2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS · 3. Adoption of the Minutes of the 2016 Annual Meeting of Shareholders 4. Auditor's Report and Receipt of the Consolidated Financial

2017

2017 ANNUAL GENERAL

MEETING OF SHAREHOLDERS

WELCOME

2017

Jean Paschini Co-Chair of the Board of Directors and Chief Executive Officer

Pierre Paschini, P.Eng. President and Chief Operating Officer

Marise Paschini Executive Vice President, Treasurer and Corporate Secretary

Jean-François Boursier, CPA, CA Chief Financial Officer

Carolyn Hanson-Carbonneau, M.Eng. Vice President, Engineering and Operations

MEMBERS OF ADF GROUP INC. MANAGEMENT COMMITTEEWELCOME

20172017

GENERAL

MEETING

MEETING AGENDA

1. Opening of the Meeting and Quorum

2. Adoption of the Meeting's Agenda

3. Adoption of the Minutes of the 2016 Annual Meeting of Shareholders

4. Auditor's Report and Receipt of the Consolidated Financial Statements for the

Fiscal Year Ended January 31, 2017

5. Election of Directors

6. Appointment of the Independent Auditor

7. Management's Report

8. Questions and Answers Session

9. Meeting Adjournment

2017











2017

GENERAL

MEETING

MEETING AGENDA

2017

Jean Paschini Co-Chair of the Board of Directors and Chief Executive Officer

ADF Group Inc.

Pierre Paschini, P.Eng. President and Chief Operating Officer

ADF Group Inc.

Marise Paschini Executive Vice President, Treasurer and Corporate Secretary

ADF Group Inc.

Marc L. Belcourt, Eng. (Ret.) Construction Consultant

Michèle Desjardins, F.Adm.A, CMC, ICD.D Senior Partner, Lansberg Gersick & Associates

President and Founder, Consultants Koby Inc. .

Corporate DirectorFrank Di Tomaso, FCPA, FCA, ICD.D

President, G.D.N.P. Inc. Consulting ServicesAntonio P. Meti, B. Comm

Senior Partner, Fasken Martineau DuMoulinRobert Paré

ELECTION OF DIRECTORSMEETING

AGENDA

2017











2017

GENERAL

MEETING

MEETING AGENDA

20172017

REPORT

REVIEW OF THE FISCAL YEAR ENDED JANUARY 31, 2017

GOOD PERFORMANCE OVERALL, DESPITE UNFAVOURABLE MARKET CONDITIONS

Slight decrease in net income compared with fiscal 2016.

Sustained increase in gross margin and EBITDA since fiscal 2015.

Liquidities requirements to finance raw material (steel) purchases.

Revenues exceeded the 100-million-dollar mark.

Revenues(In million $)

20162015 2017

$76.1M

$102.9M

$98.1M

(At January 31)

$7.3M

$14.0M

$17.2M

Gross Margin(In million $ and as a % of revenues)

20162015 2017

14.3%

16.7%

9.6%

(At January 31)

Net Income

$1.7M

$(1.6)M

$1.5M

20162015 2017

(In million $)

(At January)

2017

$235 million worth in new contracts.

Order backlog hit the 200-million-dollar mark in the third quarter ; a new height since fiscal 2003.

Staffing increase in line with the level of activities (from 571 employees in 2016 to 789 today).

20162015 201720132012 201420102009 20112007 2008

$200M

$150M

$100M

$50M

Ord

er

Back

log

2017

REPORT


2017

‒ Raising awareness and active participation of our employees to the

Lean Manufacturing approach.

‒ First cost reduction measures in the plant to increase operational

efficiency.

‒ Implementation of a computer software to provide support to our

different department in their decision-making process.

• Implementation of the first items under "ADF 2.0", aiming the improvement of

operational efficiencies:

Sub-project "Achieve Operational Excellence"

"ADF 2.0" BUSINESS PLAN

2017

REPORT


An even more comprehensive, detailed and efficient "OHS" program:

2017

• OHS Plans specifically developed for

activities in the plant and work performed

on construction sites.

• Team of qualified and dynamic

preventionists present at all times.

• Full time trainers.

OCCUPATIONAL HEALTH AND SAFETY… always a priority!


REPORT

2017

NOTICE

This presentation contains forward-looking statements reflecting ADF Group Inc.’s objectives and expectations, which by

their very nature involve risks and uncertainties. Consequently, reality may differ from ADF’s expectations.

The selected financial data set out in this presentation, as well as comparative figures for the previous fiscal years, reflect the

application of International Financial Reporting Standards (IFRS).

All amounts are in Canadian dollars, unless otherwise indicated.

FINANCIAL REVIEW2017

REPORT

$50M

$150M

$200M

$250M

$100M

$300M

2017

CONTINUITY OF THE ORDER BACKLOG

76.188.5

35.8 70.6

226.7

102.8

48.2

98.1120.5

194.5+ ‒

New

Contracts

Revenues

2015-01-31

Order Book

at February 1st, 2014

Order Book


Order Book


Order Book


+

New

Contracts

Revenues

2016-01-31

‒

New

Contracts

+

Revenues

2017-01-31

‒

FINANCIAL

REVIEW

FISCAL

2017 Order Backlog New Contracts Annual Revenues+ -

(Net of the FX impact) (Net of FX variations)

RESULTS SUMMARY

98,089102,846 5%

14,020

14.3%

17,211

16.7%

23%

7,244

7.4%

8,462

8.2%

17%

1,699

0.05

(In thousands of dollars and in dollars per share)

FISCAL YEARS ENDED JANUARY 31 2016

$

2017

$

Revenues

Gross Margin

As a % of revenues

EBITDA

As a % of revenues

Net Income

Basic and Diluted Net Income per Share

1,499

0.05

12%

2017

FINANCIAL

REVIEW

FISCAL

2017

SUMMARY OF CASH FLOW

(816) (772)

(652) (652)

(2,043) (5,569)

18,329 4,893

(10,635) (1,157)

(7,219) (9,002)

Debt Reimbursement

Dividend Payment

Net Change in Cash and Cash Equivalents

Debt Issuance (including current portion)

Cash Flow From Operations

Acquisition of Property, Plant and Equipment and Intangible Assets

2017

$(In thousands of dollars)

FISCAL YEARS ENDED JANUARY 31 2016

$

2017

FINANCIAL

REVIEW

FISCAL

2017

LONG TERM FINANCIAL POSITION

(In million of dollars)

AT JANUARY 31

2017

2014

101.8

2013

91.4

2015

104.0

2016

107.5

105.6

2017

SHAREHOLDERS’ EQUITY

2014

6.0

2013

3.7

2015

10.1

2016

15.2

32.1

2017

TOTAL INDEBTEDNESS

19.52

9.635.0

21.0

20142013 2015 2016

24.8

2017

WORKING CAPITAL

19.5

2014

27.1

2013

8.7

2015

2.4

2016

0.3

2017

AVAILABLE LIQUIDITIES

FINANCIAL

REVIEW

FISCAL

2017

2017

91%

15%

1%

63%

48,638

5,226

10.7%

3,081

6.3%

354

0.01

25,440

6,134

24.1%

3,043

12.0%

965

0.03

Revenues

Gross Margin

As a % of revenues

EBITDA

As a % of revenues

Net Income

Basic and Diluted Net Income per Share

2016

$

2017

$

FIRST QUARTERS ENDED APRIL 31

(In thousands of dollars and in dollars per share)

RESULTS SUMMARY

SUMMARY OF CASH FLOW2017

5,000

(1 574)

(207)

(1,777)

(4,294)

(2,201)

(442)

(215)

(143)

—

(3,037) —

Debt Issuance (including current portion)

Net Change in Cash and Cash Equivalents

Debt Reimbursement

Cash Flow From Operations

Acquisition of Property, Plant and Equipment and Intangible Assets

FIRST QUARTERS ENDED APRIL 31 2016

$

2017

$(In thousands of dollars )

Variation in Credit Facilities

SHORT-TERM FINANCIAL POSITION

(In million of dollars)

AT APRIL 30, 2017

2017

Q1-2018

107.6SHAREHOLDERS’ EQUITY

2014

101.8

2013

91.4

2015

104.0

2016

107.5

2017105.6

19.52

9.635.0

21.0

24.8

WORKING CAPITAL

Q1-201820142013 2015 2016 2017

24.8

6.0

3.7

10.1 1

5.2 32.1

TOTAL INDEBTEDNESS

Q1-201820142013 2015 2016 2017

35.4

19.52

7.1

8.7 2.4

0.3

AVAILABLE LIQUIDITIES

Q1-201820142013 2015 2016 2017

0.2

2017

Continue our prudent and tight cost management.

Manage the use of available liquidities.

CAPEX

Maintain all assets current.

Implementation of the first items under "ADF 2.0" business plan.

Continue our dividend policy

$0.02 per share/per year.

FINANCIAL OBJECTIVES AND PRIORITIES

2017

MARKET DEVELOPMENT

CURRENT SITUATION

… ADF REMAINS DISCIPLINED

Consolidation signs in our industry in North America.

Market segments abandoned by certain competitors.

Selling prices remain unusually low.

Increase of the international competition in North America.

OUR

MARKETS

Market conditions remain unfavourable:

2017OUR

MARKETS

A PRUDENT AND TARGETED APPROACH

Additional staffing to bid on more projects.

Project targeting and selection criteria (risks and opportunities).

Development strategy encompassing an added-value client approach.

More aggressive approach to promote ADF’s know-how.

Key personnel with experience in steel superstructure projects.

MARKET DEVELOPMENT

2017OUR

MARKETS

VDC - Virtual Design Construction Technology

MARKET DEVELOPMENT

Fiscal 2017

$235 million in new contracts signed during Fiscal 2017.

» Signature of the largest contract in ADF’s history to date, in terms of value.

• 124,000 Fabrication hours

• 50,000 Steel erecting hours

2017OUR

MARKETS

New Contracts (In million $)

Fiscal

2015

$88M

$120M

Fiscal

2016

$235M

Fiscal

2017

$50M

$150M

$250M

These new orders provide a total of

MARKET DEVELOPMENT

Since

February 1, 2017

$51M

ORDER BACKLOG2017

SALT LAKE CITY INTERNATIONAL AIRPORTSalt Lake City, Utah

Status:

Underway

Product:

Steel Structures

New Terminal • Concourses •

Passengers’ Gateway

Sector:

Airport Facilities

Nature of Work:

Fabrication • Steel Erecting Work

20,000 tons

Industrial coating

2,000,000 square feet

MAJOR

CONTRACTS

2017

ORDER BACKLOG

SALT LAKE CITY INTERNATIONAL AIRPORTSalt Lake City, Utah

MAJOR

CONTRACTS

Status:

Underway

Product:

Steel Structures

New Terminal • Concourses •

Passengers’ Gateway

Sector:

Airport Facilities

Nature of Work:


20,000 tons

Industrial coating

2,000,000 square feet

ORDER BACKLOG2017

ALL ABOARD FLORIDA TRAIN STATIONMiami, Florida

ADF Plant – Great Falls, MT

Product:

Steel Structures

Sector:

Public Infrastructure/Transport

Multi-Level Building

Nature of Work:


8,500 tons

Industrial coating

130,000 square feet

Status:

Underway

MAJOR

CONTRACTS

Site (Florida)

2017

ALL ABOARD FLORIDA TRAIN STATIONMiami, Florida

ORDER BACKLOGMAJOR

CONTRACTS

Product:

Steel Structures

Sector:


Multi-Level Building

Nature of Work:


8,500 tons

Industrial coating

130,000 square feet

Status:

Underway

2017

NEW CHAMPLAIN BRIDGEMontreal, Quebec

ORDER BACKLOGMAJOR

CONTRACTS

Status:

Underway

Sector:


ADF Paint Shop- Terrebonne, QC

Product:

140 Box Girders - Central corridor

160 Box Girders - Highway corridors

Nature of Work:

Fabrication

9,000 tons (central corridor)

Industrial coating

800,000 square feet (all 3 corridors)

20172017

ORDER BACKLOG

NEW CHAMPLAIN BRIDGEMontreal, Quebec

MAJOR

CONTRACTS

ADF Plant – Terrebonne, QC

Status:

Underway

Product:

140 Box Girders - Central corridor

160 Box Girders - Highway corridors

Sector:


Nature of Work:

Fabrication

9,000 tons (central corridor)

Industrial coating

800,000 square feet (all 3 corridors)

2017

Product:

Four steel pedestals (weight: 87,000 kg (194,000 lb) ea.)

Sector:

Commercial

2017

NEW YORK WHEELStaten Island, New York

Nature of the Work:

Fabrication 1,000 tons

Industrial Coating 500,000 sq. ft.

ADF Paint Shop – Terrebonne, QC

ADF Plant – Terrebonne, QC

Status:

Completed in 2016

ORDER BACKLOGMAJOR

CONTRACTS

OBJECTIVES AND PRIORITIESRAPPORT

DE LA

DIRECTION2017

2017

REPORT

Increase the Order Backlog

FOR THE FISCAL YEAR ENDING JANUARY 31, 2018

Increased staffing in Sales and Engineering Departments to better accompany clients.

Expert reputation and high quality facilities.

Positioned to take advantage of the investments announced in US public infrastructure.

Continue the analysis of our operations to make sure we remain efficient and competitive.

2017











2017

GENERAL

MEETING

MEETING AGENDA

2017

THANK YOU

Documents

2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS · 3. Adoption of the Minutes of the 2016 Annual Meeting of Shareholders 4. Auditor's Report and Receipt of the Consolidated Financial