Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — FY2022 Earnings Presentation
27 slides from Onterris's earnings presentation, Mar 1, 2023
Slide 1: Fourth Quarter & Full Year 2022 Earnings Call
Fourth Quarter & Full Year 2022 Earnings Call March 1, 2023
Slide 2: Safe Harbor
Safe Harbor Statements contained herein and in the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be iden
Slide 3: Operating Overview
Operating Overview ” MONTROSE ENVIRONMENTAL
Slide 4: 2022 Highlights
2022 Highlights Full Year 2022 • Solid full year 2022 results primarily driven by strengthening client demand and broad-based organic growth Revenue Adj. EPS(3) • Record customer revenue retention(1) increased to approximately $544.4M $0.24 96% and cross-selling(1) revenues nearly doubled to 35% of
Slide 5: Strong Record of Long-Term Growth
Strong Record of Long-Term Growth • Continued market share gains through (i) technology innovation & patent development and (ii) sales & marketing Revenue with a focus on integrated environmental solutions 2020-2023E CAGR(2,3) (excluding CTEH): 29% ($ in Millions, Dec FYE) • Consistent growth of cro
Slide 6: Strong Record of Long-Term Growth (Continued)
Strong Record of Long-Term Growth (Continued) • 2022 Operating Segments Adjusted EBITDA(1) excluding CTEH grew 24% primarily driven by strong organic growth Total Operating Segments Adj. EBITDA 2020-2023E CAGR: 14%, and excluding CTEH 15% • 2022 Operating Segments Adjusted EBITDA(1) including CTEH (
Slide 7: Capabilities Aligned with Emerging Political & Regulatory Priorities
Capabilities Aligned with Emerging Political & Regulatory Priorities Focus on Environmental Matters Creates Tailwinds for Montrose Ecosystem Regulatory Remediation Response Air Testing Laboratory Renewable Water Treatment Climate Change & Event Driven Response ✓ ✓ ✓ ✓ ✓ ✓ ✓ Greenhouse Gas Mitigation
Slide 8: Examples of Recent U.S. Regulatory Tailwinds
Examples of Recent U.S. Regulatory Tailwinds Rule Assessment, Permitting Measurement Remediation Summary & Response & Analysis & Reuse PFAS Hazardous Would cause PFOA and PFOS to be eligible for clean up under the recently refunded Substance Designation Legislation Superfund Program and require comp
Slide 9: Recent Examples of Incremental Client Demand for Projects Driven by Regulatory Tailwinds
Recent Examples of Incremental Client Demand for Projects Driven by Regulatory Tailwinds © 2023 Montrose Environmental Group, Inc. Proprietary and Confidential. 9
Slide 10: Recent M&A Overview
Recent M&A Overview • Successfully completed a number 2014 2014 of value-enhancing acquisitions to start 2023 • Consistently target additive services, geographies, clients and technologies • Demonstrated ability to successfully integrate, cross-sell and create revenue synergies over time • Acquisiti
Slide 11: Financial Overview
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Slide 12: Full Year and Q4 2022 Revenue Performance
Full Year and Q4 2022 Revenue Performance Full Year 2022 Revenue Full Year included (i) 26% organic revenue ($ in Millions) growth across most service lines (ex CTEH) plus small, strategic acquisitions and (ii) a $546.4 $544.4 decline in CTEH COVID-19 related services • Full Year down 0.4% YoY to $5
Slide 13: Full Year and Q4 2022 Consolidated Adjusted EBITDA Performance
Full Year and Q4 2022 Consolidated Adjusted EBITDA(1) Performance Full Year 2022 Consolidated Adjusted EBITDA(1) ($ in Millions) Full Year and Q4 Consolidated Adjusted $73.2 EBITDA(1) reflects strong organic momentum $66.2 in core business lines • Full Year down 9.6% YoY to $66.2 million due to lowe
Slide 14: Full Year 2022 Segment Performance
Full Year 2022 Segment Performance Total Operating Segments Assessment, Permitting and Response ($ in mm; % of revenue) ($ in mm; % of revenue) $546.4 $544.4 $57.1 $107.7 $99.7 $261.9 $187.2 $37.5 19.7% 18.3% 21.8% 20.0% Revenue Operating Segment Adjusted EBITDA Revenue Operating Segment Adjusted EB
Slide 15: Attractive Capital Structure
Attractive Capital Structure Commentary Market Capitalization • Flexible balance sheet to pursue investments in innovation and acquisitions in highly fragmented industry Preferred • Montrose has $214.8 million of liquidity, Equity $182M(3) including $89.8 million of cash and $125.0 million of availa
Slide 16: Outlook
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Slide 17: 2023E Outlook
2023E Outlook Current Outlook Aligned With Expectation for Attractive Long-Term Organic Growth for Foreseeable Future Revenue • 2023E revenue assumes double digit organic growth ($ in Millions) $550 - $600 $544(2) (excluding CTEH). • Including CTEH, 2023E organic growth is expected to be low-to-mid
Slide 18: ESG / Investment Highlights
Investment Highlights ESG is who we are – Significant scale with global ESG the environment is our business reach in large, growing and highly fragmented industry Proven ability to identify, Strong financial performance execute and integrate with consistent track record acquisitions with a strong of
Slide 19: Appendix
Appendix
Slide 20: Working Across Montrose to Help Solve the Global GHG Problem
Working Across Montrose to Help Solve the Global GHG Problem STEP #1 Environmental Challenge: O&G industry’s operations represent 9% of human-made greenhouse gas Deep Understanding (GHG) emissions. Stakeholders, including the SEC's newly proposed climate And Working Knowledge change disclosure rules
Slide 21: Working Across Montrose to Help Solve the Global PFAS Problem
Working Across Montrose to Help Solve the Global PFAS Problem Environmental Challenge: PFAS are widely used, long lasting chemicals components which break down very slowly over time in water, air and soil Remediation Outlook: PFAS remediation expenditures in the U.S. are estimated to surpass $160 bi
Slide 22: Summary of Oaktree A-2 Preferred
Summary of Oaktree A-2 Preferred Investment Summary Post-IPO Terms Governance • In April 2020, Oaktree • No fixed maturity date • One Oaktree representative Capital purchased $175mm remains on the Montrose - Repayable in cash at Company’s board of directors while A-2 of Series A-2 Preferred option (
Slide 23: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to our results under GAAP, in this presentation we also present certain other supplemental financial measures of financial performance that are not required by, or presented in accordance with, GAAP, including, Consolidated Adjusted EBITDA, Adjusted Net Inc
Slide 24: Reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted EPS
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted EPS (In thousands) Reconciliation Tables For the Quarter Ended For the Year Ended December 31, December 31, 2022 2021 2022 2021 Net loss $ (10,812) $ (1,472) $ (31,819) $ (25,325) Amortization
Slide 25: Reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted EPS (Quarterly)
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted EPS (In thousands) Quarter Ended Year Ended September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2022 2022 2022 2021 2021 2021 2021 2021 Net (loss) income
Slide 26: Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (In thousands) For the Quarter Ended For the Year Ended December 31, December 31, 2022 2021(a) 2022 2021(a) Net loss $ (10,812) $ (1,472) $ (31,819) $ (25,325) Interest expense 1,229 407 5,239 11,6
Slide 27: Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (Quarterly)
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (In thousands) Quarter Ended Year Ended September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2022 2022 2022 (a) 2021 (a) 2021 (a) 2021 (a) 2021 (a) 2021 (a) N
Montrose Environmental Group — FY2022 Earnings Presentation on 6ix