Atkinsrealis Group Inc. · TSX:ATRL
Atkinsrealis — SNC-Lavalin Group — Q4 2009 Earnings Presentation
26 slides from Atkinsrealis's earnings presentation, Mar 5, 2010
Slide 1: Fourth quarter and year end December 31st, 2009 conference call notes
Fourth quarter and year end December 31st, 2009 Conference call notes March 5, 2010
Slide 2: Agenda
Agenda 2 9 Forward-looking Statements • Denis Jasmin, Vice-President, Investor Relations 9 Highlights and Outlook • Pierre Duhaime, President and Chief Executive Officer 9 Financial Review • Gilles Laramée, Executive Vice-President and Chief Financial Officer
Slide 3: Forward-looking statements
Forward-looking statements 3 9 Unless otherwise specified, all dollar amounts are expressed in Canadian dollars. 9 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
Slide 4: 2009 Financial highlights
2009 Financial highlights 4 Year-to-date results 9 Net income increased by 15% to $359.4 million compared to $312.5 million for the year ended December 31, 2008. The increase is mainly due to: • An overall increase in gross margin-to-revenue ratio from the Packages activities • Partially offset by
Slide 5: 2009 Financial highlights (cont'd)
2009 Financial highlights (cont’d) 5 9 The Company’s balance sheet position remained solid with cash and cash equivalents of $1.2 billion at December 31, 2009 9 The Company’s total revenue backlog increased to $10.8 billion Both Services and Packages backlogs remained strong at $1.5 billion and $4
Slide 6: Engineering companies acquisitions in 2009
Engineering companies acquisitions in 2009 6 9 BV2 BVBA (Belgium – Pharmaceutical and biotechnology) 9 VST Ingenieros Ltda (Chile – Mining & Metallurgy) 9 Antis Conseils & Ingénierie S.A.S. and Cabinet d’Études Édouard Coumelongue Ingénieurs Conseils S.A. (France – Industrial and Infrastructure) 9 S
Slide 7: ICI 2009 notable events
ICI 2009 notable events 7 9 Groupe Immobilier Ovation (100% SLI) had entered into a 29-year agreement with the Government of Quebec to design, build, operate, maintain and finance a new concert hall for the Montreal Symphony Orchestra in Montreal. 9 Astoria II (18.5% SLI) obtained over US$1 billion
Slide 8: Financial objectives
Financial objectives 8 Financial Indicator: Financial Objective: Actual Results 2009 2008 1) Growth in net income Annual growth between 7% and 15.0% 106.4% 12% 2) Return on Average Shareholders' At least equal to long-term 27.3% 29.1% Equity (ROASE) Canada Bond Yield plus 6% (totalling 9.9% for 2009
Slide 9: Diversity of the Company's revenue base
Diversity of the Company’s revenue base 9 (in millions of $) Categories of activity Geographic areas Services Industry segments 53% Canada $2,221.4 $3,218.7 37% 36% Packages $2,202.2 O ther Regions $63.2 1% 3% Asia $212.3 4% United States $272.0 15% 6% 5% 21% Infrastructure & Latin America I.C.I.* O
Slide 10: Outlook
Outlook 10 9 2010 net income to be as high or higher than 2009 Due to: • Strong revenues backlog • Numerous and diverse prospects in Canada and outside Canada
Slide 11: Dividend increase
Dividend increase 11 Dividend 9 Given the positive outlook and the Company’s strong revenues backlog, the Board of Directors has increased the quarterly cash dividend by 13% to $0.17 per share Quarterly Dividend per share (in $) +13% increase +25% 0.170 increase 0.150 +33% increase +29% 0.120 increa
Slide 12: Financial Review
12 Financial Review Gilles Laramée, Executive Vice-President and Chief Financial Officer
Slide 13: Net income details
Net income details 13 (in millions of $) Fourth Year ended Quarter Dec. 31 2009 2008 2009 2008 Net income 98.7 75.0 359.4 312.5 SNC-Lavalin's net income from ICI: From Highway 407 4.9 13.4 9.8 20.0 From other ICI 17.8 0.3 27.1 17.2 Net income excluding ICI 76.0 61.3 322.5 275.3
Slide 14: Consolidated income statement
Consolidated income statement 14 (in millions of $) Fourth Year ended Quarter Dec. 31 2009 2008 2009 2008 Revenues 1,583.2 1,943.9 6,101.7 7,106.9 Gross margin 316.5 266.8 1,151.1 1,012.9 Selling, general and administrative expenses 148.1 157.1 545.6 515.2 Interest (revenues) and capital taxes: - fr
Slide 15: Revenues from Canada and outside Canada
Revenues from Canada and outside Canada 15 Year Ended December 31 2009 2008 For all categories of activity Canada Canada 53% 51% Outside Outside Canada Canada 47% 49% For Services and Packages Outside Canada 63% Outside Canada Canada 37% 62% Canada 38%
Slide 16: Annual gross margin
Annual gross margin 16 (in millions of $) As a % of As a % of 2009 revenues 2008 revenues Services 562.7 25.3% 678.1 29.4% Packages 357.4 16.2% 130.0 4.0% Operations & Maintenance 50.1 3.9% 43.6 3.6% Infrastructure Concession Investments 180.9 47.6% 161.2 46.5% Total gross margin 1,151.1 18.9% 1,012
Slide 17: Revenues and operating income (loss) by segment
Revenues and operating income (loss) 17 by segment Year ended December 31 (in millions of $) 2009 2008 Operating Operating Revenues Income Revenues Income (loss) Services and Packages Infrastructure & Environment 1,602.6 212.9 1,700.4 113.0 Power 921.9 88.0 1,176.2 (24.4) Chemicals & Petroleum 829.4
Slide 18: 2010 Operating income expectations
2010 Operating income expectations 18 2009 2009 Expectations per 2009 Actual vs. 2010 Operating Income 2008 MD&A Actual Expectations Expectations Services and Packages Infrastructure and Environment 9 Power 9 Chemicals and Petroleum 9 Mining and Metallurgy 9 Other Industries X Operations and Mainten
Slide 19: Balance sheet
Balance sheet 19 (in millions of $) December 31, December 31, 2009 2008 Assets Cash and cash equivalents 1,218.2 988.2 Other current assets 2,174.8 2,564.2 Property and equipment: From infrastructure concession investments 2,217.0 1,750.7 From Other Activities 114.0 123.4 Goodwill 520.9 496.1 Infras
Slide 20: Net book value of ICI
Net book value of ICI 20 (in millions of $) Dec. Dec. 2009 2008 Net book value of ICI accounted for by the full or proportionate consolidation methods 250.9 204.2 Net book value of ICI accounted for by the equity or cost methods: Net book value of ICI accounted for by the equity method 194.6 110.4 N
Slide 21: Solid financial position
Solid financial position 21 (in millions of $) Cash position 2009 2008 2007 2006 2005 Cash and cash equivalents 1,218.2 988.2 1,088.6 1,106.3 1,153.5 Freehold cash (included above) 800.0 600.0 600.0 500.0 500.0 • Return on Average Shareholders’ Equity (ROASE) 29.1% 27.3% The Company strives to be in
Slide 22: Revenue backlog by category of activity
Revenue backlog by category of activity 22 (in millions of $) Dec. Sept. Dec. 2009 2009 2008 Services 1,464.9 1,570.2 1,545.3 Packages 4,197.5 3,495.2 3,508.0 Operations & Maintenance 2,596.1 2,587.0 2,196.2 AltaLink 1,877.4 1,839.7 1,685.2 Highway 407 600.7 592.5 558.4 Others 100.6 111.5 99.1 Infra
Slide 23: Services and Packages revenues backlog by segment
Services and Packages revenues backlog by segment 23 (in millions of $) At December 31 2009 2008 Services Packages Services Packages Services and Packages Infrastructure and Environment 677.9 2,034.6 676.8 2,174.4 Power 253.5 436.1 194.7 546.0 Chemicals and Petroleum 170.5 1,553.5 179.5 647.9 Mining
Slide 24: IFRS – SLI's main impact
IFRS – SLI’s main impact 24 Subject Differences identified Potential impact on SLI (IFRS vs CND GAAP) Interest in Jointly controlled entities The Company intends to account for jointly Joint Ventures IFRS: Equity method or Proportionate controlled entities by applying the equity (J/V) consolidation
Slide 25: Peer group comparison
Peer group comparison 25 Net Income Growth R.O.E . (1) P/E (2) (Last TTM) To be comparable to our peers, SLI’s P/E needs to SNC-Lavalin 15.0% 27.3% 15.3 (3) be adjusted by removing from Fluor (4.4)% 20.9% 9.3 SLI’s price and earnings SLI’s Foster Wheeler (33.5)% 31.7% 7.6 ICIs. Jacobs Engineering (1
Slide 26: Further questions and contact
26 • 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