North American Construction Group Ltd. · TSX:NOA
North American Construction — Q3 2023 Earnings Presentation
25 slides from North American Construction's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 Earnings Presentation
Q3 2023 EARNINGS PRESENTATION November 2, 2023
Slide 2: Forward-looking statements & non-GAAP financial measures
Forward-looking statements & NOA TSX - NYSE non-GAAP financial measures This presentation contains forward-looking information which reflects the current plans and This presentation presents certain non-GAAP financial measures because management believes expectations of North American Construction G
Slide 3: Everyone Gets Home Safe
Everyone Gets NOA TSX - NYSE Home Safe 4.9 5.1 4.8 Exposure Hours 1 4.2 Trailing twelve-month recordable injury rate below 0.30 3.4 3.4 3.1 2.7 Unwavering commitment to safety delivering improvements 2.3 2.1 1.6 Maintaining health & safety focus through specific initiatives • Winter preparation camp
Slide 4: Q3 Accomplishments
Q3 Accomplishments NOA TSX - NYSE Closed acquisition of MacKellar Group effective October 1, 2023 • Provides step-change scale with geographic and commodity diversification Strongest construction quarter to date for Fargo-Moorhead project • Construction activity will progress the project past 25% co
Slide 5: Equipment Utilization
NOA TSX - NYSE Equipment Utilization1 100% 80% Target range of 75% to 85% 62% 55% 59% 56% 60% 52% Q3 2023 43% 40% 40% 31% 26% 20% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 2018 2019 2020 2021 2022 2023 Utilization impac
Slide 6: MacKellar Transaction Closed
NOA MacKellar Transaction Closed TSX - NYSE ▪ Corporate culture, core values, and maintenance skills key to fit and smooth transition ▪ Strong safety culture and has a favorable long-standing reputation in the region ▪ Brings ~450 heavy equipment assets along with $2.0 billion of contractual backlog
Slide 7: The New Global NOA Group of Companies
NOA The New Global NOA Group of Companies TSX - NYSE Australian contractor of civil earthmoving, mining services, and large-scale equipment rentals Fully maintained fleet provider located in western Australia ✓ Large scale structured to provide flexible, high-quality equipment ✓ Low-cost operator Ma
Slide 8: 2023 Q3 Financial Overview
2023 Q3 FINANCIAL OVERVIEW 8
Slide 9: 2023 Q3 Performance
NOA 2023 Q3 Performance TSX - NYSE $273M $59M 56% 14.7% Combined Adjusted Equipment Return on revenue1 EBITDA1 utilization2 invested capital 1 • Adjusted EBITDA of $59 million $100 Adjusted EBITDA1 comparable with record-setting $90 Q3 achieved in 2022 Q3 2023 $80 • Cost effective operation of the h
Slide 10: Combined Results
NOA TSX - NYSE Combined Results (figures in millio ns o f Canadian do llars, except per share amo unts) 2023 Q3 2022 Q3 Variance Wholly-owned entities $195 $191 $3 Share of amounts from investments $78 $78 $0 TOTAL COMBINED REVENUE 1 $273 $270 $3 Q3 2023 Combined gross profit1 $38 13.9% $40 14.7% ($
Slide 11: Adjusted EBITDA and EPS
NOA TSX - NYSE Adjusted EBITDA1 and EPS 1 (figures in millio ns o f Canadian do llars, except per share amo unts) 2023 Q3 2022 Q3 Variance 1,3 Adjusted EBITDA $59 22.4% $60 22.3% ($1) 1,3 Adjusted EBIT $25 9.6% $31 11.4% ($6) Adjusted EPS1 $0.54 $0.65 ($0.11) 2 General & administrative expenses $7 3
Slide 12: Cash Provided by Operating Activities
NOA TSX - NYSE Cash Provided by Operating Activities (figures in millio ns o f Canadian do llars unless o therwise stated) 2023 Q3 2022 Q3 Variance Cash provided by operations prior to change in working capital 1 $42 $40 $2 Net changes in non-cash working capital (4) (8) 4 Cash provided by operating
Slide 13: Balance Sheet
NOA TSX - NYSE Balance Sheet (figures in millio ns o f Canadian do llars unless o therwise stated) September 30, 2023 December 31, 2022 December 31, 2021 Cash $40 $69 $17 Total capital liquidity 1 154 212 233 Property, plant & equipment 695 646 641 Total assets 1012 980 869 Senior debt 1,2 $277 1.3x
Slide 14: Looking ahead
NORTH ‘S) AMERICAN CONSTRUCTION GROUP.
Slide 15: 2023 check-in
NOA TSX - NYSE 2023 check-in Priorities for Q4 2023 & Full Year 2024 1 2 • Integrate MacKellar Group • Drive global safety performance through ERP implementation and culture focused on front- and organically grow line supervision and business in Australia green-hand training Q3 2023 3 4 • Finalize r
Slide 16: Integration of MacKellar Group
NOA TSX - NYSE Integration of MacKellar Group Drive synergies through global collaboration Optimize low-cost Implement Adopt standardized operations reporting for fleet & Q3 2023 NACG ERP system to add performance scalability management Transition team in place Pursue diversified prospects in Queens
Slide 17: Bid Pipeline
NOA TSX - NYSE Bid Pipeline ESTIMATED PROJECT COMMENCEMENT TIMING Q4 2023 2024 2025+ Preferred opportunities & extensions Q3 2023 Projects in the active tender phase Projects in the pre-tender phase • Pipeline will expand significantly upon inclusion of MacKellar Group projects being bid Diversified
Slide 18: Proforma backlog
NOA TSX - NYSE Proforma backlog 1 currently at $2.8 billion ✓ Targeting to be over $3.0 billion by year-end as regional oil-sands award to offset scopes completed in Q4 2023 ✓ Mackellar Group acquisition adds $2.0 billion of contracted backlog MINING, RESOURCE & CIVIL CANADIAN OIL SANDS REGION AUSTR
Slide 19: 2023 Combined Outlook
NOA TSX - NYSE 2023 Combined Outlook Outlook now reflects full fourth quarter of MacKellar Group • Acquisition effective date of PREVIOUS CURRENT October 1, 2023 Combined revenue1 $1.15b - $1.25b $1.2b - $1.3b Sustaining capital1 based on Adjusted EBITDA1 $275m - $305m $295m - $310m strong outlook f
Slide 20: 2024 Outlook
NOA TSX - NYSE 2024 Outlook Combined revenue1 • Backlog1 provide visibility to midpoint of $1.6 billion of combined revenue1 $1.5b - $1.7b • MacKellar Group currently operating at run-rate reflected in 2024 outlook Adjusted EBITDA1 • Continued focus on cost effective operation of heavy equipment fle
Slide 21: Supplemental Information
NOA TSX - NYSE SUPPLEMENTAL INFORMATION 2023 Q3 EARNINGS PRESENTATION Q3 2023 21 21
Slide 22: Company Overview
NOA TSX - NYSE Company Overview Premier provider of mining and heavy construction services • Established reputation with over 70 years in business Northwest • Long-term contracts awarded based on safe, cost-effective operations Territories Nunavut Mobile fleet of ~900 heavy equipment assets • Fully
Slide 23: Diversification Update
NOA Diversification Update TSX - NYSE ▪ Operations in Canada, Australia Canadian oil sands and United States 15% Civil construction & ▪ Platform in place to 35% project management Q3 2023 further grow and Other Canadian diversify commodities commodities 25% ▪ Clear line of sight to Western Australia
Slide 24: Major Long-Term Contracts
NOA TSX - NYSE Major Long-Term Contracts Owner Contract1,2 Base Mine – Millennium Suncor Energy MUA 2023 2040 & North Steepbank Services Inc. with term MUC 2023 2059 Fort Hills Mine Fort Hills Energy LP with term Mildred Lake & MSA 2023 2046 Syncrude Canada Aurora mines with term Q3 2023 MSA Kearl M
Slide 25: Heavy Equipment Fleet
NOA TSX - NYSE Heavy Equipment Fleet • As at September 30, 2023, ~900 mobile heavy equipment assets provide operational flexibility • Managed on an individual asset basis and deployed with sole objective of maximum operating utilization • ~300 assets operated within the Nuna Group of Companies • New
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