Slide 1: Fourth Quarter and Full Year 2022 Earnings Conference Call
Fourth Quarter and Full Year 2022 Earnings Conference Call MOVING INFRASTRUCTURE FORWARD | February 24, 2023
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 2023
Slide 4: Fourth Quarter and Full Year 2022 Highlights
FOURTH QUARTER AND FULL YEAR 2022 HIGHLIGHTS • Generated strong revenue and Adjusted EBITDA growth in the fourth quarter, excluding the impact of the storage tanks business • Achieved double-digit revenue and Adjusted EBITDA growth for the full year, with all segments contributing • Sale of our stor
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 sustainable competitive business initiatives (ESG) into our long- advantages te
Slide 8: Disciplined Track Record of Growth
DISCIPLINED TRACK RECORD OF GROWTH Achieved 39% CAGR in our Growth Businesses over the last four years, offsetting demand headwinds in our Cyclical Businesses Adjusted EBITDA, excluding Corporate ($M) 376 332 329 43 284 51 +20% 127 219 127 +39% 129 333 277 205 157 90 FY-18 FY-19 FY-20 FY-21 FY-22 At
Slide 9: Strategic Transformation
STRATEGIC TRANSFORMATION Today Arcosa is a less cyclical and more resilient company, and the recent sale of our storage tanks business enhances our capacity to further expand in our focused growth areas Construction Products has Increased to Actionable Strategic Progress to Position Portfolio for Mo
Slide 10: Q4 and FY 2022 Results
N (o) Q4 AND FY 2022 RESULTS
Slide 11: Q4 2022 Consolidated Results
Q4 2022 CONSOLIDATED RESULTS 13% growth in Adjusted EBITDA, normalized for the divestiture of the storage tanks business Revenues ($M) Net Income ($M) Adjusted EBITDA ($M) Excluding Excluding Excluding As Reported As Reported As Reported Storage Tanks Gain on Sale Storage Tanks -4% 521.8 +8% N.M. Ad
Slide 12: FY 2022 Consolidated Results
FY 2022 CONSOLIDATED RESULTS Double-digit Adjusted EBITDA growth and improved margins Revenues ($M) Net Income ($M) Adjusted EBITDA ($M) Excluding Excluding Excluding As Reported Storage Tanks As Reported As Reported Gain on Sale Storage Tanks +10% +14% N.M. Adjusted Net Income +15% +19% 2,242.8 2,2
Slide 13: Q4 2022 Segment Results: Construction Products
Q4 2022 SEGMENT RESULTS: CONSTRUCTION PRODUCTS Strong organic pricing gains helped compensate for lower volumes Revenues ($M) Adjusted Segment EBITDA ($M) +5% +6% 221.9 211.7 49.6 21.4 46.9 19.2 192.5 200.5 Q4-21 Q4-22 Q4-21 Q4-22 Aggregates & Specialty Materials Construction Site Support Margin 22.
Slide 14: Q4 2022 Segment Results: Engineered Structures
Q4 2022 SEGMENT RESULTS: ENGINEERED STRUCTURES Adjusted Segment EBITDA, excluding storage tanks, up slightly as higher pricing was largely offset by product mix and operating inefficiencies Revenues ($M) Adjusted Segment EBITDA ($M) -12% -38% 234.5 28.3 205.9 61.6 +18% 11.5 17.5 +2% 204.6 172.9 16.8
Slide 15: Q4 2022 Segment Results: Transportation Products
Q4 2022 SEGMENT RESULTS: TRANSPORTATION PRODUCTS Adjusted Segment EBITDA growth and margin expansion driven by improvements in barge and steel components Revenues ($M) Adjusted Segment EBITDA ($M) -4% 75.6 +131% 72.5 8.3 25.2 34.3 3.6 50.4 38.2 Q4-21 Q4-22 Q4-21 Q4-22 Barges Steel Components Margin
Slide 16: FY 2022 Segment Results
FY 2022 SEGMENT RESULTS, $’S in M’S CONSTRUCTION PRODUCTS ENGINEERED STRUCTURES TRANSPORTATION PRODUCTS Revenues Adjusted Revenues Adjusted Revenues Adjusted Segment EBITDA Segment EBITDA Segment EBITDA +7% +16% 1,002.0 +11% 934.1 Storage Tanks +4% 923.5 188.9 102.1 199.2 13% +19% 317.3 796.8 216.2
Slide 17: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Flexible balance sheet and ample liquidity facilitates disciplined capital allocation strategy Net Debt / Adjusted EBITDA (ratio at end of period) Liquidity ($M) Long term target of 2.0 - 2.5x 2.1 635 2.0 1.9 1.8 • In October 2022, repaid 160 Spun 1.2 $155M of outstanding de
Slide 18: Outlook 2023
03 2023 OUTLOOK
Slide 19: 2023 Guidance
2023 GUIDANCE Solid revenue and Adjusted EBITDA growth expected for 2023, normalizing for the sale of storage tanks Revenues ($M) Adjusted EBITDA ($M) 2,243 325 310-340 2,150-2,250 189 +7% 47 +17% Includes $22M gain from land sale in Q1 for Construction 2,054 278 Products FY-22 2023 Guidance FY-22 2
Slide 20: Growth Businesses Outlook
GROWTH BUSINESSES OUTLOOK Demand outlook is attractive with additional tailwinds from increased infrastructure spending Construction Products Engineered Structures Infrastructure spending is on the rise as indicated by increased FY2022 state Forecasted Utility CAPEX driven by increased federal infra
Slide 21: Cyclical Businesses
CYCLICAL BUSINESSES Market fundamentals for our Cyclical Businesses continue to improve resulting in significant orders booked in the fourth quarter Outlook for Dry Barge Replacement Cycle Remains Intact New builds for N.A. Railcar Market Forecasted to Increase in 2023 Fleet age is Increasing due to
Slide 22: ESG Accomplishments
ESG ACCOMPLISHMENTS Expect to issue our 2022 Sustainability Report in the second quarter Highlights from Our 2021 Sustainability Report • 60% reduction in our TRIR1 since 2019 SAFETY • ARC 100 driving positive and engaged culture of safety at all levels of the organization • Expanded commentary on c
Slide 23: Appendix
APPENDIX
Slide 24: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 25: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Year Ended Full Year December 31, December 31, 2022 Guidance 2022 2021 2022 2021 Low High Net income $ 154.6 $ 9.2 $ 245.8 $ 69.6 $ 92.0 $ 114.0 Add: Interest expense, net 6.5 7.5 29.9 23.4 34.
Slide 26: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 2020 2019 2018 Construction Products Operating Profit $ 24.1 $ 22.7 $ 96.5 $ 83.2 $ 74.7 $ 52.7 $ 50.4 Add: Depreciation, depletion, and amortization ex
Slide 27: 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, March 31, September 30, December 31, 2018(1) 2018 2019 2020(1) 2021(1) 2022(1) June 30, 2022(1) 2022(1) 2022(2) Total debt
Slide 28: Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses
Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses (in millions) (unaudited) Year Ended December 31, 2018 2019 2020 2021 2022 Consolidated Adjusted EBITDA(1) $ 186.5 $ 240.7 $ 283.7 $ 283.3 $ 325.1 Add: Corporate Adjusted EBITDA(1) 32.0 43.7 48.2 45.4 50.5 Adjusted EBITDA, excludin
Slide 29: Reconciliation of Adjusted EBITDA for Storage Tanks Businesses
Reconciliation of Adjusted EBITDA for Storage Tanks Businesses (in millions) (unaudited) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 Storage tanks business: Operating Profit $ 189.3 $ 9.8 $ 230.1 $ 36.8 Add: Depreciation and amortization expense 0.1 1.7 5.2 7.3 EBITDA