May 14 th , 2019 Annual General Meeting
May 14 th , 2019 CEO Remarks
Disclaimer 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. 3
Building on Long-term Fundamentals Energy Sustainability Aging Infrastructure Impact of Depletion Oil & Gas Pipelines Global Production Forecast End Use Sector Billion toe Source: IEA Source: Welling Source: BP Energy Outlook 2018 U.S. Water Pipelines Fuel Global LNG Supply & Demand 9% Excellent Billion toe 32% Good 23% Fair Poor 11% 13% Very Poor 12% Life Elapsed Source: EPA Source: BP Energy Outlook 2018 Source: Bloomberg NEF Investments to replace, maintain and Investments for sources of new Investments to connect, ensure rehabilitate supply supply and greener alternatives Energy, water and utilities Energy and transportation Increasing Public / Regulatory Scrutiny 4 4
S H A W C O R T O D AY A Global Energy Services Company Broad product and service offering – a powerful competitive advantage 5
Industry Dynamics Global E&P Capex ($M US) and # of FIDs Commodities ($USD/bbl) $140 $450,000 240 220 $400,000 $120 200 $350,000 $100 180 Global E&P Capex ($M US) $300,000 160 $80 $250,000 # of FIDs 140 $200,000 $60 120 $150,000 100 $40 $100,000 80 $20 $50,000 60 $0 40 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 WTI ($USD/bbl) Brent ($USD/bbl) International North America # of FIDs Source: EIA Source: Spears & Associates March 2019 E&P Capex, Shawcor FID Line Internal Reference 6
2018 Highlights 2018 Highlights TRCF* 6.2 Revenue $ 1.41 billion EBITDA (Adj.) $ 135 million Backlog $ 459 million Operating Cash Flow $ 31 million $ CDN * Total Recordable Case Frequency Per Million Person Hours Worked 7
2019 Q1 Highlights 2019 Q1 Highlights Revenue $ 349.6 million EBITDA (Adj.) $ 28.2 million Backlog $ 454.2 million Net Income (Adj.) $ 3.2 million EPS (Adj.) $ 0.05 Dividend $ 0.15 per share $ CDN 8
2019: Return of Pipe Coating ENTERPRISE MARATHON Under $30M CAD NGL Expansion Swordfish $30M to $100M CAD FREEPORT LNG TARGA Freeport LNG Expn Whistler Project SHELL Above $100M CAD EQUINOR Power Nap SEMPRA TGT (Trafigura) Rosebank Port Arthur TGTP BHP Trion PHILLIPS 66 ENERGY TRAN. CONOCOPHILLIPS ACE Pipeline Waco Tor 2 PEMEX Line 7 VENTURE GLBL TPN EQUINOR Gator Express OPENE Johan Sv. Ph. 2 PTTEP PREMIER OIL MOGE Tolmount TRANS MOUNTAIN TM Expansion BP ENERGINET TC ENERGY Tortue Baltic Pipe Coastal GasLink WOODSIDE PVN FORTIS BC EXXON Sangomar Omon Block B Neptun Deep Eagle Mountain EXXON SAGE Liza 3 (Payara) ADNOC PHILLIPS 66 MEIDP Dalma SHELL PETRONAS Liberty ADNOC SK318 Limboyang PEMEX Hail & Ghasha Package C PERTAMINA Lawe Lawe BP TOTAL Atlantis PETROBRAS TOTAL / EXXON EACOP Mero 1 SHELL Papua LNG Rydberg PETROBRAS CONOCOPHILLIPS Buzios V PAN AMERICA. Barossa Hokchy ANADARKO PETROBRAS Golfinho Sepia EQUINOR INPEX Carcara Ichthys 2A WOODSIDE ENI TGS SHELL Julimar Ph 2 Agogo San Nicolas Crux WOODSIDE TOTAL WOODSIDE Scarborough Browse ENAP Fenix Cruce Bid: Pipe Coating Budgetary: Pipe Coating Pipe Coating: Offshore 26% 42% Pipe Coating: Transmission 45% 25% Pipe Coating: LNG 29% 33% 9
2019: Further Strengthening the Base Annualized Cost Synergies year one ZCL Composites Area Update • North America’s largest manufacturer of fiberglass reinforced plastic Public Co. Costs $2.0M underground storage tanks Organization* $4.2M • ZCL I Xerxes and Parabeam: Well Recognized Brands Operations $2.0M • Serves the Fuel, Water & Wastewater, and Oil & Gas markets * Includes duplicative ZCL NEO Compensation Costs • 2018 revenue of $176 million and Cost Savings > $8M Adjusted EBITDA of $23 million Annualized Revenue Synergies 3 rd year Acquisition Rationale Area Update • Leverage Shawcor’s core strengths Channel Synergies $20.0M • Expands addressable market Combined Solutions $10.0M • Increases stability • Accretive to earnings International Growth $5.0M Increases Served Accessible Market > $500M 10
Portfolio Strategy is Providing Confidence 1. Supportive base business Pipeline Replacement and Refurbishment North America Drilling and Completions Infrastructure and Transportation Expansion and Upgrading 2. Return of Pipe Coating LNG Offshore Land Transmission Lines >$2.5B in visible opportunities 3. Positioned for the long-term Strong fundamentals Established growth themes Supportive capital structure 11
May 14 th , 2019 Annual General Meeting
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