Stantec Inc · TSX:STN
Stantec — Q4 2023 Earnings Presentation
19 slides from Stantec's earnings presentation, Feb 29, 2024
Slide 1: Q4 and Year End 2023 Earnings Presentation
Q4 and Year End 2023 Earnings Presentation February 29, 2024
Slide 2: Cautionary statement
Cautionary statement This presentation contains non-IFRS and other financial measures and forward-looking statements, including a discussion of our business targets, expectations, and outlook. We caution readers not to place undue reliance on Q4 AND YEAR END 2023 our forward-looking statements since
Slide 3: 2023 Key highlights
2023 Key highlights Record Corporate Knights Financial results Global 100 Highest Organic net revenue growth rate ever achieved #1 Ranked the most sustainable design and engineering firm in the world Lowest Voluntary turnover among peers #9 Ranked as one of the most sustainable companies in the worl
Slide 4: Closed two key acquisitions to start 2024
Closed two key acquisitions to start 2024 ZETCON Morrison Hershfield 645-person engineering firm in all major 1,150-person engineering & management German metropolitan areas firm with offices in Canada, US, and India 4 Closed January 8, 2024 Closed February 9, 2024
Slide 5: Record 2023 financial results
Record 2023 financial results Net revenue Increased earnings 2023 KEY DRIVERS $5.1B | ▲ 14% driven by: Robust investment / Q4 AND YEAR END 2023 Adjusted EBITDA (1) Organic Net Revenue Growth (1) demand from both public and private $831M | ▲ 15% 9.9% sectors continues Adjusted EBITDA Margin (1) Acqui
Slide 6: United States
United States Gross and net revenue ($ millions) $4.0 Q4 AND YEAR END 2023 Billion BACKLOG Gross Revenue Net Revenue 12.3% organic growth & 2.4% acquisition growth Double-digit organic growth in: • Water – public sector and industrial projects; large-scale water security projects in western US • Bui
Slide 7: Canada
Canada Gross and net revenue ($ millions) $1.3 Q4 AND YEAR END 2023 Billion BACKLOG Gross Revenue Net Revenue 8.3% organic growth Double-digit organic growth in: • Environmental Services – permitting, archaeology resource assessments and environmental impact assessments • Infrastructure – large-scal
Slide 8: Global
Global Gross and net revenue ($ millions) $1.0 Q4 AND YEAR END 2023 Billion BACKLOG Gross Revenue Net Revenue 6.5% organic growth & 1.1% acquisition growth Double-digit organic growth in: • Water – long-term framework agreements in UK, New Zealand and Australia, and public sector investment • Energy
Slide 9: Financial Performance
Q4 AND YEAR END 2023 2023 Hyperion Water Reclamation Plant Los Angeles, California, US Financial Performance Theresa Jang - Executive Vice President and Chief Financial Officer 9
Slide 10: Q4 2023 Financial results
Q4 2023 Financial results Gross and net revenue Project margin ($ millions) ($ millions and % of NR) Q4 AND YEAR END 2023 Adjusted EBITDA and Adjusted EBITDA margin(1) Adjusted diluted earnings per share ($)(1) ($ millions and % of NR) 10 (1) Adjusted EBITDA, adjusted EBITDA margin and adjusted dilu
Slide 11: 2023 Financial results
2023 Financial results Gross and net revenue Project margin ($ millions) ($ millions and % of NR) Q4 AND YEAR END 2023 Adjusted EBITDA and Adjusted EBITDA margin(1) Adjusted diluted earnings per share ($)(1) ($ millions and % of NR) 11 (1) Adjusted EBITDA, adjusted EBITDA margin and adjusted diluted
Slide 12: Liquidity and capital resources
Liquidity and capital resources Operating cash flow Capital returned to shareholders ($ millions) ($ millions) Q4 AND YEAR END 2023 Days sales outstanding(1) Net debt to adjusted EBITDA(1) Target range Target 80 days 1.0 - 2.0x 12 (1) Net debt to adjusted EBITDA and days sales outstanding are non-IF
Slide 13: Q4 2023 Backlog, Major Projects & Outlook
Q4 AND YEAR END 2023 Q4 2023 East Midtown Greenway New York, New York, US Backlog, Major Projects & Outlook Gord Johnston - President and Chief Executive Officer 13
Slide 14: Significant Backlog
Significant Backlog Backlog ($ millions) Q4 AND YEAR END 2023 • 6.8% growth since December 31, 2022 • 4.6% organic growth; organic backlog growth in Water and Buildings • Represents approximately 12 months of work San Fernando Groundwater Basin Remediation Project 14 Los Angeles, California, US
Slide 15: Major Project Awards
Major Project Awards Lithium-ion Battery Hamdan Bin Rashid Cell Manufacturing Cancer Hospital Facility Q4 AND YEAR END 2023 • $1 billion project expected to be largest factory in • Stantec chosen to provide design services for the western Canada for high performance lithium-ion Hamdan Bin Rashid Can
Slide 16: Major Project Awards
Major Project Awards • Stantec selected to design £4 billion battery manufacturing facility in the United Kingdom for Agratas, Tata Group’s global manufacturing business. • 3.2 million square foot facility will support United Q4 AND YEAR END 2023 Kingdom’s green energy transition; one of the largest
Slide 17: 2024 Financial Targets
2024 Financial Targets Previously Published 2024 ANNUAL 2024 Annual Range RANGE Q4 2023 Net revenue growth 7% to 12% 11% to 15% Adjusted EBITDA as % of net 16.2% to 17.2% 16.2% to 17.2% revenue1 Adjusted net income as % of net above 8% above 8.0% revenue1 Adjusted diluted EPS growth1 11% to 16% 12%
Slide 18: Theresa Jang CFO Planned Retirement
Theresa Jang CFO Planned Retirement Theresa will remain as chief financial officer until her successor is in place, ensuring a smooth transition 18
Slide 19: Q&A
Q&A Sonia Sotomayor Middle School Prince George’s County, Maryland, US 19