North American Construction : NOA – Q4 2019 Results Presentation

CORPORATE PRESENTATION

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2019 ANNUAL RESULTS

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FEBRUARY 19, 2020

EVERYONE GETS HOME SAFE

Health, Safety and Environment are recognized as an integral part of our business

• Process & practices based on conviction that ALLworkplace incidents are preventable
• Promote active participation at all levels starting with focus on front line leadership
• Consistent recipient of awards validates approach but is not the driver of culture

Exposure Hours1	4.2	Total Recordable

3.4			Injury Frequency
3.1
			2.7
	2.3		2.1
		1.6	0.5

2013	2014	2015	2016	2017	2018	2019	2012	2013	2014	2015	2016	2017	2018	2019
								The John T. Ryan		The Award of Safety
								Safety Trophy; 2015		Excellence; 2015
								The Award of Safety		The Award of Safety
								Excellence; 2017		Excellence; 2018

1. In millions, exposure hours are the total number of hours of employment including overtime and training but excluding leave, sickness and other absences

2

Q4 2019 - Business Highlights

• Strong finish to 2019 with Q4 revenue of $189 million bringing full year-over-year increase to 75%
• • Organic growth of 15% provided upside to the 60% achieved through growth capital1 and the 2018 acquisitions
  • Record external maintenance deliveries in Q4 bolstered organic growth (pictured below)
• Full year gross margin1 of 13% reflects impact of integration with 2020 set to improve on investments made
• 33 ultra-class trucks purchased and operating in heavy equipment fleet
• Achieved further organic diversification with the January 2020 execution of another 5-year mine services agreement for a coal mine in Texas with a renewal option
• Component rebuild facility completed and operational in mid-January 2020
• With growth capital1 invested, heavy equipment fleet of over 775 assets with replacement value1 of $1.8 billion
• Growth & sustaining investments made to date provide line of sight to reiterate 2020 free cash flow1 range of $70 to $100 million

Figures are in Canadian dollars	3
1. See slide 23 for Non-GAAP Financial Measures

2020 Outlook - Focus on Execution

In 2019, we integrated two acquisitions, commenced operations at a coal mine in Wyoming, incorporated the ultra-class fleet, and expanded our maintenance capabilities; all while maintaining a world class safety culture

Focus in 2020 is low-cost safe customer service for our oil sands clients while diversifying our business through

1. expanded maintenance capabilities,
2. the infrastructure we have in place and
3. our reputation as a safe operator

OPERATIONAL FOCUS IN 2020

• Continue to drive our zero harm culture by avoiding complacency in maintaining a safe workplace
• Maximize equipment utilization with capital now invested and opportunity to operate higher hours in 2020
• Specifically target utilization in Q2 & Q3 through integration with Nuna & expanded summer civil projects
• Reduce reliance on vendor provided maintenance
• Leverage the brand new component rebuild facility to drive down equipment costs
• Improve use of on-site technologies & innovations
• Lower equipment damage rates via root cause analysis & where needed, change process & procedure

4

Adjusted EBITDA1 and EPS

(figures in millions of Canadian dollars, except per share amounts)	Q4 2019	Q4 2018	2019	2018
Revenue	$189		$131		$719		$410
Gross profit1	25	13.2%	18	14.0%	96	13.4%	69	16.8%
General & administrative expenses2	8	4.0%	8	6.1%	27	3.8%	26	6.2%
Net income	8		3		37		15
Earnings per Share (EPS)	$0.32		$0.11		$1.45		$0.61
Adjusted EBITDA1	$48	25.2%	$28	21.7%	$174	24.2%	$102	24.8%
Adjusted EPS1	$0.38		$0.18		$1.72		$0.99

Revenue in Q4 up 45% from full quarter of operating acquired fleet which was purchased in late November 2018

• Other drivers include the commissioned ultra-class fleet and strong external maintenance Q4 deliveries

Gross margin1 of 13% down from Q4 2018 due to mix of work and unfavourable operating conditions

• Gross margin1 also impacted by persistent increased catch-up repair costs on the acquired fleet
• Diversification efforts from mine management contracts and external maintenance improved Q4 margin

General & administrative platform and related infrastructure continues to outperform

• Administrative spending of 4.0% is another strong quarter reflecting operating leverage

Q4 adjusted EPS1 of 38 cents up 2.1x driven by strong demand & disciplined G&A

1. See slide 23 for Non-GAAP Financial Measures

2. Excludes stock based compensation

5

Cash Provided by Operating Activities

(figures in millions of Canadian dollars unless otherwise stated)	Q4 2019	Q4 2018	2019	2018
Cash provided by operations prior to change in working capital1	$45)	$27)	$149)	$95)
Net changes in non-cash working capital	37)	10)	9)	14)
Cash provided by operating activities	82)	37)	158)	109)
Sustaining capital 1	($24)	($18)	($124)	($53)
Free cash flow1	$54)	$31)	$26)	$61)

Cash provided by operations in Q4 of $45 million2 was generated from adjusted EBITDA1 less cash interest paid

• Adjusted EBITDA1 of $48 million2 correlates to $45 million2 of cash provided by operations prior to working capital1
• Cash interest paid of $5 million2 reflects debt required to fund 2018 acquisitions and recent growth capital1

Sustaining capital1 in the quarter of $24 million2 consistent with expectation on expanded heavy equipment fleet

• Q4 spending made up almost exclusively of routine maintenance spending
• Spending level consistent with componentized depreciation in the quarter

Working capital change of $37 million2 benefited free cash flow 1 as higher AR & lower AP balances from Q3 reversed

• Year-over-yearworking capital impact not significant to overall cash generation

Free cash flow1 generation of $26 million2 reflects a year of integration & growth

1.	See slide 23 for Non-GAAP Financial Measures	6
2.	Figures are in Canadian dollars

Balance Sheet

(figures in millions of Canadian dollars unless otherwise stated)	December 31, 2019	December 31, 2018	December 31, 2017
Cash	$6		$20		$8
Liquidity 1	115		116		115
Property, plant & equipment	588		528		279
Total assets	793		690		384
Senior debt 1,2	$296	1.5x	$322	2.9x	$100	1.6x
Net debt 1,2	407	2.0x	362	3.3x	131	2.1x

Senior debt1 reduction in Q4 2019 of $41 million3

• Q4 pay-down led to annual decrease of $25 million3
• Trailing senior debt leverage1 ratio of 1.7x drops the variable floating rate paid on the Credit Facility

Total assets of $793 million3 up over 200% from 2017

• Increases in total assets reflects 2018 acquisitions and two years of significant growth capital1

Senior debt leverage1

2.9x

1.9x

1.9x

1.6x

1.7x

1.4x

1.1x

1.5x

2013

2014

2015

2016

2017

2018

2019 TTM

2019 NTM

Senior debt leverage1 ratio trending downward from peak in Q4 2018

1.	See slide 23 for Non-GAAP Financial Measures	3. Figures are in Canadian dollars	7
2.	Leverage ratio for 2019 on a next twelve month basis based on 2020 Outlook

Returns on Capital & Equity

Return on Invested Capital1 - continuation of upward trend is currently at 9.6%

	Invested capital1 of $587 million represents increase of over 200% from end of 2017
	Revenue, adjusted EPS1 and adjusted EBITDA1 all up +1.7x in 2019 validating 2018 acquisitions	26.4%

Return on Equity1 - 26.4% represents another step change in shareholder returns

• Driven by strong earnings and shareholder friendly capital allocation in equity

16.8%

				9.6%
	5.0%	8.0%			5.4%
	2.2%
								0.8%

Return on Invested Capital 1		Return on Equity1
		2016 to 2018		2019

Positive trends from 2016 - 2019 in ROIC1 & ROE1 demonstrate strong underlying fundamentals

Figures are in Canadian dollars	8
1. See slide 23 for Non-GAAP Financial Measures

2020 Outlook

(figures in millions of Canadian dollars, except per share amounts)		2017	2018	2019		2020 Outlook
KEY MEASURES
Adjusted EBITDA1		63	102	174		$190	-	$215
Adjusted EPS 1		$0.31	$0.99	$1.72		$1.90	-	$2.30
Sustaining capital 1		30	55	124		$95	-	$115
Free cash flow 1		19	61	26		$70	-	$100
OTHER MEASURES
Growth capital1 inclusive of 2018 acquisitions	40	280	46		$30 - $40
Leverage ratios2	Senior debt 1	1.6x	2.9x	1.5x		1.1x	-	1.4x
	Net debt 1	2.1x	3.3x	2.0x		1.6x	-	1.8x
Share purchases / preservation	NCIB 3	15	10	nil		nil	-	$25
	Trust account	5	5	10		$5	-	$10

Long-term strategic capital investments in 2019 establish strong free cash flow1 outlook for 2020

1.	See slide 23 for Non-GAAP Financial Measures	3. See slide 20 for NCIB activity
2.	2019 & 2020 leverage ratios provided on next twelve month basis based on 2020 Outlook	9

2020 Free Cash Flow1 Outlook

(figures in millions of Canadian dollars)

$10 to $20

$70 to

$100

$10 to $20

nil to $10

$5

$12

$20

$26

2019

Deferred capital

Q3 2019 wet

Director

Higher revenue

Capital

Operational

2020 free

free

requirement

weather

retirement

-

spending

excellence

cash flow1

cash

-

-

payment in

Impact on

on larger

intiatives

range

flow1

Fleet acquired in

Impact on

mid-2019

EBITDA1

fleet

-

Q4-2018

EBITDA1

Impact on

EBITDA1

2019 events

Impact of 2019 growth capital1 &

sustaining capital1

With acquisitions integrated, clear line of sight to 2020 free cash flow1 and debt reduction

1. See slide 23 for Non-GAAP Financial Measures

10

Enterprise Value1 & Trading Multiples

		Enterprise Value1					$812
		(figures in millions of Canadian dollars)				$669
$510
	$338	$253				$291
			$234
			$158
2012	2013	2014	2015	2016		2017	2018	2019
			Net debt	Market capitalization1
12.0x	NTM Adjusted EPS Price Multiple1,2	6.0x
	EV / NTM EBITDA Multiple1,2
10.0x
				5.0x
8.0x
			7.5x					4.3x
				4.0x
6.0x
4.0x				3.0x
Jan-19	Apr-19	Jul-19Oct-19	Jan-20	Jan-19	Apr-19	Jul-19	Oct-19	Jan-20

Trading multiples continue to lag strong operational performance

1.	See slide 23 for Non-GAAP Financial Measures	11
2.	Graphs shown are a 30 day moving average of the indicated metric

Drive for Diversification (1 of 2)

		Diversification
ACCOMPLISHMENTS TO DATE	Geographic	Customer	Resource / Service Line
				Diamonds, precious
1.	November 1, 2018 - ownership interest in Nuna Group of Companies			 - metals, base metals
2.	June 21, 2019 - 5-year mine management contract for Wyoming coal mine			 - Coal
3.	December 2019 - External maintenance deliveries at target levels			 - Rebuilt equipment
4.	January 31, 2020 - 5-year mine services contract for mine in Texas			 - Coal
5.	January 2020 - New component rebuild facility opened			 - Rebuilt components

~25% of adjusted EBIT1 in 2019 was generated from outside the Canadian oil sands

1. See slide 23 for Non-GAAP Financial Measures

12

Drive for Diversification (2 of 2)

Organic diversification leverages existing platform and mining expertise

• Our reputation as a trusted operator in the harsh Canadian oil sands is a significant competitive advantage
• Competence in heavy equipment maintenance is also a differentiator
• Systems & infrastructure we have in place are applicable to operating mines and construction projects involving major earthworks

Acquired diversification remains on the radar subject to investment criteria

• Immediate synergies to ensure accretive value to shareholders
• Complimentary business that supplements existing platform
• Inherent barriers of entry present to preserve long-term value

Diversified Adjusted EBIT1 Targets2

2018 Actual	2020 Outlook	2022 Target
6%				Canadian oil sands
	~30%
		~40%		Outside Fort
				McMurray

1.	See slide 23 for Non-GAAP Financial Measures	13
2.	Adjusted EBIT profile targets exclude potential acquisitions

Appendix

Company Overview

• Premier provider of mining services and heavy construction in western Canada with over 65 years in business
• 49% interest in Nuna Group of Companies, the premier mining contractor in northern Canada for more than 25 years
• Mobile fleet of over 775 heavy assets provides operational flexibility and is backed by fleet of support equipment
• TSX and NYSE listings: "NOA"
• • Share price: $14.211
  • 52-weeklow/high: $12.87/$18.361,2
  • Market capitalization3: $366.3 million1,2
  • Shares outstanding: 25.8 million1,2
  • Dividend of $0.04 per share paid quarterly
  • S&P Rating - 'B' | Positive outlook

From concept & construction to operations &

closure, our experienced teams provide safe, cost- effective solutions in challenging environments

Mining Services

Heavy Construction

	Figures are in Canadian dollars	3. See slide 23 for Non-GAAP Financial Measures
1.	Toronto Stock Exchange, close of business February 18, 2020	15
2.	Based on common public shares (excludes 1.7 million shares held in treasury)

Long Term Oil Sands Contracts

• Long-termcontracts in place at major oil sands sites with run-of-mine projections averaging 30+ years of remaining life
• Major barriers to entry given up-front capital required to assemble and deploy a fleet of heavy equipment on site
• Historical production from commissioned sites has been unwavering and this trend is expected to continue
• Fort Hills Mine operating at full nameplate capacity. All mines in the region operating at steady state

Owner

Contract1,2 2000

2010

2020

2030

2040

2050

2060

Base Mine -

Suncor Energy

MUA

Contract term

Millenium & North

BM

2023

2040

Services Inc.

with term

Expected mine life

Steepbank

MUC

FH

2023

2059

Fort Hills Mine

Fort Hills Energy LP

with term

Mildred Lake &

Syncrude Canada

MSA

ML

2021

2046

Aurora mines

with term

Kearl Mine

Imperial Oil Limited

MSA

KM

2022

2060

Horizon Mine

Canadian Natural

MSA

HM

2020

2055

Resources Limited

Contractual backlog3 provides committed revenue of $1.1 billion through 2023

	Figures are in Canadian dollars	3. See slide 23 for Non-GAAP Financial Measures
1.	MUA - Multiple Use Agreement; MUC - Multiple Use Contract; MSA - Multiple Service Agreement.	16
2.	'With term' reflects term commitments qualifying for contractual backlog

Heavy Equipment Fleet

• Over 775 heavy equipment assets provide operational flexibility
• • Fleet count includes Nuna equipment (~160 assets)
• Step change in Q4 2018 with purchase of over 300 units
• 17 Caterpillar 797B trucks commissioned in 2019
• New replacement value1 of fleet calculated at $1.8 billion
• • Excludes the significant cost of associated infrastructure and support equipment

Fleet Count History	Indicative Operating Hours

Rigid frame trucks	274						789
Articulated trucks	48
Loading units	239		475
Dozers	135				363
Graders	48
Specialty & other	45	2014	2015	2016	2017	2018	2019

Dozers

• Rigid

graders	frame &
	art.
	trucks
Loading
units

Owned fleet	789

New replacement value1 of $1.8 billion is the culmination of prudent investing & maintenance

Figures are in Canadian dollars
1. See Slide 23 for Non-GAAP Financial Measures	17

Nuna Group of Companies

• Nuna Group of Companies is the premier mining contractor in northern Canada
• Formed in 1993, Nuna is the established incumbent contractor on the mine sites in Nunavut and the Northwest Territories
• Q3 2019 represented strongest quarter of activity on record with momentum continuing to build
• Proudly Inuit-owned through the Kitikmeot Corporation, Nuna is poised & accredited to benefit from continued mine development in remote locations, including northern Saskatchewan and Ontario
• Over 40% of workforce is Indigenous with joint venture structures in place designed to support local communities

18

First Nation & Inuit Partnerships

1. Kitikmeot Corporation
2. • Majority partner in Nuna, Kitikmeot Corporation is a wholly-owned business of Kitikmeot Inuit Association
3. Mikisew Group of Companies
4. • Majority partner in Mikisew North American Limited Partnership, the Mikisew Group of Companies, is directly owned by the Mikisew Cree First Nation
5. Dene Sky Site Services
6. • Majority partner of Dene North Site Services Partnership, Dene Sky Site Services is owned by members of the Chipewyan Prairie Dene First Nation

We take great pride & responsibility in our First Nation & Inuit partnerships

• Our partners enable us to work effectively in bringing positive changes to the local communities where we operate
• Partners bring decades of local experience that improve decision making
• Jointly led employment initiatives achieve higher success rate than stand-alone initiatives
• Collaborative investment opportunities are becoming increasingly common

19

Shareholder Friendly Activity

NCIB Purchase Track Record

• 11 million shares purchased at cost of ~$5.00 per share; represents 98% of limit & 31% of shares available in 2013

Long Term Incentive Hedging Plan

• 4 million shares purchased by the Company into the trust since 2013 has avoided over 15% dilution
• Trustee currently holds 1.7 million shares to settle long-term incentive plans

3,000

2,500								Normal Course Issuer Bid ("NCIB") Activity
2,000
1,500
1,000
500

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NYSE	NYSE			TSX	NYSE		TSX	TSX	TSX	NYSE/TSX
October 2013 December 2014	August 2015	March 2016	August 2016	April 2017	June 2017	August 2017
				Shares approved (000's)		Shares purchased

Shareholder friendly actions have safeguarded share count at 26 million outstanding

Figures are in Canadian dollars

20

Notes

21

Forward-Looking Statements

The information provided in this presentation contains forward-looking statements and information which reflect the current view of North American Construction Group Ltd. (the "Company") with respect to future events and financial performance, including the Company's expectation of improving on its full year 2019 gross margin1 in 2020, reducing debt and attaining a free cash flow1 range of $70 to $100 million in 2020 and all financial outlook information related to 2020. Such forward-looking statements represent the Company's views only as of the date of such statements. Forward-looking statements are based on management's plans, estimates, projections, beliefs and opinions as at the date of this presentation, and the assumptions related to those plans, estimates, projections, beliefs and opinions may change; therefore, they are presented for the purpose of assisting the Company's security holders in understanding management's views at such time regarding those future outcomes and may not be appropriate for other purposes. While the Company anticipates that subsequent events and developments may cause the Company's views to change, the Company does not undertake to update any forward-looking statements, except to the extent required by applicable securities laws.

Actual results could differ materially from those contemplated by the forward-looking statements in this presentation as a result of any number of factors and uncertainties, many of which are beyond the Company's control. Important factors that could cause actual results to differ materially from those in the forward-looking statements include success of business development efforts, changes in prices of oil, gas and other commodities, availability of government infrastructure spending, availability of a skilled labour force, general economic conditions, weather conditions, performance and strategic decisions of our customers, access to equipment, changes in laws and ability to execute work.

For more complete information about the Company and the material factors and assumptions underlying our forward-looking statements please read the most recent disclosure documents posted on the Company's website www.nacg.caor filed with the SEC and the CSA. You may obtain these documents by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com.

Figures are in Canadian dollars

1. See Slide 23 for Non-GAAP Financial Measures

Non-GAAP Financial Measures

A non-GAAP financial measure is generally defined by the Canadian regulatory authorities as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be adjusted in the most comparable GAAP measures. Throughout this presentation, we use non-GAAP financial measures such as "growth capital", "gross profit", "margin", "free cash flow", "adjusted EBITDA", "adjusted EPS", "cash provided by operating activities prior to change in working capital", "sustaining capital", "senior debt", "net debt", "adjusted EBIT" and "backlog". Definitions for these items can be found in the "Non-GAAP Financial Measures" section of our Management's Discussion & Analysis.

Other non-GAAP financial measures used in this presentation are "replacement value", "liquidity", "senior debt leverage", "invested capital", "return on invested capital", "return on equity", "enterprise value", "NTM EPS price multiple" and "EV / NTM EBITDA multiple". We believe these non-GAAP financial measures are commonly used by the investment community for valuation purposes, and provide useful metrics common in our industry.

"Replacement value" represents the cost to replace our fleet at market price for new equivalent equipment.

"Liquidity" is defined as cash plus available and unused Credit Facility borrowings.

"Senior debt leverage" is calculated as senior debt at period end divided by the 2020 outlook for next twelve month adjusted EBITDA.

"Invested capital" is defined as net debt plus shareholders' equity.

"Return on invested capital" is calculated as adjusted EBIT less current income tax expense and deferred income tax expense for the trailing twelve months divided by the average invested capital over the same period.

"Return on equity" is calculated as adjusted net earnings for the trailing twelve months divided by the average shareholders' equity over the same period.

"Enterprise value" is defined as net debt plus market capitalization.

"Market capitalization" is defined as the closing share price on the Toronto Stock Exchange multiplied by the common public shares outstanding (excluding shares held in treasury).

"NTM EPS price multiple" is calculated as a 30 day moving average of share price divided by next twelve month adjusted EPS.

"EV / NTM EBITDA multiple" is calculated as a 30 day moving average of enterprise value divided by next twelve adjusted EBITDA.

23