E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Inve stor Pr e se ntation August 2020 Joint Venture with Snøhetta Temple University – Charles Library Philadelphia, Pennsylvania, USA Photo credit: Michael Grimm 1
Cautionar y Note Re gar ding F or war d- L ooking State me nts Certain statements contained in this presentation constitute forward-looking information and statements within the meaning of applicable E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H securities law (collectively, "forward-looking statements"). Forward-looking statements in this presentation include, but are not limited to: our financial targets (including our annual net revenue growth, adjusted EBITDA, and net income targets; employee count; and ROIC target), our anticipated business and geographical mix, our expectations regarding economic and industry trends in the sectors and regions in which we operate, our acquisition strategy, our capital deployment strategy, and our overall growth strategy. These statements provide information about management’s current expectations and plans relating to the future. Readers are cautioned that this information may not be appropriate for other purposes. Stantec does not undertake any obligations to publicly update or revise any forward-looking statements except as required by law. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. Readers are cautioned not to place undue reliance on our forward-looking statements since a number of factors could cause actual future results, conditions, actions, or events to differ materially from the targets, expectations, estimates, or intentions expressed in these forward- looking statements. Risk factors include, but are not limited to, the risk of an economic downturn, decreased spending in the private and/or public sectors, changing market conditions for Stantec’s services, and the risk that Stantec fails to capitalize on its strategic initiatives. Investors and the public should carefully consider these factors, other uncertainties, and potential events, as well as the inherent uncertainty of forward-looking statements when relying on these statements to make decisions about our company. For more information about how other material risk factors could affect our results, please refer to the Risk Factor section in our 2019 Annual Report and Q2 2020 Management’s Discussion and Analysis incorporated herein by reference. Readers can access these documents by visiting EDGAR on the SEC website at sec.gov or by visiting the CSA website at sedar.com or on Stantec’s website at stantec.com. In determining our forward-looking statements, we consider material factors including assumptions about the performance of the Canadian, US, and global economies in 2020 and beyond and their effect on our business. These key factors and assumptions are outlined thoroughly in our press release dated December 3, 2019. Unless otherwise indicated, all amounts expressed in Canadian dollars. 2
De sign & E ngine e r ing Se r vic e s For everything from small local projects to iconic mega projects BUSINESS OPERATING UNITS (TTM Q2 2020 Net Revenue) E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H ENVIRONMENTAL ENERGY & INFRASTRUCTURE BUILDINGS WATER SERVICES RESOURCES $1,066M $828M $754M $570M $542M Stantec is a signatory to the UN Global Compact and partners with clients to promote the achievement of the UN’s Sustainable Development Goals 3
Dive r sifie d Global F ootpr int – L oc al Pr e se nc e E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Distribution of Net Revenue 29% $3.8B 54% TTM Q2 2020 17% United States Canada Global 4
Stante c at a glanc e E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 22,000 6.6% STN Employees Globally TSX & NYSE 10-Year Adjusted Diluted EPS CAGR (1) 350 65 YEARS CDN $4.9B (2) Market Capitalization Locations Worldwide Of Uninterrupted Profitability (1) TTM Q2 2020 5 (2) As of August 7, 2020
Infr astruc ture E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Q2 2020 YTD 2020 (1.7%) (0.2%) Organic net revenue growth (retraction) 0.4% 1.1% International Ave Pedestrian Realm Net revenue growth (retraction) Calgary, Alberta % of Net Revenue Net revenue by sector Net revenue by geography Q2 2020 YTD Q2 2020 YTD Q2 2020 YTD Bridges Global Transit & Rail 28% Canada Community Development United States Roadways 6
Buildings E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Q2 2020 YTD 2020 (8.7%) (4.0%) Organic net revenue growth (retraction) (7.0%) 0.0% Net revenue growth (retraction) Google Midwest Headquarters Phase IV Chicago, IL, USA % of Net Revenue Net revenue by sector Net revenue by geography Q2 2020 YTD Q2 2020 YTD Q2 2020 YTD Science & Technology Airports & Aviation Global Education 22% Civic Canada Healthcare Industrial United States Commercial 7
Wate r E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Q2 2020 YTD 2020 3.4% 4.5% Organic net revenue growth (retraction) 5.3% 5.4% Hyperion Advanced Water Purification Facility Net revenue growth (retraction) Del Mar, Playa del Rey, CA, USA % of Net Revenue Net revenue by sector Net revenue by geography Q2 2020 YTD Q2 2020 YTD Q2 2020 YTD Client Enterprise Systems Global Water Treatement * Stormwater 21% Canada Water Resources Wastewater Treatment United States Conveyance 8
E nvir onme ntal Se r vic e s E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Q2 2020 YTD 2020 (3.7%) 1.0% Organic net revenue growth (retraction) (1.6%) 2.2% Lower Powers Creek Net revenue growth (retraction) West Kelowna, British Columbia % of Net Revenue Net revenue by sector Net revenue by geography Q2 2020 YTD Q2 2020 YTD Q2 2020 YTD Mining Community Development Global Transportation 14% Power & Dams Canada Buildings Water United States Oil & Gas 9
E ne r gy & Re sourc e s E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Q2 2020 YTD 2020 2.0% 6.2% Organic net revenue growth (retraction) 2.8% 6.3% Dokie Wind Energy Project Net revenue growth (retraction) British Columbia % of Net Revenue Net revenue by sector Net revenue by geography Q2 2020 YTD Q2 2020 YTD Q2 2020 YTD WaterPower & Dams Global Mining 15% Canada Power United States Oil & Gas 10
E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H 2020 Outlook Bridge Replacement Design for a Structure on Sturgeon Road over Sturgeon Creek Winnipeg, Manitoba, Canada 11
Ke y Dr ive r s by Busine ss Ope r ating Unit COVID-19 % of Net Business Long-term Revenue Key Drivers E X C E L L E N C E I N N O V A T I O N P E O P L E G R O W T H Operating Unit Impact (Q2 2020 YTD) ▲ Multi-year frameworks for water utilities in UK and AUS; acceleration of UK AMP contract awards Less 21% ▲ Likely to benefit if governments implement stimulus programs Water Impacted ▲ Investment drivers – climate change, water availability, sustainability. ▲ Majority of projects are continuing as “essential” aside from slowdown in community development 28% ▲ Likely to benefit if governments implement stimulus programs Infrastructure Degree of Impact ▬ Investment drivers – state of good repair, urbanization, transportation, mass transit, etc. ▲ Post COVID-19 requirements for workplace, education and healthcare environments 22% ▼ Decrease in commercial and hospitality projects Buildings ▬ Investment drivers – healthcare, remote education / office working, connectivity ▲ Opportunities to develop greenfield sites will increase post COVID-19, renewable energy surge Environmental 14% ▼ Largely funded by private sector: energy & resource, industrial sector and land development Services ▬ Investment drivers – environmental stewardship as a public priority in most jurisdictions ▲ Midstream projects are continuing More Energy & 15% ▼ Largely funded by private sector Impacted Resources ▬ Investment drivers – commodity prices, climate change, energy transition, green policies Public sector revenue >50% | Variable fee revenue >50% 12
2020 Ne t r e ve nue outlook % of Ne t Ge ogr aphic Re ve nue Outlook Re gion (YT D) • Nominal revenue contraction in Q3 20 relative to Q2 20 is expected across all businesses 55% except Water, with a slightly more pronounced decline in Q4 20 due to the seasonal slowdown • Expect continuing benefit of US/Canadian exchange rate 2 0 2 0 O U T L O O K United States • Q3 20 revenues are expected to be stable relative to Q2 20, while Q4 20 revenues are expected 28% to experience the typical seasonal downturn in activity • Ramp-up of major transportation and midstream projects Canada • Net revenues are projected to improve modestly from Q2 20 to Q3 20 and stabilize at that level in Q4 20 17% • The strength of the Water business in the UK and Australia and the Transportation sector in New Zealand are expected to offset the impact of COVID-19 related project slowdowns Global Full-year 2020 net revenue expected to be comparable to 2019 13
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