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Noa ir-presentation-2013-year-end Noa ir-presentation-2013-year-end Presentation Transcript

  • Investor Presentation Year ended December 31, 2013
  • Company Overview  Founded in 1953  TSX and NYSE listings: “NOA”  Current share price: $6.47 (USD)  52 week high/low: $6.78/$3.57  Market capitalization: $228 million  Shares outstanding: 34.8 million  Average daily share volume: 96,391  Annual dividend of $0.08 per share (CAD), payable quarterly 2 Mining Heavy Construction* Data from NYSE as at February 27, 2014
  • Restructuring Initiatives Pipeline Divestiture (2012)  $16.3 million of proceeds  $15.4 million applied to term B facility  ~$30 million working capital recovery Piling Divestiture (2013)1  $227.5 million of proceeds (net $210 million)  Up to $92.5 million in contingent proceeds over three years based on EBITDA performance  $150 million redemption of Series 1 Debentures  $16.3 million Term A Facility repayment Fleet Rationalization (2012/2013)  $46.8 million in capital leases refinanced  $23.6 million expected annual EBITDA benefit  $6.0 million net cash savings in annual lease payments  $10.2 million of net sale proceeds applied to term facility 1. See appendix for full payment terms details 3
  • Shareholder Friendly Highlights Share Purchase Program  In October, announced the intention to purchase 1,800,000 common shares for cancellation, this represented 5% of the issued and outstanding shares.  In December, completed the share purchase program. After the purchase, there were approximately 34.7 million issued and outstanding common shares. Dividend Payment  Recent implementation of a new dividend policy.  Annual aggregate dividend of $0.08 (CAD) per common share, payable on a quarterly basis. Amended Credit Facility  Negotiated an interest rate reduction of 1.5%, leading to a significant reduction in the cost of borrowing.  A combination of working capital and equipment will secure $85 million in potential borrowing.  Reduced financial covenants will increase borrowing flexibility. 4
  • 5 Net Debt Reduction *83% of operating lease commitments are specific to the Canadian Natural contract at Dec. 31, 2013 *Total debt excludes operating lease obligations related to building lease commitments $424 $355 $127 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 December 31, 2011 December 31, 2012 December 31, 2013 NetDebt($Millions) Term B Facility Term A Facility Series 1 Debentures less Cash Capital Leases (including interest) Equipment Operating Leases
  • 6 HC&M – Five Year Financial History $621 $717 $636 $595 $470 $117 $109 19% 11% 9% 5% 9% 8% 14% $0 $100 $200 $300 $400 $500 $600 $700 $800 2009 2010 2011 2012 2013 3 months ended Dec 31, 2012 3 months ended Dec 31, 2013 $Millions Revenue and EBITDA Margin
  • Stronger, Better Focused NAEP is now a pure-play heavy construction and mining (HC&M) focused contractor  Simplified business can better target productivity and cost efficiencies  Efficient, productive equipment fleet  Improved financial strength and capacity represent competitive advantage  Positioned to deliver superior value to customers and shareholders 7
  • First On, Last Off 8 Explore and Design Initial Development and Secondary Upgrades / Expansions Build Relationship Major Projects  Initial mine site development, project site development, airstrips, piping  Overburden removal, mine infrastructure development, reclamation, tailing ponds remediation, equipment and labour supply Project Development Phase (3-4 years) Ongoing Operations Phase (30-40 years) Operation / Ongoing Services Operations Support Services 68% of NAEP’s Oil Sands Revenue
  • Significant Heavy Construction & Mining Contractor in the Oil Sands  Expertise  30+ years in Northern Alberta’s harsh operating environment  Knowledge to come up with best solutions for customers  Broad Service Offering  Unique suite of services across project lifecycle  Operational Flexibility  Unrivalled equipment fleet  Active on every site  Long-Term Customer Relationships  Reliability; on-time delivery  Strong safety culture 9
  • Strategic Focus  Pursue operational excellence in safety, productivity, customer satisfaction  Continued strengthening of balance sheet  Debt reduction, fleet rationalization and cash-flow improvement  Grow revenue from activity on existing mine sites, incremental work on new sites, and alternative asset utilization 10
  • Outlook for Revenue Growth  Increase in activity on existing mine sites as owners grow production  Ramp up at Kearl under new five-year agreement  Continued support of production efforts at Horizon, Base Mine, Millennium and Steepbank  Increase in work on new mine sites  Fort Hills mine  Pursuing additional and alternative asset allocation  SAGD project support  Road building  Other resource plays, such as coal, hydroelectricity, and LNG  Continued focus on delivering consistent financial and operating performance 11
  • Active with Every Oil Sands Client Activity on existing mine sites Activity on new mine sites 12  4-year master services agreement covering mining services & construction  Year 9 of 10-year overburden removal contract  5-year master services agreement covering mining services & construction  Mine not yet sanctioned  Site prep work is ongoing Key Customer Contracts  5-year master services agreement covering civil mine support services EXXON KEARL CANADIAN NATURAL HORIZON SHELL/ALBIAN JACKPINE AND MUSKEG RIVER TOTAL JOSLYN SUNCOR MILLENNIUM and STEEPBANK SYNCRUDE BASE PLANT Fort McMurray 70km SUNCOR FORT HILLS  Heavy bidding activity for initial site development at the Fort Hills mine
  • Potential Production Expansion on Oil Sands Mine Sites Activity on existing mine sites Activity on new mine sites 13  Syncrude current: 350,000 bbl/d  Syncrude expansion total potential: 600,000 bbl/d  Horizon mine current: 110,000 bbl/d  Horizon expansion total potential: 500,000 bbl/d  Fort Hills mine expected:180,000 bbl/d  Joslyn mine expected: 100,000 bbl/d Key Customer Production and Expansion  Kearl mine current: 110,000 bbl/d  Kearl mine expansion total potential: 345,000 bbl/d EXXON KEARL CANADIAN NATURAL HORIZON SHELL/ALBIAN JACKPINE AND MUSKEG RIVER TOTAL JOSLYN SUNCOR MILLENNIUM and STEEPBANK SYNCRUDE BASE PLANT Fort McMurray 70km SUNCOR FORT HILLS
  • THANK YOU 14
  • APPENDIX 15
  • Piling Asset Sale Payment Terms 1. $227.5 million cash paid at closing (less approximately $5.8 million in outstanding capital lease obligations, plus or minus customary working capital adjustments). In addition, we may receive up to $92.5 million in additional proceeds, contingent on the Purchaser achieving prescribed profitability thresholds from the assets and liabilities sold; 2. A maximum of $30 million cash paid no later than September 30, 2014, with the full amount being paid in the event that the business earns annualized Consolidated EBITDA (“First Year Consolidated EBITDA”) of $45 million or more in the period from closing to June 30, 2014. The amount payable will be $2 for every $1 that First Year Consolidated EBITDA is greater than $30 million (with the maximum payment of $30 million where First Year Consolidated EBITDA is $45 million or greater); 3. A maximum of $27.5 million cash paid no later than September 30, 2015, with the full amount being paid in the event that the business earns Consolidated EBITDA (“Second Year Consolidated EBITDA”) of $45 million or more in the period from July 1, 2014 to June 30, 2015. The amount payable will be $1.833 for every $1 that Second Year Consolidated EBITDA is greater than $30 million (with the maximum payment of $27.5 million where Second Year Consolidated EBITDA is $45 million or greater); 4. Contingent consideration to a maximum of $35 million, equal to $0.5 for every $1 by which cumulative Consolidated EBITDA in the period from closing to June 30, 2016 exceeds $135 million (with the maximum payment of $35 million where Consolidated EBITDA is $205 million or greater), calculated and paid as follows: 1. no later than September 30, 2014, the purchaser will pay the vendor an amount equal to $0.375 for every $1 by which First Year Consolidated EBITDA exceeds $45 million. 2. no later than September 30, 2015, the purchaser will pay the vendor an amount equal to $0.375 for every $1 by which the aggregate of First Year Consolidated EBITDA and Second Year Consolidated EBITDA exceeds $90 million, less any monies paid to the vendor under (a) above; and 3. no later than September 30, 2016, the purchaser will pay the vendor an amount equal to $0.5 for every $1 by which the aggregate of First Year Consolidated EBITDA, Second Year Consolidated EBITDA and Consolidated EBITDA for the period from July 1, 2015 to June 30, 2016 exceeds $135 million, less any monies paid to the vendor under (a) and (b) above. 16
  • HC&M – Heavy Equipment Fleet 17 Heavy Trucks, 111 Loading Equipment, 74 Support Equipment, 149 Owned Equipment Heavy Trucks Loading Equipment Support Equipment Heavy Trucks, 56 Loading Equipment, 16 Support Equipment, 44 Leased Equipment Heavy Trucks Loading Equipment Support Equipment
  • HC&M – Heavy Equipment Fleet 18 Heavy Equipment Fleet Category Owned Leased Rental Total SHOVELS 4 2 0 6 EXCAVATORS (≥100T) 11 3 0 14 EXCAVATORS (<100T) 59 11 0 70 RIGID FRAME TRUCKS (>200T) 40 26 0 66 RIGID FRAME TRUCKS (100T to 200T) 56 18 0 74 RIGID FRAME TRUCKS (<100T) 6 2 0 8 ARTICULATED TRUCKS 9 10 5 24 DOZERS 64 34 0 98 GRADERS 16 8 0 24 LOADERS 44 2 2 48 COMPACTORS 5 0 1 6 SPECIAL SERVICE 20 0 1 21 TOTAL 334 116 9 459 *December 31, 2013