Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation © 2024 Granite Construction. All Rights Reserved.
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
Slide 3: Agreement to Acquire Dickerson & Bowen, Inc.
Agreement to Acquire Dickerson & Bowen, Inc. Lehman-Roberts/MSG Operational Footprint Leading regional aggregates, asphalt, and highway construction company serving central and southern Mississippi • 4 asphalt plants • 3 sand & gravel pits Strengthens and expands Granite’s newly created Southeast pl
Slide 4: 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
Slide 5: Materials Segment
Materials MaterialsSegment 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 all
Slide 6: 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 (Loss) Adjusted Net Income (Loss) $77 M + $30 M Adjusted Diluted EPS (Loss) Adjusted Dilut
Slide 7: 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
Slide 8: Concluding Remarks
Concluding Remarks • 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%
Slide 9: Thank you. Questions?
Thank you. Questions? © 2024 Granite Construction. All Rights Reserved. 9
Slide 10: Appendix
Appendix The tables below contain financial information calculated • Other costs, net as described above; The methods used by the Company to calculate its non- other than in accordance with U.S. generally accepted • Transaction costs which include acquired intangible GAAP financial measures may diff
Slide 11: Materials Segment Cash Gross Profit
Materials Segment Cash Gross Profit © 2024 Granite Construction. All Rights Reserved. 11
Slide 12: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation © 2024 Granite Construction. All Rights Reserved. 12
Slide 13: Adjusted NI Reconciliation
Adjusted NI Reconciliation © 2024 Granite Construction. All Rights Reserved. 13
Slide 14: Founded in 1922, Headquartered in Watsonville, CA, NYSE: GVA
• 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
Slide 15: 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
Slide 16: Where We Work
Where We Work Home Markets Where we Work Materials: Aggregate Materials: Asphalt © 2024 Granite Construction. All Rights Reserved. 16
Slide 17: 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
Slide 18: 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
Slide 19: $5.7B High-Quality CAP with Risk-adjusted Procurement Types
Bid-Build Procurement $5.7B 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 •
Slide 20: 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
Slide 21: 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,
Slide 22: 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 $5,314 $5,169 $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
Slide 23: 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
Slide 24: 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
Slide 25: 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