Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — Q4 2021 Earnings Presentation
32 slides from Atkinsrealis's earnings presentation, Mar 3, 2022
Slide 1: Q4 Conference Call Presentation
Q 4 CO NFERENC E CALL PRESENTAT I ON MARCH 3, 2022
Slide 2: Forward-Looking Statements and Non-IFRS Financial Measures
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 PERFORM ANC E IAN EDWARDS, PRESIDENT & CEO
Slide 4: 2021 Accomplishments
4 2021 Accomplishments Delivered on our 2021 Targets Other Key Highlights 2021 Target 2021 Actual › Announced 2022-2024 “Pivoting to Growth Strategy” SNCL Engineering Services Organic Revenue growth* Low single digit percentage 5.5% ✓ › Early lifting of all World Bank sanctions › Completed the Oil &
Slide 5: Well Positioned for our Pivoting to Growth Strategy
5 Well Positioned for our “Pivoting to Growth Strategy” Strong Presence Across Core Regions Strong Backlog Growth for EDPM Unwinding the SNCL Projects LSTK Backlog $3.1B $3.4B APAC LATAM Middle-East $2.9B & Africa 5% $2.7B 9% 1% UK & Europe $1.8B 35% $1.2B US 18% $7.4B 2021 Revenues ~0 June 2019 Dec
Slide 6: Q4 Financial Highlights and 2022 Outlook
6 Q4 Financial Highlights and 2022 Outlook SNCL Engineering Services SNCL Projects 2022 Outlook2 › Revenue of $1.7B was up by 9.7%, or › Negative Segment Adj. EBIT was › SNCL Services organic revenue 11.9% based on organic revenue growth* $231M, mainly due to unfavorable growth* of 4% to 6% YoY cost
Slide 7: EDPM
7 2021 REVENUE EDPM 2020 2021 BY REGION REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) BACKLOG ($M) APAC Other Middle East 5% 8% 6.0% Canada UK & Europe +9.5% 11% 11.2% 52% 8.1% 15.2% 3,721 3,849 16.9% 432 3,138 23% 2,864 9.0% 302 US 943 1,064 179 85 Q4 Full-Year Q4 Full-Year As at Dec. 31 Organic revenue
Slide 8: Delivering Engineering Net Zero
8 Delivering Engineering Net Zero SNC-Lavalin have secured a variety of recent wins from Energy Advisory, Supply and Distribution, to downstream Energy Use in the Built Environment. Looking to the future SNC-Lavalin is developing capability in-house through an accelerated, bespoke training programme
Slide 9: Nuclear
9 2021 REVENUE Nuclear 2020 2021 BY REGION REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) BACKLOG ($M) Other 3% (1)% US 25% 43% Canada 15.1% 15.0% (9)% 929 905 14.8% 15.8% 140 136 891 835 29% 245 220 36 35 UK & Europe Q4 Full-Year Q4 Full-Year As at Dec. 31 Organic revenue contraction* BY MARKET New Build
Slide 10: Infrastructure Services
10 2021 REVENUE Infrastructure Services 2020 2021 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) BACKLOG ($M) 8.6% BY REGION 7.3% 6.5% Other 9% APAC 18.1% 1,325 1,417 9% 9.6% 6.0% 97 93 7,099 6,973 Canada 36% 334 387 32 23 US 10% Q4 Full-Year Q4 Full-Year As at Dec. 31 Organic revenue growth* 13% Middle-E
Slide 11: Capital
11 Capital 2020 2021 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) (in M$, unless otherwise indicated) 129 134 117 119 65 61 23 19 Q4 Full-Year Q4 Full-Year Q4 KEY HIGHLIGHTS › Dividend of $41M received from Highway 407 ETR › H407 ETR traffic increased by 33% vs Q4 2020, mainly supported by the easing of
Slide 12: LSTK Projects Challenges in Q4
12 LSTK Projects Challenges in Q4 Impacts Consequences › COVID-19 › COVID-19 › Significant ramp up in absenteeism levels experienced in Q4 and into › Delay to project completion, additional cost from delay 2022, mainly due to Omicron › Additional direct and delay costs › Continued productivity losse
Slide 13: Pandemic and Inflation Challenges on LSTK Projects
13 Pandemic and Inflation Challenges on LSTK Projects Example of COVID Cases on a SNC-Lavalin’s LSTK project Building Construction Index, Annual Change (%) Worker Absent (Isolation Protocols) Confirmed Positive COVID Cases Q4 2020 Q4 2021 Wave 4 17.2% 15.3% 12.1% 11.2% Wave 3 Wave 2 3.1% 3.3% 2.2% W
Slide 14: Potential Future Financial Risks
14 Potential Future Financial Risks Project Status Current Assumptions Potential Future Financial Risks › 2 of 3 Canadian LRT projects › COVID-19 › COVID-19 expected to complete over next › Absenteeism falls back to pre-Omicron level › Absenteeism remains higher than pre-Omicron year in Q2 2022 leve
Slide 15: Infrastructure EPC Projects
15 Infrastructure EPC Projects 2020 2021 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) LSTK BACKLOG ($M) (in M$, unless otherwise indicated) -35.8% 895 -192 740 -319 -251 -360 1,766 1,134 99 180 Q4 Full-Year Q4 Full-Year As at Dec. 31 Q4 KEY HIGHLIGHTS › Remaining 3 LSTK projects continue to progress wel
Slide 16: Resources
16 Resources 2020 2021 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) (in M$, unless otherwise indicated) -40 -39 -93 163 172 -171 54 29 Q4 Full-Year Q4 Full-Year Q4 KEY HIGHLIGHTS › Revenue decrease due to progress on remaining Resources LSTK project › Negative Segment Adjusted EBIT mainly due to unfavor
Slide 17: Financial Performance
17 FINAN CI AL PERFORM ANC E JEFF BELL, CHIEF FINANCIAL OFFICER
Slide 18: Q4 Selected Financial Metrics
18 Q4 Selected Financial Metrics SNCL Engineering Services EDPM Infra Services Nuclear (in M$, unless otherwise indicated) Q4 2021 Q4 2020 Change REVENUES ($M) Revenue: PS&PM 1,880 1,675 12% 1,523 1,671 Capital 65 23 183% Total Revenue 1,945 1,698 15% Segment Adjusted EBIT - Total 67 (241) n.a. Corp
Slide 19: 2021 Selected Financial Metrics
19 2021 Selected Financial Metrics SNCL Engineering Services EDPM Infra Services Nuclear ((in M$, unless otherwise indicated) 2021 2020 Change REVENUES ($M) Revenue: PS&PM 7,237 6,878 5% 5,975 6,170 Capital 134 129 4% Total Revenue 7,371 7,008 5% Segment Adjusted EBIT - Total 489 125 291% Corporate
Slide 20: Leverage and DSO
20 Leverage and DSO* NET LIMITED RECOURSE & RECOURSE DEBT TO NET LIMITED RECOURSE & RECOURSE DEBT TO ADJUSTED EBITDA RATIO*** RECONCILIATION ADJUSTED EBITDA RATIO*** 3.4 4.0 (in M$, unless otherwise indicated) Q4 2021 3.2 2.7 1.7 Limited recourse 400 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Recourse
Slide 21: Free Cash Flow
21 Free Cash Flow* (in M$, unless otherwise indicated) Q4 2021 FY 2021 Segment Adjusted EBITDA* from SNCL Engineering Services 263 765 1 Change in working capital and other items from SNCL Engineering Services (71) (221) Net cash generated from operating activities - SNCL Engineering Services 192 54
Slide 22: 2022 Outlook
22 2022 Outlook 2022 Target1 2021 Actual SNCL Services organic revenue growth* Between 4% and 6% n/a2 SNCL Services segment Adjusted EBIT to segment revenue ratio Between 8% and 10% 10.6% Segment Adjusted EBITDA to segment net revenue ratio* - Engineering Services Between 14% and 16% 17.0% Corporate
Slide 23: Conclusion
23 CO NCLUSIO N IAN EDWARDS, PRESIDENT & CEO
Slide 24: Conclusion
24 Conclusion › Company’s core business (Engineering Services) is executing well and delivered a strong financial performance, all 2021 targets achieved › Remaining focused on executing our “Pivoting to Growth Strategy”, and optimizing our delivery of sustained revenue and cash flow growth › Acceler
Slide 25: Questions & Answers
>) SNC +LAVALIN Vibe QUESTIONS & ANSWERS
Slide 26: Appendix
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Slide 27: Financial Targets (2022-2024)
27 Financial Targets (2022-2024) 2022-2024 Target1 2021 Actual SNCL Services organic revenue growth* (annually) Between 4% and 6% n/a2 SNCL Services segment Adjusted EBIT to segment revenue ratio (annually) Between 8% and 10% 10.6% Engineering Services Between 8% and 10% 10.6% Nuclear Between 13% an
Slide 28: Infrastructure EPC Projects Update
28 Infrastructure EPC Projects Update Eglinton Trillium Réseau Express Métropolitain (REM) As of December 31, 2021 Client Infrastructure Ontario City of Ottawa CDPQ Backlog ($M) ~150 ~275 ~600 Approximate Completion ~90% ~70% ~60% Expected Substantial 2022 2023 2024 Completion Year • Engineering & d
Slide 29: SNCL Projects Backlog Phasing
29 SNCL Projects Backlog Phasing 1,000 Infrastructure EPC projects Resources 900 800 700 600 (in $M) 500 400 300 200 100 0 2022 2023 2024 LSTK Construction Contracts Backlog
Slide 30: 2021 Segment Results Under the New Structure (1/2)
30 2021 Segment Results Under the New Structure Effective Jan. 1. 22 (1/2) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Total Margin % (in thousands of $) Engineering Services Revenues 1,049.6 1,061.2 1,039.3 1,216.3 4,366.4 Segment Adjusted EBIT 86.2 95.2 93.0 189.5 464.0 10.6% Segment Adjusted EBITDA* 111.5 11
Slide 31: 2021 Segment Results Under the New Structure (2/2)
31 2021 Segment Results Under the New Structure Effective Jan. 1. 22 (2/2) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Total Margin % (in thousands of $) Infrastructure LSTK Projects Revenues 245.8 234.4 263.0 164.1 907.2 Segment Adjusted EBIT (11.9) (25.3) (32.4) (233.0) (302.6) n.a. Segment Adjusted EBITDA* (
Slide 32: Endnotes
32 Endnotes 1. Organic revenue growth (contraction) is a non-IFRS ratio comparing organic revenue, itself a non-IFRS financial measure, between two periods and does not have a standardized definition within International Financial Reporting Standards (IFRS) and therefore may not be comparable to sim