2020 HALF YEAR RESULTS PRESENTATION FEBRUARY 2020 Matt Courtney - - PowerPoint PPT Presentation

2020 HALF YEAR RESULTS PRESENTATION

FEBRUARY 2020 Matt Courtney CEO Shael Munz CFO

DISCLAIMER

This presentation contains certain statements and forecasts provided by or on behalf of Intega Group Limited. Any forward‐looking statements reflect various assumptions by or on behalf of Intega. Accordingly, these statements are subject to significant business, economic and competitive uncertainties and contingencies associated with the business of Intega which may be beyond the control of Intega which could cause actual results or trends to differ materially, including but not limited to competition, industry downturns, inability to enforce contractual and

• ther arrangements, legislative and regulatory changes, sovereign and political

risks, ability to meet funding requirements, dependence on key personnel and

• ther market and economic factors. Accordingly, there can be no assurance that

any such statements and forecasts will be realised. Intega makes no representations as to the accuracy or completeness of any such statement or forecasts or that any forecasts will be achieved and there can be no assurance that any forecasts are attainable or will be realised. Additionally, Intega makes no representation or warranty, express or implied, in relation to, and no responsibility or liability (whether for negligence, under statute

• r otherwise) is or will be accepted by Intega or by any of its directors,

shareholders, partners, employees, or advisers (Relevant Parties) as to or in relation to the accuracy or completeness of the information, statements, opinions

• r matters (express or implied) arising out of, contained in or derived from this

presentation or any omission from this presentation or of any other written or oral information or opinions provided now or in the future to any interested party or its

• advisers. In furnishing this presentation, Intega undertakes no obligation to provide

any additional or updated information whether as a result of new information, future events or results or otherwise. Except to the extent prohibited by law, the Relevant Parties disclaim all liability that may otherwise arise due to any of this information being inaccurate or

• incomplete. By obtaining this document, the recipient releases the Relevant

Parties from liability to the recipient for any loss or damage which any of them may suffer or incur arising directly or indirectly out of or in connection with any use of or reliance on any of this information, whether such liability arises in contract, tort (including negligence) or otherwise. This document does not constitute, and should not be construed as, either an offer to sell or a solicitation of an offer to buy or sell securities. It does not include all available information and should not be used in isolation as a basis to invest in Intega.

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• 1. INTEGA OVERVIEW
• 2. PERFORMANCE OVERVIEW
• 3. DETAILED FINANCIAL REVIEW
• 4. COMMENTARY & OUTLOOK

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Intega has a 50 year history in Australia and the America’s. It has been formed through a number of acquisitions in the past 10 years

1990

Founding of Construction Sciences

• Founded in 1990 as

Bowler Geotechnical in Brisbane

• Expanded throughout

Australia, NZ and PNG

2002

Founding of T2/SUE

• Founded in 1990 as T2

in Ontario Canada

2018

Cardno acquires Raba Kistner

• Provides Intega with critical

scale in CMT and owners representative work in Texas and the ability to grow throughout US

2017

Acquisition of T2/SUE

• Acquired remaining

50% shareholding

• f T2 from AECOM

2019

Intega: Demerge from Cardno

• Demerge from Cardno 31

October 2019

1968

Founding of Raba Kistner

Founding of Raba Kistner in San Antonio Texas. Expanded throughout Texas

• 1986: Austin
• 2001: Houston
• 2008: Dallas

1992

Founding of QA business (PPI)

PPI founded in Houston Texas

• Significant expansion

internationally in 2000’s including specialist labour hire work in Africa

• Supply chain QA work

2014

Cardno acquires PPI

• With reduced oil

price, PPI, labour hire work in Africa run off in 2016 and 2017

• Business refocused

to QA Report work

2008

Cardno acquires Construction Sciences

• Cardno acquired Bowler

franchises

• Merged into single operating

entity: Construction Sciences

Founding Acquisitions Separation

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I nte ga i s a Q u a l i t y, Te st i n g a n d M e a s u re m e nt b u s i n e s s t h at p ro v i d e s co n st r u c t i o n m ate r i a l s te st i n g ( C M T ) , s u bs u r fa c e u t i l i t y e n g i n e e r i n g s e r v i c e s ( U E S ) a n d q u a l i t y a s s u ra n c e fo r e n e rg y co m p a n i e s ( Q A ) T h e b u s i n e s s o p e rate s p r i m a r i l y i n A u st ra l i a , t h e U n i te d S tate s , C a n a d a a n d N ew Ze a l a n d . T h e s e r v i c e s t h at I nte ga p ro v i d e s i n c l u d e :

• Construction Materials Testing (CMT): This includes providing conformance tests on construction

materials such as soil (earthworks), aggregates, pavement materials, concrete, grout, mortar, and rock. This service also includes concrete mix design and trial mix testing. These tests help determine whether the construction of a project is meeting the standards specified by the designer/owner and the required

• regulations. CMT is conducted in laboratories which are accredited by regulatory bodies in each operating

jurisdiction;

• Subsurface Utility Engineering (SUE) and Surveying: This includes mapping the location and condition of

subsurface utilities such as pipes and cables, which helps reduce the occurrence of interference and conflict with existing infrastructure before and during construction;

• Owners’ Representative Services to ensure that the quality requirements of a build meet the agreed

specifications and regulations for a project;

• Environmental Testing: This includes testing soils, asbestos, groundwater quality, construction noise, dust

and vibration levels to ensure that the build of a project meets the required environmental regulations;

• Geotechnical Engineering: This includes design of temporary works, bored pile supervision, geotechnical

investigation and site classification and pavement design; and

• Quality Assurance (QA) on critical components for energy companies to ensure that when parts arrive at a

drill rig or a facility, that they are built and function as specified.

F o r a d d i t i o n a l i n f o r m a t i o n s e e w w w. i n t e ga . n e t

• 1. INTEGA OVERVIEW
• 2. PERFORMANCE OVERVIEW
• 3. DETAILED FINANCIAL REVIEW
• 4. COMMENTARY & OUTLOOK

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WITH THE DEMERGER COMPLETED, THE FOCUS IS ON CONTINUED ORGANIC GROWTH, AND STRATEGIC ACCRETIVE ACQUISITIONS ⎼ Gross revenue $231.0 million up 17.4% on prior year on a pro forma basis1 ⎼ Fee revenue $169.0 million up 10.4% on prior year on a pro forma basis1 ⎼ EBITDA excluding the impact of AASB 16 and including pro forma acquisitions was up on prior year by 4.4% ⎼ Operating cash for the six months to December was $9.1 million ⎼ Balance sheet strong, bank debt facility successfully secured ⎼ APAC performed as expected with revenue up 7.3% on prior year comparatives. EBITDA margin increased from 11.5% to 11.6% and 13.8% after the impact of AASB 16 ⎼ Americas revenue was up 23.3% on prior year pro forma1 however EBITDA margin decreased from 6.1% to 4.9% on a pro forma basis. EBITDA margin for the half was 7.5% after the impact of AASB 16 ⎼ Backlog grew 14.4% from prior year ⎼ Completed Geochempet acquisition, a niche Petrographic analysis provider, expanding

• ur specialised testing business under Construction Sciences in Australia

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Note: 1Pro forma basis includes Raba Kistner acquisition as if it was acquired from 1 July 2018

• 1. INTEGA OVERVIEW
• 2. PERFORMANCE OVERVIEW
• 3. DETAILED FINANCIAL REVIEW
• 4. COMMENTARY & OUTLOOK

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HALF-YEAR UNDERLYING EBITDA OF $22.2M UP ON PRIOR YEAR PRIMARILY DUE TO GROWTH, NEW ACCOUNTING STANDARD AND ACQUISITION – Fee revenue up 10.4% on prior year comparative basis and 49.0% on reported primarily due to the inclusion of a full six months of Raba acquisition in Americas – EBITDA from operations of $22.2 million up from prior year reported and up 4.4% on a like for like basis. See slide 12 for more detail – Net Profit after Tax of $3.6 million – Net Profit after Tax includes $0.3 million acquisition costs, $0.4 million costs associated with the demerger and tax effect of underlying

• adjustments. See slide 13 for more detail

– Backlog up by 14.4% to $329.6 million with Americas awarded the LAX and LBJ projects and Australia renewing Holcim supply agreement during the half – Net Cash Flow from Operations $9.1 million

$m HY 20

Pro Forma

HY 19

Pro Forma

HY 19

Reported

Gross Revenue 231.0 196.8 17.4% 142.5 62.1% Fee Revenue 169.0 153.1 10.4% 113.4 49.0% EBITDA including AASB 16 22.2 15.9 39.7% 8.7 155.2% EBITDA excluding AASB 16 16.6 15.9 4.4% 8.7 90.8% Abnormal items(1) 0.7 1.7 58.8% NOPBT including AASB 16(2) 6.3 4.6 37.0% NOPBT excluding AASB 16(2) 6.5 4.6 41.3% Net Operating Profit after Tax 3.6 2.4 50% Backlog(3) 329.6 286.2 14.4% Net Cash Flow from Operations(4) 9.1

Note: FY 20 pro forma numbers represent Intega for the full six months including the four months as a subsidiary of Cardno. HY 19 pro forma includes the results of the Raba acquisition as if it had been acquired 1 July 2018 (1) See slide 13 for breakdown of Abnormal items. (2) NOPBT - Net Operating Profit before tax provides a measure of operating performance before the impact of underlying adjustments such as acquisition and demerger related costs (3) Backlog reported on a total contract basis, being the total gross value of the signed contract less the value of work performed to date. (4) Net cash flow from operations from 1 July to 31 December 2019

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HALF-YEAR UNDERLYING EBITDA OF $22.2M INCLUDING AASB 16. – The half year results for the prior year include only one month of Raba Kistner as it was acquired 30 November 2018 – The QA business in Americas is experiencing strong year on year growth which has been offset by timing of revenues and project completions in the CMT business – The introduction of the new lease standard resulted in an increase of $5.6m to EBITDA, an increase of $5.1 million in depreciation and an increase of $0.7 million in interest

• expense. Overall impact of the new standard was $0.2

million increase in the loss after tax

8.7 16.6 22.2

7.2

0.7

5.6

5 10 15 20 25

HY19 EBITDA Acquisitions Growth HY20 EBITDA before AASB 16 Impact of AASB 16 HY20 EBITDA

A $ millions

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THE NET PROFIT AFTER TAX $3.6M INCLUDES ABNORMAL CHARGES RELATED TO ACQUISITION AND DEMERGER COSTS. Acquisition costs of $0.4m: – Costs directly related to the prior year acquisitions in relation to retention expenses accrued over the retention period Demerger costs $0.3m: – Costs in relation to rebranding of the business and legal invoices directly associated with demerge activities Tax effect on underlying adjustments is immaterial

• 0.6

2.9 3.6

3.5 0.4 0.3

• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Result Post Demerge Pre Demerge Result HY20 NPAT Acquisition Costs Demerge Costs HY20 NOPAT

A $ millions

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2019 2020 H1 20 Change Versus H1 Change % (A$ Millions) 1H19 2H19 FY19 1H20 1H19 2H19 1H20 Total revenue 142.5 220.9 363.4 231.0 88.5 10.1 62.1% Fee revenue 113.4 155.9 269.3 169.0 55.6 13.1 49.0% EBITDA (including AASB 16) 22.2 EBITDA margin (including AASB 16) 13.1% EBITDA (excluding AASB 16) 8.7 15.8 24.5 16.6 7.9 0.8 90.8% EBITDA margin (excluding AASB 16) 7.7% 10.1% 9.1% 9.8% 2.2% (0.3%) 28.0% Depreciation and Amortisation (including AASB 16) 14.3 Depreciation and Amortisation (excluding AASB 16) 4.1 11.2 15.3 9.2 5.1 (2.0) 24.4% Interest expense (including AASB 16) 1.6 Interest expense (excluding AASB16) 0.1 0.4 0.5 0.9 0.8 0.5 800% Net Operating Profit before tax1 4.6 3.3 7.9 6.3 1.7 3.0 37.0% Net Operating Profit after tax1 2.4 1.8 4.2 3.6 1.2 1.8 50.0% Net operating cash flow 16.7 9.1 Basic earnings per share (cents) 0.81

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1 Net operating profit before and after tax includes the impact of AASB 16 from implementation of the standard on 1 July 2019. Impact on H1 FY20 of AASB 16 was a decrease in

profit after tax of $0.2 million

ASIA PACIFIC EBITDA MARGINS INCREASED YEAR ON YEAR FROM 11.5% TO 11.6% OR 13.8% INCLUDING THE IMPAC T OF THE NEW LEASING STANDARD. ⎼ Gross Revenue in H1 FY20 of $77.9 million, an increase of 7.3% on prior year comparative period ⎼ EBITDA for the H1 FY20 increased from $8.3 million to $9.1 million on a like for like basis and $10.8 million including the impact of AASB 16 ⎼ EBITDA margin was 11.6% (13.8% including the impact of AASB 16) up from the prior year of 11.5% ⎼ Small niche business, Geochempet, acquired in October 2019, expanding the specialised testing business KEY WINS DURINGS THE HALF INCLUDE: ⎼ Bruce Highway – Haughton River Floodplain – QLD ⎼ The Melbourne Metro – VIC ⎼ Koodaideri Mine – WA ⎼ Holcim 4 year supply agreement renewal ‐ National

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Melbourne Metro

ASIA PACIFIC EBITDA AND % MARGIN

A$ million

THE AMERICAS DIVISION CONTINUES TO GROW BOTH THE TOP AND BOTTOM LINE WITH FURTHER UPSIDE POTENTIAL ⎼ Gross Revenue in H1 FY20 of $153.2 million, up 23.3% from HY19 on a pro forma basis. ⎼ EBITDA for H1 FY20 was $7.6 million which was in line with the prior year on a pro forma basis. EBITDA including the impact of AASB 16 was $11.5 million ⎼ EBITDA margin was 4.9% (7.5% including the impact of AASB 16) down from the prior year of 6.1% ⎼ Margins for H1 FY20 are negatively impacted by the T2 business (margin excluding T2 result is 8.3%). T2 was assigned to Intega as part of the demerger and is in a turnaround phase which is a key management focus KEY WINS DURINGS THE HALF INCLUDE: ⎼ Liza ‐ Guyana ⎼ Interstate 635 LBJ East project – Texas ⎼ State Highway 97 – Texas ⎼ LAX Automated People Mover – California ⎼ Mozambique LNG

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TX State Highway 249

AMERICAS EBITDA AND % MARGIN

A$ million

H1‐2019 – shows EBITDA impact of acquisitions pro forma to 1 July 2019 by unshaded area and margin as dashed line.

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BALANCE SHEET REFLEC TS THE NET BOOK VALUE OF INTEGA GROUP ON DEMERGER FROM CARDNO. 1. Increase in property, plant and equipment mainly due to implementation of the new leasing standard 2. Increase in deferred tax assets and reduction in deferred tax liabilities primarily due to the implementation of the new leasing standard and true up on demerger 3. Net debt at 31 December 2019 for covenant calculations was $64.6 million which excludes the impact of AASB 16 4. All covenant ratios met at 31 December 2019

2 1 3

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2 4 3

POSITIVE NET CASH FROM OPERATIONS AND IMPROVED OVERALL CASH POSITION 1. Working capital movement includes cash transfers to Cardno pre demerger and TSA payments made during the period 2. Completed Geochempet acquisition prior to demerger as well as deferred settlement and retention payments relating to existing acquisitions 3. Repayment of debt from cash flow post demerger

2 1 3

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• 1. INTEGA OVERVIEW
• 2. PERFORMANCE OVERVIEW
• 3. DETAILED FINANCIAL REVIEW
• 4. COMMENTARY & OUTLOOK

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OUTLOOK FOR FY20

FY20 IS THE FIRST YEAR OF INTEGA AS A STANDALONE LISTED ENTITY ⎼ The focus of the company is on maintaining market share in Australia, increasing market share and skill set in the Americas as well as improving operations and performance ⎼ The business will continue to explore ‘on strategy’, conservatively funded acquisitions to gain access to key markets or skill sets ⎼ The business is continuing its investment in internal systems and process improvement while standing up the company to run independently of the TSA with Cardno ⎼ At this point in time, Intega Group is expecting FY20 results to be up on the prior year on a pro forma basis 22

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Selected Presentation Images in order of appearance: NZ Transport Agency. 2020. Transmission Gully Project Development. https://nzta.govt.nz/projects/wellington‐northern‐corridor/transmission‐gully‐motorway/ppp‐project‐development/ Westgate Tunnel Project. 2020. ‘Westage Tunnel Project – Design fly through (60 seconds), 0:20’ http://westgatetunnelproject.vic.gov.au/ Westgate Tunnel Project. 2020. Media Gallery, Extra Lanes on the Westgate Freeway http://westgatetunnelproject.vic.gov.au/library/media‐gallery Business Wire, Inc. 2020. Fluor Joint Venture Selected for $1.7 Billion I‐635 LBJ East Infrastructure Project in Dallas https://www.businesswire.com/news/home/20190530005861/en/Fluor‐Joint‐Venture‐Selected‐1.7‐Billion‐I‐635 State Government of Victoria, Metro Tunnel. 2020. ‘Metro Tunnel then and now, 0:16’ https://metrotunnel.vic.gov.au/ Texas Department of Transportation, TXSH249. 2019. TXSH249 Photo Gallery. https://txsh249.com/photo‐gallery/ Sunshine Coast Airport. 2017. Sunshine Coast Airport, Project Background. https://www.sunshinecoastairport.com.au/corporate/expansion‐project/project‐background/

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