Aecon Group Inc. · TSX:ARE
Aecon — Investor Presentation (August 2018)
22 slides from Aecon's investor presentation, August 2018
Slide 1: Aecon Group Inc. Investor Presentation
AECON GROUP INC. (TSX:ARE) INVESTOR PRESENTATION AUGUST, 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 Diversified Profile
Record Backlog with Diversified Profile * Recurring Revenue is not included in backlog and is, therefore, revenue over and above work to be performed from contracts in backlog
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: Recurring Revenue Poised to Continue Growth
Recurring Revenue Poised to Continue Growth Industrial recurring revenue expected to grow from contract mining volume growth as operators increase throughput and new operating site continues to ramp up. Segment recurring revenue growth will also come from telecommunications and gas distribution proj
Slide 8: 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 9: Valuable Contribution from Bermuda Concession
Valuable Contribution from Bermuda Concession 30 Year Concession to redevelop, operate and maintain May 2018 Traffic Statistics % May 16 May 17 May 18 the existing and redeveloped L.F. Wade International YTD Change YTD YTD 18 vs 17 Airport in Bermuda Air Visitors 76,729 87,827 95,729 9.0% (Leisure,
Slide 10: 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 11: 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 $0.56. ^ See notes on slide 10 for detail of one-time adju
Slide 12: Balance Sheet and Capital Structure
Balance Sheet and Capital Structure BALANCE SHEET ($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 13: 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 ▪ Mainline pipeline activity expected to
Slide 14: Appendix
APPENDIX A@CCON
Slide 15: 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 16: 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 17: 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 $25M in major
Slide 18: Industrial Q2 2018 Results
Industrial Q2 2018 Results SECOND QUARTER* TRAILING TWELVE MONTHS* Revenue ($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 19: 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 $4M period-over-period ▪ Incr
Slide 20: Cash Position
Cash Position KEY DRIVERS FOR FREE CASH FLOW FREE CASH FLOW ($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 21: Capital Markets Overview
Capital Markets Overview ANALYST COVERAGE Price as of August 1, 2018 $17.03 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 1.1 Million ($16.1 Million) CIBC Capital Markets Jacob Bo
Slide 22: 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