Quanta Services, Inc. · NYSE:PWR
Quanta Services — Investor Presentation (November 2015)
32 slides from Quanta Services's investor presentation, November 2015
Slide 1: Quanta Services Investor Presentation
Quanta Services Investor Presentation November / December, 2015 NYSE: PWR
Slide 2: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer This presentation (and oral statements regarding the subjects of this presentation) includes forward-looking statements intended to qualify under the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. These forward-
Slide 3: Key Takeaways
Key Takeaways • Quanta continues to see opportunities to increase shareholder value through growth in revenues and EPS over a multi-year period • Believe 2015 is a transition year to improved financial performance in 2016 • Quanta is the leading specialty infrastructure contractor in the markets we
Slide 4: Company Overview: Strategically Focused, Operationally Diverse
Company Overview Strategically Focused, Operationally Diverse 2014 Consolidated Revenue = $7.75 Billion* Oil & Gas Infrastructure 32% Electric Power 68% 2015 Est. Revenue = $7.5 Billion ** Revenue by Geography Estimated Revenue by Contract Type Estimated Revenue by Project Type U.S. Canada MSA Unit
Slide 5: Company Overview: Strategically Focused, Operationally Diverse
Company Overview Strategically Focused, Operationally Diverse • Transmission • Mainline Pipeline • Distribution • Substation • Shale Midstream Pipe • Gas Distribution • Compression, • Pipeline Integrity • Energized • EPC Fossil Services Electric Generation Metering & Pumping Stations Oil & Gas • Hor
Slide 6: Diverse & High Quality Customer Base
Company Overview Diverse & High Quality Customer Base • No single customer accounted for more than 6% of revenues in 2014 • The ten largest customers accounted for approximately 32% of revenues in 2014 • Strong relationships with the majority of U.S. investor owned utilities and Canadian utilities –
Slide 7: Leading Energy Infrastructure Solutions Provider
Company Overview Leading Energy Infrastructure Solutions Provider • Industry leading safety performance • Recognized market leader in electric power and oil and gas pipeline construction in North America • Entrepreneurial business model and culture • Broad, self-performing platform developed through
Slide 8: Differentiated Competitive Position – In the Sweet Spot
Company Overview Differentiated Competitive Position – In the Sweet Spot Quanta vs. Specialty Contractors Quanta vs. Traditional E&Cs 100% Est. Self Perform Capability 80% 60% 40% 20% *Bubble Size = Avg. Market Cap *Bubble Size = Avg. Market Cap 0% Smaller Larger Est. Large Project Capability • Quan
Slide 9: Differentiated Competitive Position – In the Sweet Spot
Company Overview Differentiated Competitive Position – In the Sweet Spot • Quanta is uniquely positioned to meet customer needs versus both specialty contractors and traditional engineering and construction companies 100% • Customers understand that skilled labor is critical to project success Est.
Slide 10: Multiyear Infrastructure Investment Cycle
Multiyear Infrastructure Investment Cycle For Electric Power and Oil and Gas Infrastructure • Electric Power - See growth opportunities driven by: • Need to repair, replace, upgrade and maintain transmission and distribution infrastructure throughout North America • Regulation is driving grid invest
Slide 11: Electric Power: Continued Transmission Growth Opportunities
Electric Power Continued Transmission Growth Opportunities • The North American electric grid requires significant investment due to many decades of underinvestment and changing needs • Transmission spending has increased to +3x historical spending levels in North America • Reliability initiatives (
Slide 12: Electric Power: The Opportunity is More Than Large Transmission
Electric Power The Opportunity is More Than Large Transmission Large transmission gets most of the attention, but there is a lot more going on • Strategic relationships account for more than 50% of electric power segment revenues • Smaller and medium sized projects associated with coal generation re
Slide 13: Long-Term North American Oil & Gas Production Trends
Oil & Gas Infrastructure Long-Term North American Oil & Gas Production Trends U.S. Tight Oil Production by Play U.S. Natural Gas Production by Source Canadian Oil Sands & Conventional Production (In thousands of barrels per day) 1990-2040 (trillion cubic feet) (Millions of barrels per day) 7 Other 6
Slide 14: Robust Need for Pipeline Infrastructure
Oil & Gas Infrastructure Robust Need for Pipeline Infrastructure • North America is simultaneously experiencing: Estimated Large Project Pipeline Spending ($ Billions) $30.2 • Shale development of midstream gathering $26.0 infrastructure in the U.S. and Canada $21.4 $19.3 • Increasing mainline activ
Slide 15: Oil Price Volatility – What Does It Mean?
Oil & Gas Infrastructure Oil Price Volatility – What Does It Mean? • A low percentage of our business is directly tied to oil related projects – natural gas a larger influence • Industry estimates call for continued oil and gas production over near- and long-term • Most of our services address strat
Slide 16: Strategies for Differentiation & Growth
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years • Establish programs to continuously improve safety, leadership development, operational performance standards and results • Safety ingrained in Quanta’s culture. Strive for incident free environment •
Slide 17: Strategies for Differentiation & Growth: Acquisitions
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years • Acquisitions have and will continue to play a strategic role in differentiating Quanta in the marketplace and positioning the company for profitable long-term growth • Seek well respected, entrepreneu
Slide 18: Acquisition Rationale Examples
Strategies for Differentiation & Growth Initiatives to Grow the Business Over the Next Five Years • Significantly enhanced Canadian mainline • 2014 - Canadian Mainline & Midstream Oil & Gas capabilities Pipeline Services • Improved midstream gathering, facilities, integrity and fabrication capabilit
Slide 19: Financial Overview
Financial Overview
Slide 20: Recent Financial Performance: Revenue and EPS
Recent Financial Performance Revenue, GAAP and Adjusted Diluted EPS For the Years Ended December 31, Revenue GAAP Diluted EPS (1) Adjusted Diluted EPS (1) ($ in millions) (3) * $1.73 $1.85 $7,747 $7,500(2) $1.56 $1.40 $6,412 (4) $1.37 $1.22 $1.23 $5,825 (2) $1.10 (2) $4,104 $0.82 $0.57 $0.43 2011 20
Slide 21: Revenue and Operating Income Margin by Segment
Recent Financial Performance Revenue and Operating Income Margin by Segment For the Years Ended December 31, Electric Power Oil & Gas Infrastructure ($ in millions) ($ in millions) $5,303 $2,445 $4,542 $4,290 $1,870 $3,093 $1,535 8.3% 7.4% 12.4% 11.1% 11.5% 10.7% $1,011 3.6% -4.5% 2011 2012 2013 201
Slide 22: Strong Backlog
Recent Financial Performance Strong Backlog 12-Month Backlog Total Backlog ($ in millions) ($ in millions) $5,473 $9,236 $9,648 $5,219 $4,904 $8,237 $3,699 $6,362 $6,525 $3,172 12/31/11 12/31/12 12/31/13 12/31/14 9/30/2015 12/31/11 12/31/12 12/31/13 12/31/14 9/30/2015 Electric Power Oil & Gas Infras
Slide 23: Strong Balance Sheet to Support Growth Strategies
Recent Financial Performance Strong Balance Sheet to Support Growth Strategies ($ in millions) 12/31/2011 12/31/2012 12/31/2013 12/31/2014 9/30/2015 Cash and Equivalents $ 315 $ 395 $ 489 $ 191 $ 49 Other Debt -- -- 2 6 6 Long-Term Debt -- -- -- 6 6 Credit Facility -- -- -- 69 339 Total Debt -- -- 2
Slide 24: Historical Cash Flow
Recent Financial Performance Historical Cash Flow Cash Flow from Continuing Operations Free Cash Flow from Continuing Operations* For the Years Ending December 31, & Nine Months Ending 9/30/15 For the Years Ending December 31, & Nine Months Ending 9/30/15 ($ in millions) ($ in millions) $395 $371 $2
Slide 25: Monetized Undervalued Fiber Optic Licensing Operations
Recent Corporate Actions Monetized Undervalued Fiber Optic Licensing Operations Sold Fiber Optic Licensing Operations • August 4, 2015 – Closed the sale of our fiber optic licensing operations to Crown Castle International Corp. (NYSE: CCI) for approximately $1 billion in cash, $848 million net afte
Slide 26: Committed to Generating Shareholder Value
Recent Corporate Actions Committed to Generating Shareholder Value Acquired Nearly $1.5 Billion of Quanta Common Stock in 2015 New $1.25 Billion Share Repurchase Authorization • Aug. 2015 – Announced a new $1.25 billion share repurchase authorization through Feb. 28, 2017 • Entered into a $750 milli
Slide 27: 2012–2014 Use of Capital & Go-Forward Priorities
Recent Financial Performance 2012 – 2014 Use of Capital & Go-Forward Priorities Use of Capital Priorities • Working Capital (Amounts in millions) • Capital Expenditures • Acquisitions $221 $17 • Investments $265 • Stock Repurchase $735 $600 $315 $615 $38 $191 $93 $92 Ending Cash Cash from Net Procee
Slide 28: Summary: Positioned for Continued Growth
Summary Positioned for Continued Growth Operational & Safety Excellence Dynamic End-Market Trends Visible Growth Opportunities Innovative, Industry Leading Solutions Scale & Scope Financial Strength Quanta Services Investor Presentation Page 28
Slide 29: Connect With Quanta Services Investor Relations
Connect With Quanta Services Investor Relations Download the Quanta Services IR App Available for iPhone, iPad & Android mobile devices @QuantaIR QuantaServicesIR Investor Contact Corporate Office Kip Rupp, CFA 2800 Post Oak Blvd., Suite 2600 Vice President – Investor Relations Houston, TX 77056 713
Slide 30: Appendix: Reconciliation of Segment Operating Income, As Adjusted
Appendix Reconciliation of Electric Power and Oil & Gas Infrastructure Services Segments Operating Income, As Adjusted Electric Power Oil & Gas Infrastructure 12/31/2014 12/31/2011 12/31/2014 Revenues $ 5,302.7 $ 1,011.2 $ 2,444.6 Operating Income (as reported) 463.0 (78.3) 162.8 Addback: Provisions
Slide 31: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer This presentation (and oral statements regarding the subject matter of this presentation) includes “forward-looking statements” intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995. These sta
Slide 32: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer • Our dependence on fixed price contracts and the potential to incur losses with respect to the contracts; • Our ability to successfully identify, complete, integrate and realize synergies from acquisitions; • Estimates relating to our use of percentage-of-comple
Quanta Services — Investor Presentation (November 2015) on 6ix