stn q3 16 ir presentation final
TRANSCRIPT
We createcommunities.We are Stantec.
Our public communications will contain non-IFRS measures and written or verbal forward-looking statements, including a discussion of our goals and our growth strategies. Certain information has been adjusted for the November 14, 2014, two-for-one share split. Figures for 2012 are restated for IFRS 10 and 11.
We caution readers not to place undue reliance on our forward-looking statements since a number of factors could cause actual future results to differ materially from the targets and expectations expressed.
For a discussion of risk factors and non-IFRS measures, see our 2015 Annual Report, which is available on SEDAR, EDGAR, and www.stantec.com.
Cautionary Statement
WE ARE STANTEC
1. WHO WE ARE
2. WHERE WE ARE
3. WHAT WE HAVE ACCOMPLISHED
4. WHERE WE ARE GOING
AGENDA
Our business is peopleWHO WE ARE
EngineeringArchitectureInterior DesignLandscape ArchitectureSurveyingEnvironmental SciencesProject ManagementProject Economics
Project concept. Planning. Design. Construction. Commissioning.
Stantec at a glance
STN
CDN 3.8B 62 YEARS
22,000 400TSX & NYSE
Q3 16TTM Gross
Revenue
Of uninterruptedprofitability
Employeesglobally
Locationsworldwide
WHO WE ARE
CDN 3.5B September 30, 2016
Market Cap
WE ARE BETTER TOGETHER
Full integrationSingle brand & platform
DiversificationBalanced Leadership ModelLocal & global client focus
WHO WE ARE
Our values set us apart
WE PUT PEOPLE FIRSTPeople
Creative solutionsLocal community presence
WE ARE DRIVEN TO ACHIEVE
Top-tier position
WE DO WHAT IS RIGHT
Business conduct
WHO WE ARE
PLANNING DESIGN CONSTRUCTIONMAINTENANCE
Our business model is diversified
Project Lifecycle
As a percentage of Q3 16 YTD gross revenue
Gross Revenue Breakdown by Business Operating Units
Gross Revenue Breakdown by Geographies
WHO WE ARE
As a percentage of Q3 16 YTD gross revenue
Gross Revenue Breakdown
by Geographies
WHO WE ARE
As a percentage of Q3 16 YTD gross revenue
Gross Revenue Breakdown
by Business Operating Units
10
BuildingsWHERE WE ARE
BuildingsWHERE WE ARE
As an approximate percentage of Q3 16 YTD gross revenue
YTD GROSS REVENUE BREAKDOWNBY GEOGRAPHY
YTD GROSS REVENUE BREAKDOWN BY CLIENT TYPE
Energy & Resources WHERE WE ARE
Energy & ResourcesWHERE WE ARE
As an approximate percentage of Q3 16 YTD gross revenue
YTD GROSS REVENUE BREAKDOWNBY GEOGRAPHY
YTD GROSS REVENUE BREAKDOWN BY CLIENT TYPE
14
Environmental Services
WHERE WE ARE
Environmental Services
WHERE WE ARE
As an approximate percentage of Q3 16 YTD gross revenue
YTD GROSS REVENUE BREAKDOWNBY GEOGRAPHY
YTD GROSS REVENUE BREAKDOWN BY CLIENT TYPE
InfrastructureWHERE WE ARE
InfrastructureWHERE WE ARE
As an approximate percentage of Q3 16 YTD gross revenue
YTD GROSS REVENUE BREAKDOWNBY GEOGRAPHY
YTD GROSS REVENUE BREAKDOWN BY CLIENT TYPE
We focus on performance
WHAT WE HAVE ACCOMPLISHED
Total and Organic Growthquarter over quarter
WHAT WE HAVE ACCOMPLISHED
Gross Revenue & Net Revenuemillions (C$)
WHAT WE HAVE ACCOMPLISHED
17%10-YEAR GROSS REVENUE CAGR
Gross Revenue Backlog millions (C$)
WHAT WE HAVE ACCOMPLISHED
19%10-YEAR GROSS REVENUE BACKLOG CAGR
Margin ProfileEBITDA margin profile for engineering and construction firms (% of Gross Revenue)
WHAT WE HAVE ACCOMPLISHED
EPS and Shares Outstandingmillions (C$)
WHAT WE HAVE ACCOMPLISHED
6%10-YEAR DILUTED EPSCAGR
Dividend Growth (C$)
10%4-YEAR DIVIDENDCAGR
WHAT WE HAVE ACCOMPLISHED
Cash Flowmillions (C$)
WHAT WE HAVE ACCOMPLISHED
Capital Structure NEW CREDIT FACILITIES $C800M revolving credit facility
• Expires 2020
$C450M term loan• Three tranches due 2018, 2019, 2020
NET DEBT/EBITDATTM
• 2.64 times at September 30, 20161
• Strong cash flow generation and growth prospects• Less than 2.0x expected EBITDA by the end of 2017• Strong balance sheet provides flexibility to continue executing growth strategy• Consistent dividend payout ratio policy and corresponding dividend growth
1 Includes MWH TTM EBITDA
WHAT WE HAVE ACCOMPLISHED
We are continuing our evolution
WHAT WE HAVE ACCOMPLISHED
We have a proventrack record
WHAT WE HAVE ACCOMPLISHED
Welcome to theStantec community
BURY300 Employees
March 2016
MWH6,800
EmployeesMay 2016
VOA280 Employees
May 2016
EDWARDS & ZUCK
120 EmployeesSeptember 2016
Arch|TB 60 EmployeesLetter of intent
A strategic fitSTRATEGIC PLAN OBJECTIVESConsider larger/mega-deal domestic acquisitions
Pursue international opportunities
Evolve our approach to APD in certain sectors
MWH FITLargest deal in Stantec’s history with 6,800 employees
Global platform in stable countries
Full life cycle offering in water sector in response to APD
WHERE WE ARE GOING
Why water?
• Aging infrastructure • Population distribution and growth • Climate change
• Environmental sustainability • Affordability • Regulatory pressures
WHERE WE ARE GOING
1American Society of Civil Engineers
Water-related infrastructure investment required will amount to $126 billion by 20201
We are expanding our depth and breadth
WHERE WE ARE GOING
1 According to Engineering News-Record and internal analysis
Top North American Design Firms1 Top 150 Global Design Firms
Our business objective is to be a Top Ten Global Design Firm
WHERE WE ARE GOING
To be a top ten global design firm
TRANSACTION CLOSED MAY 6
EXPLORE KEY
PURSUITS
COMPLETION OF COMBINED
OPERATING STRUCTURE
Next steps
TARGETED INTEGRATION
OF MWH AMERICAS
IN 2017
SYNERGIES THROUGH
OPTIMIZATION OF CORPORATE
COSTS
PHASEDINTEGRATION
PLAN
WHERE WE ARE GOING
We are well positioned• Diversified across sectors, regions, and project
lifecycle• Proven track record• Objective: top-tier position in each market and region
we serve• Robust capital structure to continue dividend growth
and disciplined acquisition strategy
WHERE WE ARE GOING