Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q2 2017 Earnings Presentation
23 slides from Atkinsrealis's earnings presentation, Aug 3, 2017
Slide 1: Second Quarter 2017 Conference Call Presentation
› Second Quarter 2017 › Conference Call Presentation › August 3rd, 2017
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 2017 results
Q2 2017 results › Q2 2017 IFRS net income attributable to SNC-Lavalin shareholders of $136.4M, or $0.91 EPS › Includes a net gain on disposal of the head office building of $101.5M, or $0.67 per diluted share › Q2 2017 adjusted net income from E&C of $64.2M, or $0.43 per diluted share › Lower Segmen
Slide 5: Oil & Gas
~$4B revenue business with ~21,500 Oil & Gas employees Backlog in line with Q1 2017, recently awarded : - Structural, mechanical electrical, instrumentation and piping construction services for a new facility in South Africa - FEED conversion to EPC contract for a crude oil refinery in Guinea YTD 20
Slide 6: Mining & Metallurgy
~$500M revenue business with ~1,000 Mining & Metallurgy employees Backlog more than doubled, compared to Q3 2016 - Should continue to increase in second half of the year - Recently received a notice to proceed for a large ammonia EPC project in Oman Revenue to increase in second half of the year, as
Slide 7: Power
~$1.5B revenue business with ~3,500 Power employees Improved EBIT margins - Q2 2017 EBIT of 11.8% vs Q2 2016 EBIT of 6.9% Change in revenue mix; more Nuclear, less Thermal Power and Transmission & Distribution Revenue synergies with Atkins to be developed Backlog (in B$) 2017 Revenues TTM EBIT % 5.0
Slide 8: Infrastructure
~$2.5B revenue business with ~6,500 Infrastructure employees Improved EBIT margin - Q2 2017 EBIT of 5.2% vs Q2 2016 EBIT of 4.6% Sustainable backlog Recently awarded: - Fixed-price variation agreement worth $349M awarded to Rideau Transit Group Partnership, which SNC-Lavalin is part of Revenue syner
Slide 9: Capital
Portfolio of value creating assets Capital New infrastructure vehicle created – SNC-Lavalin Infrastructure Partners LP - 5 North American mature assets, with a NBV of ~134M3, will be transferred into it - SNC-Lavalin to sell 80% of the Partnership to BBGI - Representing a fair value of $254M4 or 1.9
Slide 10: Q2 Financial performance summary
Q2 Financial performance summary E&C Capital Total Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Revenues 1,868 2,045 67 58 1,935 2,103 SG&A 169 191 16 10 185 201 EBITDA, adjusted 87 118 48 43 135 161 Adjusted EBITDA margin 4.6% 5.8% n/a n/a 7.0% 7.6% Net income, as reported 87 53 49 36 136 89 Net
Slide 11: E&C segment EBIT – Q2 2017 vs Q2 2016
E&C segment EBIT – Q2 2017 vs Q2 2016 M&M (in M$) -42 Mainly due to a decrease in GM%, partially offset by lower SG&A. 80 71 O&G 70 Mainly due to a decrease in GM% and a lower level of activity, partially offset by lower SG&A. Q2 2017 also includes 60 +14 provisions on aged receivables in -7 Venezue
Slide 12: A sustainable and diversified backlog
Strong Backlog June 2017 $9.6B A sustainable and diversified backlog (in B$) As at June 30, 2017 10.7 9.6 Reimbursable 45% Fixed-Price 55% Dec. 31, 2016 June 30, 2017 M&M Power O&G Infrastructure Does not yet include Atkins revenue backlog 12
Slide 13: 2017 Operating Cash Flow
2017 Operating Cash Flow (in M$) Q1 Q2 Q3 Q4 240 Cash Balance as December 31, 2016 1,055 187 Cash flow from operations (269) Proceeds from disposal of the head office building 173 Net costs associated to a foreign exchange hedge (49) Capital expenditures (53) (82) (82) Net increase in receivables fr
Slide 14: Outlook Update
Outlook Update › Revising 2017 outlook › Includes six months of the recently acquired Atkins operations and related financing. › Based on a WANOS of ~163M. › We continue to anticipate increased Segment EBIT for all segments, except for Mining & Metallurgy. › Atkins will be reported as a fifth E&C se
Slide 15: Questions & Answers
Questions & Answers
Slide 16: Appendix
Appendix
Slide 17: Capital investments portfolio
Capital investments portfolio Name Description Held Concession Location Equity Since Years Participation Highways, Bridges & Rail 1. Highway 407 (407 ETR) 108 km electronic toll road 1999 99 Canada (Ontario) 16.8% 2. InTransit BC* Rapid transit line 2005 35 Canada (B.C.) 33.3% 3. Okanagan Lake* Floa
Slide 18: 407 ETR information – Q2
407 ETR information – Q2 (in M$, unless otherwise indicated) Q2 2017 Q2 2016 Change Revenues 331.0 290.8 13.8% Operating expenses 39.8 33.4 (19.2)% EBITDA 291.2 257.4 13.1% EBITDA as a percentage of revenues 88.0% 88.5% (0.5)% Net Income 124.6 94.4 32.0% Traffic / Trips (in millions) 32.6 32.5 0.0%
Slide 19: 407 ETR
407 ETR Consistent growth and low cost of financing 790 Gross Vehicle Kilometres Travelled Dividends 730 750 680 (in millions – KM) (in M$) 600 2,641 Total dividends paid 460 by 407 ETR 2,517 2,437 Dividends received 300 by SNC-Lavalin 2,336 2,326 2,340 2,356 2,253 2,253 190 2,215 145 120 135 114 12
Slide 20: Diversity of revenue base – by segment
Diversity of revenue base – by segment (in B$) 2016 2017 (12 months) (6 months) 4% 3% 5% 3% $0.3 $0.1 $0.4 $0.2 $0.8 19% 20% O&G $1.6 $0.7 44% Infrastructure 44% $3.7 $1.7 Power M&M $3.9 Capital 30% $2.5 28% $1.8 $1.1 2016 Revenues YTD 2017 Revenues $8.5 billion $3.8 billion 20
Slide 21: Solid financial position
Solid financial position June 30 December 31 (in M$) 2017 2016 Assets Cash and cash equivalent 737 1,055 Restricted funds 1,265 - Other current assets 3,556 3,135 Property and equipment 291 298 Capital investments accounted for by the equity or cost methods 318 448 Goodwill 3,239 3,268 Intangible as
Slide 22: Net income reconciliation – Q2
Net income reconciliation – Q2 (in M$, except per share amount) Net Income, Net charges Acquisition Net gain on Net income, as reported related to the disposals of adjusted restructuring & E&C business, right-sizing plan Acquisition- Amortization incl. head office and other related costs of intangib
Slide 23: Net income reconciliation – YTD
Net income reconciliation – YTD (in M$, except per share amount) Net Income, Net charges Acquisition Net gain on Net income, as reported related to the disposals of adjusted restructuring & E&C business, right-sizing plan Acquisition- Amortization incl. head office and other related costs of intangi