Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Q3 2021 Earnings Presentation
20 slides from Onterris's earnings presentation, Nov 10, 2021
Slide 1: The Future of Environmental Solutions
The Future of Environmental Solutions Third Quarter 2021 Earnings Call November 10, 2021
Slide 2: Safe Harbor
Safe Harbor Statements contained herein and in the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be iden
Slide 3: Operating Overview
Operating Overview
Slide 4: Montrose Environmental at a Glance
Montrose Environmental at a Glance • Unique, high growth environmental solutions company with a focus on ESG Work Across Environmental Media excellence • Large and growing addressable market • Resilient revenue with repeat client base and diverse end markets 2,000+ 70+ In the USA, Employees Offices
Slide 5: Highlights
Highlights Q3 2021 Q3 2021 YTD • Solid quarterly results driven by growing Revenue Revenue demand for our best-in-class environmental solutions +57% +83% • Regulatory momentum, shareholder to $132.6M to $402.7M pressure, a higher frequency of environmental crises and emerging contaminants provide su
Slide 6: Strong Record of Profitable Growth Continues in 2021
Strong Record of Profitable Growth Continues in 2021 Multiple Levers to Drive Growth Revenue • Continued market share gains through ($ in millions, Dec FYE) ORGANIC $511 business development and technology GROWTH 2016 – Q3 2021 innovation LTM CAGR: 37% $328 $234 $189 $138 STRATEGIC • Strategic acqui
Slide 7: Montrose Capabilities Aligned With Emerging Political and Regulatory Priorities
Montrose Capabilities Aligned With Emerging Political and Regulatory Priorities Focus on Environmental Matters Creates Tailwinds for Montrose Assessment, Permitting Measurement & Remediation & & Response Analysis Reuse Ecosystem Regulatory Response Testing Lab LDAR Biogas Soil/Water Climate Change &
Slide 8: 2021 M&A Overview
2021 M&A Overview MEG Acquisitions and New Business Acquisition Date Rationale ▪ Successfully completed a number of FY21 ▪ Environmental consulting firm specializing in planning, watershed science, and value-enhancing acquisitions in 2021 Q4 environmental compliance ▪ Supplemented consulting presenc
Slide 9: Financial Overview
Financial Overview
Slide 10: Q3 and YTD Q3 2021 Revenue Performance
Q3 and YTD Q3 2021 Revenue Performance Q3 2021 Revenue ($ in mm) • Solid revenue growth of 57% YoY during Q3 and 83% in YTD Q3 2021 $133 • Excluding discontinued service lines(1), revenue increased 87% YoY in YTD Q3 2021 $85 • YTD growth in all segments(1) Q3 2020 Q3 2021 • Exceptional organic growt
Slide 11: Q3 and YTD Q3 2021 Adjusted EBITDA Performance
Q3 and YTD Q3 2021 Adjusted EBITDA(1) Performance Q3 2021 Adjusted EBITDA(1) ($ in mm) • Solid Q3 Adjusted EBITDA(1) growth • Up 29% YoY to $21.5 million $21 $17 • Strong YTD Q3 Adjusted EBITDA(1) • Up 64% YoY to $59.3 million Q3 2020 Q3 2021 • Margin decline as a result of Margin(1) % 19.7% 16.2% u
Slide 12: Q3 2021 Segment Performance
Q3 2021 Segment Performance Total Assessment, Permitting and Response ($ in mm; % of revenue) ($ in mm; % of revenue) $63.4 $15.7 $132.6 $21.5 $16.7 $53.6 $84.7 $8.2 $26.6 $22.6 19.7% 16.2% 30.9% 24.8% (1) Revenue Adjusted EBITDA Revenue Adjusted EBITDA Q3 20 Q3 21 Q3 20 Q3 21 Q3 20 Q3 21 Q3 20 Q3 2
Slide 13: Base Business Revenues on Solid Trajectory into 2022
Base Business Revenues on Solid Trajectory into 2022 Well Positioned for Further Growth in Base Business Revenue into 2022 Revenue ($M) $511 ~$151 $324(1) ~$31 ~$85(2) ~$53(2) “Base $215(1) Business” $169(1) Revenue $276 of ~$360M $215(1) $241(1) $169(1) LTM 3Q21 2018 2019 2020 LTM 3Q21 MEG excl. CT
Slide 14: Attractive Capital Structure
Attractive Capital Structure Commentary • Flexible balance sheet to pursue investments in innovation and acquisitions in highly fragmented industry • In October, completed follow-on equity offering, raising net proceeds of $169.8 million • Net leverage(1) of 2.8x as of 9/30/21 and 0.8x pro forma for
Slide 15: 2021 Growth Outlook
2021 Growth Outlook Adjusted EBITDA(1) guidance increased Adjusted EBITDA(1) by $5.0 million at the midpoint. ($ in mm) 2021E outlook assumes revenue growth comprised of mid-to-high single digit $75 - $80 organic growth, CTEH outperformance plus the contribution of completed acquisitions. $55 Contin
Slide 16: Investment Highlights
Investment Highlights ✓ ESG Is Who We Are – The Environment is Our Business ✓ Strong Financial Performance with Consistent Track Record of Growth & Cash Flow Generation ✓ Resilient Across Political and Economic Cycles with Diverse Customers and End Markets ✓ Differentiated Technology, Processes and
Slide 17: Appendix
Appendix
Slide 18: Summary of Oaktree A-2 Preferred
Summary of Oaktree A-2 Preferred Investment Summary Post-IPO Terms Governance • In April 2020, Oaktree • No fixed maturity date • One Oaktree representative Capital purchased $175mm remains on the Montrose of Series A-2 Preferred • Repayable in cash at board of directors while A-2 Equity to fund the
Slide 19: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to our results under GAAP, in this presentation we also present certain other supplemental financial measures that are not required by, or presented in accordance with, U.S. GAAP, including Adjusted EBITDA and Adjusted EBITDA margin. We calculate these meas
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation For the Year Ended For the Three Months For the Nine Months December 31, Ended September, Ended September, LTM (in thousands) 2020 2019 2018 2017 2016 2021 2020 2021 2020 September 30, 2021 Net (loss) income $ (57,949) $ (23,557) $ (16,491) $ (10,549) $ (8,946) $ 2,226
Montrose Environmental Group — Q3 2021 Earnings Presentation on 6ix