Arcosa, Inc. · NYSE:ACA
Arcosa — Q4 2023 Earnings Presentation
31 slides from Arcosa's earnings presentation, Feb 23, 2024
Slide 1: Fourth Quarter & Full Year 2023 Earnings Conference Call
FOURTH QUARTER & FULL YEAR 2023 EARNINGS CONFERENCE CALL MOVING INFRASTRUCTURE FORWARD | FEBRUARY 23, 2024
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 Arcosa, Inc. INVESTOR CONTACT 500 North Akard Street, Suite 400 InvestorResources@arcosa.com Dallas, TX 75201 3 I MOVING INFRASTRUCTURE FORWARD I 2024
Slide 4: Fourth Quarter and Full Year 2023 Highlights
FOURTH QUARTER AND FULL YEAR 2023 HIGHLIGHTS • Achieved double-digit revenue and Adjusted EBITDA growth, normalizing for the storage tanks divestiture, for both the fourth quarter and full year • Strong full year margin expansion with all three segments contributing • Generated 50% higher operating
Slide 5: Arcosa's Value Proposition
ARCOSA’S VALUE PROPOSITION LEADING EXPERIENCED HEALTHY BALANCE DISCIPLINED CAPITAL TRACK RECORD businesses serving management team sheet and ample allocation process to of executing on critical with history of liquidity to navigate grow in attractive strategic priorities as infrastructure managing t
Slide 6: Strategic Update
01 STRATEGIC UPDATE
Slide 7: Arcosa's Long-Term Vision
ARCOSA’S LONG-TERM VISION Grow in attractive markets Reduce the complexity and Improve long-term Integrate Environmental, where we can achieve cyclicality of the overall returns on invested capital Social, and Governance (ESG) sustainable competitive business initiatives into our long-term advantage
Slide 8: Strategic Transformation
STRATEGIC TRANSFORMATION Today Arcosa is a less cyclical and more resilient company Construction Products has Increased to Actionable Strategic Progress to Position Portfolio for Approximately 60% of Adjusted EBITDA Long-Term Growth Adjusted EBITDA, excluding Corporate ($M) • Divestiture of storage
Slide 9: Q4 & FY 2023 Results
02 Q4 & FY 2023 RESULTS
Slide 10: FY 2023 Consolidated Results
FY 2023 CONSOLIDATED RESULTS Double-digit revenue and Adjusted EBITDA growth, normalizing for the storage tank divestiture REVENUES ($M) NET INCOME ($M) ADJUSTED EBITDA ($M) +3% REPORTED ADJUSTED +13% 2,307.9 +12% 367.6 +32% 2,242.8 N.M. +48% 21.8 188.9 245.8 158.1 325.1 46.9 147.3 159.2 106.8 2,053
Slide 11: Q4 2023 Consolidated Results
Q4 2023 CONSOLIDATED RESULTS Adjusted EBITDA growth of 38% with all three segments contributing to increase REVENUES ($M) NET INCOME ($M) ADJUSTED EBITDA ($M) REPORTED ADJUSTED +16% N.M. +37% 582.2 +17% 154.6 84.3 +38% 500.3 +191% 1.3 33.2 61.7 0.4 27.1 147.3 499.0 61.3 11.4 7.3 Q4-22 Q4-23 Q4-22 Q4
Slide 12: Q4 2023 Segment Results: Construction Products
Q4 2023 SEGMENT RESULTS: CONSTRUCTION PRODUCTS Adjusted Segment EBITDA growth reflects strong pricing gains as well as operational improvements in specialty materials REVENUES ($M) ADJUSTED SEGMENT EBITDA ($M) +7% +7% 238.3 53.0 221.9 24.3 49.6 21.4 200.5 214.0 Q4-22 Q4-23 Q4-22 Q4-23 EBITDA Margin:
Slide 13: Q4 2023 Segment Results: Engineered Structures
Q4 2023 SEGMENT RESULTS: ENGINEERED STRUCTURES Wind tower tax credits and higher utility structures volumes drive significant Adjusted Segment EBITDA growth REVENUES ($M) ADJUSTED SEGMENT EBITDA ($M) +15% +85% 236.3 32.3 205.9 +15% 1.3 +89% 17.5 0.4 204.6 17.1 Q4-22 Q4-23 Q4-22 Q4-23 Margin excl. 8.
Slide 14: Q4 2023 Segment Results: Transportation Products
Q4 2023 SEGMENT RESULTS: TRANSPORTATION PRODUCTS Adjusted Segment EBITDA growth outpaces revenues led by increased volumes and operating leverage REVENUES ($M) ADJUSTED SEGMENT EBITDA ($M) +49% +67% 108.0 13.9 35.7 72.5 8.3 34.3 72.3 38.2 Q4-22 Q4-23 Q4-22 Q4-23 Barges Steel Components Margin 11.4%
Slide 15: FY 2023 Segment Results
FY 2023 SEGMENT RESULTS, $’S in M’S CONSTRUCTION PRODUCTS ENGINEERED STRUCTURES TRANSPORTATION PRODUCTS REVENUES ADJUSTED SEGMENT REVENUES ADJUSTED SEGMENT REVENUES ADJUSTED SEGMENT EBITDA EBITDA EBITDA Gain on land sale +126% +8% +23% -13% -22% +37% 1,001.3 245.3 1,002.0 149.1 433.5 61.8 923.5 21.8
Slide 16: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Flexible balance sheet and ample liquidity to support disciplined capital allocation strategy NET DEBT / ADJUSTED EBITDA (ratio at end of period) LIQUIDITY ($M) Long term target of 2.0 - 2.5x 2.1 523 105 1.2 1.3 Spun • $160M of borrowings on debt free $600M revolver that Cas
Slide 17: 2024 Outlook
03 2024 OUTLOOK
Slide 18: 2024 Guidance
2024 GUIDANCE Arcosa is poised for another strong year of growth in 2024 across our businesses Revenues ($M) Adjusted EBITDA ($M) +12% +9% 2,460 – 2,720 380 - 420 368 +16% 22 2,308 346 FY-23 2024 Guidance FY-23 2024 Guidance Margin, excl. Gain on land sale 15.0% 15.4% Gain on land sale See full year
Slide 19: Growth Businesses Outlook
GROWTH BUSINESSES OUTLOOK Demand outlook is attractive with additional tailwinds from increased infrastructure spending Construction Products Engineered Structures Infrastructure spending is on the rise as indicated by increased FY2023 state Forecasted Utility CAPEX driven by increased federal infra
Slide 20: Wind Towers Outlook
WIND TOWERS OUTLOOK 2024 is beginning of a multi-year upcycle expected for our wind tower business Long-Term Recovery in Wind Industry Expected in 2024 and Beyond Four Manufacturing Facilities to Support U.S. Energy Transition 10-year PTC extension, passed in August 2022, is expected to boost capaci
Slide 21: Inland Barge Outlook
INLAND BARGE OUTLOOK Outlook for dry barge replacement cycle remains intact Aging Fleet and Underinvestment in Replacement Support Positive Outlook for New Hopper Barge Construction Hopper Barge Fleet Age1 Annual Industry Deliveries Since ‘052 (in Years) (# Hopper Barges) • Annual industry deliverie
Slide 22: ESG Accomplishments
ESG ACCOMPLISHMENTS We expect to publish our 2023 Sustainability Report during the second quarter of 2024 Highlights from Our 2022 Sustainability Report • 30% reduction in our TRIR1 in 2022 and 72% reduction since 2019 SAFETY PEOPLE ENVIRONMENT • ARC 100 driving positive and engaged culture of Commu
Slide 23: Appendix
APPENDIX
Slide 24: Guidance Summary for 2024
GUIDANCE SUMMARY FOR 2024 COMMENTARY • $2.46B to $2.72B range for full year 2024 REVENUE • 2023 full year revenue was $2.31B • $380M to $420M range for full year 2024 ADJUSTED • 2023 full year Adjusted EBITDA was $368M, including $22M from the land sale gain in the first quarter EBITDA TAX RATE • Fu
Slide 25: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 26: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Year Ended Full Year December 31, December 31, 2024 Guidance 2023 2022 2023 2022 Low High Net income $ 27.1 $ 154.6 $ 159.2 $ 245.8 $ 144.8 $ 170.2 Add: Interest expense, net 6.8 6.5 23.4 29.9
Slide 27: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2018 2022 2023 Construction Products Operating Profit $ 24.4 $ 24.1 $ 50.4 $ 96.5 $ 138.6 Add: Depreciation, depletion, and amortization expense(1) 28.6 25.5 21.9
Slide 28: Reconciliation of Freight-Adjusted Revenues for Construction Products
Reconciliation of Freight-Adjusted Revenues for Construction Products ($’s in millions) (unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Construction Products Revenues $ 238.3 $ 221.9 $ 1,001.3 $ 923.5 Less: Freight revenues 28.5 30.4 116.1 122.1 Freight-Adjust
Slide 29: 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 30, December 31, December 31, December 31, December 31, December 31, December 31, 2018(1) 2018 2019 2020(1) 2021(1) 2022(1) 2023 Total debt excluding debt issuance costs $ 0.4 $ 1
Slide 30: Reconciliation of Historical Adjusted EBITDA for Storage Tanks Businesses
Reconciliation of Historical Adjusted EBITDA for Storage Tanks Businesses (in millions) (unaudited) Three Months Year Ended Ended December 31, December 31, 2022 2022 Storage tanks business: Operating Profit $ 189.3 $ 230.1 Add: Depreciation and amortization expense 0.1 5.2 EBITDA 189.4 235.3 Impact
Slide 31: Arcosa Contact Details
500 N. Akard Street, Suite 400 Dallas, Texas 75201 (972) 942-6500 ir.arcosa.com