Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Corporate Update (February 2021)
19 slides from Atkinsrealis's corporate update, Feb 9, 2021
Slide 1: Strategic divestiture of O&G & LSTK litigation matters review update
Strategic divestiture of O&G & LSTK litigation matters review update Conference call presentation › February 9, 2021
Slide 2: 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 associates, or SNC-Lavalin Group Inc. or one or more of its subsidiari
Slide 3: Significant step forward in de-risking the business and accelerating strategy
Significant step forward in de-risking the business and accelerating strategy Strategic divestiture of the Resources Oil & Gas (O&G) business 1 › Significant step forward in the Company’s strategy to reduce its risk profile and accelerate its ongoing transition to becoming a leading provider of prof
Slide 4: Strategic divestiture of Resources O&G business
1 Strategic divestiture of Resources O&G business Expected benefits from transaction ✓ Simplifies Company’s corporate structure and enables management to dedicate more time, effort and resources to growing the higher margin and more stable Engineering Services business; accelerates strategy to becom
Slide 5: Resources O&G business: Transaction overview
1 Strategic divestiture of Resources O&G business Transaction overview › Entered into a binding agreement to sell its O&G business, including Services and LSTK, Resources Segment Revenues to Kentech Corporate Holdings Limited › Purchaser assumes 100% of active EPC and services contracts O&G business
Slide 6: Resources O&G business (cont'd)
1 Strategic divestiture of Resources O&G business (cont’d) Remaining Resources business Resources Backlog › Remaining Resources business will be mainly comprised of Services projects in the O&G business to be sold Mining and Metallurgy (“M&M”) sector › Three completed Resources project positions, in
Slide 7: Review of legacy LSTK litigation matters & claims completed
2 Review of legacy LSTK litigation matters & claims completed › Review included remaining LSTK legacy litigation matters and all other significant litigation matters, including commercial claims receivable on all legacy and ongoing LSTK projects › Initial mandate, which included LSTK legacy litigati
Slide 8: Review of legacy LSTK litigation matters & claims completed (cont'd)
2 Review of legacy LSTK litigation matters & claims completed (cont’d) › Performed a deep-dive review of all litigation matters, including LSTK legacy litigation and all other significant litigation matters, to identify matters that may have a potential for significant impact › 20 matters identified
Slide 9: Canadian infrastructure LSTK projects completion costs review
3 Canadian infrastructure LSTK projects completion costs review Reviewed completion costs in light of COVID-19 impact and challenges Canadian infra LSTK projects backlog › Projects continue to be materially affected by lower productivity attributable to revised working conditions and supply chain di
Slide 10: Canadian infrastructure LSTK projects completion costs review (cont'd)
3 Canadian infrastructure LSTK projects completion costs review (cont’d) Canadian Light Rail projects continue to progress well REM Trilium Eglington › Major milestones achieved › Design well advanced and proceeding into › Final tunnel demolition completed › Project test track and installations deli
Slide 11: SNCL Engineering Services 2020 Outlook Reconfirmed
4 SNCL Engineering Services 2020 Outlook Reconfirmed Engineering Services Revenues Engineering Services Segment Adjusted EBIT to revenue ratio* 11.7% 10.0% 10.1% 9.8% 9.0% 9.0%12 8.2% 7.3% 8.0% $1,574M Low to mid- $1,500M $1,502M $1,535M $1,469M $1,448M single digits decline (YoY)1 Q2 2019A Q3 2019A
Slide 12: Significant progress over the past 18 months
Significant progress over the past 18 months Strategic direction (July 2019) Key milestones › Stopped bidding on LSTK projects › Entered into a binding agreement to sell O&G business, including Services and LSTK, significantly reducing operational and execution risk 1 Exit LSTK contracting work › ›
Slide 13: Conclusion
Conclusion Actions taken › Strategic divestiture of the Resources Oil & Gas business › Completed an expanded review of legacy LSTK litigation matters and all other significant litigation matters and commercial claims receivable › Reassessed costs to complete the remaining three Canadian LSTK infrast
Slide 14: Questions & Answers
Questions & Answers >) SNC+LAVALIN
Slide 15: Appendix
Appendix >) SNC+LAVALIN
Slide 16: Financial impacts summary
Financial impacts summary Amount1 (in $M) Cash / Non-cash Segment Recognized in Strategic divestiture of the Resources Oil & Gas business Fair value write-down of Oil & Gas business (260-295) Largely non-cash Discontinued operations Q4 2020 Expected to be Elimination of foreign exchange CTA2 include
Slide 17: Canadian infrastructure LSTK projects
Canadian infrastructure LSTK projects Infrastructure Backlog ($M) Completion % (SNCL portion) Country Project June 30, 2019 September 30, 2020 June 30, 2019 September 30, 2020 REM (LRT) Canada <1,050 <900 15 40 Trillium (LRT) Canada <800 <600 5 25 Eglinton (LRT) Canada <600 <350 55 75 OLRT (LRT) Can
Slide 18: Over the past 18 months we have made significant strides
Over the past 18 months ago we have made significant strides … Legend New strategic direction Strategic initiatives and settlements introduced Management appointments 1. Exiting LSTK construction work Board appointments / changes 2. Reorganizing the company into SNCL Engineering Services and SNCL Pr
Slide 19: … in advancing Company's strategy and de-risking the business
… in advancing Company’s strategy and de-risking the business Announced agreement to sell Resources O&G business, results of legacy LSTK litigation matters and reassessment of Canadian LSTK Announced settlement with infrastructure projects in light of the Competition Bureau Completion of the South A