Core & Main, Inc. · NYSE:CNM
Core & Main — Q3 2022 Earnings Presentation
20 slides from Core & Main's earnings presentation, Dec 13, 2022
Slide 1: Fiscal 2022 Third Quarter Results
Fiscal 2022 Third Quarter Results DECEMBER 13, 2022
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS Cautionary Note Regarding Forward-Looking Statements This presentation and accompanying discussion may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, all st
Slide 3: Today's Presenters
TODAY’S PRESENTERS Steve LeClair Mark Witkowski Robyn Bradbury Chief Executive Officer Chief Financial Officer VP, Finance & Investor Relations © Core & Main All Rights Reserved. Confidential and Proprietary Information. 3
Slide 4: Business Update
BUSINESS UPDATE © Core & Main All Rights Reserved. Confidential and Proprietary Information. 4
Slide 5: Q3 2022 Business Update
Q3 2022 BUSINESS UPDATE ✓ Delivered strong Q3 2022 results by executing on our growth strategies, including share gains, acquisitions and margin expansion ✓ End-market demand remains resilient despite macro challenges ̶ Municipal repair & replacement activity continues to be strong ̶ Accelerating de
Slide 6: Driving Sustainable Growth Through M&A
DRIVING SUSTAINABLE GROWTH THROUGH M&A Inland Water Works Lanier Municipal Trumbull Distributors, Inc. Supply Co. Supply Co. Status Closed August 2022 Closed October 2022 Closed October 2022 Closed December 2022 Number of Locations 1 3 1 4 Geography California Ohio & Pennsylvania Hawaii Florida & Ge
Slide 7: Helping Communities Build a Foundation for the Future
HELPING COMMUNITIES BUILD A FOUNDATION FOR THE FUTURE ▪ The city of Waukesha, Wisconsin, needed a new, sustainable water solution to continue supplying clean water to its community ▪ The city was experiencing dwindling water levels due to a growing population ▪ Core & Main was hired to help address
Slide 8: Balanced Mix Across End Markets
BALANCED MIX ACROSS END MARKETS (1) (1) (1) Municipal 39% Non-Residential 39% Residential 22% Repair & Replacement Expansion of Service New Development Repair & Replacement New Lot Development Repair & Replacement ▪ Improvements to or ▪ Expansion of infrastructure ▪ New development of water, ▪ Impro
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS © Core & Main All Rights Reserved. Confidential and Proprietary Information. 9
Slide 10: Q3 2022 Operating Results
Q3 2022 OPERATING RESULTS Net Sales Gross Profit ($ in Millions) ($ in Millions) $1,818 $500 $1,405 +29% $371 +35% % Margin 26.4% +110 bps 27.5% Q3'21 Q3'22 Q3'21 Q3'22 Adjusted Net Income(1) Adjusted EBITDA(1) ($ in Millions) ($ in Millions) $275 $165 $105 +57% $189 +46% % Margin(1) 13.5% +160 bps
Slide 11: Cash Flow & Balance Sheet Highlights
CASH FLOW & BALANCE SHEET HIGHLIGHTS Operating Cash Flow Net Debt Leverage(5) ($ in Millions) 2.8x Q3’21 Q3’22 Y-o-Y $ 1.7x Adjusted EBITDA $189 $275 $86 Investment in Operating Capital(1) (153) (87) 66 Q3'21 Q3'22 Cash Interest (12) (20) (8) Liquidity(6) ($ in Millions) Cash Taxes(2) (14) (45) (31)
Slide 12: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES 1 Organic Growth & Operational Initiatives (Low capex requirements) 2 Growth Through M&A 3 Share Repurchases Maintain Conservative Balance Sheet © Core & Main All Rights Reserved. Confidential and Proprietary Information. 12
Slide 13: Fiscal 2022 Outlook
FISCAL 2022 OUTLOOK ▪ Near-term end-market fundamentals expected to be mixed, but long-term outlook remains positive ̶ Municipal repair & replacement activity expected to drive a large portion of Q4 2022 volumes ̶ Sentiment in non-residential construction remains positive, supported by healthy biddi
Slide 14: Appendix
Appendix
Slide 15: Product & Service Offering
PRODUCT & SERVICE OFFERING © Core & Main All Rights Reserved. Confidential and Proprietary Information. 15
Slide 16: Multiple Growth Drivers
MULTIPLE GROWTH DRIVERS Greenfield Strategic Smart Geosynthetics Private Label Pricing Analytics Expansion Accounts Metering Fusible HDPE Storm Treatment Fire Category Management Innovation & Technology Solutions Drainage Plant Protection Above Market Growth Acquisitions Margin Expansion (+200 - 300
Slide 17: Track Record of Acquisitions
TRACK RECORD OF ACQUISITIONS 2017 2018 2019 2020 2021 2022 Why We Succeed Acquisition Focus Acquirer of Choice ✓ Dedicated & highly experienced M&A ✓ Consolidate existing market positions ✓ Respected reputation in the industry team ✓ Expand geographic footprint ✓ Entrepreneurial culture ✓ Robust tar
Slide 18: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted EBITDA & Adjusted EBITDA Margin ($ in Millions) Three Months Ended Twelve Months Ended October 30, 2022 October 31, 2021 October 30, 2022 July 31, 2022 May 1, 2022 January 30, 2022 October 31, 2021 Net income attributable to Core & Main, Inc. $ 111 $ 64 $
Slide 19: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Net Debt Leverage ($ in Millions) As of October 30, 2022 July 31, 2022 May 1, 2022 January 30, 2022 October 31, 2021 Senior ABL Credit Facility due July 2026 $ 90 $ 142 $ 57 $ - $ - Senior Term Loan due July 2028 1,481 1,485 1,489 1,493 1,496 Total Debt 1,571 1,62
Slide 20: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income ($ in Millions) Three Months Ended Nine Months Ended October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Net income attributable to Core & Main, Inc. $ 111 $ 64 $ 312 $ 118 Less: net income attributable to non- 67 45 185 28 cont