Mueller Water Products · NYSE:MWA
Mueller Water Products — Oppenheimer 14th Annual Industrial Growth Conference 2019
34 slides from Mueller Water Products's conference presentation, May 8, 2019
Slide 1: Oppenheimer 14th Annual Industrial Growth Conference
Where Intelligence Meets Infrastructure® Oppenheimer 14th Annual Industrial Growth Conference May 8, 2019
Slide 2: 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 limitations as analytical t
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address activities, events or developments that we intend, expect, plan, project, b
Slide 4: 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 March 31, 2019 <10% % of Natural gas • Spun off from Walter $ in millions Total utilities Industries in 2006 Net sales $931.4 • Listed on NYSE (MWA) Infrastructure $833.8 89.5% June
Slide 5: 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 6: 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 7: Products and Markets
Products and Markets [MUELLER] “=,
Slide 8: Our Leading Product Positions
Our Leading Product Positions FIRE IRON GATE BUTTERFLY BRASS HYDRANTS VALVES VALVES PRODUCTS PRODUCT PRODUCT PRODUCT PRODUCT #1 POSITION #1 POSITION #1 POSITION #2 POSITION A.Y. McDonald ACIPCO DeZURIK Ford Meter Box McWane Company estimates based on internal analysis and information from trade asso
Slide 9: Mueller is Uniquely Positioned to Address Utility Pain Points
Mueller is Uniquely Positioned to Address Utility Pain Points 9
Slide 10: Krausz Industries
Krausz Industries Krausz is a leader in pipe repair couplings, grips and clamps with a suite of products that can address virtually any water and wastewater pipe connection or repair scenario Broad Portfolio of Products HYMAX Coupling HYMAX Grip HYMAX Versa HYMAX Clamp Two-bolt wide-range Two-bolt w
Slide 11: 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 12: 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 • Majority of utilities have service connection fees and/or capital recovery (3) 1953 1958 1963 1968 1973 1978 1983 1988
Slide 13: Focus on Manufacturing Excellence Driving Organic Growth
Focus on Manufacturing Excellence Driving Organic Growth • Infrastructure has strong adjusted EBITDA margins (26.6% over last twelve months) providing a base for future growth • Enhanced operational initiatives driving ongoing productivity improvements to facilitate innovation, increase new product
Slide 14: Strong Need for Intelligence in Water Infrastructure
Strong Need for Intelligence in Water Infrastructure Black & Veatch 2018 Strategic Directions in the U.S. Water Industry “The true value of digital water emerges when we move from data harvesting to data science. Collecting information is good. Using data to make better decisions and plan for a safe
Slide 15: 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 16: Financial Performance
Financial Performance [MUELLER] “=,
Slide 17: 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 • Strong record of free cash flow • Divested Anvil and U.S. Pipe organic growth generation driven by improvements in operating results
Slide 18: History of Strong Financial Performance
History of Strong Financial Performance Delivered 26% cumulative net sales growth (4.7% CAGR) with 76% cumulative increase in adjusted EBITDA between 2013 and 2018 leading to adjusted EBITDA margin improvement around 600 bps. since 2013 (FY2013 to LTM Q2FY19) (1) Consolidated Net Sales Consolidated
Slide 19: Q2 2019 Consolidated Financial Highlights
Q2 2019 Consolidated Financial Highlights • Net sales increased $0.8 million to $234.0 million driven by the acquisition of Krausz Industries and higher pricing at Second Quarter 2019 2018 Infrastructure, partially offset by lower volumes at both Infrastructure and Technologies Net sales $ 234.0 $ 2
Slide 20: 2019 Full Year Outlook
2019 Full Year Outlook Full year 2019 expectations reflect the current business environment and include the results expected from the acquisition of Krausz Industries Ltd. • Growth in all end markets during the second half of 2019 with municipal spending growth in the mid-single digit range, residen
Slide 21: Strong Balance Sheet with Significant Flexibility
Strong Balance Sheet with Significant Flexibility • Total debt of $445.7 million and cash and cash equivalents of $134.3 million, after Krausz Industries acquisition, which closed in Q1 FY19 • Net debt leverage was 1.7x at March 31, 2019 • $143 million of excess availability under the ABL at March 3
Slide 22: Balanced and Disciplined Capital Allocation
Balanced and Disciplined Capital Allocation STRATEGIC INVESTMENTS SHAREHOLDERS BALANCE SHEET • Driving growth through capital • Returned $155 million of cash to • Reduced debt by $1.1 billion since investments and acquisitions shareholders since December March 31, 2006 and $650 million 2016 through
Slide 23: 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 24: Questions
Questions [MUELLER] ‘=.
Slide 25: Supplemental Data
Supplemental Data [MUELLER] “=,
Slide 26: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Quarter ended March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 214.1 $ 19.9 $ — $ 234.0 Gross profit $ 71.9 $ 2.9 $ — $ 74.8 Selling, g
Slide 27: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Quarter ended March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.9 Income tax expense (benefit) (1) 3.9 Interest expense, net (1) 5.9
Slide 28: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Quarter ended March 31 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 211.1 $ 22.1 $ — $ 233.2 Gross profit $ 71.4 $ 3.1 $ — $ 74.5 Selling, ge
Slide 29: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Quarter ended March 31 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 10.2 Income tax expense (1) 14.2 Interest expense, net (1) 5.2 Pension c
Slide 30: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 386.1 $ 40.7 $ — $ 426.8 Gross profit $ 128.7 $ 6.2 $ — $ 134.9 Selli
Slide 31: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2019 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net loss $ (10.1) Income tax expense (benefit) (1) (2.0) Interest expense, net (1
Slide 32: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net sales $ 371.2 $ 40.3 $ — $ 411.5 Gross profit $ 123.9 $ 6.0 $ — $ 129.9 Selli
Slide 33: Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures
Segment Results and Reconciliation of GAAP to Non-GAAP Performance Measures (UNAUDITED) Six months ended March 31, 2018 Infrastructure Technologies Corporate Consolidated (dollars in millions, except per share amounts) Net income $ 65.3 Income tax expense (1) (25.6) Interest expense, net (1) 10.4 Pe
Slide 34: Where Intelligence Meets Infrastructure
Where Intelligence Meets Infrastructure®
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