Stifel Nicolaus 2018 Cross Sector Insight Conference June 12, 2018

Transcription

1 Stifel Nicolaus 2018 Cross Sector Insight Conference June 12, 2018

2 Forward-Looking Statements and Non-GAAP Financial Disclosures Forward Looking Statements: This material and related presentation contain certain forward-looking statements within the meaning of the Private Securities Reform Act of Any such comments speak only as of this date and EMCOR assumes no obligation to update any such forward-looking statements. These forward-looking statements may include statements regarding anticipated future operating and financial performance, the nature and impact of our backlog, our ability to pursue acquisitions, our ability to return capital to shareholders, market opportunities, market growth, and customer trends. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly these statements are no guarantee of future performance. Such risk and uncertainties include, but are not limited to, adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for EMCOR s services, adverse business conditions, availability of adequate levels of surety bonding, increased competition, unfavorable labor productivity and mix of business. Certain of the risk factors associated with EMCOR s business are also discussed in Part I, Item 1A Risk Factors, of the Company s 2017 Form 10-K and in other reports filed from time to time with the Securities and Exchange Commission and available at and Such risk factors should be taken into account in evaluating any forward-looking statements. Non-GAAP Measures: This material and related presentation also include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). Any non-gaap financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP and may not be comparable to the calculation of similar measures of other companies. 2

3 EMCOR Group Leading specialty construction, building and industrial services provider 2018 estimated revenues $7.6B - $7.7B ~33,000 employees 3

4 STIFEL - CROSS SECTOR INSIGHT CONFERENCE Why EMCOR Significant expertise in project execution and service delivery Excellence in managing skilled labor Disciplined and effective cost management Broad array of services delivered into growing end markets Platform for earnings growth Strong and liquid balance sheet Flexibility for organic growth, acquisitions and share repurchases History of consistent cash generation Cash flow ± net income 4

5 Leading Market Position Across all Businesses STIFEL - CROSS SECTOR INSIGHT CONFERENCE EMCOR GROUP, INC Revenue: $7.7B CONSTRUCTION SERVICES U.S. MECHANICAL CONSTRUCTION 2017 Rev: $3.0B U.S. ELECTRICAL CONSTRUCTION 2017 Rev: $1.8B U.S. BUILDING SERVICES 2017 Rev: $1.8B U.S. INDUSTRIAL SERVICES 2017 Rev: $0.8B EMCOR UK 2017 Rev: $0.3B 5

6 CONSTRUCTION U.S. Leading Specialty Construction Contractor Sheet Metal HVAC Process Piping Fire Protection High Purity Piping Plumbing Low Voltage Voice & Data Lighting Security / Alarm Transmission & Distribution High Voltage 6

7 BUILDING SERVICES U.S. Leading National Provider of Building Services National HVAC Services Building Control Systems Retrofit Projects Repair Services Service Agreements Operations & Maintenance HVAC Services Retrofit Projects Preventative Maintenance Energy Efficiency Upgrades 7 Base Operations Facilities Management IDIQ Projects Operations & Maintenance Supplier Management

8 STIFEL - CROSS SECTOR INSIGHT CONFERENCE U.S. Industrial Services Leading Provider of Refinery / Petrochemical Turnaround Services Heat Exchanger Service / Fabrication Embedded Contracts Turnaround Services Heat Exchangers, including HF Alky Units Fluid Catalytic Cracking Units Coking Units Specialized Welding Field Services Maintenance Capital Projects 8

9 Geography and Market Sectors Geography Backlog by Market Sectors 4% 8% 13% 41% 8% 3% 96% 18% 9% ($ Millions) 2017 Revenues United States $7,346 United Kingdom 341 $7,687 ($ Millions) 2017 Backlog Commercial $1,571 Healthcare 343 Institutional 678 Hospitality / Gaming 118 Industrial 295 Transportation 485 Water / Wastewater $3,790

10 Backlog by Market Sector ($ Millions) $4,000 $3,634 $3,771 $3,903 $3,790 $3,946 $3,224 $3,302 $3,344 $3,000 $2,000 $1,000 $ Qtr. 1 Qtr. 1 Commercial Hospitality Industrial Healthcare Institutional Transportation Water & Wastewater Commercial Hospitality / Gaming Industrial Healthcare Institutional Transportation Water & Wastewater 10

11 ASC 606 Impact on Historical Backlog ($ Millions) On January 1, 2018, EMCOR adopted the FASB s new revenue recognition standard, which requires the disclosure of remaining unsatisfied performance obligations ( RPO ). $4,000 $3,000 Backlog by Segment $3,946 $4,000 $3,000 Remaining Performance Obligations $3,604 The reporting of RPO is not comparable to our historical backlog reporting. The primary difference between backlog and RPO relates to the reporting of the remaining term of our service contracts. $2,000 $1,000 $2,000 $1,000 For comparative purposes, we have presented backlog amounts within this presentation under EMCOR s historical definition. 11 $0 $ Qtr. 1 Qtr. 1 $ (GAAP) Qtr. 1 Mechanical Electrical Building Services Industrial Services EMCOR UK

12 Key Financial Data Income Statement ($ Thousands, except per share information) For the Three Months Ended March 31, Variance $ % Revenues $ 1,900,388 $ 1,891,732 $ 8, % Gross Profit 269, ,340 2, % Selling, General and Administrative Expenses 190, ,001 7, % Restructuring Expenses (475) N/M Operating Income $ 78,741 $ 82,774 $ (4,033) -4.9% 4.1% 4.4% Diluted Earnings per Common Share from Continuing Operations $ 0.94 $ 0.88 $ % 12

13 Key Financial Data Balance Sheet ($ Thousands) (Unaudited) 03/31/18 12/31/17 Cash $ 352,443 $ 467,430 Working Capital $ 657,480 $ 633,557 Goodwill $ 965,046 $ 964,893 Identifiable Intangible Assets, Net $ 484,368 $ 495,036 Total Debt $ 306,958 $ 310,150 Stockholders' Equity $ 1,691,666 $ 1,674,117 Total Debt / Total Capitalization 15.4% 15.6% 13

14 2018 Outlook Non-residential construction market expected to grow midsingle digits Building Services benefitting from continued growth in retrofit and energy savings projects Industrial Services: Weak spring turnaround season as customers deferred maintenance Expect strengthening in maintenance market later in 2018 and into 2019 Strong and liquid balance sheet 14

15 2018 Guidance Revenues $7.6 Billion $7.7 Billion Diluted EPS from Continuing Operations $4.10 $4.70 Assuming effective annual income tax rate of approximately 28% 15

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