Slide 1: Aecon Group Inc. Investor Presentation Q3 2019
AECON GROUP INC. (TSX:ARE) INVESTOR PRESENTATION Q3 2019
Slide 2: Forward-Looking Information
Forward-Looking Information The information in this presentation includes certain forward-looking statements. Although these forward-looking statements are based on currently available competitive, financial and economic data and operating plans, they are subject to risks and uncertainties. In addit
Slide 3: Why Invest in Aecon?
Why Invest in Aecon? FOCUS on People, Execution, Growth and Profitability Canada’s Premier Infrastructure Company • Industry leading safety record and performance $6.6B Backlog • Strong self perform capability is a key differentiator • Unparalleled pipeline of public and private opportunities • Part
Slide 4: Diverse & Resilient Business Model
Diverse & Resilient Business Model CONSTRUCTION CONCESSIONS Q3 2019 TTM Revenue $3,409 M + Q3 2019 TTM Revenue $248 M + Q3 2019 TTM EBITDA $179 M + Q3 2019 TTM EBITDA $91 M + Utilities 20%* Bermuda Airport Transportation 100%^ 16%* Civil Conventional 39%* Industrial 17%* Eglinton LRT Finch West LRT
Slide 5: Strong Backlog & Recurring Revenue
Strong Backlog & Recurring Revenue TOTAL BACKLOG* ($M) BACKLOG DURATION* ($M) RECURRING REVENUE*^ ($M) AS AT SEP 30 AS AT SEP 30 $4,319 $7,005 $6,557 $4,319 $7,005 $6,557 $458 $514 $526 $23 -6% $50 +2% +12% $78 $80 +62% $44 $3,592 $2,317 $16 $6,982 $1,946 $1,758 $6,507 $436 $446 $1,375 $414 $4,303 $
Slide 6: Robust Pipeline Aligns with Aecon's Strengths
Robust Pipeline Aligns with Aecon’s Strengths FEDERAL INFRASTRUCTURE PROGRAMS $40+* BILLION IN PROJECT PURSUITS Louis-Hippolyte Lafontaine Tunnel Rehabilitation QC $180B Invest in Canada Plan • 12 year Federal investment plan from 2016 to 2028 Metrolinx Regional Express Rail (RER) Program P3 ON Hami
Slide 7: Major Projects & Concessions Provide Stability
Major Projects & Concessions Provide Stability PROJECT TIMELINE (STARTING FROM 2019) 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Waterloo LRT Operations phase commenced June 2019; 10% equity stake and 30 year concession 2049 Eglinton LRT Construction started in 2015, targeting comple
Slide 8: Valuable Contribution from Bermuda Concession
Valuable Contribution from Bermuda Concession 30 Year Concession AIR VISITOR STATISTICS SOURCE: BERMUDA TOURISM AUTHORITY L.F. Wade International Airport 94,966 92,039 89,620 90,321 87,351 86,948 • Development and construction of a new terminal • Operation and maintenance of existing and then new te
Slide 9: Q3 2019 Financial Results - Reported
Q3 2019 Financial Results - Reported $ Millions Three Months Ended Trailing Twelve Months Ended (except EPS, $ per share) Sep 30* Sep 30* 2019 2018 Change+ 2019 2018 Change+ Revenue 1,025.4 1,019.7 1% 3,492 3,003 16% Gross Profit 120.6 125.1 4% 369.2 348.7 6% Gross Margin % 11.8% 12.3% 50 bps 10.6%
Slide 10: Strong & Liquid Balance Sheet to Support Growth
Strong & Liquid Balance Sheet to Support Growth BALANCE SHEET ($M) DEBT TO ADJUSTED EBITDA*^+# Sep 30, 2019 Core Cash^ 12.8 2.5x 2.0x 2.0x 2.0x Cash in Joint Ventures^ 473.6 2.0x 1.7x Total Cash^ 486.4 1.5x 1.4x 1.0x 0.9x 0.9x 0.9x 1.0x Working Capital 324.0 0.3x 0.5x 0.5x 0.5x 0.1x 0.0x # Long-Term
Slide 11: Positive Outlook
Positive Outlook Strong future revenue profile, new opportunities, and year-to-date performance and execution, supports an expectation of like-for-like revenue and Adjusted EBITDA growth in 2019 and in 2020 Continue to see significant infrastructure investment commitments by all levels of governme
Slide 12: Appendix
APPENDIX
Slide 13: Q3 2019 Financial Results - Adjusted
Q3 2019 Financial Results - Adjusted $ Millions Three Months Ended Trailing Twelve Months Ended (except EPS, $ per share) Sep 30* Sep 30* 2019 2018 Change+ 2019 2018 Change+ Revenue 1,025.4 1,019.7 1% 3,492 3,003 16% Gross Profit 120.6 125.1 4% 369.2 348.7 6% Gross Margin % 11.8% 12.3% 50 bps 10.6%
Slide 14: Q3 2019 Results – Excluding Contract Mining
Q3 2019 Results – Excluding Contract Mining Three Months Ended Trailing Twelve Months Ended $ Millions Sep 30* Sep 30* 2019 2018 Change+ 2019 2018 Change+ Revenue 1,025.4 955.2 7% 3,451 2,799 23% Gross Profit 120.6 116.3 4% 363.0 321.3 13% Gross Margin % 11.8% 12.2% 40 bps 10.5% 11.5% 100 bps Adjust
Slide 15: EBITDA Contribution by Segment
EBITDA Contribution by Segment ADJUSTED EBITDA ($ MILLIONS) ADJUSTED EBITDA MARGIN % Q3 2019 Q3 2018 % CHANGE Q3 2019 Q3 2018 BPS CHANGE Construction 73.1 76.5 4% Construction 7.3% 7.7% 40 Concessions 25.2 23.0 10% Concessions 41.0% 32.5% 850 TOTAL* 91.1 89.5 2% TOTAL* 8.9% 8.8% 10 Total Excluding 8
Slide 16: Construction Q3 2019 Results
Construction Q3 2019 Results Revenue up by $7M, or 1%, year-over-year Revenue ($M) Revenue ($M) $99M in Civil and Urban Transportation Systems driven by +1% $993 $1,000 increases in both eastern and western Canada +16% $3,409 $2,949 $32M in Nuclear from refurbishment work in Ontario $83M in Conventi
Slide 17: Concessions Q3 2019 Results
Concessions Q3 2019 Results Revenue ($M) Revenue down by $9M, or 13%, year-over-year Revenue ($M) $71 Primarily driven by decreased construction activities related to the -13% +36% $248 $62 Bermuda International Airport Redevelopment Project $183 Q3 2018 Q3 2019 Q3 2018 TTM Q3 2019 TTM TRAILING TW
Slide 18: Free Cash Flow
Free Cash Flow FREE CASH FLOW ($M) Q3 2019 Y/E KEY DRIVERS FOR TTM 2018 FREE CASH FLOW MOMENTUM Adjusted EBITDA 232.7 207.0 TTM working capital increase due to strong Cash Interest Expense (net) (34.4) (33.0) revenue growth. Year end 2018 benefited from Capital Expenditures (net) (51.2) (43.0) sig
Slide 19: Capital Markets Overview
Capital Markets Overview ARE.TSX STATISTICS ANALYST COVERAGE Price as of October 30, 2019 $18.35 Firm Analyst Telephone AltaCorp Capital Chris Murray (647) 776-8246 Shares Outstanding 60.8 Million Canaccord Genuity Yuri Lynk (514) 844-3708 Avg. Daily Share Volume 0.6 Million ($11 Million) CIBC Capit
Slide 20: Investor Relations Contacts
ADAM BORGATTI Senior Vice President Corporate Development & Investor Relations 416.297.2610 | aborgatti@aecon.com PARAG DATTA Director Corporate Development & Investor Relations 416.297.2600 x3724 | pdatta@aecon.com VANCOUVER 1055 Dunsmuir Street, Suite 2124 Vancouver, BC V7X 1G4 CALGARY 110-9th Ave