Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q1 2023 Earnings Presentation
21 slides from Atkinsrealis's earnings presentation, May 9, 2023
Slide 1: Q1 Conference Call Presentation
Q1 CONFERENCE CALL PRESENTATION May 9, 2023
Slide 2: Forward-Looking Statements, Forward-Looking Financial Information and Outlook
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 SNC-
Slide 3: Strong Start to the Year
Strong Start to the Year › “Pivoting to Growth” strategy continues delivering results › SNCL Services revenues and Segment Adjusted EBIT increased significantly year-over-year by 10.8% and 23.4%, respectively › SNCL Services backlog reached $12.1B1, a new record-high › LSTK Projects progressing in l
Slide 4: SNCL Services Backlog
NEOM’s flagship urban development “THE LINE”, SNCL Services Backlog Saudi Arabia In $M 12,079 +8% 11,834 11,664 11,306 11,182 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Q1 KEY WINS › Delivery Partner role for THE LINE, NEOM’s flagship urban development in Saudi Arabia › Nuclear
Slide 5: Engineering Services
Engineering Services Organic revenue growth* REVENUES ($M) BACKLOG ($M) 17.5% +25% 1,344 4,837 1,138 3,861 Q1 2022 Q1 2023 Mar 31, 2022 Mar 31, 2023 PROFITABILITY ($M) Segment Adjusted EBIT Segment Adjusted EBITDA** (% of segment revenues) (% of segment net revenues*) 14.0% 8.4% 13.0% 7.5% 114 142 1
Slide 6: Engineering Services Q1 Key Highlights
Engineering Services Q1 Key Highlights UK & Europe › Well positioned to capitalize on increased government spend in the defence and energy markets › Strong win rate, organic revenue growth, and backlog increase › Key wins include program for rail upgrades in the south of England over the next 5 year
Slide 7: Nuclear
Nuclear Darlington SMR, Canada Organic revenue growth* REVENUES ($M) BACKLOG ($M) 4.6% +23% 986 232 244 802 Q1 2022 Q1 2023 Mar 31, 2022 Mar 31, 2023 SEGMENT ADJUSTED EBIT ($M) (% of segment revenues) 14.8% 13.4% 34 33 Q1 2022 Q1 2023 Darlington GEH BWRX-300 Small Modular Reactor Ontario, Canada *Or
Slide 8: Nuclear Q1 Key Highlights
Nuclear Q1 Key Highlights Sizewell C, UK New Builds › Ongoing discussions on Romania’s Cernavoda CANDU® C3 & C4 new reactors › Advancing on EDF Hinkley Point C project and early works for Sizewell C in UK › OPG Darlington New Nuclear SMR project (Canada) started in January and good progress on Rolls
Slide 9: O&M and Linxon
O&M and Linxon Organic revenue contraction* Revenues ($M) Segment Adjusted EBIT ($M) Q1 Key Highlights (% of segment revenues) › Preparation well advanced in readiness for 8.6% (9.3)% Eglinton, Trillium and REM south shore moving 7.5% into operations in 2023 O&M 137 12 › Developing opportunities to
Slide 10: LSTK Projects and Capital
LSTK Projects and Capital Revenues ($M) Segment Adjusted EBIT ($M) Q1 Key Highlights -9 › Ontario projects’ commissioning and testing on track and REM progressing well -31 LSTK Projects 214 › Continuing to pursue all claims receivables 171 › Backlog decreased by 46% since Q1 2022 to $518M as at Marc
Slide 11: Financial Performance
FINANCIAL PERFORMANCE 11
Slide 12: Q1 Selected Financial Metrics
Q1 Selected Financial Metrics SNCL Services (in M$, except otherwise indicated) Q1 2023 Q1 2022 Change Engineering Services O&M Nuclear Linxon Revenues PS&PM 2,007 1,872 7% REVENUES ($M) Capital 16 16 0% 1,836 1,657 Total Revenues 2,023 1,888 7% Segment Adjusted EBIT – Total 159 109 46% Corporate SG
Slide 13: Leverage and DSO
Leverage and DSO* NET LIMITED RECOURSE & RECOURSE DEBT TO ADJUSTED EBITDA DAYS SALES OUTSTANDING (DSO)* FROM THE ENGINEERING RATIO** RECONCILIATION SERVICES SEGMENT (in M$, except otherwise indicated) March 31 2023 Limited recourse debt 400 Recourse debt 1,610 Cash and cash equivalents (561) 65 62 6
Slide 14: Free Cash Flow
Free Cash Flow* (in M$) Q1 2023 Segment Adjusted EBITDA* from SNCL Services 190 Change in working capital and other items from SNCL Services (95) Net cash generated from operating activities - SNCL Services** 94 Income taxes paid (26) Interest paid (from PS&PM) (35) Corporate costs and other items1
Slide 15: Conclusion
CONCLUSION 15
Slide 16: Conclusion
Conclusion › Robust results in SNCL Services showcase the strength of our businesses and “Pivoting to Growth” strategy › LSTK Projects are progressing in line with expectations and related claim recoveries continue to be pursued › Focus on delivering consistent earnings and cash flow › Continue winn
Slide 17: Questions & Answers
QUESTIONS & ANSWERS 17
Slide 18: Appendix
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Slide 19: 2023 Outlook
2023 Outlook 2023 Target 2022 Actual SNCL Services organic revenue growth* Between 5% and 7% 6.8% SNCL Services Segment Adjusted EBIT to segment revenue ratio Between 8% and 10% 8.7% Segment Adjusted EBITDA to segment net revenue ratio* - Engineering Services Between 14% and 16% 14.6% Corporate sell
Slide 20: Financial Targets (2022-2024)
Financial Targets (2022-2024)1 2022-2024 Target 2022 Actual SNCL Services organic revenue growth* (annually) Between 4% and 6% 6.8% SNCL Services Segment Adjusted EBIT to segment revenue ratio (annually) Between 8% and 10% 8.7% Engineering Services Between 8% and 10% 8.5% Nuclear Between 13% and 15%
Slide 21: Endnotes
Endnotes (See also the cautionary statement regarding non-IFRS financial measures and ratios, supplementary financial measures and non-financial information at slide 2 of this presentation.) 1. Organic revenue growth (contraction) is a non-IFRS ratio comparing organic revenue, itself a non-IFRS fina