Aecon : Investor Presentation (are q4 2024 ir presentation)

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

F O U R T H Q U A R T E R 2 0 2 4

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

Why Invest in Aecon?

D E V E L O P I N G C R T I C I A L I N F R A S T R U C T U R E A N D E N E R G Y S O L U T I O N S

Favourable

Diversified & Resilient

Shareholder

Demand Environment

Business Model

Value Creation

CONSOLIDATED2 CONSTRUCTION CONCESSIONS

$4.2B

$4.7B

$6.7B

ADJ. EBITDA (As Adjusted)1,5, 9

TOTAL REVENUE1

NEW AWARDS1

BACKLOG5

OPERATING PROFIT1

(at Dec 31, 2024)

$349M

$307M

$81M

117%

59%

$(60M)

$(55M)

$24M

10 YEAR

2024 TOTAL

OF 2024

ACQUISITIONS

DIVIDEND

SHAREHOLDER

REVENUE TIED TO

IN THE ENERGY

CAGR3

RETURN4

SUSTAINABILITY

TRANSITION8

PROJECTS7

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.

De-Risking Business Through Collaborative Models

Collaborative projects currently in development phases present significant opportunities for long term growth1

Darlington New Nuclear

Project (DNNP) Small Modular

Reactor

Total Capital Cost Under

Development

Integrated Project Delivery (IPD)

Aecon, GE Hitachi and AtkinsRéalis executed a six- year alliance agreement with Ontario Power Generation (OPG) to deliver North America's first grid- scale SMR through the DNNP in Ontario.

Cyril E. King and Henry E.

Rohlsen Airports in U.S. Virgin

Islands

Total Capital Cost Under

Development

Collaborative Design, Build, Finance, Operate &

Maintain

SkyCity, an Aecon-led consortium, was selected to redevelop the Cyril E. King Airport in St. Thomas and the Henry E. Rohlsen Airport in St. Croix.

Aecon will have 50% share in the design-build JV with

Contrecoeur Terminal

Expansion Project

Total Capital Cost Under

Development

Progressive Design-Build

Contrecoeur Terminal Constructors General Partnership, comprised of Aecon (40%) and Pomerleau (60%), executed a contract for the design of the in-water works for the Contrecoeur Terminal Expansion project in Quebec.

Scarborough Subway

Extension Stations, Rail and

System (SRS)

$2.8B

Target Price Contract

GO Rail Expansion On-

Corridor

(OnCorr) Works Project

Total Capital Cost Under

Development

Progressive Design, Build, Operate & Maintain

ONxpress Transportation Partners (ONxpress) selected to design, build, operate and maintain the GO Expansion OnCorr Works project in Ontario. ONxpress consortium comprised of Aecon, FCC, Deutsche Bahn and Alstom.

O&M partnership anticipated to commence in 2025

Winnipeg North End Sewage

Treatment Plant Biosolids

Facilities Upgrade project

Total Capital Cost Under

Development

Progressive Design-Build

Red River Biosolids Partners GP, a consortium comprised of Aecon, Oscar Renda and MWH Constructors, in which Aecon is the lead partner and holds a 33.3% interest, has executed a contract to deliver the Winnipeg North End Sewage Treatment Plant Biosolids Facilities Upgrade project.

Howard A. Hanson Dam

Additional Water Storage Fish

Passage Facility

Total Capital Cost Under

Development

Integrated Design and

Construction

Flatiron-Aecon Joint Venture, a consortium between Aecon and Flatiron Construction in which Aecon holds a 40% interest, executed a contract with U.S. Army Corps of Engineers to deliver the Howard A. Hanson Dam Additional Water Storage Fish Passage Facility in Ravensdale, Washington State.

The Scarborough Transit Connect (STC) is a 50/50 consortium between Aecon and FCC Canada Limited. The project will extend the TTC's Line 2 subway service nearly eight kilometers farther from the existing Kennedy Station northeast to McCowan Road and Sheppard Avenue.

1 Projects would be added to backlog following completion of successful development phases over one to two years.

Major Projects & Concessions

Provide Stability

Project Timeline (Starting from 2025)

2025

2026

2027

2028

2029

2030

U.S. Virgin Islands Airports

2064

Transition Phase

Gordie Howe Bridge

2054

Finch West LRT

2053

Eglinton LRT

2051

Oneida Energy Storage

2050

Waterloo LRT

2049

GO On-Corridor

2047

Bermuda Airport

2047

Pickering Refurbishment

2033

Bruce Power

2032

Scarborough Subway Ext.

2032

Winnipeg Biosolids Facilities

Howard A. Hanson Dam

Contrecoeur Terminal

Darlington New SMR

ECWE Elevated Guideway

Deerfoot Trail Improv.

North Anna Pwr Station

John Hart Dam Seismic

Darlington Refurbishment

Kingstown Port (St. Vincent)

Giant Mine Remediation

REM Montreal

Pattullo Bridge

Eglinton West Tunnel

Construction

Equity &

Equity, Operations &

Progressive Design, Build,

Progressive

Integrated Project

Maintenance

Operations & Maintenance

Design-Build

Delivery

Progressive Design, Build, Finance

Collaborative Development Phase

Operations & Maintenance

Concessions / DBOM1

U.S. Virgin Islands Airports

50% share in construction;

50% equity stake in 40-year concession and O&M post construction

Gordie Howe Bridge

$5.7 billion; construction started 2018; 20% equity stake and 30-year concession post construction

Finch West LRT

$2.5 billion; construction started 2018; 33.3% equity stake and 30-year concession post construction

(50% share)

Eglinton LRT

$5.3 billion; construction started 2015; 25% equity stake and 30-year concession post construction

GO Rail Expansion - On-Corridor

Cost under development; 28% interest in 23- year O&M partnership post collaborative design phase; 50% interest in construction JV

Oneida Energy Storage

$141 million EPC contract; construction started 2023; 8.35% equity stake and 20- year electricity storage services agreement (plus 5-years uncontracted revenue) post construction

Waterloo LRT

$583 million; construction started 2014 and completed 2019; 10% equity stake and 30- year concession began in 2019

Bermuda Airport

US$274 million; construction started 2017 and completed 2020; 50.1%2 equity stake and 30-year concession began in 2017

Other Major Projects1

Pickering Nuclear Refurbishment (50% JV)

$1.05 billion; planning and early works are underway, and completion and completion of this phase is expected in 2026

Bruce Power Nuclear Refurbishment (55% JV)

$1.7 billion Fuel Channel and Feeder Replacement contract for remaining five units at Bruce Nuclear Generating Station with anticipated completion in 2032

Winnipeg North End Sewage Treatment Plant (33% JV)

Cost under development; ~5-year project to be started in 2025

Howard A. Hanson Dam Passage Facility (40% JV)

Cost under development; ~4-year project to be started in 2026

Scarborough Subway Extension SRS (50% JV)

$2.8 billion; the implementation phase started in 2025 and is expected to be completed in 2032

Darlington New Nuclear Project (SMR)

Total capital cost under development via Integrated Project Delivery model; expected to reach completion in Q4 2028

Eglinton Crosstown West Extension Elevated Guideway

$290 million; ~5-year project started in 2023

Darlington Nuclear Refurbishment (50% JV)

$2.75 billion; ~10-year project started 2016

Contrecoeur Terminal (40% JV)

Cost under development; ~5-year project to be started in 2025

Deerfoot Trail Improvements Project

$615 million; ~4-year project started in 2023

North Anna Power Station (Condensers & Feedwater Heater) US$200 million; ~3-yearproject started in 2024

John Hart Dam Seismic Upgrade (60% JV) $245 million; ~3-yearproject started in 2023

Kingstown (SVG) Port Modernization Project

US$170 million; ~3-year project started in 2022

Giant Mine Remediation Water Treatment Plant Project

$215 million; ~3-year project to be started in 2023

REM LRT Montreal (24% JV) /

REM LRT Airport Station (50% JV)

$6.9 billion; ~8-year project started 2018

Pattullo Bridge Replacement (50% JV) $968 million; ~5-yearproject started 2020

Dates are general estimates of completion and may not reflect final completion dates. For information regarding risk related to construction delays, see Section 13 "Risk Factors" in the December 31, 2024 MD&A.

Eglinton Crosstown West Extension Tunnel (40% JV) $729 million; ~4-yearproject started 2021

Overview of Aecon Utilities

Large and diverse utility infrastructure provider in Canada with a growing U.S. presence

Financial Highlights

22%1

of Aecon's Construction

Segment Revenue in 2024

$610M1

2024 Recurring Revenue

(66% of Total Aecon Utilities Revenue)

$213M1

Backlog at Q4 2024

$87M2

2024 Adjusted EBITDA

$183M4

Net Debt at Q4 2024

Diversified Business Across Key End Markets

32%

26%

20%

22%

Electrical Transmission &

Renewables /

Telecom

Pipeline Distribution

Distribution

In-Home Services

Turnkey fibre installation, legacy

Natural gas gathering systems,

Services for substations, tower

Battery storage, geoexchange,

network and 5G network expansion

distribution services maintenance,

facilities construction, water

assembly and installation, including

smart home, hybrid heating, solar

distribution

high-voltage transmission

and HVAC

Oaktree Power Opportunities Fund's Minority Investment in Aecon Utilities

Investment

• $150 million Preferred Equity ($750 million enterprise value resulting in an as-converted

Revenue ($M)

ownership of 27.5%)

Amount &

•

The Preferred Equity carries a 12% dividend rate (payable in kind or cash at Aecon's

Overview

option) for the first 3 years, increasing to 14% thereafter

$918

$904

$944

• Aecon has the option to redeem the Preferred Equity for cash at any time at a value

Aecon Utilities

equivalent to the greatest of: (a) the as-converted value of the Preferred Equity, (b) the

$810

accreted value of the Preferred Equity, and (c) 1.5x the Net Investment Amount less all

Rights

$647

cash dividends and distributions paid to Oaktree

•

Aecon has four board members on Aecon Utilities' six-person Board

$550

• Creates a vehicle to accelerate Aecon Utilities' growth

• Leverages Oaktree's network of industry relationships and extensive resources to continue

Strategic

growing in the U.S.

•

Standalone capital structure provides the financial flexibility to capitalize on attractive M&A

Rationale

opportunities

• Highlights and unlocks the value of Aecon Utilities at $750M enterprise value and ~9.3x

2019

2020

2021

2022

2023

2024

TTM Adjusted EBITDA multiple3

After Construction segment intercompany eliminations for Aecon Utilities.

This is a non-GAAP financial measure. Refer to page 2 in this presentation. 2024 Adjusted EBITDA excludes corporate indirect allocation of $9.1M.

Represents the implied $750M enterprise value for Aecon Utilities divided by Q2 2023 TTM Adj. EBITDA of $80.4M. Excludes corporate indirect allocation of $8.8M.

Excludes preferred shares of Aecon Utilities. Net debt of $182.8M calculated as long-term debt of $62.9M plus bank indebtedness of $152.8M less core cash of $32.9M

Valuable Concessions and O&M Portfolio

International Airport Portfolio

Bermuda LF. Wade International Airport

• New terminal opened in December 2020

Cyril E. King Airport and Henry E. Rohlsen Airports

(Currently in Development)

• Announced in March 2024

Canadian LRTs

GO On-Corridor Works

Gordie Howe International Bridge

Oneida Energy Storage Facility

1 CC&L Infrastructure acquired a 49.9% interest in the concessionaire, which closed in Q3 2023. Aecon Concessions retains the management contract for the airport and joint control of Skyport

with a 50.1% retained interest.

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 26 for further information and reconciliation.

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 21:52:32.094.