Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q1 2023 Earnings Presentation
34 slides from Valmont Industries's earnings presentation, Apr 21, 2023
Slide 1: First Quarter 2023 Earnings Presentation
Valmont Industries, Inc. First Quarter 2023 Earnings Presentation April 21, 2023 © 2023 Valmont® Industries, Inc.
Slide 2: Disclosure Regarding Forward-Looking Statements
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
Slide 3: Steve Kaniewski, President & Chief Executive Officer
STEVE KANIEWSKI PRESIDENT & CHIEF EXECUTIVE OFFICER 3 April 21, 2023 | Valmont Industries, Inc.
Slide 4: 1Q 2023 Financials and Key Messages
1Q 2023 Financials and Key Messages The global Valmont team has delivered a great start to 2023 with record first quarter 01 sales, operating income, and EPS; strong operating cash flow; and achieving key strategic milestones We have built a leading presence in global Infrastructure and Agriculture
Slide 5: Poised to Perform Well in Current Market Conditions
Poised to Perform Well in Current Market Conditions INFRASTRUCTURE AGRICULTURE • Benefiting from several long-term, secular growth drivers • International market fundamentals remain very strong such as the global energy transition ‒ Brazil seeing growth in exports and irrigated land; • Utilities are
Slide 6: AgTech Tour 2023: Taking Technology Advancements on the Road
AgTech Tour 2023 Taking Technology Advancements on the Road • Demonstrating leadership in ag productivity • Kickoff event held April 5 at Valmont Global HQ • 6-month tour featuring hands-on tech interaction at Valley Dealers across the country − Remote control solutions − Machine health diagnostics
Slide 7: Conserving Resources. Improving Life.
Conserving Resources. Improving Life.® • Will release our 2023 Sustainability Report, with plan for dedicated ESG conference call later this year CHAMPION GREEN TEAM: • Spotlight on the successes of our Champion Green Teams ACACIA RIDGE, AUSTRALIA • Employee engagement pulse survey results • 2022 Va
Slide 8: Avner Applbaum, EVP & Chief Financial Officer
AVNER APPLBAUM EVP & CHIEF FINANCIAL OFFICER 8 April 21, 2023 | Valmont Industries, Inc.
Slide 9: 1Q 2023 Financial Summary
1Q 2023 Financial Summary SALES ($M) OPERATING INCOME ($M) DILUTED EPS GAAP Adjusted1 GAAP Adjusted1 GAAP Adjusted1 + 8.3% + 10.4% + 24.9% + 23.4% + 19.7% + 17.6% $122.1 $3.47 $3.61 $1,062.5 $1,062.5 $118.5 $980.8 $962.2 $3.07 $99.0 $2.90 $94.8 9.7% 11.1% 10.3% 11.5% 2022 2023 2022 2023 2022 2023 20
Slide 10: 1Q 2023 Results | Infrastructure
1Q 2023 Results | Infrastructure SALES ($M) 2022 2023 % SALES ($M) OPERATING INCOME ($M) Transmission, Distribution, and $281.6 $314.8 +12% + 11.2% + 20.5% Substation (TD&S) $736.1 Lighting and $662.1 212.8 229.1 +8% $94.4 Transportation (L&T) $78.3 Coatings 82.0 90.1 +10% 11.9% 12.9% Telecommunicat
Slide 11: 1Q 2023 Results | Agriculture
1Q 2023 Results | Agriculture SALES ($M) 2022 2023 % SALES ($M) OPERATING INCOME ($M) North American $182.3 $182.9 +0% Irrigation + 8.3% GAAP Adjusted1 $332.2 + 42.3% + 36.9% $306.6 International 124.3 149.3 +20% $53.3 $57.0 Irrigation $41.6 $37.5 17.2% Equipment and Parts $278.0 $299.2 +8% 12.4% 16
Slide 12: YTD Cash Flow Highlights
YTD Cash Flow Highlights ($M) YTD 04/01/2023 Net Cash Flows from Operating Activities $ 21 Net Cash Flows from Investing Activities (22) Net Cash Flows from Financing Activities (13) Net Cash Flows from Operating Activities $ 21 Purchase of Property, Plant, & Equipment (22) Free Cash Flows $ (1) Exp
Slide 13: Balanced Approach to Capital Allocation
Balanced Approach to Capital Allocation 2023 First Quarter Capital Deployment: $145M GROWING OUR BUSINESS RETURNING CASH TO SHAREHOLDERS $22M N/A $111M $12M Capital Expenditures Acquisitions Share Repurchases Dividends • Investments to support • Targeting high growth • Additional $400M share • 9% di
Slide 14: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity As of April 1, 2023 Available Credit under Cash $173 M $544 M Revolving Credit Facility2 Total Long-Term Debt $986 M Cash $173 M Shareholders' Equity $1,598 M Total Available Liquidity $717 M Total Debt to Adj. EBITDA 1 1.7 x ► Long-term debt mostly fixed-rate, wit
Slide 15: Updated Full Year 2023 Outlook and Key Assumptions
Updated Full Year 2023 Outlook and Key Assumptions PREVIOUS CURRENT 2023 OUTLOOK1 2023 OUTLOOK1 KEY ASSUMPTIONS 4%––7% 4% 7% No Change • 2022 sales include the offshore wind energy structures IncreaseininNet Increase NetSales SalesY/Y Y/Y business which was divested at the end of fiscal 2022 • Effec
Slide 16: Fundamental Market Drivers Remain Resilient
Fundamental Market Drivers Remain Resilient INFRASTRUCTURE AGRICULTURE • Long-term need for critical infrastructure investment globally, • Favorable market conditions, including elevated commodity prices supported by current and future stimulus and positive farmer sentiment are leading to increasing
Slide 17: Summary
Summary Performing well, with robust end market demand across global Infrastructure and 1 Agriculture markets with long-term favorable drivers Building a performance culture by exhibiting our core values and adhering to a 2 differentiating business model to improve productivity and drive financial r
Slide 18: Q&A
Q&A 18 April 21, 2023 | Valmont Industries, Inc.
Slide 19: Appendix
APPENDIX 19 April 21, 2023 | Valmont Industries, Inc.
Slide 20: 1Q 2023 Financial Summary
1Q 2023 Financial Summary $M, except for per share amounts Net Sales 2023 2022 Change Infrastructure $ 736.1 $ 662.1 11.2% Agriculture 332.2 306.6 8.3% Other - 18.7 NM Intersegment Sales 1 (5.8) (6.6) NM Net Sales $ 1,062.5 $ 980.8 8.3% Adjusted Net Sales 2 $ 1,062.5 $ 962.2 10.4% Operating Income $
Slide 21: U.S. Electric Utilities Capital Expenditures
U.S. Electric Utilities Capital Expenditures Source: EEI Finance Department, member company reports, and S&P Global Market Intelligence (updated Sept 2022). 21 April 21, 2023 | Valmont Industries, Inc.
Slide 22: Infrastructure Investment and Jobs Act (IIJA)
Infrastructure Investment and Jobs Act (IIJA) Infrastructure Investment and Jobs Act Spending Breakdown (In Order - Most to Least) Previously-Passed Transportation Funding | $650B Roads, Bridges and Related Programs | $111B Energy, Power and Electric Grid Reliability | $107.5B Freight and Passenger
Slide 23: 5G Adoption and Capex Spend Forecasts
5G Adoption and Capex Spend Forecasts Source: GSMA Intelligence- The Mobile Economy 2023 23 April 21, 2023 | Valmont Industries, Inc.
Slide 24: U.S. Net Cash Farm Income by Year
U.S. Net Cash Farm Income by Year Source: USDA (February 7, 2023) 24 April 21, 2023 | Valmont Industries, Inc.
Slide 25: U.S. Drought Condition
U.S. Drought Condition Source: Drought Monitor (April 13, 2023) 25 April 21, 2023 | Valmont Industries, Inc.
Slide 26: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands, except per share amounts The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2023 resu
Slide 27: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands, except per share amounts The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2023 resu
Slide 28: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands, except per share amounts The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2022 resu
Slide 29: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Dollars in thousands, except per share amounts The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2022 resu
Slide 30: 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 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 compen
Slide 31: Regulation G Reconciliation of Excluding Other Segment Net Sales
Regulation G Reconciliation of Excluding Other Segment Net Sales Dollars in thousands, except per share amounts Excluding Other segment net sales from the first quarter of fiscal 2022, which we refer to in this reconciliation as “Adjusted Net Sales” is a non-GAAP measure. The Other segment net sales
Slide 32: 2013-2022 Historical Free Cash Flow
2013-2022 Historical Free Cash Flow1,2 ($M) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net cash flows from operating activities $ 396.4 $ 174.1 $ 272.3 $ 232.8 $ 133.1 $ 153.0 $ 307.6 $ 316.3 $ 65.9 $ 326.3 Net cash flows from investing activities (131.7) (256.9) (48.2) (53.0) (49.6) (155.4)
Slide 33: Strong Free Cash Flow throughout the Cycle
Strong Free Cash Flow throughout the Cycle 2013 – 2022 Free Cash Flow1 ($M) Years of rapid raw material cost inflation 350 300 290 250 227 233 210 210 200 175 156 150 101 10-yr Avg. $156M 100 78 81 GAAP 1.33X 50 Adj. 0.83X - (50) (42) (100) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 10 Year A
Slide 34: 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