Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — Q4 2020 Earnings Presentation
27 slides from Atkinsrealis's earnings presentation, Mar 9, 2021
Slide 1: Fourth Quarter & Year-End 2020 Conference Call Presentation
Project Neon, Nevada (USA) Hinkley point, Somerset (England) Canada Post, Community Mailbox Program › Fourth Quarter & Year-End 2020 › Conference Call Presentation › March 9, 2021
Slide 2: 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 associates, or SNC-Lavalin Group Inc. or one or more of its subsidiari
Slide 3: Ian L. Edwards, President and CEO
Ian L. Edwards President and CEO 3
Slide 4: Summary
Summary › Continued to make significant strides in advancing the strategy and de-risking the business; enhancing focus on realizing the value and growth potential of Engineering Services › Signed binding agreement to sell O&G business, closing targeted for Q2 2021 › Completed a rigorous and expanded
Slide 5: SNCL Engineering Services: EDPM Highlights
SNCL Engineering Services: EDPM Highlights Q4 PERFORMANCE 2021 OUTLOOK › Revenues in Canada, UK&E & US all ahead or in line › Prospect pipeline remains strong at ~$27B with 2019 in our core markets driven by roads, rail and › Overall optimistic about a return to growth with strong defence Government
Slide 6: SNCL Engineering Services: EDPM Highlights (cont'd)
SNCL Engineering Services: EDPM Highlights (cont’d) BACKLOG / MAIN AWARDS › The $1.3B East West Rail project in the UK, delivered through an Alliance agreement, represents a step forward in major project procurement › Significant step forward in Company’s strategy to deliver major infrastructure pro
Slide 7: SNCL Engineering Services: Nuclear Highlights
SNCL Engineering Services: Nuclear Highlights Q4 PERFORMANCE 2021 OUTLOOK › Major Nuclear Operations in UK, Canada and US › Strong pipeline of projects going into 2021 in continued to be resilient and performed well Canada, the U.S. and the U.K › Major delivery milestones achieved resulting in › Sig
Slide 8: SNCL Engineering Services: Nuclear Highlights (cont'd)
SNCL Engineering Services: Nuclear Highlights (cont’d) BACKLOG / MAIN AWARDS › DOE extension of the current underground tank operations contract with SNCL JV for 2021 (possibly beyond) › Entered into a long-term extension for the Whiteshell Laboratories contract to 2027 › Numerous services and outag
Slide 9: SNCL Engineering Services: Infra. Services Highlights
SNCL Engineering Services: Infra. Services Highlights Q4 PERFORMANCE 2021 OUTLOOK › All business lines performed well, underpinned by the › Strong pipeline of opportunities for Linxon, with key O&M operations, which continued to operate at full awards focused in core markets across service levels Tr
Slide 10: SNCL Engineering Services: Infra. Services Highlights (cont'd)
SNCL Engineering Services: Infra. Services Highlights (cont’d) BACKLOG / MAIN AWARDS › Number of hydro power plant projects in Pennsylvania, USA - aligned with a low carbon energy future › 5-year extension of a major program management mandate with Canada Post › Calabogie – award to provide services
Slide 11: Capital: Q4 Highlights
Capital: Q4 Highlights H I G H W AY 4 0 7 › No dividend paid in Q4 2020, traffic volume lower by 44% vs Q4 2019 › The 407 remains a value asset in Canada’s largest city and economic hub › Maintaining sufficient liquidity to satisfy its financial obligations › Concession agreement: 78 years remaining
Slide 12: SNCL Projects: Infrastructure EPC Projects
SNCL Projects: Infrastructure EPC Projects Backlog phasing ($M) › Canadian light rail projects continue to progress well 1,000 › Three main projects remain to be completed 750 › Two projects expected to be completed by the end 500 of 2022 and one remaining project expected to be completed by 2024 25
Slide 13: SNCL Projects: Resources
SNCL Projects: Resources O&G business to be sold (discontinued operations) › Company entered into a binding agreement to sell the Oil & Gas business on February 9, closing is targeted for Q2 2021 › O&G business is presented as discontinued operations Revenue starting Q4 2020 (2020) › Remaining Resou
Slide 14: 2021 Strategic Priorities
2021 Strategic Priorities Positioning SNC-Lavalin for long-term sustainable success and becoming a leading provider of professional engineering services and project management solutions Closing the Running off Driving consistent Building a Positioning for Oil & Gas sale LSTK projects performance in
Slide 15: Positioning for growth and a sustainable future
Positioning for growth and a sustainable future GROWTH S U S TAI N AB L E F U T U R E › Leveraging Company’s expertise in Nuclear and › Developing Company’s “Engineering Net Zero” Transportation across current service offerings in core solutions to clients by designing better assets and low regions
Slide 16: Jeff Bell, Chief Financial Officer
Jeff Bell Chief Financial Officer
Slide 17: Q4 Selected financial metrics
Q4 Selected financial metrics (in M$, unless otherwise indicated) Q4 2020 Q4 20191 Change SNCL Engineering Services 1,523 1,574 (3.3%) SNCL Projects 152 358 (57.5%) Capital 23 36 (36.1%) Revenues 1,698 1,968 (13.7%) SNCL Engineering Services 153 159 (3.8%) SNCL Projects (413) 17 n.a. Capital 19 32 (
Slide 18: Q4 Highlights: Solid Results from SNCL Engineering Services
Q4 Highlights: Solid Results from SNCL Engineering Services1 › Revenue of $1,523M, a 3.2% decrease vs Q4 2019, and a 5.2% increase vs Q3 2020 › Segment Adjusted EBIT* of $153.1M, Segment Adjusted EBIT to revenue ratio* at 10.1% › Net cash generated from operating activities of $250M › Strong backlog
Slide 19: Q4 Highlights: SNCL Projects
Q4 Highlights: SNCL Projects › Revenues of $152M, a 57.5% decrease vs Q4 2019, mainly due to the continuing backlog run-off of Canadian light- rail transit LSTK construction projects › Segment Adjusted EBIT* of $(413)M, which includes, as announced on February 9: › $480 million in charges, adjustmen
Slide 20: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Net cash generated from (used for) operating activities ($M) Selected balance sheet items ($M) 2019 2020 2019 2020 312 1,573 1,571 130 122 105 1,189 23 933 -51 -136 -249 -368 -355 Cash and cash Recourse debt and Q1 Q2 Q3 Q4 Full year equivalents limited recourse debt 20
Slide 21: SNCL Engineering Services Outlook
SNCL Engineering Services Outlook Metric 2021 Outlook SNCL Engineering Services Revenue growth Low single digit percentage SNCL Engineering Services Segment Adjusted EBIT to revenue ratio* Between 8% and 10% Metric Targets Segment adjusted EBIT to revenue ratio* • EDPM 8% to 10% • Nuclear 13% to 15%
Slide 22: Questions & Answers
Questions & Answers )) SNC +LAVALIN
Slide 23: Appendix
Appendix >) SNC+LAVALIN
Slide 24: Remaining LSTK Projects in SNCL Projects Backlog
Remaining LSTK Projects in SNCL Projects Backlog Approximate Expected Backlog Project Country Completion % substantial as at Dec. 30, 2020 Client (SNCL portion) completion year ($M) M&M Project #1 MENA ~85% 2021 <75 Confidential REM (LRT) Canada ~45% 2024 <800 CDPQ Infra Trillium (LRT) Canada ~35% 2
Slide 25: 407 ETR Information
407 ETR Information (in M$, unless otherwise indicated) Q4 2020 Q4 2019 Change FY 2020 FY 2019 Change Revenues 225.5 379.3 (40.6)% 908.6 1,505.3 (39.6)% Operating expenses 44.3 54.1 (18.1)% 168.7 196.2 (14.0)% EBITDA* 181.2 325.2 (44.3)% 739.9 1,309.1 (43.5)% EBITDA as a percentage of revenues 80.4%
Slide 26: 2020 comparative restated figures
2020 comparative restated figures1 To reflect discontinued operations related to the O&G business Q1 2020 Q2 2020 Q3 2020 Q4 2020 (in thousands of $) (as disclosed) Resources Revenue (continuing operations) 65,239 (13,701) 57,687 53,691 Resources Segment Adjusted EBIT* (continuing operations) (1,921
Slide 27: Reconciliation of net income from continuing operations to adjusted net income
Reconciliation of net income from continuing operations to adjusted net income Net income Impairment loss (loss) from on Adjusted net Amortization of Fair value continuing remeasurement Adjustment on income (loss) intangible revaluation of Adjustment to Guaranteed Loss on operations of assets of gai