Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q4 2010 Earnings Presentation
29 slides from Atkinsrealis's earnings presentation, Mar 4, 2011
Slide 1: Fourth quarter and year end December 31, 2010 Conference call notes
Fourth quarter and year end December 31, 2010 1 Conference call notes MARCH 4, 2011
Slide 2: Agenda
Agenda 2 Forward-looking Statements • Denis Jasmin, Vice-President, Investor Relations Highlights and Outlook • Pierre Duhaime, President and Chief Executive Officer Financial Review • Gilles Laramée, Executive Vice-President and Chief Financial Officer
Slide 3: Forward-looking statements
Forward-looking statements 3 Unless otherwise specified, all dollar amounts are expressed in Canadian dollars. Statements made in this presentation that describe the Company’s or management’s budgets, estimates, expectations, forecasts, objectives, predictions or projections of the future may be “fo
Slide 4: 2010 Financial highlights
2010 Financial highlights 4 Year-to-date results Net income increased by 21.6% to $437.0 million compared to $359.4 million for the year ended December 31, 2009 Net income increased by 8.9% when we exclude the net gain after taxes of $26.1 million from the disposal of Valener Inc. shares and Trencap
Slide 5: 2010 Financial highlights (cont'd)
2010 Financial highlights (cont’d) 5 Year-to-date revenues increased to $6.3 billion compared to $6.1 billion for the year ended December 31, 2009 Increase in Packages and ICI Decrease in Services The Company’s balance sheet position remained strong with cash and cash equivalents of $1.3 billion at
Slide 6: Engineering companies acquired in 2010
Engineering companies acquired in 2010 6 Itansuca Proyectos de Ingeniera S.A. • Colombia: 1,000 people Other companies • France: 160 people • Other countries: 70 people Adding ~ 1,230 people to our global workforce
Slide 7: ICI notable events
ICI notable events 7 Disposals in 2010 Trencap Limited Partnership resulting in a gain after taxes of $27.4 million. Valener Inc resulting in a loss after taxes of $1.3 million. Additions in 2010 Chinook Roads Partnership K 50% equity interest K 33 years concession K 50% of EPC and O&M to SNC-Lavali
Slide 8: ICI notable events (cont'd)
ICI notable events (cont’d) 8 Additions in 2010 (cont’d) Rayalseema Expressway Private Limited (REPL) • India • 36.9% equity interest • 30 years concession 2011 AltaLink • Accepted offer from Macquarie Essential Assets Partnership to acquire remaining 23.08% ownership interest for $213 million, subj
Slide 9: Key financial indicators
Key financial indicators 9 Financial Indicator Financial Objective Actual Results 2010 2009 1) Growth in net income Annual growth between 7% and 21.6% 15.0% 12% 2) Return on Average Shareholders' At least equal to long-term Canada 27.4% 27.3% Equity (ROASE) Bond Yield plus 6% (totalling 9.8% for 201
Slide 10: Diversity
Diversity 10 Canada $3,383.3 Categories of activity Geographic areas 54% Services $2,051.9 Packages Other Regions $51.2 1% 33% 38% $2,409.0 Asia $181.8 3% United States $220.0 3% Latin America and 6% 20% Car ibbean 6% Africa $366.7 7% Middle East $1,242.4 $399.5 Europe 8% 21% $470.1 Infrastruc ture
Slide 11: Outlook
Outlook 11 2011 net income to be lower than 2010 However, 2011 net income to be in line with 2010 • When we exclude from 2010 net income: Gain after taxes of $19.6 million from the disposal of certain technology solution assets Net gain after taxes of $26.1 million from the disposal of two Infrastru
Slide 12: Dividend increase
Dividend increase 12 Board of Directors has increased the quarterly cash dividend by 23.5% to $0.21 per share +23.5% Quarterly Dividend per share (in $) increase +13% increase 0.21 +25% increase 0.17 +33% 0.15 increase 0.12 +29% increase 0.09 0.07 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 13: Financial Review
13 Financial Review Gilles Laramée, Executive Vice-President and Chief Financial Officer
Slide 14: Net income details
Net income details 14 (in millions of $) Year Ended December 31 2010 2009 Growth Actual Actual 2010 / 2009 Excluding Net Excluding 2010 Total Gain on Total Net Gain on Disposals Disposals (1) Net income excluding ICI 354.1 334.5 322.5 4% (2) Net income from ICI 82.9 56.8 36.9 54% Net income 437.0 39
Slide 15: Consolidated income statement
Consolidated income statement 15 Fourth Year Ended Quarter December 31 (in millions of $) 2010 2009 2010 2009 Revenues 1,895.4 1,583.2 6,315.0 6,101.7 Gross margin 397.5 316.5 1,331.7 1,151.1 Selling, general and administrative expenses 171.0 148.1 585.6 545.6 Interest and capital taxes: - from infr
Slide 16: Selling, general and administrative expenses
Selling, general and administrative 16 expenses (in millions of $) Year Ended December 31 2010 2009 Actual Actual Selling, general and administrative expenses 585.6 545.6 2010 2009 2008 2007 2006 Selling, general and administrative expenses as a percentage of gross margin 44.0% 47.4% 50.9% 69.5% 53.
Slide 17: Total revenues by geographic area
Total revenues by geographic area 17 (in millions of $) Year Ended December 31 2010 2009 Actual % Actual % Canada 3,383.3 54 3,218.7 53 Africa excluding Libya 824.2 13 608.7 10 Libya 418.2 7 278.8 5 Europe 470.1 7 567.5 9 Middle East 399.5 6 591.3 10 Latin America and Caribbean 366.7 6 289.2 5 Unite
Slide 18: Annual gross margin
Annual gross margin 18 (in millions of $) Year Ended December 31 2010 2009 As a % of As a % of Actual Actual revenues revenues Services 539.2 26.3 562.7 25.3 (1) Packages 448.2 18.6 357.4 16.2 Operations and Maintenance 59.7 4.5 50.1 3.9 (2) ICI 284.6 54.4 180.9 47.6 Total Gross Margin 1,331.7 21.1
Slide 19: Revenues and operating income by segment
Revenues and operating income 19 by segment (in millions of $) Year Ended December 31 2010 2009 Operating Operating Revenues Income Revenues Income Services and Packages Infrastructure and Environment 1,796.7 236.7 1,602.6 212.9 Chemicals and Petroleum 905.1 18.1 829.4 21.0 (1) (1) Power 760.2 116.3
Slide 20: 2011 operating income expectations
2011 operating income expectations 20 2010 Expectations 2010 Actual vs. 2011 Expectations Operating Income per 2009 MD&A Actual Expectations per 2010 MD&A (1) Services and Packages Infrastructure and Environment Chemicals and Petroleum X Power Mining and Metallurgy X Other Industries Operations and
Slide 21: 2011 outlook summary
2011 outlook summary 21 2011 Outlook Revenues Gross margin Selling, general and administrative expenses Interest and capital taxes Income taxes Net income SNC-Lavalin's net income from ICI Net income, excluding ICI Net income Net income (excluding 2010 net gains on disposals)
Slide 22: Balance sheet
Balance sheet 22 (in millions of $) December 31, December 31, 2010 2009 Assets Cash and cash equivalents 1,288.2 1,218.2 Other current assets 2,883.1 2,174.8 Property and equipment: From infrastructure concession investments 2,588.7 2,217.0 From other activities 117.5 114.0 Goodwill 543.6 520.9 Infr
Slide 23: ICI Net book value and market value
ICI Net book value and market value 23 MV (1) MV (1) NBV (except Others) (except Others) December December December 2010 2010 2010 (in $, per SNC- (in millions $) (in millions $) Lavalin's share) Highway 407 (16.77%) (97.4) 1,499.5 9.85 AltaLink (76.92%) 328.0 709.9 4.66 Others 532.9 532.9 3.50 763.
Slide 24: Solid financial position
Solid financial position 24 (in millions of $) Cash position 2010 2009 2008 2007 2006 Cash and cash equivalents 1,288.2 1,218.2 988.2 1,088.6 1,106.3 Freehold cash (included above) 900.0 800.0 600.0 600.0 500.0 Return on Average Shareholders’ Equity (ROASE) 2,000 35.00% Shareholder's equity ROASE 30
Slide 25: Revenue backlog
Revenue backlog 25 BY CATEGORY OF ACTIVITY December September December (in millions of $) 2010 2010 2009 Services 1,410.7 1,429.1 1,464.9 Packages 5,912.1 (1) 5,764.3 4,197.5 Operations & Maintenance 2,732.8 2,621.3 2,596.1 AltaLink 2,202.4 2,108.5 1,877.4 Highway 407 645.0 635.9 600.7 Other 102.5 1
Slide 26: Revenue backlog (cont'd)
Revenue backlog (cont’d) 26 SERVICES AND PACKAGES ONLY, BY SEGMENT At December 31 At December 31 (in millions of $) 2010 2009 Services Packages Services Packages Services and Packages Infrastructure and Environment 665.1 2,820.6 677.9 2,034.6 Chemicals and Petroleum 165.8 907.4 170.5 1,553.5 Power 2
Slide 27: International Financial Reporting Standards
International Financial Reporting Standards 27 Presentation was done on January 25, 2011 • Copy of the presentation and audio is available on our web site, under the “Investors” section Main impacts on SNC-Lavalin’s consolidated financial statements upon transition to IFRS • Service concession arran
Slide 28: Peer group comparison
Peer group comparison 28 Net Income Growth R.O.E. (1) P/E (2) To be comparable to (last TTM) our peers, SLI’s P/E needs to SNC-Lavalin 21.6% 27.4% 13.5 (3) be adjusted by removing from Fluor -47.8% 9.8% 31.7 SLI’s price and earnings SLI’s Foster Wheeler -38.5% 15.7% 18.3 ICIs. Jacobs Engineering -32
Slide 29: Further questions and contact
29 • If you have further questions, please contact: Denis Jasmin tel: (514) 393-1000, ext. # 7553 E-mail: denis.jasmin@snclavalin.com • Replay of conference call: Investor Relations section of website: www.snclavalin.com