Everus Construction Group, Inc. · NYSE:ECG
Everus Construction — Investor Day (October 2024)
59 slides from Everus Construction's investor day presentation, Oct 17, 2024
Slide 1: Investor Day
INVESTOR DAY October 17, 2024 www.EVERUS.com 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other materials Everus has filed or will file with the Securities and Exchange Commission ("SEC") (and oral communications that Everus may make) contain or incorporate by reference, or will contain or incorporate by reference, certain “forward-looking
Slide 3: Agenda
Agenda SECTION SPEAKERS Nicole Kivisto Welcome and Introduction MDU Resources Group President & Chief Executive Officer Jeff Thiede Long-Term Value Creation Plan President & Chief Executive Officer Tom Nosbusch Execution and Operational Excellence Executive Vice President & Chief Operating Officer B
Slide 4: Welcome and Introduction
Welcome and Introduction Nicole Kivisto MDU Resources Group President & Chief Executive Officer
Slide 5: Everus as an Independent Public Company
Everus as an Independent Public Company FOCUSED STRATEGY & EXECUTION National construction services platform with a dedicated strategy and strong local brands to drive sustained long-term growth and profitability TARGETED & DISCIPLINED CAPITAL ALLOCATION Optimal capital structure with disciplined ca
Slide 6: Dedicated and Experienced Board of Directors
Dedicated and Experienced Board of Directors Dale Rosenthal Jeff Thiede Mike Della Rocca Ed Ryan Board Chair President & Chief Executive Officer Former Director and CFO of Clark 20 years with Everus Former Americas CEO at AECOM Former EVP and General Counsel Construction Group Former Presi
Slide 7: Long-Term Value Creation Plan
Long-Term Value Creation Plan Jeff Thiede President & Chief Executive Officer
Slide 8: Our Mission and Values
OUR MISSION Safely Building America’s Future as an industry-leading construction services provider while achieving sustained growth OUR VALUES INTEGRITY RESPECT SAFETY TEAMWORK ©2024 EVERUS 8
Slide 9: Experienced Leadership Team With Deep Expertise
Experienced Leadership Team With Deep Expertise Jeff Thiede Tom Nosbusch Max Marcy Paul Sanderson President & Chief EVP & Chief Operating VP, Chief Financial Officer VP, Chief Legal Officer & Executive Officer Officer & Treasurer Corporate Secretary Years of experience: 43 Years of experience: 28 Ye
Slide 10: Leading Construction Services Provider
Leading Construction Services Provider National Platform of 20 Market-Leading Local Brands 9,000+ 82% 3,700+ 44,000+ 18% 9% 10% No. 10 of 600 Employees(1) Employees in Unions Customers(4) Projects(4) Backlog CAGR(2) Revenue CAGR(2) EBITDA CAGR(2) Specialty Contractors(3) Electrical & Mechanical Tran
Slide 11: Electrical & Mechanical (E&M)
Electrical & Mechanical (“E&M”) $1,916M $2,064M 9% $144.3M 7.5% Revenue Backlog as of 6/30/2024 Revenue CAGR(1) EBITDA EBITDA Margin Segment Overview Services End-Markets(2) Construction and maintenance of electrical, Electrical construction communication, fire suppression and Fire protection mechan
Slide 12: Transmission & Distribution (T&D)
Transmission & Distribution (“T&D”) $785M 58% $340M 6% $99.7M 12.7% Revenue MSA Revenue % Backlog as of 6/30/2024 Revenue CAGR(1) EBITDA EBITDA Margin Segment Overview Services End-Markets(2) Construction and maintenance services for Equipment utility and communication infrastructure Manufacturing a
Slide 13: Scaled National Platform of Market-Leading Local Brands
Scaled National Platform of Market-Leading Local Brands National Platform Operating and authorized to work across the United States Proven ability to deploy capital for innovation and to set industry standards Systematic platform-wide sharing of best practices and expertise Local Expertise 20 market
Slide 14: Strong Positioning Across Diversified End-Markets
Strong Positioning Across Diversified End-Markets Commercial Utility Industrial Institutional Service & Transportation Renewables Other $1,055M $711M $382M $325M $106M $74M $48M LTM Revenue LTM Revenue LTM Revenue LTM Revenue LTM Revenue LTM Revenue LTM Revenue 39% 26% 14% 12% 4% 3% 2% % of Contract
Slide 15: Scaled for Success, Built for Growth
Scaled for Success, Built for Growth Foundation for Scaling Operational Growth National Platform Excellence 1997 – 2004 2005 – 2014 2015 – 2023 In 1997, entered Transmission & Achieved growth through No. 10 on 2023 ENR Top 600 Distribution (T&D) segment via targeted entry into new Specialty Contract
Slide 16: Compelling Investment Thesis
Compelling Investment Thesis Leading construction services provider with differentiated execution capabilities well-positioned to benefit from multiple growth drivers and industry megatrends Proven executive leadership team executing 4EVER strategy to deliver sustained profitable growth and long-ter
Slide 17: Next Phase of Growth, Disciplined Execution, Value Creation
Next Phase of Growth, Disciplined Execution, Value Creation Sustained and Profitable Growth Operational 2024+ Excellence 2015 – 2023 4EVER strategy for sustained Scaling National Platform and profitable growth 2005 – 2014 and long-term value creation Foundation for LONG-TERM EXPECTATIONS Growth 1997
Slide 18: Employees, Value, Execution, Relationships
Employees Value Execution Relationships Attract, retain Create long-term Lead the industry Maintain and grow and train value with sustained in safety and consistent customer premier talent profitable growth high-quality execution relationships ©2024 EVERUS 18
Slide 19: Highly Skilled Employees
Highly Skilled Employees ~28 Years ~11 Years Average Executive Tenure Extensive Average General Foreman Tenure Expertise & Experienced executive Experience Technical Skills Experienced and skilled on-site team with deep project managers, general foremen expertise and foremen ensure delivery of best-
Slide 20: Consistent High-Quality Execution
Consistent High-Quality Execution Disciplined Processes Across Project Lifecycle PRE-CONSTRUCTION CONSTRUCTION POST-CONSTRUCTION Bid With Discipline Deploy Repeatable Playbook Maintain Customer Relationships Focus on technical and complex Prioritize safety and productivity Provide post-constru
Slide 21: Strong Customer Relationships
Strong Customer Relationships 3,700+ 44,000+ 18% 30+ Years Average Relationship Customers Projects Backlog CAGR(1) with Top 10 Customers(2) Broad Base of Long-Tenured Marquee Customers GENERAL CONTRACTORS Negotiated / Competitive Bid CORPORATE Confidential Confidential CUSTOMERS Data Center High-Tec
Slide 22: Multiple Levers to Drive Growth
Multiple Levers to Drive Growth Grow Share Within Further Penetrate Existing Markets Higher-Growth Sub-Markets Increase local share through strong Leverage expertise with critical customer relationships and a and complex projects to expand proven track record of execution within high-growth sub-mark
Slide 23: Well-Positioned in High-Growth Industry Megatrends
Well-Positioned in High-Growth Industry Megatrends CAGR(1) Why Everus Wins DATA CENTERS AND AI 14+ years of data center experience and relationships Computing requirements driving 15% 2023 – 2030 with multiple customers and general contractors investment in tech infrastructure Go-to partner for grid
Slide 24: Geographic Expansion Through Satellite Projects – Data Centers
Geographic Expansion Through Satellite Projects – Data Centers Building Blocks of Data Center Excellence and Expansion ✓ Highly skilled workforce and scaled ✓ Extensive ✓ 14+ years of significant experience solutions for consistent execution knowledge-sharing in the data center industry Growing Mome
Slide 25: Geographic Expansion Through Strategic M&A
Geographic Expansion Through Strategic M&A M&A Philosophy ✓ Attractive and ✓ Leading ✓ Proven ✓ Compelling ✓ Strong safety and complementary markets local brand leadership team financial return people-first culture Disciplined Acquisition & Systematic Integration Acquired PerLectric in 2020, success
Slide 26: Long-Term Value Creation
Employees Value Execution Relationships LONG-TERM EXPECTATIONS 5%–7% 7%–9% Organic Revenue CAGR EBITDA CAGR LONG-TERM V LONG-TERM VALUE ALUECREATION CREATION ©2024 EVERUS 26
Slide 27: Compelling Investment Thesis
Compelling Investment Thesis Leading construction services provider with differentiated execution capabilities well-positioned to benefit from multiple growth drivers and industry megatrends Proven executive leadership team executing 4EVER strategy to deliver sustained profitable growth and long-ter
Slide 28: Execution and Operational Excellence
Execution and Operational Excellence Tom Nosbusch Executive Vice President & Chief Operating Officer
Slide 29: Today's Key Messages
Today’s Key Messages Industry-leading safety-first culture attracts and retains highly skilled workforce necessary to execute complex projects Systematic application of repeatable playbook across project lifecycle enables consistent high-quality outcomes, from pre-construction and design-assist to p
Slide 30: People-First Culture With Industry-Leading Safety Focus
People-First Culture With Industry-Leading Safety Focus Rigorous Approach to Safety Industry-Leading Safety Record Founding member of Electrical Lost-Time Incident Rate 0.33 Transmission & Distribution Partnership, a collaboration of industry stakeholders working 0.66 Industry Average to improve s
Slide 31: Execution Playbook for Repeatable High-Quality Results
Execution Playbook for Repeatable High-Quality Results HIGH-QUALITY OUTCOMES High Employee Leverage Unique Retention Continuously Position Safety as Pre-Construction Train and Develop a Core Value, Not Design-Assist Workforce Skills Only a Priority Capabilities High Customer Retention New Project Sy
Slide 32: Pre-Fabrication Drives Productivity and Cost Savings
Pre-Fabrication Drives Productivity and Cost Savings Benefits of Pre-Fabrication Early Adopter of Pre-Fabrication Why Everus Wins Improved safety Project-planning standards that identify pre-fabrication opportunities Greater labor efficiency Robust communication and knowledge- and lower labor co
Slide 33: Marquee E&M Project
Marquee E&M Project COMPETITIVE STRENGTH PROJECT HIGHLIGHTS Design-Assist Exceptional pre-construction capabilities and value Project Delivery analysis enabled fast start and completion in 2023 19+ Year customer relationship Ability to rapidly scale workforce, peaking at 650 Flexible Highly employee
Slide 34: Decades-Long T&D Relationship
Decades-Long T&D Relationship COMPETITIVE STRENGTH PROJECT HIGHLIGHTS Strong Customer 26+ year customer relationship with significant and Relationship predictable MSA project work 26+ Year customer relationship Providing full scope of services across T&D, including Breadth of reconductoring, pole ch
Slide 35: Disciplined Execution for Repeatable High-Quality Results
Disciplined Execution for Repeatable High-Quality Results Disciplined Processes Across Project Lifecycle PRE- POST- CONSTRUCTION CONSTRUCTION CONSTRUCTION Bid With Discipline Deploy Repeatable Maintain Customer Utilizing Job Cost Data Playbook Relationships and Service Work Opportunities High-Qualit
Slide 36: Break
Break
Slide 37: Financial Profile and Outlook
Financial Profile and Outlook Max Marcy Vice President, Chief Financial Officer & Treasurer
Slide 38: Today's Key Messages
Today’s Key Messages Consistent execution and disciplined strategy deliver strong financial performance spanning 27 years Strong market positions and tailwinds from megatrends provide multiple levers for expansion and sustained growth Capital-light business model and disciplined capital allocation f
Slide 39: Diversified Revenue Base for Sustained Growth
Diversified Revenue Base for Sustained Growth Revenue by End-Market Revenue by Customer Revenue by Project Size(1) 7 End-Markets With 25 Sub-Markets Across E&M and T&D Diversified Customer Base Well-Balanced Project Mix 3% 2% 4% 12% 30% 29% 39% 36% 14% 64% 40% 26% Commercial Utility Industrial Insti
Slide 40: Strong Backlog and Revenue Growth
Strong Backlog and Revenue Growth Track Record of … Delivering Sustained Strong Backlog Growth … Long-Term Revenue Growth Backlog $ in millions Revenue $ in millions $2,854 $2,699 $2,682 $2,403 $2,131 $2,011 $2,096 $2,052 $1,849 $1,385 $1,273 $1,144 (1) 2019 2020 2021 2022 2023 As of 2019 2020 2021
Slide 41: Capital-Light, Low Fixed-Cost Model For Flexibility & Resilience
Capital-Light, Low Fixed-Cost Model For Flexibility & Resilience Capital-Light Business Model With Low Fixed Costs For Disciplined Growth Investments Flexibility and Resilience(2) Gross CapEx $ in millions Gross CapEx Variable costs Gross CapEx % of Revenue Fixed costs 45 10% 40 $39 9% $36 $36 8% 35
Slide 42: Profitable Growth With a Resilient Margin Profile
Profitable Growth With a Resilient Margin Profile Bid Discipline and Operational Excellence … In Turn Driving Sustained and Enable Resilient Margin Profile … Profitable Growth EBITDA $ in millions EBITDA Margins(1) EBITDA(1) 5-Year Avg. EBITDA Margin: 7.9%(2) 8.4% $223 $225 8.3% 8.2% 7.9% 7.2% 7.8%
Slide 43: Confirmed 2024 Financial Guidance
Confirmed 2024 Financial Guidance Key Drivers Confirmed 2024 Guidance(2) Confidence in the business and segment guidance Revenue that MDU previously provided $2.65B – $2.85B Strong demand for E&M data center, government and education projects, and T&D utility and transportation work EBITDA Federal f
Slide 44: 2024 EBITDA Guidance Including Impact of Full-Year Dis-Synergies
2024 EBITDA Guidance Including Impact of Full-Year Dis-Synergies 2024 EBITDA Bridge (Assuming Full-Year Dis-Synergies) $ in millions $230 $28 $202 Midpoint of 2024 Full-Year Guidance Assuming EBITDA Guidance Net Dis-Synergies (1) Full-Year Net Dis-Synergies Recurring dis-synergies include insurance,
Slide 45: Strong Balance Sheet and Strategic Flexibility
Strong Balance Sheet and Strategic Flexibility Maintaining a Flexible Balance Sheet Prioritize growth investments; target long-term net leverage between 1.5x–2.0x 1.5x–2.0x Target Provide ample capacity to support growth Net Leverage(1) across cycles Ensure strategic flexibility for opportunistic in
Slide 46: Disciplined Capital Allocation For Long-Term Value Creation
Disciplined Capital Allocation For Long-Term Value Creation USES OF CAPITAL NEAR-TERM PRIORITIES % of total capital uses Grow share within existing markets and higher-growth sectors 1 Organic Growth Grow with existing customers in new geographies Working ~20% Investment Growth and maintenance
Slide 47: Long-Term Expectations
Employees Value Execution Relationships LONG-TERM EXPECTATIONS 5%–7% 7%–9% Organic Revenue CAGR EBITDA CAGR 2.0%–2.5% 1.5x–2.0x CapEx as % of Revenue Net Leverage ©2024 EVERUS 47
Slide 48: Closing Remarks
Closing Remarks Jeff Thiede President & Chief Executive Officer
Slide 49: Compelling Investment Thesis
Compelling Investment Thesis Benefit From Multiple Proven Leadership Team Scaled National Platform Skilled Workforce, Diversified Revenue Base Growth Drivers and Executing 4EVER of Market-Leading Local People-First Culture & & Disciplined Capital Industry Megatrends Strategy Brands Repeatable Playbo
Slide 50: Q&A
Q&A
Slide 51: Please join us for Everus' Q3 2024 Webcast
Please join us at 8:30 AM EST on Nov. 7 for Everus’ Q3 2024 Webcast th
Slide 52: Appendix
s Appendix
Slide 53: Non-GAAP Financial Guidance
Non-GAAP Financial Guidance Our forward-looking guidance for EBITDA, EBITDA Margin and long-term net leverage are non-GAAP financial measures that exclude or otherwise have been adjusted for special items from our U.S. GAAP financial statements. We are unable to reconcile forward-looking non-GAAP gu
Slide 54: Non-GAAP Reconciliation of EBITDA
Non-GAAP Reconciliation of EBITDA Twelve Months Ended December 31st 2023 2024 LTM ($ in millions, except for As of Q2 2019 2020 2021 2022 1H 2023 2H 2023 1H 2024 margin values) 2024 Net Income $93.0 $109.7 $109.4 $124.8 $64.7 $72.5 $67.2 $139.7 Adjustments: Interest 5.3 4.1 3.5 6.4 8.9 8.1 6.0 14.1
Slide 55: Financial Reconciliations (E&M)
Financial Reconciliations (E&M) ($ in millions, except for LTM as of 4.5-Year 2019 2023 1H 2023 2H 2023 1H 2024 margin values) Q2 2024 CAGR E&M Revenue $1,274.3 $1,916.0 $2,134.9 $1,163.3 $971.6 $944.9 9.5% Operating Income $64.0 $131.0 $134.4 $69.2 $65.2 $65.8 17.3% Other Income 1.1 7.0 6.1 4.4 1.7
Slide 56: Financial Reconciliations (T&D)
Financial Reconciliations (T&D) ($ in millions, except for LTM as of 4.5-Year 2019 2023 1H 2023 2H 2023 1H 2024 margin values) Q2 2024 CAGR T&D Revenue $596.3 $785.0 $734.6 $345.0 $389.6 $395.3 6.3% Operating Income $76.0 $80.1 $73.6 $28.3 $45.3 $34.8 1.2% Other Income 0.4 1.7 2.1 1.0 1.1 0.6 42.0%
Slide 57: Reference for Historical Growth in Backlog
Reference for Historical Growth in Backlog ($ in millions) 2019 As of 6/30/2024 4.5-Year CAGR Backlog 1,144.0 2,403.4 17.9% ©2024 EVERUS 57
Slide 58: Non-GAAP Reconciliation of Net Leverage
Non-GAAP Reconciliation of Net Leverage ($ in millions, except for As of Spinoff Date, leverage ratios) October 31st, 2024 Total Debt $340 Cash $50 Net Debt $290 LTM EBITDA(1) as of Q2 2024 $225 Gross Leverage 1.5x Net Leverage(1) 1.3x (1) Reflects EBITDA over last twelve months ended 6/30/2024 befo
Slide 59: Building America's Future.
Building America’s Future. 59
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