Mueller Water Products · NYSE:MWA
Mueller Water Products — Baird 2018 Global Industrial Conference
31 slides from Mueller Water Products's conference presentation, Nov 7, 2018
Slide 1: Where Intelligence Meets Infrastructure
Where Intelligence Meets Infrastructure® Baird 2018 Global Industrial Conference November 7, 2018
Slide 2: Non-GAAP Financial Measures
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
Slide 3: Mueller Water Products at a Glance
Mueller Water Products at a Glance HISTORY LTM FINANCIALS END MARKETS* FISCAL YEAR 2018 • Founded 160 years ago as of Sep. 30, 2018 <10% • Spun off from Walter % of Total Natural gas utilities $ in millions Industries in 2006 Net sales $ 916.0 • Listed on NYSE (MWA) June 1, 2006 Infrastructure $ 818
Slide 4: Focused Strategy and Execution Driving Results
Focused Strategy and Execution Driving Results Where Intelligence Meets Infrastructure® Committed to delivering sustainable and efficient solutions for our customers and the work they do by bridging the gap between intelligence and infrastructure, helping our customers deliver the most important wat
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: Products and Markets
Products and Markets TOIEAPSGMG CaNtcd Products
Slide 7: Our Leading Product Positions
Our Leading Product Positions FIRE IRON GATE BUTTERFLY BRASS HYDRANTS VALVES VALVES PRODUCTS #1 PRODUCT POSITION #1 PRODUCT POSITION #1 PRODUCT POSITION #2 PRODUCT POSITION A.Y. McDonald ACIPCO DeZURIK Ford Meter Box McWane Company estimates based on internal analysis and information from trade asso
Slide 8: Bringing Value to our Customers
Bringing Value to our Customers • Providing valued products and services to over 50,000 municipalities and utilities • Utilizing proprietary smart technologies to help our customers actively diagnose, monitor and control the delivery of drinking water • Developing new technology offerings which util
Slide 9: 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 10: Funding Water Infrastructure Repair
Funding Water Infrastructure Repair Historical Water rates compared to other utilities(1) 600 CPI Utilities (NSA 1982-1984 = 100) 500 400 300 200 100 Utility Sources of Funding 0 • 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 2013 2018 Majority of utilities have service connection fee
Slide 11: Focus on Manufacturing Excellence Driving Organic Growth
Focus on Manufacturing Excellence Driving Organic Growth • Infrastructure has strong adjusted EBITDA margins (26.6% in FY2018) providing a base for future growth • Enhanced operational initiatives driving ongoing productivity improvements to facilitate innovation, increase new product development, a
Slide 12: Strong Need for Intelligence in Water Infrastructure
Strong Need for Intelligence in Water Infrastructure Black & Veatch 2016 Strategic Directions in the U.S. Water Industry “Smart metering is a highly successful way of accurately identifying water loss.” Water Conservation Non-Revenue Water Customer Service Focus • 37% of U.S. experiencing drought •
Slide 13: Technologies Bringing Intelligence to Water Infrastructure
Technologies Bringing Intelligence to Water Infrastructure Intelligent Water TechnologyTM is Mueller’s full-line of innovative solutions, products and services that actively diagnose, monitor and control the delivery of safe, clean drinking water to consumers and businesses Smart Metering Leak Detec
Slide 14: Financial Performance
Financial Performance TOIEAPSGMG CaNtcd Products
Slide 15: Focused Execution Driving Results
Focused Execution Driving Results PURSUED STRATEGIC GENERATED FREE CASH FLOW IMPROVED PRODUCTIVITY AND OPPORTUNITIES REDUCED COSTS • Leveraged Mueller brand to drive • Produced strong record of free cash • Divested Anvil and U.S. Pipe organic growth flow generation driven by improvements in operatin
Slide 16: History of Strong Financial Performance
History of Strong Financial Performance Delivered 26% cumulative net sales growth since 2013 (4.7% CAGR) with 76% cumulative adjusted EBITDA growth yielding a 570 bps. improvement in adjusted EBITDA margin since 2013 Consolidated Net Sales Consolidated Adjusted EBITDA (1) and ($ in millions) Adjuste
Slide 17: Q4 2018 Consolidated Financial Highlights
Q4 2018 Consolidated Financial Highlights • Net sales increased 12.1% to $254.3 million driven by higher volumes at both Infrastructure and Fourth Quarter 2018 2017 Technologies, as well as higher pricing at Infrastructure Net sales $ 254.3 $ 226.9 • Adjusted operating income increased 8.7% to $42.6
Slide 18: 2019 Full Year Outlook
2019 Full Year Outlook Full year 2019 expectations reflect the current business environment, and exclude the impact from the pending acquisition of Krausz Industries Ltd., which we anticipate closing in December 2018 • Healthy demand in all end markets with municipal spending growth in the low to mi
Slide 19: Strong Balance Sheet with Significant Flexibility
Strong Balance Sheet with Significant Flexibility • Net debt leverage was 0.5x at September 30, 2018, down from a peak of more than 6x • Refinanced debt in June 2018 with $450 million of 5.5% Senior Notes due 2026 providing fixed interest rates over an 8-year period • Have $175 million ABL Agreement
Slide 20: Balanced and Disciplined Capital Allocation
Balanced and Disciplined Capital Allocation STRATEGIC INVESTMENTS SHAREHOLDERS BALANCE SHEET • Driving organic growth through • Increased dividend 25% in • Reduced debt by $1.1 billion since capital investments and January 2018 which is the fourth March 31, 2006 and $650 million acquisitions increas
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: Supplemental Data
Supplemental Data TOIEAPSGMG CaNtcd Products
Slide 23: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Quarter ended September 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 223.5 $ 30.8 $ — $ 254.3 Gross profit (loss) $ 77.4 $ 8.1 $ — $ 85.5 Selling, ge
Slide 24: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Quarter ended September 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 25.0 Loss on early extinguishment of debt 0.3 Income tax expense (1) 9.7 Intere
Slide 25: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Quarter ended September 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 204.4 $ 22.5 $ — $ 226.9 Gross profit $ 76.3 $ 4.7 $ — $ 81.0 Selling, general a
Slide 26: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Quarter ended September 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 19.3 Loss from discontinued operations (after tax) 0.8 Income tax expense (1) 8
Slide 27: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Year ended September 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 818.8 $ 97.2 $ — $ 916.0 Gross profit (loss) $ 284.7 $ 5.2 $ — $ 289.9 Selling, gen
Slide 28: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Year ended September 30, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 105.6 Loss on early extinguishment of debt 6.5 Gain on settlement of interest rate
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Year ended September 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 739.9 $ 86.1 $ — $ 826.0 Gross profit $ 259.9 $ 8.0 $ — $ 267.9 Selling, general an
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Year ended September 30, 2017 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 123.3 Income from discontinued operations (after tax) (69.0) Income tax expense (1
Slide 31: Questions
= oo Questions : cree Mueller MUELLER) "=. Products
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