Granite Construction Incorporated · NYSE:GVA

Granite Construction — Q2 2024 Earnings Presentation

24 slides from Granite Construction's earnings presentation, August 2024

  1. Slide 1: August 2024 Earnings Presentation

    August 2024 Earnings Presentation © 2024 Granite Construction. All Rights Reserved.

  2. Slide 2: Safe Harbor

    Safe Harbor Any statements contained in this presentation "target," “anticipates,” “intends,” “plans,” allocations, CAP, and results. These expectations that are not based on historical facts, including “appears,” “may,” “will,” “should,” “could,” may or may not be realized. Some of these statements

  3. Slide 3: Company overview

    • Founded in 1922 • Headquartered in Watsonville, CA • Publicly traded since 1990, NYSE: GVA • One of the largest diversified, vertically integrated civil contractors and construction materials producers in the U.S. • Geographically diverse public and private client base • Thoughtful project pursuit

  4. Slide 4: Our Markets & Customers

    Our Markets & Customers Granite serves customers in both public and private sectors within our reportable business segments: Construction and Materials. Our expertise allows us to provide infrastructure solutions in a range of markets as a diversified civil contractor and materials producer. ENR | E

  5. Slide 5: Where We Work

    Where We Work Home Markets Where we Work Materials: Aggregate Materials: Asphalt © 2024 Granite Construction. All Rights Reserved. 5

  6. Slide 6: Home Market Strategy a Key Differentiator

    Home Market Strategy a Key Differentiator Client Centric Focus Home Market Community Engagement Market Intelligence & Insight Blended Project Portfolio Owner and Regulator Relationships Readily Available Resources We will focus on home markets where these attributes exist, among others. With these a

  7. Slide 7: Strong Transportation Funding Supports California Growth

    Strong Transportation Funding Supports California Growth • Caltrans (California Department of Transportation) capital project funding allocations stable and aligned with the agency’s project delivery capacity • Caltrans awards continued to grow significantly for the second consecutive calendar year,

  8. Slide 8: California Senate Bill 1 (SB-1) 10 Year Revenue and Allocation

    California Senate Bill 1 (SB-1) 10 Year Revenue and Allocation 10 Year SB-1 Revenue and Allocation $7,263 $6,947 $6,653 $7,163 $6,313 $6,847 $6,553 $6,213 $5,245 $5,235 $5,079 $5,169 $5,314 $4,280 $4,257 $4,980 $3,673 $4,180 $4,157 $3,384 $3,515 $3,199 $2,840 $2,844 $3,490 $2,489 $2,617 $3,332 $3,16

  9. Slide 9: Vertical Integration Empowers Home Markets

    Vertical Integration Empowers Home Markets Why Vertical Integration? » Compete in markets where owning materials is necessary External AGG Sales External HMA Sales » Maximize productivity and scheduling Aggregate Production HMA Production Construction » Ensure quality materials Operations » Leverage

  10. Slide 10: Investment Framework Supports Long-term Growth

    Investment Framework Supports Long-term Growth SUPPORT & Solidify and Bolster EXPAND & Expand Into New Core Competencies STRENGTHEN and Strengths TRANSFORM Geographies INVESTMENT CATEGORIES INVESTMENT CATEGORIES Strengthen & Bolt-on: Civil Automation Expand Home Construction & & Reserve VI Expansion

  11. Slide 11: Granite Investment Framework – Expand and Transform

    Granite Investment Framework – Expand and Transform Lehman-Roberts/MSG VI Expansion & Platform Operational Footprint Expanded Granite’s footprint and created a new platform in the Southeast (AR, TN, MS) through the acquisition of Lehman-Roberts, Memphis Stone & Gravel, and Dickerson & Bowen Highly p

  12. Slide 12: $5.6B High-Quality CAP with Risk-adjusted Procurement Types

    Bid-Build Procurement $5.6B High-Quality CAP with Risk-adjusted Procurement Types • Project duration typically several months to 3 years • Traditional method with owners preparing the design and construction and transportation management plans • Contractors compete on a competitive low-bid process •

  13. Slide 13: Accelerating Organic Growth and Acquisitions

    Accelerating Organic Growth and Acquisitions Accelerating Revenue Growth $3.9 - $4.0 Strong public funding and resilient private $3.5 $3.3 $0.6 market supporting organic revenue growth $0.5 $0.5 $3.0 $3.3 - $3.4 Infrastructure Bill is lifting the market and is expected to continue to build in signif

  14. Slide 14: 2024 Guidance – Accelerating Growth and Shareholder Return

    2024 Guidance – Accelerating Growth and Shareholder Return Revenue SG&A Adjusted EBITDA Margin* (Percentage of Revenue) $3.9 - $4.0 9.5% - 11.5% $3.5 8.4% 7.5% - 8.0% 8.0% FY 2023 FY 2024F FY 2023 FY 2024F FY 2023 FY 2024F $ in billions * both years include stock-based compensation adjustment © 2024

  15. Slide 15: Capital Allocation Priorities

    Capital Allocation Priorities 1 Maintain current level of dividend 2 Support business operations via maintenance capex (1.5% - 2.0% of annual revenue) 3 Optimize gross debt-to-capital ratio to 20%-30% through debt repayment 4 Focused growth capex and M&A to drive growth and efficiencies 5 Opportunis

  16. Slide 16: Q2 2024 Results

    Q2 2024 Results Q2 2024 YOY Change Total Revenue Total Revenue $1,082 M + $184 M Construction Revenue Construction Revenue $918 M + $169 M Materials Revenue Materials Revenue $165 M + $15 M Adjusted Net Income Adjusted Net Income $77 M + $30 M Adjusted Diluted EPS Adjusted Diluted EPS $1.73 + $0.67

  17. Slide 17: Construction Segment

    Construction Segment CAP History $5,546 $5,498 $5,576 $5,438 $135 $225 $97 $70 2% 4% 2% • CAP of $5.6 billion, increased $77 million sequentially and 1% increased $139 million year-over-year $160 $138 $174 $204 3% 3% 3% 4% o California CAP decreased $86 million sequentially to $4,214 $2.3 billion an

  18. Slide 18: Materials Segment

    Materials Materials Segment Segment Materials Gross Profit And Cash • Centralizing materials segment management functions Gross Profit Margin 19.3% • Strategic investments continue in 2024 o Materials-focused acquisition of Dickerson and Bowen 15.2% 14.6% 8.2% o Southwest Washington land lease to al

  19. Slide 19: Why Granite?

    Why Granite? • Strong revenue growth in Q2’24, adjusted EBITDA and operating cash flow well ahead of 2023 • Healthy CAP supported by continued strong public and private market environment • Healthy state budgets across Granite's geographies • Reiterating adjusted EBITDA margin of 9.5% to 11.5% guida

  20. Slide 20: Thank you. Questions?

    Thank you. Questions? © 2024 Granite Construction. All Rights Reserved. 20

  21. Slide 21: Appendix

    Appendix The tables below contain financial information calculated • Other costs, net as described above; Items that may have a significant impact on the other than in accordance with U.S. generally accepted • Transaction costs which include acquired intangible Company's financial position, results

  22. Slide 22: Materials Segment Cash Gross Profit

    Materials Segment Cash Gross Profit © 2024 Granite Construction. All Rights Reserved. 22

  23. Slide 23: Adjusted EBITDA Reconciliation

    Adjusted EBITDA Reconciliation © 2024 Granite Construction. All Rights Reserved. 23

  24. Slide 24: Adjusted NI Reconciliation

    Adjusted NI Reconciliation © 2024 Granite Construction. All Rights Reserved. 24

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