Stantec Inc · TSX:STN
Stantec — Q1 2019 Earnings Presentation
25 slides from Stantec's earnings presentation, May 2019
Slide 1: Q1 2019 Earnings Presentation
EVOKE DELIVER INSPIRE COLLABORATE SUSTAIN Q1 2019 EVOLVE Earnings Presentation DESIGN ENHANCE LEAD INNOVATE PERFORM ENVISION ACHIEVE CREATE TRANSFORM
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains non-IFRS measures and forward-looking statements, including a discussion of our business targets, expectations, and outlook. We caution readers not to place undue reliance on our forward-looking statements since a number of factors could cause actual f
Slide 3: Agenda
3 Agenda Gord Johnston Q1 2019 Highlights Theresa Jang Financial Performance Revised 2019 Annual Targets Gord Johnston Operational Highlights 2019 Outlook
Slide 4: Q1 2019 Overview
4 Q1 2019 Overview United States Canadian Global Business Business Business 2.4% 0.4% 8.1% O R G AN I C N E T R E V E N U E G R O WT H 1 S T R AT E G I C AC Q U I S I T I O N Wood & Grieve Engineering 600 people Australia
Slide 5: Financial Performance
>) _ GQ Stantec TSX: NYSE . SSS
Slide 6: Adoption of IFRS 16
6 Adoption of IFRS 16 Q1 19 Q1 19 Increase (millions of Canadian dollars) as reported excluding IFRS 16 (decrease) Impact on income statement items Administrative and marketing expenses 357.1 392.6 (35.5) Depreciation of lease assets 27.4 - 27.4 Net interest expense 17.2 9.1 8.1 Net income 44.9 44.9
Slide 7: Q1 Results
7 Q1 19 Results (millions of Canadian dollars, except per share amounts) Q1 2019 Q1 2018 Gross revenue 1,151.5 1,021.3 Net revenue 904.1 808.8 EBITDA from continuing operations (1) 132.2 86.9 - Excluding IFRS 16 (1) 96.7 86.9 Net income from continuing operations 44.9 36.6 Net income 44.9 36.8 Basic
Slide 8: Restated 2019 Targets and Q1 Results
8 Restated 2019 Targets and Q1 19 Results Q1 19 Results Compared to Previously Published Revised 2019 Revised 2019 Measure (millions of Canadian dollars, unless otherwise stated) 2019 Target * Annual Target Annual Target Gross margin as % of net revenue 53% to 55% no change 54.0% Administrative and
Slide 9: Liquidity and Capital Resources
9 Liquidity and Capital Resources Sources and Uses of Cash (millions of Canadian dollars) 500 Cash Flow Q1 19 Q1 19 Q1 18 Q1 19 TTM 450 Inflow excluding 400 (Outflow) as reported IFRS 16 350 300 Operating (88.5) (114.1) (73.0) Q1 19 250 200 Investing (104.2) (99.4) (44.5) 150 Financing 68.2 89.0 129
Slide 10: Liquidity and Capital Resources
10 Liquidity and Capital Resources Net debt to Adjusted EBITDA (TTM) As reported excluding IFRS 16 Internal guideline 1.0x to 2.0x 1.5x to 2.5x Q1 19 2.0x (1) 2.67x (1) Net debt/adjusted EBITDA was calculated using a proforma IFRS 16 adjustment for Q2 18 to Q4 18 adjusted EBITDA, calculated as 3.8%
Slide 11: Operational Highlights
11 Operational Highlights American Academy of Pediatrics Headquarters Itasca, Illinois
Slide 12: Canada
12 Canada millions (C$) $320 $310 $300 $290 $280 $270 Gross Revenue $260 $250 $240 Net Revenue $230 Q1 19 Q1 18 Q1 19 Net revenue growth Active in public transit across the country Won significant master service agreement in 4.6% Environmental Services Hiring in Energy & Resources and Environmental
Slide 13: United States
13 United States millions (C$) $700 $600 $500 $400 $300 Gross Revenue $200 $100 Net Revenue $0 Q1 19 Q1 18 Q1 19 Net revenue growth Solid backlog in Water, Transportation, Bridges Organic growth in Buildings 8.6% Won significant Power projects Organic net revenue growth 2.4% Crescent Dunes Solar Ene
Slide 14: Global
14 Global millions (C$) $250 $200 $150 $100 Gross Revenue $50 Net Revenue $0 Q1 19 Q1 18 Q1 19 Net revenue growth Organic growth in all business operating units Growth in Australia and New Zealand Water 41.0% Continuing market improvements in Latin American Mining Organic net revenue growth 8.1% Can
Slide 15: Recent project wins
15 Recent project wins • Conceptual design and project management services for phase 3 of the Narragansett Bay Commission’s Combined Sewer Overflow Control Facilities program in Rhode Island. • Reappointed to the Homes England Multidisciplinary Framework to support the delivery of affordable housing
Slide 16: Acquisition Strategy
16 Acquisition Strategy
Slide 17: 2019 Outlook
17 2019 Outlook Overall Canada United States Global Organic gross revenue growth Slowing economic growth Solid consumer spending and Expand our global footprint and in the low- to mid-single digits because of volatile oil prices and business investment benefit from healthy GDP growth rising interest
Slide 18: Colorado Rockies Experience, Denver, Colorado
18 Colorado Rockies Experience Denver, Colorado
Slide 19: Aquatron Genome Atlantic, Halifax, Nova Scotia
19 Aquatron Genome Atlantic Halifax, Nova Scotia
Slide 20: Sustainability Report
20 Sustainability Report Now available on Stantec.com
Slide 21: Investor Day
21 Investor Day Edmonton, AB June 12, 2019
Slide 22: Appendix: Revenue by Reportable Segment
22 Appendix Net Revenue by Reportable Segment Gross Revenue by Reportable Segment Quarter Change Change Quarter Ended Due to Change Due % Quarter Quarter Due to Change Due % (In millions of Canadian dollars, Ended Mar Mar 31, Total Change Due to Foreign to Organic of Organic (In millions of Canadian
Slide 23: Appendix: Consolidated Statement of Cash Flows
23 Appendix Consolidated Statement of Cash Flows Indirect Method (Unaudited) Q1 19 (In millions of Canadian dollars) $ CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS Net income for the year from continuing operations 44.9 Add (deduct) items not affecting cash: Depreciation
Slide 24: Appendix: Reconciliation of Non-IFRS Financial Measures
24 Appendix Reconciliation of Non-IFRS Financial Measures Quarter Ended March 31 As reported (In millions of Canadian dollars, except per share amounts) 2019 2018 Net income from continuing operations 44.9 36.6 Add back: Income taxes 13.6 13.6 Net interest expense 17.2 5.3 Depreciation and amortizat
Slide 25: Appendix: Impact of IFRS 16
25 Appendix Impact on Statement of Financial Position at January 1, 2019 Impact on Statement of Cash Flows – Quarter ended March 31 Before IFRS Increase Continuing Operations IFRS 16 16 (decrease) 2019 (In millions of Canadian dollars) $ $ $ 2019 before IFRS Increase Current assets as reported 16 (d