Alamo Group, Inc. · NYSE:ALG
Alamo — Q1 2021 Earnings Presentation
27 slides from Alamo's earnings presentation, May 6, 2021
Slide 1: Alamo Group Inc. Investor Presentation
ALAMO GROUP INC. A COMPANY FOR ALL SEASON S I N V E S T O R P R E S E N TAT I O N Feb ru ar y 2 0 2 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains statements that may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts and represent only the Company’s beliefs and expectati
Slide 3: Who We Are
WHO WE ARE Alamo Group is a global leader in the design and manufacture of high quality infrastructure maintenance equipment for governmental and industrial markets and agricultural equipment for farms and ranches • Founded in 1969 • Corporate Headquarters Seguin, Texas • IPO 1993 (NYSE: ALG) Alamo
Slide 4: COVID-19
COVID-19 Alamo Group Inc., like most manufacturing companies in the world today, is being affected by the COVID-19 pandemic. While most of our businesses are deemed essential, we have experienced challenges both internally and externally that have constrained our operations. Despite these challenges
Slide 5: Sustainability
SUSTAINABILITY Alamo is committed to a sustainable model for growth and profitability. This applies to both our internal processes as well as the products we manufacture. Through investments, incentives, process redesign and product development, we have targeted continuous improvements including red
Slide 6: Sales and Earnings Overview
SALES AND EARNINGS OVERVIEW 6 alamo-group.com 6
Slide 7: Sales by Division
SALES BY DIVISION Net Sales (U.S. $ Millions) $1,200 Agricultural Industrial $1,163 $1,119 1,100 $1,009 1,000 $912 $880 900 $845 800 $768 $811 700 $638 $538 $563 600 $525 500 400 300 200 $349 $371 $351 $352 $342 $320 100 0 2015 2016 2017 2018 2019 2020 7 alamo-group.com 7
Slide 8: Industrial Division: Products
INDUSTRIAL DIVISION Products The Industrial Division provides equipment for maintenance on and around highways, airports, military installations, industrial Alamo Industrial Wide Area Mower Tiger Triple Flail Mower properties, parks and recreational facilities, commercial landscapes, and other speci
Slide 9: Industrial Division: End Users
INDUSTRIAL DIVISION End Users • State, county and local authorities and other governmental agencies in the United States and Rivard Trencher Tenco Snow Plow internationally • Contractors • Other specialty markets Rayco Forestry Mulchers Rivard Vacuum Truck Conver Weed Harvester Work Boat Morbark Bru
Slide 10: Industrial Division: Sales and Distribution
INDUSTRIAL DIVISION Sales and Distribution • Sold direct and through approximately 1,300 dealers with over 3,300 sales outlets • Marketed under Alamo Industrial®, Boxer®, Conver, Denis Cimaf®, Everest®, Gradall®, H.P. Fairfield™, Henke®, Herder®, Morbark®, NiteHawk®, Old Dominion Brush™, Precision M
Slide 11: Recent Acquisition: Morbark, LLC
RECENT ACQUISTION Morbark, LLC On October 24, 2019 Alamo Group Inc. completed the acquisition of Morbark, LLC, the company’s largest acquisition to date. Morbark is a leading manufacturer of equipment and aftermarket parts for the forestry tree maintenance, biomass, land management and recycling mar
Slide 12: Agricultural Division: Products
AGRICULTURAL DIVISION Products The Agricultural Division provides equipment for farmers, ranchers, contractors and landscapers primarily aimed at vegetation Dixie Chopper ZT Mower maintenance, turf and landscaping McConnel Agribuggy markets, as well as supporting production agriculture and the lives
Slide 13: Agricultural Division: End Users, Sales and Distribution
AGRICULTURAL DIVISION End Users • Farmers • Commercial landscapers • Ranchers • Residential homeowners • Mowing contractors • Hobby farmers Sales and Distribution • Sold primarily through approximately 6,000 dealers, distributors, OEMs and other outlets Bomford Rotary Mower • Marketed under Bomford®
Slide 14: Strategic Objectives Drive Shareholder Value
STRATEGIC OBJECTIVES DRIVE SHAREHOLDER VALUE Strategic Organic Growth Continuous Acquisitions Operational Improvement 1 alamo-group.com 14
Slide 15: Acquisition Strategy
ACQUISITION STRATEGY Our objective is to acquire businesses or products that command or have potential to be major players in their niche markets and are complementary to Alamo’s existing range Bomford Rotary Mower Types of Targeted Acquisitions • Consolidation of similar products in current markets
Slide 16: Alamo Acquisitions
ALAMO ACQUISITIONS Type of Acquisition Acquisitions Schulte, Twose, Valu-Bilt, Rousseau, Tenco, Nite-Hawk, Market Share Bush Hog, Spearhead, Super Consolidation Products, Wausau-Everest, Votex Flail Slope & Bank Mower Dixie Chopper Schwarze, Twose, Schulte, Gradall, Vacall, Henke, Tenco, Complementa
Slide 17: Acquisition Timeline
ACQUISTION TIMELINE We have completed 27 acquisitions since 2000 alamo-group.com 17
Slide 18: Organic Growth
ORGANIC GROWTH Our objective is to grow organically at rates in excess of core market growth rates McConnel Robotic Flail Mower Organic Growth Drivers • Geographical expansion • Product development • Cross selling opportunities • Strength of multiple distribution networks Schulte Disc Harrow • Prici
Slide 19: New Product Development Enhances Organic Growth
NEW PRODUCT DEVELOPMENT ENHANCES ORGANIC GROWTH Our new product development is focused on the needs of customers, both large and small, for more efficient, safer and user-friendly equipment Alamo Industrial Mantis wide area Super Products Camel 1200 Vacuum mower Truck with improved water recycling I
Slide 20: Continuous Operational Improvement
CONTINUOUS OPERATIONAL IMPROVEMENT Our objective is to continuously Group Purchasing Initiatives improve our operating efficiencies • The Company takes advantage of the combined group’s procurement power Investments in Technology through corporate purchasing initiatives • The Company has continually
Slide 21: Continuous Improvement Focus Drives Our Production Strategy
CONTINUOUS IMPROVEMENT FOCUS DRIVES OUR PRODUCTION STRATEGY Alamo Group has a global manufacturing presence in close proximity to our major markets Bush Hog – Selma, Alabama Rivard – Daumeray, France Our manufacturing The Company sources raw capabilities provide us better materials and components co
Slide 22: Continuous Improvement Focus Drives Our Production Strategy
CONTINUOUS IMPROVEMENT FOCUS DRIVES OUR PRODUCTION STRATEGY We make capital investments to continuously improve the efficiency and productive capacity of our manufacturing facilities, as well as the quality of the products Fiber laser plate cutting center we manufacture Automatic plate handling syst
Slide 23: Results of Operational Improvements
RESULTS OF OPERATIONAL IMPROVEMENTS Sales Per Employee 2010 $232,000 2020 $292,000 +26% 2 alamo-group.com 23
Slide 24: Income Statement
INCOME STATEMENT Fiscal Year Ended (In U.S. $ Thousands) 12/31/2020 12/31/2019 12/31/2018 Revenue $ 1,163,466 $ 1,119,138 $ 1,008,822 Gross Margin $ 292,110 $ 273,227 $ 256,115 % of Revenue 25.1 % 24.4 % 25.4 % Operating Expenses $ 198,945 $ 178,579 $ 155,027 Operating Income $ 93,165 $ 94,648 $ 101
Slide 25: Balance Sheet
BALANCE SHEET Fiscal Year Ended (In U.S. $ Thousands) 12/31/2020 12/31/2019 12/31/2018 Current Assets $ 503,010 $ 570,828 $ 452,843 Total Assets $ 1,109,329 $ 1,212,763 $ 721,633 Current Liabilities $ 157,295 $ 162,874 $ 100,852 Working Capital $ 345,715 $ 407,954 $ 351,991 Total Debt $ 285,386 $ 44
Slide 26: Why Alamo, Why Now?
WHY ALAMO, WHY NOW? An integrated Leadership strategy for An incentive position in long-term system niche revenue and aligned with markets earnings performance growth A Proven Recipe For Growth Financial Stability in Long-term strength to government growing support spending on demand for strategic i
Slide 27: Contact Information
CONTACT INFORMATION Corporate Office 1627 East Walnut St. Seguin, Texas 78155 Ron Robinson, President & CEO Phone: 830-372-9615 Email: rrobinson@alamo-group.com Dan Malone, Executive Vice President, CFO & Investor Relations Director ALAMO GROUP INC. Phone: 830-372-9581 A company for all seasons… Ema