Arcosa, Inc. · NYSE:ACA
Arcosa — Q1 2024 Earnings Presentation
30 slides from Arcosa's earnings presentation, May 3, 2024
Slide 1: First Quarter 2024 Earnings Conference Call
FIRST QUARTER 2024 EARNINGS CONFERENCE CALL MOVING INFRASTRUCTURE FORWARD | MAY 3, 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: First Quarter 2024 Highlights
FIRST QUARTER 2024 HIGHLIGHTS • First quarter revenues up 9% and Adjusted EBITDA up 7%, normalizing for the $22 million land sale gain in the prior period • Results were better than expected, recovering from broad-based weather impacts in January with double-digit Adjusted EBITDA growth and higher o
Slide 5: Arcosa's Value Proposition
ARCOSA’S VALUE PROPOSITION LEADING EXPERIENCED HEALTHY BALANCE DISCIPLINED CAPITAL TRACK RECORD businesses serving management team sheet and ample allocation process to of executing on critical with history of liquidity to navigate grow in attractive strategic priorities as infrastructure managing t
Slide 6: Strategic Update
01 STRATEGIC UPDATE
Slide 7: Arcosa's Long-Term Vision
ARCOSA’S LONG-TERM VISION Grow in attractive markets Reduce the complexity and Improve long-term Integrate Environmental, where we can achieve cyclicality of the overall returns on invested capital Social, and Governance (ESG) sustainable competitive business initiatives into our long-term advantage
Slide 8: Strategic Transformation
STRATEGIC TRANSFORMATION Today Arcosa is a less cyclical and more resilient company Construction Products has Increased to Actionable Strategic Progress to Position Portfolio for Approximately 60% of Adjusted EBITDA Long-Term Growth Adjusted EBITDA, excluding Corporate ($M) • Completed $180 million
Slide 9: April 9, 2024 – Completed Acquisition of Ameron for $180 Million
APRIL 9, 2024 – COMPLETED ACQUISITION OF AMERON FOR $180 MILLION Advances our strategy to effectively deploy capital into Arcosa’s growth businesses by expanding our product offerings in Engineered Structures BUSINESS PROFILE STRATEGIC RATIONALE Ameron is a leading supplier of highly engineered, pre
Slide 10: Q1 2024 Results
02 Q1 2024 RESULTS
Slide 11: Q1 2024 Consolidated Results
Q1 2024 CONSOLIDATED RESULTS Strong revenue and Adjusted EBITDA growth led by Construction and Transportation Products, normalizing for the 2023 land sale gain Revenues ($M) Net Income ($M) Adjusted EBITDA ($M) +9% -30% -15% 598.6 51.7 108.1 549.2 21.8 92.0 +7% 36.0 55.7 39.2 86.3 (4.0) (3.2) Q1-23
Slide 12: Q1 2024 Segment Results: Construction Products
Q1 2024 SEGMENT RESULTS: CONSTRUCTION PRODUCTS Adjusted Segment EBITDA growth reflects accretive impact of recent acquisitions and operational improvements in specialty materials REVENUES ($M) ADJUSTED SEGMENT EBITDA ($M) +6% -21% 251.2 76.4 236.1 29.5 25.1 21.8 60.1 +10% 211.0 221.7 54.6 Q1-23 Q1-2
Slide 13: Q1 2024 Segment Results: Engineered Structures
Q1 2024 SEGMENT RESULTS: ENGINEERED STRUCTURES Decline in Adjusted Segment EBITDA due to product mix in utility structures and plant start up costs REVENUES ($M) ADJUSTED SEGMENT EBITDA ($M) +12% -10% 231.6 30.1 207.7 27.2 Q1-23 Q1-24 Q1-23 Q1-24 Margin 14.5% 11.7% Utility, Wind Towers, and Related
Slide 14: Q1 2024 Segment Results: Transportation Products
Q1 2024 SEGMENT RESULTS: TRANSPORTATION PRODUCTS Adjusted Segment EBITDA growth outpaces revenues due to increased barge volumes and operating leverage REVENUES ($M) ADJUSTED SEGMENT EBITDA ($M) +10% +32% 115.8 18.6 105.4 36.1 14.1 37.3 79.7 68.1 Q1-23 Q1-24 Q1-23 Q1-24 Barges Steel Components Margi
Slide 15: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW Disciplined ‘cash culture’ and balance sheet flexibility to support expansion through organic growth initiatives and opportunistic acquisitions NET DEBT / ADJUSTED EBITDA (ratio at end of period) FREE CASH FLOW ($M) Long term target of 2.0 - 2.5x +346% +25% 1.7 30.3 117.6
Slide 16: 2024 Outlook
03 2024 OUTLOOK
Slide 17: 2024 Guidance Increased
2024 GUIDANCE INCREASED Increased Revenue and Adjusted EBITDA guidance range to reflect Ameron acquisition and solid first quarter results Revenues ($M) Adjusted EBITDA ($M) +16% 2,575 – 2,775 410 - 440 2,460 – 2,720 380 - 420 368 +23% 2,308 22 346 FY-23 Previous 2024 Updated 2024 FY-23 Previous 202
Slide 18: 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 19: Wind Towers Outlook
WIND TOWERS OUTLOOK 2024 is the beginning of an anticipated multi-year upcycle for our wind towers 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 boo
Slide 20: Inland Barge Outlook
INLAND BARGE OUTLOOK Positive outlook as fleet replacement needs sustain market recovery Aging Fleet and Underinvestment in Replacement Support Positive Outlook for New Hopper Barge Construction Hopper Barge Fleet Age1 Annual Hopper Barge Industry Deliveries Since ‘052 (in Years) (# Hopper Barges) •
Slide 21: ESG Accomplishments
ESG ACCOMPLISHMENTS We published our 2023 Sustainability Report that highlights our business-focused sustainability efforts Highlights from Our 2023 Sustainability Report • Scope 1 and 2 GHG emissions intensity1 reduction of GREENHOUSE GAS (GHG) 17% compared to 2020 baseline, tracking ahead of EMISS
Slide 22: Appendix
APPENDIX
Slide 23: Guidance Summary for 2024
GUIDANCE SUMMARY FOR 2024 COMMENTARY • $2.575B to $2.775B range for full year 2024 REVENUE • 2023 full year revenue was $2.31B • $410M to $440M range for full year 2024 ADJUSTED • 2023 full year Adjusted EBITDA was $368M, including $22M from the land sale gain in the first quarter EBITDA TAX RATE •
Slide 24: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 25: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Full Year March 31, 2024 Guidance 2024 2023 Low High Net income $ 39.2 $ 55.7 $ 166.9 $ 183.3 Add: Interest expense, net 6.6 5.9 34.0 36.0 Provision for income taxes 8.1 14.2 34.1 40.2 Deprecia
Slide 26: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Year Ended Twelve Months Ended March 31, December 31, March 31, 2024 2023 2018 2023 2024 Construction Products Operating Profit $ 28.8 $ 49.5 $ 50.4 $ 138.6 $ 117.9 Add: Depreciation, depletion, and amortizati
Slide 27: Reconciliation of Freight-Adjusted Revenues for Construction Products
Reconciliation of Freight-Adjusted Revenues for Construction Products ($’s in millions) (unaudited) Three Months Ended March 31, 2024 2023 Construction Products Revenues $ 251.2 $ 236.1 Less: Freight revenues 23.7 27.8 Freight-Adjusted Revenues $ 227.5 $ 208.3 Adjusted Segment EBITDA(1) $ 60.1 $ 76.
Slide 28: 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 March 31, 2024 December 31, 2023 March 31, 2024 Ameron(1) Pro Forma Total debt excluding debt issuance costs $ 573.1 $ 611.4 $ 160.0 $ 771.4 Cash and cash equivalents 104.8 176.5 (20.0) 156
Slide 29: Reconciliation of Ameron Pro Forma Adjusted EBITDA
Reconciliation of Ameron Pro Forma Adjusted EBITDA (in millions) (unaudited) Year Ended December 31, 2023 Net Income $ 14.9 Add: Interest expense, net — Provision for income taxes(1) — Depreciation, depletion, and amortization expense 4.9 EBITDA 19.8 Add: Inventory revaluation (0.4) Other non-recurr
Slide 30: Arcosa Contact Details
500 N. Akard Street, Suite 400 Dallas, Texas 75201 (972) 942-6500 ir.arcosa.com