Stantec Inc · TSX:STN
Stantec — Investor Day (December 2019)
33 slides from Stantec's investor day presentation, Dec 3, 2019
Slide 1: Exhibit 99.1
Exhibit 99.1Exhibit 99.1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 2 Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this presentation constitute forward-looking information and statements within the meaning of applicable securities law (collectively, forward-lookin
Slide 3: Design with Community in Mind
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 3 Design with Community in Mind 3E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 3 Design with Community in Mind 3
Slide 4: Redefining our vision
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 4 REDEFINING OUR VISION Top 10 global design firm that maximizes long-term, sustainable value Laying the groundwork for our next chapter Returned to pure play Strengthened Rigorous and Drive earnings growth design focus alignment with d
Slide 5: Stantec's strategy
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 5 Stantec’s strategy Our vision is: To be a top-10 global design firm that maximizes long-term, sustainable value. Our strategy is: To grow and diversify sustainably for the benefit of our clients, employees and shareholders. We will do
Slide 6: Evolving Stantec for the future
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 6 Evolving Stantec for the future Theresa Tino Gord Stuart Catherine Steve Marshall Emree Jang DiManno Fleck Johnston Lerner Schefer Davert Siaroff Chief Business Chief Practice Chief Innovation Chief Human Chief Financial President & C
Slide 7: Excellence: Execution | Efficiency | HSSE | Sustainability
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 7 Miami-Dade Consent Decree Miami, Florida Excellence Execution | Efficiency | HSSE | SustainabilityE X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 7 Miami-Dade Consent Decree Miami, Florida Excellence Execution | Effici
Slide 8: Enhancing operational performance
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 8 W E A R E D R I V E N Enhancing operational performance TO A C H I E V E Execution Improves Gross Margin Efficiency Decreases A&M Costs MAINTAIN GROSS MARGIN AT Project size, Scope 53 - 55% complexity & PM Scalable and pricing Work sh
Slide 9: Environment, social & governance
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 9 W E A R E D R I V E N TO A C H I E V E Environment, social & governance We actively manage our environmental, social, and governance impacts, both in how we operate our business and how we support clients 36% • Business Conduct: 100%
Slide 10: Innovation: Enabling growth
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 10 The Beat, Boston, Massachusetts Innovation Enabling growth | The creativity & innovation funnel | Digital transformationE X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 10 The Beat, Boston, Massachusetts Innovation Ena
Slide 11: Enabling Growth: Creativity & Innovation funnel
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 11 Enabling Growth Our innovation Our Creativity & commercialization funnel Innovation (C&I) program nurtures the efforts of our people as they develop any idea that benefits us, our clients and communities, our competitive position, or
Slide 12: Digital Strategy
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 12 Digital Strategy The digital landscape Framework: 1 Technology adding value to clients and communities 2 Technology driving delivery effectiveness and shareholder value 3 Technology achieving digital efficiency, resiliency and securi
Slide 13: eDNA
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 13 W E A R E D R I V E N TO A C H I E V E eDNA Working with the University of Guelph TARGET: and Precision Biomonitoring, we have deployed a >3/year hand-held tool to sample, extract, and INITIATIVES COMMERCIALIZED analyze eDNA for the
Slide 14: People: Building an inspired culture
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 14 People Building an inspired culture | Our people strategyE X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 14 People Building an inspired culture | Our people strategy
Slide 15: Culture through community
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 15 Culture through Building an inspired culture community Agile, nimble, entrepreneurial, focused on our clients and on winning and delivering exceptional projects. Career Empowerment Program Employee Resource Groups Developing Professi
Slide 16: Our people strategy
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 16 W E A R E D R I V E N TO A C H I E V E Our people strategy >85% INCLUSION & DIVERSITY ENGAGEMENT <12% EMPLOYEE RETENTION VOLUNTARY TURNOVER E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 16 W E A R E D R I V E N TO A
Slide 17: Growth: Growth targets | Business mix
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 17 SEVA residences– foot bridge and marsh development, Candiac, Quebec Growth Growth targets | Business mix E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 17 SEVA residences– foot bridge and marsh development, Candiac,
Slide 18: Growth: 2022 targets
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 18 W E A R E D R I V E N Growth TO A C H I E V E Continued diversification through organic and acquired growth to enhance long-term earnings stability 2022 Targets ADJUSTED EARNINGS PER SHARE >11% CAGR RETURN ON INVESTED CAPITAL >10% NE
Slide 19: Strong macro trends support our continued growth
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 19 Strong macro trends support our continued growth Key Market Trends: CLIMATE CHANGE, URBANIZATION, GEOPOLITICS AND BREAKTHROUGH TECHNOLOGY US$24 Strategic Growth Opportunities: Trillion TOTAL SPEND IN THE NEXT DECADE US$2 Trillion ADD
Slide 20: Organic growth pillars
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 20 W E A R E D R I V E N TO A C H I E V E Organic growth pillars CAMPAIGNS ACCOUNT MARKET 2 - 5% MANAGEMENT POSITIONING ANNUAL ORGANIC By identifying and By sharpening our By strengthening our NET REVENUE GROWTH prioritizing our most ap
Slide 21: The story of environmental services growth
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 21 The story of environmental services growth Now generating over $500M in annual Net Revenue¹ and double-digit organic growth² 2018 2014 2010 2004 True Grit Engineering Tetres Consultants Inc. Williamsburg Environmental Group Sear-Brow
Slide 22: Acquisition priorities going forward
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 22 Acquisition priorities going forward Expand our Portfolio Winning projects that neither firm could win alone. Continue Grow our Diversify our to grow in Australia and European Expand our Market North New Zealand operations. Penetrati
Slide 23: Growing across verticals to promote earnings stability
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 23 Growing across verticals to promote earnings stability Growth will continue across all business units Infrastructure Buildings Optimal Revenue Water Mix Environmental E&R Maintain weighting of 85% or higher toward non-cyclic industri
Slide 24: Disciplined acquisition growth
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 24 Disciplined acquisition growth Small and medium-sized acquisitions that meet our minimum requirements: Accretive to earnings • Risk adjusted internal rate of return must be > weighted average cost of capital. Synergistic opportunitie
Slide 25: Financial Highlights
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 25 Bhote Koshi Hydropower Project Bhoti Koshi River, Sindhulpalchok District, Nepal Financial Highlights Capital deployment | Balance sheet | Financial targetsE X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 25 Bhote Kosh
Slide 26: Capital allocation strategy has evolved
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 26 W E A R E D R I V E N Capital allocation strategy has evolved TO A C H I E V E 25 - 30% More than $500M DIVIDEND PAY OUT RATIO Returned to shareholders since 2010 61.3 Share Repruchases >11% Dividends 63.9 ADJUSTED EPS CAGR 55.5 46.1
Slide 27: Our ongoing capital allocation philosophy
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 27 Our ongoing capital allocation philosophy Focused on achieving the best risk adjusted returns Operating cash flow Maintaining a Our core Sustaining CapEx strong balance Base dividend commitments sheet Excess Cash Flow Competing capit
Slide 28: Balance sheet strength
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 28 W E A R E D R I V E N TO A C H I E V E Balance sheet strength Net Debt to Adjusted EBITDA (TTM) 3.5 3 1.0 - 2.0x NET DEBT : ADJUSTED EBITDA 2.5 WITH IFRS 16 Net debt to Adjusted EBITDA presented excluding the adoption of IFRS 16 2 Wh
Slide 29: Our 2022 Targets
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 29 Our 2022 Targets Ruwais Marina District, Rumais, Abu Dhabi, UAE ADJUSTED ADJUSTED RETURN ON NET REVENUE EBITDA MARGIN EARNINGS PER SHARE INVESTED CAPITAL >10% 16-17% >11% >10% CAGR OF NET REVENUE CAGRE X C E L L E N C E I N N O V A T
Slide 30: 2020 targets and guidance
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 30 2020 targets and guidance Targets: (1) Adjusted EBITDA 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% (% of net revenue) (1) Adjusted Net Income 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% (% of net re
Slide 31: Stantec's strategy
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 31 Stantec’s strategy Our vision is: To be a top-10 global design firm that maximizes long-term, sustainable value. Our strategy is: To grow and diversify sustainably for the benefit of our clients, employees and shareholders. We will d
Slide 32: Q&A 2022 – Clear vision
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 32 SR 90 Tamiami Trail - Bridging from East of Osceola Camp to West of Airboat Association of Florida Q&A 2022 – Clear visionE X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 32 SR 90 Tamiami Trail - Bridging from East of
Slide 33: Targets 2020 Appendix
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 33 Targets 2020 Appendix (In millions of Canadian dollars, unless otherwise stated) (note 1) Adjusted EBITDA as % of net revenue 15.5% to 16.5% (note 1) Adjusted net income as % of net revenue At or above 6.0% (note 2) Return on Investe