Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Investor Presentation (March 2024)
27 slides from Onterris's investor presentation, March 2024
Slide 1: Investor Presentation
Investor Presentation A Leading End-to-End Environmental Solutions Company
Slide 2: Safe Harbor
Safe Harbor Statements contained herein and in the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be iden
Slide 3: Who We Are
Who We Are
Slide 4: Montrose at a Glance
Montrose at a Glance Montrose At A Glance ~3,100 120+ 17 Employees Locations Patents Attractive, growing market Differentiated as an Worldwide Issued with secular long-term integrated player - unique tailwinds combination of services and proprietary technology ~15% ~96% ~51% 2020 – 2023 Revenue Repe
Slide 5: Our Integrated Solutions Are Unique
Our Integrated Solutions Are Unique Assessment, Permitting Measurement Remediation and Response and Analysis & Reuse Identify Quantify Remediate KEY CAPABILITIES • Environmental Assessments • Multi-Media Laboratory Services • Consulting, Engineering, Design, • Environmental Emergency Response • Data
Slide 6: Our Integrated Solutions Are Unique (cont.)
Our Integrated Solutions Are Unique (cont.) Assessment, Permitting Measurement Remediation REVENUE MIX and Response and Analysis & Reuse 2023 Does not capture full margin expansion of Matrix (underway) 2023 MARGIN1 | LONG TERM MARGIN1 TARGET 2023 Margin Long Term Margin 2023 Margin Long Term Margin
Slide 7: Our Integrated Offering Matters to Clients
Our Integrated Offering Matters to Clients A third party study1 conducted of over 500 companies indicated that there was significant demand for integrated environmental solutions Extremely interested in an …unaware or unsure of where integrated solution… to find one 1) Conducted by KS&R Research fro
Slide 8: Leading with Science: Using R&D to Address Unmet Client Needs
Leading with Science: Using R&D to Address Unmet Client Needs Our client asked us for a PFAS removal system with better efficacy, lower cost and less waste generation, so our scientists created a novel alternative that continues to achieve non-detect after billions of gallons treated Superior effica
Slide 9: The Montrose Model is Increasingly Recurring, Predictable and Scalable
The Montrose Model is Increasingly Recurring, Predictable and Scalable ~96% The Montrose (Revenue Retention)1 Advantage + 15% ~6,000 (Avg. annual organic growth)2 ~200B (Unique Clients) + (PFAS TAM)4 ~51% + 1. Business (Cross Sales)3 >$150B 30-40% (Growth from Next-Gen Solutions) Grounded on (Annual
Slide 10: High Quality and Diverse Customer Base With Recurring Revenue
1. Business Grounded on Recurring Revenue High Quality and Diverse Customer Base With Recurring Revenue Diversified Customer Base & End Markets Percentage of Recurring Revenue1 Has • ~6,000 unique clients in 2023; 200+ of Fortune 500 companies Increased Over Time • Highly diverse customer base acros
Slide 11: Customer and Revenue Diversity Insulates from Political and Economic Shifts
1. Business Grounded on Recurring Revenue Customer and Revenue Diversity Insulates from Political and Economic Shifts Revenue Over Time ($M) Tight Labor Market Economic Uncertainty; Higher Inflation and Interest Rates COVID Economic Shock Obama Trump Administration Biden Administration Administratio
Slide 12: Integration Fuels The Cross-Sell Flywheel
2. Integration Fuels Cross-Selling Integration Fuels The Cross-Sell Flywheel Percentage of revenue from … due to the strong Flywheel effect cross-sell1 has increased… Proven ability to cross-sell solutions Cross-sell revenue Client identifies a Montrose designs has increased over 40 percentage point
Slide 13: Case Study – Go To Market Strategy and Leveraging Cross-Selling
2. Integration Fuels Cross-Selling Case Study – Go To Market Strategy and Leveraging Cross-Selling1 Expanding Client Touchpoints A Truly Integrated Service Approach One example of Montrose's cross-selling1 success is Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 our performance with a major American mul
Slide 14: Capabilities Aligned With Strong Secular Tailwinds in Large Addressable Markets
3. Large, Sustained Tailwinds Capabilities Aligned With Strong Secular Tailwinds in Large Addressable Markets Integrated Solutions and Technology Portfolio Position Montrose to Grow Faster Than The Market ASSESSMENT, PERMITTING MEASUREMENT REMEDIATION & REUSE AND RESPONSE AND ANALYSIS Water, Renewab
Slide 15: We Provide Integrated Solutions for PFAS Management
3. Sustained Tailwinds - Growth From Emerging Contaminants We Provide Integrated Solutions for PFAS Management We offer a unique suite of PFAS capabilities that can be integrated or provided a la carte, based on client needs Testing & Analysis (Enthalpy) Water Treatment Technology (ECT2) Ultra-trace
Slide 16: Methane Monitoring – Technology Disruption Brings a New Age
3. Sustained Tailwinds - Growth From Greenhouse Gas Mitigation and Air Quality Management Methane Monitoring – Technology Disruption Brings a New Age Montrose Offers The Full Solution Stack Large Market- ~$725M Annual Serviceable Addressable Market (SAM) from 20 Clients Montrose’s top 20 energy cust
Slide 17: R&D and Innovation Help Address Client Needs and Are Core to Montrose's Approach
4. Technology Innovation Bolsters Organic Growth and Barriers to Entry R&D and Innovation Help Address Client Needs and Are Core to Montrose’s Approach Montrose’s Select Showcase of Existing and Future Technologies Aligned With Long-Term R&D Advantage Megatrends Solutions are quickly In Process of P
Slide 18: Real-Time Monitoring and Software Innovation Core To Our Future
4. Technology Innovation Bolsters Organic Growth and Barriers to Entry Real-Time Monitoring and Software Innovation Core To Our Future The scale, complexity and regulatory requirements of the environmental contamination challenges today require real-time monitoring through platform solutions - like
Slide 19: M&A Strategy – Disciplined and a Core Growth Engine
5. Disciplined M&A in a Highly Fragmented Market M&A Strategy – Disciplined and a Core Growth Engine Key Pillars of M&A Strategy Proven Ability to Create Value from M&A One Year from Acquisition • Pipeline of assets that bring new talent, technology, and /or geographic expansion Revenue IDENTIFY • I
Slide 20: Matrix Solutions Acquisition: An Example of Value Creation in Action
5. Disciplined M&A in a Highly Fragmented Market Matrix Solutions Acquisition: An Example of Value Creation in Action Transaction Overview Key Outcomes • In June 2023, we completed a $48.6M acquisition of Matrix Solutions, one of Canada’s leading environmental engineering and consulting companies Im
Slide 21: Financial Overview
Financial Overview
Slide 22: Strong Record of Long-Term Growth
Strong Record of Long-Term Growth Consolidated Revenue2 ($M) Consolidated Adjusted EBITDA3,4 ($M) Montrose (Core)1 Consolidated Adjusted EBITDA3 Emergency Response 2019 – 2023 CAGR: 27.0% 2019 – 2023 CAGR2: 35.2% and Core only: 29.9% 1) Montrose (Core) excludes emergency response revenue 2) Excludes
Slide 23: Attractive Capital Structure
Attractive Capital Structure Commentary Equity Market Capitalization • Flexible balance sheet to further invest in innovation and acquisitions • Liquidity of $148.2 million including $23.2 million of cash and $125.0 million Preferred of availability under revolver as of Equity 12/31/23 $122M3 • Net
Slide 24: Appendix
Appendix
Slide 25: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to our results under GAAP, in this presentation we also present certain other supplemental financial measures of financial performance that are not required by, or presented in accordance with, GAAP, including, Consolidated Adjusted EBITDA, Consolidated Adj
Slide 26: Reconciliation of Net Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net Income to Consolidated Adjusted EBITDA (In thousands) For the Year Ended December 31, 2023 2022(a) 2021(a) 2020(a) 2019(a) Net loss $ (30,859) $ (31,819) $ (25,325) $ (57,949) $ (23,557) Interest expense 7,793 5,239 11,615 13,819 6,755 Income
Slide 27: Matrix Solutions Reconciliation of Net Income to Consolidated Adjusted EBITDA
Matrix Solutions Reconciliation of Net Income to Consolidated Adjusted EBITDA (In thousands) Matrix Solutions 2022 Purchase price $48,582 Revenue $69,912 Net Income $2,293 Add Back Taxes (1,160) Add Back Depreciation 1,260 Add Back Interest 268 Acquisition costs 61 Other non-recurring 598 Adjusted E
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