North American Construction Group Ltd. · TSX:NOA
North American Construction — Investor Presentation (February 2019)
19 slides from North American Construction's investor presentation, February 2019
Slide 1: Investor Presentation
Investor Presentation February 2019
Slide 2: Company Overview
Company Overview ▪ Premier provider of heavy construction and mining services Mining Mining in western Canada ▪ Provides a comprehensive & integrated approach to customer needs from consultation to completion ▪ 65 years in business ▪ TSX and NYSE listings: “NOA” ▪ Share price: $15.02 (1) ▪ 52-week l
Slide 3: Strategic Focus
Strategic Focus ▪ More than 40 years in operating in northern Alberta’s harsh environment ▪ Knowledge to determine optimal solutions for customers Dominant Position ▪ Operational excellence in safety, cost structure, productivity & customer satisfaction in Niche Market ▪ Long-term customer relations
Slide 4: Operational Excellence
Operational Excellence $700 30% ▪ Relentless approach to low-cost operations on customer mine sites $600 25% ▪ Focus on customer needs and operational 23% 25% excellence initiatives resulted in significant improvement in margins from 2012 to 2018 $500 ▪ During same time frame, focused effort on 22%
Slide 5: Shareholder Activity
Shareholder Activity Share Purchase Program ▪ Since October 2013, 10.7 million shares purchased at an average price below $5 per share through NCIB activity ▪ Represents more than 98% of approved limit and 30% of total shares available in October 2013 Dividend Payment ▪ Annual aggregate dividend of
Slide 6: Balance Sheet Management
Balance Sheet Management Enterprise Value (1) $800 $739 $600 $510 $400 $338 $253 $282 $234 $158 $200 $0 2012 2013 2014 2015 2016 2017 2018 Debt, net of cash Market capitalization Share Price over Tangible Book Value Senior Debt Leverage (2) 5.9x 3.0x 2.6x 2.5x 2.0x 2.9x 1.2x 1.2x 1.1x 2.0x 1.5x 1.0x
Slide 7: Strong Organic Opportunities
Strong Organic Opportunities Core Market Upside – Oil Sands Expand Equipment Maintenance Grow support services through term contracts on Leverage expertise to secure market share of existing and new mines third party repair & maintenance services Additional Resource Markets Infrastructure Projects E
Slide 8: Mine Site Presence – First On, Last Off
Mine Site Presence – First On, Last Off Project Development Phase (3-4 years) Ongoing Operations Phase (30-50 years) ▪ Initial mine site development, project site ▪ Overburden removal, mine infrastructure development, development, airstrips, piping reclamation, tailing ponds remediation, equipment a
Slide 9: Oil Sands Customers
Oil Sands Customers ▪ NACG has a long & proud history with all customers in the Fort McMurray oil sands region ▪ Consolidation of heavy equipment contractors has positioned NACG as the prime heavy equipment contractor in the region Suncor Energy Inc. ▪ Four continuous decades of heavy construction &
Slide 10: Best-in-Class Maintenance
Best-in-Class Maintenance Facilities ▪ Acheson - Major fleet repairs & overhauls ▪ Ruth Lake (Fort McMurray) - Major inspections & repairs ▪ Site - Maintain unit health and utilization Maintenance Strategy ▪ Planning – improved wrench time productivity ▪ Reliability – increased component utilization
Slide 11: Acheson Facility
Acheson Facility ▪ 10-bay maintenance and rebuild facility on 20 acres with integrated office • Located immediately west of Edmonton, 8-month build time, fully operational November 2018 • Owned facility with estimated payback of 5 years ▪ Purpose-built for North American Construction Group • Combine
Slide 12: Transformational Acquisitions
Transformational Acquisitions On November 1, 2018, NACG acquired a 49% ownership interest in Nuna Group of Companies, a civil construction and mining contractor based in Edmonton ▪ Final purchase price of $42.8 million represents a transaction multiple of ~1.0x tangible book value On November 23, 20
Slide 13: Nuna – Business Overview
Nuna – Business Overview ▪ Formed in 1993, Nuna provides construction, logistics, contract mining and support services to the resource Office Locations: industry primarily in northern Canada Headquarters • Involved in virtually every major mining project in Operations Nunavut and the Northwest Terri
Slide 14: Nuna – Customer Base
Nuna – Customer Base Mining Services Oil & Gas / Chemicals Government 14
Slide 15: Nuna – Major Projects
Nuna – Major Projects Diavik Diamond Mine early Mary River site services, early earthworks, site development, earthworks and ad hoc labour Canyon Creek access road dikes and other contracts supply contracts Gahcho Kué’s ongoing Winter Giant Mine care & maintenance Gunnar Uranium Mine roads contracts
Slide 16: Outlook for Revenue Growth
Outlook for Revenue Growth Continued incremental growth in mine support volumes and heavy construction activity on existing oil sands mine sites as owners grow production ▪ Securing our core business by signing long-term agreements with four major customers ▪ Supporting production efforts at Kearl,
Slide 17: Current Financing
Current Financing $400 18.4% 20.0% $350 15.0% $300 $250 8.9% 10.0% Debt ($ millions) 10.0% $200 5.7% 5.0% 4.7% 5.0% $150 $100 0.0% $50 $0 -5.0% 2013 2014 2015 2016 2017 2018 Operational cash flow to de-lever balance sheet by ~$150 million over next three years while maintaining cash reserves for gro
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Slide 19: 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 abili
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