Aecon Group Inc. · TSX:ARE
Aecon — Investor Presentation (September 2018)
21 slides from Aecon's investor presentation, September 2018
Slide 1: Aecon Group Inc. Investor Presentation September 2018
AECON GROUP INC. (TSX:ARE) INVESTOR PRESENTATION SEPTEMBER 2018
Slide 2: Forward-Looking Information
Forward-Looking Information The information in this presentation includes certain forward-looking statements. Although these forward-looking statements are based on currently available competitive, financial and economic data and operating plans, they are subject to risks and uncertainties. In addit
Slide 3: Resilient Business Model with Three Diverse Segments
Resilient Business Model with Three Diverse Segments INFRASTRUCTURE INDUSTRIAL CONCESSIONS 37%* 60%* 3%* Rail & Transit Nuclear Heavy Mechanical Works Project Development Roads, Bridges and Tunnels Gas Pipelines & Stations Processing Facilities Public-Private Partnerships Municipal Roads Power Gener
Slide 4: Record Backlog with Growing Recurring Revenue
Record Backlog with Growing Recurring Revenue * Recurring Revenue is not included in backlog and is, therefore, revenue over and above work to be performed from contracts in backlog 4
Slide 5: Backlog at Historic Levels
Backlog at Historic Levels $7.0 2.3x 2.5x $6.0 2.0x 1.7x $5.0 1.5x 1.5x 1.5x 1.4x 1.5x 1.4x 1.4x 1.5x $4.0 1.3x 1.2x 1.1x 1.0x 1.1x $3.0 0.9x 1.0x 0.9x 1.0x 0.7x 0.7x 0.7x $2.0 0.6x 0.5x $1.0 $0.0 0.0x Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2
Slide 6: Robust Pipeline of Opportunities
Robust Pipeline of Opportunities Second Narrows Water Supply Tunnel Vancouver BC Coastal GasLink Pipeline+ BC Metrolinx Regional Express Rail (RER) Pre-Works ON Fort Hills Earthworks AB Confederation LRT Phase 2 ON Highway 401 HOT Lanes ON Hamilton LRT ON Trans Mountain Pipeline AB/BC RER Electrific
Slide 7: Long-Term Projects and Concessions Provide Outlook Stability
Long-Term Projects and Concessions Provide Outlook Stability Project Timeline (starting from end of Q2 2018) Mar-2018 Mar-2023 Mar-2028 Mar-2033 Mar-2038 Mar-2043 Mar-2048 Mar-2053 Waterloo LRT Construction completed in 2017; equity stake and 30 year concession post construction Eglinton LRT Constru
Slide 8: Valuable Contribution from Bermuda Concession
Valuable Contribution from Bermuda Concession Q2 YTD 2018 Traffic Statistics 30 Year Concession to redevelop, operate and maintain Q2 16 Q2 17 Q2 18 % Change the existing and redeveloped L.F. Wade International YTD YTD YTD 18 vs 17 Airport in Bermuda Air Visitors 107,963 124,103 132,365 6.7% (Leisur
Slide 9: Q2 2018 Financial Results - Reported
Q2 2018 Financial Results - Reported $ Millions Three Months Ended Trailing Twelve Months Ended (except EPS, $ per share) June 30* June 30* 2018 2017 Change+ 2018 2017 Change+ Revenue 755 686 10% 2,743 3,044 10% Gross Profit 79.5 71.6 11% 322.9 320.1 1% Gross Margin % 10.5% 10.4% 10bps 11.8% 10.5% 1
Slide 10: Q2 2018 and Q2 2018 TTM Reconciliation
Q2 2018 and Q2 2018 TTM Reconciliation ▪ On a pro-forma basis reflecting the adjustments above, Q2 2018 Earnings per Share (diluted) would have improved from $0.13 to $0.16 and EPS (diluted) for Q2 2018 TTM would have increased to $0.81 from $0.56. ^ See notes on slide 10 for detail of one-time adju
Slide 11: Balance Sheet and Capital Structure
Balance Sheet and Capital Structure BALANCE SHEET ($MM) DEBT TO ADJUSTED EBITDA*^+ Jun 30, 3.0x 2018 2.7x Cash^ 433.0 2.5x Working Capital 111.9 2.0x 2.0x 2.0x 2.0x 1.9x 1.8x Long-Term Debt 1.5x 1.2x - Finance Leases 72.7 1.0x 1.0x 0.9x 0.9x - Equipment & Other Asset Loans 50.3 0.8x LT Debt excludin
Slide 12: Outlook
Outlook Backlog and Revenue Growth Expected in 2018 and Beyond ▪ $6.4 billion backlog at June 30, 2018 with further growth expected based on robust pipeline of opportunities ▪ F.G. Gardiner Expressway Rehabilitation Project ($248 million) awarded in July 2018 ▪ Gordie Howe Bridge project expected to
Slide 13: Appendix
APPENDIX A@CCON
Slide 14: Q2 2018 Financial Results – Adjusted
Q2 2018 Financial Results – Adjusted $ Millions Three Months Ended Trailing Twelve Months Ended (except EPS, $ per share) June 30* June 30* 2018 2017 Change+ 2018 2017 Change+ Revenue 755 686 10% 2,743 3,044 10% Gross Profit 79.5 71.6 11% 322.9 320.1 1% Gross Margin % 10.5% 10.4% 10bps 11.8% 10.5% 1
Slide 15: Revenue and Adj. EBITDA Margin by Segment
Revenue and Adj. EBITDA Margin by Segment ^ See slide 11, Q2 2018 and Q2 2018 TTM Reconciliation, and notes on slide 10 for detail of one-time adjustments to results
Slide 16: Infrastructure Q2 2018 Results
Infrastructure Q2 2018 Results SECOND QUARTER* TRAILING TWELVE MONTHS* Revenue up by $83M, or 35%, year-over-year Revenue ($M) Revenue ($M) $47M in major projects east due to increased activity on light rail +35% +4% $320 transit projects and Bermuda Airport project $1,003 $1,046 $237 $25M in major
Slide 17: Industrial Q2 2018 Results
Industrial Q2 2018 Results SECOND QUARTER* TRAILING TWELVE MONTHS* Revenue ($M) Revenue down by $22M, or 5%, year-over-year Revenue ($M) -19% $442 -5% $420 $12M in conventional industrial from lower site construction work in $2,066 commodity mining $1,668 $33M in nuclear from higher activity on proj
Slide 18: Concessions Q2 2018 Results
Concessions Q2 2018 Results Revenue up by $15M period-over-period ▪ Higher construction activities from Bermuda International Airport Redevelopment Project ▪ $30M of construction revenue related to Bermuda is eliminated on consolidation in the quarter Adjusted EBITDA up $4M period-over-period ▪ Incr
Slide 19: Cash Position
Cash Position KEY DRIVERS FOR FREE CASH FLOW FREE CASH FLOW ($MM) MOMENTUM Q2 2018 Y/E TTM 2017 Significant working capital improvement in 2018 YTD Adjusted EBITDA 161.8 156.5 Cash interest up due to interest expense on non- Cash Interest Expense (net) (31.2) (22.7) recourse project debt for Bermuda
Slide 20: Capital Markets Overview
Capital Markets Overview ANALYST COVERAGE Price as of September 1, 2018 $17.35 Firm Analyst Telephone AltaCorp Capital Chris Murray (647) 776-8246 Shares Outstanding 59.8 Million Canaccord Genuity Yuri Lynk (514) 844-3708 Avg. Daily Share Volume 1.0 Million ($14.2 Million) CIBC Capital Markets Jacob
Slide 21: Contact
ACVPCON ADAM BORGATTI Senior Vice President, Corporate Development & Investor Relations 416.297.2610 | aborgatti@aecon.com AECON PACIFIC HEADQUARTERS AECON WEST HEADQUARTERS AECON EAST HEADQUARTERS 1055 Dunsmuir Street, Suite 2124 110-9th Avenue SW, Suite 300 20 Carlson Court, Suite 800 Vancouver, B