Atkore Inc. · NYSE:ATKR
Atkore — Q4 2022 Earnings Presentation
47 slides from Atkore's earnings presentation, Nov 18, 2022
Slide 1: Fourth Quarter and Full Year 2022 Earnings Presentation and Business Update
Fourth Quarter and Full Year 2022 Earnings Presentation and Business Update November 18, 2022 © Atkore
Slide 2: Cautionary Statements
Cautionary Statements This presentation is provided for general informational purposes only and it does not include every item which may be of interest, nor does it purport to present full and fair disclosure with respect to Atkore Inc. (the “Company” or “Atkore”) or its operational and financial in
Slide 3: Today's Discussion
Today’s Discussion 1. Outstanding Results & Performance in 2022 2. Company Overview & Growth Journey 3. Well-Positioned for Long-Term Growth & Value Creation © Atkore 3 3
Slide 4: FY 2022 Year in Review
FY 2022 Year in Review Delivered record Strong balance sheet Product vitality index financial results with Total Debt reached high single Leverage Ratio < 1x digits as a percentage of Q4 Net Sales MC Glide TuffTM – As of 2022, Atkore Inc. Received employer, Awarded EC&M received an MSCI ESG and cust
Slide 5: Strong Results in Q4 and Full Year 2022
Strong Results in Q4 and Full Year 2022 Q4 Net Sales $M Net Income $M Adjusted EBITDA1 $M Diluted EPS $/share Adjusted Diluted EPS1 $/share 2022 +11% +9% +11% +22% +26% 1,029.0 220.8 325.1 5.18 5.52 923.7 202.6 292.9 4.26 4.39 501.7 477.4 54.2 88.8 98.2 46.0 0.94 1.11 1.01 1.18 Q4 Q4 Q4 Q4 Q4 Q4 Q4
Slide 6: Consolidated Atkore Bridges
Consolidated Atkore Bridges Q4 Net Sales Bridge Adjusted EBITDA Bridge1 2022 $45 $10 $57 $1,029M $325M $45 $924M $8 $293M $4 $5 $22 $5 Includes a $9M unfavorable impact related to business interruption insurance received in Q4 2021 2021 Volume/Mix Price M&A F/X / Other 2022 2021 Volume/Mix Cost Pric
Slide 7: Company Overview
Company Overview © Atkore 7
Slide 8: Atkore: a Compelling Investment
Atkore: a Compelling Investment Disciplined Operational Focus Values-based organization driven by the Atkore Business System Track Record of Success Strong track record of earnings growth, increasing free cash flow and excellent return on capital Market Leadership Leading market share in key product
Slide 9: Our Foundation Is the Atkore Business System
Our Foundation Is the Atkore Business System © Atkore 9
Slide 10: Our Products Are All Around You
Our Products Are All Around You Wire Basket Cable Armored Cable Tray & Fittings Flexible & Liquid Tight Electrical Electrical Conduit Prefabrication Cable Tray, Industrial Flexible Ladder & Fittings Electrical Conduit Steel Conduit & Fittings Metal Framing & Fittings (Including Seismic) Specialty El
Slide 11: Integrated & Aligned Operating Segments
Integrated & Aligned Operating Segments Electrical Safety & Infrastructure Adj. EBITDA 20.5% 23.0% 39.1% 42.3% Adj. EBITDA 14.7% 13.6% 11.7% 15.4% Margin1 (%) margin1 (%) Financials Summary $3,014 $2,233 $901 $698 $1,390 $1,271 $528 $498 Net Sales ($M) Net Sales ($M) FY 2019 FY 2020 FY 2021 FY 2022
Slide 12: Growth Driven by Atkore Business System
Growth Driven by Atkore Business System Historical Net Sales Bridge Key Discussion Items $593 $15 $3,914M $1,924 $21 A• Analysis understanding customer and product level profitability minimized impact of volume declines; Examples B include strategic determination to reduce $1,504M A retail exposure
Slide 13: Our Business Has Transformed Since IPO
Our Business Has Transformed Since IPO Transformed sales mix to drive significant revenue growth and profitability through organic and inorganic activities while increasing our total addressable market opportunity Adjusted EBITDA Adjusted EBITDA Margin1 Margin1 15.1% 34.3% Total Addressable Market O
Slide 14: Diversity of End-Market Use Enables Flexibility
Diversity of End-Market Use Enables Flexibility Estimated Net Sales by Key Product Area & Market Non-Residential Construction (Global) Residential (U.S.) OEM / OTHER Commercial & Institutional Data Centers & Utility Multi-Family Single Family Industrial Warehouses Plastic Pipe, Conduit & Fittings Me
Slide 15: Solid Market Fundamentals
Solid Market Fundamentals Architecture Billings Index Dodge Momentum Index >50 indicates growth vs. prior month; Leads construction starts by 2000 = 100; Leads construction starts by ~9 to 12 months ~12 months 52.4 52.5 53.0 169 50.5 50 155 150 146 43.6 139 Sep’18 Sep’19 Sep’20 Sep’21 Sep’22 Sep’18
Slide 16: Exposed to Strong Underlying MegaTrends
Exposed to Strong Underlying MegaTrends Demand Driver by “Electrification of Grid Digital Growth in Key Product Area Everything” Hardening Infrastructure Renewables (Illustrative Impact) Plastic Pipe, Conduit & Fittings Metal Electrical Conduit & Fittings Metal Framing, Cable Management & Constructi
Slide 17: Conduits of Growth
Conduits of Growth M&A Pipeline Category Expansion Focused Product Initiatives Category Growth & Innovation Customer Experience Digital Capabilities Enhancements & Resources Ongoing investment areas across the business to improve market positioning and operational capabilities © Atkore 17
Slide 18: Strategic & Disciplined Approach to M&A
Strategic & Disciplined Approach to M&A M&A Focused on Key Markets with Growth Opportunities Critical mass in Seek growth in core product categories for scale in key markets served markets Diligent assessment of macro growth trends and competitive landscape Unlock access to attractive markets,
Slide 19: Outstanding M&A Track Record
Outstanding M&A Track Record M&A Deployed $649M to bolster product categories, expand geographic presence and enter new markets to enhance our transformation May 2017 October 2017 September 2018 August 2019 October 2020 December 2021 May 2022 August 2022 Marco Calpipe Vergokan NV Rocky Mountain Colb
Slide 20: Welcome Elite Polymer Solutions!
Welcome Elite Polymer M&A Solutions! Manufacturer of High Density Polyethylene (HDPE) conduit, primarily serving telecommunications, power utility, and transportation markets Acquired the assets of Elite Polymer Solutions on November 7, 2022 Located in Lovelady, Texas, with approximately 55 employee
Slide 21: HDPE Products Expected to Drive Growth
Category Expansion Example HDPE Products Expected to Drive Growth Between recent organic and inorganic investments, we expect our HDPE related products to be a strong driver of growth for the next several years given the secular tailwinds behind the products and our execution of the Atkore Business
Slide 22: New Large Tube Capacity & Capabilities Provide Opportunity
Category Expansion New Large Tube Capacity & Example Capabilities Provide Opportunity Solar megatrend represents a growth and category expansion opportunity — leveraging recent capability and capacity investments for mechanical tubing products that can be used in renewable energy applications. In Ma
Slide 23: Focused Product Category Growth & Innovation
Focus Category & Focused Product Category Growth & Innovation Innovation New product innovation and share gain opportunities in key categories and markets expected to contribute to incremental and profitable growth over the next several years Growth Examples PLASTIC PIPE & CONDUIT & FITTINGS METAL E
Slide 24: Positioned for Long-Term Growth & Value Creation
Positioned for Long-Term Growth & Value Creation © Atkore 24
Slide 25: Strong Financial Profile to Support Future Growth
Strong Financial Profile to Support Future Growth Net Sales Adjusted EBITDA1 Adjusted Diluted EPS1 $M $M $/share +21% CAGR +43% CAGR +67% CAGR 3,914 1,342 21.55 2,928 898 12.98 1,835 1,917 1,765 1,504 272 324 327 228 2.78 3.62 3.78 1.65 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 201
Slide 26: Initial FY2023 Outlook
Initial FY2023 Outlook Outlook Summary Outlook Items for Q1 2023 FY2023 FY2023 Consolidated Atkore Outlook Outlook Comments & Perspective Net Sales Down LSD% vs. PY Flat to Down ~10% vs. PY • Accounting methodology associated with torque tube tax credits related to Adjusted EBITDA1 $240M – $260M $85
Slide 27: Key Bridging Assumptions FY23 vs. FY22
Key Bridging Assumptions FY23 vs. FY22 With continued normalization of average selling prices in key product lines such as PVC electrical conduit, we expect part of the pricing outperformance in FY2022 to continue to normalize and be an unfavorable year over year impact in FY2023 vs. FY2022 ILLUSTRA
Slide 28: Updated Capital Deployment Framework
Updated Capital Deployment Framework Capital Deployment Focused on Driving Growth in Adjusted EPS Capital Deployment Model – FY 2023 & Forward Status Update Target Cash Flow from Capital Expenditures, ~$200M in expected capital expenditures in FY23; includes Operating Activities to be Organic Growth
Slide 29: Strategy Set to Deliver Future Performance
Strategy Set to Deliver Future Performance We expect our Conduits of Growth and Capital Deployment Model to help drive future performance Illustrative Long-Term Adjusted EPS1 Bridge, $/share $21.55 >$18 $13.10 - $14.90 $12.98 $3.78 $1.65 FY17 FY20 FY21 FY22 Volume Benefits Pricing Normalization FY23
Slide 30: Atkore: a Compelling Investment
Atkore: a Compelling Investment Disciplined Operational Focus Values-based organization driven by the Atkore Business System Track Record of Success Strong track record of earnings growth, increasing free cash flow and excellent return on capital Market Leadership Leading market share in key product
Slide 31: Appendix
Appendix © Atkore 31
Slide 32: Q4 Income Statement Summary
Q4 Income Statement Summary ($’s in millions) Y/Y Y/Y % Q4 2022 Q4 2021 Change Change Net Sales $1,029.0 $923.7 $105.3 11.4% Operating Income $296.8 $266.0 $30.9 11.6% Net Income $220.8 $202.6 $18.2 9.0% Adjusted EBITDA1 $325.0 $292.9 $32.2 11.0% Adjusted EBITDA Margin2 31.6% 31.7% (10 bps) - Net In
Slide 33: Consolidated Atkore Bridges
Consolidated Atkore Bridges Electrical Safety & Infrastructure ($’s in millions) Y/Y ($’s in millions) Y/Y Q4 2022 Q4 2021 Q4 2022 Q4 2021 Change Change Net Sales $795.2 $697.5 14.0% Net Sales $233.9 $227.4 2.9% Adjusted EBITDA $308.8 $283.9 8.7% Adjusted EBITDA $36.4 $29.0 25.4% Adjusted EBITDA Mar
Slide 34: FY22 Income Statement Summary
FY22 Income Statement Summary ($’s in millions) Y/Y Y/Y % FY 2022 FY 2021 Change Change Net Sales $3,913.9 $2,928.0 $985.9 33.7% Operating Income $1,233.8 $798.9 $434.9 54.4% Net Income $913.4 $587.9 $325.6 55.4% Adjusted EBITDA1 $1,341.8 $897.5 $444.2 49.5% Adjusted EBITDA Margin2 34.3% 30.7% +360
Slide 35: Segment Information
Segment Information Three months ended September 30, 2022 September 30, 2021 Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA (in thousands) Net sales EBITDA Margin Net sales EBITDA Margin Electrical $ 795,220 $ 308,783 38.8 % $ 697,492 $ 283,945 40.7 % Safety & Infrastructure 233,884 36,371 15.6 %
Slide 36: Segment Information
Segment Information Fiscal year ended September 30, 2022 September 30, 2021 September 30, 2020 September 30, 2019 Adjusted Adjusted Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA (in thousands) Net sales EBITDA Margin Net sales EBITDA Margin Net sales EBITDA Margin
Slide 37: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation Consolidated Atkore Inc. Three months ended Fiscal Year Ended September 30, September 30, September 30, September 30, (in thousands, except per share data) 2022 2021 2022 2021 Net income $ 220,802 $ 202,561 $ 913,434 $ 587,857 Stock-based compensation 3,065
Slide 38: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation Consolidated Atkore Inc. Three months ended September 30, September 30, September 30, September 30, September 30, September 30, (in thousands, except per share data) 2022 2021 2020 2019 2018 2017 Net income $ 220,802 $ 202,561 $ 54,241 $ 45,997 $ 32,699 $ 2
Slide 39: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation Consolidated Atkore Inc. Fiscal Year Ended September 30, September 30, September 30, September 30, September 30, September 30, (in thousands, except per share data) 2022 2021 2020 2019 2018 2017 Net income $ 913,434 $ 587,857 $ 152,302 $ 139,051 $ 136,645 $
Slide 40: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore Inc. Three months ended Fiscal Year Ended September 30, September 30, September 30, September 30, (in thousands) 2022 2021 2022 2021 Net income $ 220,802 $ 202,561 $ 913,434 $ 587,857 Income tax expense 66,557 65,222 290,186 192,144 De
Slide 41: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore Inc. Three months ended September 30, September 30, September 30, September 30, September 30, September 30, (in thousands) 2022 2021 2020 2019 2018 2017 Net income $ 220,802 $ 202,561 $ 54,241 $ 45,997 $ 32,699 $ 20,857 Income tax expe
Slide 42: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Consolidated Atkore Inc. Fiscal Year Ended September 30, September 30, September 30, September 30, September 30, September 30, (in thousands) 2022 2021 2020 2019 2018 2017 Net income $ 913,434 $ 587,857 $ 152,302 $ 139,051 $ 136,645 $ 84,639 Income tax ex
Slide 43: Trailing Twelve Month Adjusted EBITDA
Trailing Twelve Month Adjusted EBITDA Consolidated Atkore Inc. TTM Three months ended September 30, September 30, March 25, December 24, (in thousands) 2022 2022 June 24, 2022 2022 2021 Net income $ 913,434 $ 220,802 $ 254,313 $ 233,477 $ 204,843 Interest expense, net 30,676 9,000 7,243 7,514 6,918
Slide 44: Net Debt to Total Debt and Leverage Ratio
Net Debt to Total Debt and Leverage Ratio Consolidated Atkore Inc. September 30, December 24, September 30, December 25, June 24, 2022 March 25, 2022 June 25, 2021 March 26, 2021 ($ in thousands) 2022 2021 2021 2020 Short-term debt and current maturities of long- term debt $ — $ — $ — $ — $ — $ 4,00
Slide 45: Net Debt to Total Debt and Leverage Ratio
Net Debt to Total Debt and Leverage Ratio Consolidated Atkore Inc. September 30, September 30, September 30, September 30, September 30, September 30, ($ in thousands) 2022 2021 2020 2019 2018 2017 Short-term debt and current maturities of long-term debt $ — $ — $ — $ — $ 26,561 $ 4,215 Long-term de
Slide 46: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Consolidated Atkore Inc. Fiscal year ended September 30, September 30, September 30, September 30, September 30, September 30, (in thousands) 2022 2021 2020 2019 2018 2017 Net cash provided by operating activities $ 786,835 $ 572,902 $ 248,762 $ 209,694 $ 145,703 $ 121,
Slide 47: atkore.com
atkore.com © Atkore © Atkore 47