Granite Construction Incorporated · NYSE:GVA
Granite Construction — Investor Presentation (March 2024)
24 slides from Granite Construction's investor presentation, March 2024
Slide 1: March 2024 Investor Presentation
March 2024 Investor Presentation © 2023 Granite Construction. All Rights Reserved.
Slide 2: Safe Harbor
Safe Harbor Any statements contained in this presentation occurrences, circumstances, opportunities, the reader is cautioned not to place undue that are not based on historical facts, including targets, activities, performance, growth, demand, reliance on them. The reader is also cautioned statement
Slide 3: Company overview: founded 1922, NYSE: GVA
• Founded in 1922 • Headquartered in Watsonville, CA • Publicly traded since 1990, NYSE: GVA • One of the largest diversified, vertically integrated civil contractors and construction materials producers in the U.S. • Geographically diverse public and private client base • Thoughtful project pursuit
Slide 4: Our Markets & Customers
Our Markets & Customers Granite serves customers in both public and private sectors within our reportable business segments: Construction and Materials. Our expertise allows us to provide infrastructure solutions in a range of markets as a diversified civil contractor and materials producer. ENR | E
Slide 5: Where We Work
Where We Work Home Markets Where we Work Materials Facilities © 2023 Granite Construction. All Rights Reserved. 5
Slide 6: Home Market Strategy a Key Differentiator
Home Market Strategy a Key Differentiator Client Centric Focus Home Market Community Engagement Market Intelligence & Insight Blended Project Portfolio Owner and Regulator Relationships Readily Available Resources We will focus on home markets where these attributes exist, among others. With these a
Slide 7: Strong Transportation Funding Supports California Growth
Strong Transportation Funding Supports California Growth • Caltrans (California Department of Transportation) capital project funding allocations stable and aligned with the agency’s project delivery capacity • Caltrans awards continued to grow significantly for the second consecutive calendar year,
Slide 8: California Senate Bill 1 (SB-1) 10 Year Revenue and Allocation
California Senate Bill 1 (SB-1) 10 Year Revenue and Allocation 10 Year SB-1 Revenue and Allocation $7,263 $6,947 $6,653 $7,163 $6,313 $6,847 $6,553 $6,213 $5,245 $5,235 $5,079 $5,169 $5,314 $4,280 $4,257 $4,980 $3,673 $4,180 $4,157 $3,384 $3,515 $3,199 $2,840 $2,844 $3,490 $2,489 $2,617 $3,332 $3,16
Slide 9: Vertical Integration Empowers Home Markets
Vertical Integration Empowers Home Markets Why Vertical Integration? » Compete in markets where owning materials is necessary External AGG Sales External HMA Sales » Maximize productivity and scheduling Aggregate Production HMA Production Construction » Ensure quality materials Operations » Leverage
Slide 10: Investment Framework Supports Long-term Growth
Investment Framework Supports Long-term Growth SUPPORT & Solidify and Bolster EXPAND & Expand Into New Core Competencies STRENGTHEN and Strengths TRANSFORM Geographies INVESTMENT CATEGORIES INVESTMENT CATEGORIES Strengthen & Bolt-on: Civil Automation Expand Home Construction & & Reserve VI Expansion
Slide 11: Granite Investment Framework – Expand and Transform
Granite Investment Framework – Expand and Transform VI Expansion & Platform • Expanded Granite’s footprint and created a new platform in the Southeast (AR, TN, MS) through the acquisition of Lehman-Roberts and Memphis Stone & Gravel • Highly profitable and EBITDA margin accretive with approximately
Slide 12: Granite Investment Framework - Support and Strengthen
Granite Investment Framework - Support and Strengthen Strengthening Home Markets Bolt-on, Automation & Reserve Expansion • Strengthening Texas home markets in Dallas/Ft. Worth and Houston • Completed acquisition of Brunswick Canyon quarry and • Strong Texas macro environment supported by the IIJA as
Slide 13: $5.5B High-Quality CAP with Risk-adjusted Procurement Types
Bid-Build Procurement $5.5B High-Quality CAP with Risk-adjusted Procurement Types • 2023 CAP growth 10% YOY • Project duration typically several months to 3 years • Traditional method with owners preparing the design and construction and transportation management plans • Contractors compete on a com
Slide 14: Accelerating Organic Growth and Acquisitions
Accelerating Organic Growth and Acquisitions $3.8 - $4.0 Strong public funding and resilient private $3.5 $3.3 $0.6 market supporting organic revenue growth $0.5 $0.5 $3.0 $3.2 - $3.4 Infrastructure Bill is lifting the market and is expected to continue to build in significance $2.8 Acquisition of L
Slide 15: 2024 Guidance – Accelerating Growth and Shareholder Return
2024 Guidance – Accelerating Growth and Shareholder Return Revenue SG&A Adjusted EBITDA (Percentage of Revenue) Margin $3.8 - $4.0 $3.5 8.4% 9.0% - 11.0% 7.5% - 8.0% 7.7% FY 2023 FY 2024F FY 2023 FY 2024F FY 2023 FY 2024F $ in billions © 2023 Granite Construction. All Rights Reserved. 15
Slide 16: Capital Allocation Priorities
Capital Allocation Priorities 1 Maintain current level of dividend 2 Support business operations via maintenance capex (1.5% - 2.0% of annual revenue) 3 Optimize gross debt-to-capital ratio to 20%-30% through debt repayment 4 Focused growth capex and M&A to drive growth and efficiencies 5 Opportunis
Slide 17: 2023 Results
2023 Results Q4 2023 FY 2023 Total Revenue Total Revenue $934 M $3,509 M Construction Revenue Construction Revenue $794 M $2,992 M Materials Revenue Materials Revenue $140 M $517 M Adjusted Net Income Adjusted Net Income $36 M $140 M Laguna Seca Raceway Pedestrian Bridge Adjusted Diluted EPS Adjuste
Slide 18: Construction Segment
Total Company Construction Segment • Total CAP of $5.5 billion, decreased $39 million sequentially and increased $1.1 billion YOY CAP by Group $1,076 , $1,662 , $1,401 , $1,708 , • Expect substantial opportunities to continue to grow CAP and revenue in 24% 37% 25% 31% 2024 • Construction revenue inc
Slide 19: Materials Segment
Materials Materials Segment Segment Revenue by Product* Revenue by Group • Total volumes and orders strong throughout Q4 3% 11% • Revenue increase driven by business acquired and higher 30% asphalt and aggregate sales prices YOY with further price 2023 39% 2023 50% increases expected in 2024 67% • A
Slide 20: Why Granite?
Why Granite? • Accelerating revenue growth both organic and through acquisitions • CAP of $5.5 billion as of Q4 2023, $1.1 billion higher than the prior year • 47% of our de-risked CAP at Q4 2023 is best value projects • Continued strong public and private market environment supported by the acceler
Slide 21: © 2023 Granite Construction. All Rights Reserved.
© 2023 Granite Construction. All Rights Reserved.
Slide 22: Appendix
Appendix The tables below contain financial information income taxes, adjusted provision for income taxes, Management believes that these additional non- calculated other than in accordance with U.S. adjusted net income attributable to Granite GAAP financial measures facilitate comparisons generally
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation © 2023 Granite Construction. All Rights Reserved. 23
Slide 24: Adjusted NI Reconciliation
Adjusted NI Reconciliation © 2023 Granite Construction. All Rights Reserved. 24
Granite Construction — Investor Presentation (March 2024) on 6ix