Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q4 2022 Earnings Presentation
24 slides from Atkinsrealis's earnings presentation, Mar 3, 2023
Slide 1: Q4 Conference Call Presentation
Q4 CONFERENCE CALL PRESENTATION March 3, 2023
Slide 2: Forward-Looking Statements, Forward-Looking Financial Information and Outlook
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 SNC-
Slide 3: Delivering on Company's "Pivoting to Growth" Strategy
Delivering on Company’s “Pivoting to Growth” Strategy Growing SNCL Services Unwinding LSTK Projects 4.9% 6.8% 8.7% › The two Ontario projects 2022 revenue 2022 Organic 2022 Segment Adj. have reached the major growth revenue growth* EBIT to Segment milestone of being largely (YoY) (YoY) revenue ratio
Slide 4: 2022 Accomplishments
2022 Accomplishments Delivered on our 2022 Targets Other Key Highlights 2022 Latest Targets 2022 Actual › Added ~3,000 net employees to SNCL Services organic revenue growth* Between 5% and 7% 6.8% ✓ workforce SNCL Services segment Adjusted EBIT to segment revenue ratio Between 8.5% and 9.0% 8.7% ✓ ›
Slide 5: Q4 Financial Highlights and 2023 Outlook
Q4 Financial Highlights and 2023 Outlook (All results reflect comparisons to prior-year period of Q4 2021, except otherwise indicated) SNCL Services LSTK Projects 2023 Outlook › Revenue increased 1.0% to $1.7B, or 1.1% on › Segment Adjusted EBIT was negative › SNCL Services organic revenue an organi
Slide 6: Engineering Services
2022 REVENUE Engineering Services 2021 2022 BY REGION REVENUES ($M) PROFITABILITY ($M) BACKLOG ($M) SEGMENT ADJ. EBIT SEGMENT ADJ. EBITDA** APAC Other (% of gross revenues) (% of segment net revenues)* MEA UK & Europe 9.3% +24% 10.6% 17.8% 931 931 8.5% 931 14.6% 128 Canada 2.3% 4,273 4,686 15.6% 23.
Slide 7: Nuclear
2022 REVENUE Nuclear 2021 2022 BY REGION REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) Other Canada (0.2%) US 15.0% 16.1% 1.2% 905 896 136 144 15.8% 18.2% 220 224 35 41 Q4 Full-Year Q4 Full-Year UK & Europe Organic revenue growth (contraction)* Q4 KEY HIGHLIGHTS BY MARKET › Strong margin and bookings, wi
Slide 8: O&M
2022 REVENUE O&M 2021 2022 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) 4.6% 11.6% 9.9% BY REGION 12.4% 470 497 55 49 10.1% 7.8% 115 132 12 10 Other Q4 Full-Year Q4 Full-Year Canada Organic revenue growth* Q4 KEY HIGHLIGHTS › All projects performing as expected, continuing to see additional services rev
Slide 9: Linxon
2022 REVENUE Linxon 2021 2022 REVENUES ($M) PROFITABILITY ($M) BACKLOG ($M) SEGMENT ADJ. EBIT (% of SEGMENT ADJ. EBITDA** gross revenues) (% of segment net revenues)* 0.4% 3.1% 4.5% 1.9% 18 2.9% 22 128 BY REGION (17.0%) 588 561 3 4 974 882 -10 -6 764 -14 -13 (1.8%) (1.3%) APAC U.K. & Europe 164 134
Slide 10: Capital
Capital 2021 2022 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) 134 119 109 93 65 49 61 45 Q4 Full-Year Q4 Full-Year Q4 KEY HIGHLIGHTS › Revenue and Segment Adjusted EBIT mainly impacted by the decreased contribution from the sale of InPower BC G.P. (John Hart Generating Station) in Q1 2022 as well as lo
Slide 11: LSTK Projects
LSTK Projects 2021 2022 REVENUES ($M) SEGMENT ADJUSTED EBIT ($M) LSTK BACKLOG ($M) -41% -150 -233 -261 907 -303 1,167 799 664 685 164 119 Q4 Full-Year Q4 Full-Year Dec. 31 Sept. 30 Dec. 31 Q4 KEY HIGHLIGHTS › The two Ontario LSTK projects are largely physically complete › REM progressing well; proje
Slide 12: Financial Performance
FINANCIAL PERFORMANCE
Slide 13: Q4 Selected Financial Metrics
Q4 Selected Financial Metrics SNCL Services Engineering Services O&M Nuclear Linxon (in M$, except otherwise indicated) Q4 2022 Q4 2021 Change REVENUES ($M) Revenues PS&PM 1,851 1,880 (2)% 1,716 1,732 Capital 49 65 (25)% Total Revenues 1,900 1,945 (2)% Segment Adjusted EBIT – Total 51 67 (24)% Corpo
Slide 14: 2022 Selected Financial Metrics
2022 Selected Financial Metrics SNCL Services (in M$, except otherwise indicated) 2022 2021 Change Engineering Services O&M Revenues Nuclear Linxon PS&PM 7,440 7,237 3% Capital 109 134 (19)% REVENUES ($M) Total Revenues 7,549 7,371 2% 6,640 Segment Adjusted EBIT – Total 413 489 (16)% 6,330 Corporate
Slide 15: Leverage and DSO
Leverage and DSO* NET LIMITED RECOURSE & RECOURSE DEBT TO ADJUSTED EBITDA DAYS SALES OUTSTANDING (DSO)* FROM THE ENGINEERING RATIO** RECONCILIATION SERVICES SEGMENT 1 (in M$, except otherwise indicated) Dec. 31 2022 Limited recourse 400 Recourse debt 1,471 Cash and cash equivalents (570) 65 60 61 60
Slide 16: Free Cash Flow
Free Cash Flow* (in M$) Q4 2022 2022 Segment Adjusted EBITDA* from SNCL Services 191 721 Change in working capital and other items from SNCL Services 1 149 (169) Net cash generated from operating activities - SNCL Services** 340 552 Income taxes paid (12) (77) Interest paid (33) (117) Corporate cost
Slide 17: 2023 Outlook
2023 Outlook 2023 Target 2022 Actual SNCL Services organic revenue growth* Between 5% and 7% 6.8% SNCL Services Segment Adjusted EBIT to segment revenue ratio Between 8% and 10% 8.7% Segment Adjusted EBITDA to segment net revenue ratio* - Engineering Services Between 14% and 16% 14.6% Corporate sell
Slide 18: Conclusion
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Slide 19: Conclusion
Conclusion › SNCL Services business delivering against “Pivoting to Growth” strategy › Recent results further demonstrate the resiliency of SNC-Lavalin’s go forward business and its ability to grow in the current macro environment › Strongly positioned with a leading presence across core markets of
Slide 20: Questions & Answers
QUESTIONS», & ANSWERS,
Slide 21: Appendix
APPENDIX
Slide 22: Financial Targets (2022-2024)
Financial Targets (2022-2024)1 2022-2024 Target 2022 Actual SNCL Services organic revenue growth* (annually) Between 4% and 6% 6.8% SNCL Services Segment Adjusted EBIT to segment revenue ratio (annually) Between 8% and 10% 8.7% Engineering Services Between 8% and 10% 8.5% Nuclear Between 13% and 15%
Slide 23: LSTK Projects Update
LSTK Projects Update Eglinton Trillium Réseau Express Métropolitain (REM) As at December 31, 2022 Client Infrastructure Ontario City of Ottawa CDPQ Backlog ($M) ~90 ~120 <425 Approximate Completion ~95% ~90% >75% Expected Substantial 2023 2023 2024 Completion Year › All stations / buildings structur
Slide 24: Endnotes
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 fina