Statement Regarding Forward-Looking Information...2021/03/03 · Continued expansion into adjacent...
Transcript of Statement Regarding Forward-Looking Information...2021/03/03 · Continued expansion into adjacent...
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Statement Regarding Forward-Looking Information
This presentation contains forward-looking information within the meaning of applicable securities laws. Words such
as "may", "will", "should", "anticipate", "plan", "expect", "believe", "predict", "estimate" or similar terminology are used
to identify forward-looking information. This forward-looking information is based on assumptions, estimates and
analysis made in the light of the Company's experience and its perception of trends, current conditions and expected
developments, as well as other factors that are believed by the Company to be reasonable and relevant in the
circumstances. Forward-looking information involves known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements to be materially different from those predicted,
expressed or implied by the forward-looking information. Additional information on the risks and uncertainties on the
Company’s business can be found in the Company’s current Annual Information Form, annual and quarterly reports
and in other reports and filings made with the securities regulatory authorities and available at www.sedar.com and
www.shawcor.com. The forward-looking information is provided as of the date of this presentation and the Company
does not assume any obligation to update or revise the forward-looking information to reflect new events or
circumstances, except as required by law. The complete text of Shawcor’s statement on forward looking information
is included at the outset of the Company’s Fourth Quarter 2020 Management Discussion and Analysis (MD&A)
report, which is available on SEDAR and on the Company’s website at shawcor.com.
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Corporate
Overview 2020 In ReviewToday’s
Positioning Takeaways
CORPORATE OVERVIEW
▪ At a Glance
▪ Our Segments
▪ Our Diversified Portfolio
2020 IN REVIEW
▪ 2020 Company Response
TODAY’S POSITIONING
▪ Revenue Mix
▪ Sum of the Parts
▪ Swinging to the Positive
TAKEAWAYS
▪ Our Fundamentals
▪ Key Takeaways
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At a Glance
18+Countries of
Operation
3Reporting
Segments
5,000+Global
Employees
11Recognized
Brands
208Proprietary
Formulations &
Patents
$1.2BRevenue
(2020)
50+Years on
the TSX
Corporate
Overview
Shawcor is a growth-oriented, global material sciences company with its
three segments of Pipeline and Pipe Services, Composite Systems and
Automotive and Industrial, serving the sectors of the Infrastructure, Energy
and Transportation markets. The Company operates through a global
network of fixed and mobile manufacturing and service facilities and is valued
for its integrity, technology and proven capability to execute.
INTEGRITY TECHNOLOGY EXECUTION
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Our Segments
#1Inspection and Asset
Management
#1 Underground Composite
Tanks
#1 Composite Pipe
#2 Heat Shrink and Devices
TO MAINTAIN OUR LEADING MARKET
POSITION:
THROUGH OUR TRUSTED
BRANDS:
▪ Bredero Shaw
▪ Lake Superior Consulting
▪ Shaw Pipeline Services
▪ Shawcor Inspection Services
▪ Socotherm
▪ FlexPipe
▪ Global Poly
▪ Guardian
▪ Xerxes
▪ DSG-Canusa
▪ Shawflex
LEVERAGING OUR MATERIAL
SCIENCE EXPERTISE TO:
Provide pipeline protection
and inspection solutions as
well as integrity and
engineering services
Manufacture flexible and
environmentally-friendly
composite systems and
solutions
Supply integrated heat
shrink systems and
engineered wire and cable
solutions
#1 Offshore Pipe Coating
#1 Girth Weld Inspection
PIPELINE AND PIPE
SERVICES
AUTOMOTIVE AND
INDUSTRIAL
COMPOSITE SYSTEMS
Corporate
Overview
#1 Engineered Wire and
Cable
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INFRASTRUCTURE TRANSPORTATION ENERGY
WaterPower
Generation
Electrical
UtilitiesAutomotive Fuel Transit Upstream Midstream
Composite Pipe
Composite Tanks
Heat Shrink & Cold Applied
Products
Engineered Wire & Cable
Oilfield Asset Management
Pipe Coating
Inspections
Integrity & Engineering
Services
Our Diversified Portfolio
Canada
North America
Global
LEGEND
Corporate
Overview
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2020 in ReviewCorporate
Overview
2020 in
Review
$350
$412$394
$334$319
$266 $268
$326
$28 $36 $42$30
$6 $4$18
$46
40%
50%
60%
70%
80%
90%
100%
110%
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20
SCL Performance vs. Global Economic Activity
SCL Revenue (C$M) SCL Adj.EBITDA (C$M) GDP Advanced Economies (%)
GDP Emerging Economies (%) Global Mobility %
Substantial pullback in activity in 2020.
The dual impact of COVID-19 and oil price
declines resulted in:
▪ Automotive OEM shutdowns
▪ Drilling and completions halted
▪ Suspension of project sanctioning
▪ Facility interruptions and supply chain
disruptions
▪ Unprecedented uncertainty
2020 Company Priorities:
1. Health & safety of our employees
2. Delivering for our customers
3. Long-term financial stability
Source : IMF, January 2021 ; Google Mobility Report, March 2021
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2020 Company Response
Employee
Safety
3.52020 TRCF
6.02019 TRCF
→ Implemented strict measures at
facilities to prevent the spread of
COVID-19
→2020 - record year for safety
performance at Shawcor
Cost
Reductions
22%Salaried
Workforce
Reduction
6Controlled
Closures of
Pipe Coating
Facilities
$80MSustainable
Annualized
Savings Achieved
in 2020
$60MSG&A Quarterly
Run-Rate*
Capital
Management
→Amended Credit Facility with
Covenant Relief to End of 2021
$24Min Limited
Capital Spending
$27MReduction in
Working Capital (excluding restructuring
liabilities)
$78
$61
$89
$41
$76
$45
$24
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2014 2015 2016 2017 2018 2019 2020
CAPEX
Delivering for Our
Customers
→Continued consistent execution
Impact on Financial Metrics
Corporate
Overview
2020 in
Review
$130MCash from
Asset Sales
*Includes targeted incentive-based compensation
*Acquired ZCL
>3,500kmPipe Coated
>4,250Tanks Sold
>90,000kmTubing Extruded
*
$348 $331 $328
$219
$-
$100
$200
$300
$400
Q1 Q2 Q3 Q4
2020 Net Debt
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Revenue Mix
2013 2020
9%
35%
15%
16%
1%
Corporate
Overview
2020 in
Review
Today’s
Positioning
33%
30%
18%
17%
26%
10
11%
2018 Actual (2) 2019 ActualPre-Downturn
Average (2) (3) Future Scenarios (4)
PIPELINE & PIPE SERVICES
COMPOSITE
SYSTEMS
AUTOMOTIVE &
INDUSTRIAL
9% 9% 12% 15%
6% 2% 5% 10% 15%
23% 22% 21%
19% 18% 18%
(1) Adjusted EBITDA is a non-GAAP measure. See MD&A Section 13.0: Reconciliation of non-GAAP Measures (2) Adjusted EBITDA % for prior years revised to reflect similar level of benefit from adoption of IFRS16 as 2019(3) Pipeline segment – late cycle average 2013 to 2015, Composite segment – early cycle average 2014 to 2015,
Automotive & Industrial segment – no downturn average 2013 to 2015(4) Future scenarios are not a direct reflection of expected 2021 performance
22%
18%
17%
SHAWCOR TOTAL
Adjusted EBITDA %(1)
Sum of the Parts
6% 14%
-1%
17%
18%
10%
20%
21%
2020 ActualQ4 2020
Actual
18% 20% 22%
20%
Segment EBITDA Profile
Corporate
Overview
2020 in
Review
Today’s
Positioning
19%
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▪ Oceaneering 8.6
▪ Subsea 7 6.0
▪ Transocean 10.6
▪ Technip FMC 4.8
▪ Oil States 12.3
6.8x
5 - 12x
10 - 25x
9 - 14x
PIPELINE & PIPE SERVICES
COMPOSITESYSTEMS
AUTOMOTIVE & INDUSTRIAL
▪ Hexcel 26.1
▪ Celanese 10.9
▪ NOV 22.8
▪ TPI Composites 15.1
▪ ZCL Composites 10.7(2)
▪ Thermon 13.9
▪ Wesco 9.4
▪ Prysmian 9.6
▪ Belden 11.1
▪ TE Connectivity 14.0
Offshore
Services
Materials
Technology
Automotive &
Industrial
Technology
(1) Values per Nasdaq as of Mar. 19, 2021(2) Acquisition multiple
Comparison of Trading Multiples - (EV/EBITDA) 2021(1) Consensus
Sum of the PartsSegment EBITDA Profile
Corporate
Overview
2020 in
Review
Today’s
Positioning
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Swinging to the PositiveCorporate
Overview
2020 in
Review
Today’s
Positioning
→ 12-month Backlog > $450 million
→ Conditional Bid awards $130 million
→ Currently $170 million
$ 453 M
$ 1,489 M
Backlog Bid Budgetary
$ 841 M
$ 130 M
Strength in Work SecuredForward Movement in Large
Capital Projects
→ Infrastructure stimulus
investments
→ Gas project sanctioning in
Middle East (Domestic and LNG)
→ New tax incentives in Norway
→ National resource holders
investing (Brazil, Middle East,
Malaysia, etc.)
→ Attractive investment parameters
(Guyana)
→ Depleted reservoirs require
replacement (Australia)
Strengthening Base Business
→ Resilient demand for retail fuel
→ Increased adoption of electric
and hybrid vehicles
→ Growth in water and wastewater
markets
→ E&P capital spending returning
→ Increased infrastructure
spending to maintain, replace
and upgrade(e.g. 5G)
→ Optimized footprint that has
maintained ability to serve active
regions
Backlog, Bid and Budgetary as of Q4 2020
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Our Fundamentals
The Need:
To manage and optimize
assets across the entire
lifecycle.
Shawcor’s Opportunity:
To provide integrity
management and use
technology for performance,
data and decision making.
The Need:
To move energy and water
over distances to match
supply and demand.
Shawcor’s Opportunity:
To develop new sources
and construct and maintain
critical infrastructure.
The Need:
To improve energy security,
reliable supply, and
uninterrupted access.
Shawcor’s Opportunity:
To provide energy and
infrastructure development.
The Need:
To protect the physical
environment and reduce
overall intensity.
Shawcor’s Opportunity:
To develop new solutions
and alternatives to support
the transition to a lower
carbon future.
Corporate
Overview2020 in
Review
Today’s
PositioningTakeaways
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Diversified Portfolio
Corporate
Overview2020 in
Review
Today’s
PositioningTakeawaysKey Takeaways
Lean Organization with Leading Market Position
Ability to Execute
Resilient Base Business with Substantial Torque Potential
Long term Fundamentals
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SUPPLEMENTARY
INFORMATION
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Our Brand
Incident and Injury Free (IIF)
health and safety protocols
Product and service quality to
exceed expectations
Uncompromising business ethics
Deliver as promised
Depth in materials science
Over 155 patents, 86 patents
pending, 51 proprietary
formulations
Partner network of customers,
suppliers, universities and
research institutes
Proven track record in all
regions
International skilled workforce
Project management leadership
Continuous improvement
commitment
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Our Commitment to ESG
DSG Rheinbach
Evaluating our footprint and actioning improvements:
Innovating to enable our customers to reduce their footprint:
PROVIDING SOLUTIONS
TO SECURE, PROTECT
AND CONSERVE WATER
FOSTERING DIVERSITY
AND INCLUSION IN THE
WORKPLACE
FACILITATING ADVANCEMENT
IN ELECTRIFICATION OF
VEHICLES
DEVELOPING
REMOTE
APPLICATIONS
THAT LOWER
EMISSIONS,
HSE RISK AND
RESOURCE
REQUIREMENTS
Shawcor's operating and leadership practices fully embrace ESG (Environmental, Social and Governance) ideals and principles. Shawcor continues to evolve as an
organization to better reflect our enduring values of Integrity, Technology and Execution and to ensure we are positioned to meet the requirements of tomorrow. We are
committed to continuously advancing our ESG performance, both internally and externally, by:
MEASURING OUR
PERFORMANCE
AND DISCLOSING
RESULTS AND
PROGRESS IN OUR
SUSTAINABILITY
REPORT
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Segment Deep Dive
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Pipeline and Pipe Services Offering
PROTECTIVE COATINGS FLOW ASSURANCE
INTEGRITY MANAGEMENT ENGINEERING SERVICES
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International and offshore projects and
footprint optimization expected to drive
improved profitability Energy transition from coal to gas
Lower cost offshore development
Aging infrastructure replacement
NOC and IOC Domestic Energy
Security
Favorable tax incentives
Demand for expertise and high-end
solutions
Growth in LNG supply chain
Development of collaborative subsea
technology
Pipeline rehabilitation projects
Pipeline and Pipe Services Overview
2020 Revenue
Contribution2020 Adj. EBITDA
Contribution
56%
-5%
$662M ($4M)
2020
SCL Revenue
$1,178M
2020
SCL Adj. EBITDA
$74M
2020 FINANCIAL PERFORMANCE
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Composite Systems Offering
COMPOSITE TANKS COMPOSITE PIPE
POLYETHYLENE PIPE OILFIELD ASSET MANAGEMENT
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Growing acceptance and established
base business will drive high growth Continued conversion to composites
Aging infrastructure replacement
Oil and gas development
Global environmental regulations &
ESG focus
Continued expansion into adjacent
markets (e.g., water and wastewater)
Expansion of the portfolio through the
addition of large diameter platform
International expansion
Composite Systems Overview
2020 FINANCIAL PERFORMANCE
$56M$321M2020 Revenue
Contribution2020 Adj. EBITDA
Contribution
27%
65%
2020
SCL Revenue
$1,178M
2020
SCL Adj. EBITDA
$74M
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Automotive and Industrial Offering
ENGINEERED WIRE & CABLE COLD SHRINK TECHNOLOGY
APPLICATION EQUIPMENTHEAT SHRINK TECHNOLOGY
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Stable outlook with growth prospects
in core markets Global automotive production
Electronic content growth
Aerospace and defense investments
Non-residential industrial construction
Aging infrastructure
Solutions for electric vehicle production
North American electrical infrastructure
Nuclear energy solutions
Fire safety applications
Custom cable engineering
Automotive and Industrial Overview
2020 FINANCIAL PEFORMANCE
$35M$198M2020 Revenue
Contribution2020 Adj. EBITDA
Contribution
17%
40%
2020
SCL Revenue
$1,178M
2020
SCL Adj. EBITDA
$74M
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2020 Sale of Products Business
On December 23, 2020, Shawcor announced the sale of its
Pipeline Performance Products business (the “Products
business”) to Seal For Life Industries for USD $91.5 million
Obtained full value (13.0x multiple on 2019 EBITDA)
Removed complexity
The sale of the business allows Shawcor to focus on areas
where it has the greatest differentiation opportunity for long term
growth