Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — FY2021 Earnings Presentation
36 slides from Valmont Industries's earnings presentation, Feb 17, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Presentation
© 2021 Valmont® Industries, Inc. Valmont Industries, Inc. Fourth Quarter and Full Year 2021 Earnings Presentation February 17, 2022
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other f
Slide 3: Steve Kaniewski, President & Chief Executive Officer
| Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 20223 STEVE KANIEWSKI PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 4: 4Q 2021 Segment Sales and Segment Summaries
4Q 2021 Segment Sales and Segment Summaries February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation4 Significant Irrigation Revenue Growth • Led by substantially higher pricing and strong underlying demand • Continuing to invest in upgrading and hardening the grid • Inc
Slide 5: Full Year 2021 Segment Sales and Segment Summaries
Full Year 2021 Segment Sales and Segment Summaries February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation5 Considerable Sales Growth in All Segments • Sales growth driven by significantly higher pricing • Continued robust demand driven by grid resiliency and renewables
Slide 6: Advancing our ESG Strategy and 2022 Sustainability Report
6 Advancing our ESG Strategy and Communication with the Release of our 2022 Sustainability Report February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation Elevated ESG to a Top Strategic Imperative Alignment to New Frameworks Improvement in ISS scores for Environment and
Slide 7: Avner Applbaum, EVP & Chief Financial Officer
AVNER APPLBAUM EVP & CHIEF FINANCIAL OFFICER | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 20227
Slide 8: 4Q 2021 Financial Summary
4Q 2021 Financial Summary February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation8 Sales Operating Income Diluted EPS GAAP Adjusted1 GAAP Adjusted1 20.7% (6.1%) 24.4% (25.6%) 24.1% • Higher volumes in Irrigation and favorable pricing, in both Engineered Support Structur
Slide 9: 4Q 2021 Results | Utility Support Structures
Sales Operating Income1 19.6% 4Q 2021 Results | Utility Support Structures 9 ($M) Key Statistics 2020 Sales $ 271.0 Intersegment Sales 7.3 Volume 6.7 Pricing/Mix 41.3 Acquisitions/Divestiture - Currency Translation (2.3) 2021 Sales $ 324.0 $324.0 $271.0 2021 2020 COMMENTARY • Adjusted operating inco
Slide 10: 4Q 2021 Results | Engineered Support Structures
Sales Operating Income1 14.0% 4Q 2021 Results | Engineered Support Structures February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation10 ($M) $291.9 $256.1 2021 2020 $29.2 $19.2 $24.4 2021 2020 2020 Adj. COMMENTARY • Operating income of $29.2 million, or 10.0% of sales,
Slide 11: 4Q 2021 Results | Coatings
4Q 2021 Results | Coatings February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation11 ($M) COMMENTARY • Operating income of $10.3 million, or 10.5% of sales, decreased 270 basis points compared to last year • Profitability was impacted by a lag in pricing to recover high
Slide 12: 4Q 2021 Results | Irrigation
Sales Operating Income1 55.0% 23.6% 4Q 2021 Results | Irrigation February 17, 202212 ($M) $28.6 $33.0 $22.3 $25.3 2021 2021 Adj. 2020 2020 Adj.2021 2020 $150.5 $126.3 $97.1 $102.2 North America International | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation Key Statistics 2020 Sale
Slide 13: 2021 Cash Flow Highlights
2021 Cash Flow Highlights February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation13 Strategically Securing Raw Material to Support Strong Sales Growth ($M) YTD 12/25/2021 Net Cash Flows from Operating Activities $ 65.9 Net Cash Flows from Investing Activities (417.3) Ne
Slide 14: Balanced Approach to Capital Allocation
Balanced Approach to Capital Allocation February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation14 $108 $313 $26 $41 Capital Expenditures Acquisitions Share Repurchases Dividends 2021 Capital Deployment: $488M Capital Expenditures • 2021 CapEx of $108M in line with expec
Slide 15: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation15 Cash $177.2M Total Long-Term Debt $947.1M Shareholders’ Equity $1,413.6M Total Debt to Adj. EBITDA1 1.9x Available Credit under Revolving Credit Facility2 $590.5M Cash $177.2M T
Slide 16: Full Year 2022 Outlook and Key Assumptions
Full Year 2022 Outlook and Key Assumptions 16 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 KEY ASSUMPTIONS • Unfavorable foreign currency translation impact of ~1.0% of Net Sales • Continue implementing additional price actions as needed across our businesses
Slide 17: Fundamental Market Drivers Remain Resilient
Fundamental Market Drivers Remain Resilient 17 Record Backlog of More than $1.6B at the End of 2021 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 COATINGS IRRIGATION • Closely following industrial production trends • Global preservation of critical infrastructu
Slide 18: 2022 Segment Outlook
2022 Segment Outlook February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation18 Positive Momentum Across All Businesses USS • Expect margin improvement from strong market demand and the benefit of previous pricing actions • Backlog indicative of long-term market drivers
Slide 19: Summary
Ability to grow sales through innovation and execution while being flexible and responding quickly to meet customer needs Increased operating income by executing on our pricing strategies and advancing operational excellence across our footprint Invested in our employees and technology to drive new
Slide 20: Q&A
Q&A 20 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022
Slide 21: Appendix
APPENDIX 21 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022
Slide 22: Full Year 2021 Financial Summary
Full Year 2021 Financial Summary February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation22 Sales Operating Income Diluted EPS GAAP Adjusted1 GAAP Adjusted1 20.9% 26.9% 24.4% 38.5% 33.5% • Sales growth in all segments • Led by Irrigation which grew 59.3% to a record $1.0
Slide 23: 4Q and Full Year 2021 Financial Summary
4Q and Full Year 2021 Financial Summary 23 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 Net Sales 2021 2020 Change YTD 2021 YTD 2020 Change Utility Support Structures $ 324.0 $ 271.0 19.6% $ 1,121.5 $ 1,002.2 11.9% Engineered Support Structures 291.9 256.1 14.
Slide 24: Steel Material Index Trends 2020-2021 YTD
Steel Material Index Trends 2020-2021 YTD 24 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 Source: FastMarketsAMM.
Slide 25: State Transportation Investment Funding Measures
State Transportation Investment Funding Measures 25 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 Source:(10/18/21) Transportation Investment Advocacy Center.
Slide 26: State Transportation Investment Funding Measures by Type and State
State Transportation Investment Funding Measures by Type and State 26 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 Source: Transportation Investment Advocacy Center. Increased Fuel Tax Electric Vehicle Fee Road Usage Fee
Slide 27: 5G Adoption and Capex Spend Forecasts
5G Adoption and Capex Spend Forecasts 27 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 Source: GSM Association.
Slide 28: U.S. Net Cash Farm Income by Year
U.S. Net Cash Farm Income by Year February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation28 Source: USDA, American Farm Bureau Federation
Slide 29: 2012-2021 Historical Free Cash Flow
2012-2021 Historical Free Cash Flow1 February 17, 2022 | Valmont Industries, Inc. | 4Q and Full Year Earnings Presentation29 10 Year Average FCF is $143M; Last 5 Years Has Averaged $107M 1 Adjusted earnings for purposes of calculating FCF conversion may not agree to the adjusted net earnings. The di
Slide 30: Strong Free Cash Flow throughout the Cycle
Years of rapid raw material cost inflation GAAP 0.43X 1.04X 0.55X 5.66X 1.01X 0.67X 0.86X 1.37X 1.49X (0.21X) Adj. N/A 0.98X 0.53X 1.71X 1.27X 0.49X 0.66X N/A 1.28X (0.19X) 2012 – 2021 Free Cash Flow1 ($M) 100 290 101 227 175 78 81 210 210 (42) 143 (100) (50) - 50 100 150 200 250 300 350 2012 2013 2
Slide 31: Calculation of Adjusted EBITDA and Leverage Ratio
Calculation of Adjusted EBITDA and Leverage Ratio 31 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022 Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt/Adjusted EBITDA may not exceed 3.5X Adjusted EBITDA
Slide 32: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 32 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022
Slide 33: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 33 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022
Slide 34: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 34 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022
Slide 35: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 35 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022
Slide 36: Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings
Regulation G Reconciliation of Forecasted GAAP and Adjusted Earnings 36 | Valmont Industries, Inc. | 4Q and Full Year Earnings PresentationFebruary 17, 2022