Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Investor Presentation (November 2022)
39 slides from Onterris's investor presentation, November 2022
Slide 1: Investor Presentation November 2022
Investor Presentation November 2022
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 excellence • Large and growing addressable market • Resilient revenue with repeat client base and diverse end markets • Strong record of organic growth and innovation, even during Covid-19 pa
Slide 5: 80+ Offices • 2,700+ Employees
80+ Offices • 2,700+ Employees © 2022 Montrose Environmental Group, Inc. Proprietary. 5
Slide 6: Montrose Focus and Integration Optimizes Environmental Solutions
Montrose Focus and Integration Optimizes Environmental Solutions Standard Industry Approach Montrose Value-Add Client Environmental Need Client Environmental Need Measurement ~28% & Analysis Assessment, Permitting & Response (Multiple Companies) Measurement & Analysis 2021 Revenue Mix ~24% (Multiple
Slide 7: Three Integrated Business Segments
Three Integrated Business Segments Montrose provides holistic environmental solutions to clients 18% of Revenue Sourced From Multiple Service Lines in 2021 Assessment, Measurements Remediation Permitting & Response & Analysis & Reuse Emergency Response (CTEH): Air Testing: Water Treatment and Renewa
Slide 8: Long Term Relationships Across Diverse Customers and End Markets
Long Term Relationships Across Diverse Customers and End Markets Revenue End Market Mix Ex. CTEH(2) 2021 • 5,300+ clients with largest client 1.9% representing ~10% of FY2021 Revenue 6.2% 19.3% 9.2% • Long-standing relationships with a number of Fortune 1000 companies and government entities 10.2% •
Slide 9: Key Drivers of Environmental Solutions Industry For Montrose
Key Drivers of Environmental Solutions Industry For Montrose Regulatory Global Public & Compliance Infrastructure Demands • Multimedia compliance audits and • Record-setting U.S. Government • Service opportunities are emerging in reporting in response to regulatory infrastructure bill funding will e
Slide 10: Capabilities Aligned with Emerging Political & Regulatory Priorities
Capabilities Aligned with Emerging Political & Regulatory Priorities Focus on Environmental Matters Creates Tailwinds for Montrose Assessment, Permitting & Measurement & Analysis Remediation & Reuse Response Ecosystem Regulatory Response Testing Lab LDAR Biogas Soil/Water Climate Change & Event Driv
Slide 11: Examples of Recent Regulatory Tailwinds
Examples of Recent Regulatory Tailwinds Assessment, Rule Summary Permitting & Measurement Remediation Response & Analysis & Reuse PFAS Hazardous Would cause PFOA and PFOS to be eligible for clean up Substance Designation Legislation under the recently refunded Superfund Program and require companies
Slide 12: Working Across Montrose to Help Solve the Global PFAS Problem
Working Across Montrose to Help Solve the Global PFAS Problem Environmental Challenge: PFAS are widely used, long lasting chemicals components which break down very slowly over time in water, air and soil Remediation Outlook: PFAS remediation expenditures in the U.S. are estimated to surpass $160 bi
Slide 13: Distinguishing Features of Montrose PFAS Solutions
Distinguishing Features of Montrose PFAS Solutions Patented Technology* Less Waste, Smaller Footprint A sustainable system for For every removing and concentrating million gallons PFAS from water allows of water PFAS-saturated resin to be treated, only ~ regenerated onsite and 1 gallon of solid reus
Slide 14: PFAS - European Expansion
PFAS - European Expansion Start Date Pre-2022 2022 • Prior to installing a full-scale PFAS removal system, “Pilot” studies (or technology SWEDEN demonstrations) are conducted for up to twelve months to ensure treatment objectives can be met given the unique water and geologic conditions at each site
Slide 15: Working Across Montrose to Help Solve the Global GHG Problem
Working Across Montrose to Help Solve the Global GHG Problem STEP #1 Environmental Challenge: O&G industry’s operations represent 9% of human-made Deep Understanding greenhouse gas (GHG) emissions. Stakeholders, including the And Working Knowledge SEC's newly proposed climate change disclosure rules
Slide 16: Consistent Creation of Economic Value
Consistent Creation of Economic Value Organic Earnings Strategically Additive Continued Growth (+) Acquisitions (+) Investments (-) • Consistent growth since 2016: • Acquisitions represent a core part of • Investments in corporate growth strategy within a highly infrastructure and in new business -
Slide 17: Consistent, Steady, Stable Growth
Key Organic Growth Initiatives 1 Expand existing local relationships into national 2 Sell additional environmental services 3 Deploy innovative technologies, processes and applications to and international to existing clients address unmet relationships client needs 4 Provide sales training and buil
Slide 18: Recent M&A Overview
Recent M&A Overview • Successfully completed a number of value- enhancing acquisitions 2014in 2021 and 2022 2014 • Consistently target additive services, geographies, clients and technologies • Demonstrated ability to successfully integrate, cross-sell and create revenue synergies over time • Acquis
Slide 19: Investment Highlights
Investment Highlights ESG is who we are – Significant scale with global ESG the environment is our business reach in large, growing and highly fragmented industry Proven ability to identify, Strong financial performance execute and integrate with consistent track record acquisitions with a strong of
Slide 20: Financial Overview
Financial Overview @Y\ MONTROSE
Slide 21: Strong Record of Long-term Growth
Strong Record of Long-term Growth Multiple Levers to Drive Growth ORGANIC Continued market share gains through Revenue ($ in Millions, Dec FYE) focused marketing, business development 2016-Q3 2022 LTM CAGR: 31% GROWTH and technology innovation $546 $549 MARGIN Revenue Growth EXPANSION and Operating
Slide 22: Q3 2022 Segment Performance
Q3 2022 Segment Performance Total Operating Segments Assessment, Permitting and Response ($ in mm; % of revenue) ($ in mm; % of revenue) $132.6 $130.3 $29.5 $63.4 $25.3 $46.4 $15.7 $9.8 22.2% 19.4% 24.8% 21.2% Revenue Operating Segment Adjusted EBITDA Revenue Operating Segment Adjusted EBITDA Q3 21
Slide 23: Q3 and YTD Q3 2022 Revenue Performance
Q3 and YTD Q3 2022 Revenue Performance Q3 2022 Revenue ($ in Millions) Q3 Revenue and YTD Q3 Revenue in-line with expectations for: (i) strong organic revenue $132.6 $130.3 growth across most services lines plus accretive acquisitions and (ii) a decline in CTEH COVID-19 related services • Q3 down 1.
Slide 24: Q3 and YTD Q3 2022 Consolidated Adjusted EBITDA Performance
Q3 and YTD Q3 2022 Consolidated Adjusted EBITDA(1) Performance Q3 2022 Consolidated Adjusted EBITDA(1) ($ in Millions) Q3 and YTD Q3 Consolidated Adjusted EBITDA(1) in-line with expectations $20.3 $17.1 • Q3 and YTD Q3 decline due to lower revenue and business mix, respectively, the cyber- attack in
Slide 25: Attractive Capital Structure
Attractive Capital Structure Commentary Market Capitalization • Flexible balance sheet to pursue investments in innovation and acquisitions Preferred in highly fragmented industry Equity • Montrose has $218.6 million of liquidity, $182M(3) including $93.6 million of cash and $125.0 million of availa
Slide 26: Outlook
6) MONTROSE NVIRONMENT
Slide 27: Base Business Revenues on Solid Trajectory in 2022
Base Business(1) Revenues on Solid Trajectory in 2022 Well Positioned for Growth in Base Business(1) Revenue in 2022 ~$545(5) Revenue ($M) $534 ~$10-20 ~$147 $311 ~$31 ~$525-535 $206 $158 $387 $280 $206 $158 2018 2019 2020 2021 2022E Base Business Revenue(1,2,3) CTEH Above-Trend Revenue(4) (1) Base
Slide 28: 2022 Outlook
2022 Outlook Current Outlook Aligned With Long-term Expectation for Base Business Revenue(1) Growth on Average in Excess of 20% Per Year For Foreseeable Future • 2022E outlook assumes revenue double-digit Revenue ($ in Millions) organic growth excluding CTEH plus accretive $535 - $555 $546 acquisiti
Slide 29: Margin Expansion Plan and Expectations Unchanged
Margin Expansion Plan and Expectations Unchanged Percent of Revenue 2019 2020 2021 Long-Term Target Operating Segment Adjusted EBITDA(1) 19.3% 22.1% 19.7% 23-25% Corporate Adjusted EBITDA(1,2) (5.8%) (5.5%) (5.5%) (3-5%) Start-up losses (3) (0.4%) (0.7%) (0.8%) Consolidated Adjusted EBITDA(1,4) 12.9
Slide 30: Case Studies & Thought Leadership
Case Studies & Thought Leadership
Slide 31: Case Studies & Thought Leadership
Case Studies & Thought Leadership E-Books Webinars Blogs Case Studies © 2022 Montrose Environmental Group, Inc. Proprietary. 31
Slide 32: Appendix
Appendix
Slide 33: Revenue End Market Mix With and Without CTEH in 2021
Revenue End Market Mix With and Without CTEH in 2021 End Market Excluding CTEH Including CTEH Industrial Manufacturing 19.3% 9.8% Fed / State / Local Governments 18.4% 10.0% Industrial Services 12.4% 5.0% Oil & Gas 11.9% 6.7% Renewable Energy 10.5% 5.6% Consumer Products 10.2% 8.8% Utilities 9.2% 5.
Slide 34: Summary of Oaktree A-2 Preferred
Summary of Oaktree A-2 Preferred Investment Summary Post-IPO Terms Governance • In April 2020, Oaktree Capital • No fixed maturity date • One Oaktree representative purchased $175mm of Series A-2 remains on the Montrose board Preferred Equity to fund the cash - Repayable in cash at Company’s of dire
Slide 35: 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 of financial performance that are not required by, or presented in accordance with, GAAP, including, Consolidated Adjusted EBITDA, Adjusted Net Inc
Slide 36: Reconciliation Tables
Reconciliation Tables Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Adjusted Net Income (in thousands) For the Three Months Ended For the Nine Months September 30, Ended September 30, 2022 2021 2022 2021 Net (loss) income $ (5,720) $ 2,226 $ (21,007) $ (23,853) (1) Amorti
Slide 37: Reconciliation of Net (Loss) Income to Adjusted Net Income
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Adjusted Net Income (in thousands) Q uarter Ended Year Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2022 2022 2021 2021 2021 2021 2021 Net (loss) income $ (7,751) $ (7,536) $ (1,472) $ 2,
Slide 38: Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (in thousands) For the Three Months Ended For the Nine Months S eptember 30, Ended S eptember 30, 2022 2021(a) 2022 2021(a) Net (loss) income $ (5,720) $ 2,226 $ (21,007) $ (23,853) Interest expens
Slide 39: Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (in thousands) Q uarter Ended Year Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2022 2022 (a) 2021 (a) 2021 (a) 2021 (a) 2021 (a) 2021 (a) Net (loss) income $
Montrose Environmental Group — Investor Presentation (November 2022) on 6ix