Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q4 2018 Earnings Presentation
26 slides from Atkinsrealis's earnings presentation, Feb 22, 2019
Slide 1: Fourth Quarter 2018 Conference Call Presentation
Federal Way Link Extension › Fourth Quarter 2018 › Conference Call Presentation › February 22nd, 2019
Slide 2: Forward-looking statements; Non-IFRS financial measures
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 3: Q4 2018 – Neil Bruce, President and CEO
Q4 2018 Neil Bruce, President and CEO Dubai Opera 3
Slide 4: Q4 2018 main segment highlights
Q4 2018 main segment highlights Mining & Metallurgy › Negative Segment EBIT of $349M › $346M loss on one major lum-sum EPC project › Expect significant recoveries in the future › Project loss mainly due to unexpected site conditions, greater than expected environmental and safety measures, and under
Slide 5: Q4 2018 main segment highlights
Q4 2018 main segment highlights Clean Power, Nuclear, Thermal Power › Clean Power › Backlog* of $900M › 10% increase vs September 30, 2018 › more than tripled, compared to $259M at December 31, 2017 › 1.6 book-to-bill ratio in Q4 2018 › Nuclear › Segment EBIT of $39M with a 16% margin › ~35% of Nucl
Slide 6: Q4 2018 main segment highlights
Q4 2018 main segment highlights EDPM › $2.4B of backlog* – $0.9B of new awards in Q4 2018 ($3.6B new awards in 2018) › Selected as prime consultant to provide construction engineering and inspection services for a bridge in Tampa, Florida › Aurora Engineering Partnership, which includes Atkins, has
Slide 7: Q4 2018 – Sylvain Girard, EVP and CFO
Q4 2018 Sylvain Girard, EVP and CFO John Hart Generating Station Replacement 7
Slide 8: Q4 2018 financial performance (vs Q4 2017)
Q4 2018 financial performance (vs Q4 2017) YTD Adjusted net income in line with Corporate SG&A revised guidance issued on February 11, › Q4 2018 included a $25M non-cash Guarantee Minimum Pension (GMP) equalization expense for past service costs (included in Q4 2019 adjustments) › YTD adjusted net i
Slide 9: E&C segment EBIT – Q4 2018 vs Q4 2017
E&C segment EBIT – Q4 2018 vs Q4 2017 -26 (in M$) -121 Due to a Q418 forecasted loss of M&M ~$346M on a major EPC project in +8 -$352M Latin America (refer to the Company’s +8 119 Jan. 28 and Feb. 11, 2019 press 125 98 -4 releases. -352 93 +41 31 39 32 40 Mainly due to a Q418 unfavorable O&G impact
Slide 10: 2018 Operating Cash Flow
2018 Operating Cash Flow Improved cash flow from operations Cash Balance as December 31, 2017 707 (in M$) Q1 Q2 Q3 Q4 YTD Cash flows from operations (304) 376 Capital expenditures (153) Net increase in receivables from long-term concession arrangements (61) 16 Increase in recourse debt 2,609 (82) (6
Slide 11: Capital structure and debt ratios
Capital structure and debt ratios Dec. 31 Limited recourse debt $980B (in M$, unless otherwise indicated) 2018 Net recourse debt 1,657 Unused capacity under the $2.6B committed revolving credit facility $2.1B TTM adjusted EBITDA 582 Cash and cash equivalents $634M Less: TTM interest on limited recou
Slide 12: Outlook
Outlook 2019 Guidance Adjusted EBITDA from E&C1,2 $900M - $950M Adjusted diluted EPS from E&C1,2 $2.00 - $2.20 Adjusted consolidated diluted EPS 1,2 $3.00 - $3.20 Effective tax rate on adjusted E&C earnings ~20% Weighted average number of shares ~175.8M On a quarterly basis, the Company expects that
Slide 13: Questions & Answers
Questions & Answers
Slide 14: Appendix
Appendix
Slide 15: 2017 restated figures (1 of 2)
2017 restated figures1,2 (1 of 2) On a comparable basis with our new 2018 structure3 (in thousands of $) Segment Q1 2017 Q2 2017 Q3 2017 Q4 2017 Total EBIT % Mining & Metallurgy Revenues 101,411 94,827 106,957 129,609 432,804 Segment EBIT 5,072 6,557 833 3,467 15,929 3.7% Oil & Gas Revenues 856,545
Slide 16: 2017 restated figures (2 of 2)
2017 restated figures1,2 (2 of 2) On a comparable basis with our new 2018 structure3 (in thousands of $) Segmen Q1 2017 Q2 2017 Q3 2017 Q4 2017 Total t EBIT % EDPM (Engineering, Design and Project Management) Revenues 39,575 43,187 715,403 893,743 1,691,908 Segment EBIT 2,529 2,978 60,586 118,775 18
Slide 17: 407 ETR
407 ETR Consistent growth and low cost of financing 920 845 790 Gross Vehicle Kilometres Travelled Dividends 730 750 680 (in millions – KM) 2,709 2,748 (in M$) 600 2,641 Total dividends paid 460 by 407 ETR 2,517 2,437 Dividends received by SNC-Lavalin 2,336 2,326 2,340 2,356 300 2,253 190 2,215 142
Slide 18: 407 ETR information – Q4
407 ETR information – Q4 (in M$, unless otherwise indicated) Q4 2018 Q4 2017 Change Revenues 356.6 327.3 8.9% Operating expenses 54.0 43.0 25.6% EBITDA 302.6 284.3 6.4% EBITDA as a percentage of revenues 84.9% 86.9% (2.0%) Net Income 155.9 114.9 35.7% Traffic / Trips (in millions) 32.1 32.1 0.0% Ave
Slide 19: 407 ETR information – full year
407 ETR information – full year (in M$, unless otherwise indicated) 2018 2017 Change Revenues 1,390.3 1,267.7 9.7% Operating expenses 179.7 163.9 9.6% EBITDA 1,210.6 1,103.8 9.7% EBITDA as a percentage of revenues 87.1% 87.1% - Net Income 539.0 470.1 14.7% Traffic / Trips (in millions) 126.6 125.7 0
Slide 20: Revenues by industry segment
Revenues by industry segment 2017 2018 Capital Capital Thermal Power Thermal Power Mining & Metallurgy Mining & Metallurgy Oil & Gas 2% Oil & Gas Clean Power 4% 3% Clean Power 4% 5% 1% 4% 5% Nuclear 2 25% Nuclear 9% 8% 37% 1 $9.3B $10.1B 18% EDPM 32% 22% 21% EDPM Infrastructure Infrastructure 74% 26
Slide 21: Revenues by geographic area
Revenues by geographic area 2017 2018 11% 20% $0.8 14% Americas 1 Middle East & Africa $9.3B 7% 49% 52% Asia Pacific $10.1B CAN 31% $3.9CAN 29% USA 17% Europe USA 17% Latam 3% Latam 4% 23% 24% $1.8 1Only includes 6 months of Atkins revenues, as it was acquired on July 3, 2017. 21
Slide 22: Backlog by industry segment
Backlog by industry segment December 31, 2018 Capital Mining & Metallurgy Oil & Gas Clean Power 1% Nuclear 3% 10% 6% 8% 73% Reimbursable & Engineering Service Contracts EDPM 16% $14.9B 27% EPC Fixed- price Contracts 56% Infrastructure Effective January 1, 2018, the Company’s definition of backlog ha
Slide 23: Financial position
Financial position (in M$) December 31 December 31 2018 2017 Assets Cash and cash equivalents 634 707 Other current assets 4,024 3,908 Property and equipment 483 414 Capital investments accounted for by the equity or cost methods 368 352 Goodwill 5,370 6,323 Intangible assets related to business com
Slide 24: Net income reconciliation – Q4
Net income reconciliation – Q4 Net Net charges Acquisition Amortization Net loss Net expense Impact of Non-cash Non-cash Adjusted Income (reversal) -related of intangible (gain) on for the 2012 U.S. goodwill Guaranteed Net income (IFRS) related to costs and assets related disposals class action corp
Slide 25: Net income reconciliation – full year
Net income reconciliation – full year Net Net charges Acquisition Amortization Net loss Net expense Impact of Non-cash Non-cash Adjusted Income (reversal) -related of intangible (gain) on for the 2012 U.S. goodwill Guaranteed Net income (IFRS) related to costs and assets related disposals class acti
Slide 26: Our values are the essence of our company's identity
Our values are the essence of our company’s identity. They represent how we act, speak and behave together, and how we engage with our clients and stakeholders. We put safety at the heart of everything we do, to safeguard people, assets and the environment. We do the right thing, no matter what, and