Valmont(US:VMI)2020-02-26 21:23Market Presence and Expansion - In 2019, approximately 31% of Valmont's net sales were generated from markets outside of North America[6]. - Valmont's strategy includes expanding geographic presence in Europe, the Middle East, and North Africa, particularly for lighting structures[8]. - Valmont expanded its geographic presence in Europe, the Middle East, and North Africa for lighting structures, building manufacturing presences in China and India[8]. - The company operates approximately 270 dealer locations in North America and another 270 dealers in international markets, showcasing its extensive distribution network[39]. Acquisitions and Growth - The company acquired Larson Camouflage in 2019, enhancing its offerings in wireless communication concealment solutions[11]. - The company has made significant acquisitions over the past five years, including a galvanizing business in Texas in 2019[11]. - Valmont's Coatings segment has grown significantly, leveraging expertise in galvanizing to develop a global business segment[10]. Product Development and Innovation - The Utility segment's sales increased in 2018 due to the introduction of prepackaged substations, simplifying installation for customers[7]. - The company leverages its engineering capabilities to develop new products for existing markets, such as tramway structures in Europe[9]. - The company estimates that mechanized irrigation can improve water application efficiency by 40-90% compared to traditional methods, reflecting a strong value proposition for customers[38]. - The company believes mechanized irrigation can improve water application efficiency by 40-90% compared to traditional methods, emphasizing its technological advantage[38]. Financial Performance and Demand - The backlog of orders at the end of the 2019 fiscal year was $924.1 million, up from $644.7 million at the end of 2018, indicating a significant increase in demand[44]. - Utility support structures accounted for $615.0 million of the backlog, a substantial increase from $325.9 million in the previous year[45]. - Irrigation segment net sales included technology sales of $56.7 million in 2019, compared to $45.3 million in 2018 and $43.4 million in 2017, showing a growth trend in technology offerings[35]. - The U.S. electrical transmission grid requires significant investment in the coming years, which is expected to drive demand for electrical utility structures[27]. - The U.S. government funds highway and road improvements, which significantly impacts the demand for Valmont's transportation and commercial lighting products[17]. Competitive Strategy - The competitive strategy focuses on providing high value through product quality, customer service, and timely delivery[22]. - The company competes on the basis of product quality, engineering expertise, and customer service, with a focus on high-value solutions[28]. - The company competes on the basis of product quality, engineering expertise, and customer service, which are critical in maintaining market position[28]. - The company has a competitive edge in the irrigation segment, being a leader among the four main participants in North America[39]. Workforce and Operations - The company employs 9,862 individuals as of December 28, 2019, indicating a stable workforce to support operations[46]. - The company has not experienced extended shortages of steel in recent years due to strong relationships with major steel producers, ensuring material availability[40]. Market Trends - The demand for Valmont's products is driven by infrastructure spending, particularly in the transportation and commercial lighting markets[19]. - The irrigation market is driven by the need for improved yields and cost savings, influenced by factors such as net farm income and commodity prices[36]. - The market for Valmont's communication products is driven by increased demand for wireless communication and data, particularly with the advent of 5G technology[20].