Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q2 2021 Earnings Presentation
25 slides from Atkinsrealis's earnings presentation, Jul 30, 2021
Slide 1: Q2 Conference Call Presentation
Q2 C ON FER EN CE C ALL PRESEN TATION J U LY 3 0 , 2 0 2 1 Sydney Metro - Western Sydney Airport project Sydney, Australia
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 PERFORMANC 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 Reaffirming 2021 Outlook SNCL Engineering Services SNCL Projects backlog for SNCL Engineering delivers solid Q2 results continues to decrease Services, reflecting current currency rates › Revenue of $1.5B increased by › LSTK construction contracts › Revenue to increase by a low- 2.4%, or 6
Slide 5: Strategic Priorities
5 Strategic Priorities Closing the Running off LSTK Driving consistent Building a Positioned for Oil & Gas sale projects performance in connected growth and a successfully Engineering collaborative sustainable future Services organization Positioning SNC-Lavalin for long-term sustainable success and
Slide 6: Engineering a sustainable society
6 Engineering a sustainable society Growing portfolio of Net Zero work advising clients across energy, infrastructure and transportation sectors › Award from UK Gov Property Agency to help deliver Net Zero targets › Ensuring that over 4M sq. ft. of public sector office space meet enhanced sustainabi
Slide 7: EDPM
7 EDPM Revenues ($M) Segment Adjusted EBIT* ($M) Backlog Up 0.2% as reported and +5.3% on a constant currency basis1* 8.4% 9.1% 934 935 85 $3.0B 79 (+12% YoY) Q2 2020 Q2 2021 Q2 2020 Q2 2021 Segment Adj. EBIT to segment revenue ratio* (%) Q2 Key highlights › Strong performance across all regions, pa
Slide 8: Nuclear
8 Nuclear Revenues ($M) Segment Adjusted EBIT* ($M) Up 6.1% as reported and +9.6% on a constant currency basis1* 14.0% 14.2% 221 235 31 33 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Segment Adj. EBIT to segment revenue ratio* (%) Q2 Key highlights › Strong revenue growth driven by increased support of assets f
Slide 9: Infrastructure Services
9 Picture to be included Infrastructure Services Revenues ($M) Segment Adjusted EBIT* ($M) Up 6.3% as reported and +9.2% on a constant currency basis1* 7.3% 7.9% 315 334 23 26 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Segment Adj. EBIT to segment revenue ratio* (%) Q2 Key highlights › Revenue growth driven by
Slide 10: Capital
10 Capital Revenues ($M) Segment Adjusted EBIT* ($M) 22 20 18 16 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 Key highlights › H407 ETR traffic increased sequentially from Q1 and by 52% YoY; progress of the vaccine roll-out in Ontario led to gradual easing of restrictions › Other concessions performing well ›
Slide 11: Infrastructure EPC Projects
11 Infrastructure EPC Projects Revenues ($M) Segment Adjusted EBIT* ($M) LSTK Backlog 183 233 -19 -22 $1.3B (-45% YoY) Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 Key highlights › Remaining 3 LSTK projects continue to progress well › LSTK construction contracts backlog down by ~13% vs end of March › Loss due
Slide 12: Resources
12 Resources Revenues ($M) Segment Adjusted EBIT* ($M) 1 41 -72 -14 Q2 20201 Q2 2021 Q2 20201 Q2 2021 Q2 Key highlights › Mining business performed well; strong growth potential › Significant progress made towards the closing of the O&G business sale › Closed the sale of a substantial portion (i.e.,
Slide 13: Financial Performance
FIN A N C IA L PERFORMANC E JEFF BELL, CHIEF FINANCIAL OFFICER
Slide 14: Q2 Selected financial metrics
14 Q2 Selected financial metrics SNCL Engineering Services (in M$, unless otherwise indicated) Q2 2021 Q2 20201 Change EDPM Infra Services Nuclear Revenues 1,798 1,660 8% Segment Adjusted EBIT* 140 59 137% Revenues Corporate SG&A expenses (27) (18) 50% $1,470M $1,504M Net income (loss) from continui
Slide 15: Balance sheet and Days Sales Outstanding (DSO)
15 Balance sheet and Days Sales Outstanding (DSO)* Selected balance sheet items Days sales outstanding* (EDPM) As at March 31, 2021 As at June 30, 2021 $1,396M 1,397M 71 68 64 61 58 $703M $663M Cash and cash Recourse debt and Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 equivalents limited recourse debt
Slide 16: Free cash flow
16 Free cash flow (in M$, unless otherwise indicated) Q2 2021 Segment Adjusted EBIT from SNCL Engineering Services* 145 Segment Adjusted EBITDA from SNCL Engineering Services* 177 Change in working capital and other items from SNCL Engineering Services1 (20) Operating cash flow from operations from
Slide 17: SNCL Engineering Services Outlook
17 SNCL Engineering Services Outlook1 Metric 2021 Outlook SNCL Engineering Services revenue growth Low single digit percentage SNCL Engineering Services Segment Adjusted EBIT to segment revenue ratio* Between 8% and 10% Metric Targets Segment adjusted EBIT to segment revenue ratio* • EDPM 8% to 10%
Slide 18: Conclusion
18 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 19: Conclusion
19 Conclusion › Solid financial results for SNCL Engineering Services during first half of the year › LSTK projects progressing well; backlog continued to decrease › Strong pipeline of new work across all our core geographies driven by governments spending in Infrastructure and low-carbon assets › R
Slide 20: Questions & Answers
) SNC-LAVALIN Ye Ug ouc-an. & ANSWERS
Slide 21: Appendix
A PPEN D IX
Slide 22: Remaining LSTK projects in SNCL Projects backlog
22 Remaining LSTK projects in SNCL Projects backlog Expected Approximate substantial Backlog as at Project Country Completion % June 30, 2021 Client completion (SNCL portion) ($M) year M&M Project #1 MENA ~90% 2021 <50 Confidential REM (LRT) Canada ~55% 2024 <700 CDPQ Infra Trillium (LRT) Canada ~55
Slide 23: SNCL Projects Backlog phasing
23 SNCL Projects Backlog phasing 1,000 Infrastructure EPC projects Resources 900 800 700 600 (in $M) 500 400 300 200 100 0 2021 (Last 6 months) 2022 2023 2024 Expected annual conversion to Revenue
Slide 24: 407 ETR Information
24 407 ETR Information (in $M, unless otherwise indicated) Q2 2021 Q2 2020 Change Revenues 212.2 129.6 63.7% Operating expenses 32.8 36.2 (9.4)% EBITDA* 179.4 93.4 92.1% EBITDA as a percentage of revenues* 84.5% 72.1% +12.4% Net income (loss) 24.7 (46.9) n.a. Traffic / Trips (in millions) 16.3 10.7
Slide 25: Reconciliation of IFRS net income (loss) from continuing operations to adjusted net income from PS&PM
25 Reconciliation of IFRS net income (loss) from continuing operations to adjusted net income from PS&PM Q2 2021 Q2 20201 In $M Per diluted EPS in $ In $M Per diluted EPS in $ Net income (loss) attributable to SNC-Lavalin shareholders from continuing 29.2 0.17 (25.3) (0.14) operations (IFRS) Restruc