Badger Meter, Inc. · NYSE:BMI
Badger Meter — Investor Presentation (January 2022)
23 slides from Badger Meter's investor presentation, January 2022
Slide 1: Badger Meter, Inc. General Investor Presentation
BADGER METER, INC. GENERAL INVESTOR PRESENTATION January 2022 © 2022 Badger Meter, Inc. 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain statements contained in this presentation as well as other information provided from time to time by Badger Meter, Inc. (the “company”) or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to
Slide 3: Badger Meter Is a Premier Smart Water Solutions Provider
BADGER METER IS A PREMIER SMART WATER SOLUTIONS PROVIDER • Comprehensive suite of digital smart water offerings including flow measurement, water quality and other parameters with software / analytics solutions $ • Industry leader in North American smart water metering, with a strong global position
Slide 4: Comprehensive Portfolio of Smart Water Offerings to Solve Customer Challenges
COMPREHENSIVE PORTFOLIO OF SMART WATER OFFERINGS TO SOLVE CUSTOMER CHALLENGES Secular Drivers Our Product and Digital Solutions Outcomes Data Communications Population Growth Water Scarcity • Flow (total and rate) • Wired / wireless networks Revenue and Demand Change Environment Changes • Water qual
Slide 5: Building on Core Solutions with Water Quality Monitoring
BUILDING ON OUR ESTABLISHED FOUNDATION OF CORE SOLUTIONS WITH WATER QUALITY MONITORING • Complementary offerings Macro Trends Driving Water Quality Applications • Product technology - electrochemical and optical sensors Distribution system security / • Geographies - ATi in the US and UK, s::can inst
Slide 6: Smart Water Innovation Leader
SMART WATER INNOVATION LEADER Driving Enhancements in Smarter Measurement & Actionable Data Enhanced Operational Efficiencies Static Metering Water Quality Cellular & IoT Software & Analytics • Smarter meters – flow, • Low maintenance, • 5th generation endpoint • Cloud software for utility pressur
Slide 7: Fourth Quarter Financial Snapshot
FOURTH QUARTER FINANCIAL SNAPSHOT • Utility water sales increased 23.4%. Excluding year- (US$ in millions, except per share data) Q4 2021 Q4 2020 Change over-year benefit of water quality acquisitions, utility water core growth was 14.4%. Strong order activity Sales $135.7 $112.3 20.8% and recoverin
Slide 8: 2021 Recap / Outlook
2021 RECAP / OUTLOOK Full Year 2021 9% Core Utility Water • Record 2021 financial performance despite backdrop of pandemic, supply Sales Growth chain disruptions, logistics challenges and inflation 30 BPS • Core utility water growth of 9%, and 13% above 2019’s pre-pandemic sales level Op Profit Marg
Slide 9: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES • No outstanding debt obligations and $87M of cash at December Internal Investment to support organic 31, 2021 growth and sustain core business • Strong free cash flow, working capital management – 133% conversion of net earnings in Grow the dividend annually in line wi
Slide 10: Environmental, Social and Governance Integral to Business Strategy
ENVIRONMENTAL, SOCIAL AND GOVERNANCE INTEGRAL TO BUSINESS STRATEGY • Smart Water Solutions enable water conservation, resiliency and improved water quality – aligned with United Nations SDGs − Estimate our products save >5B gallons of water annually, equating to >11.5M kWh of energy (7,850 tons of C
Slide 11: Background Information
BACKGROUND INFORMATION © 2022 Badger Meter, Inc. 11
Slide 12: Competitive Advantages – Why Badger Meter Wins
COMPETITIVE ADVANTAGES – WHY BADGER METER WINS >50K Water Utilities in US Broadest Range of Offerings • Brass and polymer – Choice Matters • Mechanical and static (ultrasonic) Utility Size and their Share of • Drive by, fixed and cellular radio technology Meter connections Technology Leadership • We
Slide 13: Cellular Communication vs. Fixed Network
CELLULAR COMMUNICATION VS. FIXED NETWORK • Easy • Flexible • Resilient • Savings • Standard LTE-M Cellular Communication Technology – Example of Innovation Leadership © 2022 Badger Meter, Inc. 13
Slide 14: Smart Water Acceleration
SMART WATER ACCELERATION The Business Case The Solutions Why are utilities willing to pay more? How our leading technologies deliver • Reduce non-revenue water (NRW) • Meters • Mechanical meters lose some accuracy over • Static (E-series ultrasonic) holds accuracy over time lifetime; commercial size
Slide 15: Utility Water-Integrated Solution Offering
UTILITY WATER-INTEGRATED SOLUTION OFFERING Mechanical Meters 1 Static Meters 1 • Broadest product offering - both mechanical 1 and static meters in both metal and polymer • Next generation E-Series Ultrasonic Meter METERS with D-Flow technology Recordall® Disc E-Series® Ultrasonic • Complete line of
Slide 16: Smart Water Key Growth Strategies
SMART WATER KEY GROWTH STRATEGIES • Maintain leading position in the North American smart water market through continued development of leading-edge offerings • Penetrate and grow select international markets (e.g. Middle East, UK) with fit-for- market solutions • Leverage addition of real-time wate
Slide 17: Radio Connectivity - Penetration
RADIO CONNECTIVITY - PENETRATION MANUAL READ METERS WITH RADIOS/SOFTWARE $40-$50 price $150-$250 price per per meter system CONVERSION TO CONTINUE • Badger Meter was the first US company to offer radios on water meters (1988) • Radio connectivity allows for automated North American water meter marke
Slide 18: Flow Instrumentation Key Growth Strategies
FLOW INSTRUMENTATION KEY GROWTH STRATEGIES • Expand niche share by targeting water-related applications, predominately • Building Automation/HVAC/Sustainability • Water and Wastewater treatment and distribution • Leverage addition of real-time water quality monitoring for industrial process and disc
Slide 19: Strategic Acquisitions
STRATEGIC ACQUISITIONS Potential Steps in Process Acquisition Targets Criteria • Technology solutions that can be • Companies leveraged across both utility and flow Ideation List of Potential Targets previously tracked Water quality monitoring New targets added instrumentation markets • • Sensors /
Slide 20: Acquisition History
ACQUISITION HISTORY Year Company Type Location Price Utility Water Instrumentation and Connectivity: 2021 Analytical Technology, Inc Water quality monitoring USA / UK $44M 2020 s::can Water quality monitoring Vienna, Austria $31M 2018 Innovative Metering Distributor Tampa, FL $8M Solutions 2017 Caro
Slide 21: Global Innovation and Manufacturing Footprint
GLOBAL INNOVATION AND MANUFACTURING FOOTPRINT LULEA SWEDEN – Ultrasonic technology development MILWAUKEE, WI – Communication technologies, advanced metering development BERN, BRNO, CZECH REPUBLIC MILWAUKEE - HQ RACINE, WI SWITERLAND VIENNA AUSTRIA – Optical water quality sensing VIENNA
Slide 22: Annual Financial Trends
ANNUAL FINANCIAL TRENDS (US$ in millions, except per share data) • Sales growth driven primarily by smart water solution penetration 2018 2019 2020 2021 • Radios and SaaS Sales $433.7 $424.6 $425.5 $505.2 • Water quality Adj Oper Earnings 59.4 62.2 65.2 78.7 13.7% 14.6% 15.3% 15.6% • Margins driven
Slide 23: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS EBITDA Free Cash Flow (US$ in millions) (US$ in millions) Q4 2021 Q4 2020 2021 2020 Q4 2021 Q4 2020 Net Earnings (GAAP) $17.3 $13.1 $60.9 $49.3 Cash from Ops (GAAP) $27.1 $15.9 Income tax provision 5.6 3.8 17.7 15.6 Capital Expenditures (0.9) (3.2) Depreciation 2.6 3