Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — Q3 2021 Earnings Presentation
27 slides from Atkinsrealis's earnings presentation, Oct 29, 2021
Slide 1: Q3 Conference Call Presentation
Q 3 CO NFERENC E CALL PRESENTAT I O N OCTOBER 29, 2021 A465 Highway South Wales, UK
Slide 2: Forward-Looking Statements, Forward-Looking Financial Information and Outlook
2 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 SN
Slide 3: Business Performance
BUSINESS PERFO RM ANC E IAN EDWARDS, PRESIDENT & CEO
Slide 4: Summary
4 Summary SNCL Projects: SNCL Engineering Services: backlog continues to 2021 Outlook for SNCL delivers solid Q3 results decrease, and O&G Engineering Services transaction completed › Revenue of $1.5B increased by › LSTK construction contracts › Continuing to expect revenue 2.2%, or 4.2% on a consta
Slide 5: Pivoting to Growth
5 Pivoting to Growth HOW WE WIN Deploying global capabilities locally to our clients and delivering unique end-to-end services across the whole life WHERE WE PLAY cycle of an asset, by connecting people, data and technology Strong presence across Canada, the U.S. and the UK, as to meet the demands o
Slide 6: Building Talent Capacity for Growth
6 Building Talent Capacity for Growth Strengthening our data & technology capability to meet demands of the future › Advanced engineering Global Technology Center in India with >2,000 employees › World-class technical, digital, professional and managerial training programs delivered globally – ~10,0
Slide 7: EDPM
7 EDPM Revenues ($M) Segment Adjusted EBIT* ($M) Backlog Up +2.0% as reported and +4.1% on a constant currency basis1* 9.0% 9.4% 899 917 $3.2B 81 86 (+15% YoY) Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segment Adj. EBIT to segment revenue ratio* (%) Q3 Key highlights › Revenue growth driven by strong performa
Slide 8: Delivering Engineering Net Zero
8 Delivering Engineering Net Zero Two significant recent wins see SNC-Lavalin at the forefront of Net Zero design & delivery; working with and supporting a forward- thinking UK Government organization to decarbonize their entire estate, in addition to a multimillion-dollar commission to develop a UK
Slide 9: Nuclear
9 Nuclear Revenues ($M) Segment Adjusted EBIT* ($M) Decreased (2.1)% as reported and (0.3)% on a constant currency basis1* 16.1% 16.3% 225 220 36 36 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segment Adj. EBIT to segment revenue ratio* (%) Q3 Key highlights › Solid financial performance; operating margins abov
Slide 10: Infrastructure Services
10 Infrastructure Services Revenues ($M) Segment Adjusted EBIT* ($M) Up +5.9% as reported and +7.6% on a constant currency basis1* 7.8% 6.6% 324 343 25 23 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segment Adj. EBIT to segment revenue ratio* (%) Q3 Key highlights › Revenue growth driven by hydro power projects
Slide 11: Capital
11 Capital Revenues ($M) Segment Adjusted EBIT* ($M) 39 37 27 24 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 Key highlights › No dividend received from Highway 407 ETR in Q3 2021, $20M received in October › H407 ETR traffic increased by 24% vs Q3 2020, mainly supported by the relaxation of COVID-19 related r
Slide 12: Infrastructure EPC Projects
12 Infrastructure EPC Projects Revenues ($M) Segment Adjusted EBIT* ($M) LSTK Backlog 237 257 -25 -26 $1.1B (-42% YoY) Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 Key highlights › Remaining 3 LSTK projects continue to progress well › LSTK construction contracts backlog down by ~17% vs end of June › Headwinds
Slide 13: Resources
13 Resources Revenues ($M) Segment Adjusted EBIT* ($M) 58 -3 -3 45 Q3 20201 Q3 2021 Q3 20201 Q3 2021 Q3 Key highlights › Revenue decrease due to progress on remaining Resources LSTK project › Strong performance in mining services continues with YoY growth >10% and significant pipeline growth driven
Slide 14: Financial Performance
14 FINAN CI AL PERFO RM ANC E JEFF BELL, CHIEF FINANCIAL OFFICER
Slide 15: Q3 Selected Financial Metrics
15 Q3 Selected Financial Metrics SNCL Engineering Services (in M$, unless otherwise indicated) Q3 2021 Q3 20201 Change EDPM Infra Services Nuclear Revenues 1,809 1,781 2% Segment Adjusted EBIT* - Total 139 151 (8)% Revenues Corporate SG&A expenses (52) (25) 108% $1,448M $1,480M Net income (loss) fro
Slide 16: Balance sheet and Days Sales Outstanding (DSO)
16 Balance sheet and Days Sales Outstanding (DSO)* Selected balance sheet items Days sales outstanding* (EDPM) As at June 30, 2021 As at September 30, 2021 $1,397M $1,450M 68 64 61 58 56 $663M $520M Cash and cash Recourse debt and Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 equivalents limited recourse
Slide 17: Net Cash from Operating Activities
17 Net Cash from Operating Activities Nine months ended (in M$, unless otherwise indicated) Q3 2021 Sept 30, 2021 Segment Adjusted EBIT from SNCL Engineering Services* 145 423 Segment Adjusted EBITDA from SNCL Engineering Services* 174 515 1 Change in working capital and other items from SNCL Engine
Slide 18: 2021 Outlook
18 2021 Outlook1 Metric 2021 Outlook SNCL Engineering Services revenue growth Low single digit percentage SNCL Engineering Services Segment Adjusted EBIT to segment Between 9.0% and 9.5%2 revenue ratio* Net cash generated from operating activities Broadly breakeven 1 This slide contains forward-look
Slide 19: Conclusion
19 CO NCLUSIO N IAN EDWARDS, PRESIDENT & CEO
Slide 20: Conclusion
20 Conclusion › Solid financial results for SNCL Engineering Services during Q3 › Strong pipeline of new work across all our core geographies, driven by governments’ spending in Infrastructure and low-carbon assets › Completed the Oil & Gas business divestiture and continued progress on unwinding th
Slide 21: Questions & Answers
Q UEST IO NS & ANSW ER S
Slide 22: Appendix
APP EN DI X
Slide 23: Remaining LSTK Projects in SNCL Projects Backlog
23 Remaining LSTK Projects in SNCL Projects Backlog Eglinton Trillium Réseau Express Métropolitain (REM) As of September 30, 2021 Client Infrastructure Ontario City of Ottawa CDPQ Backlog ($M) <150 <275 <600 Approximate ~90% ~70% ~60% Completion Expected Substantial 2022 2022 2024 Completion Year
Slide 24: SNCL Projects Backlog Phasing
24 SNCL Projects Backlog Phasing 1,000 Infrastructure EPC projects Resources 900 800 700 600 (in $M) 500 400 300 200 100 0 2021 (Last 3 months) 2022 2023 2024 Expected annual conversion to Revenue
Slide 25: 407 ETR Information
25 407 ETR Information (in $M, unless otherwise indicated) Q3 2021 Q3 2020 Change Revenues 333.1 265.7 25% Operating expenses 43.9 39.1 12% EBITDA* 289.2 226.6 28% EBITDA as a percentage of revenues* 86.8% 85.3% +1.5% Net income (loss) 106.6 49.1 117% Traffic / Trips (in millions) 24.3 19.6 24% Aver
Slide 26: Reconciliation of IFRS Net Income from Continuing Operations to Adjusted Net Income from PS&PM
26 Reconciliation of IFRS Net Income (Loss) from Continuing Operations to Adjusted Net Income from PS&PM Q3 2021 Q3 2021 Q3 20201 Q3 20201 In $M Per diluted EPS in $ In $M Per diluted EPS in $ Net income (loss) attributable to SNC-Lavalin shareholders from continuing 18.6 0.11 (8.8) (0.05) operation
Slide 27: Financial Targets (2022-2024)
27 Financial Targets (2022-2024)1 SNCL SERVICES C O N S O L I D AT E D ( AN N U AL L Y ) ( BY EN D OF 2024) O R G AN I C S E G M E N T AD J . F R E E C AS H F L O W * * NET LIM ITED RECOURSE REVENUE EBIT T O SEG M EN T O V E R C O N S O L I D AT E D & R EC OU R SE D EBT T O G ROWTH R E V E N U E R A