Mueller Water Products · NYSE:MWA
Mueller Water Products — Baird's 2011 Industrial Conference
33 slides from Mueller Water Products's conference presentation, Nov 9, 2011
Slide 1: Baird's 2011 Industrial Conference
Baird’s 2011 Industrial Conference November 9, 2011
Slide 2: Non-GAAP Financial Measures
Mueller Water Products| Non-GAAP Financial Measures ‘The Company presents adjusted income (loss) from operations, adjusted operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per share, free cash flow and net debt as non-GAAP measures. Ad
Slide 3: Safe Harbor Statement
Mueller Water Products| Safe Harbor Statement This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address activities, events or developments that we intend, expec
Slide 4: Mueller Water Products overview
Mueller Water Products} | Leading North American provider of water infrastructure and flow control products and services Increasing investment needed in water infrastructure industry Leading brands in water infrastructure and one of the largest installed bases in the Leveraging brands to expand inte
Slide 5: Our Business
Mueller Water Products| Our Business + $1.3B LTM net sales (as of September 30, 2011) FY2011 Primary End Markets + Portfolio includes: Net Sales $1.38 + Fire hydrants Valves + Pipe fittings Ductile iron pipe + Metering systems Leak detection Specified in 100 largest U.S. metropolitan markets(”) More
Slide 6: Broad Product Portfolio
Broad Product Portfolio a (Sin milions) : Est. 1899 Est. 1999 (1850) sa sr 2s INCOME (LOSS) (*) $56 $34 "ANORTIZATION® $48 $15 so wa PORTFOLIO 6 \ C) b Butterfly, Batt Pipe Nipples. taney Metering ‘Sytem Jot Figs and Plug Waves Sipe Srcn anrtnton xcdeopatecpecnt $0.8
Slide 7: Complete Water Transmission Solutions
Complete Water Transmission Solutions area pana « ll Poste ‘ Mueller Water Products manufactures and markets products and services that are used in the transmission, distribution and measurement of safe, clean drinking water and in water treatment facilities. " r 4 ‘oli a See ae von tt tt Wado teres
Slide 8: Mueller Water Products product lines and competitors
Mueller Water Products| BUTTERFLY AND BRASS WATER BALL VALVES PRC FIRE HYDRANTS GATE VALVES ODUCTS DUCTILE IRON PIPE Mueller Water Products a ACIPCO oe e ‘AY, McDonald nn r) DeZURIK e Ford Meter Box i ° Griffin Pipe © MecWane ry ry ry where avataie.
Slide 9: Strategy And Objectives
Strategy And Objectives attractive water infrastructure markets worldwide Maintain leadership positions with customers and end users lizeorthe large, > | and-growing™ Continue to enhance operational and organizational excellence Broaden breadth and depth of products and services Expand international
Slide 10: Strategic Initiatives
Strategic Initiatives Maintain leadership positions with customers and end users + Leveraging the Mueller brand + Leveraging distribution network + Developing value-added products + Improving customer service levels and services Continue to enhance operational and organizational excellence | + Stren
Slide 11: Our End Markets
Slide 12: Primary End Markets: 2006-2011
Primary End Markets: 2006-2011 FY 2006 FY 2011 Net Sales: $1.9B. Net Sales: $1.3B Repair and replacement Nbteresidencial 30% Since 2006, our exposure to the residential construction market has declined from roughly 40% to 5%. Feet cerguton 9 ven prima by et community deepest
Slide 13: Historical Housing Starts
Historical Housing Starts Historical Housing Starts (1959 - September 2011) ‘Seasonally Adjusted Annualized
Slide 14: Non-Residential Construction
Mueller Water Products| Non-Residential Construction Non-Residential Construction Actual / Forecast AIA Architecture Billings Index (Diftision Index, : Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 EEEPELEEELREGRRLEREREE EEE ans Zina & Acs sare: lb i utero cebr4,201 Deter of cbr 201 We continue to see s
Slide 15: Significant Market Opportunities
Significant Market Opportunities
Slide 16: The Market Opportunity Is Significant And Growing
The Market Opportunity Is Significant And Growing Repair and Replacement Market Future Drinking Water , 6) + Aging water pipes need to be repaired/ replaced Rifiasiucture: Expenditure Nests + Valves and hydrants typically replaced at same time as pipes ASCE graded drinking water infrastructure a D-(
Slide 17: Aging Water Infrastructure
Aging Water Infrastructure tl E26 2 & S 1% 8 20% fd & $ By 1x 5 10% £3 $ 3S sox #°* = ass s 8 é Box 1870 1890 1910 1930 | 1950 1970 1990 2000 2010 2020 2020 2040 2050 2060 2070 Year Installed Year gee 2-10: Ag Dison of Cart ventory of Pfr 20 Ges Fea sit itd Anal Replat Nees Tonio its ond Dison ‘Main
Slide 18: Funding Water Infrastructure
Funding Water Infrastructure Stronger EPA regulations should lead to increased investment + At least 40 cities under consent decrees “New Jersey can maintain a ~ Atlanta $4.08 viable economy with a — Washington, D.C. $2.68 sound environment only if it ~ Baltimore City and county $1.78 ensures that i
Slide 19: Funding Water Infrastructure Repair
Funding Water Infrastructure Repair Utility-Expected Historical Water red te Sources of Capital for 2011 @ Operations 43% Grants Other 4% Loans/ Debt 6% 90% funded at local level) From 2007-2009, average annual residential water rates increased about 10% 63% of American voters willing to pay more to
Slide 20: Opportunities: Smart Metering and Pipe Condition Assessment
Mueller Water Products| Opportunities: Smart Metering and Pipe Condition Assessment | ‘Smart Metering + Advanced Metering Infrastructure 20% of market -$200 million today* + Forecasted to grow an average of 20% per year through 2015" + Transition from one-way to two- way AMI Systems Pipe Condition A
Slide 21: Actions & Business Results
a. See ; , i Actions & Business Results
Slide 22: Management Actions/Initiatives
Management Actions/Initiatives ( Objectives Actions } Reduce costs and improve operating leverage Manage working capital an capital expenditures to generate free cash flow + Closed six plants since FY2006 + Sold two non-core assets of Anvil in FY2010 * 30, 2011 from approximately 6,300 to approximat
Slide 23: History of Strong Financial Performance
History of Strong Financial Performance _(see appendices for GAAP reconciliation) _ Ell Anya” MARGIN
Slide 24: Consolidated Non-GAAP Results
Mueller Water Products| Consolidated Non-GAAP Results Fourth Quarter Fiscal $ in millions (except per share amounts) 2011 2010 Net sales $373.6 $346.7 Adj. income from operations $0.4 $15.4 ‘Adj. operating margin 2.4% 44% Adj. net income (loss) per share ($0.03) $0.00 Adj. EBITDA $29.7 $36.7 ‘Adj. E
Slide 25: Debt Structure
Mueller Water Products| Debt Structure + FY 2010 recapitalization provided a long-term — vttisturty capital structure + Extended maturities with no. Significant required “” principal payments before 201 = + Locked in long-term capital at attractive rates as | 5 + Preserved deleveraging capability “=
Slide 26: Key Financial Metrics
Key Financial Metrics ree. can row aoe {$63 million free cash flow average over last six years Debt has declined $871 million since 2006 0 si eed $3327 susot stove eeeessess
Slide 27: Why Invest in MWA?
Mueller Water Products| Why Invest in MWA? Water industry has fundamentally strong long-term dynamics G) Driven y reel tonne and uparaded wfrastructire '* Limited number of suppliers to end market Strong competitive position Leading brand positions with large installed base Leading municipal specifi
Slide 28: Supplemental Data
2 Mueller Water Products) iy i] Supplemental Data
Slide 29: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Cnmilions, except per share amounts)
Slide 30: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Cnmilions, excep per share amounts)
Slide 31: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Goins, xoept per share amounts)
Slide 32: Segment Results and Reconciliation of Non-GAAP to GAAP
Segment Results and Reconciliation of Non-GAAP to GAAP Performance Measures Govilins, xoept per share amounts)
Slide 33: Questions
Questions
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