Slide 1: Fourth Quarter and Full Year 2021 Earnings Conference Call
Fourth Quarter and Full Year 2021 Earnings Conference Call February 24, 2022
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: Key messages from today's call
Key messages from today’s call • Arcosa continues to deliver strong revenue and Adjusted EBITDA growth in Construction Products and Engineered Structures while effectively managing cyclicality in our wind tower and Transportation Products businesses • Construction Products remains a key growth drive
Slide 5: Arcosa's Value Proposition
Arcosa’s Value Proposition Leading Experienced Healthy 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 attracti
Slide 6: 3-Year Transformation
1 3-Year Transformation 6 / Moving Infrastructure Forward
Slide 7: Today, Arcosa is a less cyclical and more resilient company
Today, Arcosa is a less cyclical and more resilient company, with attractive infrastructure catalysts supporting long-term growth Construction Products has Increased to 57% of Adjusted Actionable Strategic Progress Since Spin to Position EBITDA Portfolio for Long-Term Growth • Invested ~$1.3 billion
Slide 8: Arcosa's Long-Term Vision
Arcosa’s Long-Term Vision Grow in attractive markets Reduce the complexity Improve long-term Integrate Environmental, where we can achieve and cyclicality of the returns on invested Social, and Governance sustainable competitive overall business capital initiatives (ESG) into our advantages long-ter
Slide 9: Q4 and Full Year 2021 Results
2 Q4 and Full Year 2021 Results 9 / Moving Infrastructure Forward
Slide 10: Q4-2021 Financial Results
Q4-2021 Financial Results Double digit growth in revenues and Adjusted EBITDA, led by Construction Products and Engineered Structures Revenues Net Income Adjusted EBITDA ($M) Adjusted ($M) ($M) +14% 521.8 458.9 +17% +16% 19.2 65.9 16.5 56.4 10.0 6.0 10.5 9.2 Q4-20 Q4-21 Q4-20 Q4-21 Q4-20 Q4-21 Margi
Slide 11: Full Year 2021 Financial Results
Full Year 2021 Financial Results Full Year Adjusted EBITDA flat with prior year as growth in our Construction Products and Engineered Structures segments overcame cyclical challenges in Transportation Products segment Revenues Net Income Adjusted Adjusted EBITDA ($M) +5% ($M) ($M) 0% 2,036.4 Decline
Slide 12: Segment Results: Construction Products
Segment Results: Construction Products Recent acquisitions, strong organic growth, and attractive fundamentals drove 51% increase in Adjusted Segment EBITDA in the fourth quarter Aggregates & Specialty Materials Construction Site Support Q4 2021 Full Year 2021 Revenues Adjusted Segment EBITDA Revenu
Slide 13: Segment Results: Engineered Structures
Segment Results: Engineered Structures Strong revenue and Adjusted Segment EBITDA growth led by utility structures and storage tanks, more than offsetting anticipated lower wind tower volumes Wind, Utility & Related Structures Storage Tanks Q4 2021 Full Year 2021 Revenues Adjusted Segment EBITDA Rev
Slide 14: Segment Results: Transportation Products
Segment Results: Transportation Products Adjusted Segment EBITDA declined primarily due to a 39% decrease in barge revenues in Q4, resulting from weak order activity since the onset of the pandemic and rising steel prices Barge Steel Components Q4 2021 Full Year 2021 Revenues Adjusted Segment EBITDA
Slide 15: Balance Sheet Highlights
Balance Sheet Highlights Reduced leverage to the low end of our long-term target and increased our liquidity by repaying $75M in debt supported by strong Free Cash Flow of $65M in the fourth quarter Net Debt / Adjusted EBITDA (ratio at end of period) Liquidity ($M) 2.3 419 Long term target of 2.0 -
Slide 16: Additional Q4 and Full Year 2021 Financial Information
Additional Q4 and Full Year 2021 Financial Information Commentary Corporate • Q4-2021 expenses were consistent with our normal run-rate of ~$13-14M per quarter, after Costs adding back $8.7M legal settlement and $1.5M of acquisition-related expenses • Full year tax rate was 17%, down from 2020’s rat
Slide 17: 2022 Outlook
3 2022 Outlook 17 / Moving Infrastructure Forward
Slide 18: Outlook for 2022
Outlook for 2022 Our outlook for growth businesses is strong and offsets cyclical challenges from wind towers, barge, and steel components Expect ~15% Increase in Adjusted EBITDA from Growth … Based on Attractive Fundamentals Driving Organic Businesses in 2022 … Expansion and Full Year Contributions
Slide 19: Cyclical Businesses
Cyclical Businesses In 2022, our cyclical businesses are expected to be at <20% of their combined 2018 Adjusted EBITDA levels, but we remain confident in long-term fundamentals and expect to see recovery in 2023 and beyond Outlook for dry barge replacement cycle remains intact New builds for N.A. Ra
Slide 20: 2022 Total Company Outlook
2022 Total Company Outlook At the mid-point of our guidance range, our total 2022 Adjusted EBITDA exceeds 2021 Revenues Adjusted EBITDA $M’s $M’s 2,100 – 2,200 2,036 1,936 280 - 305 284 283 1,737 241 Adjusted EBITDA for our cyclical businesses of $20-25M FY-19 FY-20 FY-21 FY-22 FY-19 FY-20 FY-21 FY-
Slide 21: We continue to make progress on our ESG journey
We continue to make progress on our ESG journey For Arcosa, building a culture of ESG starts with foundational steps achieved through stakeholder engagement, cross-functional collaboration, and planning Major ESG Milestones Ordered most recent activity first Increased female Board of Director repres
Slide 22: Appendix
Appendix
Slide 23: Additional Financial Guidance for 2022
Additional Financial Guidance for 2022 Commentary Corporate ~$13-14M per quarter, excluding one-time items related to acquisitions and integration costs We expect a full year 2021 tax rate of ~21-23% Tax Rate $120-140M in 2022, including $30-50M of growth projects Capital expenditures We con
Slide 24: Non-GAAP Measures
Non-GAAP Measures Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 25: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Year Ended Full Year December 31, December 31, 2022 Guidance 2021 2020 2021 2020 2019 Low High Net income $ 9.2 $ 10.5 $ 69.6 $ 106.6 $ 113.3 $ 72.0 $ 89.0 Add: Interest expense, net 7.5 2.2 23
Slide 26: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 2019 2018 Construction Products Operating Profit $ 22.7 $ 12.8 $ 83.2 $ 74.7 $ 52.7 $ 50.4 Add: Depreciation, depletion, and amortization expense(1) 23.
Slide 27: Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow
Reconciliation of Net Debt to Adjusted EBITDA and Free Cash Flow ($’s in millions) (unaudited) As of Pro Forma September December 31, December 31, December 31, March 31, June 30, 2021 September December 31, 30, 2018(1) 2018 2019 2020(1) 2021(1) (1) 30, 2021(1) 2021(2) Total debt excluding debt issua
Slide 28: Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses
Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses (in millions) (unaudited) Year Ended Full Year 2022 December 31, Guidance 2018 2019 2020 2021 Low High Consolidated Adjusted EBITDA(1) $ 186.5 $ 240.7 $ 283.7 $ 283.3 $ 280.0 $ 305.0 Add: Corporate Adjusted EBITDA(1) 32.0 43.7 48.2