Aecon Group Inc T.ARE

Nuclear - valuation of division

[Gabriel]

Slide 10: Nuclear made 16% of TTM (12 months)  revenue of 4,326m or 692m. Considering the higher margins in nuclear, we can safely assume it has a value of 500-830m based on an EBITDA margin of 12-15% and a multiple of 6-8x. For reference, Bird trades at close to 8x. Compare to 900m market cap for the whole.

https://aeconcomfiles.blob.core.windows.net/web-live/docs/default-source/investor-briefcase/are---q1-2024-conference-call-presentation.pdf?sfvrsn=36b25483_5

[Henrye]

G- great analysis that is realistic and makes sense. could you please share your re evaluation opinion of the utility USA recent acquisition with Extreme electric included . I think based on Oak tree investment, it was based on 850  million+- for 100% , so if Aecon assuming bought the investment at a small discount US$ , what is the projected new valuation. They will now pick up on several

[Gabriel]

I don't have the figures. I agree that the key for Aecon now is to grow its EBITDA, like Bird has been doing, regardless of our legacy LSTK contracts. If I was on the board, I would give management the tools and make sure they grow the consolidated EBITDA to 500m in 2025 or 2026. If my management does not deliver, I would replace them considering they have already failed on their fiduciary

[Gabriel]

We agreed to waive 127m likely in receivables for our 50% share in SA Energy. 

[Henrye]

G- There will need be tons of hard core explaining to do at the upcoming conference call by the management. I fully understand  your and our underlying frustration and disappointment. I am sure that they will explain how they had to work and perform under severe duress during lengthy Covid restrictions and how their World changed and point out to initial shock and confusion in effectively

[Gabriel]

On the CGL bid: You do not sign a construction contract without a periodic (12 months) price adjustment clause based on a construction price index. If the owner does not offer this elementary protection in the administrative conditions of contract, you openly raise this abusive issue during the Q&A period (thereby openly denouncing it), making sure this is reported in construction magazines

[Henrye]

All should read your very articulate and thoughtful response with such clarity and effort. Cheers to NEW Aecon that is a lot more smarter and no doubt a lot more disciplined and not willing to ever again repeat the mistakes! I truly believe that they have learnt from this terrible covid period.  I would hope the ENTIRE Aecon management team would read and reread your your post as should the

[Gabriel]

ChatGPT confirms. Will AI rule the world ? Question I asked ChatGPT: Contractors have lost a lot of money in lump sum turn key construction contracts during Covid and thereafter. How in your opinion can such be avoided in the future? Answer of ChatGPT: Lump sum turn key (LSTK) construction contracts have been particularly challenging during the COVID-19 pandemic due to unforeseen

[Henrye]

That is exactly what I was thinking and you sent us this existing elaborate report, my hat is off to you! After reinforcing all my thoughts after reading your timely information, I now increased my support for Aecon 10 fold, and no matter, will not sell a single share unless forced due to someone real soon acquiring Aecon in hole or in part ! Its very possible and inevitable!  Surprised

[Ronbromleygross]

Are we sure someone will acquire Aecon soon or are we speculating at the "possibility"? I like Aecon too and have actually initiated my first 2 buys this past week (not big purchases) but just getting my foot in the door considering the valuatuon was very compelling and we did drop from the recent peak of roughly $17.40 to the recent low of around $14.40 based on the recent company

[Henrye]

Ron , absolutely love your post! No doubt you are very intelligent with your thought process!  You are bang on that there is no way you will have wait 4 years for  Aecon effective from your purchase date. Whether there is an aquistion or not we are on near path of greatness at which time it will be up you to choose to leave upon your satisfaction, or take a bit off the table and pursue

[Gabriel]

Very dear Ron, I am very pleased and assured to have you on board with us based on your key position in a very comparable corporation, your smartness and your kindness. I am equally grateful to your posts.