Slide 1: First Quarter 2017 Conference Call Presentation
› First Quarter 2017 › Conference Call Presentation › May 4th, 2017 1
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: SNC-Lavalin and WS Atkins – two highly complementary businesses
SNC-Lavalin and WS Atkins – two highly complementary businesses Creates a Global Fully Creates a global fully integrated professional services and project management company with over Integrated Professional C$12.1B(1) in consolidated revenue and C$706M(1) in adj. E&C EBITDA(2) on a pro forma basi
Slide 5: Q1 2017 results
Q1 2017 results › Q1 2017 IFRS net income attributable to SNC-Lavalin shareholders of $89.7M, or $0.60 EPS › Q1 2017 adjusted net income from E&C of $60.7M, or $0.40 per diluted share › 6.1% higher than Q1 2016, due to higher gross margin-to-revenue ratio and lower SG&A, partially offset by higher f
Slide 6: Oil & Gas
~$4B revenue business with ~21,500 Oil & Gas employees Improved EBIT % - Q1 2017 EBIT of 6.5% vs Q1 2016 EBIT of 4.9% Backlog remains strong at $3.4B, recently awarded : - Engineering and project management services for a gas oil separation plant in Saudi Arabia - EPC contract for design, supply, co
Slide 7: Mining & Metallurgy
~$500M revenue business with ~1,000 Mining & Metallurgy employees Improved EBIT % - Q1 2017 EBIT of 6.6% vs Q1 2016 EBIT of 4.8% 53% increase in backlog, compared to Q4 2016 level, recently awarded: - Detailed design services contract for the Talabre Tailings Expansion Phase VIII project in Chile -
Slide 8: Power
~$1.5B revenue business with ~3,500 Power employees Improved EBIT margins - Q1 2017 EBIT of 8.6% vs Q1 2016 EBIT of 7.6% Two Awards of Excellence from the Association of Consulting Engineering Companies – British Colombia - Jimmie Creek Hydroelectric Project in the Energy & Industry category - BC Hy
Slide 9: Infrastructure
~$2.5B revenue business with ~6,500 Infrastructure employees Improved EBIT margin - Q1 2017 EBIT of 6.6% vs Q1 2016 EBIT of 5.5% Sustainable backlog, recently announced: - Two Rail & Transit design contracts in London, UK - Inspection services contract provision for the Hibernia and Hebron offshore
Slide 10: Capital
Portfolio of value creating assets Capital 407 ETR continues to deliver very good Q1 results (see appendix) - Revenues up 15.7% - VKT up 5.6% - EBITDA up 17.5% - Dividend up 10.5% New structure for our North American concession investments (excl. Highway 407 ETR) continues to progress In M$ Cumulati
Slide 11: Q1 Financial performance summary
Q1 Financial performance summary E&C Capital Total Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Revenues 1,788 1,931 61 57 1,849 1,988 SG&A 147 158 10 10 157 168 EBITDA, adjusted 100 100 49 44 149 144 Adjusted EBITDA margin 5.6% 5.2% n/a n/a 8.1% 7.2% Net income, as reported 45 31 45 91 90 122 Ne
Slide 12: E&C segment EBIT – Q1 2017 vs Q1 2016
E&C segment EBIT – Q1 2017 vs Q1 2016 M&M (in M$) +14 Mainly due to lower SG&A, partially offset by lower level of activity. 60 56 O&G 50 Mainly due to an increase in GM%, lower SG&A and some favorable cost 42 +3 reforecast and outcomes. +1 -1 40 32 31 29 30 Power 30 Mainly due to an increase in GM%
Slide 13: A sustainable and diversified backlog
Strong Backlog March 2017 $10.1B A sustainable and diversified backlog (in B$) As at March 31, 2017 10.7 10.1 Reimbursable 45% Fixed-Price 55% Dec. 31, 2016 March 31, 2017 M&M Power O&G Infrastructure 13
Slide 14: 2017 Operating Cash Flow
2017 Operating Cash Flow Improved cash flow from operations (in M$) Q1 2015 Q1 2016 Q1 2017 Cash Balance as December 31, 2016 1,055 Cash flow from operations (187) (187) (240) Capital expenditures (32) Net increase in receivables from long-term concession arrangements (21) Dividends to SNC Sharehold
Slide 15: Financing Overview
Financing update – proposed acquisition of WS Atkins Sources of ~C$1.3B ~C$1.1B ~C$1.5B Funds Equity Issuance Recourse Debt CDPQ(1) Loan Subscription receipt offering ~£300M acquisition term loan from Issued at SNC-Lavalin Highway banking syndicate Holdings Inc. level and is non- ~C$880M pub
Slide 16: Outlook
Outlook › Maintaining 2017 outlook › We anticipate increased Segment EBIT for all segments, except for Mining & Metallurgy. › Does not take into account the recently proposed acquisition of WS Atkins or related financing. Outlook 2017 Adjusted diluted EPS from E&C $1.70 $2.00 ($0.36 in 2014, $1.34 i
Slide 17: Questions & Answers
Questions & Answers
Slide 18: Appendix
Appendix
Slide 19: Capital investments portfolio
Capital investments portfolio Name Description Held Concession Location Equity Since Years Participation Highways, Bridges & Rail 1. Highway 407 (407 ETR) 108 km electronic toll road 1999 99 Canada (Ontario) 16.8% 2. InTransit BC Rapid transit line 2005 35 Canada (B.C.) 33.3% 3. Okanagan Lake Floati
Slide 20: 407 ETR information – Q1
407 ETR information – Q1 (in M$, unless otherwise indicated) Q1 2017 Q1 2016 Change Revenues 260.7 225.3 15.7% Operating expenses 40.2 37.7 6.6% EBITDA 220.5 187.6 17.5% EBITDA as a percentage of revenues 84.6% 83.3% 1.3% Net Income 87.4 64.6 35.3% Traffic / Trips (in millions) 27.5 26.8 2.6% Averag
Slide 21: 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$) 600 2,641 Total dividends paid 460 by 407 ETR 2,517 2,437 Dividends received 300 by SNC-Lavalin 2,336 2,326 2,340 2,356 2,253 2,253 190 2,215 145 120 135 114 12
Slide 22: Diversity of revenue base – by segment
Diversity of revenue base – by segment (in B$) 2016 2017 (12 months) (3 months) 4% 3% 6% 3.3% $0.3 $0.4 $0.1 O&G $0.8 19% 20.2% Infrastructure $1.6 $0.4 44% (I&C + O&M) 46.3% $3.7 Power $0.8 M&M $3.9 $2.5 Capital $0.5 30% 24.7% $1.8 2016 Revenues Q1 2017 Revenues $8.5 billion $1.8 billion 22
Slide 23: Solid financial position
Solid financial position (in M$) March 31 December 31 2017 2016 Assets Cash and cash equivalent 811 1,055 Other current assets 3,230 3,135 Property and equipment 310 298 Capital investments accounted for by the equity or cost methods 459 448 Goodwill 3,247 3,268 Intangible assets related to Kentz ac
Slide 24: Net income reconciliation – Q1
Net income reconciliation – Q1 (in M$, except per share amount) Net Income, Net charges Acquisition Net gain on Net income, as reported related to the Capital adjusted restructuring & Investment and right-sizing plan Acquisition- Amortization E&C business and other related costs of intangible Dispos