FY24 Q2
PRESENTATION
SAFE HARBOR
This presentation contains certain forward-looking statements concerning Matrix Service Company's operations, economic performance and management's best judgment as to what may occur in the future. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences, many of which are beyond the control of the Company, and any one of which, or a combination of which, could materially affect the results of the Company's operations. Such forward-looking statements are subject to a number of risks and uncertainties as identified in the Company's most recent Annual Report on Form 10-K and in subsequent filings made by the Company with the SEC. To the extent the Company utilizes non-GAAP measures, reconciliations will be provided in various press releases and
on the Company's website.
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ABOUT MATRIX
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COMPANY OVERVIEW
WHO WE ARE
Matrix is a top tier North American energy and industrial engineering and construction
contractor committed to delivering the highest
quality work - safely, on time, and on budget.
LEADER IN ENERGY & INDUSTRIAL INFRASTRUCTURE SOLUTIONS
INFRASTRUCTURE MEGATRENDS PROVIDE LONG RUNWAY AND
MULTI-BILLION DOLLAR PROJECT OPPORTUNITY PIPELINE
LNG, NGLs, | Oil (Midstream and | Utility and | Hydrogen and |
and Ammonia | Downstream) | Electrical Infrastructure | Renewable Fuels |
OUR PURPOSE
We build a brighter future, improve quality of life, and create long-term value for our people,
business partners, shareholders, and communities.
OUR VISION
To be the company of choice for engineering, constructing, and maintaining the energy and industrial infrastructure that people rely on
around the world.
Headquarters: Tulsa, Oklahoma with offices throughout the United States and Canada, as well as in Sydney, Australia, Seoul, South Korea, and Dubai, UAE
NASDAQ Stock Symbol: MTRX
Primary Operations: North America and select international countries
Earnings: Driven by work in both traditional and emerging energy markets and industrial facilities
Balance Sheet: Consistently strong with minimal to no debt
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OUR EXPERTISE | CRITICAL INFRASTRUCTURE SOLUTIONS
CAPITAL PROJECTS, TURNAROUNDS, MAINTENANCE AND REPAIR SERVICES
STORAGE AND TERMINAL | UTILITY AND POWER | PROCESS AND INDUSTRIAL |
SOLUTIONS | INFRASTRUCTURE | FACILITIES |
- STORAGE TANKS AND TERMINALS
- SPECIALTY VESSELS INCLUDING COMPLEX CRYOGENIC INFRASTRUCTURE
- ATMOSPHERIC STORAGE TANKS (FLAT BOTTOM TANKS)
- MAINTENANCE AND UPGRADES
- SPECIALTY TANK PRODUCTS
• | LNG PEAK SHAVING STORAGE FACILITIES | • | REFINERY MAINTENANCE, REPAIR, AND |
TURNAROUNDS | |||
• | TRADITIONAL ELECTRICAL: | • UPGRADES AND RETROFITS FOR | |
─ SUBSTATIONS | |||
RENEWABLE FUELS | |||
─ TRANSMISSION & DISTRIBUTION | • | NATURAL GAS FACILITIES | |
- STORM REPAIRS
─ FACILITY ELECTRICAL & INSTRUMENTATION | • THERMAL VACUUM CHAMBERS |
• MINING AND MINERALS INFRASTRUCTURE |
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OUR MARKETS | OVERALL OUTLOOK
1st AMERICAN | SHALE | 3RD GREAT AMERICAN ENERGY |
ENERGY REVOLUTION | REVOLUTION | REVOLUTION |
50000
KBOED | 40000 |
BY TYPE, | |
PRODUCTIONENERGY | 30000 |
20000 | |
U.S. | 10000 |
1949 | 1953 | 1957 | 1961 | 1965 | 1969 | 1973 | 1977 | 1981 | 1985 | 1989 | 1993 | 1997 | 2001 | 2005 | 2009 | 2013 | 2017 | 2021 | 2025 | 2029 | 2033 | 2037 | 2041 | 2045 | 2049 | |
Other Energy | Conventional Oil & Gas | Shale Oil & Gas | Renewables | |||||||||||||||||||||||
SOURCES: EIA (historical), Goldman Sachs Global Investment Research: Carbonomics; Kboed: kilobarrel of oil equivalent per day
The markets we serve are well-alignedwith EIA and other projections for the 3rd Great
American Energy
Revolution as it relates to Conventional Oil & Gas, Shale Oil & Gas, and Renewables.
Enterprise-wide, our skills and expertise are transferable as the world and our clients transition to a lower carbon energy mix.
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OUR STRATEGY
STRENGTHEN THE CORE | EXPAND IN EXISTING MARKETS | GROW INTO NEW MARKETS |
Traditional energy tanks and terminals | LNG and NGL storage terminals | Renewable energy infrastructure such |
Refining | Midstream gas processing | as hydrogen and biofuels |
Thermal vacuum chambers | Chemicals and petrochemicals | |
Electrical infrastructure | Carbon capture | |
Mining and minerals | Renewable power in utility scale solar |
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OUR TURNAROUND STORY | RETURNING TO PROFITABILITY
FY2020 | FY2021 | FY2022 | FY2023 | FY2024 |
EXTERNAL MARKET FACTORS
GLOBAL PANDEMIC:
- ENERGY DEMAND DESTRUCTION
- CLIENTS PAUSE CONSTRUCTION PROJECTS, DEFER MAINTENANCE
• MINIMAL PROJECT OPPORTUNITIES IN HIGHLY COMPETITIVE MARKET RESULTING IN:
- LOW MARGIN OPPORTUNITIES
- LOW REVENUE VOLUME
- SIGNIFICANT UNDER-RECOVERY OF CONSTRUCTION OVERHEAD COSTS
INCREASING GLOBAL FOCUS ON ENERGY TRANSITION
INTERNAL COMPANY ACTIONS
REDUCED COSTS, REORGANIZED, AND STREAMLINED THE BUSINESS
FOCUSED EFFORTS ON CORE TRADITIONAL AND EMERGING MARKETS SUPPORTED BY OUR EXPERTISE
DISPOSED OF UNDERPERFORMING ASSETS
LAUNCHED ROBUST QUALITY PROGRAM
REBUILT BACKLOG TO COMPANY RECORD OF $1.45
RESTORED HISTORIC DOUBLE-DIGIT GROSS MARGINS
FOUNDATIONAL PRINCIPLES EMBEDDED IN OUR CULTURE AND CORE VALUES
CONSERVATIVE BALANCE SHEET MANAGEMENT | PROTECTING AND DEVELOPING OUR PEOPLE | BUILDING LONG-TERM CLIENT RELATIONSHIPS
NEAR-TERM OUTLOOK
Strong revenue growth beginning in second half of FY2024
Improved consolidated direct margins
Full recovery of construction overhead
SG&A leverage
Improved overall operating results and EBITDA
Achievement of long-term financial targets
Our internal actions and foundational principles, coupled with improving market
tailwinds, position Matrix for near-term profitability and long-term growth.
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OUR TURNAROUND STORY | BACKLOG AND REVENUE
Millions | $1,600 | ||||||||
$1,417 | $1,450 | ||||||||
$1,400 | |||||||||
$1,200 | $1,219 | $1,219 | $1,101 | ||||||
$1,092 | |||||||||
$1,098 | |||||||||
$1,098 | $1,090 | $1,090 | |||||||
$1,000 | |||||||||
$795 | |||||||||
$800 | $758 | $758 | $673 | $708 | |||||
$682 | |||||||||
$600 | $589 | $589 | |||||||
$463 | $463 | ||||||||
$400 | |||||||||
$200 | |||||||||
$0 | |||||||||
FY2018 | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 YTD |
Beginning Year Backlog | Ending Year Backlog | EXTERNAL MARKET FACTORS | |
Revenue | |||
GLOBAL PANDEMIC | INTERNAL COMPANY ACTIONS | ||
(OFFICIAL U.S. PUBLIC HEALTH EMERGENCY | TO RETURN TO PROFITABILITY | ||
DID NOT END UNTIL MAY 2023) | AND POSITION THE COMPANY | ||
FOR ONGOING GROWTH
- Backlog has tripled since FY2021 with significant increases in multi-year project awards, especially in late FY2023 and early FY2024
- Projects allow for historic double-digit margins and full recovery of construction overhead costs
Significant revenue growth is expected as recent project awards
transition to field construction.
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MARKET TAILWINDS | KEY MACROECONOMIC DRIVERS
GLOBAL ENERGY SECURITY
- Crude oil
- Refined products
- Natural Gas and Gas Liquids
DOMESTIC ENERGY SUPPLY ASSURANCE
- LNG Storage and Peak Shaving
- Aging and Secure Electrical Infrastructure
CLEAN ENERGY TRANSITION
- Hydrogen, Ammonia
- Natural Gas
- Carbon Capture
- Electrification of Everything
DEMAND FOR OTHER COMMODITIES
- Metals, Mining and Minerals Investment
- Batteries, infrastructure, etc.
FEDERAL INFRASTRUCTURE INVESTMENT
- The Inflation Reduction Act (IRA) Energy and Climate provision provides $391 Billion, although analysts are forecasting the IRA to cost around $1.2 Trillion
- Investment is expected to be a spring-board for an additional $2 Trillion in private infrastructure investments by 2032 and $11 Trillion by 2050
- Resilient, clean, 21st century electric grid
- Supporting the clean energy transition such as: Hydrogen, renewables, EV's, Bio-fuels, Carbon Capture
- Airports including fueling and sustainable aviation fuel investments
- Infrastructure repair, replacement, and electrification which impact Copper, Lithium and other mineral commodities
- Wastewater treatment will require digesters and aluminum covers
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Disclaimer
Matrix Service Company published this content on 12 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 18:49:07 UTC.