What changed in this filing

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Item 1. Business

2022-02-23 compared with 2021-02-24 · 50 added, 56 removed, 246 unchanged (30% of the section changed)

(a) General Description of Business

We are a diversified producer of products and services for infrastructure and agriculture markets.

We were founded in 1946, went public in 1968 and our shares trade on the New York Stock Exchange (ticker:

The Company operates and reports its results in the following four reporting segments:

Our Infrastructure products and services are delivered through the Engineered Support Structures segment, the Utility Support Structure segment, and the Coatings segment.

Our Irrigation products and services are delivered through the Irrigation segment.

In 2021, the Company operated and reported its results in the following four reporting segments:

• Engineered Support Structures (ESS);

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Our Utility segment helps deliver power with products to better harden grids to make infrastructure more resilient by selling structures to support electrical transmission, distribution lines, and substation conversion and storage.

Our Irrigation segment produces mechanized irrigation equipment and related services to help deliver water, fertilizers, herbicides, and pesticides to agricultural crop that save time, conserve water, energy, and other input costs while also assisting in increasing yields.

Our Irrigation segment produces mechanized irrigation equipment and related services to help deliver water, fertilizers, herbicides, and pesticides to agricultural crops that save time, conserve water, energy, and other input costs while also assisting in increasing yields.

This segment also develops technology for better precision application including predictive, autonomous crop management.

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In 2021, approximately 34% of our net sales were either sold in markets or produced by our manufacturing plants outside of North America.

We were founded in 1946, went public in 1968 and our shares trade on the New York Stock Exchange (ticker:

Business Strategy

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Our strategy is to increase our market penetration by differentiating our products from our competitors’ products through superior customer service, engineering proficiency, technological innovation and consistent high quality.

Our Utility segment experienced sales volume growth in 2020 which we believe was due to the continuing shift toward renewable energy sources and increasing need for stronger, more sustainable grid infrastructure.

Our Irrigation segment experienced sales volume growth in 2021 which we believe was partially due to the continuing importance of our precision agriculture/technology offerings.

Bringing our Existing Products to New Markets.

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Our Irrigation segment has a long history of developing new emerging markets for mechanized irrigation around the world.

In 2020, we secured a $240 million multi-year order in Egypt.

In 2020, we secured a $240 million multi-year order for the Egypt market.

Developing New Products for Markets that We Currently Serve.

Our strategy is to grow by developing new products for markets using our comprehensive understanding of end-user requirements and leveraging longstanding relationships with key distributors and end-users.

In recent years we developed and sold structures for tramway applications in Europe.

The customers for this product line include many of the state and local governments that purchase our lighting structures.

The 2019 acquisition of Larson Camouflage, an industry leader in wireless communication concealment solutions give us the ability to offer integrated solutions to mobile carriers and other wireless communication customers around the world.

Our Utility segment increased its 2020 sales by offering spun concrete distribution poles and increased its 2018 sales by offering substations that are prepackaged in a manner intended to simplify our customer's installation.

In recent years we developed and sold structures for tramway applications in Europe, spun concrete distribution poles for the Utility markets, and began offering concealment solutions for the wireless communication markets.

Developing New Products for New Markets or Leveraging Core Competencies to Further Diversify our Business is a path to increase sales.

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The decorative lighting market has different requirements and preferences than our traditional transportation and commercial markets.

In 2020, we acquired Solbras ® , a provider of solar energy solution for agriculture and during 2018, we acquired Convert Italia SpA, a provider of engineered single axis solar tracking solutions.

In 2021, we acquired Prospera Technologies, Ltd., an artificial intelligence technology company focused on machine learning and computer vision in agriculture providing an opportunity to grow recurring revenue through agronomy monitoring software solutions.

In 2020, we acquired Solbras ® , a provider of solar energy solutions for agriculture and during 2018, we acquired Convert Italia SpA, a provider of engineered single axis solar tracking solutions.

These furthered our commitment to renewable energy which we believe will provide us future growth opportunities through the ability to bring power to underserved regions and transform unproductive land into efficient cropland.

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Our significant business expansions during the past five years include the following (including the segment where the business reports):

• Acquisition of the remaining 30% not previously owned of IGC Galvanizing Industries (M) Sdn Bhd (Coatings)

• Acquisition of 5.2% of the remaining 10% not previously owned of Valmont SM (Utility)

• Acquisition of a highway safety business (Aircon) that manufactures guardrails, structural metal products, and solar structural products in India (ESS)

• Acquisition of an integrator of prepackaged pump stations (Irrigation)

• Acquisition of an integrator of prepackaged pump stations (Torrent Engineering and Equipment) located in Indiana (Irrigation)

• Acquisition of a worldwide provider of parts for agricultural irrigation equipment, Irrigation Components International (ICI), located in the United States (Irrigation)

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• Acquisition of 75% of a provider of engineered solar tracker solutions (Convert Italia SpA) headquartered in Italy (Utility)

• Acquisition of a steel lattice structures producer located in India (Utility)

• Acquisition of a galvanizing business located in New Zealand (Coatings)

• Acquisition of a steel lattice structures producer (Derit) located in India (Utility)

• Acquisition of a galvanizing business (CSP Coating Systems) located in New Zealand (Coatings)

• Acquisition of a wireless communication concealment solutions provider (Larson Camouflage) headquartered in Arizona (ESS)

• Acquisition of the remaining 4.8% not previously owned of Valmont SM (Utility)

• Acquisition of a galvanizing business located in Texas (Coatings)

• Acquisition of a manufacturer and distributor of wireless site components and safety products in Florida (ESS)

• Acquisition of a galvanizing business (United Galvanizing) located in Texas (Coatings)

• Acquisition of a manufacturer and distributor of wireless site components and safety products (Connect-It Wireless, Inc.) located in Florida (ESS)

• Acquisition of the remaining 49% not previously owned of AgSense LLC (Irrigation)

• Acquisition of 55% of a provider of solar solutions for Agriculture (Solbras) located in Brazil (Irrigation)

• Acquisition of KC Utility Packaging, LLC, a utility substation product provider (Utility)

• Acquisition of Prospera Technologies, Ltd, an artificial intelligence company in agriculture located in Israel (Irrigation)

• Acquisition of PivoTrac, a remote monitoring Irrigation service company in Texas (Irrigation)

In 2018, the Company divested of Donhad, a grinding media producer in Australia.

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Engineered Support Structures :

This segment consists of the manufacture and distribution of engineered poles, towers, and components for lighting, transportation, and wireless communication markets, including integrated structure solutions for smart cities, and engineered access systems;

This segment consists of the manufacture and distribution of engineered poles, towers, and components for lighting, transportation, and wireless communication markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products;

Utility Support Structures:

This segment consists of the manufacture of engineered steel and concrete structures for utility markets, including transmission, distribution, and substation products, and renewable energy generation equipment;

This segment consists of galvanizing, painting and anodizing services to preserve and protect metal products;

This segment consists of the manufacture of agricultural irrigation equipment, parts, services, tubular products, and advanced technology solutions for water management and precision agriculture.

In addition to these four reportable segments, there are other businesses and activities which are not more than 10% of consolidated sales, operating income or assets.

This includes the manufacture of forged steel grinding media for the mining industry and is reported in the "Other" category until its divestiture in 2018.

This segment consists of the manufacture of engineered steel and concrete structures for utility markets, including transmission, distribution, substation products, and renewable energy generation equipment;

This segment consists of galvanizing, CorroCote, anodizing, and powder coating services to preserve and protect metal products;

This segment consists of the manufacture of center pivots and linear irrigation equipment for agricultural markets, including parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture.

Information concerning the principal products produced and services rendered, markets, competition and distribution methods for each of our four reportable segments is set forth below.

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In Europe, Valmont is a leader in decorative lighting poles, which provide an attractive yet functional solution for our customers.

We are leveraging this expertise to expand our decorative product sales in North America, China, and the Middle East.

Traffic poles are structures to which traffic signals and overhead signs are attached and aid the orderly flow of automobile traffic.

Valmont traffic and overhead sign structures aid in the orderly flow of automobile traffic.

We are leveraging this expertise to expand our decorative product sales in North America, and the Middle East.

Valmont traffic and overhead sign structures contribute to the orderly flow of automobile traffic.

These poles, which support traffic signals and overhead signs, are engineered to meet customer specifications to ensure the proper function and safety of the structure.

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A wireless communication cell site mainly consists of a steel pole or tower, shelter (enclosure where the radio equipment is located), antennas (devices that receive and transmit data and voice information to and from wireless communication devices) and components (items that are used to mount antennas to a structure and to connect cabling and other parts from the antennas to the shelter).

Larger mono-pole structures are engineered and designed to customer specifications, which include factors such as the number of antennas on the structure and wind and soil conditions.

Due to the size of these mono-pole structures, design is important to ensure each structure meets performance and safety specifications.

Larger monopole structures are engineered and designed to customer specifications, which include factors such as the number of antennas on the structure and wind and soil conditions.

Due to the size of these monopole structures, design is important to ensure each structure meets performance and safety specifications.

We also produce and distribute access systems that allow people to move safely and effectively in an industrial, infrastructure or commercial facility.

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Markets —The key markets for our products and solutions are the transportation, construction, and industrial markets.

The transportation market includes street and highway lighting and traffic control, much of which is driven by government spending programs.

The transportation market includes street and highway lighting, traffic control, and bridges;

all of which are supported through both state and federal government spending programs.

For example, the U.S.

government funds highway and road improvement through the FAST Act.

This program provides funding to improve the nation’s roadway system, which includes roadway lighting and traffic control enhancements.

government will fund infrastructure improvement through the newly passed Infrastructure Investment and Jobs Act.

This bill will allocate funding to reinforce the nation’s bridges, increase safety for the travelling public, update airport, ports, and waterways, and improve the highway and roads systems.

Many products from our transportation product portfolio will be utilized when making these enhancements including traffic structures, bridge systems, roadway and street lighting, highmast lighting, etc.

Matching funding from the various states may be required as a condition of federal funding.

FAST Act was extended by one year in late 2020 to allow Congress more time for developing a long term funding bill.

The current federal executive administration has recommended increases to spending on roadway infrastructure.

Additionally, public and private partnerships have recently emerged as an additional funding source.

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This market is driven by macro-economic factors such as general economic growth rates, interest rates and the commercial construction economy.

Valmont has many long-standing relationships with OEM (who also manufacture light fixtures and equipment) who also serve this market.

Valmont has many long-standing relationships with OEM (also manufacture light fixtures and equipment) who also serve this market.

Industrial markets for access systems are typically driven by infrastructure, industrial and commercial construction spending.

Customers include construction firms or installers who participate in these markets, natural gas and mineral exploration companies, resellers such as steel service centers, and end users.

These markets can be cyclical depending on economic conditions.

The market for our communication products is driven by increased demand for wireless communication and data.

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We also manufacture complex steel structures such as rotor houses for wind turbines.

crown-mounted compensators, winches and cranes for oil and gas exploration, and material handling equipment for manufacturing.

Our solar single-axis “tracker” product is an integrated system of steel structures, electric motors, and electronic controllers.

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As utilities increase development of large-scale solar power and micro-grid applications, single axis tracker solutions will be an essential tool for achieving higher energy production.

Sales of complex steel structures, wind turbine towers and rotor houses, material handling systems, utility transmission structures, and structures for oil & gas exploration mainly occur within Europe.

Sales of complex steel structures, wind turbine towers, rotor houses, and utility transmission structures mainly occur within Europe.

Approximately 35% of all ground-mounted solar energy projects constructed globally during 2019 utilized trackers according to Wood Mackenzie.

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These contractual arrangements often last between 3 and 5 years and are frequently renewed.

For offshore and complex steel structures, we compete based on our ability to co-engineer and design solutions with customers.

For offshore and other complex steel structures, we compete on price based on our ability to co-engineer and design solutions with customers.

We are one of a limited number of competitors that can execute advanced order production of complex steel constructions that require a high degree of engineering and complex manufacturing customization.

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Services Rendered —We add finishes to metals that inhibit corrosion, extend service lives and enhance the aesthetics of a wide range of materials and products.

Among the services provided include:

• Hot-dip Galvanizing

• Powder Coating

In our Coatings segment, we take unfinished products from our customers and return them with a galvanized, anodized or painted finish.

Galvanizing is a process that protects and prolongs the life of steel with a zinc coating that is bonded to the product surface to inhibit rust and corrosion.

Anodizing is a process applied to aluminum that oxidizes the surface of the aluminum in a controlled manner, which protects the aluminum from corrosion and allows the material to be

dyed a variety of colors.

We also paint products using powder coating and e-coating technology (where paint is applied through an electrical charge) for a number of industries and markets.

We take unfinished products from our customers and return them with a galvanized, anodized or painted finish.

Hot-dip galvanizing is a process that protects and prolongs the life of steel with a zinc coating that is bonded to the product surface to inhibit rust and corrosion.

CorroCote adds a protection to steel for those products that are anchored below ground against the corrosive effects of soil and underground moisture .

Anodizing is a process applied to aluminum that oxidizes the surface of the aluminum in a controlled manner, which protects the aluminum from corrosion and allows the material to be dyed a variety of colors.

We also paint products using powder coating for a number of industries and markets.

Markets —Markets for our products are varied and our profitability is not substantially dependent on any one industry or external customer.

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Demand for coatings services generally follows the local industrial economies.

Galvanizing is used in a wide variety of industrial applications where corrosion protection of steel is desired.

Galvanizing is used in a wide variety of

industrial applications where corrosion protection of steel is desired.

While markets are varied, our markets for anodized or painted products are more directly dependent on consumer markets than industrial markets.

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Products Produced —We manufacture and distribute mechanical irrigation equipment and related service parts under the “Valley” brand name.

A Valley irrigation machine usually is powered by electricity and propels itself over a farm field and applies water and chemicals to crops.

A Valley irrigation machine is powered by electricity (via solar, grid, or diesel generator) and propels itself over a farm field and applies water and chemicals to crops.

Water and, in some instances, chemicals are applied through sprinklers attached to a pipeline that is supported by a series of towers, each of which is propelled via a drive train and tires.

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The irrigation machine used in international markets is substantially the same as the one produced for the North American market.

We also manufacture tubular products for industrial customers primarily in the agriculture industry as well as in the transportation and other industries.

Our remote management capabilities allow control of pivots and a variety of other farm equipment on any web-connected device and our suite of advanced technology solutions offers capabilities to assist in reducing water and energy use.

Irrigation anomaly detection can alert growers of pivot-related water issues with artificial intelligence and machine learning (in select markets) is the next step toward predictive, autonomous crop management.

Our crop anomaly detection can alert growers of pivot-related water issues with artificial intelligence and machine learning (in select markets) to help farmers determine where and how much to irrigate.

During fiscal 2021, we purchased Prospera Technologies Ltd, a leading global artificial intelligence and machine learning provider of advanced agronomy monitoring solutions.

Irrigation net sales in 2021, 2020, and 2019 included technology sales of $97.9 million, $67.1 million, and $56.7 million, respectively.

We also manufacture tubular products for industrial customers primarily in the agriculture industry as well as in the transportation and other industries.

We also sell solar energy solutions for agriculture primarily in international markets.

Other Types of Irrigation — There are other forms of irrigation available to farmers, two of the most prevalent being flood irrigation and drip irrigation.

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• the largest user of that freshwater is agriculture

We believe these factors, along with the trend of a growing worldwide population and improving diets, reflect the need to use water more efficiently while increasing food production to feed this growing population.

We believe these factors, along with the trends of a growing worldwide population, improving diets, and governments' efforts to address food security, reflect the need to use water more efficiently while increasing food production to feed this growing population.

We believe that mechanized irrigation can improve water application efficiency by 40-90% compared with traditional irrigation methods by applying water uniformly near the root zone and reducing water runoff.

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Patents, Licenses, Franchises and Concessions.

We have a number of patents for our manufacturing machinery, poles and irrigation designs.

We have a number of patents for our manufacturing machinery, poles, highway guardrail, and irrigation designs.

We also have a number of registered trademarks.

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Management talent is critical as well, to help grow our businesses and effectively plan for succession of key employees upon retirement.

At December 26, 2020 we had approximately 5,920 employees in the United States and approximately 4,920 employees in foreign countries.

At December 25, 2021 we had approximately 6,080 employees in the United States and 4,959 employees in foreign countries.

The Company places a high value on diversity and inclusion, encouraging employees with diverse backgrounds and experiences who share a common interest in profitable development, improving corporate culture, and delivering sustainable business results.

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Our program for succession and management development has our highest level of attention with our CEO responsible for reporting on the program directly to our board of directors.

For additional information, please see the “About Us” page on our website and section titled “Governance, Human Capital and Sustainability Highlights” in the Company’s 2021 Proxy Statement.

For additional information, please see the “About Us” and "Sustainability" pages on our website and section titled “Governance, Human Capital and Sustainability Highlights” in the Company’s 2022 Proxy Statement.

(d) Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business