Aecon Group Inc. · TSX:ARE
Aecon — AltaCorp Capital Institutional Investor Conference (January 2014)
21 slides from Aecon's conference presentation, Jan 16, 2014
Slide 1: Aecon Group Inc. Investor Presentation
Aecon Group Inc. (TSX: ARE) Investor Presentation AltaCorp Capital Institutional Investor Conference January 16, 2014 1
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION The information in this presentation includes certain forward-looking statements. These “forward-looking” statements are based on currently available competitive, financial and economic data and operating plans but are subject to risks and uncertainties. In addition to ev
Slide 3: Canada's Premier Construction and Infrastructure Development Company
CANADA’S PREMIER CONSTRUCTION AND INFRASTRUCTURE DEVELOPMENT COMPANY 3
Slide 4: Aecon Overview
AECON OVERVIEW ONE Aecon approach Focused on execution and performance Leading safety record and stringent code of ethics Strong backlog supplemented by growing recurring revenue Expanding margins and on a clear path to deliver stronger results Balanced and diversified 4
Slide 5: Strategic Core Markets
STRATEGIC CORE MARKETS Aecon Infrastructure o Transportation o Heavy Civil o Social Infrastructure Aecon Energy o Oil and Gas o Power Generation: Nuclear, Co-Generation, Thermal & Renewable o Utilities (including pipeline and transmission) o Energy Support Services Aecon Mining o Mine Site Ins
Slide 6: Business Strategy
BUSINESS STRATEGY Four P’s: 1. PEOPLE – Invest in our people and their safety 2. PROFITABILITY – Drive to best-in-class margins 3. PARTNERSHIPS – Organic growth through partnerships and alliances 4. PERFORMANCE – Focus on execution, operational discipline, and risk management 6
Slide 7: Achievements & Outlook
ACHIEVEMENTS & OUTLOOK Significant progress towards 9% EBITDA target in 2015 o Growth in margins and profitability in Energy segment o Mining business successfully scaled o Expanded Utilities business in western Canada o Redefined and refocused Buildings operations Positive Outlook o Robust infr
Slide 8: 2013 Q3 Financial Results
2013 Q3 FINANCIAL RESULTS Three months ended Nine months ended $ Millions September 30 September 30 2013 2012 2013 2012 Revenue 897.3 820.5 2,162.4 1,955 Gross Profit 94.1 98.8 175.9 185.7 Adjusted EBITDA 79.5 68.6 105.0 94.1 Adjusted EBITDA Margin 8.9% 8.4% 4.9% 4.8% Operating Profit 57.6 52.1 42.6
Slide 9: Major Projects
MAJOR PROJECTS IPF Cold Lake & Polaris Syncrude Co-Gen Henday Ring Road Capilano Tunnels Lower Mattagami Waneta Dam Rocanville Mine Port Mann TTC Sheppard West Darlington Air Rail Link Eglinton Crosstown Tunnels Union Station 9
Slide 10: National Fabrication Capability
NATIONAL FABRICATION CAPABILITY FABRICATION FACILITIES Brantford, ON 60,000 sq. ft. Cambridge, ON 120,000 sq. ft. Kitchener, ON 15,000 sq. ft. Dartmouth, NS 47,000 sq. ft. Pictou, NS 50,000 sq. ft. Edmonton 1, AB 80,000 sq. ft. Edmonton 2, AB 85,000 sq. ft. Vancouver, BC 40,000 sq. ft. TOTAL 497,000
Slide 11: Track Record of Profitable Growth
TRACK RECORD OF PROFITABLE GROWTH Adjusted EBITDA Margin 3.1% 4.8% 6.2% 5.5% 2.2% 5.1% 6.0% 5.9% 3,500 200 180 3,000 ADJUSTED EBITDA 160 REVENUE 2,500 140 2,000 120 100 1,500 80 1,000 60 40 500 20 0 0 2006 2007 2008 2009 2010 2011 2012 2013 Q3 TTM $ Millions 2006 – 2009 GAAP Compound Annual Growth R
Slide 12: Improved Returns for Shareholders
IMPROVED RETURNS FOR SHAREHOLDERS Adjusted Net Income Dividends Declared Attributable to Shareholders(1) (Cents Per Share) ($ Millions) 0.35 0.32 80 74.5 67.6 0.30 0.28 70 59.3 0.25 60 54.5 48.3 0.20 0.20 0.20 0.20 50 44.4 0.20 40 31.0 0.15 30 0.10 0.07 20 11.5 10 0.05 0 0.00 2006 2007 2008 2009 201
Slide 13: Balanced and Diversified Portfolio
BALANCED AND DIVERSIFIED PORTFOLIO (Q3 2013 TTM REVENUE) US +INT'L 2% Infra. Alberta Energy 35% 35% Ontario 41% 40% SECTOR GEOGRAPHY BC 3% Mining Other East Sask. 24% 6% 14% Indirect Public & Fixed Price Utilities Cost Plus & Similar 18% & Similar 27% 34% CLIENT Private CONTRACT TYPE BASE 51% Public
Slide 14: Backlog Revenue and Recurring Revenue
BACKLOG REVENUE AND RECURRING REVENUE $3,500 $3,000 Recurring Revenue: (TTM) $2,500 $717 Million Total Backlog Revenue: $ Millions $2,000 (At September 30, 2013) $2,090 Million $1,500 Aecon Mining $137 Million $1,000 Aecon Energy $1,028 Million $500 Aecon Infrastructure $925 Million $0 2006 2007
Slide 15: Visibility in Backlog Duration
VISIBILITY IN BACKLOG DURATION $2,500 $2,000 $195 $601 $1,500 $ Millions $72 $281 $1,000 $1,294 $500 $1,006 $0 Q1 2009 Q3 2013 < 12 MTHS 12 - 24 MTHS > 24 MTHS 15
Slide 16: Key Balance Sheet Objectives
KEY BALANCE SHEET OBJECTIVES 1. Efficient financing of equipment fleet – expected to remain at current levels 2. Maintain prudent leverage – at or below 1.0x through end 2015 after Convertible Debenture maturities, driven by: o Adjusted EBITDA growth o Recourse debt reduced to primarily equipment fi
Slide 17: Convertible Debentures
CONVERTIBLE DEBENTURES Bought-deal financing raised $172.5 million through issuance of Convertible Debentures due December 2018 Proceeds will be used to refinance existing Convertible Debenture indebtedness due September 2014 and for general corporate purposes o Interest rate on new debentures i
Slide 18: Key Statistics
KEY STATISTICS Revenue as at September 30, 2013 (TTM) $3.1 billion Backlog as at September 30, 2013 $2.1 billion Market Capitalization ~ $900 million 52 Week Share Price Range $10.32 – $16.40 Shares Outstanding 55.9 million Average Daily Volume ~ 250,000 Annual Dividend $0.32/share M
Slide 19: Market Opportunities
MARKET OPPORTUNITIES Canada’s construction industry is forecast to be one of the world’s largest construction markets by 2020 Unprecedented opportunities in key sectors: o Infrastructure: Large transportation projects in the planning or bidding stages o Energy: In power, $200B is projected to be
Slide 20: Summary: The Aecon Advantage
SUMMARY Industry leader with unmatched scale and scope in Canada Positioned in three key growth sectors Strong backlog with growing recurring revenues Ongoing Adjusted EBITDA margin expansion Solid capital structure Focused on execution and performance + + THE AECON ADVANTAGE 20
Slide 21: Aecon Group Inc. (TSX: ARE)
Aecon Group Inc. (TSX: ARE) Investor Presentation AltaCorp Capital Institutional Investor Conference January 16, 2014 21
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