Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Investor Presentation (November 2024)
29 slides from Onterris's investor presentation, November 2024
Slide 1: November Investor Presentation
November Investor Presentation A LEADING END-TO-END ENVIRONMENTAL SOLUTIONS COMPANY
Slide 2: Safe Harbor
Safe Harbor Statements contained herein and in the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be iden
Slide 3: Who We Are
Who We Are @) MON
Slide 4: Montrose at a Glance
Montrose at a Glance Key Data Points Attractive, growing global Differentiated integrator ~3,400 100+ 23 market with secular - unique combination of EMPLOYEES LOCATIONS PATENTS long-term tailwinds services and proprietary WORLDWIDE ISSUED technology ~15% ~96% ~51% 2020 – 2023 REVENUE REPEATED 2023 R
Slide 5: Our Integrated Solutions Are Unique
Our Integrated Solutions Are Unique Assessment, Measurement Remediation Permitting and Analysis & Reuse and Response Identify Quantify Remediate KEY CAPABILITIES • Environmental Assessments • Multi-Media Laboratory Services • Consulting, Engineering, Design, • Environmental Emergency Response • Data
Slide 6: Segment Overview – Increasing Revenue, Reporting Strong Margins
Segment Overview – Increasing Revenue, Reporting Strong Margins Assessment, Measurement Remediation Permitting and Analysis & Reuse and Response REVENUE MIX 2023 2023 MARGIN1 | LONG TERM MARGIN1 TARGET 2023 Margin Long Term Margin 2023 Margin Long Term Margin 2023 Margin Long Term Margin 24% 20%-25%
Slide 7: Our Integrated Offering Matters to Clients
Our Integrated Offering Matters to Clients Integrated Environmental Solutions Survey ...unaware or A third party study1 81 % unsure of where to find one conducted of over 500 companies indicated that there was significant demand for integrated 500 environmental solutions Companies Independently Surv
Slide 8: Investment Highlights
Investment Highlights Unique, vertically integrated Significant scale with global reach environmental company serving repeat client base Consistent record of strategically and Large TAM and secular tailwinds backed financially accretive acquisitions coupled by regulatory and corporate initiatives wi
Slide 9: Recurring, Predictable and Scalable Business Model
Recurring, Predictable and Scalable Business Model
Slide 10: The Montrose Model is Increasingly Recurring, Predictable and Scalable
The Montrose Model is Increasingly Recurring, Predictable and Scalable ~96% 15% ~$500B 30-40% ~18% REVENUE TOTAL ADDRESSABLE GROWTH FROM AVERAGE REVENUE AVG. ANNUAL RETENTION1 MARKET4 NEXT-GEN SOLUTIONS INCREASE6 ORGANIC GROWTH2 ~6,000 ~51% >$150B 23 ~6.5 UNIQUE CLIENTS ANNUAL WEATHER-RELATED PATENT
Slide 11: Business Grounded on Recurring Revenue
1. Business Grounded on Recurring Revenue Customer and Revenue Diversity Insulates from Political and Economic Shifts Revenue Over Time ($ in millions) 15% Average Organic Growth FY21 thru FY233 COVID 4% Organic Growth2 1st Trump Administration FY17 thru FY19, 7% Average Organic Growth1 Obama Trump
Slide 12: High Quality and Diverse Customer Base With Recurring Revenue
1. Business Grounded on Recurring Revenue High Quality and Diverse Customer Base With Recurring Revenue Diversified Customer Base & End Markets Percentage of Recurring Revenue2 2023 REVENUE1 BY END MARKET Has Increased Revenue Retention2 Chemicals Over Time Remains Strong 3% Other Consumer Products,
Slide 13: Integration Fuels Cross-Selling
2. Integration Fuels Cross-Selling Proven Ability to Cross-Sell Environmental Solutions, Drive Organic Revenue Growth and Enhance Customer Relationships Percentage of revenue from cross-sell1 has increased… … due to the strong flywheel effect Client identifies Montrose designs a challenge a solution
Slide 14: Case Study – Go To Market Strategy and Leveraging Cross-Selling
2. Integration Fuels Cross-Selling Case Study – Go To Market Strategy and Leveraging Cross-Selling1 Expanding Client Touchpoints A Truly Integrated Service Approach One example of Montrose's cross-selling1 success is our performance The image illustrates the strategic expansion of Montrose's service
Slide 15: Significant, Sustained Tailwinds
3. Significant, Sustained Tailwinds Capabilities Aligned With Strong Secular Tailwinds in Large Addressable Markets ASSESSMENT, PERMITTING MEASUREMENT REMEDIATION & REUSE AND RESPONSE AND ANALYSIS TREATMENT ADVISORY RESPONSE TESTING REMEDIATION TECHNOLOGY INCREASED ENERGY PRODUCTION INFRASTRUC
Slide 16: We Provide Integrated Solutions for PFAS Management
3. Significant, Sustained Tailwinds We Provide Integrated Solutions for PFAS Management We offer a unique suite of PFAS capabilities that can be integrated or Water Treatment Technology provided a la carte, based on client needs Full range of PFAS treatment products and services including design & e
Slide 17: Real-Time Monitoring and Software Innovation Core To Our Future
3. Significant, Sustained Tailwinds Real-Time Monitoring and Software Innovation Core To Our Future Air Montrose Offers The Full Solution Stack Large Market: ~$725M Annual Monitoring Serviceable Addressable Advanced Market (SAM) from 20 Clients ~$75 Monitoring ~$250 & Software Montrose’s top 20 ener
Slide 18: Technology Innovation Bolsters Organic Growth and Barriers to Entry
4. Technology Innovation Bolsters Organic Growth and Barriers to Entry R&D and Innovation Help Address Client Needs and Are Core to Montrose’s Approach Select Showcase of Existing and Future Technologies Montrose’s Aligned With Long-Term Megatrends R&D Advantage Solutions are quickly In Process of P
Slide 19: Real-Time Monitoring and Software Innovation Core To Our Future
4. Technology Innovation Bolsters Organic Growth and Barriers to Entry Real-Time Monitoring and Software Innovation Core To Our Future The scale, complexity and regulatory requirements of the environmental contamination challenges today require real-time monitoring through platform solutions - like
Slide 20: Disciplined M&A in a Highly Fragmented Market
5. Disciplined M&A in a Highly Fragmented Market M&A Strategy – Disciplined and a Core Growth Engine Key Pillars of M&A Strategy Proven Ability to Create Value from M&A One Year from Acquisition • Pipeline of assets that bring new talent, technology, and /or geographic expansion IDENTIFY • In a mass
Slide 21: Matrix Solutions Acquisition: An Example of Value Creation in Action
5. Disciplined M&A in a Highly Fragmented Market Matrix Solutions Acquisition: An Example of Value Creation in Action Transaction Overview Key Outcomes • In June 2023, we completed a $48.6M acquisition of Matrix Solutions, one of Canada’s leading environmental IMPLIED PURCHASE MULTIPLE engineering a
Slide 22: Financial Highlights
Financial Highlights
Slide 23: Strong Record of Long-Term Growth
Strong Record of Long-Term Growth Consolidated Revenue ($M) Consolidated Adjusted EBITDA2 ($M) ($ IN MILLIONS, % AS A PERCENT OF SEGMENT REVENUE) ($ IN MILLIONS, % AS A PERCENT OF SEGMENT REVENUE) Montrose (Core)1 Consolidated Adjusted EBITDA2 Emergency Response $95-100 $690-740 2019 – 2023 CAGR: 27
Slide 24: Ongoing Focus on Cash Flow Generation & Attractive Capital Structure
Ongoing Focus on Cash Flow Generation & Attractive Capital Structure Continued Focus on Operating Cash Flow Capitalization Preferred Equity Generation $122M3 • Target 50%+ of Operating Cash Flow as a percentage of Consolidated Adjusted EBITDA1 on an annual basis • Maintenance capex ~ 1% of revenue N
Slide 25: Near-term Priority is Redemption of Preferred Equity, Subsequent Deleveraging
Near-term Priority is Redemption of Preferred Equity, Subsequent Deleveraging Disciplined Capital Allocation Drives Strong Returns Capital Deployed Into Value Creation Since 2023 1. Prioritize balance sheet simplification in the near-term; will focus on redemption of the Series A-2 Preferred Stock $
Slide 26: Appendix
Appendix
Slide 27: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to our results under GAAP, in this presentation we also present certain other supplemental financial measures of financial performance that are not required by, or presented in accordance with, GAAP, including, Consolidated Adjusted EBITDA, Consolidated Adj
Slide 28: Reconciliation of Net Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net Income to Consolidated Adjusted EBITDA For the Year Ended December 31, ($ in thousands) 2023 2022(a) 2021(a) 2020(a) 2019(a) Net loss $ (30,859) $ (31,819) $ (25,325) $ (57,949) $ (23,557) Interest expense 7,793 5,239 11,615 13,819 6,755 Incom
Slide 29: Matrix Solutions Reconciliation of Net Income to Consolidated Adjusted EBITDA
Matrix Solutions Reconciliation of Net Income to Consolidated Adjusted EBITDA ($ in thousands) Matrix Solutions 2022 Purchase price $48,582 Revenue $69,912 Net Income $2,293 Add Back Taxes (1,160) Add Back Depreciation 1,260 Add Back Interest 268 Acquisition costs 61 Other non-recurring 598 Adjusted
Montrose Environmental Group — Investor Presentation (November 2024) on 6ix