Q 4 & Y E A R E N D 2 0 1 9 Q4 & Ye ar E nd 2019 Earnings Presentation Joint Venture with Snøhetta Temple University – Charles Library Philadelphia, Pennsylvania, USA Photo credit: Michael Grimm 1
Cautionar y State me nt This presentation contains non-IFRS measures and forward-looking statements, including a discussion of our business targets, expectations, and outlook. We caution readers not to place undue Q 4 & Y E A R E N D 2 0 1 9 reliance on our forward-looking statements since a number of factors could cause actual future results to differ materially from the targets and expectations expressed. For a discussion of risk factors and non-IFRS measures, see our 2019 Annual Report which is available on SEDAR, EDGAR, and stantec.com. 2
Age nda Q 4 & Y E A R E N D 2 0 1 9 Gord Johnston Q4 & Year-end 2019 Overview Theresa Jang Financial Performance Gord Johnston Operational Highlights 3
I N 2 0 1 9 W E R E D E F I N E D O U R V I S I O N T op 10 global de sign fir m that maximize s long-te r m, sustainable value Q 4 & Y E A R E N D 2 0 1 9 Strengthened alignment Earnings growth Disciplined capital with shareholders through efficiency allocation • • • Introduced relative Total Reshaping workforce initiative Reduced leverage • Shareholder Return as Share buy-back • management incentive Disciplined M&A • • Discontinued option plan Sustainable dividend growth 4
2019 R e vie w 4.4% 5.2% 10.6% Organic Net Acquisition Net Net Revenue Growth Q 4 & Y E A R E N D 2 0 1 9 Revenue Growth Revenue Growth 8.8% $2.02 11.0% Adjusted Basic and Diluted EPS Adjusted Diluted Return on from Continuing Operations EPS Growth Invested Capital 5
Q4 2019 Ove r vie w 7.8% growth in net revenue driven by: 2% backlog increase 5.3% organic growth in all business operating units $4.3 B United States from end of 2018 2.8% acquisition growth mainly focused in Buildings Canada gross revenue backlog Global 11 months of work 8.2% increase in gross margin reflecting continued focus on project Q 4 & Y E A R E N D 2 0 1 9 execution and project mix Q4 19 Organic net revenue 1.6% 9.6% (0.5%) 1.3% 0.1% 13.2% 7.5% 4.7% 5.3% growth (retraction) 600 1,000 500 800 400 Net revenue 600 in millions CAD 300 400 200 Q4 18 Q4 19 200 100 0 0 Canada United States Global Buildings Energy & Environmental Infrastructure Water Overall Resources Services 6
Q 4 & Y E A R E N D 2 0 1 9 F inanc ial Pe r for manc e International Ave Pedestrian Realm Calgary, Alberta, Canada 7
Adoption of IF R S 16 Q4 19 2019 Q4 19 excluding Increase 2019 excluding Increase as reported IFRS 16 (decrease) as reported IFRS 16 (decrease) (millions of Canadian dollars except where noted) Impact on income statement items Administrative and marketing expenses 348.5 385.7 (37.2) 1,433.6 1,576.6 (143.0) Q 4 & Y E A R E N D 2 0 1 9 Depreciation of lease assets 30.6 - 30.6 115.8 - 115.8 Net interest expense 17.5 9.7 7.8 69.6 37.3 32.3 Net income 42.4 43.3 (0.9) 194.4 198.1 (3.7) Impact on non - IFRS financial measures (1) EBITDA 140.0 102.8 37.2 576.0 433.0 143.0 Adjusted EBITDA 142.8 105.6 37.2 574.4 431.4 143.0 Net debt/adjusted EBITDA 1.1x 1.5x (0.4)x (1) Non-IFRS measures are discussed in the Definitions section of our 2019 Annual Report. 8
Q4 & F Y 2019 R e sults Q4 19 Q4 18 FY 2019 FY 2018 % of Net % of Net % of Net % of Net (In millions of Canadian dollars, $ Revenue $ Revenue $ Revenue $ Revenue except per share amounts and percentages ) Gross revenue 1,210.2 134.3 1,083.9 129.7 4,827.3 130.1 4,283.8 127.7 Q 4 & Y E A R E N D 2 0 1 9 Net revenue 901.0 100.0 835.6 100.0 3,711.3 100.0 3,355.2 100.0 Gross margin 486.3 54.0 449.4 53.8 2,008.4 54.1 1,815.2 54.1 Administrative and marketing expenses 348.5 38.7 382.7 45.8 1,433.6 38.6 1,438.2 42.9 EBITDA from continuing operations (1) 140.0 15.5 61.2 7.3 576.0 15.5 370.1 11.0 Net income from continuing operations 42.4 4.7 21.2 2.5 194.4 5.2 171.3 5.1 Basic and diluted earnings per share (EPS) from 0.38 0.19 1.74 1.51 continuing operations Adjusted EBITDA from continuing operations (1) 142.8 15.8 84.2 10.1 574.4 15.5 392.5 11.7 Adjusted net income from continuing operations (1) 52.3 5.8 45.5 5.4 225.0 6.1 206.6 6.2 Adjusted basic and diluted EPS from continuing operations (1) 0.47 0.40 2.02 1.82 (1) EBITDA, adjusted EBTIDA, adjusted net income, and adjusted basic and diluted EPS are non-IFRS measures (discussed in the Definition section of our 2019 Annual Report. 9
2019 R e sults Ve r sus Guidanc e E xpre sse d as a pe rc e nt o f ne t re ve nue & re vise d fo r I F RS 16 54.1% Gross Margin 49.0% 50.0% 51.0% 52.0% 53.0% 54.0% 55.0% 56.0% 57.0% 58.0% 59.0% 38.6% Q 4 & Y E A R E N D 2 0 1 9 Admin & Marketing 33.0% 34.0% 35.0% 36.0% 37.0% 38.0% 39.0% 40.0% 41.0% 42.0% 43.0% 15.5% Adjusted EBITDA (1) 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 6.1% Adjusted Net Income (1) 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% (1) Adjusted EBITDA and adjusted net income are non-IFRS measures discussed in the Definition section of our 2019 Annual Report. 10
L iquidity and Capital R e sour c e s Cash Flow Sources and Uses of Cash from Continuing Operations 450 FY FY FY (millions of Canadian FY 2018 FY 2019 dollars) 2019 2019 2018 400 Inflow excluding Q 4 & Y E A R E N D 2 0 1 9 350 (Outflow) as reported IFRS 16 as reported 300 Operating 449.9 333.2 205.2 250 200 Investing (135.2) (84.8) (220.9) 150 100 50 Financing (286.0) (219.7) (23.9) 0 Sources Uses Sources Uses Cash Credit facility Operations Net effect 28.7 28.7 (39.6) Acquisitions Capital assets Dividends Share repurchases Other 11
L e ve r age Net Debt to Adjusted EBITDA As reported excluding IFRS 16 Internal guideline 1.0x to 2.0x 1.5x to 2.5x Q 4 & Y E A R E N D 2 0 1 9 December 31, 2019 1.1x (1) 1.5x (1) Net debt/adjusted EBITDA is a non-IFRS measure discussed in the Definition section of our 2019 Annual Report. 12
2020 tar ge ts and guidanc e T arge ts: Adjusted EBITDA (1) 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% (% of net revenue) Adjusted Net Income (1) Q 4 & Y E A R E N D 2 0 1 9 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% (% of net revenue) 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% Return on Invested Capital Guidanc e : Gross Margin 49.0% 50.0% 51.0% 52.0% 53.0% 54.0% 55.0% 56.0% 57.0% 58.0% 59.0% (% of net revenue) Admin & Marketing Expenses 33.0% 34.0% 35.0% 36.0% 37.0% 38.0% 39.0% 40.0% 41.0% 42.0% 43.0% (% of net revenue) Net Debt to Adjusted EBITDA 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 (1) Adjusted EBITDA, adjusted net income, and ROIC are non-IFRS measures (discussed in the Definition section of our 2019 Annual Report). 13
Q 4 & Y E A R E N D 2 0 1 9 Ope r ational Highlights Inova Mather Proton Therapy Center Fairfax, VA, USA 14
Canada millions (C$) $400 $1,200 $1,000 $300 $800 $200 $600 Gross Revenue $400 Q 4 & Y E A R E N D 2 0 1 9 $100 $200 Net Revenue $0 $0 Q4 19 Q4 18 2019 2018 Quarterly Highlights University of Manitoba Museum Phase II Continued organic growth in Environmental Winnipeg, MB, Canada Services and Transportation Q4 19 FY 2019 Some retraction in Power and Water Net revenue growth 1.6% 2.0% New mining projects and TransMountain Organic net revenue growth 1.6% 0.1% spurred growth in Energy & Resources Backlog at December 31, 2019 $1.0B 15
Unite d State s millions (C$) millions (C$) $3,000 $700 $600 $2,500 $500 $2,000 $400 $1,500 $300 Gross Revenue $1,000 Q 4 & Y E A R E N D 2 0 1 9 $200 $500 $100 Net Revenue $0 $0 2019 2018 Q4 19 Q4 18 Quarterly Highlights Martin County, Florida Substation Continued growth in Transportation, Lake Mary, Florida Environmental Services, and Water Q4 19 FY 2019 Ramp-up of renewable Power projects Net revenue growth 9.5% 9.8% Increased midstream Oil & Gas projects Organic net revenue growth 9.6% 7.0% Backlog at December 31, 2019 $2.6B 16
Global millions (C$) millions (C$) $1,000 $250 $800 $200 $600 $150 Gross Revenue $400 $100 Q 4 & Y E A R E N D 2 0 1 9 $200 $50 Net Revenue $0 $0 2019 2018 Q4 19 Q4 18 Quarterly Highlights Center Parcs, Longford Forest Slight organic retraction due to declining County Longford, Ireland commodity prices, project wind downs and Q4 19 FY 2019 slowing UK Transportation sector Net revenue growth 14.5% 32.7% Continued growth in Environmental Services Organic net revenue growth (retraction) (0.5%) 4.7% Steady work in UK AMP projects Backlog at December 31, 2019 $630M 17
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