Stantec Inc · TSX:STN
Stantec — Investor Presentation (November 2021)
26 slides from Stantec's investor presentation, Nov 5, 2021
Slide 1: Investor Presentation
Investor Presentation November 5, 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: A global leader in sustainable engineering & design
A global leader in sustainable engineering & design Net Zero #5 #1 Carbon neutral Ranked fifth Ranked most LEADERS IN SUSTAINABILITY for 2022, Net most sustainable zero for 2030 sustainable corporation corporation in North in the world America Our Operational Pledge 2021 Corporate Knights Global 100
Slide 4: Stantec at a glance
Stantec at a glance GROWTH 22,000 7.2% STN PEOPLE Employees Globally 10-Year Adjusted Diluted TSX & NYSE EPS CAGR(1) INNOVATION EXCELLENCE 350 65+ YEARS CDN $7.6B(2) Offices Worldwide Of Uninterrupted Profitability Market Capitalization 1. Q3 2021 2. November 4, 2021 4
Slide 5: Cardno Acquisition
Stantec has agreed to acquire select assets from Cardno, strengthening the company’s positioning in the ESG and engineering advisory markets (1) 2,750 CARDNO ACQUISITION Purchase Price EMPLOYEES US$500M North America Consulting (2) Environmental Services, Ecosystem Assessment and Restoration, Infras
Slide 6: Global growth aligned with our strategy
Global growth aligned with our strategy Cardno nearly doubles Stantec’s United States presence in Australia 2,500 Increases US Environmental Services presence by more than 1,400 1,050 1,200 ~2x 60% 450 CARDNO ACQUISITION 2016 2019 2021 2021 2021 Grows Stantec’s US presence by 15% Australia Achieves
Slide 7: Record adjusted EPS achieved in Q3
Record adjusted EPS achieved in Q3 Net Revenue Adjusted EBITDA Margin $933M 16.7% 5.0% increase on a ▼ 54 basis points due to constant currency basis FV revaluation of share- based compensation Q3 2021 Adjusted Diluted EPS Backlog $0.72 $4.7B 16.1% increase 7.0% organic growth since Dec 31, 2020 7
Slide 8: Diversified Global Footprint – Local Presence
Diversified Global Footprint – Local Presence GROWTH Distribution of Net Revenue PEOPLE 30% INNOVATION 50% $3.6B TTM Q3 2021 20% EXCELLENCE United States Canada Global 8
Slide 9: Engineering, Architecture and Environmental Services
Engineering, Architecture and Environmental Services BUSINESS OPERATING UNITS (TTM Q3 2021 Net Revenue) GROWTH ENVIRONM ENTAL ENERGY & INFRASTRUCTURE WATER BUILDINGS SERVICES RESOURCES $993M $770M $737M $583M $499M PEOPLE INNOVATION EXCELLENCE Signatory to the UN Global Compact Stantec is a signator
Slide 10: Infrastructure
Infrastructure Net revenue by Sector Q3 YTD 2021 Front-end design and engineering services, construction management, and inspection work for private and public sector clients Roadways GROWTH 150+ 12 Community Dev 28% Transit & Rail Envision Envision-certified of Q3 YTD 2021 PEOPLE Sustainability pro
Slide 11: Water
Water Net revenue by sector Q3 YTD 2021 Engineering, design, construction management, financial and enterprise Conveyance management, program and asset management, and intelligent platforms for Wastewater Treatment GROWTH public and private sector clients 1,650 67 Water Treatment 22% Water Resources
Slide 12: Buildings
Buildings Net revenue by sector Q3 YTD 2021 Pre-design, design, and construction administration services in planning, Commerical architecture, interior design, buildings engineering, and sustainability and Healthcare GROWTH building performance for vertical infrastructure Civic 650+ 35+ 21% Educatio
Slide 13: Environmental Services
Environmental Services Net revenue by sector Q3 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 Q3 YTD 2
Slide 14: Energy & Resources
Energy & Resources Net revenue by sector Q3 YTD 2021 Industrial engineering services for private sector energy, resource, and power clients Power GROWTH Mining 37+ GW 115+ GW 13% Oil & Gas solar & wind renewable hydro renewable of Q3 YTD 2021 PEOPLE Waterpower energy generation capacity energy gener
Slide 15: A Global Leader in Sustainability: Carbon Neutral, Net Zero
Carbon Neutral Net Zero A GLOBAL LEADER IN SUSTAINABILITY Pledged to be carbon neutral 1.5ºC science-based emissions for our 2022 operational reduction targets validated by emissions. SBTi. Committed to sustainability 15
Slide 16: Governance
Governance A diverse board with exceptional backgrounds A GLOBAL LEADER IN SUSTAINABILITY 38% Female Certified Integrated Management System: • Quality Management (ISO 9001) • Occupational Health & Safety Management (OHSAS 45001:2018) • Environmental Management (ISO 14001:2015) • IT Service Managemen
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: 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 18
Slide 19: 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$13,040B3 A GLOBAL LEADER IN SUSTAINABILITY Sustainable Cities Affordable and Sustainable Cities Life on Land and Communities Cle
Slide 20: Cardno strengthens Stantec's sustainability leadership
Cardno’s sophisticated approach to ESG and Sustainability Services aligns with Stantec and will further strengthen Stantec’s leadership position in the marketplace. Strengthening Stantec’s CARDNO ACQUISITION 60% INCREASE IN U.S. Sustainability Leadership ENVIRONMENTAL SERVICES EXPOSURE ENHANCED ECOS
Slide 21: Q3 2021 Financial Performance
Q3 2021 Q3 2021 Wintrust Wealth Management Chicago, Illinois, United States Financial Performance Theresa Jang - Executive Vice President and Chief Financial Officer 21
Slide 22: Q3 2021 results
Q3 2021 results Adjusted EBITDA and margin ($ millions, %) Q3 2021 Q3 2020 Change % Year- (In millions of Canadian dollars, except per share amounts over-year and percentages) $ $ change Net revenue 932.9 916.5 1.8 Gross margin 507.0 479.1 5.8 Administrative and marketing expenses 353.2 324.1 9.0 Q3
Slide 23: Balance sheet strength
Balance sheet strength Net debt to adjusted EBITDA(1) Days sales outstanding Q3 2021 0.8x Target range 81 days Target at Sept 30, 2021 1.0 - 2.0x at Sept 30, 2021 <80 days (1) Net debt to adjusted EBITDA and days sales outstanding are non-IFRS measures discussed in the Definitions section of the 202
Slide 24: Liquidity and capital allocation
Liquidity and capital allocation Quarterly and TTM Free cash flow(1) (Comparisons to YTD 2020) ($ millions) • $10 million increase in capital expenditures YTD $14 • ~$800 million in credit capacity largely undrawn Q3 2021 Cash flow from continuing operations Capital returned to shareholders (million
Slide 25: Stantec & Cardno ideally positioned for US stimulus
Stantec & Cardno ideally positioned for US stimulus Bipartisan bill expected to boost spending by 13% over next six years (1) Passed bill ACEC Engineering and Design Addressable areas of bipartisan bill (2) US$ Services Forecast (1) Transportation Infrastructure (US$ billions in output in A/E Servic
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