Quanta Services, Inc. · NYSE:PWR
Quanta Services — Investor Presentation (November 2016)
33 slides from Quanta Services's investor presentation, November 2016
Slide 1: Quanta Services Investor Presentation
Quanta Services Investor Presentation Nov. / Dec., 2016 NYSE: PWR
Slide 2: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer This presentation (and oral statements regarding the subjects of this presentation) includes forward-looking statements intended to qualify under the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. These forward-
Slide 3: Key Takeaways
Key Takeaways • Quanta continues to see opportunities to increase shareholder value through growth in revenues and EPS over a multi-year period • Believe 2015 was a transition year to improved financial performance in 2016 • Quanta is the leading specialty infrastructure contractor in the markets we
Slide 4: Strategically Focused, Operationally Diverse
Company Overview Strategically Focused, Operationally Diverse 2015 Consolidated Revenue = $7.6 Billion* Oil & Gas Infrastructure 35% Electric Power 65% 2016 Est. Revenue = $7.7 Billion ** Revenue by Geography Estimated Revenue by Contract Type Estimated Revenue by Project Type MSA Unit Price New U.S
Slide 5: Quanta Is A Leading Integrated Infrastructure Solutions Provider
Company Overview Strategically Focused, Operationally Diverse Quanta Is A Leading Integrated Infrastructure Solutions Provider • Transmission • Mainline Pipeline • Distribution • Substation • Shale Midstream Pipe • Gas Distribution • Compression, • Pipeline Integrity • Energized • EPC Fossil Service
Slide 6: Diverse & High Quality Customer Base
Company Overview Diverse & High Quality Customer Base • No single customer accounted for more than 8% of revenues in 2015 • The ten largest customers accounted for approximately 36% of revenues in 2015 • Strong relationships with the majority of U.S. investor owned utilities and Canadian utilities –
Slide 7: Leading Energy Infrastructure Solutions Provider
Company Overview Leading Energy Infrastructure Solutions Provider • Industry leading safety performance • Recognized market leader in electric power and oil and gas pipeline construction in North America • Entrepreneurial business model and culture • Broad, self-performing platform developed through
Slide 8: Differentiated Competitive Position – In the Sweet Spot
Company Overview Differentiated Competitive Position – In the Sweet Spot Quanta vs. Specialty Contractors Quanta vs. Traditional E&Cs 100% Est. Self Perform Capability 80% 60% 40% 20% *Bubble Size = Avg. Market Cap *Bubble Size = Avg. Market Cap 0% Smaller Larger Est. Large Project Capability • Quan
Slide 9: Differentiated Competitive Position – In the Sweet Spot
Company Overview Differentiated Competitive Position – In the Sweet Spot • Quanta is uniquely positioned to meet customer needs versus both specialty contractors and traditional engineering and construction companies 100% • Customers understand that skilled labor is critical to project success Est.
Slide 10: Multiyear Infrastructure Investment Cycle
Multiyear Infrastructure Investment Cycle For Electric Power and Oil and Gas Infrastructure • Electric Power - See growth opportunities driven by: • Need to repair, replace, upgrade and maintain transmission and distribution infrastructure throughout North America • Regulation is driving grid invest
Slide 11: Continued Transmission Growth Opportunities
Electric Power Continued Transmission Growth Opportunities • The North American electric grid requires significant investment due to many decades of underinvestment and changing needs • Transmission spending has increased to +3x historical spending levels in North America • Reliability initiatives (
Slide 12: Additional Growth Opportunities
Electric Power Additional Growth Opportunities • Strategic relationships account for more than 50% of electric power segment revenues • Distribution services growing as reliability and Est. North American Distribution modernization are utility priorities Construction Market • Smaller and medium size
Slide 13: Long-Term North American Oil & Gas Production Trends
Oil & Gas Infrastructure Long-Term North American Oil & Gas Production Trends U.S. Shale Natural Gas Production U.S. Tight Oil Production Canadian Oil Sands & Conventional Production 2005-2025 (trillion cubic feet) 2005-2025 (millions of barrels per day) (Millions of barrels per day) 18 6 16 5 14 12
Slide 14: Long-Term North American Oil & Gas Production Trends
Oil & Gas Infrastructure Long-Term North American Oil & Gas Production Trends Est. Large Pipeline Project Miles In Construction • Need for pipeline and related infrastructure driven by the significant increase in North American 4,798 4,730 unconventional natural gas and oil production – 4,099 3,718
Slide 15: Oil Price Volatility – What Does It Mean?
Oil & Gas Infrastructure Oil Price Volatility – What Does It Mean? • A low percentage of our business is directly tied to oil related projects – natural gas a larger influence • Industry estimates call for continued high levels of oil and gas production over near- and long-term • Most of our service
Slide 16: Initiatives to Grow the Business Over the Next Five Years
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years • Ongoing programs to continuously improve safety, leadership development, operational performance standards and results • Safety ingrained in Quanta’s culture. Strive for incident free environment • De
Slide 17: Initiatives to Grow the Business Over the Next Five Years
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years • Acquisitions have and will continue to play a strategic role in differentiating Quanta in the marketplace and positioning the company for profitable long-term growth • Seek well respected, entrepreneu
Slide 18: Acquisition Rationale Examples
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years • Significantly enhanced Canadian large pipeline • 2014 - Canadian Large Pipeline & Midstream Oil & Gas capabilities Pipeline Services • Improved midstream gathering, facilities, integrity and fabricati
Slide 19: Financial Overview
Financial Overview
Slide 20: Revenue, GAAP and Adjusted Diluted EPS
Recent Financial Performance Revenue, GAAP and Adjusted Diluted EPS For the Years Ended December 31, Revenue GAAP Diluted EPS (1) Adjusted Diluted EPS (1) ($ in millions) (3) * $1.73 $1.85 (2) (2) $7,747 $7,572 $7,700 $1.40 $1.56 $1.54 (2) $1.22 $1.22 (4) $1.20 $1.37 $6,412 $5,825 $1.11 (5) $0.62 20
Slide 21: Revenue and Operating Income Margin by Segment
Recent Financial Performance Revenue and Operating Income Margin by Segment For the Years Ended December 31, Electric Power Oil & Gas Infrastructure ($ in millions) ($ in millions) $5,303 $2,635 $4,937 $2,445 $4,290 $4,542 $1,870 $1,535 8.3% 7.4% (3) 12.4% 11.5% 5.4% 10.7% (1) 3.6% (4) 7.5% (2) 2012
Slide 22: Strong Backlog
Recent Financial Performance Strong Backlog 12-Month Backlog Total Backlog ($ in millions) ($ in millions) $9,843 $9,236 $9,387 $5,766 $8,237 $5,220 $5,209 $4,904 $6,525 $3,699 12/31/12 12/31/13 12/31/14 12/31/15 9/30/2016 12/31/12 12/31/13 12/31/14 12/31/15 9/30/2016 Electric Power Oil & Gas Infras
Slide 23: Strong Balance Sheet to Support Growth Strategies
Recent Financial Performance Strong Balance Sheet to Support Growth Strategies ($ in millions) 12/31/2012 12/31/2013 12/31/2014 12/31/2015 9/30/2016 Cash and Equivalents $ 395 $ 489 $ 191 $ 129 $ 117 Other Debt -- 2 12 15 7 Credit Facility -- -- 69 467 480 Total Debt -- 2 81 482 487 Total Equity 3,7
Slide 24: Historical Cash Flow
Recent Financial Performance Historical Cash Flow Cash Flow from Continuing Operations Free Cash Flow from Continuing Operations* For the Years Ending December 31, For the Years Ending December 31, ($ in millions) ($ in millions) $618 $434 $371 $248 $163 $117 $15 2012 2013 2014 2015 2012 2013 2014 2
Slide 25: Committed to Generating Shareholder Value
Significant Corporate Actions Committed to Generating Shareholder Value Acquired $1.7 Billion of Quanta Common Stock Executed on $1.25 Billion Share Repurchase Authorization • Aug. 2015 – Announced a new $1.25 billion share repurchase authorization through Feb. 28, 2017 • Completed a $750 million ac
Slide 26: 2012 – 2015 Use of Capital & Go-Forward Priorities
Recent Financial Performance 2012 – 2015 Use of Capital & Go-Forward Priorities Use of Capital Priorities • Working Capital (Amounts in millions) • Capital Expenditures • Acquisitions • Investments $221 $49 $1,700 $265 • Stock Repurchase $485 $848 $1,353 $783 $728 $315 $98 $129 Ending Cash Cash from
Slide 27: Positioned for Growth
Summary Positioned for Growth Operational & Safety Excellence Multi-Year Growth Opportunities Innovative, Industry Leading Solutions Scale & Scope Financial Strength Investor Presentation Page 27
Slide 28: Connect With Quanta Services Investor Relations
Connect With Quanta Services Investor Relations Download the Quanta Services IR App Available for iPhone, iPad & Android mobile devices @QuantaIR QuantaServicesIR Investor Contact Corporate Office Kip Rupp, CFA 2800 Post Oak Blvd., Suite 2600 Vice President – Investor Relations Houston, TX 77056 713
Slide 29: Reconciliation of Adjusted Net Income from Continuing Operations Attributable to Common Stock
Appendix Reconciliation of Adjusted Net Income from Continuing Operations Attributable to Common Stock Estimated Guidance Range 2013 2014 2015 2016 2016 Reconciliation of adjusted net income from continuing operations attributable to common stock: 372,057 269,224 120,286 184,500 192,500 Net income f
Slide 30: Reconciliation of Electric Power and Oil & Gas Infrastructure Services Segments Operating Income, As Adjusted
Appendix Reconciliation of Electric Power and Oil & Gas Infrastructure Services Segments Operating Income, As Adjusted Oil & Gas Amounts in millions, except percentages Electric Power Infrastructure 12/31/2014 12/31/2015 12/31/2014 Revenues $ 5,302.7 $ 4,937.3 $ 2,444.6 Operating Income (as reported
Slide 31: Reconciliation of Free Cash Flow
Appendix Reconciliation of Free Cash Flow 2012 2013 2014 2015 Net Cash Provided by Operating Activities of Continuing Operations 116,715 370,558 247,742 618,183 Less: Net Capital Expenditures: Additions to Property and Equipment (171,983) (221,946) (247,216) (209,968) Proceeds from Sale of Property
Slide 32: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer This presentation (and oral statements regarding the subject matter of this presentation) includes “forward-looking statements” intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995. These sta
Slide 33: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer • Our dependence on fixed price contracts and the potential to incur losses with respect to the contracts; • Our ability to successfully identify, complete, integrate and realize synergies from acquisitions; • Estimates relating to our use of percentage-of-comple
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