Eagle Materials Inc · NYSE:EXP
Eagle Materials — Investor Presentation (September 2023)
22 slides from Eagle Materials's investor presentation, Sep 8, 2023
Slide 1: Company Overview Evolution and Outlook Fiscal Year 2024 Investor Presentation
Company Overview Evolution and Outlook Fiscal Year 2024 Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
Slide 3: Eagle Materials Company Overview
Eagle Materials Company Overview â–ª Founded in 1963 as a subsidiary of Centex Corp. â–ª Completed the IPO in 1994 and stock began trading on the NYSE â–ª In 2004, Centex spun off Centex Construction Products which became Eagle Materials Inc. (NYSE: EXP) â–ª Two primary business lines: Portland ceme
Slide 4: Who We Are: We Manufacture Necessities Not Luxuries
Who We Are We Manufacture Necessities Not Luxuries • Our two major product lines are Portland cement (“Heavy” materials) and gypsum wallboard (“Light” materials), today proportionately 50/50 • Both building products have essential roles in the growth and renewal of America • We strategically operate
Slide 5: Eagle Materials: Financial Evolution
Eagle Materials: Financial Evolution In Millions, Annual at March Year-End Revenue $2,387 Heavy $579 Light 2011 2023 (Trough) Through investments and acquisitions, we’ve grown from a balanced sales contribution between our businesses a decade ago to a greater Heavy materials contribution today Opera
Slide 6: Comparative on Peer Profit Margins
Comparative on Peer Profit Margins Pre-Tax Margin % (Latest Fiscal Year) 30.0 27.4 20.0 17.7 17.8 14.1 15.0 10.8 10.0 – Eagle Heavy Peers Light Peers Pre-Tax Margin % (10-Year Average)1 30.0 21.0 20.0 14.1 11.5 8.9 9.6 10.0 1.7 – Eagle Heavy Peers Light Peers EBITDA Margin % (Latest Fiscal Year) 40.
Slide 7: Comparative on Peer Return on Capital
Comparative on Peer Return on Capital Return on Equity % (Latest Fiscal Year) 40.0 39.8 30.2 30.0 20.0 14.3 11.8 12.5 8.8 10.0 – Eagle Heavy Peers Light Peers Return on Equity % (10-Year Average)1 40.0 30.0 21.4 20.0 16.0 10.5 8.4 10.0 6.5 2.7 – Eagle Heavy Peers Light Peers Return on Invested Capit
Slide 8: Comparative on Peer Cash Flow Metrics
Comparative on Peer Cash Flow Metrics Free Cash Flow Yield % (Latest Fiscal Year) 10.0 8.0 7.9 6.5 6.0 4.0 2.4 2.3 2.0 1.4 0.5 – Eagle Heavy Peers Light Peers Free Cash Flow Yield % (10-Year Average)1 10.0 8.0 6.3 5.9 6.0 4.4 4.0 3.5 2.8 2.0 2.0 – Eagle Heavy Peers Light Peers Free Cash Flow Convers
Slide 9: End-Use Applications: US Building Code and Specification Driven
End-Use Applications US Building Code and Specification Driven Cement is the essential binding material in concrete which has • Unrivaled strength, durability, longevity and resilience • Energy efficiency • Doesn’t burn, rust or rot • Malleable at the jobsite • Few practical cement substitutes, and
Slide 10: Cement US Heartland System
Cement US Heartland System Strategic Geographic Focus, Manufacturing Away from US Coastlines (Imports) Plants and Capacities1 (ST2 thousands) Texas Lehigh (50%) 720 Illinois Cement 1,100 Mountain Cement 800 Nevada Cement 550 Central Plains Kansas City 1,300 Central Plains Tulsa 900 Fairborn Cement 9
Slide 11: US Cement Consumption and Clinker Capacity
US Cement Consumption and Clinker Capacity Million Metric Tons 120,000 US Clinker Capacity 100,000 80,000 60,000 40,000 20,000 0 2017 2018 2019 2020 2021 2022 Public Residential Nonresidential Other New capacity — and capacity expansion — is constrained due to regulation (NESHAP) Imports will be req
Slide 12: Gypsum Wallboard and Paperboard System
Gypsum Wallboard and Paperboard System US Sunbelt Strategic Geographic Focus West of Mississippi River Natural Gypsum Gypsum, CO East of Mississippi River 700 MMSF Synthetic Gypsum Duke, OK 1,300 MMSF Albuquerque, NM Georgetown, SC 425 MMSF 900 MMSF Bernalillo, NM Lawton, OK 550 MMSF 390,000 tons pa
Slide 13: Gypsum Wallboard: US Demand is Closely Linked with Housing
Gypsum Wallboard US Demand is Closely Linked with Housing 1400 48 New Home Sales (000) 1200 42 Wallboard Shipments (BSF) 36 1000 30 800 24 600 18 400 12 200 6 0 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 Source: Census Bureau, Gypsum Association
Slide 14: Eagle Materials Strategy Since 2010
Eagle Materials Strategy Since 2010 Strategy and Investment Directions Heavy Side Cement and Con/Agg Light Side Wallboard and Paperboard Growth • Cement • Aggregates Improvement • Brownfield paper expansion Results ✓ Tripled Cement capacity through acquisitions ✓ Achieved scale materiality ✓ Largest
Slide 15: Macroeconomic Fundamentals
Macroeconomic Fundamentals Future Determinants of Profitability Favorable for Eagle Businesses Heavy Side Winning US Heartland Strategy, Different Than International + Supply + Demand + Substitutes + Structure + Sustainability + Imports + Logistics Light Side Reasons Why Future Cycles May Be More Fa
Slide 16: Eagle Materials Capital Allocation
Eagle Materials Capital Allocation $3.0 Billion Over the Last Five Years â–ª Capital Allocation Priorities Remain Unchanged — Investments in Profitable Strategic Growth Opportunities — Investments to Maintain and Improve Existing Assets — Return of Cash to Shareholders through Share Repurchases and
Slide 17: Well-Managed Capital Structure
Well-Managed Capital Structure Net Debt/Adj. EBITDA Below 2x (with Exception of Temporary Increase For the Kosmos Acquisition) Kosmos Acquisition 3.1x Plan was implemented to quickly reduce leverage post-acquisition 1.5x 1.5x 1.5x 1.4x 1.4x 1.3x 1.3x 1.3x FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Slide 18: Environmental CO2 Measurement and Disclosure
Environmental CO2 Measurement and Disclosure Notwithstanding our growth in cement (we grew our asset base 3x over recent years) … … we have continued to make significant progress in reducing our per unit CO2 emissions – on our journey to value chain carbon neutrality Note: Year-to-year variations ar
Slide 19: CO2e Progress, 2030 Goals and Longer-Term Aspirations
CO2e/ton Cementitious Product, CO2e as reported Progress, 2030 Goals and Longer-Term Aspirations Phase 1 Phase 2 Phase 3 0.9 0.8 0.7 0.6 Product Mix Shift to 100% Limestone 0.5 Cement for all 0.4 construction grades, and Process in conjunction with 0.3 Optimization related actions implies a 0.2 20%
Slide 20: Appendix
| |e Appendix
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $ in millions, Fiscal Year Ending March 31 FY 21 FY 22 FY 23 Net Earnings, as reported $ 339 $ 374 $ 462 (Earnings) from Discontinued Operations (5) – –Income Tax Expense 90 101 127 Interest Expense 44 31 35 Depreciation, Depletion and Amortization 129 129 139 EBITDA f
Slide 22: Net Debt to Adjusted EBITDA Reconciliation
Net Debt to Adjusted EBITDA Reconciliation $ in millions, Fiscal Year Ending March 31 FY 21 FY 22 FY 23 Total debt, excluding debt issuance costs $ 1,015 $ 950 $ 1,100 Cash and cash equivalents 264 19 15 Net Debt $ 751 $ 931 $ 1,084 Adjusted EBITDA from Continuing Operations $ 571 $ 657 $ 782 Net De
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