Mdu Resources Group, Inc. · NYSE:MDU
Mdu Resources — Investor Presentation (December 2021)
34 slides from Mdu Resources's investor presentation, December 2021
Slide 1: Investor Presentation December 2021
DECEMBER 2021 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements and Use of Non-GAAP Measures
FORWARD-LOOKING STATEMENTS AND USE OF NON-GAAP MEASURES This presentation contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, there
Slide 3: MDU Resources is Building a Strong America
MDU Resources is Building a Strong America® eA oh ce 4 With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our markets while being a safe and great place to work. Company founded in 1924 | * Headquartered in Bismarck, ND Utilities
Slide 4: Key Performance Indicators
KEY PERFORMANCE INDICATORS YTD AS OF SEPTEMBER 30, 2021 Operating Revenues Net Income (in billions) (in millions) $277.9 $291.6 $5.00 $4.24 $300.00 $4.15 $4.00 $225.00 $3.00 $150.00 $2.00 $1.00 $75.00 $0.00 $0.00 2020 2021 2020 2021 EBITDA From Continuing Earnings Per Share Operations $800.00 $2.00
Slide 5: EBITDA Mix Over Time
EBITDA MIX OVER TIME Fundamentally enhanced business mix and improved customer diversification since 2007 Divested volatile Oil & Gas business in 2014-16, eliminating majority of commodity exposure Improved mix of Regulated Energy Delivery earnings and EBITDA, increasing long-term visibility E
Slide 6: Capital Expenditures
CAPITAL EXPENDITURES MDU Resources’ organic investments remain the primary driver of high-quality earnings growth Regulated Energy Delivery Focus Capital Expenditure by Segment ($ in millions) Capital investments primarily in regulated businesses where rates of return have a high level of certaint
Slide 7: Segment Overview
LISTED ==MDU RESOURCES | Building a Strong America’ NYSE GROUP.
Slide 8: Business Segment Overview
BUSINESS SEGMENT OVERVIEW Regulated Energy Delivery Businesses 2021 EBITDA1 YTD as of September 30 ($ in millions) Growing the business by investing in the safety and reliability of our existing system $126 $220 Focused on organic growth first while managing Electric and operating costs Natural
Slide 9: Electric and Natural Gas Snapshot
ELECTRIC AND NATURAL GAS SNAPSHOT 1,149,663 WA CUSTOMERS 226,471 Customers ND As of 09.30.21 MT 207,131 Customers 112,255 Customers OR MN 765 MW 80,007 Customers 21,957 Customers ID OWNED GENERATION SD 394,404 Customers 71,307 Customers WY 36,131 Customers 28,900 MILES OF ELECTRIC AND GAS TRANSMISSI
Slide 10: Utility Industry Regulatory Dynamics
UTILITY INDUSTRY REGULATORY DYNAMICS Constructive regulatory mechanisms help stabilize earnings performance MDU Utilities Group enjoys constructive regulatory relationships in all of its service territories, allowing it to ensure adequate and timely recovery of incurred costs – MDU Utilities Group
Slide 11: Rate Base Organic Growth Drivers
RATE BASE ORGANIC GROWTH DRIVERS Continuous rate base growth supported by strong customer growth and system investments Utility earnings growth is driven by capital deployment, resulting in rate base growth Historical MDU Utilities Group Customer Base Rates are agreed upon with the utility commi
Slide 12: Environmental Focus
ENVIRONMENTAL FOCUS Focused on operating our Utilities business with a decreasing environmental footprint GHG Emissions Reduction Targets Sustainable Operations Target to reduce electric utility GHG emissions Retirement of Coal Facilities. In the process of retiring three aging coal intensity by 4
Slide 13: Pipeline Snapshot
PIPELINE SNAPSHOT 3,700 MILES OF PIPE OVER 2.2 BCF/D SYSTEM CAPACITY 13 INTERCONNECTING POINTS Rate Base1 (Regulated Energy Delivery) Segment EPS 325 ($ in millions) $5,000 $4,229 EMPLOYEES $4,000 $0.25 $3,133 $0.19 $3,000 $0.20 $0.18 $1,772 $0.15 LARGEST $2,000 $1,000 $0.10 STORAGE FIELD IN $0 $0.0
Slide 14: Annual Throughput
ANNUAL THROUGHPUT Million Dekatherms 500 450 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 14
Slide 15: Pipeline Expansion: North Bakken Expansion
PIPELINE EXPANSION WBI Energy is actively expanding its services in North Dakota through two key projects North Bakken Expansion As designed, will provide an additional 250 million cubic feet per day of natural gas transportation capacity, representing an 11.5% increase from 2020 levels Project
Slide 16: Pipeline Expansion: Wahpeton Expansion
PIPELINE EXPANSION WBI Energy is actively expanding its services in North Dakota through two key projects Wahpeton Expansion Constructing a 60 mile, 12-inch pipeline expansion and ancillary facilities to Wahpeton, ND Recently received approval to use the FERC pre-filing review process This exp
Slide 17: Construction Services Snapshot
CONSTRUCTION SERVICES SNAPSHOT 7,900 EMPLOYEES AT PEAK 43 STATES OF OPERATION 6 OUTSIDE CONSTRUCTION COMPANIES Segment Revenue and Year-End Backlog Segment EBITDA1 12 ($ in millions) ($ in millions) INSIDE CONSTRUCTION Revenue Backlog COMPANIES $3,000 $200 $173 $2,096 $150 $2,000 Ranked 4th $1,273 $
Slide 18: Market Leader
MARKET LEADER Leading local presence in inside and outside specialty contracting High-Value Projects Local Brands, National Strength MDU Construction Services Group is a national industry- KCI Terminal leading transmission/distribution and electrical/mechanical specialty contractor Providing ser
Slide 19: Supplemental Growth via M&A
SUPPLEMENTAL GROWTH VIA M&A 25 acquisitions since inception Expanding into new geographies and services Segment Revenue by acquiring complementary brands that ($ in millions) enhance our portfolio $2,500 Continued expansion into new product and geographic markets, helping to enhance scale and bran
Slide 20: Multiple High-Growth Opportunities
MULTIPLE HIGH-GROWTH OPPORTUNITIES Infrastructure spending gap creates multiple levers for long-term growth 2020-2029 Infrastructure Systems1 Funding Gap >$1.5 trillion spending gap in U.S. infrastructure drives Surface Transportation $1,205 large opportunity for MDU Construction Services Electric
Slide 21: Safety, Community, Employees & Excellence
SAFETY, COMMUNITY, EMPLOYEES & EXCELLENCE The well-being of our employees, customers and communities is at the core of everything we do Safety First We provide industry-leading safe and healthy work environments and continuously improve operational performance Employee Satisfaction Attract, deve
Slide 22: Construction Materials Snapshot
CONSTRUCTION MATERIALS SNAPSHOT NEARLY 6,000 EMPLOYEES AT PEAK SEASON 14 STATES OF OPERATION Segment Revenue and Period-End Backlog Segment EBITDA1 1.1 BILLION ($ in millions) ($ in millions) TONS OF RESERVES $2,500 Revenue Backlog $2,178 $400 $1,877 $305 $2,000 $300 $245 $1,500 TOP 10 $1,000 $483 $
Slide 23: U.S. Infrastructure Growth
U.S. INFRASTRUCTURE GROWTH Significant underinvestment in recent years results in decades-long growth opportunities Over $1.5 trillion funding gap in U.S. infrastructure expected to drive heightened construction demand This decades-long growth opportunity is present across multiple infrastructur
Slide 24: Aggregates Focused
AGGREGATES FOCUSED KRC Aggregates Overview Aggregates Sales Volume Top 10 aggregate producer in the U.S. (Tons in millions) Well-positioned to expand market share given increasing reach and 34 32.3 robust aggregate reserves 32 30.9 29.8 30 Steady growth in aggregates sales volume since 2015 27
Slide 25: Bolt-On M&A
BOLT-ON M&A Knife River was built through a combination of organic growth and 87 acquisitions Ample bolt-on M&A opportunities Segment Revenue ($ in millions) Familiarity with local markets Ongoing M&A focused on expanding vertically $2,500 Key areas of focus: integrated construction material f
Slide 26: Construction Education at its Finest
CONSTRUCTION EDUCATION AT ITS FINEST Knife River is going beyond the classroom to provide hands-on training in real-world environments. Building real skills through both education and experience. 80,000 square-foot heated indoor arena for training Learn more at www.krtrainingcenter.com on trucks a
Slide 27: Sustainability
SUSTAINABILITY Knife River operates sustainably to protect the environment and support our communities KNIFE RIVER SUSTAINABILITY efforts are closely integrated into our business strategy and help create a competitive advantage Environmental investments. Pioneered the first thermal remediation servi
Slide 28: Financial Guidance
FINANCIAL GUIDANCE AS OF NOVEMBER 3, 2021 Select Historical Results 2021 Guidance Forward Guidance Framework 2015-2020 2015 2020 CAGR Electric & Natural Gas 5% Rate Base CAGR over 5 years $0.31 $0.50 10% - Utility EPS Customer Growth: 1-2% annually Pipeline EPS $0.07 $0.19 22.1% - - Construction Mat
Slide 29: Appendix
At i woke? 4 By a = MDU LISTED | Building a Strong America® NYSE HE MDU RESOURCES GROUP.
Slide 30: Reconciliation of EBITDA Guidance
RECONCILIATION OF EBITDA GUIDANCE (in millions) Low High Income from continuing operations $378.0 $418.0 Adjustments: Interest expense 90.0 95.0 Income taxes 85.0 90.0 Depreciation, depletion and amortization 297.0 297.0 EBITDA from continuing operations $850.0 $900.0 30
Slide 31: Reconciliation of EBITDA
RECONCILIATION OF EBITDA ($ in millions) For the year ended December 31 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Income from Continuing $307.8 $322.8 $293.7 ($123.3) $244.0 $226.0 ($14.3) $168.7 $185.0 $176.4 $233.1 $285.0 $269.4 $335.2 $390.5 Ops. Adjustments: Inte
Slide 32: Multi-Year Financials
MULTI-YEAR FINANCIALS ($ in millions, except per share data) For the year ended December 31 2015 2016 2017 2018 2019 2020 Revenue $4,014 $4,129 $4,443 $4,532 $5,337 $5,533 Operating Profit $326 $409 $424 $402 $481 $545 Operating Margin 8.1% 9.9% 9.5% 8.9% 9.0% 9.8% EBITDA1 $550 $630 $640 $622 $753 $
Slide 33: Reconciliation of 2020 EBITDA
RECONCILIATION OF 2020 EBITDA ($ in millions) Nine Months Ended September 30, 2020 Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $40.3 $13.8 $24.3 $74.5 $122.1 $3.4 $278.4 continuing ops. Adjustments: Interest Expense 20.1 27.5 5.7
Slide 34: Reconciliation of 2021 EBITDA
RECONCILIATION OF 2021 EBITDA ($ in millions) Nine Months Ended September 30, 2021 Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $41.6 $20.1 $28.7 $81.8 $116.9 $2.2 $291.3 Continuing Ops. Adjustments: Interest Expense 19.8 27.6 5.6
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