Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — Q3 2023 Earnings Presentation
23 slides from Atkinsrealis's earnings presentation, Nov 10, 2023
Slide 1: Q3 Conference Call Presentation
Q3 CONFERENCE CALL PRESENTATION November 10, 2023
Slide 2: Forward-Looking Statements, Forward-Looking Financial Information and Outlook
2 Forward-Looking Statements, Forward-Looking Financial Information and Outlook References in this presentation, and hereafter, to the “Company”, “AtkinsRéalis”, “SNC-Lavalin”, “we”, “us” and “our” mean, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint
Slide 3: Strong Q3 Results and Positive Operating Cash Flows
3 Strong Q3 Results and Positive Operating Cash Flows ▪ Performance was robust across our core geographies ▪ AtkinsRéalis Services revenues reached a quarterly record-high of $2.0B ▪ AtkinsRéalis Services organic revenue growth* and Segment Adjusted EBIT increased by 19.5% and 22.6%, respectively1 ▪
Slide 4: AtkinsRéalis Services Backlog
4 AtkinsRéalis Services Backlog (In $M) 12,501 +7% 12,358 12,079 11,834 11,664 30-Sep-22 31-Dec-22 31-Mar-23 30-Jun-23 30-Sep-23 Q3 KEY WINS ▪ Awarded initial works contract by EcoProBM to design and project manage one of Canada’s largest Cathode Active Material plants, in Bécancour, Québec ▪ Awarde
Slide 5: Engineering Services
5 Engineering Services Organic revenue growth* REVENUES ($M) BACKLOG ($M) +29% 23.3% +11% 1,518 5,123 1,177 4,623 M25 Junction 10 Wisley Lane Bridge, UK Q3 2022 Q3 2023 30-Sep-22 30-Sep-23 PROFITABILITY ($M) Segment Adjusted EBIT Segment Adjusted EBITDA** (% of segment revenues) (% of segment net re
Slide 6: Engineering Services Q3 Key Highlights
6 Engineering Services Q3 Key Highlights Substantial demand for our unique end-to-end capabilities, fueled by public sector focus on secure, affordable, and clean solutions for the built environment UK & EUROPE UNITED STATES CANADA • Positive outlook and wins continue for the Water and • IIJA and IR
Slide 7: Nuclear
7 Nuclear Organic revenue growth* REVENUES ($M) BACKLOG ($M) +23% 19.6% +23% 271 1,053 219 859 Hinkley Point C, UK Q3 2022 Q3 2023 30-Sep-22 30-Sep-23 PROFITABILITY ($M) Segment Adjusted EBIT (% of segment revenues) +6% 37 39 16.7% 14.3% Q3 2022 Q3 2023 * Organic revenue growth is a non-IFRS ratio.
Slide 8: Nuclear Q3 Key Highlights
8 Nuclear Q3 Key Highlights CANDU® fleet, proprietary technologies, and comprehensive capabilities uniquely position AtkinsRéalis for the global Nuclear revival NEW BUILDS REACTOR SUPPORT & LIFE WASTE MANAGEMENT & • Canada and Romania signed a $3B1 export EXTENSION DECOMMISSIONING development deal t
Slide 9: O&M and Linxon
9 O&M and Linxon Organic revenue growth (contraction)* REVENUES ($M) PROFITABILITY ($M) Q3 KEY HIGHLIGHTS Segment Adjusted EBIT (% of segment revenues) (8.4)% ▪ Developing opportunities to expand O&M capabilities in the UK ▪ Reduction in revenues mainly due to a contract O&M 124 115 16 16 completion
Slide 10: LSTK Projects and Capital
10 LSTK Projects and Capital REVENUES ($M) PROFITABILITY ($M) Q3 KEY HIGHLIGHTS Segment Adjusted EBIT ▪ Commissioning and testing on Ontario Projects continue as planned LSTK -13 ▪ REM South Shore portion in operation and remaining construction progressing well Projects 217 128 -44 ▪ Continuing to p
Slide 11: Enabling a Sustainable Society
To find out more, see our 2022 ESG Report and ESG Enabling a Sustainable Society Presentation available on our website. 2022 ESG Report Highlights of our revenues are from projects ~50% that solve these global challenges1: Reducing Our Building an Inspired & Inclusive Fostering Environmental Impact
Slide 12: Financial Performance
12 FINANCIAL PERFORMANCE 12
Slide 13: Q3 Selected Financial Metrics
13 Q3 Selected Financial Metrics ATKINSRÉALIS SERVICES Engineering Services O&M (in $M, except otherwise indicated) Q3 2023 Q3 2022 Change Nuclear Linxon Revenues PS&PM 2,171 1,860 17% REVENUES ($M) Capital 29 30 (3)% 2,044 Total Revenues 2,200 1,889 16% 1,643 Segment Adjusted EBIT – Total 197 134 4
Slide 14: Leverage and DSO
14 Leverage and DSO* NET LIMITED RECOURSE & RECOURSE DEBT TO ADJUSTED EBITDA DAYS SALES OUTSTANDING (DSO)* FROM THE ENGINEERING RATIO** RECONCILIATION SERVICES SEGMENT (in $M, except otherwise indicated) September 30, 2023 Limited recourse debt 398 Recourse debt 1,731 Cash and cash equivalents (564)
Slide 15: Free Cash Flow
15 Free Cash Flow* In $M Nine months ended Q3 2023 September 30, 2023 Segment Adjusted EBITDA* from AtkinsRéalis Services 222 615 Change in working capital and other items from AtkinsRéalis Services (38) (267) Net cash generated from operating activities – AtkinsRéalis Services** 184 348 Income taxe
Slide 16: Conclusion
16 CONCLUSION 16
Slide 17: Conclusion
17 CONCLUSION ▪ Strong revenue, operating profit and positive cash flow in the quarter further emphasize the resilience of AtkinsRéalis’ businesses ▪ Strongly positioned with a leading presence across core markets of Canada, the US, and the UK ▪ The Company’s unique competitive differentiators and a
Slide 18: Questions & Answers
18 QUESTIONS & ANSWERS 18
Slide 19: Appendix
19 APPENDIX 19
Slide 20: Revised 2023 Outlook
20 Revised 2023 Outlook Revised 2023 Target 2022 Actual Between 15% and 17% AtkinsRéalis Services organic revenue growth* 6.8% (raised November 10, 2023) AtkinsRéalis Services Segment Adjusted EBIT to segment revenue ratio Between 8% and 10% 8.7% Segment Adjusted EBITDA to segment net revenue ratio*
Slide 21: Financial Targets (2022-2024)
21 Financial Targets (2022-2024)1 2022-2024 Target 2022 Actual AtkinsRéalis Services organic revenue growth* (annually) Between 4% and 6% 6.8% AtkinsRéalis Services Segment Adjusted EBIT to segment revenue ratio (annually) Between 8% and 10% 8.7% Engineering Services Between 8% and 10% 8.5% Nuclear
Slide 22: Endnotes
22 Endnotes (See also the cautionary statement regarding non-IFRS financial measures and ratios, supplementary financial measures and non-financial information at slide 2 of this presentation.) 1. Organic revenue growth (contraction) is a non-IFRS ratio comparing organic revenue, itself a non-IFRS f
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