Slide 1: Second Quarter 2014 Conference Call Notes
SECOND QUARTER 2014 Conference Call Notes August 8, 2014
Slide 2: Agenda
2 Agenda Forward-looking Statements Denis Jasmin, Vice-President, Investor Relations President and CEO Remarks Robert G. Card, President and Chief Executive Officer Financial Review Alain-Pierre Raynaud, Executive Vice-President and Chief Financial Officer
Slide 3: Forward Looking Statements
3 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
Slide 4: President and CEO Remarks
4 PRESIDENT AND CEO REMARKS ROBERT G. CARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 5: Financial Review
5 FINANCIAL REVIEW ALAIN-PIERRE RAYNAUD, EXECUTIVE VICE-PRESIDENT AND CHIEF FINANCIAL OFFICER
Slide 6: Kentz Proposed Acquisition
6 Kentz Proposed Acquisition On June 23, 2014, SNC-Lavalin announced that it has reached an agreement with Kentz on the terms of a cash acquisition Consideration: £9.35 per share Acquisition value: £1.2B ($2.1B)1 Financed by a recourse non-revolving acquisition credit agreement “Acquisition Facility
Slide 7: Consolidated Income Statement
7 Consolidated Income Statement (in millions CA$) Comments •Decrease in M&M and Second Quarter Six months ended June 30 O&G 2014 2013 2014 2013 •Decrease in Power an Revenues Services 558.7 723.1 1,062.2 1,373.8 M&M, partially offset by Packages 625.0 736.9 1,235.2 1,460.3 increase in I&C and O&G Op
Slide 8: SG&A Trend by Quarter
8 SG&A Trend by Quarter (in millions CA$) YTD decrease of 9.3% -24.2 249.3 -20.4 250.0 -32.5 -20,3 228.7 225.1 208.2 207.1 208.3 200.0 186.8 175.7 150.0 10.3% 11.8% 10.5% 10.6% 12.3% 100.0 10.9% 9.0% 10.9% 50.0 0.0 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q2 2012 2013 2012 2013 2013 2014 2013 2014 Decline in SG&A mainl
Slide 9: EBIT by Segment
9 EBIT by Segment (in millions CA$) •Higher EBIT from Altalink, which includes impact of cease 300 267.4 in depreciation in 2014 •Higher dividend received 2014 continue to be affected by legacy 250 from Highway 407 •Lower contribution from SKH fixed price projects , 2013 included: 200 176.5 • A risk
Slide 10: Revenue Backlog by Activity
10 Revenue Backlog by Activity (in billions CA$) 10,0 8,2 8,4 8,3 8,0 1,9 2,0 2,2 6,0 O&M Packages 4,0 4,8 4,8 4,5 Services 2,0 1,5 1,6 1,6 0,0 June March December 2014 2014 2013 Book-to-bill ratio (YTD) 0.97 1.06 0.74
Slide 11: Main Challenging Projects in Backlog
11 Main Challenging Projects in Backlog (in millions CA$) As at June 30, As at March 31 2014 2014 Revenue backlog Services 1,526.0 1,604.3 Packages 4,843.4 4,780.9 Operations and Maintenance (O&M) 1,843.8 1,988.9 Total Revenue Backlog 8,213.2 8,374.1 Challenging Projects Hospitals (~ 50% to be recog
Slide 12: Financial Position
12 Financial Position (in millions CA$) June 30 December 31 2014 2013 Assets Cash and cash equivalents 853 1,109 Asset of disposal group classified as held for sale 6,779 - Other current assets 2,786 2,807 Property and equipment : From ICI - 5,132 Excluding ICI 163 180 ICI accounted for by the equit
Slide 13: Cash Flow – Year-to-Date
13 Cash Flow – Year-to-Date (in millions CA$) 1,500 370 -426 1,109 -427 1,000 853 1,020 -793 500 0 Cash and cash EBITDA Net change in Acquisition of Net increase in non- Other mainly due to Cash and cash equivalents as at From E&C (+49M) non-cash working property and recourse long-term interest paid
Slide 14: 2014 Outlook
14 2014 Outlook EPS to be in the range of $2.80 and $3.05 › Based on the assumptions that: • Environment & Water, Infrastructure & Construction and Oil & Gas sub-segments will continue to be challenging; • Mining & Metallurgy sub-segment will continue to be affected by the softening of the commodity
Slide 15: If you have further questions, please contact
15 If you have further questions, please contact: Denis Jasmin tel: 514 393-8000, ext. # 57553 E-mail: denis.jasmin@snclavalin.com Replay of conference call: Investor Relations section of website: www.snclavalin.com
Slide 16: WE CARE
16 WE CARE embodies SNC-Lavalin’s key corporate values and beliefs. It is the cornerstone of everything we do as a company. Health and safety, employees, the environment, communities and quality: these values all influence the decisions we make every day. And importantly, they guide us in how we ser