North American Construction Group Ltd. · TSX:NOA
North American Construction — Q2 2019 Earnings Presentation
15 slides from North American Construction's earnings presentation, Jul 30, 2019
Slide 1: Q2 2019 Results
CORPORATE PRESENTATION - Q2 2019 RESULTS - JULY 30, 2019
Slide 2: Q2 2019 – Business Update
Q2 2019 – Business Update ▪ Strong performance validates financial projections related to recent acquisitions ▪ Top decile safety record as injury frequency rate well below 0.5 target on 3.5 million exposure hours (1) ▪ Long-term consistent contracts are mitigating the impact of seasonality and prov
Slide 3: 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 ▪ Ongoing safety excellence through continuous development of process and culture ▪ Promote active particip
Slide 4: EBITDA and Earnings per Share
EBITDA and Earnings per Share (millions of Canadian dollars, except per share amounts) Q2 2019 Q2 2018 Q2 2019 YTD Q2 2018 YTD Revenue $177 $79 $363 $194 Gross profit 23 13.3% 10 12.1% 53 14.6% 36 18.8% General & administrative expenses (2) 6 3.4% 5 6.9% 15 4.1% 11 5.8% Net income 14 - 21 11 Adjuste
Slide 5: Free Cash Flow & Growth Capital
Free Cash Flow & Growth Capital (millions of Canadian dollars, except per share amounts) Q2 2019 Q2 2018 Q2 2019 YTD Q2 2018 YTD Adjusted EBITDA $37) $15) $89) $54) Sustaining capital expenditures (36) (14) (91) (37) Cash interest paid (4) (1) (9) (4) Working capital & other 5) 13) 7) 17) Free Cash
Slide 6: Balance Sheet
Balance Sheet (millions of Canadian dollars, except per share amounts) June 30, 2019 December 31, 2018 December 31, 2017 Cash $17 $20 $8 Liquidity 165 127 115 Property, plant & equipment 586 528 279 Total assets 775 690 384 Senior debt (2) (3) $292 1.6x $322 1.8x $100 1.6x Net debt (2) (4) 392 2.2x
Slide 7: Returns on Capital & Equity
Returns on Capital & Equity Return on Invested Capital – currently at 8.3% ▪ Current invested capital of $647 million represents 92% increase from June 2018 ▪ Includes front weighted sustaining capital program in the first half of 2019 Return on Equity – 18.1% 25.0% 40.0% ▪ Consistent positive net e
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 89) $175 – $190 $190 – $215 Adjusted Earnings Per Share (2) $0.31 $0.99 $0.93) $1.60 – $1.90 $1.90 – $2.30 Sustaining capital spending 30 55 92) $110 – $120 $95 – $115 Free Cash Flow
Slide 9: Enterprise Value & Trading Multiples
Enterprise Value & Trading Multiples $850 $748 (1) $668 Enterprise Value $650 $510 $450 $338 $253 $282 $234 $250 $158 $50 2012 2013 2014 2015 2016 2017 2018 Q2-2019 ($150) Net debt Market capitalization 22.0x EPS Multiple (2) EBITDA Multiple (2) 6.0x 17.0x 4.5x 4.0x 12.0x 8.3x 7.0x 3.0x Jul-17 Jan-1
Slide 10: Shareholder Friendly Activity
Shareholder Friendly Activity NCIB Purchase Track Record ▪ 11 million shares purchased at cost of $4.90 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% dil
Slide 11: Appendix
Appendix })
Slide 12: Company Overview
Company Overview ▪ Premier provider of mining services and heavy construction in Mining Services Mining western Canada ▪ Provide comprehensive & integrated approach to customer needs from consultation to completion ▪ Over 65 years in business ▪ TSX and NYSE listings: “NOA” ▪ Share price: $13.23 (1)
Slide 13: 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 14: Heavy Equipment Fleet
Heavy Equipment Fleet ▪ Fleet of over 700 assets provides operational flexibility ▪ 620 owned, 100 on short-term rental arrangements ▪ Step change in November 2018 with purchase of +200 units ▪ Fleet utilization in 2018 reflects five-year high ▪ Half of operating hours generated from haul trucks ▪ 1
Slide 15: 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
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