Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q3 2017 Earnings Presentation
25 slides from Atkinsrealis's earnings presentation, Nov 2, 2017
Slide 1: Third Quarter 2017 Conference Call Presentation
› Third Quarter 2017 › Conference Call Presentation › November 2nd, 2017
Slide 2: Agenda
Agenda Forward-looking statements › Denis Jasmin, Vice-President, Investor Relations CEO remarks › Neil Bruce, President and Chief Executive Officer Financial overview › Sylvain Girard, Executive Vice-President and Chief Financial Officer Q&A
Slide 3: Forward-looking statements
Forward-looking statements Reference in this presentation, and hereafter, to the “Company” or to “SNC-Lavalin” means, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint arrangements, or SNC-Lavalin Group Inc. or one or more of its subsidiaries or joint ar
Slide 4: Q3 2017 results
Q3 2017 results › Q3 2017 IFRS net income attributable to SNC-Lavalin shareholders of $103.6M, or $0.59 EPS › Includes a net gain from the partial disposal associated with the transfer of four Capital investments of $26.5M › Includes acquisition-related and integration costs of $30.0M (in line with
Slide 5: Oil & Gas
~$3.7B revenue business with ~21,500 Oil & Gas employees Improved EBIT % - Q3 2017 EBIT of 7.3% vs Q2 2017 EBIT of 3.6% Revenues of $845M in Q3 YTD 2017 awards of ~ $1.3B. Recently awarded: - MSA with Chevron for systems completion support on all major capital projects worldwide C. Brown re-appointe
Slide 6: Mining & Metallurgy
~$500M revenue business with ~1,000 Mining & Metallurgy employees Backlog at $0.7B, compared to $0.3B at the end of 2016 and 2015 Recently awarded: - Notice to proceed for a large ammonia EPC project in Oman - Contract for the development of engineering design and licensing services for a fertilizer
Slide 7: Power
~$1.5B revenue business with ~3,500 Power employees Q3 EBIT includes $17.6M net unfavorable impact due to cost reforecast and favorable outcome from the close out of a project - Excluding this unfavorable impact, Q3 EBIT = 8.4% Change in revenue and backlog mix; more Nuclear and clean renewables, le
Slide 8: Infrastructure
~$2.5B revenue business with ~6,500 Infrastructure employees Improved EBIT margin Sustainable backlog - YTD 2017 awards of ~$1.7B Recently awarded: - Construction contract from Husky Energy as part of the West White Rose Project in Newfoundland and Labrador - Design, engineering and financing for th
Slide 9: Atkins
~$3.6B revenue business with ~18,000 (acquired July 3, 2017) employees Q3 2017 revenue of $805M with a 9.1% EBIT Revenue backlog of $2.0B (Added to SNC-Lavalin’s total backlog in Q3) - Recently awarded a resignalling contract of the Norwich-Yarmouth-Lowestoft route in UK 100-day integration period c
Slide 10: Capital
Portfolio of value creating assets Capital SNC-Lavalin Infrastructure Partners LP vehicle update: - BBGI subscribed to units in an amount equal to 80% of the value of 4 assets - 4 North American mature assets were transferred in Q3 - $36.7M gain in Q3 - 1 more asset (MIHG) should be transferred into
Slide 11: Q3 Financial performance summary
Q3 Financial performance summary E&C Capital Total Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Revenues 2,572 2,100 60 68 2,632 2,168 SG&A 395 129 4 12 399 141 EBITDA, adjusted 196 46 54 47 250 93 Adjusted EBITDA margin 7.6% 2.2% n/a n/a 9.5% 4.3% Net income, as reported 29 0 75 43 104 43 Net in
Slide 12: E&C segment EBIT – Q3 2017 vs Q3 2016
E&C segment EBIT – Q3 2017 vs Q3 2016 M&M -$11M New, acquired Mainly due to a decrease in GM%, incl. (in M$) +90 July 3, 17 a negative reforecast on a project in South America, partially offset by higher 80 +8 volume and lower SG&A. 73 O&G +$90M 62 Mainly due to an increase in GM%, incl. 60 a positi
Slide 13: A sustainable and diversified backlog
Backlog September 2017 $11.3B A sustainable and diversified backlog (in B$) As at September 30, 2017 11.3 Atkins Services 20% 10.7 Reimbursable 25% Fixed-Price 55% Dec. 31, 2016 September 30, 2017 M&M Power O&G Infrastructure Atkins Atkins’ services contracts backlog includes reimbursable contracts,
Slide 14: 2017 Operating Cash Flow
2017 Operating Cash Flow (in M$) Cash Balance as December 31, 2016 1,055 Q1 Q2 Q3 Q4 240 Cash flow from operations (612) 187 Atkins acquisition (3,119) Increase in limited recourse debt 1,500 Proceeds from share issuance 1,221 (82) (82) Increase in recourse debt, net of repayment 688 (187) Capital e
Slide 15: Capital structure and debt ratios
Capital structure and debt ratios (in M$, unless otherwise indicated) Q3 2017 Limited recourse debt $1.47B Net recourse debt 884 TTM adjusted EBITDA 688 Unused capacity under the $2.75B committed revolving credit facility $2.04B Less: TTM interest on limited recourse debt* (23) TTM adjusted EBITDA,
Slide 16: 2017 Outlook
2017 Outlook › Maintaining 2017 outlook › Includes six months of the recently acquired Atkins operations and related financing. › Based on a WANOS of ~163M. › We continue to anticipate increased Segment EBIT for all segments, except for Mining & Metallurgy. Outlook 2017 Adjusted diluted 2017 Adjuste
Slide 17: Questions & Answers
Questions & Answers
Slide 18: Appendix
Appendix
Slide 19: Capital investments portfolio
Capital investments portfolio Name Description Held Concession Location Equity Since Years Participation Highways, Bridges & Rail 1. Highway 407 (407 ETR) 108 km electronic toll road 1999 99 Canada (Ontario) 16.8% 2. InTransit BC* Rapid transit line 2005 35 Canada (B.C.) 6.7% 3. Okanagan Lake* Float
Slide 20: 407 ETR information – Q3
407 ETR information – Q3 (in M$, unless otherwise indicated) Q3 2017 Q3 2016 Change Revenues 348.7 321.3 8.5% Operating expenses 40.9 36.4 (12.4)% EBITDA 307.8 284.9 8.0% EBITDA as a percentage of revenues 88.3% 88.7% (0.4)% Net Income 143.2 115.9 23.6% Traffic / Trips (in millions) 33.5 33.5 0.0% A
Slide 21: 407 ETR
407 ETR Consistent growth and low cost of financing 790 Gross Vehicle Kilometres Travelled Dividends 730 750 680 (in millions – KM) (in M$) 600 2,641 Total dividends paid 460 by 407 ETR 2,517 2,437 Dividends received 300 by SNC-Lavalin 2,336 2,326 2,340 2,356 2,253 2,253 190 2,215 145 120 135 114 12
Slide 22: Diversity of revenue base – by segment
Diversity of revenue base – by segment (in B$) 2016 2017 (12 months) (9 months) 0% 4% 3% $0.3 13% $0.4 $0.8 3% $0.8 19% O&G 5% $0.2 $1.6 Infrastructure $0.3 39% 44% $2.5 $3.7 Power M&M Capital $3.9 16% Atkins $1.1 30% $2.5 $1.8 24% $1.5 2016 Revenues YTD 2017 Revenues $8.5 billion $6.4 billion 22
Slide 23: Solid financial position
Solid financial position September 30 December 31 (in M$) 2017 2016 Assets Cash and cash equivalent 642 1,055 Other current assets 4,414 3,135 Property and equipment 384 298 Capital investments accounted for by the equity or cost methods 346 448 Goodwill 6,229 3,268 Intangible assets related to busi
Slide 24: Net income reconciliation – Q3
Net income reconciliation – Q3 (in M$, except per share amount) Net Income, Net charges Acquisition Net gain on Net income, as reported related to the disposals of adjusted restructuring & E&C business, right-sizing plan Acquisition- Amortization head office and other related costs of intangible bui
Slide 25: Net income reconciliation – YTD
Net income reconciliation – YTD (in M$, except per share amount) Net Income, Net charges Acquisition Net gain on Net income, as reported related to the disposals of adjusted restructuring & E&C business, right-sizing plan Acquisition- Amortization head office and other related costs of intangible bu