Kirby Corporation · NYSE:KEX
Kirby — Investor Presentation (November 2024)
55 slides from Kirby's investor presentation, November 2024
Slide 1: Investor Presentation
Investor Presentation NYSE: KEX November 2024
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements Non-GAAP Financial Measures Statements contained in this presentation with respect to the future are forward-looking statements. These statements reflect management’s reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertaint
Slide 3: Company Overview
Company Overview Marine Transportation Distribution and Services The largest inland and coastwise tank barge fleets Nationwide service provider and distributor of in the United States engines, transmissions, parts, industrial equipment, oilfield service equipment and electrical power • 40+ successfu
Slide 4: Why Invest in Kirby?
Why Invest in Kirby? Proven track record of success over the long-term Two strong franchises – Marine Transportation – Distribution and Services Purpose-built management team with decades of relevant experience in both core businesses Disciplined financial management – Investment-grade balan
Slide 5: Public Market Information
Public Market Information NYSE: KEX Share Price on November 4, 2024 $115.33 Shares Outstanding 57.5 MM as of September 30, 2024 Market Capitalization $6,635 MM Net Debt* $912 MM as of September 30, 2024 Enterprise Value $7,547 MM * Net debt = Total debt less cash and cash equivalents 4
Slide 6: Marine Transportation Acquisitions
Marine Transportation Acquisitions Through consolidating acquisitions, Kirby is the nation’s premier tank barge company with a young and efficient fleet Tank Tank Date Barges Description Date Barges Description 1986 5 Alliance Marine 2007 37 Coastal Towing, Inc 2007 11 Midland Marine Corporation (op
Slide 7: Distribution and Services Expansions
Distribution and Services Expansions Kirby’s distribution and services business is one of the nation’s leading service providers and distributors of engines, transmissions, parts, industrial equipment, oilfield service equipment, and electrical power generation equipment Acquisitions Internal Growth
Slide 8: Historical Revenue Growth
Historical Revenue Growth Marine Transportation and Distribution and Services Revenue from Continuing Operations 3,500 $3,092 $2,971 3,000 $2,838 $2,785 $2,566 2,500 $2,242 $2,247 $2,148 $2,113 $2,214 In Millions 2,000 $1,850 $2,171 $1,771 1,500 $1,360 $1,173 $1,082 $984 1,000 $796 $1,110 $675 $613
Slide 9: Historical EPS Growth
Historical EPS Growth Earnings Per Share, Excluding One-Time Items $6.00 Economic Financial Tank barge COVID-19 downturn crisis industry overbuilding pandemic 2011 – 2015 $4.93 ------------------------ $5.00 Oil and gas $4.44 industry downturn $4.11 1 $4.00 $3.73 $3.72 $3.35 1 1 $2.91 $2.90 $3.00 $2
Slide 10: Marine transportation is the cleanest, safest, and most efficient mode of surface transportation
Marine transportation is the cleanest, safest, and most efficient mode of surface transportation Marine Transportation has far fewer impacts on the population than truck or rail Barges are more fuel efficient Barges are better for the environment Barges are safer Source: National Waterways Foundatio
Slide 11: Strong Emphasis on Safety
Strong Emphasis on Safety 99.95% Safe Watches* in 2023 Safety is the first and foremost concern in everything we do All employees have safe work responsibility The Board of Directors regularly reviews the safety performance of the organization “Being safe is not a decision; it is a series of
Slide 12: Sustainability Highlights
SUSTAINABILITY HIGHLIGHTS Disclosed 2,300 Employees believe the 99.95% Scope 3 Company operates by strong values, has a strong SAFE WATCHES safety culture, and would Marine Training with NO HARM Emissions recommend working for Certificates the Company to others. ISSUED Company Culture In 2023 Survey
Slide 13: Marine Transportation
Marine Transportation
Slide 14: Waterways are a Crucial Link between U.S & Global Trade
Waterways are a Crucial Link between U.S & Global Trade Kirby operates on 12,000 miles of navigable US waterways Texas and Louisiana account for 80% of the total U.S. production of chemicals and petrochemicals 13
Slide 15: Industry Leader Well Positioned for Continued Growth
Industry Leader Well Positioned for Continued Growth The U.S. barge industry serves the inland waterways and U.S. coastal ports Kirby is principally in the liquid cargo transportation business - Inland share (barge count): 27%* - Coastal share (capacity): 16%** No competition from foreign comp
Slide 16: Marine Transportation Demand Drivers
Marine Transportation Demand Drivers Inland & Offshore Drivers Revenue by Product1 2% 21% Petrochemicals and Chemicals 52% Black Oil 25% Refined Petroleum Products Agricultural Chemicals Markets and Products Moved Products Drivers 30% Benzene, Styrene, Methanol, Naphtha, Acrylonitrile, Consumer Dura
Slide 17: $150+ Billion of U.S. Petrochemical Investments
$150+ Billion of U.S. Petrochemical Investments* Ohio Cost ($MM) PTT On hold New ethylene 10,000 PBF 2015 Aromatics exp unk Indiana Monaca, PA Iowa Cost ($MM) Cost ($MM) Cost ($MM) Midwest Fert. TBD New ammonia 2,800 Shell 2022 New polyethylene 6,000 Orascom (OCI) 2017 New fertilizer 3,000 CF Indust
Slide 18: Common Products Moved on the Waterways
Common Products Moved on the Waterways Black Oil Pressurized Petrochemicals Refined Products Agriculture Product List: Product List: Product List: Product List: Product List: Crude Oil LPG Methanol Kerosene/Jet Fuel Ammonia Asphalt Propane Ethanol Gasoline Ammonium Fuel Oil B
Slide 19: Inland Market
Inland Market 18
Slide 20: Number of Inland Tank Barges
Number of Inland Tank Barges Inland barge market: Estimated for the years 2002 through 2024 Q3 4,300 The inland tank barge market has grown 4,003* 4,100 annually at 1.8% over the last 20 years and 3,900 remained flat over the last 5 years --------------------------------------------- 3,700 Kirby exp
Slide 21: Flexible Fleet Size Keeps Utilization High
Flexible Fleet Size Keeps Utilization High Better asset utilization through scale advantages Tank Barge Fleet Large fleet facilitates better asset utilization - More backhaul opportunities - Faster barge turnarounds - Diversity of barge products and spot opportunities - Less cleaning Towboat Fleet
Slide 22: Kirby Inland Fleet by Barge Type
Kirby Inland Fleet by Barge Type* * Barge counts as of September 30, 2024 21
Slide 23: Inland Barge Fleet by Operator
Inland Barge Fleet by Operator Tank Dry Cargo Tank Dry Cargo Shipper Owned Independent Barges Barges Shipper Owned Independent Barges Barges Operated Operated Operated Operated Chem Carriers, Inc. 52 - Kirby Corporation* 1,095 - John W. Stone Oil 40 - American Commercial Lines LLC. 394 3,040 Buffalo
Slide 24: Kirby Growth and Asset Replacement Strategy Based on Counter Cyclical Acquisitions
Kirby Growth and Asset Replacement Strategy Based on Counter Cyclical Acquisitions Kirby is focused on growth while replenishing and reducing the age of its inland barge fleet through asset acquisitions vs. newbuilds Number Kirby’s Inland Barge Fleet Over Time vs. Industry of Barges Kirby Count Inde
Slide 25: Kirby Inland Marine – Increase in Earnings Potential
Kirby Inland Marine – Increase in Earnings Potential 2017 2024* Change Number of Inland Barges 841 1,095 +30% Inland Bbl Capacity (MM Bbls) 17.3 24.2 +40% Inland Average Barge Age 14.4 16.8 2.4 years Significant growth while improving asset quality Increase in operational scale * Barge count as
Slide 26: Inland Barge Utilization Recovering from COVID Lows
Inland Barge Utilization Recovering from COVID Lows Margins historically lag barge utilization through the cycle, but have started to improve Utilization % Inland EBITDA and operating income have started to inflect and are expected to Margin % continue to improve in 20251 96 36 94 92 32 90 28 88 86
Slide 27: Kirby Inland Marine Differentiators
Kirby Inland Marine Differentiators Safety culture High quality customer portfolio Heavily engrained in the supply chain of many blue chip companies – Acquired Lyondell, Dow, and SeaRiver’s captive fleets Horsepower management Largest tank barge fleet – scale matters – Facilitates better a
Slide 28: Coastal Market
Coastal Market Coastal Division 27
Slide 29: Coastal Tank Barge Fleet by Operator
Coastal Tank Barge Fleet by Operator Kirby is the second largest Coastal tank barge operator by barrel capacity Tank barge count as of September 30, 2024 Source: Kirby, company websites and public filings 28
Slide 30: Coastal Tank Barge Age Profile
Coastal Tank Barge Age Profile Coastal Barge Market Age Distribution Number of barges by age and category There are no coastal barges under construction The average age of the nation’s coastal tank barge fleet is ~15 years, but 19 barges are 25+ years old and candidates for retirement in the coming
Slide 31: Differentiators for Kirby’s Coastal Business
Differentiators for Kirby’s Coastal Business Inland company key relationships Kirby Ocean Transport – Working for blue chip refiners – Long term contracts with 40 year relationship Younger, more efficient fleet Counter cyclical investments Focus on transporting black oil and chemicals 30
Slide 32: Distribution & Services
Distribution & Services
Slide 33: Introduction to Distribution & Services
Introduction to Distribution & Services Who we are… 62 Seattle LOCATIONS ACROSS NORTH AND SOUTH AMERICA Albany Marlborough Casper Middletown Lodi Piscataway 5 Thorofare Grand Junction Denver Paducah Chesapeake Tulsa Albuquerque Rocky Mount Oklahoma City BRANCH LOCATIONS IN Lubbock Wichita Falls Litt
Slide 34: Kirby is a leader in industrial distribution
Kirby is a leader in industrial distribution Who we represent… Kirby D&S is the largest single distributor in the world for our Dealerships OEM partners provide rights to Distributorships provide unique and exclusive OEM service customers representation rights in assigned areas of responsibility in
Slide 35: Distribution & Services has diversified sources of revenue across multiple industries
Distribution & Services has diversified sources of revenue across multiple industries Customer Industry Base Commercial & Industrial - Distribution, Power Generation - Distribution, services and packaged equipment services, manufactured and packaged ~47% of D&S segment revenues equipment New equipme
Slide 36: Power Generation
Power Generation Kirby is a leading provider of power generation units across various industries Sells pre-packaged and fabricated power generation systems for emergency, standby, and auxiliary power Provides service and parts to nuclear power plants Manufactures mobile microgrid systems Ren
Slide 37: Power Generation Technology
Power Generation Technology Kirby manufactures power generation equipment that is creating new opportunities in oil and gas, commercial, and industrial end markets NATURAL GAS RECIPROCATING GENERATORS POWER DISTRIBUTION SYSTEMS High Power Output: 2.5 MW Enables highly scalable power plants and m
Slide 38: Commercial and Industrial
Commercial and Industrial Kirby is a leading distribution and services provider to key markets MARINE ON-HIGHWAY Major service and OEM new product and replacement parts Distributes, sells parts, and services diesel engines and provider for diesel engines and ancillary products transmissions Lo
Slide 39: Oil and Gas
Oil and Gas Kirby is one of the largest providers of equipment, service and parts to the oilfield MANUFACTURING DISTRIBUTION Designs and manufactures a wide array of specialized Heavy duty cycle associated with fracturing leads to the need for equipment for hydraulic fracturing, acidizing, cemen
Slide 40: Distribution & Services is Recovering
Distribution & Services is Recovering The acquisition of S&S in 2017 generated a significant increase in earnings, but the 2019 industry downturn and COVID-19 adversely impacted profitability in recent years Business activity started to inflect in FY 2021 and is expected to remain stable in 20241 de
Slide 41: Financial Highlights
Financial Highlights
Slide 42: 3Q 2024 Overview
3Q 2024 Overview Financial Summary $ millions except earnings (loss) per share 3Q 2024 3Q 2023 Variance % 2Q 2024 Variance % Revenues $ 831.1 $ 764.8 $ 66.3 9% $ 824.4 $ 6.7 1% Operating income 126.9 93.5 33.4 36% 120.5 6.4 5% Net earnings attributable to Kirby 90.0 63.0 27.0 43% 83.9 6.1 7% Earning
Slide 43: Marine Transportation – 2024 Fourth Quarter Outlook
Marine Transportation – 2024 Fourth Quarter Outlook Solid demand with minor headwinds, seasonal weather and marginal softness in the refining market Inland – Positive market dynamics due to limited new barge construction – Barge utilization expected to be around 90% range – Continued price improve
Slide 44: Distribution & Services – 2024 Fourth Quarter Outlook
Distribution & Services – 2024 Fourth Quarter Outlook Near-term softness due to uncertainty in supply issues, and customers deferring maintenance Power generation – Strong growth in orders as demand in data center and backup power markets remains robust – Volatile delivery schedule of new products
Slide 45: Adjusted EBITDA Per Share
Adjusted EBITDA Per Share Tank barge industry overbuilding Economic Financial 2011 – 2015 COVID-19 downturn crisis ------------------------- pandemic $12.00 Oil and gas industry $11.23 downturn $10.49 $10.38 $10.00 $9.31 $9.03 1 $8.32 $8.35 $7.95 $7.89 $8.00 $7.27 $6.66 $6.80 1 $6.14 $6.00 $5.60 $5.
Slide 46: Cash Flow Generation
Cash Flow Generation Kirby consistently generates free cash flow* Operating cash flow Capital expenditures $ in Millions (ex-acquisitions) $700 $600 to $601 $700 $600 $540 $524 $512 $500 $439 $445 $325 $416 $402 to $400 $355 $355 $345 $353 $347 $326$312 $322 $302 $294 $300 $253 $248 $231 $200 $177 $
Slide 47: Capital Structure
Capital Structure 2012 to 2024 Q3 Debt-to-Total Capital Cenac 63 Barges $244MM Savage 92 Barges Allied $279MM Transp. 39.9% 10 units Targa Cenac 63 Barges $109MM 16 Barges 40% $69MM $244MM Undisclosed 35.3% 6 Pressure 13 Barges Barges Seacor $68MM 33.8% $41MM 27 Barges Undisclosed $89MM 31.3% 23 Bar
Slide 48: Financial Strength
Financial Strength Investment grade rating – Standard & Poor’s: BBB, stable – Moody’s: Baa3, stable $500 million 4.20% Senior Notes – Maturity date of March 1, 2028 – Used to fund Higman Marine acquisition in 2018 $300 million 3.50% Senior Notes – 10-year maturity due January 19, 2033 – Used t
Slide 49: Why Invest in Kirby?
Why Invest in Kirby? Proven track record of success over the long-term Two strong franchises – Marine Transportation – Distribution and Services Purpose-built management team with decades of relevant experience in both core businesses Disciplined financial management – Investment-grade balan
Slide 50: Appendix
Appendix 49
Slide 51: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Kirby reports its financial results in accordance with generally accepted accounting principles (GAAP). However, Kirby believes that certain non-GAAP financial measures are useful in managing Kirby’s businesses and evaluating Kirby’s performance.
Slide 52: Reconciliation of GAAP Net Earnings to Non-GAAP Adjusted EBITDA
Reconciliation of GAAP Net Earnings to Non-GAAP Adjusted EBITDA KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP Adjusted EBITDA 2024-Q3 YTD 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 ($ in millions) Net earnings (loss) attributable to Kirby $ 243.9 $ 22
Slide 53: Reconciliation of GAAP to Non-GAAP Financial Measures Excluding One-Time Items
Reconciliation of GAAP to Non-GAAP Financial Measures Excluding One-Time Items KIRBY CORPORATION Reconciliation of GAAP to Non-GAAP Financial Measures Excluding One-Time Items (unaudited, $ in millions except per share amounts) Q3 2024 Q3 YTD 2024 Full Year 2023 Full Year 2022 Net Diluted Net Dilute
Slide 54: Marine Transportation Performance Measures
Marine Transportation Performance Measures KIRBY CORPORATION MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 1Q 2Q 3Q YTD 1Q 2Q 3Q 4Q Total Total Year Year Year Year Year Year Year Year Year Inland Performance Measurements: Ton miles (in mil
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