Atkore Inc. · NYSE:ATKR
Atkore — Atkore International Group — J.P. Morgan Aviation, Transportation & Industrials Conference 2017
34 slides from Atkore's conference presentation, Mar 14, 2017
Slide 1: J.P. Morgan Aviation, Transportation & Industrials Conference
J.P. Morgan Aviation, Transportation & Industrials Conference March 14, 2017
Slide 2: Cautionary statements
1 Cautionary statements This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward-looking statements that are subject to known and unknown risks and uncertainties, ma
Slide 3: Today's presenters
2 Today’s presenters Name Position Experience John Williamson President, Chief Executive Officer and Director of Atkore Member of Board of Governors; National Electrical Manufacturers Association (NEMA) Joined the Company in 2011 Jim Mallak Vice President and Chief Financial Officer of Atkore Joined
Slide 4: Leading Electrical Raceway and Mechanical Products & Solutions provider
3 $48 $50 Q1 Leading Electrical Raceway and Mechanical Products & Solutions provider ■ #1 or #2 market positions in most of our products1 ■ Offer must-stock products to distribution and OEM customers via single integrated platform ■ Established reputation as an industry leader in quality, availabili
Slide 5: Atkore all around you
4 Cable Tray, Wire Basket Tray & Cable Ladder Armored Cable, Luminary Cable & Fittings Metal Framing & Fittings Flexible Electrical Conduit and Liquidtight Flexible Metal Conduit & Fittings PVC Electrical Conduit & Fittings Metal Electrical Conduit & Fittings In-Line Galvanized Mechanical Tube Atkor
Slide 6: Electrical Raceway segment
5 $86 $107 $175 $180 9% 11% 18% 18% 6% 8% 10% 12% 14% 16% 18% 20% FY 2014 FY 2015 FY 2016 LTM Dec. 30, 2016 Adjusted EBITDA ($mm) Adjusted EBITDA Margin PVC Electrical Conduit & Fittings 26% Armored Cable & Fittings 32% Other 8% Metal Electrical Conduit & Fittings 34% Atkore’s Electrical Raceway seg
Slide 7: Mechanical Products & Solutions segment
6 Metal Framing and Fittings 34% Mechanical Pipe 47% Other 19% ■ Comprehensive offering of metal framing and in-line galvanized tubular products ■ Offer critical combination of metal framing, value-added fittings and construction services to industrial and electrical distributors ■ ~60% of framing u
Slide 8: Atkore's significant transformation
7 Atkore’s significant transformation ■ Limited strategic vision ■ Little customer coordination ■ Underperforming leadership ■ No growth or M&A strategy 2011 2011 - 2016 Atkore strategy ■ Leading market positions/brands ■ Upgraded over 90% of leadership ■ Developed clear strategy ■ Implemented Atkor
Slide 9: The foundation for our improvement
8 The foundation for our improvement... ■ Market Intelligence and analysis ■ Portfolio analysis ■ Business development ■ “Evergreen” strategy ■ Product management ■ Culture of innovation ■ Talent assessment and acquisition ■ Talent engagement and development ■ Aligned incentives and compensation ■ R
Slide 10: Management team experience
9 Name / Position Relevant Experience Electrical Industry Experience Experience Gained With John P. Williamson President & Chief Executive Officer 30 years 16 years James A. Mallak Chief Financial Officer 30 years 4 years Peter Lariviere President, Cable Solutions 25 years 10 years Bill Waltz Presid
Slide 11: Investment highlights
atkore ___ Investment highlights a INTERNATIONAL
Slide 12: Investment highlights
11 Investment highlights Leading market positions and strong brands Superior customer value proposition with a compelling portfolio Significant scale providing barriers to entry Focused growth strategy to attack substantial market opportunity a. Capitalize on attractive end-market growth dynamics b.
Slide 13: Leading market positions and strong brands
12 Leading market positions and strong brands1 Leading market positions in each of our core businesses #1 #1 #1 #1 #2 Rank 35% 38% 39% 80% 23% Market share1 Steel Conduit PVC Conduit Armored Cable In-line Galvanized Mechanical Tube Metal Framing and Related Fittings 1 Management estimates based on m
Slide 14: Superior customer value proposition with a compelling portfolio
13 Global Electrical Distributors Independent Electrical Distributors Industrial Distributors & Big Box Retail Electrical Raceway. Your wayTM Bundling & Co-loading ■ Brands and reputation ■ Product breadth ■ Bundling, co-loading and value-add advantages ■ Quality, availability, delivery and service
Slide 15: Significant scale providing barriers to entry
14 3 Industry-leading scale that allows us to provide: Broad portfolio of products, enabling us to deliver integrated source-to-outlet electrical solutions Value-added reliable service and on-time delivery solidifying our customer value proposition Difficult-to-replicate manufacturing technolo
Slide 16: Focused growth strategy to attack substantial market opportunity
15 4 a) Capitalize on attractive end-market growth dynamics b) Grow market share with new and existing customers c) Execute on strategic pricing and mix opportunities d) Expand product offering through innovation e) Pursue M&A to deliver incremental growth Focused growth strategy to attack substanti
Slide 17: Capitalize on attractive end-market growth dynamics
16 OEM, 18% International 8% Other 5% U.S. construction 69% MR&R 22% New residential construction 16% Infrastructure 7% New non- residential construction 55% Atkore is geared to U.S. non-residential construction 10% 10% 8% 7% 6% Source: Dodge Data & Analytics as of November 2016. 1 MR&R includes non
Slide 18: Grow market share with new and existing customers
17 Grow market share with new and existing customers4b A ll st rate g ic b u s in ess u n it s E lect ri c a l R ace w a y i n f o c u s All customers Large national accounts Regional and smaller independent distributors Segment by 13 SBUs Incentivize each SBU General Manager to serve and grow w
Slide 19: Execute on strategic pricing and mix opportunities
18 Execute on strategic pricing and mix opportunities 4c Step 2: Improve performance Step 1: Develop capabilities Step 3: Optimize mix Step 4: Complete roll-out Developing mindset, skillset and toolset on how to price effectively Better quality, delivery, availability and ease of doing business Shif
Slide 20: Expand product offering through innovation
19 2016 ■ 9 new products (7 Electrical Raceway and 2 MP&S) A track record of successful innovation across businesses Luminary Cable example Opportunity RecognitionSolution ■ Demand for building and lighting automation due to increasing cost of electricity EC&M Magazine “Product of the Year” award fo
Slide 21: Pursue M&A to deliver incremental growth
20 2011 2012 Pursue M&A to deliver incremental growth ■ Focused effort to build out our Raceway and MP&S positions - Strengthening our value proposition by continued development of our existing portfolio - Expanding into higher margin adjacencies ■ Leverage our manufacturing technology and capabilit
Slide 22: Strong profitability with clear runway for further improvement
21 15.8% 20%+ Atkore LTM 12/2016 Adj. EBITDA margin Strategic pricing and mix initiatives Productivity initiatives Other initiatives and upside Illustrative long-term Adj. EBITDA margin Strategic pricing and mix Continued roll-out of strategic pricing to both Electrical Raceway and MP&S Purchasi
Slide 23: Financial overview
atkore Financial overview a INTERNATIONAL
Slide 24: Impressive financial momentum
23 Impressive financial momentum Adjusted EBITDA ($mm) and Y-o-Y growth rate1 $32 $27 $30 $37 $27 $36 $47 $54 $48 $58 $67 $61 $50 Q1 Q2 Q3 Q4 Adjusted EBITDA margin and Y-o-Y margin improvement 9.2% 7.6% 7.6% 9.2% 7.1% 9.3% 12.1% 13.6% 13.7% 16.5% 17.0% 14.7% 14.8% Q1 Q2 Q3 Q4 FY 2014 FY 2015 FY 201
Slide 25: Key market influences by segment
24 Key Market Influences by Segment Growth Outlook Electrical Raceway (65% of FY 2016 Adjusted net sales) Mechanical Products & Solutions (35% of FY 2016 Adjusted net sales) FY 2017 Healthcare Industrial Residential Construction Sluggish recovery Low to Mid Single Digit New non- residen
Slide 26: Strong balance sheet and cash flow
25 Strong balance sheet and cash flow 1 Based on an assumed interest rate. At December 30, 2016, assuming LIBOR exceeded 1.00%, each one percentage point change in interest rates would have resulted in a change of approximately $5.1 million in the annual interest expense on our New Term Loan Facilit
Slide 27: Appendix
atkore Appendix a INTERNATIONAL
Slide 28: Summary historical financial information
27 Summary historical financial information Note: Numbers in each column may not sum to their respective reported figures due to rounding. 1 Based on Adjusted net sales. Fiscal year ended Three months ended LTM ($mm) Sept. 26, 2014 Sept. 25, 2015 Sept. 30, 2016 Dec. 25, 2015 Dec. 30, 2016 Dec. 30, 2
Slide 29: Adjusted net sales reconciliation
28 Adjusted net sales reconciliation Note: Numbers in each column may not sum to their respective reported Adjusted net sales figures due to rounding. Consolidated Atkore Fiscal year ended Three months ended LTM ($mm) Sept. 26, 2014 Sept. 25, 2015 Sept. 30, 2016 Dec. 25, 2015 Dec. 30, 2016 Dec. 30,
Slide 30: Adjusted EBITDA reconciliation – annual
29 Adjusted EBITDA reconciliation – annual A B C D E F G H Note: Numbers in each column may not sum to their respective reported Adjusted EBITDA figures due to rounding. 1 Includes the predecessor period from September 25, 2010 through December 22, 2010 and the successor period from December 23. 201
Slide 31: Adjusted EBITDA reconciliation – quarterly
30 Adjusted EBITDA reconciliation – quarterly Note: Numbers in each column may not sum to their respective reported Adjusted EBITDA figures due to rounding. A B C D E G H J I Three months ended Last twelve months ($mm) Mar. 28, 2014 Jun. 27, 2014 Sep. 26, 2014 Dec. 25, 2014 Mar. 27, 2015 Jun. 26, 20
Slide 32: Adjusted EBITDA reconciliation (cont'd)
31 Adjusted EBITDA reconciliation (cont’d) a) Restructuring amounts represent exit or disposal costs including termination benefits and facility closure costs. Impairment amounts represent write-downs of goodwill, intangible assets and/or long-lived assets a) Represents pension costs in excess of ca
Slide 33: Segment information
32 Segment information Fiscal year ended September 30, 2016 September 25, 2015 ($mm) Net sales Impact of Fence & Sprinkler exit Adjusted net sales Adjusted EBITDA Adjusted EBITDA margin Net sales Impact of Fence & Sprinkler exit Adjusted net sales Adjusted EBITDA Adjusted EBITDA margin Electrical Ra
Slide 34: Net debt / Adjusted EBITDA reconciliation
33 Net debt / Adjusted EBITDA reconciliation Fiscal year ended LTM ($mm) Sept. 26, 2014 Sept. 25, 2015 Sept. 30, 2016 Dec. 30, 2016 Short term debt and current maturities of long-term debt $42.9 $2.9 $1.3 $4.2 Long-term debt 650.0 649.3 629.0 489.5 Total debt $692.9 $652.2 $630.3 $493.7 Less cash an