Mdu Resources Group, Inc. · NYSE:MDU
Mdu Resources — Investor Presentation (September 2020)
45 slides from Mdu Resources's investor presentation, Sep 23, 2020
Slide 1: September 2020 Investor Relations
SEPTEMBER 2020 INVESTOR RELATIONS
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS During the course of this presentation, we will make certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual r
Slide 3: MDU Resources is Building a Strong America
MDU Resources is Building a Strong America® ion #53 460 With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our markets while being a safe and great place to work. Company founded in 1924 | * Headquartered in Bismarck, ND Conductin
Slide 4: Company Overview
COMPANY OVERVIEW A strong infrastructure is the heart of the American economy. It is the natural gas and electricity that power business, industry and our daily lives. It is the pipes and wires that connect our homes, factories, offices and stores to bring them to life. It is the transportation netw
Slide 5: Competitive Position
COMPETITIVE POSITION • 2020 YTD EPS* - $0.62; Up 19% from 2019 • Annualized dividend of $0.83 per share. 82 consecutive years Strong Financial Position of quarterly dividend payments • Capitalization ratio of 55.1% equity* *As of June 30, 2020 • Licensed to operate in 43 states • 1.1 billion tons of
Slide 6: Key Performance Indicators
KEY PERFORMANCE INDICATORS YTD AS OF JUNE 30, 2020 Operating Revenues Net Income (in billions) (in millions) $3.00 $2.56 $150.00 $2.39 $124.8 $102.7 $2.00 $100.00 $1.00 $50.00 $0.00 $0.00 2019 2020 2019 2020 EBITDA From Continuing Earnings Per Share Operations $400.00 (in millions) $345.1 $1.00 $293
Slide 7: Earnings Contributions
EARNINGS CONTRIBUTIONS TRAILING TWELVE MONTH AS OF JUNE 30, 2020 EARNINGS Regulated Energy 35% Construction 65% EBITDA Regulated Energy Construction 45% 55% 7
Slide 8: Capital Expenditures
CAPITAL EXPENDITURES Electric and natural gas utility − System infrastructure upgrades and $900.00 replacements $20 $800.00 − Natural gas combustion turbine $700.00 $154 Pipeline and midstream $79 $600.00 $20 − North Bakken expansion (millions) $500.00 Construction materials and $161 $256 $157
Slide 9: Dividend Growth
DIVIDEND $0.85 GROWTH $0.83 82 consecutive years of $0.80 quarterly dividend payments Dividend increased Annualized Dividend Rate November 2019, making 29 $0.75 $0.75 consecutive years of increases Annualized dividend $0.83 per share $0.70 Member of S&P High-Yield Dividend Aristocrats index
Slide 10: Board Governance and Leadership
BOARD GOVERNANCE AND LEADERSHIP Committees of the Board of Directors 1 Director 20+ Years Director Audit Compensation Environmental Nominating & & Sustainability Governance Chenxi Wang 4 Directors 10-20 Years David M. Sparby 5 Directors Edward A. Ryan 1-10 Years John K. Wilson Karen B. Fagg Mark A.
Slide 11: COVID-19 – Our Response
COVID-19 – OUR RESPONSE Our products and services considered essential – Operations permitted to proceed with increased social distancing measures for our more than 14,000 employees Health and safety of employees, customers and communities a priority – Implemented work from home policies where a
Slide 12: Construction Services
MDU LISTED = MDU RESOURCES | Building a Strong America: INW74= GROUP.
Slide 13: Construction Services
CONSTRUCTION SERVICES 7,200 EMPLOYEES AT PEAK 42 STATES OF OPERATION 6 OUTSIDE CONSTRUCTION COMPANIES 12 INSIDE CONSTRUCTION COMPANIES Ranked 12th on ENR’s Top 600 Specialty Contractors List 13
Slide 14: Service Offerings
SERVICE OFFERINGS TRANSMISSION EXCAVATION DISTRIBUTION RENEWABLES EQUIPMENT INDUSTRIAL STORM WORK FIRE SUPPRESSION 14
Slide 15: Strategy
STRATEGY To be a top-tier national specialty contractor providing services and support to the electrical and mechanical industries by attracting and retaining a quality workforce across the United States and being a safe and great place to work. 15
Slide 16: Revenue Growth
REVENUE GROWTH FOR QUARTER ENDED JUNE 30 $600.0 $500.0 $497.2 $464.9 $400.0 millions $300.0 $336.3 $323.6 $286.0 $200.0 $100.0 $0.0 2016 2017 2018 2019 2020 16
Slide 17: Earnings Growth
EARNINGS GROWTH $30.0 FOR QUARTER ENDED JUNE 30 $27.9 $22.8 $20.0 millions $14.1 $12.4 $10.0 $7.0 $0.0 2016 2017 2018 2019 2020
Slide 18: Customer Satisfaction: Backlog
CUSTOMER SATISFACTION: BACKLOG AS OF JUNE 30 $1,400 $1,306 $1,200 $1,148 $1,000 $800 $888 millions $600 $596 $508 $400 $200 $0 2016 2017 2018 2019 2020 18
Slide 19: Growing Our Operations
GROWING OUR OPERATIONS Pride Electric, Inc. acquisition completed PerLectric Inc. acquisition completed February September 2019 2020 Expands and strengthens the services portfolio in Expands the geographic footprint into the Mid- the Seattle, WA market Atlantic Region Founded in 1993, Prid
Slide 20: Outlook
OUTLOOK $1.31 billion of backlog as of June 30, up 14% from 2019 – All-time record backlog High demand for specialty contracting work in the following areas: – High-tech, mission critical area – Gaming and hospitality – Medical and public sector – Electric transmission, distribution and gas util
Slide 21: Construction Materials
CONSTRUCTION i ‘ i i i i ils MDU RESOURCES GROUP, WC MDU LISTED Building a Strong America’ nwa
Slide 22: Construction Materials
CONSTRUCTION MATERIALS NEARLY 6,000 EMPLOYEES AT PEAK SEASON 15 STATES OF OPERATION 1.1 BILLION TONS OF RESERVES TOP 10 U.S AGGREGATE PRODUCER 22
Slide 23: Knife River Strategy
KNIFE RIVER STRATEGY Create value by treating our people well and leading our markets in quality, service and safety Enhance shareholder value by generating cash and continued meaningful growth Grow through M&A and greenfield Take advantage of our vertical integration 23
Slide 24: Revenue Growth
REVENUE GROWTH FOR QUARTER ENDED JUNE 30 $700.0 $600.0 $621.1 $596.0 $500.0 $541.4 $501.6 $509.6 $400.0 millions $300.0 $200.0 $100.0 $0.0 2016 2017 2018 2019 2020 24
Slide 25: Earnings Growth
EARNINGS GROWTH FOR THE QUARTER ENDED JUNE 30 $60.0 $50.0 $53.0 $40.0 millions $30.0 $33.7 $29.2 $20.0 $24.3 $21.2 $10.0 $0.0 2016 2017 2018 2019 2020 25
Slide 26: Construction Backlog
CONSTRUCTION BACKLOG AS OF JUNE 30 $1,200.0 $1,000.0 $1,042 $800.0 $875 $805 $766 $731 millions $600.0 $400.0 $200.0 $0.0 2016 2017 2018 2019 2020 26
Slide 27: Growing Our Operations
GROWING OUR OPERATIONS GROWTH STRATEGY SPOKANE PRESTRESS Maintain vertical integration Doubles the size of our Prestress Grow in current markets operations – Organic – Bridge components and commercial buildings – Bolt-On A market leader in the Pacific Explore new platforms Northwest – Focu
Slide 28: Outlook
OUTLOOK Backlog of $875 million as of June 30, 2020 Actively pursuing acquisition opportunities 28
Slide 29: Utility Electric & Natural Gas
UTILITY ELECTRIC & NATURAL GAS
Slide 30: Electric and Natural Gas
ELECTRIC AND NATURAL GAS 1,126,500 CUSTOMERS WA 800 MW 221,800 Customers 16.8% Rate Base MT ND OWNED GENERATION 111,600 Customers 206,520 Customers OR 12.4% Rate Base MN 37.7% Rate Base 8,100 77,680 Customers 5.1% Rate Base ID 22,100 Customers 1.3% Rate Base SD MILES OF TRANSMISSION 380,900 Customer
Slide 31: Customer Growth Rates
CUSTOMER GROWTH RATES Combined Utility 1,150,000 1.33% 5-Year CAGR 1,100,000 1,050,000 1,000,000 950,000 900,000 850,000 800,000 750,000 700,000 2015 2016 2017 2018 2019 31
Slide 32: Strategy
STRATEGY Grow the business by investing in the safety and reliability of our existing system Focus on organic growth first while managing operating costs Look to expand into areas where similar operating and growth objectives exist Pillars to success –Integrity, safety, employees, customers
Slide 33: Utility Electric & Natural Gas Outlook
UTILITY ELECTRIC & NATURAL GAS OUTLOOK Safely meet customer demand by upgrading and expanding infrastructure and facilities Customer base expected to continue growing by 1-2% annually Expects to grow rate base by 5% compounded annually over the next five years Focused on timely regulatory re
Slide 34: Pipeline
MDU . LISTED == MDU RESOURCES | Building a Strong America’ NW GROUP INC,
Slide 35: WBI Energy Assets and Operations
WBI ENERGY ASSETS AND OPERATIONS 4,000 MILES OF PIPE OVER 2.2 BCF/D SYSTEM CAPACITY 14 INTERCONNECTING POINTS 335 EMPLOYEES LARGEST STORAGE FIELD IN N. AMERICA 35
Slide 36: Strategy Statement
STRATEGY STATEMENT Building upon our core strengths and expertise, WBI Energy will become a leader in the Mid-Continent and Rocky Mountain regions in meeting North America’s energy needs BUILDING A STRONG AMERICA® 36
Slide 37: Our Strengths
OUR STRENGTHS Low risk, stable returns with regulated business Integrated pipeline, storage and interconnects in heart of Bakken Experienced, talented team Design, engineer, construct and operate capability BUILDING A STRONG AMERICA® 37
Slide 38: WBI in the Bakken
WBI Energy Transmission Non-WBI Transmission Pipeline Gas storage field Pipeline Interconnect Non-WBI Gas Plants WBI in the Bakken Service to 24 of 31 natural gas plants 6 Bakken interconnects WBI moves over 50% of Bakken gas More takeaway capacity needed 38
Slide 39: Upcoming and Completed Growth Projects
WBI Energy-Transmission Non-WBI Transmission Pipeline Gas storage field Demicks Lake Projects Pipeline Interconnect Expansion Projects Upcoming Growth Projects Project In-Service Date MMcf/d North Bakken Expansion 2021 250 Completed Growth Projects Project In-Service Date MMcf/d Demicks Lake Project
Slide 40: Pipeline Outlook
PIPELINE OUTLOOK North Bakken Expansion project – Will increase capacity, as designed, by an estimated 250 million cubic feet per day – Expected to start construction in early 2021 – Expected to be in service late 2021 Profitably grow core business – Be the pipeline of choice for increasing Bakk
Slide 41: Questions
INVESTOR RELATIONS QUESTIONS
Slide 42: Appendix: Reconciliation of Non-GAAP Measures: EBITDA (TTM June 2019)
APPENDIX RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: EBITDA Trailing Twelve Months as of June 30, 2019 (dollars in millions) Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $47.8 $42.2 $31.4 $78.0 $86.5 $2.9 $288.8 continuing ops.
Slide 43: Appendix: Reconciliation of Non-GAAP Measures: EBITDA (YTD June 2019)
APPENDIX RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: EBITDA Year to Date as of June 30, 2019 (dollars in millions) Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $23.0 $30.3 $14.0 $42.9 $(5.3) $(0.7) $104.2 continuing ops. Adjustm
Slide 44: Appendix: Reconciliation of Non-GAAP Measures: EBITDA (TTM June 2020)
APPENDIX RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: EBITDA Trailing Twelve Months as of June 30, 2020 (dollars in millions) Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $55.3 $40.7 $32.0 $94.9 $140.5 $(7.1) $356.3 continuing op
Slide 45: Appendix: Reconciliation of Non-GAAP Measures: EBITDA (YTD June 2020)
APPENDIX RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: EBITDA Year to Date as of June 30, 2020 (dollars in millions) Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $23.5 $31.4 $16.3 $44.8 $14.8 $(5.5) $125.3 continuing ops. Adjustme
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