North American Construction Group Ltd. · TSX:NOA
North American Construction — Q1 2021 Earnings Presentation
29 slides from North American Construction's earnings presentation, Apr 29, 2021
Slide 1: Q1 2021 Earnings Presentation
Q1 2021 EARNINGS PRESENTATION April 29, 2021 1
Slide 2: Forward-looking statements & Non-GAAP financial measures
Forward-looking statements & 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 Q1 2021 EARNINGS expectations of North American Construction Group Lt
Slide 3: Agenda
Q1 2021 EARNINGS AGENDA Opening comments Q1 2021 performance Financial overview Operational priorities Outlook for 2021 3 3
Slide 4: Everyone Gets Home Safe
Everyone Gets Home Safe Q1 2021 EARNINGS Exposure Hours 1 4.2 Total Recordable Injury Frequency 3.4 3.4 3.3 3.1 2.7 2.3 2.1 0.5 1.6 0.5 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 2013 2014 2015 2016 2017 2018 2019 2020 Q1 TTM 2021 TTM • Exposure hours are slightly lower due to continuing impact
Slide 5: Q1 2021 Performance
Q1 2021 EARNINGS Q1 2021 PERFORMANCE 5
Slide 6: 2021 Q1 Performance
2021 Q1 Performance $0.65 $61.1M 19.0% +23% Q1 2021 EARNINGS Adjusted EPS1 Adjusted EBITDA1 Gross profit margin1 Revenue increase from Q4 2020 $70 • Record adjusted EBITDA1 achieved in Adjusted EBITDA1 $61.1 Q1 despite year over year revenue $60 decrease from strong operational execution as well as
Slide 7: Heavy Equipment Operating Hours
Heavy Equipment Operating Hours Overall gross increase of 28% in equipment hours from Q4 2020 • Result of both continued recovery and step change by Nuna’s heavy equipment fleet Q1 2021 EARNINGS Operating hours specific to the NACG fleet were up 14% which translated into a 23% increase in top-line r
Slide 8: Q1 2021 Financial Overview
Q1 2021 EARNINGS Q1 2021 FINANCIAL OVERVIEW 8
Slide 9: Adjusted EBITDA and EPS
Adjusted EBITDA1 and EPS (figures in millio ns o f Canadian do llars, except per share amo unts) Q1 2021 Q1 2020 Variance Q1 2021 EARNINGS Revenue $168 $199 ($30) Gross profit1 32 19.0% 35 17.4% (3) 2 General & administrative expenses 7 4.2% 9 4.6% (2) Net income and comprehensive income 19 19 0) Ba
Slide 10: Cash provided by operating activities
Cash provided by operating activities (figures in millio ns o f Canadian do llars unless o therwise stated) Q1 2021 Q1 2020 Variance Q1 2021 EARNINGS Cash provided by operations prior to change in working capital1 $60) $54) $14 Net changes in non-cash working capital (18) (5) (13) Cash provided by o
Slide 11: Balance sheet
Balance sheet (figures in millio ns o f Canadian do llars unless o therwise stated) March 31, 2021 December 31, 2020 December 31, 2019 Q1 2021 EARNINGS Cash $32 $44 $6 1 Liquidity 151 148 115 Property, plant & equipment 644 634 588 Total assets 842 839 793 Senior debt 1,2 $353 2.1x $353 2.0x $296 1.
Slide 12: Outlook for 2021
Q1 2021 EARNINGS OUTLOOK FOR 2021 12
Slide 13: Operational Priorities for 2021
Operational Priorities for 2021 Q1 2021 EARNINGS 1 2 3 Maintain pandemic Maximize utilization of available Accelerate use of lower cost protocols, uphold zero heavy equipment fleet; component rebuild facility; harm safety culture; achieve geographic & commodity on time on budget shop sustainability
Slide 14: Accelerated Drive for Diversification
Accelerated Drive for Diversification Bid pipeline is strong reflecting strength in commodity prices Q1 2021 EARNINGS • Significant award in Q4 2020 in Northern Ontario a strong signal of growing confidence in the mining industry • Recent submission from partnerships for two multi-year mining contra
Slide 15: Bid Pipeline
Bid Pipeline ESTIMATED PROJECT COMMENCEMENT TIMING Short-term 6 Months 12-18 Months 2-3 Years Q1 2021 EARNINGS Preferred opportunities & extensions Projects in the active tender phase Projects in the pre- tender phase Diversified resources & geography Size = $100m scope Canadian oil sands region • B
Slide 16: Equipment Utilization
Equipment Utilization • Operating utilization of 66% in Q1 2021 reflects a substantial increase from the low in Q2 2020 of 24% Q1 2021 EARNINGS • Utilization of our equipment fleet is a key driver of profitability and continuation of upward trend is a focus • Internal maintenance programs have kept
Slide 17: Fleet Telematics Program
Fleet Telematics Program • In collaboration with Caterpillar and Finning, NACG commissioned the in-house program in March 2021 • Telematics will provide whole machine operation and maintenance monitoring Q1 2021 EARNINGS • Onboard hardware installed by technical experts will stream data in real-time
Slide 18: ESG Update – Q1 2021
ESG Update – Q1 2021 Q1 - 2021 versus 2020 Inaugural 2021 Sustainability Report issued February 2021 +52% Q1 2021 EARNINGS • Provides structured framework for accountability moving forward • Expectation to issue annual report every February Year over year increase in revenue Progress made in the thr
Slide 19: 2021 Outlook
2021 Outlook Key Measures: Q1 2021 EARNINGS $80 $180 - $210 $210 Current line of sight and assumption of Adjusted EBITDA1 continued easing of site access restrictions $80 $95 - $105 $210 offer ability to provide outlook for 2021 Sustaining capital1 • Adjusted EPS1 is built on EBITDA1 $1.00 $1.60 - $
Slide 20: Supplemental Information
SUPPLEMENTAL INFORMATION Q1 2021 EARNINGS PRESENTATION 20
Slide 21: Company Overview
Company Overview Premier provider of mining and heavy construction services Q1 2021 EARNINGS • Established reputation with over 65 years in business • Long-term contracts awarded based on safe cost-effective operations Mobile fleet of ~900 heavy equipment assets • Fully backed by support equipment &
Slide 22: Environment, Social, Governance
Environment, Social, Governance • Inaugural 2021 Sustainability Report issued February 2, 2021 Q1 2021 EARNINGS • Provides structured framework for accountability moving forward Three key focus areas for 2021 Reclamation and Environmental Services 1. Inclusivity & Diversity in Operations • Salvaged
Slide 23: First Nation & Inuit Partnerships
First Nation & Inuit Partnerships 1. Kitikmeot Corporation We take great pride & responsibility in our First Nation & Inuit Q1 2021 EARNINGS partnerships • Majority partner in Nuna, Kitikmeot Corporation is a wholly- owned business of Kitikmeot Inuit Association • Our partners enable us to work effe
Slide 24: Nuna Group of Companies
Nuna Group of Companies Nuna Group of Companies is the premier mining Q1 2021 EARNINGS contractor in northern Canada Formed in 1993, Nuna is the established incumbent contractor on the mine sites in Nunavut and the Northwest Territories • Q1 2021 represented strongest first quarter of activity on re
Slide 25: Heavy Equipment Fleet
Heavy Equipment Fleet • As at March 31, 2021, ~900 mobile heavy equipment assets provide operational flexibility • Managed on an individual asset basis and deployed with sole Q1 2021 EARNINGS objective of maximum operating utilization • Fleet count includes ~270 assets operated within Nuna Group of
Slide 26: Acheson Facilities
Acheson Facilities 1. 10-bay maintenance facility with integrated office Q1 2021 EARNINGS • Purpose-built for North American Construction Group • Larger cranes and wash bay sized to handle all heavy equipment fleet • Fits ultra class mining trucks (>300t payload) and large shovels (>600t) • Low cost
Slide 27: Expansion of Acheson Maintenance Facility
Expansion of Acheson Maintenance Facility Existing ten-bay facility at capacity Expansion to add four bays and a cold storage facility • Demand for maintenance has • Will provide over 14,000 additional square feet of additional workspace surpassed initial projected demand • Will add capacity for app
Slide 28: Long Term Contracts
Long Term Contracts • Long-term contracts remain in place with run-of-mine projections • Oil sands production resiliency through the pandemic is a testament to Q1 2021 EARNINGS averaging 30+ years of remaining life the operating model of mining operations Owner Contract1,2 2000 2010 2020 2030 2040 2
Slide 29: Current Composition
Current Composition 48% Debt Structure $0 10.0% Annual $0 Cost of Debt 34% 8.9% Net debt1 of $397 million as at March 31, 2021 $0 Q1 2021 EARNINGS • Credit facility provides overall liquidity1 of $151 $0 13% million based on $119 million of capacity combined$0 with $32 million of cash 5.0% 4.8% 5.7%
North American Construction Group — Q1 2021 Earnings Presentation on 6ix