Valmont Industries at William Blair Conference: Strategic Growth Amid Challenges

On Wednesday, June 4, 2025, Valmont Industries (NYSE:VMI) presented at the 45th Annual William Blair Growth Stock Conference. The company outlined its strategic vision, emphasizing growth in infrastructure and agriculture while tackling challenges like North American market dynamics. Valmont aims to leverage global trends and optimize operations for sustained shareholder value.

Key Takeaways

• Valmont reported net sales of approximately $4.1 billion last year, with strong contributions from infrastructure.
• The company is investing $100 million annually in utility capacity expansion, expecting significant revenue and margin gains.
• A new $700 million share repurchase program has been authorized, highlighting shareholder returns.
• Challenges include North American agriculture pullback and solar industry uncertainties.
• Management is committed to reducing corporate costs below 2% of revenues.

Financial Results

• Net Sales: Approximately $4.1 billion in the last fiscal year.
• Infrastructure Segment: Contributed nearly $3 billion with a robust operating margin of 16.6%.
• Agriculture Segment: Generated just over $1 billion, with international sales offsetting North American declines.
• Capital Expenditure: Investing $100 million annually, primarily in utility sector growth.
• Earnings Growth: Operating income and EPS more than doubled over five years despite plateauing revenue.

Operational Updates

• Capacity Expansion: Focused on utility business, aiming for over $100 million in revenue with a 20% operating margin.
• Technology Enhancements: Consolidating agricultural apps into one platform and adding e-commerce capabilities.
• Cost Reduction: Initiatives to lower costs in agriculture and reduce corporate expenses.
• Solar Business: Reviewing North American market strategy amid industry challenges.

Future Outlook

• Strategic Focus: Expanding utility capacity and positioning agriculture for growth, especially in international markets.
• Cost Optimization: Targeting corporate cost reduction below 2% of revenues.
• Shareholder Returns: $700 million share repurchase over the next three to four years.
• Challenges: Navigating North American solar market uncertainties and managing tariffs.

Q&A Highlights

• Middle East Opportunities: Significant growth potential in the region with expanded capacity in Dubai.
• Tariff Impact: Mitigated through strategic sourcing and customer negotiations, maintaining profit neutrality.
• Productivity Initiatives: Enhancing throughput and productivity via improved material scheduling and maintenance programs.

In conclusion, Valmont Industries remains optimistic about leveraging global megatrends for growth. For a detailed view, readers are encouraged to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Brian Draub, Industrial Technology Analyst, William Blair: Okay. Good morning. We’ll go ahead and get started. I’m Brian Draub, the Industrial Technology Analyst at William Blair. Thank you all for coming to the Valmont presentation.

I’m required to inform you quickly that you can find a full list of research disclosures on our website, williamblair.com. So today, as you know, we have the team from Valmont here. We have Renee Campbell, who is senior vice president, investor relations and treasurer. We also have Tom Ligori, who’s, recently joined in the last year as CFO. So thank you both for being here.

I’m gonna say a couple nice things about Valmont, then I’ll turn it over to Renee. So Valmont is one of those companies that, you know, I realized very quickly when I started to cover the company in 2010 and went to visit them that, once you start covering it or you’re aware of it, they’re you you realize they’re all around you every day. They have 40% share, maybe 45% share in North American high voltage electricity transmission structures. So as you’re driving through the countryside, you see those structures. That’s probably Valmont.

Also irrigation, 40% market share globally. Irrigation is very likely the food that we have for lunch here today will incorporate crops that were grown with Valmont irrigation systems. They’re in the midst of doing some of the largest irrigation systems installations in the world in The Middle East at the moment. Also highway structures, the poles along the highway, the poles that you see at stadiums, the signage along the highways, a lot of that is Valmont as well. So it’s one of these companies all around you every day, and we’re excited to have them with us.

So I’ll turn it over to Renee. Thanks for being here.

Renee Campbell, Senior Vice President, Investor Relations and Treasurer, Valmont: Thank you. Thanks, Brian. We appreciate the opportunity to be here as well. And at Valmont, we have a long history of innovation and execution. And Tom and I look forward to sharing some of the exciting things and strategies and opportunities with all of you today.

So before we start, I just want to quickly say that and remind everyone that our disclosure on forward looking statements applies to today’s presentation and discussions as outlined here on slide two. So I will start with just a quick snapshot of Valmont for those of you who are less familiar with us. We are a Fortune 1,000 company. We are a global leader in providing products and solutions for infrastructure and agriculture markets with a strong and growing presence worldwide. We were founded nearly eighty years ago, headquartered in Omaha, Nebraska.

And last year, we generated approximately $4,100,000,000 in net sales. Our current market cap is around 6 and a half billion dollars, and we operate in over 100 countries with 83 manufacturing facilities and a global workforce of about 11,000 people. Looking at our geographic sales mix, just over 70% of our revenue comes from The US and Canada, with the remaining diversified across EMEA, Latin America, and Asia Pacific. And this global presence really gives us both resilience and growth opportunities across multiple markets. In terms of our business segments, infrastructure is our largest with nearly $3,000,000,000 in sales last year and delivering a strong operating margin of 16.6%, While agriculture or irrigation accounts for just over a billion dollars in sales and remains a strategic growth area, particularly as global food security and land productivity become increasingly critical.

So all of this really aligns with our company’s promise of conserving resources and improving life. So I wanna walk you through what we do. As Brian said, a lot of what we do, you really see every day. You may not notice it, but it’s very, very visible across a landscape. And although we did start as an irrigation company all those years ago, and we actually founded the mechanized irrigation industry, As mentioned today, our larger segment is our infrastructure business.

So I’d like to walk you through our portfolio of products and solutions. It’s very diversified across key end markets, energy, transportation, communications, and renewables, all aligned with strong secular trends and national priorities. So I’ll start with utility. It’s just under half, nearly half of of our segment sales. It’s our largest product line.

We’re seeing very strong demand driven by rising electricity consumption, the need to replace aging grid infrastructure, and the continued build out of renewable energy. Our business supports transmission, distribution, and substation infrastructure. We manufacture steel. We do some concrete structures, and we also have a couple of composites, facilities. And we’re making very focused capacity investments to meet this long term growth.

Lighting and transportation, this business is about 30% of the segment sales, and this supports public safety and infrastructure with lighting, traffic structures, highway safety structures. This business is very aligned to state and federal funding, including DOT investments and both road and, residential housing construction, also aligned to single family housing starts for our lighting business. Our coatings business is primarily hot dipped zinc galvanizing, and it is it’s a very consistent business. It aligns with regional GDP and industrial production trends. Anywhere between 30 to forty, fifty percent of the sales in that in that business at any given time are for our own internal products.

We galvanize most everything that we manufacture out of steel, and it really adds resiliency and scalability and operational leverage across the portfolio. Our telecom business continues to benefit from carrier spending and five g build out programs. We provide telecom components. So think about anything that a contractor or a carrier would need at a job site to build out that site. We also do macro towers.

We do concealment solutions, and we do some small cell infrastructure as well. And it’s our distribution model, especially in that components business, and our customer service levels that really continue to differentiate us in that space. And finally, solar, it’s a a smaller part but important part of the portfolio. And we’re seeing really promising momentum in Europe. This was a a business that we acquired, back in 2018 called Convert Italia.

It started and and still remains the market leader in Italy. And we’re seeing, some some really promising momentum, especially in agro agrivoltaic applications. We have, this last year, exited some lower margin or lower return projects, and now we’re really focused on targeted value creating growth opportunities. So altogether, would say our infrastructure portfolio is very diversified, but also well positioned to grow anchored by a very strong secular demand drivers and supported by targeted investments in capacity, Tom will will touch on a bit later. Alright.

Let’s take a closer look at our agriculture segment and how our portfolio aligns with global trends and and grower needs. So our core business, the majority is really irrigation equipment and parts. And it’s center pivot irrigation systems like you can see on the slide, it’s linear systems, it’s corner machines, as well as aftermarket parts. And all of that is really built around our industry leading Valley brand. And what sets us apart one of the the areas that sets us apart is our very strong dealer network.

It’s the strongest. It’s the most trusted in the industry. And Valley dealers are really embedded in local communities, providing farmers with support and installation and service. And that’s something that’s really extremely difficult for others to replicate at scale. They are a very, very much a core part of how we deliver value and maintain grower loyalty.

And they’re also a major driver of our aftermarket parts sales, which are a growing and margin accretive portion of the business. Overall demand for this business is influenced, I would say, by three key market drivers. So in US markets and even in some international markets, net farm income or its equivalent remains the biggest influence. And that’s really closely linked to grain commodity prices, so corn and soybeans, for example, as well as input costs and interest rates. Demand is also being driven by ongoing conversion from less efficient or maybe even nonexistent irrigation to more advanced automated solutions that we can provide.

And we’re also seeing farm consolidation, which is increasing the number of large strategic customers that really need scalable irrigation solutions and ongoing support. I mentioned aftermarket parts. This really is a key growth initiative that we are focused on, in our ag business and a strategic priority for us. And we’re making some really, really strong progress there. We recently introduced a new ecommerce platform, which is improving, I’ll say, the customer experience or the grower experience by making it very easy, and fast to order parts while the grower or dealer is in the field and improving service delivery.

And that’s really critical, especially if you think about and through the middle of the growing season, it’s it’s hot. A machine goes down for some reason, the grower really needs to get that back up and running as soon as possible. And it’s important to have, that visibility and availability, of of parts, when they need it the most. Moving to technology, products and services. It’s just under 10% of sales last year.

Well so while it’s still a smaller part of our business, it does represent a high potential growth area. So this is advanced monitoring and automation tools. It’s everything from the ability to control your pivot from your cell phone or your iPad, but also to be to enable the grower to make smarter, more precise decisions about when, where, and how much to irrigate. And it’s not just about improving yields, while that is very important, it’s also about using less water, less energy, and doing more with with fewer resources, which has become increasingly important around the world, and, and we’re proud to lead the industry in this area. And then finally, just as a subset of all of that, I wanted to highlight our international sales.

Today, it’s approximately half of our total sales and growing. And it’s a testament, I would say, to global the increasing global demand for for scalable solutions. And we’re seeing really strong momentum from countries like Brazil, where they’re really focused on developing land and putting land into agriculture use. But also government backed food security programs, particularly in emerging markets like The Middle East, where populations are growing and diets are improving, and we’re supporting new land developments in those regions that previously were not even farming before. And these are all long term opportunities that continue to build out our global footprint.

And then I wanted before I turn it over to Tom, I want to just touch on, what we consider to be global megatrends that Valmont is very closely aligned to. And these are, you know, powerful structural trends that play directly to our strengths and we believe are shaping our growth for years to come. So I’ll start with infrastructure and the energy transition. Now we’re we’re experiencing what I would say is kind of a once in a generation transformation in energy generation, and it’s accelerating demand for grid connectivity and electrification. Everything from electric vehicles to smart homes and the expansion of data centers.

And these trends are really driving sustained infrastructure investment, creating strong demand demand for the engineered structures that Valmont is uniquely positioned to deliver. Next would be aging infrastructure and resilience. So across The US and really, really globally, infrastructure is just getting older. Think about roads and bridges and utility structures. All of those are, at some point, in need of either replacement or reinforcement.

And, you know, it doesn’t take much to, you know, look around and realize as storms and severe weather have become more frequent, hardening the grid and building more resilient systems really is no longer optional. And this is an area where Valmont is especially well positioned. And then finally, technology and data consumption. So as I mentioned, the rapid growth of data usage and technologies like AI are placing new demands on both power and connectivity. And we’re supporting this with our telecom products and utility solutions that help to power and connect the world’s digital future and enable the infrastructure behind it.

And turning to agriculture, I’ll start with food security. As I mentioned, governments around the world really are working to improve food security locally and reduce their reliance on imports. And in many regions, especially Middle East and Africa, our valley irrigation systems are enabling farmers to grow more food where it wasn’t even previously viable. Next, sustainability and productivity. There really is limited land and water around the world, so doing more with less has never been more critical.

And our center pivot linear and corner machines are essential in helping farmers maximize yields while conserving resources and making land more productive. And our Valley brand is the global leader leader in the industry for this. And then finally, population growth. The world’s population is expected to grow by nearly 700,000,000 people over the next decade. And more people means a greater demand for food with fewer available resources, which will require smarter, more productive farming.

So just to summarize, you know, whether it’s building critical infrastructure, which, and or delivering sustainable irrigation solutions, we’re very well positioned at the center of these global megatrends and well positioned to grow as these global needs continue to evolve. So with that, I’ll turn it over to Tom.

Tom Ligori, CFO, Valmont: Thank you, Renee. Great job. An overview of our business. First of all, thank you everybody for joining. We know you’re you have choices, you’re very busy and we appreciate your time today.

And Brian, thank you for having us here. A great conference and really happy to be here. So let me start off with these are the twenty twenty five critical objectives. This is what the Valmont leadership team is working on and really the whole team globally. The first is we call it catch the infrastructure wave.

Renee explained to you all of the mega trends in our infrastructure. The biggest growth areas is our utility business. Today we’re capacity constrained. So when we talk about catching the wave, it’s about adding capacity, having the people and processes to be able to meet the demand that’s coming from our customers. The second one is for our agriculture segment.

And yes, North America ag is down, our international business is growing, but we want to take this time and really focus on positioning the ag business for growth and for margin expansion. Renee talked to you about our technology products. Today, you can control your pivot from a phone app And we’re spending we have software engineers in Valley, Nebraska, which is next to our headquarters in Omaha. And we’re spending time to improve our technology application. We used to have five different apps for a farmer to use.

Last year, our software team put it on one app. We added the e commerce and this is all about making farmers want the value pivot. And today we are the premium price premium products. It was focusing on ag positioning it for growth. Third is disciplined resource allocation, which is both optimizing our cost structure, making sure we have people at the right place and future, but it’s also about our capital allocation.

I’ll talk about that in a minute. None of this happens without our team and our team is forefront. If you go into one of our factories, we’re making large steel structures, brake presses, welders. We have 24 plants in The U. S, plants in Poland, throughout Europe, throughout APAC.

So safety, we start every management meeting talking about safety to keep our team safe. And with that is talent development, right? We’re a growing business, we’re expanding capacity, we need processes, we need people that are well trained and furthering their careers. So financially, let’s take a look at our revenue or operating margin and our earnings per share over the last five years. So we had good revenue growth up through 2022, then it kind of plateaued.

We had North American ag pullback. You’re very familiar with what’s going on in the solar industry. Solar has pulled back a bit. And what is important to know is in the utility business, we pass on the steel costs, meaning we’re allowed to if steel goes up, we pass it on to the customers. And if steel prices come down, we pull down our prices.

So part of that is just lower steel costs over the last few years. Whether steel prices go up and down has no effect on profitability, which gets to the next slide. Over the last five years, even with the plateauing revenue, we more than doubled our operating income and more than doubled our earnings per share as well. So at the bottom of the chart, these are the initiatives we have within the company to grow our revenues, our margins and our earnings per share over the next three to four years. In infrastructure, it is all about catching that wave and expanding capacity.

So what we have told our investors is we are spending $100,000,000 a year in CapEx for growth primarily for utility. When we spend $100,000,000 of CapEx in utility, we get over $100,000,000 of revenue at about a 20% GAAP operating margin and one dollar EPS. So catching the wave, putting the capacity in place is very important. And we expect to do this over the next two to three years, one hundred million per year. When we put this new capacity in place, this is all within existing plants.

It’s not new plants. It means that we’re going to get more throughput in each of our plants. And if you get more throughput, which is incremental capital, we’re going to lower the cost of our utility structure. And this is really important. This is part of the margin expansion that’s going on in infrastructure.

In our Ag business, we’re focused on growing the higher margin, higher growth areas of the business, which would be the international for revenue and our technology products and focusing on the aftermarket, which is spare parts, which is what Renee was talking about with our e commerce system. We’re also looking at how do we reduce the cost of a pivot. The last three or four months, we’ve been focused on a pivot teardown. The whole intent is same functionality, same reliability, but at a lower cost to the farmers. In corporate, our corporate costs over the last few years have increased to hovering near 3% of revenues.

We think it should be below 2% of revenues. Renee and I are on a team that’s with a glamorous name of corporate cost team, but this is all about looking at our outside service providers are spending on insurance, our legal team, our credit rating agencies and finding ways to have a leaner, more efficient corporate cost. So in the near term, some of the things that we’re working on, this is all about getting us positioned for the next three years. The first is aligning our organization. So Abner, our CEO has a big focus on reducing the number of layers in our organization.

And this is all about making us faster, be able to catch that wave, get a better flow of information. As part of that, we will have costs coming down. We’re also looking at, as I said, the corporate cost and there’s an activity on our total portfolio, but this is mostly based, mostly looking at our solar business. We all know what’s going on in solar in North America. Our EMEA business is doing very well.

Solar last year was about $150,000,000 of revenue. So a small piece of business, but it’s about a breakeven, slight loss. And we think the prospects at least in the near term are not very favorable in The U. So we’re taking a good hard look at that. And that means looking at cost reduction activities.

We’re going to really reconsider what markets we’re serving. We have about 60,000,000 to $70,000,000 of goodwill intangibles and software development costs on our balance sheet. We’ll do an impairment test. But this is all about making our solar business back to a growth stage more profitable. Everything on that right, this is all about aligning the company behind the infrastructure wave, positioning ag for growth, so that over the next three to four years, you’ll see revenue growth, continuation of operating income and margin expansion, and further growth in our earnings per share.

Capital allocation, we came out in January with our updated capital allocation priorities. It’s about 50% reinvesting in our business and 50% to shareholder returns. The 50% reinvesting in our business is what we just talked about, investing in capacity growth for primarily utility. There’s also a place for M and A, but what you should know about M and A, this would be smaller tuck in acquisitions, where we feel we can bring a new geography, a new product that’s close to our current core business. As far as shareholder returns, we just announced a $700,000,000 increase in our share repurchase authorization.

That’s about 10% of our market cap. We expect to do that on a programmatic basis over the next three to four years. And lastly, the dividend. Dividend is important to many of our shareholders. Over the last four or five years, this has a CAGR of 10% of our dividend, but it’s been a little bit inconsistent as far as timing in every year.

We want to get onto a cycle of every first quarter, we increase our dividend. We just increased it in January, up 13%, I believe year over year. So lastly, why invest in Valmont? Well, we feel very good about the next three to four years. This is all about serving high growth markets, catching the infrastructure wave, positioning Ag for growth over the coming years, expanding our margins, which we just went through all of the steps, expanding our EPS, and really helping with shareholder returns with both growing EPS, as well as our dividend in our share repurchase program.

So with that, thanks for the time. And we have some time left for Q and A.

Brian Draub, Industrial Technology Analyst, William Blair: Okay. Thanks very much, Tom and Renee. Yeah, we do have five minutes and fifty three seconds for some Q and A here. So I was wondering if we could talk about the Irrigation segment just to kick off the Q and A and what’s happening in The Middle East and kind of frame out the potential for some of these huge projects that are happening. In my view, this bug is

Tom Ligori, CFO, Valmont: flying No, don’t worry about it.

Brian Draub, Industrial Technology Analyst, William Blair: In my view, we might just be getting started terms of what we’re seeing in Egypt. We’re doing a lot of work on these Egypt. And it’s incredible, by the way, if anyone if you take a look at an aerial view, the amount of pivot systems that you can see going in place there. But I think it’s only maybe 25% of the way of what they want to really do.

Tom Ligori, CFO, Valmont: It’s a great question. And our Ag business is about $1,000,000,000 business annually, 50% of it’s in North America, 50 Percent is international. That international piece is both South America. We have a large presence in Brazil, a factory in Brazil, but The Middle East is very important. It’s a high growth area.

We have a factory in Dubai. We expanded capacity in that factory in the last year or so. It’s doing very well. Today, pipeline in our Middle East business is the largest it’s been in the last three to four years. Now, traditionally the international EMEA business has been lower margin.

And the reason is because of very large projects, might make tens of millions of dollars on a project. Whereas in North America, we’re selling $100,000 pivot, a pivot at a time often. But we take the way we look at this is if our Middle East business is going to be the growth driver or a large part of the growth driver, we really need to improve margins on that business. And as we’ve taken a look, we find a number of opportunities. It’s mostly in our supply chain.

In our factory, there’s opportunities to improve productivity, throughput, level load the plant. And also in our sourcing of steel, we are a very large procurer of steel globally. And if you’re in North America where 75% of our revenues are, our team is focused on supplier relationships, very focused aggressive procurement and negotiation, as well as partnership with steel vendors. We need to take that type of activity and we’re moving it over to The Middle East, because as this business grows, it just warrants a very tight supply chain. The Middle East is really a bright spot.

Thank you for asking that question. And we feel we have a number of good opportunities and levers to help improve the margins as we go forward.

Brian Draub, Industrial Technology Analyst, William Blair: Yeah, you’re welcome for the question. So just bear with me here. We’ve got one from the audience.

Tom Ligori, CFO, Valmont: Yeah. If you could repeat. The tariffs? The question was about the impact of tariffs and specifically the steel tariffs. So when we first looked at tariffs in January, February with the new administration, we had some significant exposures $80,000,000 But at the heart, what was very positive was we serve most of our U.

S. Customers in both segments from 23, 20 four manufacturing plants in The U. S. We have one our lowest cost facility. So that was the concern.

The team did an exceptional job within Valmont to mitigate that. So part of it is passing it on to our customers, on the infrastructure side. We have a large backlog of work. Our products are we have the largest market share on the utility infrastructure. These are big major projects by utility companies that pulls got to be there at the right time, go up at the right high quality, otherwise the construction project slows down.

So we have a very good position with the utility customers. And when we went to them and explained the tariffs, we were able to pass on about half of that total tariff costs. But then on the supply chain side, our concern was that we were using Mexico tariffs. So we were able to change our sourcing. We now buy U.

S. Steel, send it down to our Monterey facility, make the polls. Our facility is U. S. MCA compliant, United States, Canada, Mexico agreement.

So we’ve really, we’ve mitigated just about all of the tariffs and we came out and said both on our call and in the press release that would be profit neutral. We called the cost neutral. We were corrected as really profit neutral. So now that there’s an additional 25% oh, I’m sorry. Now that there’s an additional 25%, the work we’ve done has basically mitigated it.

Really there might be an indirect impact from higher steel costs. Steel futures went up on Monday, but they’ve since come back down. The team is very agile. They’re very focused on this. What I’d like to say is every day we come in and we manage our tariffs and our costs, but every day we come in and we focus on things that are going to make us better three years out.

Brian Draub, Industrial Technology Analyst, William Blair: We have time for one more question.

Tom Ligori, CFO, Valmont: Yes. So I’ll give you a for instance.

Renee Campbell, Senior Vice President, Investor Relations and Treasurer, Valmont: The question was improving throughput and productivity in the factories.

Tom Ligori, CFO, Valmont: So when we go visit plants all the time, it’s part of building our team. When you go to plants, you’ll see productivity charts. And they’ll have high productivity than a weak dip, high productivity, a weak dip. And when the dips in productivity were happening is because we didn’t have material at the right place at the right time. People came in to ruin the production flow for the whole day or a piece of machinery down.

So what we’re doing as part of this capacity expansion is we’ve assigned a team to look at our material scheduling and as well as our preventive maintenance program to keep our machinery up higher. So by getting more throughput, because we’ve now added more capacity, get improved material scheduling, improved maintenance program, we’ll get more throughput with the same cost. And that’ll be that’s the higher productivity and lower cost per structure.

Brian Draub, Industrial Technology Analyst, William Blair: All right. Out of time. We’re going to have a breakout session. If you would like to join the conversation there. Thank you very much.

Tom Ligori, CFO, Valmont: Thanks for joining. We appreciate it. Thank you, Brian. Thanks, Renee.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.