Valmont Industries, Inc. · NYSE:VMI
Valmont Industries — Q3 2016 Earnings Presentation
17 slides from Valmont Industries's earnings presentation, 2016
Slide 1: 3Q 2016 Earnings Call Presentation
3Q 2016 Earnings Call Presentation Valmont Industries. Inc. | 2016 Investor Day
Slide 2: Forward-looking Statement Disclosure
Forward-looking Statement Disclosure 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 factors tha
Slide 3: Third Quarter Highlights
Third Quarter Highlights Benefits of restructuring, share repurchases and other productivity improvements drive improved GAAP and adjusted earnings despite lower revenues Revenues down 3.5% driven by reductions in International Utility and North American Coatings GAAP Operating income rises 30
Slide 4: Financial Highlights—Third Quarter
Financial Highlights—Third Quarter NET SALES 2015 2016 Percent Dollars in millions except per share amounts Change Engineered Support Structures $199.4 $203.2 1.9% Utility Support Structures 164.7 150.7 (8.5%) Coatings 76.2 70.1 (8.0%) Energy & Mining 84.7 81.6 (3.8%) Irrigation 126.8 127.8 (0.8%) O
Slide 5: Financial Highlights Operating Income GAAP
Financial Highlights Operating Income GAAP Dollars in millions Operating Operating Increase Operating Operating Income 3Q Income 3Q /Decrease Income Percent Income Percent 2015 2016 3Q 2015 3Q 2016 Engineered Support $20.1 $19.6 (2.5%) 10.1% 9.6% Structures Utility Support 14.5 16.0 10.4% 8.8% 10.6%
Slide 6: Financial Highlights Operating Income Adjusted*
Financial Highlights Operating Income Adjusted* Dollars in millions Adjusted Adjusted Increase Operating Operating Operating Operating /Decrease Income Percent Income Percent Income 3Q Income 3Q 3Q 2015 3Q 2016 2015 * 2016 * Engineered Support $21.7 $20.2 (6.9%) 10.9% 9.9% Structures Utility Support
Slide 7: Engineered Support Structures
Engineered Support Structures $ in millions Sales Net of Intercompany Activity Revenue Operating Income* 2015 Revenue $194.4 $24 $21.7 $250 $20.1 $19.6 $20.2 $199.4 $203.2 Volume (0.5) $200 $18 Pricing/Mix 0.2 $150 $12 Acquisitions - $100 $6 Currency Translation (1.0) $50 $- $- 2016 Revenue $193.1 2
Slide 8: Utility Support Structures
Utility Support Structures $ in millions Sales Net of Intercompany Activity Revenue $18 Operating Income* 2015 Revenue $164.4 $175 $16.6 $164.7 $16.0 Volume (2.4) $165 $16 $15.7 Pricing/Mix (11.6) $155 $150.7 $14.5 Acquisitions - $145 $14 Currency Translation - $135 $12 $125 2015 GAAP 2015 Adj. 2016
Slide 9: Coatings
Coatings $ in millions Sales Net of Intercompany Activity Operating Income* 2015 Revenue $64.8 $16 $14.2 $14 $11.7 $12.2 Volume (4.6) $12 $10 Pricing/Mix (2.5) $8 Acquisitions 2.0 $6 $4 $3.1 Currency Translation (0.3) $2 $- 2016 Revenue $60.0 2015 GAAP 2015 Adj. 2016 GAAP 2016 Adj • Sudden meaningfu
Slide 10: Energy and Mining
Energy and Mining $ in millions Sales Net of Intercompany Activity Revenue $8 Operating Income* 2015 Revenue $82.7 $85 $84.7 $5.6 $6 $3.6 $3.9 Volume (3.3) $84 $4 $2 Pricing/Mix 0.4 $83 $- Acquisitions - $82 $81.6 $(2) Currency Translation 1.4 $(4) $81 $(6) $(4.3) 2016 Revenue $81.2 $80 2015 GAAP 20
Slide 11: Irrigation
Irrigation $ in millions Sales Net of Intercompany Activity Revenue Operating Income* 2015 Revenue $125.5 $15 $14.2 $14.2 $14.2 $130 Volume (1.8) $127.8 $128 $126.8 Pricing/Mix 1.9 $10 $126 Acquisitions - $124 Currency Translation (0.1) $5 $122 $120 2016 Revenue $125.5 $- 2015 2016 2015 GAAP 2015 Ad
Slide 12: YTD Free Cash Flow
YTD Free Cash Flow Dollars in Millions 2015 2016 Change Net Income $74.5 $107.1 $32.6 Deprec/Amort 70.9 61.2 (9.7) Working Capital (Incr/Decr) 8.6 (31.6) (40.2) Impairment of Goodwill & Tradename 15.2 - (15.2) Other 13.6 (9.6) (23.1) Operating CF 182.8 127.3 (55.5) CapEx (34.5) (42.2) (7.7) Free Cas
Slide 13: Balance Sheet – 3Q 2016
Balance Sheet – 3Q 2016 Goal: Maintain Investment-grade rating; Keep Debt/EBITDA from 1.5 to 2.5x 3Q 2016 Actual Credit Rating Free Cash Flow $85.1M YTD S&P BBB+ Negative Cash At 06/25 $349M ($297 Ex. US) Moody’s Baa3 Stable Total Debt $757M Debt Maturities – in Millions Debt/Adjusted 2.63X Adjusted
Slide 14: Summary
Summary Q3 EPS improved despite slightly lower revenues Positive effects from restructuring and productivity Improvements Steel price volatility effectively managed Favorable tax rate Strong Balance Sheet and Liquidity Annual guidance modified to reflect weaker Coatings Volumes – Adjuste
Slide 15: Summary of Effect of Significant Non-recurring Items on Reported Results
Valmont – Summary of Effect of Significant Non-recurring Items on Reported Results Valmont – Recast 2015 Segment Figures Other (8,608) (14,420) Net cash flows from financing activities (82,356) (190,226) Effect of exchange rates on cash and cash equivalents (3,478) (26,113) Net change in cash and ca
Slide 16: Recast 2015 Segment Figures by Quarter
Valmont – Recast 2015 Segment Figures by Quarter Valmont – Recast 2015 Segment Figures For the Third Quarter Ended Sept. 24, 2016 Operating Restructuring Adjusted Income- As expenses - before Operating Segment Operating Income Reconciliation Reported tax Income Net Sales Engineered Support Structure
Slide 17: Calculation of Adjusted EBITDA and Leverage Ratio
Valmont – Calculation of Adjusted EBITDA and Leverage Ratio Valmont – Calculation of Adjusted EBITDA and Leverage Ratio Trailing 12 Debt Coverage Calculation Months 9/24/2016 Net earnings attributable to Valmont Industries, Inc. $ 72,607 Interest expense 44,417 Income tax expense 54,297 Depreciation