North American Construction Group Ltd. · TSX:NOA
North American Construction — Q3 2019 Earnings Presentation
17 slides from North American Construction's earnings presentation, Oct 29, 2019
Slide 1: Q3 2019 Results
CORPORATE PRESENTATION - Q3 2019 RESULTS - OCTOBER 29, 2019
Slide 2: Everyone Gets Home Safe
EVERYONE GETS HOME SAFE Health, Safety and Environment are recognized as an integral part of our business ▪ Process & practices based on conviction that ALL workplace incidents are preventable ▪ Promote active participation at all levels starting with focus on front line leadership ▪ Consistent reci
Slide 3: Q3 2019 – Business Highlights
Q3 2019 – Business Highlights ▪ Consistent & unrelenting rain in July & August resulted in an estimated $20 million impact on Q3 revenue ▪ Operations performed exceptionally well in difficult operating conditions and margin results rebounded in September ▪ Significant working capital fluctuation in
Slide 4: EBITDA and Earnings per Share
EBITDA and Earnings per Share (millions of Canadian dollars, except per share amounts) Q3 2019 Q3 2018 Q3 2019 YTD Q3 2018 YTD Revenue $166 $85 $530 $279 Gross profit 18 11.0% 14 16.9% 71 13.5% 51 18.2% General & administrative expenses (1) 5 3.0% 6 7.3% 20 3.7% 18 6.3% Net income 8 1 29 13 Adjusted
Slide 5: Cash Flow from Operations
Cash Flow from Operations (millions of Canadian dollars, except per share amounts) Q3 2019 Q3 2018 Q3 2019 YTD Q3 2018 YTD Cash from operations prior to working capital $30) $18) $104) $69) Sustaining net capital additions ($22) ($4) ($100) ($34) Net changes in working capital (35) (10) (29) 4) Free
Slide 6: Balance Sheet
Balance Sheet (millions of Canadian dollars, except per share amounts) September 30, 2019 December 31, 2018 December 31, 2017 Cash $12 $20 $8 Liquidity 103 127 115 Property, plant & equipment 598 528 279 Total assets 795 690 384 Senior debt (1) (2) $338 1.7x $322 2.9x $100 1.6x Net debt (1) (3) 441
Slide 7: Returns on Capital & Equity
Returns on Capital & Equity Return on Invested Capital – upward trend currently at 8.8% ▪ Current invested capital of $696 million represents increase of 2.0x from September 2018 ▪ Revenue, Adjusted EPS and EBITDA also all 2.0x or higher validating projections of Q4 2018 acquisitions 25.0%Return on
Slide 8: 2019 Full Year & 2020 Outlook
2019 Full Year & 2020 Outlook 2017 2018 2019 YTD 2019 Full Year _ 2020 Outlook _ KEY MEASURES Adjusted EBITDA 63 102 126) $170 – $180 $190 – $215 Adjusted Earnings Per Share $0.31 $0.99 $1.34) $1.65 – $1.85 $1.90 – $2.30 Sustaining capital spending 30 55 100) $115 – $120 $95 – $115 Free Cash Flow 19
Slide 9: 2020 Free Cash Flow Outlook
2020 Free Cash Flow Outlook $90 $2 $15 $6 $80 $5 $5 $70 $12 $60 $20 $50 $70 to $100 $40 $30 $20 to $20 $40 $10 One-time capital Q3 2019 wet One-time Higher Higher Lower Lower - weather payment revenue sustaining rental & components 2019 FCF Fleet acquired in - - (~$50M) capital subcontractor costs 2
Slide 10: Enterprise Value & Trading Multiples
Enterprise Value & Trading Multiples $825 $850 Enterprise Value (1) $669 $650 $510 $450 $338 $253 $282 $234 $250 $158 $50 2012 2013 2014 2015 2016 2017 2018 Q3-2019 ($150) Net debt Market capitalization EPS Price Multiple (2) EBIDTA EV Multiple (2) 6.0x 20.0x 15.0x 4.5x 10.0x 3.7x 7.0x 5.0x 3.0x Sep
Slide 11: Shareholder Friendly Activity
Shareholder Friendly Activity NCIB Purchase Track Record ▪ 11 million shares purchased at cost of ~$5.00 per share; represents 98% of limit & 31% of shares available in 2013 Long Term Incentive Hedging Plan ▪ 4 million shares purchased by the Company into the trust since 2013 has avoided over 15% di
Slide 12: Appendix
Appen dix Car AMERICAN CONSTRUCTION GROUP
Slide 13: Company Overview
Company Overview ▪ Premier provider of mining services and heavy construction in western Canada with over 65 years in business Mining Services Mining ▪ 49% interest in Nuna Group of Companies, the premier mining contractor in northern Canada for more than 25 years ▪ Mobile fleet of over 750 heavy as
Slide 14: Long Term Oil Sands Contracts
Long Term Oil Sands Contracts ▪ Long-term contracts in place at major oil sands sites with run-of-mine projections averaging 30+ years of remaining life ▪ Major barriers to entry given up-front capital required to assemble and deploy a fleet of heavy equipment on site ▪ Historical production from co
Slide 15: Heavy Equipment Fleet
Heavy Equipment Fleet ▪ Over 750 heavy equipment assets provide operational flexibility ▪ Fleet count now includes Nuna equipment (126 assets) ▪ Step change in Q4 2018 with purchase of over 300 units ▪ 18 Caterpillar 797B trucks to be delivered in 2019 ▪ New replacement value of heavy equipment flee
Slide 16: Nuna Group of Companies
Nuna Group of Companies ▪ Nuna Group of Companies is the premier mining contractor in northern Canada ▪ Formed in 1993, Nuna is the established incumbent contractor on the mine sites in Nunavut and the Northwest Territories ▪ Q3 2019 represented strongest quarter of activity on record with momentum
Slide 17: Forward-Looking Statements
Forward-Looking Statements The information provided in this presentation contains forward-looking statements and information which reflect the current view of North American Construction Group Ltd. (the “Company”) with respect to future events and financial performance, including the Company’s expec
North American Construction Group — Q3 2019 Earnings Presentation on 6ix