Mayville Engineering Company, Inc. · NYSE:MEC
Mayville Engineering — William Blair 40th Annual Growth Stock Conference (June 2020)
19 slides from Mayville Engineering's conference presentation, Jun 10, 2020
Slide 1: Investor Presentation
Investor Presentation June 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of
Slide 3: MEC Team
MEC Team Robert D. Kamphuis Chairman, President and Chief Executive Officer Todd M. Butz Chief Financial Officer Ryan F. Raber Executive Vice President – Strategy, Sales & Marketing 2 | Experience You Can Trust TM
Slide 4: Strategic Priorities
Strategic Priorities “Don’t just get by…..get better together” Priorities Operational Outcomes 1 Maintaining employee health and Responsiveness to changing market safety conditions Continued exceptional customer 2 service and collaboration More efficient structure to serve customers Maintaining foun
Slide 5: Market Leader with Differentiated Competitive Position
Market Leader with Differentiated Competitive Position MEC is the Largest U.S. Metal Fabricator(1) Able to provide the broadest range of production capabilities… Prototype & Fabrication Performance Structures Tubes Tanks …serving a diverse range of end markets… Sleeper Box Chassis Platforms & Roll O
Slide 6: Unique Full-Service Offering
Unique Full-Service Offering Providing Value-Added Services for Customers Coupled with Continuous Improvement Manufacturing Process Create Customer Refinement Defined Concept Product Manufacturing Collaboratively Process Designed and Planning Developed Prototyping and Preproduction Development Large
Slide 7: Long-Term Growth Opportunities
Long-Term Growth Opportunities 5 Utilize M&A integration expertise to M&A Upside extend capabilities, geographies and markets 4 Enter New Adjacent Leading edge, flexible asset base allows MEC Markets to expand product offering 3 Core Application Support new product and market expansions for custo
Slide 8: COVID-19 Pandemic Update
COVID-19 Pandemic Update • MEC maintains “Essential Service” designation – Viewed as key supplier by customers – All 20 facilities across the U.S. remain operational • Prioritizing health and safety of employees • Responding to change ‘normal course of business’ • Focused on factors within our contr
Slide 9: Investment Highlights: Why MEC?
Investment Highlights: Why MEC? Ultimate ReSource Differentiated Well Positioned for Long-Term, for Complex Industrial Company Profitable Growth Manufacturing Needs #1 largest fabricator in the U.S. Agile and adaptable business Strong financial position and free with unmatched scale and model drives
Slide 10: Additional Information
Investor Presentation Additional Information June 2020
Slide 11: Financial Position, Liquidity, and Free Cash Flow Advantage
Financial Position, Liquidity, and Free Cash Flow 1 Strong Financial Position Net debt Leverage Ratio of 1.58x (1) 2 Ample Liquidity $300MM of borrowing capacity (2) Aligned markets & capacity helps stabilize 3 Free Cash Flow Stability performance Well Equipped Better to Manage + Positioned Than = A
Slide 12: Free Cash Flow Conversion
Free Cash Flow Conversion (1) 100% 80% 60% ~50% Average 40% 20% 0% 2016 2017 2018 2019 2020 Expectation 2017 greater than average due to decline in working capital 2019 lower than average primarily due to timing of investments in technology and automation (two times annual average). (1) Free cas
Slide 13: 2019 – Q1 2020 Net Sales and Adjusted EBITDA
2019 – Q1 2020 Net Sales and Adjusted EBITDA Net Sales by Quarter ($MM) Adjusted EBITDA(1) by Quarter ($MM) $160 $20.0 $144 $145 $17.8 $18.0 $140 $16.8 $129 $16.0 $120 $109 $14.0 $13.6 $102 $100 $11.4 $12.0 $80 $10.0 $8.0 $60 $6.0 $4.9 $40 $4.0 $20 $2.0 $- $- Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q1 '1
Slide 14: Adj. EBITDA Margin
Demonstrated Ability to Adapt to Market Conditions Improving Profitability by Leveraging… $140.0 $128.5 16.0% $120.0 14.0% $108.6 $102.3 Adj. EBITDA Margin 10.6% 10.5% 12.0% $100.0 10.0% Net Sales $80.0 8.0% $60.0 4.8% 6.0% $40.0 4.0% $20.0 2.0% $- 0.0% Q3 2019 Q4 2019 Q1 2020 Net Sales Adj EBITDA M
Slide 15: EBITDA Margin % Q4 2019 to Q1 2020 Bridge
EBITDA Margin % Q4 2019 to Q1 2020 Bridge 12.0% 1.6% 10.5% 2.4% 10.0% 2.2% 0.5% 8.0% 4.8% 6.0% 4.0% 2.0% 0.0% Q4 2019 Gross Margin Mfg Spend Absorption SG&A Q1 2020 Improvements Installation of direct-to-metal paint line, better utilization of laser automation, full quarter of consolidation of VA fa
Slide 16: EBITDA Margin % Q1 2019 to Q1 2020 Bridge
EBITDA Margin % Q1 2019 to Q1 2020 Bridge 25.0% 1.9% 1.2% 0.5% 20.0% 2.5% 2.1% 11.7% 15.0% 10.5% 10.0% 7.2% 1.5% 0.7% 5.0% 0.0% Q4 2019 Efficiency / Headcount Controllable Gain DMP Absorption Depreciation SG&A Q1 2020 Automation Spend Sharing Synergies / Scrap Gross margin improvements from automati
Slide 17: Track Record of Long-Term Profitable Growth
Track Record of Long-Term Profitable Growth Net Sales ($MM) $600 $520 $500 $400 $355 $320 $313 $304 $290 $287 $300 $200 $178 $175 $154 $123 $100 $- 09* 10* 11* 12* 13* 14* 15* 16* 0 17 0 18 0 19 20 20 20 20 20 20 20 20 2 2 2 Adjusted EBITDA(1) margin range of ~9% to ~14% for the periods presented Fr
Slide 18: Net Sales by End Markets
Net Sales by End Markets End Market Diversification (% of Net Sales) 100% 14% 14% 13% 12% 15% 4% 7% 6% 7% 80% 7% 11% 8% 13% 13% 11% 17% 60% 27% 26% 28% 32% 22% 40% 17% 16% 18% 15% 20% 35% 27% 26% 19% 21% 0% 2015 2016 2017 2018 2019 Heavy-and Meduim-Duty Construction Powersports Agriculture Military
Slide 19: Investor Presentation
Investor Presentation June 2020
Mayville Engineering Company — William Blair 40th Annual Growth Stock Conference (June 2020) on 6ix