Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Investor Day (May 2023)
118 slides from Valmont Industries's investor day presentation, May 23, 2023
Slide 1: Investor Day May 23, 2023
valmont ~ Investor Day May 23, 2023
Slide 2: Disclosure Regarding Forward-Looking Statements
These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of th
Slide 3: Agenda
Agenda 3 9:10 AM Built for Sustainable Outperformance Steve Kaniewski | President & Chief Executive Officer Driving Growth and Transformation in Agriculture Josh Dixon | President, Global Irrigation Transforming the Agriculture Industry with Technology Daniel Koppel | President, Agriculture Technolo
Slide 4: Built for Sustainable Outperformance
Built for Sustainable Outperformance Steve Kaniewski President and CEO
Slide 5: Key Messages
Key Messages 5 Enduring business built on a solid foundation that compounds through outperformance, 01 innovation and operational excellence that’s uniquely positioned to serve our expanding markets Introducing “Run Grow Transform” framework to guide Valmont into higher-quality 02 growth sectors whe
Slide 6: Valmont Snapshot
Manufacturing Facilities $2,928 $1,347 Infrastructure Agriculture Valmont Snapshot (NYSE: VMI) Delivering Innovative Solutions for Global Infrastructure and Agriculture Markets 1 As of 05/19/23. 2 See 2022 Annual Report. 3 Includes intersegment sales. 4 Includes amounts attributable to the Infrastru
Slide 7: Building on a Strong Foundation to Accelerate Growth
Building on a Strong Foundation to Accelerate Growth Across Our Business 7 Where We Were: 2018 Where We Are: 2023 • Four segments • Transitioning organizational structure • ~10,000 employees; limited technology (Machine learning and AI) expertise • Early stages of elevating commitments to ESG • Init
Slide 8: Our Differentiated Business Model Enables Our Strategy
Our Differentiated Business Model Enables Our Strategy and Drives Strong, Sustainable Shareholder Value 1 Total Shareholder Return vs. S&P MidCap 400 Index of 38% and S&P 400 Industrial Machinery of 44%; Source: FactSet as of 12/31/2022 8 ~111% Total Shareholder Return Over Past 5 Years1 Value Creat
Slide 9: Uniquely Positioned to Win in Infrastructure and Agriculture
Breadth of product offerings Differentiated niche industries with high barriers to entry Unparalleled response time and customer service Minimize business cyclicality through innovative solutions that address customer challenges and provide better economics Unmatched channel in capital goods markets
Slide 10: Serving Markets with Multi-Year Demand Drivers
10 Serving Markets with Multi-Year Demand Drivers Proactively Capturing Attractive Industry Trends to Drive Above Market Growth Our products and solutions, enhanced with innovative technology, are addressing global megatrends and driving above market growth Infrastructure • Energy transition: demand
Slide 11: Introducing Run Grow Transform
Evolving into a higher quality and more dynamic organization that is less cyclical and enhances customer value Introducing “Run Grow Transform” 11 GROW TRANSFORM RUN Built for sustainable outperformance and growth • Proven ability to deliver results and drive growth despite market volatility and eco
Slide 12: Strategic Focus
Strategic Focus Agriculture Outpacing Our Rapidly Growing Markets and Transforming Our Markets with Technology-Enhanced Offerings Impactful, Smart Solutions for Customers Drive More Resilient and Recurring Revenue for Valmont 12 Energy Transition Super Cycle Technology-driven Solutions Critical Supp
Slide 13: Transforming into an Industrial Tech Company
Delivering on Our Technology Future as We Transform into an Industrial Tech Company Modernizing Our Internal Operations to Drive Enhanced Value for Our Customers and Continued Outperformance 13 Enhancing our core services and product offerings with technology Technology Sales Leveraging data for eva
Slide 14: Operating and Growing Sustainably
Strong Sustainability Ratings2 Rating of 1 across E, S and G CEO-Led ESG Leadership We Are Operating and Growing Sustainably and Solving Problems for Our Customers 14 Engaging and Celebrating Those That Make it Possible Responded favorably on the latest Employee Engagement Survey Targeted percentage
Slide 15: Experienced Board of Directors
Mogens Bay Chairman Valmont Industries Catherine Paglia Lead Director Enterprise Asset Management Audit Committee Human Resources Committee Kaj Den Daas Retired CEO, Quality Light Source Retired EVP, Philips Lighting B.V. of the Netherlands Chair, Audit Committee ESG Committee; Governance & Nominati
Slide 16: Credible Management Team with Deep Industry Expertise
Aaron Schapper Group President, Infrastructure 2011 Renee Campbell SVP, Investor Relations & Treasurer 2017 Gene Padgett SVP, Finance & Chief Accounting Officer 2022 Ellen Dasher VP, Global Taxation 1996 Andrew Massey VP, Chief Legal & Corporate Secretary 2006 Credible Management Team with Deep Indu
Slide 17: 5-Year Financial Targets
Continuing to Drive Sustainable Outperformance 5-Year Financial Targets Execution of Our Strategy is Enabling Us to Accelerate Growth and Transform Our Business 1 Estimated compound annualized growth rates from base year 2022; organic sales growth only 17 12 - 15% EPS Growth1 5 - 8% Net Sales Growth
Slide 18: Key Takeaways
Key Takeaways 18 Introducing “Run Grow Transform” framework to guide Valmont into higher-quality growth sectors where our value proposition aligns to our customers’ needs 02 Leveraging technology and digitization throughout our organization to deliver innovative product solutions, drive digital tran
Slide 19: Driving Growth and Transformation in Agriculture
Driving Growth and Transformation in Agriculture Josh Dixon President, Global Irrigation
Slide 20: Key Messages | Agriculture
Key Messages | Driving Growth and Transformation in Agriculture RUN Executing to meet rapidly growing global market needs driven by a growing population, food security needs, and resource conservation GROW Accelerating international growth in attractive markets, expanding our geographic presence Gro
Slide 21: Agriculture Overview
Leveraging Unique Position in Global Agriculture Market to Deliver Irrigation and Technology Solutions 57% 43% North America International 2022 Sales Mix1 Product Lines 2022 Sales %1 Expected 5-yr CAGR3 Equipment and Parts 91% 6-8% Technology Products and Services 9% 15-17% Agriculture Overview | En
Slide 22: Continuing to Execute on Our Transformation Journey
Continuing to Execute on Our Transformation Journey Where We Were: 2013 • Equipment sales focus with significant majority from pivot systems • Mostly North America business • Small OEM aftermarket presence • Global growth driving to higher growth markets • Aftermarket revenue growing at a faster pac
Slide 23: Trusted Partner of Choice for Land Productivity Solutions
Trusted Partner of Choice for Land Productivity Solutions Fully localized production in all geographies (APAC, EMEA, CALA) Well-Positioned to Win in Irrigation and Agronomy as We Provide Farmers with Life-Changing Solutions Differentiated Assets Proprietary Capabilities 770 global dealer locations a
Slide 24: Well-Positioned to Capture Large and Growing Market Opportunities
Well-Positioned to Capture Large and Growing Market Opportunities Expect Valley® Agriculture to Continue to Grow Faster than the Markets We Serve Large and Growing Market Our future SAM is growing at an ~8% CAGR 2022 Opportunity 2027E Opportunity ~$8.8B Market Drivers Necessary productivity enhancem
Slide 25: Center Pivot Increases in Yields Over Dryland Farming
Center Pivot Increases in Yields Over Dryland Farming 1 2022 Average Closing Prices. 2 USDA 2022 Yield Averages. 3 Based on a typical 160-acre Field 4 Variable Rate Irrigation 44% Corn 29% Soybeans 55% Wheat Significantly Increasing Crop Yields by Precisely Applying Water When and Where it is Needed
Slide 26: Growing Faster than the Market
Growing Faster than the Market While Deepening Customer Engagement and Developing Higher-Quality Revenue Streams International Expansion Aftermarket Parts Solutions Selling 26
Slide 27: International Sales Expected to Surpass 50% of Agriculture Sales
International Sales Expected to Surpass 50% of Agriculture Sales 67% 33% 45% 55% North America International 57% 43% Agriculture Sales1 by Region Growing and Transforming Our Portfolio Through International Expansion 2013 2022 2027E Diversifying international mix to drive stable revenue growth • Str
Slide 28: Growing and Transforming Our Portfolio with Aftermarket Parts
Growing and Transforming Our Portfolio with Aftermarket Parts ~$240M ~$540M 2022 Sales 2027E Sales Target Significant Opportunity as the Trusted Partner of Choice Machine agnostic offerings serve not only our 228K+ Valley® center pivots, but the entire global center pivot irrigation market Internati
Slide 29: Case Study | Leading Global Provider of Ag Solar Solutions
Case Study | Leading Global Provider of Ag Solar Solutions Background 12,500-hectare (30,900 acre) farm in Mato Grosso, Brazil Looking to reduce energy costs to irrigate soy, corn and beans Complex engineering requirements Strong geography for solar solutions – legislation on retail net metering Val
Slide 30: Agriculture 5-Year Outlook and Goals
Agriculture 5-Year Outlook and Goals Focused on Increasing Resiliency and Quality of Revenue Stream 30 Expect sales to grow to ~$2B Through the agriculture cycle Further diversify product mix and drive increased recurring and reoccurring sales Non-equipment sales expected to be >50% of Ag Sales Cont
Slide 31: Agriculture Expected Sales Growth Bridge
Valmont Actions • Constraints on natural resources • Food security as national security • Significant replacement, service and upgrade opportunity • Digital farming management Agriculture Expected Sales Growth Bridge 31 Leveraging Market Growth • Grow and Transform initiatives • Driving internationa
Slide 32: Key Takeaways | Agriculture
Key Takeaways | Agriculture 32 Expect to deliver ~$700M of incremental sales by 2027E RUN Executing to meet rapidly growing global market needs driven by a growing population, food security needs, and resource conservation GROW Accelerating international growth in attractive markets, expanding our g
Slide 33: Transforming the Agriculture Industry with Technology
Transforming the Agriculture Industry with Technology Daniel Koppel President, Agriculture Technology
Slide 34: Differentiated, Leading Agriculture Technology Business
$300M Purchase Price 90+ employees Unique Portfolio of Technology Solutions Acquired in 2021 +145,000 connected devices in 63 countries Differentiated Assets Largest globally-integrated provider of field and water management solutions in the industry, with an unparalleled dealer network 200 tech pro
Slide 35: Key Messages | Agriculture Technology
Key Messages | Agriculture Technology 35 RUN Differentiated Ag Tech organization: integrating product, software and machine learning talent, and operating mode with Valley’s existing industry-leading agri-business professionals, dealer network, and irrigation experts GROW Focused on growth: developi
Slide 36: Focused on Key Productivity-Enhancing Ag Tech Areas
Focused on Key Productivity-Enhancing Ag Tech Areas Equipping Farmers and Agronomists with Better Insights through Innovative, Differentiated Technology Solutions 36 Remote Monitor and Control Irrigation Optimization Agronomic Insights • Growers can conveniently monitor and control the health of the
Slide 37: Industry Leader with Compelling Customer Value Proposition
Industry Leader with Compelling Customer Value Proposition Leveraging Technology and Global Reach to Deliver Unique Value to an Expanding Market Source: Revenue improvements are based on a 2% increase in yields per field. Estimates are based on market prices and average yield results provided by the
Slide 38: Technology to Transform the Agriculture Industry
• Significantly accelerating deployment of cutting-edge AI technologies • Leading technology to solve challenges and add value to growers • Leveraging Valley’s distribution network to deploy technology solutions in the field Proactively Addressing Secular Customer and Societal Needs… • Increasing fo
Slide 39: Enabling Farmers to Pinpoint Crop Health Issues Faster
Enabling Farmers to Pinpoint Crop Health Issues Faster, Driving Greater Labor and Input Cost Savings Plant Insights Transforms Center Pivots into Crop Monitoring Machines 39 Images provide farmers with real-time insights High-resolution cameras mounted on pivot irrigation spans take thousands of lea
Slide 40: Integrating Software with Pivot Infrastructure
Integrating Software with Pivot Infrastructure Disruptive and Differentiated Technology Provides Real-Time, Actionable Insights for Growers 40 Crop Health Analysis Unparalleled agronomist-led AI analysis finds hard-to-detect crop damage and provides helpful insights to ensure higher yield and greate
Slide 41: Golden Grain [Video]
Golden Grain [Video] ie Valmont ¥ a1
Slide 42: Key Takeaways | Agriculture Technology
Key Takeaways | Agriculture Technology 42 RUN Differentiated Ag Tech organization: integrating product, software and machine learning talent, and operating mode with Valley’s existing industry-leading agri-business professionals, dealer network, and irrigation experts GROW Focused on growth: develop
Slide 43: Q&A
Q&A
Slide 44: Break
BREAK
Slide 45: Driving Growth and Transformation in Infrastructure
Driving Growth and Transformation in Infrastructure Aaron Schapper Group President, Infrastructure
Slide 46: Key Messages | Infrastructure
RUN Optimize our business with active portfolio management and pursue productivity improvements to reduce complexity and leverage resources GROW Uniquely positioned for an energy transition super cycle with solar and transmission products; leveraging solutions for reliable infrastructure and penetra
Slide 47: Infrastructure Overview
Infrastructure Overview | Delivering Safety, Security and Reliability, Resulting in Enhanced Customer ROI 1 Includes intersegment sales. 2 Five-year period from year end 2022 through year end 2027 47 76% 24% North America International 2022 Sales Mix1 2022 Operating Income ($M) and Operating Margin
Slide 48: Benefiting from Durable Industry Trends
Benefiting from Durable Industry Trends 48 Vehicle Electrification EV Charging EV chargers committed in US nationally by 20303 500K Tech-Driven Solutions Smart poles installed globally by 20305 10.8M Smart Infrastructure Cellular Densification Data Usage Increase in data usage by 20284 60% 5G Energy
Slide 49: Multi-Year Funding Reinforces Demand Outlook
Multi-Year Funding Reinforces Demand Outlook 49 EFSD+ (EU Fund for Sustainable Development) in guaranteed investments for infrastructure projects4 IRA (Inflation Reduction Act) in investments for clean energy technology, manufacturing, and innovation2 ~$370B IIJA (Infrastructure Investment & Jobs Ac
Slide 50: The Energy Transition Super Cycle
The Energy Transition Super Cycle 1 Annual Energy Outlook 2022 – March 2022 – EIA (US Energy Information Administration) 2 Solar Futures Study – September 2021 – US Department of Energy (https://www.energy.gov/sites/default/files/2021-09/Solar%20Futures%20Study.pdf) 3 Annual Energy Outlook 2022 – Ma
Slide 51: Valmont Infrastructure at the Heart of Rapidly Evolving Ecosystem
Valmont Infrastructure at the Heart of Rapidly Evolving Ecosystem Meeting Our Customers Where They Are with a Full Suite of Solutions 51
Slide 52: Energy Transition Driving Transmission, Distribution and Substation Growth
Energy Transition Driving Transmission, Distribution and Substation Growth ~$1.2B ~$1.6B 2022 Sales 2027E Sales Target Growth Drivers Renewable generation capacity will double, accounting for 50% of total electricity generation in North America by 20501 National network of 500K EV charging stations
Slide 53: Transmission, Distribution & Substation Transformation Initiatives
Integrated Substation Solutions Lightweight, Hybrid Distribution Structures PyraMAX® Engineered Transmission Solutions Technology AI-Driven Drone Inspection Services Transmission, Distribution, & Substation Advancing the Energy Transition Transformation Initiatives 53 Conditions Monitoring Sensors P
Slide 54: Case Study | Hybrid Distribution Poles
Case Study | Hybrid Distribution Poles 54 Background • Grid hardening has fundamentally changed the distribution pole market requiring stronger structures in coastal regions • In order to meet these changing strength and performance requirements, structures have gotten heavier and more costly • Dist
Slide 55: Infrastructure Investments Driving Lighting & Transportation Growth
Infrastructure Investments Driving Dynamic Lighting & Transportation Growth 55 ~$940M ~$1.3B 2022 Sales 2027E Sales Target Growth Drivers Infrastructure Investment and Jobs Act (IIJA) • $110B to roads, highway, and bridge infrastructure1 • $18B to electrify vehicles1 Tech Driven Solutions • 10.8M un
Slide 56: Valmont Solutions for a Tech-Enabled World
Industrial Electric Vehicle Charging Agricultural Infrastructure Sustainable Bridge Structures Tech-Enabled Infrastructure Lighting & Transportation Valmont Solutions for a Tech-Enabled World 56 Transformation Initiatives Capturing Emerging Market Opportunities and Delivering High Value Solutions fo
Slide 57: Case Study | Industrial Vehicle Charging
Case Study | Industrial Vehicle Charging 1 Electric Buses Market Size, Market Share, Application Analysis, Regional Outlook, Growth Trends, Key Players, Competitive Strategies and Forecasts, 2022 to 2030 – February 2023 – Research & Markets 57 Background • EVs are a viable solution for reducing air
Slide 58: Durable Infrastructure Market Expansion Driving Coatings Growth
CHIPS and Inflation Reduction Act incentivized restoring U.S. manufacturing with $54B in federal funding and ~$250B project backlog6 Durable Infrastructure Market Expansion Driving Coatings Growth 58 ~$360M ~$530M 2022 Sales1 2027E Sales Target Growth Drivers Infrastructure Investment and Jobs Act (
Slide 59: Enhancing the Customer Experience with Digital Solutions
Process Monitoring and Tracking • Quality Control and Automation with GalvTrac® and TankTrac • Safety and Automation with SecureVision • Product Location Visibility with LiveTrac Lightning Service® Same Day Turnaround Unmatched Customer Experience with Valmont Coatings Connector® (VCC) Max Coatings
Slide 60: Demand for Data Driving Telecom Infrastructure Growth
Demand for Data Driving Telecom Infrastructure Growth 60 ~$320M ~$520M 2022 Sales 2027E Sales Target Growth Drivers Spectrum Auctions: >$120B spent in U.S. on 5G spectrum5 Increased Data Consumption • Mobile data demand increased 62x since 20111 Increased 5G Network Adoption • 5G networks to cover 8
Slide 61: Telecom Valmont Solutions Offer Innovation from a Trusted Partner
PIM Shield® Solutions Line Expansion Leverage Valmont Utility Relationships for Small Cell Deployment Global Expansion of Ericsson® Partnership InnovationLab Research & Development Group Telecom Valmont Solutions Offer Innovation from a Trusted Partner 61 Transformation Initiatives
Slide 62: Case Study | Long Range Drone Inspection
Case Study | Long Range Drone Inspection 62 Background • Traditional helicopter inspections pose safety risks for the linemen performing them • Costs associated with these inspections are also very high • Quality of traditional inspections does not provide a high level of accuracy to customers to su
Slide 63: Solar Growing into World's Leading Generation Source
Solar Growing into World's Leading Generation Source 63 ~$125M ~$500M 2022 Sales1 2027E Sales Target Growth Drivers New energy policy to support energy transition • $370B Inflation Reduction Act (IRA) • $250B REPowerEU Solar generation installed power capacity to surpass coal by 2027, becoming large
Slide 64: Expanding Solar through Innovative Technology Solutions
Global Manufacturing, Supply Chain and Sales Presence Weather Risk Mitigation Technology Drone Deployed Project Development Services Autonomous Inspection and Maintenance Services Solar Valmont Solutions Enable the Energy Transition 64 Transformation Initiatives Expanding Solar through Innovative Te
Slide 65: Infrastructure Outlook and Goals
5-year (2027E) 2030E Infrastructure Outlook and Goals 65 Projected sales to grow ~$1.5B Through strong market growth driven by the energy transition and evolution ~30% projected Solar CAGR1 Driven by the need for power sources to be more renewable $500M projected sales From new products and solution
Slide 66: Infrastructure Expected Sales Growth Bridge
~$4.4B Infrastructure Expected Sales Growth Bridge 66 $2.9B1 $400M $375M $370M $200M $170M Well-Positioned to Drive Above Market Growth Leveraging Market Growth Valmont Actions • Grow and Transform initiatives • New products and services and geographic expansion capture higher growth opportunities •
Slide 67: Key Takeaways | Infrastructure
Key Takeaways | Infrastructure 67 Expect to deliver ~$1.5B of incremental revenue and margin expansion by 2027E RUN Optimize our business with active portfolio management and pursue productivity improvements to reduce complexity and leverage resources GROW Uniquely positioned for an energy transitio
Slide 68: Accelerating Growth and Transformation through Operational Excellence
Accelerating Growth and Transformation through Operational Excellence Diane Larkin EVP, Global Operations
Slide 69: Key Messages | Operational Excellence
Key Messages | Operational Excellence 69 Well-positioned to support capacity growth across our businesses 01 through operational excellence and strategic investments Enhanced operational excellence and lean manufacturing enables 02 optimization and efficiencies Technology drives improvement and sust
Slide 70: Leveraging Operational Excellence to Accelerate Growth
Leveraging Operational Excellence to Accelerate Growth Together, Capacity Initiatives are Expected to Support 25 – 30% Volume Growth 70 Talent and Capabilities Machinery Flexible Footprint Supply Chain • Advancing human capital to be fit for the future • Retaining and developing our people • Attract
Slide 71: Enabling Sustainable Outcomes through Strategic Priorities
Enabling Sustainable Outcomes through Strategic Priorities Advancing Operational Excellence Supports Our Capacity Levers 71 Optimizing resources and empowering talent to solve our customers’ challenges Strategic Priorities Focus on Disruptive Innovation Drive Optimization and Efficiency Industry 4.0
Slide 72: Centralized Management Structure Enables Scalability
Centralized Management Structure Enables Scalability Differentiated Structure as One Valmont 72 • Integrating shared services and operations of Valmont Solar® and Ag Solar • Sharing operations in order to gain scale • Brazil: Sharing aftermarket warehouses • Talent management and development across
Slide 73: Talent Initiatives | People are the Engine of Our Growth
Talent Initiatives | People are the Engine of Our Growth and Transformation Attracting, Retaining and Inspiring Our Employees is Essential to Our Overall Corporate Goals 73 Retain and Develop Talent • Be the most desirable employer • Improve working location environment • Continue to support and pro
Slide 74: Transformation Enabled by Continuous Improvement Mindset
Transformation Enabled by Continuous Improvement Mindset 74 Foundational Lean Mindset • Elevating lean thinking and vision to world-class levels • Focus on continuous improvement in systems, processes and tools • Drive results via systematic problem-solving and data analytics • Cultural enablers fac
Slide 75: Case Study | Strategic Investing to Expand Capacity and Capability
Case Study | Strategic Investing to Expand Capacity and Capability 75 Outcomes Increase large pole capacity by >10% Supports $110M in additional sales Increases pole size capability Adds state-of-the-art capability Example Infrastructure Capacity Expansion $40M investment in machinery and existing f
Slide 76: Disruptive Innovation to Increase Capacity and Enhance Quality
• Projection Technology (e.g., light guide systems for assembly) • Autonomous welding Largest Opportunities to Grow and Transform! Disruptive Innovation to Increase Capacity, Enhance Quality, and Deliver ESG Initiatives Enterprise-wide Rollout of Disruptive Innovation Expected to be 50% Complete by
Slide 77: Continuous Improvement through Technology and Digitization
Combined with Industry 4.0 Technology to Drive Further Increased Efficiency and Productivity Continuous Improvement through Technology and Digitization Utilizing Lean and Technology Expected to Continue to Deliver Sustainable Outcomes 77 Connected Equipment Digitization of data and information Indus
Slide 78: Case Study | Sustainability is Embedded into Our Operations
Outcomes Builds grid resiliency and meets growing demand for transmission poles Net Metering Agreement for generated energy to be sold back to grid at retail price Creates northern U.S. concrete utility market presence Scope II net zero facility; solar field will offset site's electricity consumptio
Slide 79: Driving Towards World-Class Operations
Driving Towards World-Class Operations to Enable Our Grow and Transform Initiatives Continuous Improvement Mindset as We Build on Our Strong Foundation to Deliver Customer Solution Excellence 1 Top Decile 79 World-Class Operations Superior level of organizational performance creating exceptional cus
Slide 80: Key Takeaways | Operational Excellence
Key Takeaways | Operational Excellence 80 Enhanced operational excellence and lean manufacturing enables optimization and efficiencies 02 Technology drives improvement and sustainability in our operations supported by an evolving innovation culture 04 Well-positioned to support capacity growth acros
Slide 81: Accelerating Run Grow Transform with a Disciplined Financial Framework
Accelerating Run Grow Transform with a Disciplined Financial Framework Avner Applbaum EVP and CFO
Slide 82: Key Messages | Finance
Evolving into a higher quality and more dynamic organization that is less cyclical and enhances customer value Key Messages 82 GROW TRANSFORM RUN Built for sustainable outperformance and growth Outperforming despite different market volatility and economic cycles Driving geographic expansion and inv
Slide 83: Strong Track Record of Historical Performance
Strong Track Record of Historical Performance Continuing to Deliver Sustainable, Long-Term Profitable Growth and Demonstrate Resiliency Proven ability to execute in all economic scenarios as we continuously maximize profitability and expand margins through strategic pricing and operational excellenc
Slide 84: Continuing to Drive Long-Term Shareholder Value through Cycle
Continuing to Drive Long-Term Shareholder Value through Cycle 84 33% 128% 111% 169% 328% -13% 23% 38% 178% 258% -9% 24% 44% 191% 264% 1 Year 3 Years 5 Years 10 Years 15 Years Total Shareholder Return1 VMI S&P MidCap 400 Index S&P 400 Industrial Machinery 1 FactSet as of 12/31/2022 Shareholder Value
Slide 85: Exceptionally Strong, Flexible Balance Sheet with Ample Liquidity
Liquidity Available Credit under Revolving Credit Facility2 $544 M Total Available Liquidity $717 M April 1, 2023 Cash $173 M Total Long-Term Debt $986 M Shareholders’ Equity $1,598 M Total Debt to Adj. EBITDA1 1.7x Built Exceptionally Strong, Flexible Balance Sheet with Ample Liquidity 1 See append
Slide 86: Robust Free Cash Flow Generation Supports Value Creation
$210 $210 $(42) $233 $(100) $(50) $- $50 $100 $150 $200 $250 2019 2020 2021 2022 Robust Free Cash Flow Generation Supports Value Creation 1 We use the non-GAAP measure of FCF, which we define as GAAP net cash flows from operating activities reduced by capex. We believe that FCF is a useful performan
Slide 87: Disciplined and Balanced Approach to Capital Allocation
Disciplined and Balanced Approach to Capital Allocation Capital Allocation Framework Aligned with Growth Strategy and Shareholder Value Creation 1 Includes $66M purchase of non-controlling interest of AgSense, Convert Italia, Torrent, and West Coast Engineering 87 Growing Our Business & Fueling Inno
Slide 88: Reinvesting to Enable Grow and Transform Strategy
Reinvesting to Enable Grow and Transform Strategy Driving Growth with a Disciplined Approach to Investing in High ROIC Projects 88 Targeted CapEx to support our high growth markets, address labor constraints, improve productivity and accelerate innovation 2019 2020 2021 2022 Next 5yr Annual Average
Slide 89: Supporting Strategy through Disciplined Approach to M&A
Supporting Strategy through Disciplined Approach to M&A Expanding Grow and Transform Opportunities 89 Strategic Filters • Technology / Capability Expansion • Portfolio Enhancement • High-Growth Businesses • Geographic Expansion Our Goal Create value and accelerate our Run Grow Transform framework by
Slide 90: Augmenting Grow and Transform with M&A
Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Agriculture Agriculture Agriculture Infrastructure 2018 2018 2018 2018/2019 2019 2019 2020 2021 2021 2022 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Augmenting Grow and Transform with M&A Creating an Ecosy
Slide 91: Case Study | ConcealFab Acquisition
91 Case Study | ConcealFab® Acquisition Transaction Overview • Valmont purchased majority share in 2022 • Industry leader in passive intermodulation (PIM) mitigation solutions and telecom equipment concealment • Approximately $50 million in revenue Serving as an Example for Future Transactions • Acc
Slide 92: Reaffirming 2023 Financial Outlook
• 2022 sales include the offshore wind energy structures business which was divested at the end of fiscal 2022 • Effective tax rate of 28% to 29%, primarily due to expected geographic mix of earnings • Minimal expected foreign currency translation impact to net sales • Capital expenditures expected
Slide 93: 5-Year Financial Targets
Key Assumptions Continuing to Drive Sustainable Outperformance 5-Year Financial Targets Run Grow Transform Strategy Driving Expectations Higher and Enabling a More Resilient Business 1 Estimated compound annualized growth rates from base year 2022; organic sales growth only 93 12 - 15% EPS Growth1 5
Slide 94: Our Path to Sustainable Profitability
Valmont Actions • Operating leverage on capturing market growth • Accretion from growth in high margin product lines Our Path to Sustainable Profitability 94 >14% 0.3% 10.3% 10.0% High Value Customer Solutions Enable Operating Margin Expansion Leveraging Volume Growth • Grow & Transform initiatives
Slide 95: Well-Positioned to Deliver Greater than 18% ROIC by 2027E
>18% ROIC 2027E Well-Positioned to Deliver Greater than 18% ROIC by 2027E Clear Strategy to Capture High Growth Opportunities and Drive Significantly Higher ROIC 95 ~9% ROIC1 2019 Improving Capital Efficiency Working capital efficiency, asset utilization and portfolio management High Value Customer
Slide 96: Key Takeaways | Finance
Evolving into a higher quality and more dynamic organization that is less cyclical and enhances customer value Key Takeaways | Finance 96 GROW TRANSFORM RUN Built for sustainable outperformance and growth Outperforming through different economic cycles and market volatility Driving geographic expans
Slide 97: Built for Sustainable Outperformance
Built for Sustainable Outperformance Steve Kaniewski President and CEO
Slide 98: Key Takeaways
Key Takeaways 98 Introducing “Run Grow Transform” framework to guide Valmont into higher-quality growth sectors where our value proposition aligns to our customers’ needs 02 Leveraging technology and digitization throughout our organization to deliver innovative product solutions, drive digital tran
Slide 99: Q&A
Q&A
Slide 100: Appendix
Appendix
Slide 101: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 101 The non-GAAP tables below disclose the impact of the loss from divestiture of the offshore wind energy structures business on fiscal 2022 results. Further, the non-GAAP tables below disclose the impact of intangible ass
Slide 102: Reconciliation of Non-GAAP Financial Measures: Operating Income
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 102 Operating Income Reconciliation Operating income - as reported $ 354,499 $ 179,263 $ 2,259 $ (102,772) $ 433,249 Stock-based compensation - Prospera — 9,896 — — 9,896 Prospera intangible asset amortization — 6,580 — — 6
Slide 103: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 103 The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2021 results. We believe the adjustments for Prosper
Slide 104: Reconciliation of Non-GAAP Financial Measures: Operating Income
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 104 Operating Income Reconciliation Operating income - as reported $ 273,598 $ 137,027 (40,192) $ (83,648) $ 286,785 Impairment of long-lived assets — — 27,911 — 27,911 Prospera intangible asset amortization — 3,396 — — 3,3
Slide 105: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 105 The non-GAAP tables below disclose the impact of goodwill, tradenames, and a facility, restructuring costs on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (
Slide 106: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 106
Slide 107: Return on Invested Capital Reconciliation
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 107 Return on Invested Capital is a non-GAAP measure. Accordingly, Invested Capital and Return on Invested Capital should not be considered in isolation or as a substitute for net earnings, cash flows from operations or oth
Slide 108: Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings
Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings (Dollars in thousands, except per share amounts) 108 The non-GAAP tables below disclose the impact on the range of estimated diluted earnings per share of the (1) amortization of the intangible asset (Prospera) and (2) stock-based
Slide 109: 2013-2022 Historical Free Cash Flow
2013-2022 Historical Free Cash Flow1,2 109 1 Adjusted earnings for purposes of calculating FCF conversion may not agree to the adjusted net earnings. The difference is due to non-recurring expenses which were settled in cash in the year of occurrence as part of net cash flows from operating activiti
Slide 110: Calculation of Adjusted EBITDA and Leverage Ratio
Calculation of Adjusted EBITDA and Leverage Ratio Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt/Adjusted EBITDA may not exceed 3.5X Adjusted EBITDA (or 3.75X Adjusted EBITDA after certain material acquisitions) of the prior four quarte
Slide 111: Leadership Bios
Leadership Bios
Slide 112: Leadership Bios: Steve Kaniewski
Leadership Bios Steve Kaniewski, President & CEO Stephen G. Kaniewski is the president and chief executive officer of Valmont, where he has been driving digital transformation and improving margins through operating efficiencies and pricing action within the organization since assuming his role in 2
Slide 113: Leadership Bios: Aaron Schapper
Leadership Bios Aaron Schapper, Group President, Infrastructure In his role as group president, infrastructure, Aaron is responsible for the strategic leadership of the infrastructure segment. His focus is on executing a global approach for Valmont, leveraging the company’s footprint, talent and tec
Slide 114: Leadership Bios: Josh Dixon
Leadership Bios Josh Dixon, President, Global Irrigation In his role as president, irrigation, Josh leads a team focused on the sustainable, profitable growth of the irrigation business around the globe. Josh joined Valmont Irrigation in 2015 as vice president of global operations, responsible for g
Slide 115: Leadership Bios: Daniel Koppel
Leadership Bios Daniel Koppel, President, Agriculture Technology In his role as president of Ag Tech, Daniel guides the strategy and development of the company’s ag tech products and services. His passion for building technological solutions that feed the world led to the successful global expansion
Slide 116: Leadership Bios: Diane Larkin
Leadership Bios Diane Larkin, EVP, Global Operations In her role as executive vice president of global operations at Valmont, Diane leads efforts to maximize the company’s manufacturing footprint across the entire enterprise. She’s also responsible for developing a long-term strategy for aligning op
Slide 117: Leadership Bios: Avner Applbaum
Leadership Bios Avner Applbaum, EVP & Chief Financial Officer Avner joined Valmont in 2020 as executive vice president and chief financial officer. He is responsible for developing and implementing the company’s financial strategy. Avner oversees financial activities, including accounting and contro
Slide 118: Leadership Bios: Renee Campbell
Leadership Bios Renee Campbell, SVP, Investor Relations & Treasurer As senior vice president, investor relations and treasurer, Renee supports the company’s long-term growth strategy, focusing on investor relations strategy, capital allocation and capital structure, treasury operations, cash managem