Stantec Inc · TSX:STN
Stantec — Investor Presentation (August 2021)
26 slides from Stantec's investor presentation, Aug 4, 2021
Slide 1: Investor Presentation
Investor Presentation August 4, 2021
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this presentation constitute forward-looking information and statements within the meaning of applicable securities law (collectively, "forward-looking statements"). Forward-looking statements in this presentation i
Slide 3: Stantec at a glance
Stantec at a glance EXCELLENCE INNOVATION PEOPLE GROWTH 22,000 7.6% STN Employees Globally 10-Year Adjusted Diluted TSX & NYSE EPS CAGR(1) 350 65+ YEARS CDN $6.7B(2) Offices Worldwide Of Uninterrupted Profitability Market Capitalization 1. Q2 2021 2. August 4, 2021 3
Slide 4: Q2 2021 Executing our strategy
Q2 2021 Executing our strategy Net Revenue Adjusted EBITDA Margin $908M 16.1% 2.2% increase on a 1.1% increase constant currency basis Q2 2021 Adjusted Diluted EPS Backlog $0.62 $4.6B 19.2% increase 6.0% organic growth since Dec 31, 2020. Additional $1.2B of notified awards not yet in backlog. 4
Slide 5: We are a proven sustainability leader
We are a proven sustainability leader Net Zero #5 #1 Carbon neutral Ranked fifth Ranked most LEADERS IN SUSTAINABILITY for 2022, then most sustainable sustainable net zero for 2030 corporation corporation in the world in North America Our Operational Pledge 2021 Corporate Knights Global 100 CDP (1)
Slide 6: Diversified Global Footprint – Local Presence
Diversified Global Footprint – Local Presence GROWTH Distribution of Net Revenue PEOPLE 30% INNOVATION 51% $3.6B TTM Q2 2021 19% EXCELLENCE United States Canada Global 6
Slide 7: Engineering, Architecture and Environmental Services
Engineering, Architecture and Environmental Services BUSINESS OPERATING UNITS (TTM Q2 2021 Net Revenue) ENVIRONM ENTAL ENERGY & GROWTH INFRASTRUCTURE WATER BUILDINGS SERVICES RESOURCES $989M $771M $736M $569M $501M PEOPLE INNOVATION EXCELLENCE Signatory to the UN Global Compact Stantec is a signator
Slide 8: Infrastructure
Infrastructure Net revenue by Sector Q2 YTD 2021 Front-end design and engineering services, construction management, and inspection work for private and public sector clients Roadways GROWTH Community Dev 150+ 12 28% Transit & Rail Envision Envision-certified of Q2 YTD 2021 PEOPLE Sustainability pro
Slide 9: Water
Water Net revenue by sector Q2 YTD 2021 Engineering, design, construction management, financial and enterprise Conveyance management, program and asset management, and intelligent platforms for public and private sector clients Wastewater Treatment GROWTH Water Treatment 1,650 67 22% Water Resources
Slide 10: Buildings
Buildings Net revenue by sector Q2 YTD 2021 Pre-design, design, and construction administration services in planning, Healthcare architecture, interior design, buildings engineering, and sustainability and building performance for vertical infrastructure Commercial GROWTH Civic 650+ 35+ 21% Educatio
Slide 11: Environmental Services
Environmental Services Net revenue by sector Q2 YTD 2021 Planning and permitting services for private sector clients, and remediation Water activities for private and public sector clients Oil & Gas GROWTH Buildings 40,000+ 1,000 16% Power & Dams Transportation acres miles of streams and of Q2 YTD 2
Slide 12: Energy & Resources
Energy & Resources Net revenue by sector Q2 YTD 2021 Industrial engineering services for private sector energy, resource, and power clients Mining GROWTH Power 37+ GW 115+ GW 13% Oil & Gas solar & wind renewable hydro renewable of Q2 YTD 2021 Waterpower PEOPLE energy generation capacity energy gener
Slide 13: Our commitment to a robust ESG strategy
SUSTAINABILITY Our commitment to a robust ESG strategy 13
Slide 14: UN Sustainable Development Goals (SDGs)
UN Sustainable Development Goals (SDGs) GROWING CONTRIBUTION TO UN SDGs AS MEASURED BY GROSS REVENUE A GLOBAL LEADER IN SUSTAINABILITY 2020 49% 2019 45% $- $1,000 $2,000 $3,000 $4,000 $5,000 Gross Revenue ($ millions) Other 14
Slide 15: Strategic growth priorities aligned with UN SDGs
Strategic growth priorities aligned with UN SDGs COASTAL ECOSYSTEM SMART CITIES AND ENERGY RESILIENCE RESTORATION URBAN PLACES TRANSITION US$300B1 US$9,000B1 US$1,700B2 US$13,040B3 A GLOBAL LEADER IN SUSTAINABILITY Sustainable Cities Affordable and Sustainable Cities Life on Land and Communities Cle
Slide 16: Carbon Neutral to Net Zero
Carbon Neutral Net Zero 2022 2030 Pledged to be carbon neutral Committed to set 1.5ºC CARBON NEUTRAL TO NET ZERO for our 2022 operational science-based emissions emissions. reduction targets. Our sustainability pledges 16
Slide 17: Social leadership
Social leadership Community Engagement (CE) Inclusion & Diversity Gender Pay Equity A GLOBAL LEADER IN SUSTAINABILITY $45M by 2025 We support I&D through A review of our pay practices Committed to investing a further partnerships to gain access to top found that women have received $15 million throu
Slide 18: Good Governance
Good Governance Certified Integrated Management System: • Quality Management (ISO 9001) • Occupational Health & Safety Management (OHSAS 45001:2018) A GLOBAL LEADER IN SUSTAINABILITY • Environmental Management (ISO 14001:2015) • IT Service Management System (ISO 20000-1:2018) • Information Security
Slide 19: Q2 2021 Financial Performance
Q2 2021 Q2 2021 Financial Performance Theresa Jang - Executive Vice President and Chief Financial Officer 19
Slide 20: Q2 2021 results
Q2 2021 results Adjusted EBITDA and margin ($ millions, %) Q2 2021 Q2 2020 Change % Year- (In millions of Canadian dollars, except per share over-year amounts and percentages) $ $ change Net revenue 908.3 951.1 (4.5) Gross margin 483.3 489.7 (1.3) Q2 2021 Administrative and marketing expenses 341.3
Slide 21: Impact of stronger Canadian Dollar on US earnings
Impact of stronger Canadian Dollar on US earnings Q2 21 vs Q2 20 YTD 21 vs YTD 20 US$1 to CAD $1.22 vs $1.39 $1.25 vs $1.37 Reduction in Q2 2021 Revenue $60.9M $90.5M Adjusted EBITDA $8.2M $11.6M Adjusted net income $4.0M $5.5M Adjusted diluted EPS $0.04 $0.05 21
Slide 22: Balance sheet strength
Balance sheet strength Net debt to adjusted EBITDA(1) Days sales outstanding Q2 2021 0.9x Target range 76 days Target decreased to at June 30, 2021 1.0 - 2.0x at June 30, 2021 <80 days (1) Net debt to adjusted EBITDA and days sales outstanding are non-IFRS measures discussed in the Definitions secti
Slide 23: Liquidity and capital allocation
Liquidity and capital allocation Quarterly and TTM Free cash flow(1) ($ millions) (Comparisons to YTD 2020) • $74 million decrease in free cash flow YTD (1) • $51 million used to repurchase shares YTD • ~$800 million in credit capacity largely undrawn Q2 2021 Capital returned to shareholders Cash fl
Slide 24: 2021 Outlook – Earnings guidance increased
2021 Outlook – Earnings guidance increased Adjusted diluted EPS growth target now 4% -7% (1) Upward revision of guidance ranges Geography 2021 Regional Outlook 2021 Targets – Updated 2021 YTD Performance United States • Slower start to recovery 15.4% 2021 OUTLOOK Adjusted EBITDA(1) 14.0% 15.0% 16.0%
Slide 25: Stantec ideally positioned to benefit from US stimulus
Stantec ideally positioned to benefit from US stimulus Bipartisan Senate bill would boost spending ~6% above ACEC forecast over next six years (1) ACEC Engineering and Design Addressable areas of bipartisan bill (2) Funding Services Forecast (1) ($ billions in output in A/E Services) Transportation
Slide 26: Committed to our strategic targets for 2023
Committed to our strategic targets for 2023 Net Adjusted Earnings Revenue per Share >10% >11% STRATEGIC TARGETS CAGR CAGR Adjusted EBITDA Adjusted Return on Margin Invested Capital 16-17% >10% Of Net Revenue Maximizing long-term, sustainable value through our value creators 26