4 Q 2 0 1 6 E a r n i n g s C a l l P r e s e n t a t i o n Valmont Industries. Inc. | 2016 Investor Day
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 that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements. including general economic and business conditions. conditions affecting the industries served by the Company and its subsidiaries. conditions affecting the Company’s customers and suppliers. competitor responses to the Company’s products and services. the overall market acceptance of such products and services. the integration of acquisitions and other factors disclosed in the Company’s periodic reports filed with the Securities and Exchange Commission. Consequently such forward-looking statements should be regarded as the Company’s current plans. estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 2 Valmont Industries. Inc. | 4Q 2016
Fourth Quarter Highlights Revenues grew 6.4% with gains in Engineered Support Structures, Utility Support Structures and Energy and Mining Irrigation revenues unchanged. Lower North American sales offset by higher international sales GAAP Operating income rises to $56 million from a loss of $17 million; adjusted operating income grows 27% to $63 million* GAAP Operating income 8.3% of net sales compared to loss in 2015, (7.9% and 9.4% in 2015 and 2016 respectively adjusted*) Diluted earnings per share increased to $3.10 compared to a loss of $1.34 in 2015 ($1.35 and $1.61 in 2015 and 2016 respectively adjusted*) Repurchased 57,000 shares; $132 million remaining on the current authorization * See reconciliation of GAAP operating income to adjusted (non-GAAP) figures at the end of this presentation. 3 Valmont Industries. Inc. | 4Q 2016
Financial Highlights—Fourth Quarter NET SALES 2016 2015 Percent Change Dollars in millions except per share amounts Engineered Support Structures $216.5 $193.4 11.9% Utility Support Structures 185.1 170.6 8.5% Coatings 75.5 75.7 (0.3%) Energy & Mining 87.9 78.8 11.5% Irrigation 136.6 137.6 (0.7%) Other - 1.0 NM Intersegment Sales (27.0) (23.3) NM Net Sales $674.6 $633.8 6.4% Operating Income $56.1 ($17.0) NM Adjusted Operating Income* $63.4 $49.8 27.3% Net Income $70.1 ($30.6) NM Adjusted Net Income* $36.3 $31.1 16.7% Diluted Earnings Per Share (EPS) $3.10 ($1.34) NM Adjusted Diluted (EPS)* $1.61 $1.35 19.3% * See reconciliation of GAAP operating income to adjusted (non-GAAP) figures at the end of this presentation. 4 Valmont Industries. Inc. | 4Q 2016
Financial Highlights Operating Income GAAP Dollars in millions Operating Operating Increase Operating Operating Income 4Q Income 4Q /Decrease Income Percent Income Percent 2016 2015 4Q 2016 4Q 2015 Engineered Support $16.6 $13.9 18.7% 7.6% 7.2% Structures Utility Support 20.8 (2.4) NM 11.2% (1.4%) Structures Coatings 9.5 5.3 79.3% 12.6% 7.0% Energy & Mining 2.7 (21.5) NM 3.1% (27.3%) Irrigation 16.9 8.3 103.6% 12.4% 6.0% Corporate/Other (10.3) (20.6) NM Consolidated $56.1 ($17.0) NM 8.3% (2.7%) Operating Income 5 Valmont Industries. Inc. | 4Q 2016
Financial Highlights Operating Income Adjusted* Dollars in millions Adjusted Adjusted Increase Operating Operating Operating Operating /Decrease Income Percent Income Percent Income 4Q Income 4Q 4Q 2016* 4Q 2015* 2016 * 2015 * Engineered Support $19.2 $18.0 5.6% 8.8% 9.3% Structures Utility Support 20.7 16.1 29.0% 11.2% 9.5% Structures Coatings 9.8 12.9 (23.8%) 13.1% 17.0% Energy &Mining 6.2 0.5 NM 7.1% 0.6% Irrigation 17.5 16.2 7.4% 12.8% 11.8% Corporate/Other (10.1) (13.9) NM Consolidated $63.4 $49.8 27.3% 9.4% 7.9% Operating Income * See reconciliation of GAAP operating income to adjusted (non-GAAP) figures at the end of this presentation. 6 Valmont Industries. Inc. | 4Q 2016
Engineered Support Structures $ in millions * Revenue Operating Income 2015 Revenue $193.4 $24 $250 $19.2 $216.4 $18.0 Volume 27.4 $193.4 $16.6 $200 $18 $13.9 Pricing/Mix (3.4) $150 $12 Acquisitions - $100 Currency Translation (1.0) $6 $50 $‐ $‐ 2016 Revenue $216.4 2016 2015 2016 GAAP 2016 Adj 2015 GAAP 2015 Adj. • North America revenue up mostly due to strength in wireless communications and commercial lighting and traffic products • Wireless in Asia Pacific benefitting from 4G buildout in Australia and China * See GAAP/Non-GAAP reconciliation at end of slide presentation 7 Valmont Industries. Inc. | 4Q 2016
Utility Support Structures $ in millions 2015 Revenue $170.6 * Operating Income Revenue $205 $25 $20.8 $20.7 Volume 10.1 $185.1 $185 $16.1 $20 Pricing/Mix 4.4 $170.6 $15 $165 Acquisitions - $10 Currency Translation - $145 $5 $‐ $125 2016 Revenue $185.1 $(5) $(2.4) 2016 2015 2016 GAAP 2016 Adj 2015 GAAP 2015 Adj. • North America: volume and price up as market activity increases • Portion of price increase tied to higher steel costs * See GAAP/Non-GAAP reconciliation at end of slide presentation 8 Valmont Industries. Inc. | 4Q 2016
Coatings $ in millions Revenue * 2015 Revenue $75.7 $78 Volume (1.6) $75.7 $75.5 $76 Pricing/Mix 1.0 $74 Acquisitions - $72 Currency Translation 0.4 $70 $68 2016 Revenue $75.5 20162 2015 • Stronger: Bridge and Highway, Utility • Weaker: Solar • Greater mix of internal volumes • Rising zinc costs – sales price recovery realized by lagged cost increases * See GAAP/Non-GAAP reconciliation at end of slide presentation 9 Valmont Industries. Inc. | 4Q 2016
Energy and Mining $ in millions Revenue * 2015 Revenue $78.8 Operating Income $6.3 $90 $10 $87.9 Volume 7.5 $2.7 $0.5 $5 Pricing/Mix 0.5 $85 $‐ $(5) Acquisitions - $78.8 $80 $(10) Currency Translation 1.2 $(15) $75 $(20) 2016 Revenue $87.9 $(25) $(21.5) $70 2016 GAAP 2016 Adj 2015 GAAP 2015 Adj. 2016 2015 • Access Systems revenue up, making inroads in new markets • Grinding Media sales increase • Offshore demand from wind energy industry solid * See GAAP/Non-GAAP reconciliation at end of slide presentation 10 Valmont Industries. Inc. | 4Q 2016
Irrigation $ in millions Operating Income * Revenue 2015 Revenue $137.6 $140 $137.6 $20 $136.6 $16.9 $17.5 Volume (2.1) $16.2 $135 Pricing/Mix 0.6 $15 Acquisitions - $130 $10 $8.3 Currency Translation 0.5 $125 $5 $120 2016 Revenue $136.6 2016 2015 $- 2016 2016 Adj. 2015 GAAP 2015 Adj • North America sales decrease modestly vs. Q4 2015 • International markets benefit from stronger Latin American demand • Industry pricing conditions remain competitive • Continued release of new technology products * See GAAP/Non-GAAP reconciliation at end of slide presentation 11 Valmont Industries. Inc. | 4Q 2016
2016 Results Compared With Stated Goals 2016 Result Metric Goal 2016 Result GAAP Adjusted Revenue Growth 5-10% (3.7%) (3.7%) EPS Growth > 10% 346% 14.0%* ROIC (after-tax) > 10% 11.0% 10.0%* Free Cash Flow > 1.0x net 0.93x 1.10x* Conversion earnings * See the Company’s calculation of these financial metrics (some of which are non-GAAP) at end of presentation. 12 Valmont Industries. Inc. | 4Q 2016
Free Cash Flow and Conversion – 2016 & 2015 Stated Goal – 1.0X Dollars in Millions 2016 2015 Operating Cash Flow 219.2 272.3 CapEx (57.9) (45.5) Free Cash Flows $161.3 $226.8 Adjusted Net Earnings * $145.8 $131.8 Free Cash Flows to Adj. Net Earnings 1.1 1.7 • Fourth quarter free cash flow strong with inventories and accounts receivable declining sequentially • 2016 free cash flow conversion exceeds goal of 1.0x * See reconciliation of GAAP figures to Non-GAAP figures at end of slide presentation 13 Valmont Industries. Inc. | 2016 Investor Day
Balance Sheet – 4Q 2016 Goal: Maintain Investment-grade rating; Keep Debt/EBITDA from 1.5 to 2.5x 4Q 2016 Actual Credit Rating Free Cash Flow $161M YTD S&P BBB+ Negative Cash At 12/31/16 $400M ($327 Ex. US) Moody’s Baa3 Stable Total Debt $756M Debt Maturities – in Millions Debt/Adjusted 2.32X Adjusted EBITDA* * See the Company’s calculation at end of presentation. 14 Valmont Industries. Inc. | 4Q 2016
2017 Guidance EPS growth of 10% over 2016 adjusted EPS of $6.42* 2016 GAAP EPS was $7.63 Assumptions: – Revenue growth expected for all segments; average 5% for the corporation, excluding acquisitions – Raw Materials Raw materials costs up early in year, moderate later in 2017 – Foreign Exchange rates Currency translation effects estimated to be minor in 2017 – Tax Rate Effective tax rate of 31% – CapEx for 2017 expected to be $60-65mm * See GAAP/Non-GAAP reconciliation at end of slide presentation 15 Valmont Industries. Inc. | 4Q 2016
Recommend
More recommend
