Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — Q1 2021 Earnings Presentation
24 slides from Atkinsrealis's earnings presentation, May 14, 2021
Slide 1: Q1 Conference Call Presentation
Q1 C ON FER EN CE C ALL PRESEN TATION M AY 1 4 , 2 0 2 1 John Hart Dam Hydro Station British Columbia, Canada
Slide 2: Forward-Looking Statements, Forward-Looking Financial Information and Outlook
2 Forward-Looking Statements, Forward-Looking Financial Information and Outlook 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 SN
Slide 3: Business Performance
B U SIN ESS PERFORMAN C E I AN E D WAR D S , P R E S I D E N T & C E O
Slide 4: Summary
4 Summary SNCL Engineering Services SNCL Project backlog 2021 Outlook for SNCL delivers solid Q1 results continues to decrease Engineering Services maintained › Revenues of $1.5B with Segment › LSTK construction contracts Adjusted EBIT margin of 8.8% backlog reduced by $242M in Q1 › Bookings of $1.7
Slide 5: EDPM
5 EDPM Revenues Segment Adjusted EBIT* Backlog 6.1% 8.6% $945M $933M $81M $2.9B $58M (+10% YoY) Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 Key highlights › Strong performance across Canada, USA and the UK › Actions to reduce cost base, mainly in Middle-East, increasing margins › Backlog at 3-year high and b
Slide 6: Nuclear
6 Nuclear Revenues Segment Adjusted EBIT* 15.5% 13.9% $237M $229M $37M $32M Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 Key highlights › Continued growth in new build support in the UK › Further opportunities for reactor engineering, field service work, decommissioning and waste management › Continuing to ex
Slide 7: Infrastructure Services
7 Infrastructure Services Revenues Segment Adjusted EBIT* 4.9% 5.8% $353M $353M $17M $20M Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 Key highlights › Improved profitability in O&M and health services › Developing opportunities in non-LSTK major project delivery services in the rail & transit and social infr
Slide 8: Capital
8 Capital Revenues Segment Adjusted EBIT* $46M $42M $22M $19M Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 Key highlights › No dividend received in Q1 2021 for Highway 407 ETR › Highway 407 traffic volumes decreased by approximately 45% › Other concessions continue to perform well › Pipeline of opportunities
Slide 9: Infrastructure EPC Projects
9 Infrastructure EPC Projects Revenues Segment Adjusted EBIT* LSTK Backlog $222M $226M $4M $1.5B -$11M (-40% YoY) Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 Key highlights › Remaining 3 LSTK projects continue to progress well › LSTK construction contracts backlog down by ~12% vs end of December › Lower gros
Slide 10: Resources
10 Resources Revenues Segment Adjusted EBIT* $2M $65M $57M -$2M Q1 20201 Q1 2021 Q1 20201 Q1 2021 Q1 Key highlights › Closing of the O&G sale transaction continues to be targeted for Q2 2021 › Lower Revenue driven by remaining LSTK project approaching completion › Growth in Revenue and profitability
Slide 11: Our vision for engineering a sustainable society
11 Our vision for engineering a sustainable society Net Zero Carbon 2030 Key ESG Objectives Set annual targets, externally verified, with ED&I Integrity & Governance annual updates published via the Carbon › Increasing diversity & social inclusion Disclosure Project › Increasing representation of wo
Slide 12: Financial Performance
FIN A N C IA L PERFORMAN C E JEFF BELL, CHIEF FINANCIAL OFFICER
Slide 13: Q1 Selected financial metrics
13 Q1 Selected financial metrics SNCL Engineering Services (in M$, unless otherwise indicated) Q1 2021 Q1 20201 Change EDPM Infra Services Nuclear Revenues 1,820 1,869 (3)% Segment Adjusted EBIT* 143 155 (8)% Revenues Corporate SG&A expenses 16 37 (57)% $1,535M $1,515M Net income from continuing ope
Slide 14: Balance sheet and Days Sales Outstanding (DSO)
14 Balance sheet and Days Sales Outstanding (DSO)* Selected balance sheet items Days sales outstanding* As at December 31, 2020 As at March 31, 2021 (EDPM) $1,571M $1,396M 73 71 68 64 61 $933M $703M Cash and cash Recourse debt and Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 equivalents limited recourse
Slide 15: Free cash flow
15 Free cash flow (in M$, unless otherwise indicated) Q1 2021 Segment Adjusted EBIT from SNCL Engineering Services* 133 Segment Adjusted EBITDA from SNCL Engineering Services* 165 Change in working capital and other items from SNCL Engineering Services1 (47) Operating cash flow from operations from
Slide 16: SNCL Engineering Services Outlook
16 SNCL Engineering Services Outlook1 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
Slide 17: Conclusion
17 C ON C LU SION I AN E D WAR D S , P R E S I D E N T & C E O
Slide 18: Conclusion
18 Conclusion › Good start of the year with strong results › Strong pipeline of new work across all of our core geographies as governments continue investing in projects › Well positioned for growth and a sustainable future › Enhanced ESG targets with launch of ‘Our vision for a sustainable society’
Slide 19: Questions & Answers
QU ESTION S & ANSWERS
Slide 20: Appendix
A PPEN D IX
Slide 21: Remaining LSTK projects in SNCL Projects backlog
21 Remaining LSTK projects in SNCL Projects backlog Expected Approximate substantial Backlog as at Project Country Completion % March 31, 2021 Client completion (SNCL portion) ($M) year M&M Project #1 MENA ~85% 2021 <50 Confidential REM (LRT) Canada ~50% 2024 <750 CDPQ Infra Trillium (LRT) Canada ~4
Slide 22: SNCL Projects Backlog phasing
22 SNCL Projects Backlog phasing Infrastructure EPC projects Resources 1,000 900 800 700 600 (in $M) 500 400 300 200 100 0 2021 (Last 9 months) 2022 2023 2024 Expected annual conversion to Revenue
Slide 23: 407 ETR Information
23 407 ETR Information (in M$, unless otherwise indicated) Q1 2021 Q1 2020 Change Revenues 169.1 287.8 -41.2% Operating expenses 38.4 49.1 -21.8% EBITDA* 130.7 238.7 -45.2% EBITDA as a percentage of revenues 77.3% 82.9% -565 bps Net income 3.7 114.5 -96.8% Traffic / Trips (in millions) 13.1 23.5 -44
Slide 24: Reconciliation of IFRS net income from continuing operations to adjusted net income from PS&PM
24 Reconciliation of IFRS net income from continuing operations to adjusted net income from PS&PM Q1 2021 Q1 20201 In $m Per diluted EPS in $ In $m Per diluted EPS in $ Net income from continuing operations attributable to SNC-Lavalin 67.7 0.39 0.9 0.01 shareholders (IFRS) Restructuring and transfor