Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q4 2016 Earnings Presentation
27 slides from Atkinsrealis's earnings presentation, Mar 2, 2017
Slide 1: Fourth Quarter 2016 Conference Call Presentation
› Fourth Quarter 2016 › Conference Call Presentation › March 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: 2016 Retrospective
2016 Retrospective What we said What we did Adjusted diluted EPS from E&C Guidance › March 2016 $1.50 - $1.70 $1.51 › September 2016 $1.30 - $1.60 Total SG&A year-over-year savings of $100M $132M 2016 Operating cash flow slightly positive or flat +$106M Disposal of France and Real Estate Both sales
Slide 5: Strategic priorities
Strategic priorities 2016 2017 › Streamline our structure › Continue our progress in Operational Excellence › Focus on delivery › Become a more client-centric organization › Promote a more performance-driven › Continue building a performance-driven culture culture › Growth in our four sectors › Grow
Slide 6: 2016 results
2016 results › 2016 IFRS net income attributable to SNC-Lavalin shareholders of $255.5M, or $1.70 EPS › 2016 adjusted net income from E&C of $226.4M, or $1.51 per diluted share › 12.2% higher than 2015, due to lower SG&A, partially offset by lower gross margin › Oil & Gas, Mining & Metallurgy and Po
Slide 7: Oil & Gas
~$4B revenue business with ~21,500 Oil & Gas employees Q4 EBIT includes $28M net favorable impact on GM regarding the two projects in the Middle East mentioned in Q3. While there have been positive conclusions to some issues in Q4, discussions are still ongoing Excluding this favorable impact, Q4 EB
Slide 8: Mining & Metallurgy
~$500M revenue business with ~1,000 Mining & Metallurgy employees Backlog increased back to Q4 2015 level, awarded in Q4: - Service contract for a sulphur dioxide mitigation project in Russia - EPC contract for the replacement of an effluent treatment plant in Chile - EPC contract for the constructi
Slide 9: Power
~$1.5B revenue business with ~3,500 Power employees New award in Q4 2016: - Nuclear pre-project contract in Argentina Improved EBIT margins We see in front of us global nuclear and renewable opportunities Backlog (in B$) 2016 Revenues TTM EBIT % 3.5 8% 7.0% 2.4 45% 2.5 55% 6% 1.5 Reimbursable Fixed-
Slide 10: Infrastructure (I&C + O&M)
~$2.5B revenue business with ~6,500 Infrastructure (I&C + O&M) employees Improved EBIT margin - 2016 EBIT of 5.2% vs 2015 EBIT of 1.8% Backlog - Following the completion of the sale of its non-core Real Estate Facilities Management business in Canada and its local French operations in December 2016,
Slide 11: Capital
Portfolio of value creating assets Capital Sold three concession investments in 2016 for a net cash inflow of ~$100M Total dividends/distributions received in 2016 of $162M ($133M from 407 ETR) 407 ETR continues to deliver very good results (see appendix) - Revenues up 17.3% (Q4 over Q4) - VKT up 6.
Slide 12: Q4 Financial performance summary
Q4 Financial performance summary E&C Capital Total Q4 2016 Q4 2015 Q4 2016 Q4 2015 Q4 2016 Q4 2015 Revenues 2,146 2,590 65 56 2,211 2,646 SG&A 201 205 13 13 214 218 EBITDA, adjusted 108 145 47 41 155 186 Adjusted EBITDA margin 5.0% 5.6% n/a n/a 7.0% 7.0% Net income, as reported (38) 14 40 35 2 49 Ne
Slide 13: E&C segment EBIT – Q4 2016 vs Q4 2015
E&C segment EBIT – Q4 2016 vs Q4 2015 M&M (in M$) Mainly due to lower level of activity and -18 GM%, partially offset by lower SG&A. 140 O&G 119 120 Mainly due to lower level of activity, partially offset by a net favorable impact +1 of $28M on GM regarding two projects 101 100 under the same contra
Slide 14: A sustainable and diversified backlog
Strong Backlog Dec. 2016 $10.7B A sustainable and diversified backlog (in B$) As at Dec. 31, 2016 15.00 Reimbursable 45% 10.00 10.9 10.7 5.00 Fixed-Price 55% 0.00 Dec. 31, 2015 Dec. 31, 2016 M&M Power O&G Infrastructure O&M FM + France Non-core Real Estate Facilities Management business in Canada (O
Slide 15: 2016 Operating Cash Flow
2016 Operating Cash Flow Improved cash flow from operations 2015 2016 YTD Q1 Q2 Q3 Q4 YTD Cash Balance as December 31, 2015 1,582 240 Cash flow from operations 106 187 106 Net inflow on disposals of Capital investments and E&C businesses 78 Capital expenditures (151) (82) Payments for Capital invest
Slide 16: Outlook
Outlook › We anticipate increased Segment EBIT from Infrastructure, Oil & Gas and Power, compared to 2016, while Mining & Metallurgy should remain in line with 2016. Outlook 2017 Adjusted diluted EPS from E&C $1.70 $2.00 ($0.36 in 2014, $1.34 in 2015 and $1.51 in 2016 ) 16
Slide 17: Questions & Answers
Questions & Answers
Slide 18: Appendix
Appendix
Slide 19: 407 ETR information – Q4
407 ETR information – Q4 (in M$, unless otherwise indicated) Q4 2016 Q4 2015 Change Revenues 297.3 253.4 17.3% Operating expenses 42.2 48.6 (13.2)% EBITDA 255.1 204.8 24.6% EBITDA as a percentage of revenues 85.8% 80.8% 5.0% Net Income 98.0 74.0 32.4% Traffic / Trips (in millions) 31.7 30.8 2.9% Ave
Slide 20: 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$) 600 2,641 Total dividends paid 460 by 407 ETR 2,517 2,437 Dividends received 300 by SNC-Lavalin 2,336 2,326 2,340 2,356 2,253 2,253 190 2,215 145 120 135 114 12
Slide 21: Capital investments portfolio
Capital investments portfolio Name Description Held Concession Location Equity Since Years Participation Highways, Bridges & Rail 1. Highway 407 (407 ETR) 108 km electronic toll road 1999 99 Canada (Ontario) 16.8% 2. InTransit BC Rapid transit line 2005 35 Canada (B.C.) 33.3% 3. Okanagan Lake Floati
Slide 22: Diversity of revenue base – by segment
Diversity of revenue base – by segment (in B$) 2016 2015 4% 3% 8% 2% $0.3 $0.4 $0.2 O&G $0.8 $0.8 19% 19% Infrastructure $1.6 (I&C + O&M) 41% 44% $1.8 $3.7 Power $3.9 M&M $3.9 $2.5 Capital 30% $2.9 $1.8 30% 2016 Revenues 2015 Revenues $8.5 billion $9.6 billion 22
Slide 23: Diversity of revenue base – by geography
Diversity of revenue base – by geography (in B$) 2016 2015 5% 2% 6%$0.8 5% 19% North America 15% Middle East & Africa $3.9 Asia-Pacific 52% 52% CAN 41% Europe CAN 44% USA 11% USA 8% Latin America $1.8 22% 22% 2016 Revenues 2015 Revenues $8.5 billion $9.6 billion 23
Slide 24: Year-end financial performance summary
Year-end financial performance summary E&C Capital Total 2016 2015 2016 2015 2016 2015 Revenues 8,223 9,364 248 223 8,471 9,587 SG&A 679.0 824.6 45.1 31.1 724.1 855.6 EBITDA, adjusted 372 433 180 176 552 609 EBITDA margin 4.5% 4.6% n/a n/a 6.5% 6.4% Net income, as reported 47 96 209 308 256 404 Net
Slide 25: Solid financial position
Solid financial position (in M$) December 31 December 31 2016 2015 Assets Cash and cash equivalent 1,055 1,582 Other current assets 3,135 3,616 Property and equipment 298 265 Capital investments accounted for by the equity or cost methods 448 468 Goodwill 3,268 3,387 Intangible assets related to Ken
Slide 26: Net income reconciliation – Q4
Net income reconciliation – Q4 (in M$, except per share amount) Net Income Net charges Acquisition of Kentz One-time Net loss (gain) Net income, (loss), related to the net foreign on Capital adjusted as reported restructuring & exchange gain Investment and right-sizing plan Acquisition- Amortization
Slide 27: Net income reconciliation – full year
Net income reconciliation – full year (in M$, except per share amount) Net Income, Net charges Acquisition of Kentz One-time Net loss (gain) Net income, as reported related to the net foreign on Capital adjusted restructuring & exchange gain Investment and right-sizing plan Acquisition- Amortization