading natural and Unique platform with sustainable Integration Update recycled aggregates company competitive advanta
Slide 27: Long-Term Vision: Energy Equipment Progress
Long-Term Vision: Energy Equipment Progress We have continued executing on our long-term strategy for Energy Equipment despite short term COVID- 19 uncertainty Build the foundation for growth Invest to expand into attractive Leverage combined platform product lines to accelerate growth 2018-2019 202
Slide 28: Expansion into Adjacent Infrastructure-Related Product Lines
Expansion into Adjacent Infrastructure-Related Product Lines With our acquisitions, we have expanded our product offering in the $3B transmission and distribution markets, as well as entered new large markets tied to infrastructure growth END MARKETS AND PRODUCT LINES RENEWABLE ELECTRICITY POWER TRA
Slide 29: ESG Update
4 ESG Update 29 / Moving Infrastructure Forward
Slide 30: Long-term Vision: ESG Update
Long-term Vision: ESG Update We are committed to developing reportable metrics and establishing meaningful goals in areas important to our stakeholders Our People Our Environment Employee Health & Safety Energy Management Diversity Air Quality Talent Management GHG Emissions Community Relations Wate
Slide 31: Long-term Vision: ESG Update
Long-term Vision: ESG Update As we integrate ESG initiatives into our long-term strategy, our operations teams have taken an active role in pursuing initiatives that promote environmental responsibility Arcosa’s Meyer Utility Structures’ Arcosa Marine is sponsoring a Arcosa’s Construction Products g
Slide 32: Our products are used in important, environmentally friendly industries
Our products are used in important, environmentally friendly industries Arcosa operates in multiple industries which contribute to environmental protection Arcosa Wind Towers Arcosa Marine builds barges Arcosa’s Recycled Arcosa’s Meyer Utility Arcosa’s Steel produces steel towers to for the fuel-sav
Slide 33: Appendix
Appendix
Slide 34: Non-GAAP Measures
Non-GAAP Measures Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. We adjust EBITDA for certain items that are not reflective of the normal earnings of our business (“Adjusted EBITDA”). GAA
Slide 35: Reconciliation of Consolidated and Combined Adjusted EBITDA
Reconciliation of Consolidated and Combined Adjusted EBITDA ($’s in millions) (unaudited) Twelve Months Year Ended Ended Three Months Ended Nine Months Ended December 31, September 30, September 30, September 30, 2016 2017 2018 2019 2020 2020 2019 2020 2019 Revenues $1,704.0 $1,462.4 $1,460.4 $1,736
Slide 36: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) LTM Three Months Ended Nine Months Ended September September 30, September 30, 30, 2020 2019 2020 2019 2020 Construction Products Operating Profit $ 20.8 $ 16.5 $ 61.9 $ 45.3 $ 69.3 Add: Depreciation, depletion, and amortization
Slide 37: Reconciliation of Free Cash Flow and Net Debt to Adjusted EBITDA
Reconciliation of Free Cash Flow and Net Debt to Adjusted EBITDA ($’s in millions) (unaudited) Three Months Ended March 31, June 30, September 30, December 31, March 31, June 30, September 2019 2019 2019 2019 2020 2020 30, 2020 Cash Provided by Operating Activities$ 125.0 $ 16.2 $ 77.8 $ 139.8 $ 41.
Slide 38: Reconciliation of Cherry EBITDA
Reconciliation of Cherry EBITDA ($’s in millions) (unaudited) Twelve Months Ended September 30, 2019: Net income $ 28.5 Add: Interest expense, net 0.1 Provision for income taxes 1.2 Depreciation, depletion, and amortization expense 7.1 EBITDA 36.9 Reconciliation Strata Materials Adjusted EBITDA ($’s