Aecon : Conference Call Presentation (are q4 2024 conference call presentation)

Published: 2025-03-05 16:53:28 ET ARE.TO

Fourth Quarter 2024 Results Presentation

March 6, 2025

A E C O N G R O U P I N C . ( T S X : A R E )

2024 Financial Results

$ Millions

Years Ended

(except per share amounts)

December 31 (As Reported)

December 31 (As Adjusted)2,5

2024

2023

Change1

2024

2023

Change1

Revenue

4,243

4,644

4,161

3,809

Gross Profit

182.5

255.6

29%

455.3

458.6

Gross Profit Margin %4

4.3%

5.5%

120 bps

10.9%

12.0%

110 bps

Adjusted EBITDA2

82.6

143.4

42%

349.4

355.3

Adjusted EBITDA Margin %3

1.9%

3.1%

120 bps

8.4%

9.3%

93 bps

Operating Profit (loss)

(60.1)

240.9

125%

Profit (loss) attributable to shareholders

(59.5)

161.9

137%

Earnings per share - diluted

(0.95)

2.10

145%

Adjusted profit (loss) attributable to shareholders 2

(61.6)

160.9

138%

Adjusted earnings (loss) per share - diluted 2

(0.99)

2.09

147%

New Awards

4,747

4,505

Backlog (at end of period) 2

6,662

6,157

bps = basis point.

This is a non-GAAP financial measure. Refer to page 2 in this presentation.

3 This is a non-GAAP financial ratio. Refer to page 2 in this presentation.

4 This is a supplementary financial measure. Refer to page 2 in this presentation.

5 Excludes impacts of legacy projects and divestitures. Refer to Section 5 "Recent Developments", Section 10.2 "Contingencies" and Section 13 "Risk Factors" in the December 31, 2024 MD&A for more information on legacy projects. Refer to page 17

for further information and reconciliation.

Construction 2024 Results

Revenue down by $352M, or 8%, year-over-year

$460M in industrial operations driven by decreased activity on mainline pipeline work following the

achievement of substantial completion on a large project in Q3 2023, partially offset by a higher volume of field construction work at wastewater treatment and industrial facilities in western Canada in 2024

$198M in urban transportation solutions primarily from a decrease in Light Rail Transit ("LRT") work in Ontario and Québec as three LRT projects near completion

$14M in civil operations largely from a decrease in road building construction work in eastern

20241

(As Reported)

Revenue ($M)

$4,573

-8%

$4,221

2023

2024

20241,2

(As Adjusted)3

Revenue ($M)

+9%

$3,798

$4,138

2023

2024

Canada after the sale of ATE in Q2 2023 of $51 million, partially offset in the balance of civil operations by an increase in roadbuilding construction work in western Canada

$282M in nuclear operations driven by an increased volume of refurbishment work at nuclear generating stations located in Ontario and the U.S.

$38M in utilities operations primarily from an increased volume of electrical transmission work in the U.S. and an increase in battery energy storage system work, partially offset by a decreased volume of telecommunications and gas distribution work

New awards higher by $290M, or 7%, year-over-year

New Awards ($M)

$4,428

+7%

$4,718

2023

2024

1 Totals and variances may not add due to rounding and eliminations.

Excludes impacts of legacy projects and divestitures. Refer to page 17 for further information and reconciliation.

This is a non-GAAP financial measure. Refer to page 2 in this presentation.

Construction 2024 Results (continued)

20241

(As Reported)

20241,4

(As Adjusted)2

Adjusted EBITDA2 down by $65M year-over-year

Operating Profit down by $114M year-over-year

Negative gross profit from the four fixed price legacy projects of $273 million in 2024 compared to negative gross profit of $215 million in 2023 for a net negative year-over-year impact on operating profit and adjusted EBITDA of $58 million3

Lower gross profit margin in civil operations and urban transportation solutions

Higher volume and gross profit margin in nuclear

Higher gross profit margin in industrial operations

Increase in acquisition-related transaction costs ($10 million largely in utilities) and increase in amortization expense related to acquisition-related intangible assets from the Xtreme, Ainsworth Power Construction, and United transactions in 2024 ($5 million)

Adj. EBITDA ($M)

$99

-66% $34

20232024

(2.2% margin)

(0.8% margin)

Operating Profit ($M)

$59

Adj. EBITDA ($M)

$326

$307

-6%

2023

2024

(8.6% margin)

(7.4% margin)

Decrease in other income ($10 million) driven by lower gains on sale of property, buildings, and

-193%

equipment (primarily in utilities)

2024

2023

-$55

(1.3% margin)

(-1.3% margin)

Concessions 2024 Results

Revenue down by $61M, or 84%, year-over-year

The decrease was primarily due to lower reported revenue from Skyport as a result of the commencement of the equity method of accounting for the Company's retained 50.1% interest in Skyport following the above noted sale of a 49.9% interest in Skyport in the third quarter of 2023

Adjusted EBITDA2 down by $3M, or 3%, year-over-year and Operating Profit down by $150M, or 86%, year-over-year

The lower operating profit was primarily due to gains related to a sale in the third quarter of 2023 of a 49.9% interest in the Bermuda International Airport concessionaire which resulted in a year-over-year decrease in gains on sale of $133 million

In the balance of the Concessions segment, operating profit in 2024 decreased by $17 million. The ongoing operations at Skyport was negatively impacted by a 49.9% reduction in Aecon's ownership interest in Skyport and from the use of the equity method of accounting in 2024 where operating results for Aecon's interest in Skyport are reported net of financing costs and income taxes. These unfavourable impacts were partially offset by one-time recoveries in Skyport in 2024 of $5.9 million

20241

(As Reported)

Revenue ($M)

$74

-84%

$12

2023

2024

Adj. EBITDA ($M)

$90

$87

-3%

2023

2024

Operating Profit ($M)

$174

-86%

$24

2023

2024

20241,3

(As Adjusted)2

Revenue ($M)

$13$12

-8%

20232024

Adj. EBITDA ($M)

$75

$81

+8%

2023

2024

Totals and variances may not add due to rounding and eliminations.

This is a non-GAAP financial measure. Refer to Refer to page 2 in this presentation.

Excludes impact of divestiture. Refer to page 17 for further information and reconciliation.

Q4 2024 Financial Results (As Adjusted)

$ Millions

Three Months Ended

Twelve Months Ended

Dec 31

2024

2023

Change2

2024

2023

Change2

Revenue

1,267

1,130

12%

4,243

4,644

Legacy Projects

(52)

(123)

(82)

(723)

Divestiture Impacts1

(112)

Revenue (As Adjusted)3

1,215

1,007

21%

4,161

3,809

Adjusted EBITDA3

76.3

70.2

82.6

143.5

42%

Legacy Projects Loss / (Profit)

35.8

40.0

272.8

215.2

Divestiture Impacts1

(5.9)

(3.4)

Adjusted EBITDA (As Adjusted)3

112.1

110.2

349.4

355.3

Margin % 4

9.2%

10.9%

171 bps

8.4%

9.3%

93 bps

Additional Information:

Construction (As Adjusted)5

Revenue3

1,200

1,004

20%

4,138

3,798

Adjusted EBITDA3

100.8

105.0

307.0

326.1

Margin % 4

8.4%

10.5%

206 bps

7.4%

8.6%

117 bps

Concessions (As Adjusted)5

Revenue3

4.2

3.0

42%

12.0

13.0

Adjusted EBITDA3

17.4

19.7

12%

80.9

74.9

Corporate Adjusted EBITDA3

(6.1)

(14.5)

58%

(38.5)

(45.8)

16%

5 Refer to page 17 for further information and reconciliation.

Financial Position, Liquidity and Capital Resources

Balance Sheet ($M)

Free Cash Flow ($M)

Core Cash

Bank Indebtedness

Cash in Joint Operations

Total Cash

Net Working Capital

Long-Term Debt

LT Debt

December 31, 2024 123.3 (152.8) 314.8 285.3

76.5

124.6 27.0 151.6

Operating Profit

Depreciation and amortization

(Gain) on sale of assets

Costs related to business acquisitions

Income from projects accounted for using the equity

method

Equity Project EBITDA

Adjusted EBITDA

Cash Interest Expense (net)

Capital Expenditures (net of disposals)

Income Taxes Paid

Change in Working Capital

2024

2023

(60.1)

240.9

87.879.0

(33.9)

(222.3)

9.9

0.0

(21.2)

(18.8)

100.064.5

82.6143.4

(14.1)

(51.1)

(23.6)

47.1

(52.0)

(38.7)

80.925.0

Total LT Debt

Net Debt

Long-Term Debt to 2024 Adjusted EBITDA

2,8

Net Debt to 2024 Adjusted EBITDA

1,2,8

Debt (excluding Preferred Shares of Aecon Utilities) to capitalization percentage

151.6 Net JV Impact5

181.1 Non-cash items in Adjusted EBITDA 1.8x Free Cash Flow 6,7

2.2x

12% Cash Flow From Operations Cash Flow From Investing Activities Cash Flow From Operations & Investing Activities

(78.9)

(50.6)

7.6

51.1

(159.6)

360.8

(152.0)

411.8

5 Net JV Impact represents the difference between Equity Project EBITDA included in Adjusted EBITDA (Equity Project EBITDA as defined in the December 31, 2024 MD&A) and distributions from projects accounted for using the equity method.

6 Excludes $17.4 million incremental proceeds on minority sale of Bermuda Airport and sale of ATE in 2024 and $317.6 million net proceeds on minority sale of Bermuda Airport and sale of ATE in 2023. Excludes $174.5 million outflow (net of cash acquired) in 2024 related to strategic business acquisitions.

7 Free Cash Flow is a capital management measure that management uses to analyze and evaluate the cash generated after taking into consideration cash outflows that support its operations and maintain its capital assets. Management also believes this measure is commonly used by the investment community for valuation purposes. Refer to page 15 in this presentation for a quantitative reconciliation to the most comparable financial measure, being Cash Flow From Operations & Investing Activities.

8 This is a non-GAAP financial measure or non-GAAP ratio. Refer to page 2 in this presentation.

Diverse Business Model

Construction

2024 Adj. EBITDA (As Adjusted)

$307 M1,6,7 Concessions

2024 Revenue (As Adjusted)

$4,138 M1,6,7

2024 Revenue (As Adjusted)

2024 Adj. EBITDA (As Adjusted)

BERMUDA INTERNATIONAL AIRPORT

$12 M1,6,7 $81 M1,6,7

50.1%3,4

Civil

32%2

Urban Transportation

Solutions

12%2

Utilities

22%2

Nuclear Power

23%2

Industrial

11%2

U.S. VIRGIN ISLANDS AIRPORTS ST. THOMAS & ST. CROIX

FINCH

WEST LRT

GO RAIL NETWORK

ON-CORRIDOR

EGLINTON

LRT

GORDIE HOWE INTERNATIONAL BRIDGE

WATERLOO

LRT

ONEIDA ENERGY

STORAGE L.P.

50.0%5

33.3%3

28.0%3

25.0%3

20.0%3

10.0%3

8.35%3

Solid Backlog & Recurring Revenue Profile

Reported backlog excludes collaborative and progressive design projects currently under development1

Total Backlog3 ($M)

Backlog Duration ($M)

Recurring Revenue 4 (As Adjusted) ($M)

At December 31

$6,662

$6,296

$6,157

$111

$6,296

$6,157

$99

$1,066

$104

$1,408

$2,374

$1,018

$2,179

$1,853

$775

$1,284

$1,309

$6,197

$6,053

$6,551

$3,035

$2,669

$3,004

2022

2023

2024

2022

2023

2024

2022

2023

2024

Construction

Concessions

12 Months

13-24 Months

Beyond 24 Months

58% Cost Plus/ Unit Price

42% Fixed Price

61% Cost Plus/Unit Price

39% Fixed Price

(50% at December 31, 2023)

(58% same period last year)

(42% same period last year)

Backlog Contract Type At December 31, 2024

2024 Revenue2

This is a non-GAAP financial measure. Refer to page 2 in this presentation.

Recurring revenue (as adjusted for the impacts from the sale of ATE and 49.9% stake in Skyport). Adjustment to 2022 of -$121M, to 2023 of -$68M and to 2024 of $nil.

Disclaimer

Aecon Group Inc. published this content on March 05, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 05, 2025 at 21:52:31.687.