Granite Construction Incorporated · NYSE:GVA
Granite Construction — Investor Presentation (May 2024)
24 slides from Granite Construction's investor presentation, May 2024
Slide 1: May 2024 Investor Presentation
May 2024 Investor Presentation © 2024 Granite Construction. All Rights Reserved.
Slide 2: Safe Harbor
Safe Harbor Any statements contained in this presentation “believes,” “expects,” “estimates,” allocations, CAP, and results. These expectations that are not based on historical facts, including "target," “anticipates,” “intends,” “plans,” may or may not be realized. Some of these statements regardin
Slide 3: Founded in 1922, Headquartered in Watsonville, CA, NYSE: GVA
• Founded in 1922 • Headquartered in Watsonville, CA • Publicly traded since 1990, NYSE: GVA • One of the largest diversified, vertically integrated civil contractors and construction materials producers in the U.S. • Geographically diverse public and private client base • Thoughtful project pursuit
Slide 4: Our Markets & Customers
Our Markets & Customers Granite serves customers in both public and private sectors within our reportable business segments: Construction and Materials. Our expertise allows us to provide infrastructure solutions in a range of markets as a diversified civil contractor and materials producer. ENR | E
Slide 5: Where We Work
Where We Work Home Markets Where we Work Materials Facilities © 2024 Granite Construction. All Rights Reserved. 5
Slide 6: Home Market Strategy a Key Differentiator
Home Market Strategy a Key Differentiator Client Centric Focus Home Market Community Engagement Market Intelligence & Insight Blended Project Portfolio Owner and Regulator Relationships Readily Available Resources We will focus on home markets where these attributes exist, among others. With these a
Slide 7: Strong Transportation Funding Supports California Growth
Strong Transportation Funding Supports California Growth • Caltrans (California Department of Transportation) capital project funding allocations stable and aligned with the agency’s project delivery capacity • Caltrans awards continued to grow significantly for the second consecutive calendar year,
Slide 8: California Senate Bill 1 (SB-1) 10 Year Revenue and Allocation
California Senate Bill 1 (SB-1) 10 Year Revenue and Allocation 10 Year SB-1 Revenue and Allocation $7,263 $6,947 $6,653 $7,163 $6,313 $6,847 $6,553 $6,213 $5,245 $5,235 $5,079 $5,169 $5,314 $4,280 $4,257 $4,980 $3,673 $4,180 $4,157 $3,384 $3,515 $3,199 $2,840 $2,844 $3,490 $2,489 $2,617 $3,332 $3,16
Slide 9: Vertical Integration Empowers Home Markets
Vertical Integration Empowers Home Markets Why Vertical Integration? » Compete in markets where owning materials is necessary External AGG Sales External HMA Sales » Maximize productivity and scheduling Aggregate Production HMA Production Construction » Ensure quality materials Operations » Leverage
Slide 10: Aligning and Streamlining Organizational Structure
Aligning and Streamlining Organizational Structure All operations formerly organized into three groups Structure Aligned with Segments Reorganization to align operating groups with Construction and Materials Construction segment leadership focused on: California Mountain Central • Growth and project
Slide 11: Investment Framework Supports Long-term Growth
Investment Framework Supports Long-term Growth SUPPORT & Solidify and Bolster EXPAND & Expand Into New Core Competencies STRENGTHEN and Strengths TRANSFORM Geographies INVESTMENT CATEGORIES INVESTMENT CATEGORIES Strengthen & Bolt-on: Civil Automation Expand Home Construction & & Reserve VI Expansion
Slide 12: Granite Investment Framework – Expand and Transform
Granite Investment Framework – Expand and Transform VI Expansion & Platform • Expanded Granite’s footprint and created a new platform in the Southeast (AR, TN, MS) through the acquisition of Lehman-Roberts and Memphis Stone & Gravel • Highly profitable and EBITDA margin accretive with approximately
Slide 13: $5.5B High-Quality CAP with Risk-adjusted Procurement Types
Bid-Build Procurement $5.5B High-Quality CAP with Risk-adjusted Procurement Types • Project duration typically several months to 3 years • Traditional method with owners preparing the design and construction and transportation management plans • Contractors compete on a competitive low-bid process •
Slide 14: Accelerating Organic Growth and Acquisitions
Accelerating Organic Growth and Acquisitions Accelerating Revenue Growth $3.8 - $4.0 Strong public funding and resilient private $3.5 $3.3 $0.6 market supporting organic revenue growth $0.5 $0.5 $3.0 $3.2 - $3.4 Infrastructure Bill is lifting the market and is expected to continue to build in signif
Slide 15: 2024 Guidance – Accelerating Growth and Shareholder Return
2024 Guidance – Accelerating Growth and Shareholder Return Revenue SG&A Adjusted EBITDA Margin* (Percentage of Revenue) $3.8 - $4.0 9.5% - 11.5% $3.5 8.4% 7.5% - 8.0% 8.0% FY 2023 FY 2024F FY 2023 FY 2024F FY 2023 FY 2024F $ in billions * both years include stock-based compensation adjustment © 2024
Slide 16: Capital Allocation Priorities
Capital Allocation Priorities 1 Maintain current level of dividend 2 Support business operations via maintenance capex (1.5% - 2.0% of annual revenue) 3 Optimize gross debt-to-capital ratio to 20%-30% through debt repayment 4 Focused growth capex and M&A to drive growth and efficiencies 5 Opportunis
Slide 17: Q1 2024 Results
Q1 2024 Results Q1 2024 YOY Change Total Revenue Total Revenue $672 M + $112 M Construction Revenue Construction Revenue $595 M + $92 M Materials Revenue Materials Revenue $77 M + $20 M Adjusted Net Income (Loss) Adjusted Net Income (Loss) ($9 M) + $5 M Laguna Seca Raceway Pedestrian Bridge Adjusted
Slide 18: Construction Segment
Construction Segment CAP History $5,546 $5,499 $135 $225 • CAP of $5.5 billion, decreased $47 million sequentially and $5,104 2% 4% increased $395 million year-over-year $68 1% $160 3% $138 o California CAP decreased $4 million sequentially to 3% $206 $2.4 billion and increased $519 million year-ove
Slide 19: Materials Segment
Materials Materials Segment Segment Aggregate Reserves • Increase in both aggregate and asphalt volumes 1,290 • Price increases in both aggregates and asphalt in line with 1,126 expectations for 2024 277 996 246 • Order activity remains strong in line with expectations 231 • Strategic investments co
Slide 20: Why Granite?
Why Granite? • Started 2024 strong with revenue, adjusted EBITDA and operating cash flow well ahead of 2023 • CAP of $5.5 billion as of Q1 2024, $395 million higher than the prior year • 46% of our de-risked CAP at Q1 2024 is best value projects • Continued strong public and private market environme
Slide 21: Thank you.
Thank you. © 2024 Granite Construction. All Rights Reserved. 21
Slide 22: Appendix
Appendix The following tables contain financial information We provide adjusted income (loss) before income Management believes that these additional non- calculated other than in accordance with U.S. taxes, adjusted provision for (benefit from) income GAAP financial measures facilitate comparisons
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation © 2024 Granite Construction. All Rights Reserved. 23
Slide 24: Adjusted NI Reconciliation
Adjusted NI Reconciliation © 2024 Granite Construction. All Rights Reserved. 24
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