Centuri Holdings, Inc. Morgan Stanley's 14th Annual Laguna Conference

Thank you, Ryan. It is good to be here, and thank you for inviting Kelly and I. Two years, it feels like 20. It has been a busy two years. I think rolling out the Vision One Centuri strategy earlier this year, both internally and externally, has given us a key guiding light to where we are trending. That strategy focuses on really three key drivers. First of all, protecting and deepening the core of who we are and who our client base is. Secondly, expanding our portfolio into those end markets that bring more margin opportunity for us, but using the same services. Building a sustainable, integrated business model. Vision One Centuri, across those three areas, is who we are, is where we are focused, and where our guiding light is.

If I think about what those individual components are, protecting and deepening the core is all about getting closer to our base customers in the utility market. It is about building capability alongside their needs. It is about getting closer to those customers in driving efficiency into their capital needs. It is about scaling up around what those customers need so that we can service them more consistently across both gas, electric. We can provide more and more integrated services there and also expand the margins to which we deliver for our shareholders. Expanding the portfolio, similar. We took a decision on the strength of our end markets to not deviate and to stick to the knitting. Bringing capability that we deploy across our utility base into adjacent industries is allowing us to capture higher-margin work within those adjacent industries that have got high growth profiles.

Such as renewable gas, data centers, transmission, which is part of our business but has not got as much scale, as well as other areas in midstream services. Integrating the business in a sustainable way. We came from an environment where we were part of a great utility, but we were very decentralized. I think for a contractor like ours to be successful, you need to bring all of the resource, all of the capability, all of the balance sheet, all of the focus, all of the learnings, all of the knowledge together into an organization so you can maximize the value for all. So they are the three strands of Vision One Centuri, focused on our core clients, expanding our portfolio, underpinned by an integrated operation.

And I guess the output from that, as we communicated, is we believe what we have with our end markets will drive into a minimum of 10% organic growth rate each year into our planning horizon of the next five years. We see that working together collectively affords us margin expansion. So we believe our base gross profit will get towards 10%. And I think it gives us a good platform as we learn more about our business, as we separate from our former parent into a standalone contractor. It gives us a good platform to go even further in the future.

Yeah. I think before we talk specifics around people, we've got to go back to first principles. Two years ago, we were still a subsidiary of a public utility. It's only 12 months ago did we become totally independent. So over that period of time, we've been maturing into where we would like to be, which is a fully integrated service provider that maximize value for all stakeholders and shareholders. Step one, when I came into the business, was to do some block and tackling. There were some elements of the business that needed to be strengthened around go to market, build good backlog into the business at good margins so we could manage utilization, get a presence in the market, get a position in the market that came across as one Centuri and not separate opcos.

More recently, you've seen a significant amount of near-term investment needed in our overhead to build the tools, some advisory help, some capability in the near term that really takes us to where we are today, which is now adding to our team so that we can drive sustainability, we can drive margin expansion, and implement capital efficiency. So we've brought in three recent additions to the team. Kelly Youngblood joining us to lead as CFO, and we're pleased and proud he's joined our business, and he brings everything and many years of experience that we need to get to where we need to be on those two key elements of margin expansion and capital efficiency. Danielle Hunter has joined us, coming in as a general counsel as well as general administration officer. She brings years of experience around building back office capability, operational support, as well as legal support.

Finally, but as importantly, Mike Christie, who has got over 25 years in our utility industry, has joined us as Group Development Officer, and his role in life will be to drive the deepening and the cross-sell of our organization, which will underpin margin expansion, but also work very diligently in building capability so we can achieve our strategic objectives. I think with those three additions, we have now got an exceptionally strong team that will lead us to success in the future.

Yeah. Thanks again for having us here, Ryan. Really appreciate it. As Chris kind of alluded, I've kind of been around a while. I started my career at Halliburton, one of the largest oil field service companies out there. I worked there for over 25 years in various roles. I worked international positions, domestic, corporate, ran their investor relations group for several years. A big company like that is kind of great because even though you're working for one company, you feel like you have a lot of careers within the same company because they move you around quite a bit. I physically relocated my family seven times during the career and got a lot of good development from Halliburton. Since Halliburton, over the last, I don't know, 11 years or so, I've held three other CFO positions, at Diamond Offshore Drilling, which was a public company.

I went over to BJ Services, which was a spinoff from Baker Hughes. That was a private equity-owned company. I did that for a few years. Most recently, over the last six years, I went to another public company, MRC Global, which was a distributor, which was actually heavy into the gas utility business. It's not completely new to me. Electric's a little bit new to me, but gas utilities I've been involved with. That's briefly my background. My last company actually merged with a major competitor last November. I took some time off, and as I was trying to determine what I was going to do next, this opportunity came up and I was honestly being very picky about what I wanted to go into next.

I wanted a company that had tremendous growth potential, had a good balance sheet, had a CEO that I thought I could work well with, had a board of directors I thought I could work well with. I was just kind of at that point in my career where I felt I could be pretty picky on what I wanted to do next. This one, Chris was kind enough to spend a lot of time with me as I was doing the diligence of the company and listened. It came down and it's pretty simple. When I look at opportunities, I kind of simplify things into the good, the bad, the ugly. When I looked at the good of this company, the top line is just there's a phenomenal growth opportunity for Centuri. It's grown first half, 33% year on year.