Orion Group Holdings, Inc. · NYSE:ORN
Orion — Investor Presentation (October 2017)
37 slides from Orion's investor presentation, Oct 24, 2017
Slide 1: Company Update Fall 2017
{) ORION GROUP HOLDINGS Company Update Fall 2017
Slide 2: Forward Looking Statements
Forward Looking Statements The matters discussed in this presentation may constitute or include projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of which the Company is availing itself. Certain forward-looking
Slide 3: Current Status
£) ORION GROUP HOLDINGS Current Status
Slide 4: Company Overview
NYSE: ORN Headquarters: Houston, TX Employees: ~2,250 Shares outstanding: ~28.0 MM Market cap: ~$170 MM Average Project Duration: 6 - 9 months 70% of revenues stem from private sector Leading specialty construction company providing marine construction and concrete construction service
Slide 5: Organization Structure
Organization Structure 2016 Revenue $ 284.6 MM 2016 EBITDA $15.9 MM 2016 EBITDA Margin 5.6% 12/31/16 Backlog $ 280.7 MM 2016 Revenue $ 293.6 MM 2016 EBITDA $ 22.4 MM 2016 EBITDA Margin 7.6% 12/31/16 Backlog $ 153.3 MM Marine Segment Concrete Segment Note: EBITDA is a non-GAAP measure that represents
Slide 6: Volatility in Marine Market Has Increased
Volatility in Marine Market Has Increased 6 Increase Competition Dysfunctional Federal Budgeting Process Continuing Resolution inconsistency Federal debt ceiling issues Permitting Delays
Slide 7: The Future
£) ORION GROUP HOLDINGS The Future
Slide 8: Forward Vision
Forward Vision 8 Orion seeks to be the premier specialty construction company, focused on providing solutions for our customers across the infrastructure, industrial, and building sectors, while maintaining a healthy financial position and maximizing stakeholder value. Strategic Plan Established in
Slide 9: Strategic Vision
Strategic Vision Infrastructure Industrial Marine Concrete Building 9 Sectors Se gmen ts Industrial Industrial brings the talents of the marine and concrete segments together to execute concreate based work inside the industrial plant environment. * *
Slide 10: Infrastructure Sector
£) ORION GROUP HOLDINGS Infrastructure Sector
Slide 11: Infrastructure Sector Overview
Infrastructure Sector Overview Orion’s Infrastructure sector is made up of its Marine Construction Segment Provides turnkey solutions on and over waterways Construction, restoration, and maintenance of marine facilities, pipelines, bridges, causeways, environmental structures, and dredging of
Slide 12: Extensive Suite of Marine Capabilities
Extensive Suite of Marine Capabilities Port Facilities Wharves Cruise Ship Terminals Bulkheads Military Installations Liquid Cargo Terminals Piers Dry Bulk Terminals Container Terminals Docks Marinas Marine Transportation Facility Construction Marine Environmental Structures Dr
Slide 13: Example Customer Types
Example Customer Types Federal Government Customers State Government Customers Local Government Customers Private Customers 13 Broad Customer Base Federal [VAL UE] State [VAL UE] Local [VAL UE] Private [VAL UE] 2016 Revenue by Customer
Slide 14: Infrastructure Trends
Trend Significance Relevant Data Port Expansion and Maintenance > Expected increases in cargo volume from larger ships transiting the expanded Panama Canal will require ports to expand their dock capacity and port infrastructure and perform additional dredging services to deepen their channels > Inc
Slide 15: Building Sector
£) ORION GROUP HOLDINGS Building Sector
Slide 16: Building Sector Overview
Building Sector Overview Orion’s Building sector is made up of its Concrete Construction Segment Commercial concrete construction is a stable growing market with opportunities to grow geographically and within service offerings Services Offered: Concrete foundations Tilt wall buildings S
Slide 17: Concrete Segment
Concrete Segment Purchased TAS Commercial Concrete in August 2015 for $115 million Established in 1980, TAS is second-largest Texas- based concrete contractor Provides turnkey services covering all phases of commercial concrete construction Concrete construction primarily driven by populatio
Slide 18: Concrete Services and Resources
>90% Repeat Business Concrete Services and Resources TAS provides services across three avenues: Light Commercial – Horizontally poured concrete, tilt-walls, trenches, rebar installation and pumping services Structural – Elevated concrete pouring, including columns, elevated beams and structur
Slide 19: Building Sector – Customer Overview
Building Sector – Customer Overview Example Customer Types 19 Local [VAL UE] Private [VAL UE] 2016 Revenue by Customer
Slide 20: Building Sector Trends
Trend Significance Relevant Data Institutional Developments and Expansions > The Company’s institutional markets include educational facilities, medical facilities, museums, and religious developments > Due to significant population growth in Texas, there has been great demand for institutional deve
Slide 21: Industrial Sector
£) ORION GROUP HOLDINGS Industrial Sector
Slide 22: Industrial Sector Overview
Industrial Sector Overview Orion’s Industrial sector is a new development bringing talent from both segments to meet customer’s needs Industrial brings the talents of the marine and concrete segments together to execute concrete based work inside the industrial plant environment. Services Offe
Slide 23: Industrial Sector Overview
Industrial Sector Overview 23 The Industrial Sector will leverage the Company’s existing core competencies to access other growing markets, such as the petrochemical and LNG sectors Initially, the Industrial Sector will focus on projects in the Texas-Louisiana market, with a primary focus on the
Slide 24: Example Customer Types
Example Customer Types Private Customers 24 Broad Customer Base Proforma Revenue by Customer Private 100% Industrial leverages the talents of both Orion Marine Group and TAS to meet the demands of existing and new customers in a plant environment
Slide 25: Industrial Sector Trends
Trend Significance Relevant Data Petrochemical > The rapid increase in America’s hydrocarbon output combined with aging facilities will drive growth and investment in the sector > According to the American Chemistry Council, capital spending is expected to reach $70 billion annually by 2021 Refinery
Slide 26: Acquisition Strategy
£) ORION GROUP HOLDINGS Acquisition Strategy
Slide 27: Diversified Platform
Diversified Platform 27 (1) Infrastructure Sector comprised of the Marine Construction Segment. Building Sector comprised of the Concrete Construction Segment. Revenue Breakdown Comparison (2013 vs. 2016) End Market Top Customers Sector (1) Service Type 57.4% 70.0% 15.4% 16.4% 18.6% 7.0% 8.6% 6.5% 0
Slide 28: Acquisition History
Date Target Valuation Rationale Result 2017 Tony Bagliore Concrete, Inc. (“TBC”) $6.0 million ~2.4x EBITDA Provides an entry for the TAS business to move into the Central Texas market and will serve as a platform for future growth Rebrand TBC as TAS Commercial Concrete and operate under one common b
Slide 29: Additional Service Offerings
Additional Service Offerings 29 Fabrication Vertical Integration Land Based Industrial Infrastructure Industrial Building Fireproofing Equipment Rental Fabrication Equipment Rental Fabrication Fu tu re Se rvi ce O ff eri n gs Orion will continue to explore potential additional profitable service off
Slide 30: Financial Highlights
&) ORION GROUP HOLDINGS Financial Highlights
Slide 31: Historical Financial Performance
Historical Financial Performance 31 (Dollars in Millions) Historical Revenue (1) Historical Proforma EBITDA & Margin (1) Orion’s focus on diversifying its customer base and end market exposure along with making several strategic acquisitions have positioned the Company to take advantage of improving
Slide 32: Potential Projected Annual Revenue
Potential Projected Annual Revenue Marine Concrete EBITDA 32 Se gmen ts Industrial $250 $300 - 50 200 - 300 400 - $600 $900 - $30 $36 - 8 30 - 24 32 - $62 $98 - @ 12% @ 15% @ 8% Potential projected annual revenue and EBITDA with existing businesses
Slide 33: Free Cash Flows
Free Cash Flows 33 -$15 -$10 -$5 $0 $5 $10 $15 $20 Infastructure Building (D o lla rs in M ill io n s) $1.7M $(14.2)M $(4.5)M $17.9M Capital Expenditures Free Cash Flows 2016 Free Cash Flows $15.9M EBITDA $22.4M EBITDA
Slide 34: Investment Highlights
Investment Highlights 34 Focuses on returning value to shareholders Diverse end markets with improving market demand High EBITDA growth opportunity Diversification of services through accretive acquisitions
Slide 35: Appendix
&) ORION GROUP HOLDINGS Appendix
Slide 36: EBITDA and EBITDA Margin Reconciliation
EBITDA and EBITDA Margin Reconciliation 36 2011 2012 2013 2014 2015 2016 Net income (loss) $(13,114) $(11,866) $331 $6,877 $(8,060) $(3,620) Income tax $(6,347) $(4,640) $(937) $3,175 $(2,519) $1,581 Interest expense, net $318 $708 $512 $677 $3,116 $6,172 Depreciation and amortization $22,092 $21,57
Slide 37: Contact Us
Investor Relations (713) 852-6582 ir@orionmarinegroup.com Contact Us 37
Orion Group Holdings — Investor Presentation (October 2017) on 6ix