Innovate Corp. · NYSE:VATE

Innovate — HC2 Holdings — Investor Presentation (May 2018)

35 slides from Innovate's investor presentation, May 3, 2018

  1. Slide 1: HC2 Holdings, Inc. Investor Presentation May 3, 2018

    HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2018 Investor Presentation May 3, 2018

  2. Slide 2: Clear focus on delivering sustainable value for all stakeholders

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Clear focus on delivering sustainable value for all stakeholders  Value operator with long-term outlook  Acquire controlling equity interests in diverse industries creating value through growth in operating subsidiaries  Strong capital base allows funding

  3. Slide 3: HC2's Diversified Portfolio

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 11 Early Stage and Other Holdings Life Sciences: PANSEND  MediBeacon: Unique non-invasive real-time monitoring of kidney function  R2 Dermatology: Medical device to brighten skin based on Mass. General Hospital technology  BeneVir: Oncolytic viral immunot

  4. Slide 4: First Quarter 2018 Update: BeneVir

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . First Quarter 2018 Update 14 BeneVir:  BeneVir is a portfolio company of Pansend, our Life Sciences segment – Focused on the development of a patent-protected oncolytic virus, BV-2711, for the treatment of solid cancer tumors  Pansend is the owner of all o

  5. Slide 5: First Quarter 2018 Update: GMSL

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . First Quarter 2018 Update 15 GMSL:  We expect GMSL to report backlog at levels consistent with those reported at year end, reflective of normal burn off recognized in the first quarter on its maintenance contracts, in addition to strong backlog from GMSL’s

  6. Slide 6: Financial Overview

    Financial Overview

  7. Slide 7: DBM Global Historical Financial Summary

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . $513.8 $502.7 $579.0 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 2015 2016 2017 DBM Global Historical Financial Summary 17 Revenue Adjusted EBITDA Free Cash Flow(1) Backlog $52.0 $59.9 $51.6 10.1% 11.9% 8.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.

  8. Slide 8: Global Marine Group Historical Financial Summary

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Global Marine Group Historical Financial Summary 18 $42.1 $41.2 $44.0 31.2% 25.4% 26.0% 0% 10% 20% 30% 40% 50% 60% $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 2015 2016 2017 Adj. EBITDA Adj. EBITDA Margin Revenue Adjusted EBITDA Capital Expenditures Free Cash F

  9. Slide 9: Historical Consolidated Revenue and Adjusted EBITDA

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Historical Consolidated Revenue and Adjusted EBITDA 19 ($USD millions) Core Operating Revenue $460.4 $735.0 $701.9 $513.8 $502.7 $579.0 $134.9 $161.9 $169.5 $6.8 $6.4 $16.4 $1,115.9 $1,406.0 $1,466.8 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2015 20

  10. Slide 10: Free Cash Flow Generation

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Free Cash Flow Generation 20 ($USD millions) 1. Free Cash Flow defined as Adjusted EBITDA less Maintenance Capital Expenditures. LTM 12/31/17 Core Operating Adj. EBITDA $105.5 Less: Non-Operating Corporate Adj. EBITDA $29.2 Less: GMSL Maintenance Capex 3.3 L

  11. Slide 11: Appendix

    Appendix

  12. Slide 12: DBM Global Inc. (Schuff Intl.)

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . DBM Global Inc. (Schuff Intl.) 22  DBM Global Inc. is focused on delivering world class, sustainable value to its clients through a highly collaborative portfolio of companies which provide better designs, more efficient construction and superior asset mana

  13. Slide 13: DBM Global Inc. Core Activities, Products and Services

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . DBM Global Inc. (Schuff Intl.) 23 Core Activities Products & Service Offerings Industries Served  The largest structural steel fabricator and erector in the U.S.  In-house structural & design engineering expertise  Assets of Mountain States Steel became p

  14. Slide 14: Global Marine Group - Business Description

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 24 “Engineering a Clean and Connected Future”  Leading provider of offshore marine engineering delivered via three business units  Founded in 1850 - Headquartered in UK with major regional hub in Singapore and an established European base in Germany Global

  15. Slide 15: Global Marine Group Core Activities

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 25 C o re A cti v it ie s Maintenance  Provision of vessels on standby to repair fiber optic telecom cables in defined geographic zones  Location of fault, cable recovery, jointing and re-deployment of cables  Operation of depots storing cable and spare p

  16. Slide 16: American Natural Gas

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . American Natural Gas 26  Designs, builds, owns, operates and maintains compressed natural gas commercial fueling stations for transportation  Building a premier nationwide network of publically accessible heavy duty CNG fueling stations throughout the Unit

  17. Slide 17: PTGi International Carrier Services

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . PTGi International Carrier Services (“PTGi ICS”) 27  Leading international wholesale telecom service company providing voice and data call termination to the telecom industry worldwide  Provides transit and termination of telephone calls through its own gl

  18. Slide 18: Continental Insurance Group

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Continental Insurance Group 28  The formation of Continental Insurance Group (“CIG”) in April 2015 to invest in the long-term care and life insurance sector is consistent with HC2’s overall strategy of taking advantage of dislocated and undervalued operatin

  19. Slide 19: Pansend Life Sciences Segment

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Pansend 29 HC2’s Pansend Life Sciences Segment Is Focused on the Development of Innovative Healthcare Technologies and Products  80% equity ownership of company focused on immunotherapy; Oncolytic virotherapy for treatment of solid cancer tumors  Founded b

  20. Slide 20: 704Games (Formerly Dusenberry Martin Racing)

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 704Games (Formerly Dusenberry Martin Racing (DMi, Inc.)) 30  Owns worldwide exclusive licensing rights to NASCAR® simulation style racing titles on interactive entertainment platforms – Owns all the code, artwork and animation previously developed for legac

  21. Slide 21: Consolidated Financial Summary

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Consolidated Financial Summary 31 Q4 2017 Q4 2016 FY 2017 FY 2016 Statement of Operations (Selected Financial Data) Total Net Revenue $458.5 $454.0 $1,634.1 $1,558.1 Total Operating Expenses $460.0 $449.0 $1,635.3 $1,559.5 Income Loss From Operations ($1.5)

  22. Slide 22: Segment Financial Summary

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Segment Financial Summary 32All data as of December 31, 2017 Construction formerly Manufacturing; Energy formerly Utilities. FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Adjusted EBITDA Core Operating Subsidiaries Construction $51.6 $15.1 $16.8 $11.1 $8.6

  23. Slide 23: Reconciliation to Adjusted EBITDA, Full Year 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2017 33 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (46,911)$ Less: Net Income

  24. Slide 24: Reconciliation to Adjusted EBITDA, Full Year 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2016 34 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (94,549)$ Less: Net loss a

  25. Slide 25: Reconciliation to Adjusted EBITDA, Full Year 2015

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2015 35 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net Income (loss) attributable to HC2 Holdings, Inc. (35,565)$ Less: N

  26. Slide 26: Reconciliation to Adjusted EBITDA, Q4 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2017 36 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (8,537)$ Less: Net Inco

  27. Slide 27: Reconciliation to Adjusted EBITDA, Q3 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended September 30, 2017 37 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (5,967)$ Less: Net Inc

  28. Slide 28: Reconciliation to Adjusted EBITDA, Q2 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2017 38 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (17,911)$ Less: Net Income

  29. Slide 29: Reconciliation to Adjusted EBITDA, Q1 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2017 39 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (14,496)$ Less: Net loss a

  30. Slide 30: Reconciliation to Adjusted EBITDA, Q4 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2016 40 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (61,464)$ Less: Net los

  31. Slide 31: Reconciliation to Adjusted EBITDA, Q3 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended September 30, 2016 41 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net Income (loss) attributable to HC2 Holdings, Inc. $ (4,558) Les

  32. Slide 32: Reconciliation to Adjusted EBITDA, Q2 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2016 42 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net Income (loss) attributable to HC2 Holdings, Inc. $ 1,935 Less: Net

  33. Slide 33: Reconciliation to Adjusted EBITDA, Q1 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2016 43 ($USD thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net Income (loss) attributable to HC2 Holdings, Inc. $ (30,462) Less:

  34. Slide 34: Reconciliation to Insurance Adjusted Operating Income

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Insurance Adjusted Operating Income 44 ($USD thousands) Adjusted Op rating Income - Insurance ("Insurance AOI") FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Q4 2016 Net Income (loss) - Insurance segment 7,0

  35. Slide 35: HC2 Holdings, Inc. Investor Relations Contact

    HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2018 A n d r e w G . B a c k m a n • i r @ h c 2 . c om • 2 1 2 . 2 3 5 . 2 6 9 1 • 4 5 0 P a r k A v e n u e , 3 0 t h F l o o r , N e w Y o r k , N Y 1 0 0 2 2 May 3, 2018

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