Mdu Resources Group, Inc. · NYSE:MDU
Mdu Resources — Siebert Williams Shank West Coast Utilities Conference 2021
22 slides from Mdu Resources's conference presentation, Mar 18, 2021
Slide 1: Investor Presentation
WEST COAST UTILITIES CONFERENCE - MARCH 2021 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS During the course of this presentation, we will make certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual r
Slide 3: MDU Resources is Building a Strong America
MDU Resources is Building a Strong America® eA oh ce 4 With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our markets while being a safe and great place to work. Company founded in 1924 | * Headquartered in Bismarck, ND Utilities
Slide 4: Company Overview
COMPANY OVERVIEW Infrastructure is our business, and we are Building a Strong America®. Powering and connecting homes, factories, offices and stores. Building roads, highways, data infrastructure and airports. MDU Resources keeps our economy moving. High Quality Portfolio of Businesses Diversified E
Slide 5: Investment Thesis
INVESTMENT THESIS 9.3% EBITDA1 CAGR (2015-2020) Consistent long-term growth 16.7% EPS CAGR (2015-2020) 56% Construction / 44% Regulated Energy Balance of cyclical and counter-cyclical businesses Delivery EBITDA mix (2020) Runway of attractive organic and inorganic growth >$1 trillion spending gap in
Slide 6: EBITDA Mix Over Time
EBITDA MIX OVER TIME Fundamentally enhanced business mix and improved customer diversification since 2007 Divested volatile Oil & Gas business in 2014-16, eliminating majority of commodity exposure Improved mix of Regulated Energy Delivery earnings and EBITDA, increasing long-term visibility E
Slide 7: Rate Base Organic Growth Drivers
RATE BASE ORGANIC GROWTH DRIVERS Continuous Rate Base growth supported by strong customer growth and system investments Utility earnings growth is driven by capital deployment, resulting in Historical MDU Utilities Group Customer Base growth in Rate Base Organic growth driven in part by positive
Slide 8: Capital Expenditures
CAPITAL EXPENDITURES MDU Resources’ organic investments remain the primary driver of high-quality earnings growth Regulated Energy Delivery Focus Capital Expenditure by Segment ($ in millions) Capital investments primarily in regulated businesses where rates of return have a high level of certaint
Slide 9: Growth in Construction
GROWTH IN CONSTRUCTION Built through a combination of acquisitions and organic expansion, Construction Materials and Services provide high return, long-term growth Construction Revenue ($ in millions) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 Construction Services Knife River began in business began
Slide 10: Dividends
DIVIDENDS Long history of dividend increases coupled with payout ratio materially improving post-2015 83 consecutive years of quarterly dividend payments with 30 consecutive years of increases Payout ratio reached 80% following 2014-16 business divestitures – has steadily declined to <50% Memb
Slide 11: Segment Overview
LISTED EE MDU RESOURCES | Building a Strong America’ [Naas GROUP. NC
Slide 12: Business Segment Overview
BUSINESS SEGMENT OVERVIEW Regulated Energy Delivery Businesses 2020 EBITDA1 ($ in millions) Growing the business by investing in the safety and reliability of our existing system $173 $305 Focused on organic growth first while managing Electric and operating costs Natural Gas Looking to expand
Slide 13: Electric and Natural Gas Snapshot
ELECTRIC AND NATURAL GAS SNAPSHOT WA 1,140,928 224,973 Customers CUSTOMERS MT 112,129 Customers ND OR 207,410Customers MN 800 MW 79,165 Customers 22,305 Customers ID OWNED GENERATION SD 388,075 Customers 71,144 Customers WY 35,727 Customers 28,900 MILES OF ELECTRIC AND GAS TRANSMISSION AND Rate Base
Slide 14: Pipeline Snapshot
PIPELINE SNAPSHOT 3,700 MILES OF PIPE OVER 2.2 BCF/D SYSTEM CAPACITY 13 INTERCONNECTING POINTS Rate Base1 (Regulated Energy Delivery) Segment EPS 325 ($ in millions) $5,000 $4,229 EMPLOYEES $4,000 $0.25 $3,133 $0.19 $3,000 $0.20 $0.18 $1,772 $0.15 LARGEST $2,000 $1,000 $0.10 STORAGE FIELD IN $0 $0.0
Slide 15: Construction Services Snapshot
CONSTRUCTION SERVICES SNAPSHOT 7,900 EMPLOYEES AT PEAK 45 STATES OF OPERATION 6 OUTSIDE CONSTRUCTION COMPANIES Segment Revenue and Year-End Backlog Segment EBITDA1 12 ($ in millions) ($ in millions) INSIDE CONSTRUCTION Revenue Backlog COMPANIES $3,000 $200 $173 $2,096 $150 $2,000 Ranked 11th $1,273
Slide 16: Construction Materials Snapshot
CONSTRUCTION MATERIALS SNAPSHOT NEARLY 6,000 EMPLOYEES AT PEAK SEASON 15 STATES OF OPERATION Segment Revenue and Period-End Backlog Segment EBITDA1 1.1 BILLION ($ in millions) ($ in millions) TONS OF RESERVES $2,500 Revenue Backlog $2,178 $400 $1,877 $305 $2,000 $300 $245 $1,500 TOP 10 $1,000 $483 $
Slide 17: Appendix
At i woke? 4 By a = MDU LISTED | Building a Strong America® NYSE GE MDU RESOURCES GROUP. NC
Slide 18: Financial Guidance
FINANCIAL GUIDANCE Select Historical Results 2021 Guidance Forward Guidance Framework 2015-2020 2015 2020 CAGR Electric & Natural Gas $0.31 $0.50 10% - EPS: 5% Rate Base CAGR over 5 years Utility EPS Pipeline EPS $0.07 $0.19 22.1% - - Revenue: $2.1 billion to $2.3 billion Construction Materials $211
Slide 19: Reconciliation of EBITDA Guidance
RECONCILIATION OF EBITDA GUIDANCE (in millions) Low High Income from continuing operations $393.0 $434.0 Adjustments: Interest expense 95.0 95.0 Income taxes 90.0 99.0 Depreciation, depletion and amortization 297.0 297.0 EBITDA from continuing operations $875.0 $925.0
Slide 20: Reconciliation of EBITDA
RECONCILIATION OF EBITDA ($ in millions) For the year ended December 31 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Income from Continuing $307.8 $322.8 $293.7 ($123.3) $244.0 $226.0 ($14.3) $168.7 $185.0 $176.4 $233.1 $285.0 $269.4 $335.2 $390.5 Ops. Adjustments: Inte
Slide 21: Multi-Year Financials
MULTI-YEAR FINANCIALS ($ in millions, except per share data) For the year ended December 31 2015 2016 2017 2018 2019 2020 Revenue $4,014 $4,129 $4,443 $4,532 $5,337 $5,533 Operating Profit $326 $409 $424 $402 $481 $545 Operating Margin 8.1% 9.9% 9.5% 8.9% 9.0% 9.8% EBITDA1 $550 $630 $640 $622 $753 $
Slide 22: Reconciliation of 2020 EBITDA
RECONCILIATION OF 2020 EBITDA ($ in millions) For the year ended December 31, 2020 Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $55.6 $44.0 $37.0 $109.7 $147.3 $(3.1) $390.5 Continuing Ops. Adjustments: Interest Expense 26.7 36.8 7
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