Slide 1: Aecon Group Inc. Investor Presentation
AECON GROUP INC. (TSX:ARE) INVESTOR PRESENTATION JUNE 22, 2018
Slide 2: Forward-Looking Information
Forward-Looking Information The information in this presentation includes certain forward-looking statements. Although these forward-looking statements are based on currently available competitive, financial and economic data and operating plans, they are subject to risks and uncertainties. In addit
Slide 3: Resilient Business Model with Three Diverse Segments
Resilient Business Model with Three Diverse Segments INFRASTRUCTURE INDUSTRIAL CONCESSIONS 35%* 62%* 3%* Rail & Transit Nuclear Heavy Mechanical Works Project Development Roads, Bridges and Tunnels Gas Pipelines & Stations Processing Facilities Public-Private Partnerships Municipal Roads Power Gener
Slide 4: Strong Backlog with Diversified Profile
Strong Backlog with Diversified Profile * Recurring Revenue is not included in backlog and is, therefore, revenue over and above work to be performed from contracts in backlog 4
Slide 5: Backlog growing to Historic Levels
Backlog growing to Historic Levels $6,000 2.0x 1.7x 1.8x $5,000 1.5x 1.5x 1.5x 1.6x 1.4x 1.5x 1.4x 1.4x 1.3x 1.4x $4,000 1.2x 1.1x 1.2x 1.0x 1.1x 0.9x 1.0x 0.9x $3,000 1.0x 0.7x 0.7x 0.7x 0.7x 0.8x $2,000 0.6x 0.6x 0.4x $1,000 0.2x $0 0.0x Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15
Slide 6: Robust Pipeline of Opportunities
Robust Pipeline of Opportunities Gardiner Expressway Rehabilitation^ ON Coastal GasLink Pipeline+ BC Metrolinx Regional Express Rail (RER) Pre-Works ON Fort Hills Earthworks AB Enbridge Line 3 $8 BN* Confederation LRT Phase 2 ON MB Additional Spreads Hamilton LRT ON Trans Mountain Pipeline AB/BC RER
Slide 7: Recurring Revenue Poised to Continue Growth
Recurring Revenue Poised to Continue Growth Industrial recurring revenue expected to grow from contract mining volume growth as operators increase throughput and new operating site ramps up during the year. Segment recurring revenue growth will also come from telecommunications and gas distribution
Slide 8: Long-Term Projects and Concessions Provide Outlook Stability
Long-Term Projects and Concessions Provide Outlook Stability Project Timeline (starting from end of Q1 2018) March-2018 March-2023 March-2028 March-2033 March-2038 March-2043 March-2048 March-2053 Waterloo LRT Construction completed in 2017; equity stake and 30 year concession post construction Cons
Slide 9: Valuable Contribution from Bermuda Concession
Valuable Contribution from Bermuda Concession 30 Year Concession to redevelop, operate and maintain Q1 Traffic Statistics % the existing and redeveloped L.F. Wade International Q1 16 Q1 17 Q1 18 Change 18 vs 17 Airport in Bermuda Air Visitors 32,233 36,752 40,325 9.7% (Leisure, Business and Other) T
Slide 10: Q1 2018 Financial Results - Reported
Q1 2018 Financial Results - Reported $ Millions Three Months Ended Trailing Twelve Months Ended (except EPS, $ per share) March 31* March 31* 2018 2017 Change+ 2018 2017 Change+ Revenue 543 675 20% 2,674 3,197 16% Gross Profit 47.0 51.0 8% 314.9 318.4 1% Gross Margin % 8.6% 7.6% 100bps 11.8% 10.0% 1
Slide 11: Q1 2018 and Q1 2018 TTM Reconciliation
Q1 2018 and Q1 2018 TTM Reconciliation ▪ On a pro-forma basis reflecting the adjustments above, Q1 2018 Loss per Share (diluted) would have improved from ($0.32) to ($0.27) and EPS (diluted) for Q1 2018 TTM would have increased to $0.70 from $0.46 ^ See notes on slide 10 for detail of one-time adjus
Slide 12: Balance Sheet and Capital Structure
Balance Sheet and Capital Structure BALANCE SHEET ($MM) DEBT TO ADJUSTED EBITDA*^+ 3.0x Mar 31, 2.7x 2018 Cash^ 262.6 2.5x Working Capital 306.6 2.0x 2.0x 2.0x 1.9x 2.0x 1.9x Long-Term Debt - Finance Leases 69.6 1.5x - Equipment & Other Asset Loans 55.7 1.2x LT Debt excluding Convertible Debentures
Slide 13: Outlook
Outlook Backlog and Revenue Growth Expected in 2018 and Beyond ▪ $4.6 billion backlog at March 31, 2018 with further growth driving backlog to record levels during Q2 2018 ▪ Site C generating station and spillways civil works project added $482 million to backlog in Q1 2018, Réseau express métropoli
Slide 14: Appendix
APPENDIX A@CCON
Slide 15: Q1 2018 Financial Results – Adjusted
Q1 2018 Financial Results – Adjusted $ Millions Three Months Ended Trailing Twelve Months Ended (except EPS, $ per share) March 31* March 31* 2018 2017 Change+ 2018 2017 Change+ Revenue 543 675 20% 2,674 3,197 16% Gross Profit 47.0 51.0 8% 314.9 318.4 1% Gross Margin % 8.6% 7.6% 100bps 11.8% 10.0% 1
Slide 16: Revenue and Adj. EBITDA Margin by Segment
Revenue and Adj. EBITDA Margin by Segment ^ See slide 11, Q1 2018 and Q1 2018 TTM Reconciliation, and notes on slide 10 for detail of one-time adjustments to results 16
Slide 17: Infrastructure Q1 2018 Results
Infrastructure Q1 2018 Results FIRST QUARTER* TRAILING TWELVE MONTHS* Revenue ($MM) Revenue up by $1M, or 1%, year-over-year Revenue ($MM) +1% $2M in major projects east from increases in Bermuda Airport $1,037 -7% $963 $152 $153 offset by lower activity on transit projects in Ontario $1M in major p
Slide 18: Industrial Q1 2018 Results
Industrial Q1 2018 Results FIRST QUARTER* TRAILING TWELVE MONTHS* Revenue ($MM) Revenue down by $150M, or 28%, year-over-year Revenue ($MM) $531 -23% -28% $76M in conventional industrial from lower site construction work in $2,198 $381 commodity mining $1,689 $65M in nuclear from higher activity on
Slide 19: Concessions Q1 2018 Results
Concessions Q1 2018 Results Revenue down by $5M period-over-period ▪ Lower construction activities from Bermuda International Airport Redevelopment Project ▪ $18M of construction revenue related to Bermuda is eliminated on consolidation in the quarter Adjusted EBITDA up $6M period-over-period ▪ Incr
Slide 20: Cash Position
Cash Position KEY DRIVERS FOR FREE CASH FLOW FREE CASH FLOW ($MM) MOMENTUM Q1 2018 Y/E TTM 2017 Significant working capital improvement in 2017 Adjusted EBITDA 153.3 156.5 Cash interest up due to interest expense on non- Cash Interest Expense (net) (32.6) (22.7) recourse project debt for Bermuda Int
Slide 21: Capital Markets Overview
Capital Markets Overview ARE.TSX STATISTICS ANALYST COVERAGE Price as of June 19, 2018 $15.52 Firm Analyst Telephone AltaCorp Capital Chris Murray (647) 776-8246 Shares Outstanding 59.7 Million Canaccord Genuity Yuri Lynk (514) 844-3708 Avg. Daily Volume 750,000 ($12.0 Million) CIBC World Markets Ja
Slide 22: Aecon Contact Information
ACCON STEPHEN KING Director, Corporate Development & Investor Relations 416.297.2600 x3825 | sking@aecon.com AECON PACIFIC HEADQUARTERS AECON WEST HEADQUARTERS AECON EAST HEADQUARTERS 1055 Dunsmuir Street, Suite 2124 110-9th Avenue SW, Suite 300 20 Carlson Court, Suite 800 Vancouver, BC V7X 1G4 Calg