Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — Q4 2023 Earnings Presentation
26 slides from Atkinsrealis's earnings presentation, Mar 1, 2024
Slide 1: Q4 Conference Call Presentation
Q4 CONFERENCE CALL PRESENTATION March 1, 2024
Slide 2: Forward-Looking Statements, Forward-Looking Financial Information and Outlook
2 Forward-Looking Statements, Forward-Looking Financial Information and Outlook References in this presentation to the “Company”, “AtkinsRéalis”, “SNC-Lavalin”, “we”, “us” and “our” mean, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint arrangements or
Slide 3: 2023 – A Pivotal Year
3 2023 – A Pivotal Year • Proved that our Pivoting to Growth strategy is working, AtkinsRéalis Services: deliberately focusing our efforts on core end-markets and regions 20.3% 18.3% Organic revenue Revenue growth • Delivered well in excess on revenue growth target (YoY) growth* (YoY) $804M 8.9% • C
Slide 4: 2023 Accomplishments
OTHER 2023 KEY HIGHLIGHTS 4 2023 Accomplishments ▪ Propelled the company into a new era, launching AtkinsRéalis, a vibrant new brand reflecting our dynamic transformed company ▪ Launched strategic review and exited the Scandinavian 2023 Latest Targets 2023 Actuals Engineering Services business Atkin
Slide 5: Strong Q4 Results and Positive Operating Cash Flows
5 Strong Q4 Results and Positive Operating Cash Flows ▪ Robust results across our businesses and core geographies ▪ AtkinsRéalis Services revenues reached a quarterly record-high of $2.2B ▪ AtkinsRéalis Services organic revenue growth* and Segment Adjusted EBIT increased by 24.6% and 29.2%, respecti
Slide 6: AtkinsRéalis Services Backlog
6 AtkinsRéalis Services Backlog (In $M) 13,746 Q4 KEY WINS +16% ▪ AtkinsRéalis-led consortium awarded contract for CANDU® reactor life extension in Romania 12,501 12,358 ▪ Awarded Miami International 12,079 Airport design services contract to 11,834 enhance runway safety ▪ Awarded National Highways
Slide 7: Engineering Services
7 Engineering Services Organic revenue growth* REVENUES ($M) BACKLOG ($M) +26% +26% +16% +27% +24% 2023 REVENUES BY MARKET 1,569 5,897 5,431 1,243 4,686 Other 4,662 Power & Renewables Water Q4 2022 Q4 2023 2022 2023 31-Dec-22 31-Dec-23 Defence PROFITABILITY ($M) Industrial/ Segment Adjusted EBIT Seg
Slide 8: Engineering Services Q4 Key Highlights
8 Engineering Services Q4 Key Highlights Demand for our global capabilities remains strong as public entities focus on replacing an aging infrastructure with dynamic, sustainable, secure solutions for future generations UK & EUROPE UNITED STATES CANADA • Strong opportunity flow continues in Defence,
Slide 9: Nuclear
9 Nuclear 2023 REVENUES BY REGION Organic revenue growth* Other REVENUES ($M) BACKLOG ($M) +24% +17% US +98% UK & Europe +22% +14% 278 1,044 1,854 224 896 937 Canada Q4 2022 Q4 2023 2022 2023 31-Dec-22 31-Dec-23 PROFITABILITY ($M) 2023 REVENUES Segment Adjusted EBIT BY MARKET (% of segment revenues)
Slide 10: Nuclear Q4 Key Highlights
10 Nuclear Q4 Key Highlights Substantial backlog highlights our unique capabilities to serve the Nuclear renaissance through our global expertise and proprietary technologies such as CANDU® MONARK™ NEW BUILDS REACTOR SUPPORT & LIFE WASTE MANAGEMENT & • Introduced new large reactor design: CANDU® EXT
Slide 11: O&M and Linxon
11 O&M and Linxon Organic revenue growth (contraction)* REVENUES ($M) PROFITABILITY ($M) Q4 KEY HIGHLIGHTS Segment Adjusted EBIT O&M (7)% (% of segment revenues) ▪ Developing opportunities to expand O&M capabilities in the UK 9.9% 9.8% ▪ Reduction in revenues mainly due to a contract completion in Q
Slide 12: LSTK Projects and Capital
12 LSTK Projects and Capital REVENUES ($M) PROFITABILITY ($M) Q4 KEY HIGHLIGHTS LSTK Segment Adjusted EBIT Projects ▪ Commissioning and testing on Ontario Projects continue as planned -24 ▪ Continuing to pursue all claims -59 receivables 799 -150 507 -261 ▪ Backlog decreased by approx. half since Q4
Slide 13: 2024 New Operational Structure
13 2024 New Operational Structure ▪ The new structure merges the Engineering Services and O&M segments ▪ Engineering Services Regions formed: Canada, United Kingdom & Ireland (UKI), United States & Latin America (USLA), and Asia, Middle East, & Australia (AMEA) ▪ The Nuclear, Linxon, LSTK Projects a
Slide 14: Financial Performance
14 FINANCIAL PERFORMANCE
Slide 15: Q4 Selected Financial Metrics
15 Q4 Selected Financial Metrics ATKINSRÉALIS SERVICES Engineering Services O&M Nuclear Linxon (in $M, except otherwise indicated) Q4 2023 Q4 2022 Change Revenues REVENUES ($M) PS&PM 2,216 1,851 20% 2,151 Capital 64 49 31% 1,732 Total Revenues 2,280 1,900 20% Segment Adjusted EBIT – Total 232 51 355
Slide 16: 2023 Selected Financial Metrics
16 2023 Selected Financial Metrics ATKINSRÉALIS SERVICES Engineering Services O&M Nuclear Linxon (in $M, except otherwise indicated) 2023 2022 Change Revenues REVENUES ($M) PS&PM 8,496 7,440 14% 7,989 Capital 139 109 28% 6,641 Total Revenues 8,634 7,549 14% Segment Adjusted EBIT – Total 766 413 85%
Slide 17: Free Cash Flow
17 Free Cash Flow* (in $M) Q4 2023 2023 2022 Segment Adjusted EBITDA* from AtkinsRéalis Services 239 854 721 Change in working capital and other items from AtkinsRéalis Services 217 (50) (169) Net cash generated from operating activities – AtkinsRéalis Services** 456 804 552 Income taxes paid (37) (
Slide 18: Leverage and DSO
18 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) December 31, December 31, 2023 2022 Limited recourse debt 398 400 Recourse debt 1,421 1,471 Cash
Slide 19: 2024 Outlook
19 2024 Outlook1 (in $M) 2024 Targets 2023 Actuals Engineering Services Regions organic revenue growth* Between 8% and 10% 20.9% Nuclear organic revenue growth* Between 12% and 15% 14.3% Engineering Services Regions Segment adjusted EBITDA to segment net revenue ratio* Between 15% and 17% 15.0% Nucl
Slide 20: Conclusion
20 CONCLUSION
Slide 21: Conclusion
21 Conclusion ▪ 2023 was a great year, characterized by key wins across our businesses in the core geographies of Canada, the US, and the UK ▪ Record backlog highlights our long runway for growth and the significant demand for our services ▪ Strong pipeline of opportunities as clients continue to fo
Slide 22: Questions & Answers
22 QUESTIONS & ANSWERS
Slide 23: Appendix
23 APPENDIX
Slide 24: 2023 Engineering Services Regions
24 2023 Engineering Services Regions Results under the new structure effective January 1, 20241 (Engineering Services + O&M) (in $M) YEAR ENDED DECEMBER 31, 2023 Segment Segment Adjusted Adjusted EBIT to EBITDA to Q1 Q2 Q3 Q4 FY 2023 segment segment net revenue ratio revenue ratio** Canada Revenue 3
Slide 25: Financial Targets (2022-2024) (Set in 2021)
25 Financial Targets (2022-2024)1 (Set in 2021) 2022-2024 Targets 2022 Actuals 2023 Actuals AtkinsRéalis Services organic revenue growth* (annually) Between 4% and 6% 6.8% 18.3% AtkinsRéalis Services Segment Adjusted EBIT to segment revenue ratio (annually) Between 8% and 10% 8.7% 8.9% Engineering S
Slide 26: Endnotes
26 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 f