Q Earnings Presentation. Refine.

Transcription

1 Q Earnings Presentation Refine.

2 Cautionary Statement This presentation contains non-ifrs measures and forward-looking statements, including a discussion of our business targets, expectations and outlook. 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 2017 Annual Report and Q MD&A, which are available on SEDAR, EDGAR, and stantec.com.

3 3 Agenda Gord Johnston Highlights Dan Lefaivre Financial Performance Gord Johnston Operational Highlights Outlook

4 4 Q Highlights 4 th Consecutive quarter of overall gross and net organic revenue growth Cost reductions Office consolidations Improved utilization Focused on 2018 strategic plan ACQUISITION ESI Consulting Ltd. ACQUISITION Occam Engineers Inc.

5 5 Subsequent Events Initiated strategic review Construction Services ACQUISITION Traffic Design Group Limited (TDG) Letter of Intent Norwest Corporation Letter of Intent Cegertec

6 Financial Performance 6

7 7 IFRS 15 (In millions of Canadian dollars) Retained Earnings Consulting Construction Services Services Consolidated $5.0 billion gross revenue backlog $3.8 billion Consulting Services $1.2 billion Construction Services Contracts with multiple goods or services - (2.7) (2.7) Change orders and claims (3.0) (2.1) (5.1) Liquidated damages - (18.0) (18.0) Significant financing component Deferred contract costs - (0.3) (0.3) Total opening retained earnings impact (1.3) (22.6) (23.9) IFRS 9 New classification rules for financial assets and accounting rules for debt modifications $2.7 million unrealized fair value loss on equity investments held for self-insured liabilities in Q1 18

8 8 Q1 18 Financial Results Net Revenue by Reportable Segments & Business Operating Units (In millions of Canadian dollars, except percentages) Quarter Ended March 31, 2018 Quarter Ended March 31, 2017 Total Change Change Due to Net Acquisitions (Divestitures) Change Due to Foreign Exchange Change Due to Organic Growth (Retraction) % of Organic Growth (Retraction) Consulting Services Canada (0.3) n/a % United States (14.4) 1.3 (19.9) % Global % Total Consulting Services (18.7) 21.4 Percentage growth (retraction) 0.5% 0.2% (2.4%) 2.7% Construction Services Percentage growth (retraction) 2.7% - 0.4% 2.3% Total (18.4) % Consulting Services Buildings (4.0) 10.5 (5.1) (9.4) (5.0%) Energy & Resources (0.3) (2.3) % Environmental Services (0.8) 0.8 (1.9) % Infrastructure (2.1) - (6.7) % Water (8.0) (9.7) (2.7) % Total Consulting Services (18.7) 21.4 Percentage growth (retraction) 0.5% 0.2% (2.4%) 2.7%

9 9 Q1 18 Financial Results Gross Margin by Business Operating Units Q1 18 Q1 17 Consulting Services Buildings 53.2% 55.1% Energy & Resources 51.8% 53.3% Environmental Services 56.7% 56.3% Infrastructure 54.2% 53.5% Water 56.5% 58.9% Consulting Services - Total 54.5% 55.5% Construction Services 25.1% 33.9% Consolidated 52.2% 53.9%

10 10 Q1 18 Financial Results (In millions of Canadian dollars, except for percentages) Q1 18 $ Q1 17 $ Administrative and marketing expenses (1) 41.3% 43.3% Positively impacted by: Occupancy costs Integration costs & discretionary spending Utilization (1) As a % of net revenue.

11 11 Q1 18 Financial Results (In millions of Canadian dollars, except for per share amounts) Q1 18 $ Q1 17 $ Gross revenue 1, ,276.3 Net revenue Adjusted EBITDA (1) Net income 36.8 (58.0) Adjusted net income (1) Diluted EPS 0.32 (0.51) Adjusted diluted EPS (1) Cash dividends declared per common share (1) Non-IFRS measure defined in our 2017 Annual Report.

12 Q1 18 Financial Results 12

13 13 First Quarter Progress on 2018 Annual Targets Consulting Services Construction Services Total Target Results Target Results Target Results Gross margin as % of net revenue 53% to 55% 54.5% 30% to 33% 25.1% 52% to 54% 52.2% Administrative and marketing expenses as a % of net revenue 41% to 43% 42.6% 25% to 27% 25.7% 41% to 43% 41.3% EBITDA as a % of net revenue (note 1, 2) 11% to 13% 11.3% 7% to 9% (1.0%) 10% to 12% 10.3% Net income as a % of net revenue At or above 5% 4.2% (note 1) EBITDA as a percentage of net revenue is calculated as EBITDA, divided by net revenue (note 2) EBITDA is a non-ifrs measure (discussed in the Definition section of our 2017 Annual Report) Met or performed better than target Did not meet target

14 Operational Highlights 14

15 15 CONSULTING SERVICES Canada $350 $300 $250 $200 $150 millions (C$) Organic gross revenue growth Q % $100 $50 $0 Q1 17 Q1 18 Gross Revenue Net Revenue Organic net revenue growth 4.3% Growth driven by private sector, especially Energy & Resources. Revenue growth in the healthcare industry in BC, Saskatchewan, and Ontario Won several projects in the midstream Oil and Gas business Growth in Infrastructure was driven by community development work Vancouver Convention Centre Vancouver, British Columbia

16 16 CONSULTING SERVICES United States $700 $600 $500 $400 $300 millions (C$) Organic gross revenue growth Q % $200 $100 $0 Q1 17 Q1 18 Gross Revenue Net Revenue Organic net revenue growth 0.9% Growth in Environmental Services Increased activity in private and public sector projects Organic growth in Mining New projects in WaterPower & Dams Stantec Arlington Virginia Office Arlington, Virginia

17 17 CONSULTING SERVICES Global $160 $140 $120 $100 $80 $60 $40 $20 $0 Q1 17 Q1 18 millions (C$) Gross Revenue Net Revenue Organic gross revenue growth Organic net revenue growth Q % 6.3% Organic growth driven by Mining in Latin America and Water in the Middle East Consistent revenue from UK AMP6 Dubai Mall UAE Dubai, United Arab Emirates

18 18 Construction Services $300 $250 millions (C$) Q1 18 $200 $150 Organic gross revenue retraction (3.7%) $100 $50 $0 Q1 17 Q1 18 Gross Revenue Net Revenue Organic net revenue growth 2.3% Steady work on several major US water and wastewater treatment plant projects Ongoing construction activities for AMP6 Legacy project issues continue to impact UK operations Transportation Construction Fort Saskatchewan, Alberta

19 19 Recent project wins $5.0 billion gross revenue backlog $3.8 billion Consulting Services $1.2 billion Construction Services Delivering the concept design for raising the Warragamba Dam west of Sydney, Australia, to improve flood mitigation in the downstream community Providing engineering, geotechnical, surveying and other services for the Mid-Breton Sediment Diversion project, a key component of Louisiana s master plan for a sustainable coast Designing the Hampstead Bypass and US 17 highway improvements in North Carolina Providing engineering services for the $1.9B Long Island Rail road rail modernization project Transforming tailings processing from Alberta Oil Sands for Titanium Corporation Serving as the Strategic Planning Partner for Yorkshire Water to support the AMP7 period ( )

20 Outlook Canada United States Global Overall Federal and provincial increased infrastructure spending Modest improvement in energy and resources sector Moderate slow down in housing market Federal and state increased infrastructure spending Growth in non-residential construction Growth in housing market Economic growth resulting from tax reform Economic growth Expand global footprint into new markets Long-term target of 15% gross revenue CAGR Organic gross revenue growth in the low- to mid-single digits Strong backlog and client relationships New opportunities for APD

21 Sustainability Report Now available on stantec.com

22 Q&A 22