Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q2 2016 Earnings Presentation
26 slides from Atkinsrealis's earnings presentation, Aug 4, 2016
Slide 1: Second Quarter 2016 Conference Call Presentation
› Second Quarter 2016 › Conference Call Presentation › August 4th, 2016
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: Q2 2016 results
Q2 2016 results › Q2 2016 adjusted net income from E&C of $71.4 million, or $0.48 per diluted share › “STEP Change” program resulted in 10.1% reduction in Q2 2016 SG&A expenses, building upon the 18.7% reduction in Q1 › “Operational Excellence” program progressing well and expected to further improv
Slide 5: Oil & Gas
Oil & Gas A ~$4B revenue business with ~20,500 employees TTM Revenues $4.0B 7.9% EBIT margin in Q2 2016 Sustainable backlog Backlog remains over $4B Contract awards for engineering consultancy and support services in Qatar Contract award for an EPC of an asphalt production facility in Saudi Arabia M
Slide 6: Mining & Metallurgy
Mining & Metallurgy A ~$500M revenue business with ~2,000 employees TTM Revenues $0.5B Sustainable backlog $100M new awards in Q2 2016 Contract awards for two potash projects in Quebec and Utah Contract award for a pre-feasibility study in the gold sector in Colombia Backlog (in M$) YTD 2016 Revenue
Slide 7: Power
Power A ~$2B revenue business with ~3,500 employees TTM Revenues $1.7B Sustainable backlog $200M new awards in Q2 2016 Contract award for nuclear life extension project in Argentina Contract awards for two nuclear services at the Darlington Nuclear Generating Station in Ontario Contract award for th
Slide 8: Infrastructure (I&C + O&M)
Infrastructure (I&C + O&M) A ~$3B revenue business with ~10,000 employees TTM Revenues $2.7B New awards in Q2 2016 of $500M TTM EBIT margin continues to improve (profitable in I&C for four quarters in a row) Agreement reached to sell the real estate facilities management business in Canada for $45M
Slide 9: Capital
Capital 17 Investments The new structure for our North American concession investments continues to progress well, but complexity around the assets made this slip from Q2 to Q3 Announcement now expected in Q3 407 ETR continues to deliver very good results (see appendix) New one-day trips record Reve
Slide 10: Financial performance summary
Financial performance summary E&C Capital Total Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Revenues 2,045 2,192 58 58 2,103 2,250 SG&A 190 218 11 6 201 224 EBITDA, adjusted 118 49 43 48 161 97 EBITDA margin 5.8% 2.2% n/a n/a 7.6% 4.3% Net income, as reported 53 (18) 36 45 89 27 Net income, adju
Slide 11: E&C segment EBIT – Q2 2016 vs Q2 2015
E&C segment EBIT – Q2 2016 vs Q2 2015 (in M$) Decrease mainly due to lower volume +6 of activity, partially offset by increased 80 71 GM% (close out process on certain +4 major int’l projects) 65 60 Lower SG&A and higher volume of activity and GM% on projects excl. 40 +57 Valerus, partially offset b
Slide 12: Sustainable and diversified revenue backlog
Sustainable and diversified revenue backlog As at June 30, 2016 (in B$) By Category and Segment 16 12 45% 55% 8 Reimbursable Fixed-price 4 2% 16% 0 32% June 15 Sept. 15 Dec. 15 March 16 June 16 O&G I&C Power O&M M&M 23% 27% O&G I&C Power O&M M&M 12
Slide 13: Operating Cash Flow Q2 YTD
Operating Cash Flow Q2 YTD Improved cash flow from operations 2015 2016 (in M$) Cash Balance as December 31, 2015 1,582 Cash flow from operations (322) (322) Inflow on disposals of Capital investments 102 Capital expenditures (58) +$604M Net increase in receivables from long- term concession arrange
Slide 14: Financial position
Financial position (in M$) June 30, 2016 December 31, 2015 Assets Cash and cash equivalent 1,064 1,582 Other current assets 3,543 3,616 Property and equipment 273 265 Capital investments accounted for by the equity or cost methods 435 468 Goodwill 3,138 3,387 Intangible assets related to Kentz acqui
Slide 15: Outlook
Outlook › We expect that the Oil & Gas and Power segments will be the main contributors to net income, while Mining & Metallurgy will likely be the smallest contributor to net income. › We also expect that the Infrastructure & Construction sub-segment will return to full year profitability in 2016.
Slide 16: Questions & Answers
Questions & Answers
Slide 17: Appendix
Appendix
Slide 18: SNC-Lavalin's capital allocation priorities
SNC-Lavalin’s capital allocation priorities 1. ORGANIC INVESTMENTS Investments to support our E&C Investments in Capital core business, drive profitable investments which will act as organic growth/improve margins catalyst for E&C revenues 2. DIVIDENDS SNC-Lavalin has increased its yearly dividend p
Slide 19: 407 ETR information – Q2
407 ETR information – Q2 (in M$, unless otherwise indicated) Q2 2016 Q2 2015 Change Revenues 290.8 257.2 13.1% Operating expenses 33.4 31.3 6.7% EBITDA 257.4 225.9 13.9% EBITDA as a percentage of revenues 88.5% 87.8% 0.7% Net Income 94.4 76.6 23.2% Traffic / Trips (in millions) 32.5 31.5 3.2% Averag
Slide 20: 407 ETR information
407 ETR information Year ended December 31 2015 2014 Change (in M$) Revenues 1,002.2 887.6 12.9% Operating expenses 162.2 151.9 6.8% EBITDA 840.0 735.7 14.2% EBITDA as a percentage of revenues 83.8% 82.9% 0.9% Net income 311.2 222.9 39.6% Total Revenues / EBITDA Toll revenues (in M$) (in M$) 916 EBI
Slide 21: 407 ETR information
407 ETR information 730 750 680 Gross Vehicle Kilometres Travelled Dividends 600 (in millions - km) (in M$) 460 Dividends received 2,517 by SNC-Lavalin 2,437 300 Dividends paid by 2,336 2,326 2,340 2,356 407 ETR 2,253 2,253 190 2,215 145 135 120 114 122 126 2,124 85 77 101 2,064 32 50 14 24 20 23 20
Slide 22: Diversity of revenue base – by segment
Diversity of revenue base – by segment (in B$) YTD 2016 2015 (6 Months) (12 Months) 3% 2% $0.1 $0.2 5% $0.8 $0.2 $0.2 8% $0.8 19% $1.2 19% $0.8 43% 41% $1.8 $1.8 $3.9 $3.9 30% $1.2 30% $1.8 $2.9 O&G O&G Infrastructure (I&C + O&M) Infrastructure (I&C + O&M) Power Power M&M M&M Capital Capital YTD 201
Slide 23: Diversity of revenue base – by geography
Diversity of revenue base – by geography 2015 2014 6% 15% 13% 7% 22% 52% 7% 67% 5% 6% North America North America Latin America Latin America Europe Europe Middle East & Africa Middle East & Africa Asia-Pacific Asia-Pacific 2015 Revenues $9.6 billion 23
Slide 24: Capital investments portfolio
Capital investments portfolio Name Description Held Concession Location Equity Since Years Participation Highways, Bridges & Rail 1. Highway 407 108 km electronic toll road 1999 99 Canada (Ontario) 16.77% 2. InTransit BC Rapid transit line 2005 35 Canada (B.C.) 33.3% 3. Okanagan Lake Floating bridge
Slide 25: Net income reconciliation – Q2
Net income reconciliation – Q2 (in M$, except per share amount) Net Income, Net charges Acquisition of Kentz One-time net Net gain on Net income, as reported related to the foreign Capital adjusted restructuring exchange gain Investment and right-sizing Acquisition- Amortization of disposals plan an
Slide 26: Net income reconciliation – YTD 2016
Net income reconciliation – YTD 2016 (in M$, except per share amount) Net Income, Net charges Acquisition of Kentz One-time net Net gain on Net income, as reported related to the foreign Capital adjusted restructuring exchange gain Investment and right-sizing Acquisition- Amortization of disposals p