Slide 1: First Quarter 2022 Earnings Conference Call
First Quarter 2022 Earnings Conference Call MOVING INFRASTRUCTURE FORWARD | April 29, 2022
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 2022
Slide 4: First Quarter 2022 Highlights
First Quarter 2022 Highlights • Double-digit revenue and Adjusted EBITDA growth driven by Construction Products and Engineered Structures • Effectively managing cyclicality in our wind tower and Transportation Products businesses • Secured $105 million in new barge orders, filling our planned capaci
Slide 5: Arcosa's Value Proposition
ARCOSA’S VALUE PROPOSITION LEADING EXPERIENCED HEALTHY BALANCE DISCIPLINED CAPITAL TRACK RECORD businesses serving management team sheet and ample allocation process to of executing on critical with history of liquidity to navigate grow in attractive strategic priorities as infrastructure managing t
Slide 6: Strategic Update
01 STRATEGIC UPDATE
Slide 7: Arcosa's Long-Term Vision
ARCOSA’S LONG-TERM VISION Grow in attractive markets Reduce the complexity and Improve long-term Integrate Environmental, where we can achieve cyclicality of the overall returns on invested capital Social, and Governance sustainable competitive business initiatives (ESG) into our long- advantages te
Slide 8: Divestiture of Storage Tanks Business
DIVESTITURE OF STORAGE TANKS BUSINESS Excellent example of improving a business and preparing it for monetization when market conditions are supportive, enabling us to realize significant value through a competitive sale process TRANSACTION OVERVIEW STRATEGIC RATIONALE • Entered into definitive agre
Slide 9: Strategic Transformation
STRATEGIC TRANSFORMATION Today Arcosa is a less cyclical and more resilient company, and the sale of our storage tanks business enhances our capacity to further expand in our focused growth areas Construction Products has Increased to Actionable Strategic Progress Since Spin to Position Portfolio 55
Slide 10: Q1 2022 Results
02 Q1 2022 RESULTS
Slide 11: Q1 2022 Consolidated Results
Q1 2022 CONSOLIDATED RESULTS Adjusted EBITDA increased 30%, outpacing revenue growth in the first quarter Revenues ($M) Net Income ($M) Adjusted EBITDA ($M) +22% +19% +30% 535.8 20.9 0.7 73.4 440.4 17.6 1.7 56.5 20.2 15.9 Q1-21 Q1-22 Q1-21 Q1-22 Q1-21 Q1-22 Adjusted Margin 12.8% 13.7% See Adjusted N
Slide 12: Segment Results: Construction Products
SEGMENT RESULTS: CONSTRUCTION PRODUCTS Recent acquisitions and organic growth drove 26% increase in Adjusted Segment EBITDA Revenues ($M) Adjusted Segment EBITDA ($M) +38% +26% 211.5 41.3 23.6 32.9 153.2 17.9 187.9 135.3 Q1-21 Q1-22 Q1-21 Q1-22 Aggregates & Specialty Materials Construction Site Supp
Slide 13: Segment Results: Engineered Structures
SEGMENT RESULTS: ENGINEERED STRUCTURES Double-digit revenue and Adjusted Segment EBITDA growth driven by increased pricing and margin improvement in our utility structures business Revenues ($M) Adjusted Segment EBITDA ($M) +21% +38% 250.5 36.3 207.0 59.9 26.4 43.0 190.6 164.0 Q1-21 Q1-22 Q1-21 Q1-2
Slide 14: Segment Results: Transportation Products
SEGMENT RESULTS: TRANSPORTATION PRODUCTS Revenue and Adjusted Segment EBITDA declined primarily due to lower barge volumes Revenues ($M) Adjusted Segment EBITDA ($M) -8% -24% 80.2 8.7 73.8 22.3 6.6 26.8 57.9 47.0 Q1-21 Q1-22 Q1-21 Q1-22 Barges Steel Components Margin 10.8% 8.9% See Adjusted Segment
Slide 15: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Ended the first quarter with ample liquidity and leverage at the low end of our targeted range Net Debt / Adjusted EBITDA (ratio at end of period) Liquidity ($M) 435 Long term target of 2.0 - 2.5x 2.1 2.0 Cash 89 Spun debt free • No material near-term debt with 0.5 0.5 matur
Slide 16: Updated 2022 Outlook
03 UPDATED 2022 OUTLOOK
Slide 17: Outlook for 2022
OUTLOOK FOR 2022 Strong outlook for growth businesses, which offsets cyclical challenges from wind towers, barge, and steel components Expect ~17% Increase in Adjusted EBITDA from …Based on Attractive Fundamentals Driving Organic Expansion Growth Businesses in 2022… and Full Year Contributions from
Slide 18: Cyclical Businesses
CYCLICAL BUSINESSES In 2022, our cyclical businesses are expected to be at <20% of their combined 2018 Adjusted EBITDA levels, but long-term fundamentals remain attractive Outlook for Dry Barge Replacement Cycle Remains Intact New builds for N.A. Railcar Market Forecasted to Increase Fleet Age is In
Slide 19: Updated 2022 Outlook
UPDATED 2022 OUTLOOK Increasing the mid-point of our Adjusted EBITDA guidance range, which reflects annual growth of 5% from 2021 Adjusted EBITDA ($M) 280 - 305 290 - 305 284 283 241 Adjusted EBITDA for our cyclical businesses of $20-25M FY-19 FY-20 FY-21 Original 2022 Updated 2022 Guidance Guidance
Slide 20: ESG Update
ESG UPDATE We published our 2021 Sustainability Report highlighting actions we have taken to integrate ESG in our long-term strategy • 60% reduction in our TRIR1 since 2019 SAFETY • ARC 100 continues to drive positive and proactively engaged culture of safety at all levels of the organization SUSTAI
Slide 21: Appendix
APPENDIX
Slide 22: Additional Financial Guidance for 2022
ADDITIONAL FINANCIAL GUIDANCE FOR 2022 COMMENTARY CORPORATE • ~$13-14M per quarter, excluding one-time items related to acquisition and divestiture-related costs COSTS • We expect a full year 2022 tax rate of ~21-23% TAX RATE CAPITAL • $120-140M in 2022, including $30-50M of growth projects EXPENDIT
Slide 23: Non-GAAP Measures
NON-GAAP MEASURES Refer to slides that follow for accompanying reconciliations “EBITDA” is defined as net income plus interest, taxes, depreciation, depletion, and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for certain items that are not reflective of the normal earnings of our bu
Slide 24: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income ($’s in millions) (unaudited) Three Months Ended Full Year March 31, 2022 Guidance 2022 2021 Low High Net income $ 20.2 $ 15.9 $ 75.0 $ 83.0 Add: Interest expense, net 7.1 2.1 31.0 31.0 Provision for income taxes 6.4 4.4 21.5 22.5 Depreciatio
Slide 25: 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, 2022 2021 2021 2020 2019 2018 2022 Construction Products Operating Profit $ 16.7 $ 15.8 $ 83.2 $ 74.7 $ 52.7 $ 50.4 $ 84.1 Add: Depreciation, dep
Slide 26: 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, 2018(1) 2018 2019 2020(1) 2021(1) 2022(2) Total debt excluding debt issuance costs $ 0.4 $ 185.5 $ 107.3 $ 254.5
Slide 27: Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses
Reconciliation of Adjusted EBITDA for Cyclical and Growth Businesses (in millions) (unaudited) Year Ended Full Year 2022 Guidance December 31, 2018 2019 2020 2021 Low High Consolidated Adjusted EBITDA(1) $ 186.5 $ 240.7 $ 283.7 $ 283.3 $ 290.0 $ 305.0 Add: Corporate Adjusted EBITDA(1) 32.0 43.7 48.2
Slide 28: Reconciliation of Adjusted EBITDA for Storage Tanks Business
Reconciliation of Adjusted EBITDA for Storage Tanks Business (in millions) (unaudited) Average for Year Ended Years Ended Year Ended December 31, December 31, December 31, 2018 2019-2021 2021 Storage tanks business: Operating Profit $ (9.5) $ 21.9 $ 36.8 Add: Depreciation and amortization expense 5.