A Deep Dive Into EDPM
›December 2019A Deep Dive Into EDPM December 2019 Forward-looking statements - - PowerPoint PPT Presentation
A Deep Dive Into EDPM December 2019 Forward-looking statements - - PowerPoint PPT Presentation
A Deep Dive Into EDPM December 2019 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
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 arrangements. Statements made in this presentation that describe the Company’s or management’s budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be “forward-looking statements”, which can be identified by the use of the conditional or forward-looking terminology such as “aims”, “anticipates”, “assumes”, “believes”, “cost savings”, “estimates”, “expects”, “goal”, “intends”, “may”, “plans”, “projects”, “target”, “should”, “synergies”, “vision”, “will”, or the negative thereof or other variations thereon. Forward-looking statements also include any
- ther statements that do not refer to historical facts. Forward-looking statements also include statements relating to the following: (i) future capital expenditures, revenues, expenses, earnings,
economic performance, indebtedness, financial condition, losses and future prospects; and (ii) business and management strategies and the expansion and growth of the Company’s operations. All such forward-looking statements are made pursuant to the “safe-harbour” provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company’s current
- bjectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company’s business and anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes. Forward-looking statements made in this presentation are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company’s 2018 Management Discussion and Analysis (MD&A) and as updated in the first, second and third quarters of 2019. If these assumptions are inaccurate, the Company’s actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company’s assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risk factors are set out in the Company’s 2018 MD&A and as updated in the first, second and third quarters of 2019.
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EDPM leadership
Philip Hoare
President EDPM Appointed in March 2019 › 22 years with Atkins / EDPM. Joined Atkins in 1997 and has held several senior positions including leading the transportation division and operations across Europe and CEO UK & Europe from 2017 to 2019 › Member of Institution of Civil Engineers Appointed in October 2017
Chris Birdsong
CEO Asia Pacific Appointed in 2010 › Joined Atkins / EDPM in 2007 and appointed managing director of the UK Management Consultants › Previously worked for Bechtel for over 30 years in project development and delivery › Fellow of the Institute of Business Consulting (IBC) and is on the IBC Council
George Nash
President & CEO North America Appointed in 2016 › Joined Atkins / EDPM in 2016 from AECOM, where he most recently served as Group President of Energy, Infrastructure and Industrial Construction › More than 30 years of experience providing a wide range of consulting, engineering, design, construction and commissioning services to markets worldwide › Bachelor’s degree in Mechanical Engineering from Brown University and registered professional engineer
Simon Cole
Senior Vice President Finance › 33 years with Atkins / EDPM › Previously Atkins Group Financial Controller and divisional Finance Director › Group including the UK and Far East, Major project P3 / PPP experience as Controller and Finance Director › Fellow of the Chartered institute of Certified Accountants
Richard Robinson
CEO UK&E Appointed in November 2019 › Previously the Chief Operating Officer at HS2 and has held senior leadership roles at AECOM, BAA Heathrow, and Anglo American following his early career at ICI › Chartered Chemical Engineer
Cris Dedigama
CEO MEA › Appointed in November 2019 › Spent 30 years leading projects and managing operations in the engineering and construction sector › Developed SNC-Lavalin’s Infrastructure sector in the Middle East region. Appointed in November 2019
The driving force behind a successful business
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EDPM
World-Class global consultancy business with highly respected Atkins and F&G brands with 80+ years of design and engineering history Robust growth prospects driven by core UK and European markets and significant opportunities in underpenetrated North American and APACmarkets Leadership in digital innovation to enhance customer delivery and expand service offerings
Global consultancy business
Multidisciplinary team of ~21,000 professionals that delivers comprehensive end-to-end project solutions across design, engineering and project management consultancies
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World-class services provider
UK & Europe ~ 9,300 employees North America ~ 6,500 employees Asia Pacific ~ 1,250 employees Global Design Centre (India) ~ 2,150 employees Middle East & Africa ~ 1,800 employees
Core business is helping clients plan, design and enable major capital programs Atkins, Member of the SNC-Lavalin Group, is one the world’s most respected design, engineering and project management consultancies
Delivering End-to-End Service Offering With Global Delivery Capabilities and ~ 21,000 people across four regions
To infrastructure and transportation sectors
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Professional services
Business Highlights
› Services oriented business with inherently low financial risk / asset light model leading to consistent and predictable marginprofile › Negligible/ limited exposure to construction risk › Lower project investment costs and lower third party project costs › “Book and burn” business model – short / medium term contracts,framework and master service agreements with robust replenishmentrates › ‘Seller doer’model › Blue chip public and private sector client base with recurring businessand with
- ver 20,000 contracts globally
› 90% of revenues sourced from government procurement agencies and 10% from private sector
Attractive and diversified consultancy model
Oriented business model
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Professional services
Revenue Segmentation
FY18 Contract Type
- Approx. even revenue contribution across
service offerings with ~1/3 of revenue generated from long-dated recurring framework agreements
FY18 Offering Mix
Largely services oriented business with a focus on design, consultancy and project & program management
Sector Exposure
› Revenue base diversified across sectors › Increased resilience against sector cyclicality
Oriented business model
7 Consultancy Large Programmes Frameworks 38% 30% 32% Consultancy Design Project & Program Management 35% 21% 6% Rail Roads E&W Buildings Defence Airports Industrial/ Other 22% 10% 24% 9% 6% 4% Other
Attractive and diversified consultancy model
25% 38%
Robust revenue growth and industry-leading profitability
Resilient and Growing Revenue Base
Consistent growth driven by robust markets in key geographies Contracts diversification and broad geographic mix of longstanding clients in
- ur portfolio mitigates risk and volatility
Industry Leading Profitability
Strategic focus on profitability by focusing
- n higher margin work
2018 margin improvement explained by acquisition synergies, improved efficiency, productivity from operating model, efficiencies of scale and use of the Global Design Centre
1 2
LTM Q3 2019 FY 2018
$3,896M $3,676M
9.3% 9.6%
Revenues Segment EBIT* Margin
Delivering
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Resilient Business Model with Industry Leading Profitability
Note: Segment EBIT* margin % calculated on a gross revenue basis
* Non-IFRS measure, additional details can be found in SNC-Lavalin’s MD&AHighly respected and well-known Atkins and F&G brands Strong global footprint across North America, UK & Europe, Middle East and APAC New digital capabilities transforming design and creating new digital services and platforms Full spectrum, end to end engineering consultancy services across a broad range of markets Ability to attract and retain the world’s best engineering talent
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Why we win
SNC-Lavalin’s EDPM division is a world leading global consultancy business
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Global Strength and Depth in Rail and Transit
Crossrail, London, UK
Market capabilities
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Technical Excellence in Roads and Bridges
Project Neon, Nevada, USA
Market capabilities
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World-class Reputation in Masterplanning
Asia Aerospace City,Malaysia
Market capabilities
Growing Defence and Cyber Security Expertise
Horizon Energy Security Standards Review
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Market capabilities
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Project and Programme Management
The Royal Atlantis The Palm, Dubai, UAE
Market capabilities
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Delivering New Technology
Biometric Recognition, HeathrowAirport
Market capabilities
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End-to-end Consultancy and Advisory Capability
Reshaping our Cities
Market capabilities
Aligned Corporate Culture and Values
Merger of legacy SNC-Lavalin rail & transit with Atkins increasing depth and breadth of capabilities and leading to significant project awards
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Depth and breadth of combined capabilities resulting in incremental project wins
› Leveraging enhanced capabilities across the platforms leading to significant project awards › Inland Rail PMO Contract › Metro PMO Contract › Bakerloo Line extension contract
Consolidation of Best-in-Class Practices with Legacy Canadian Infrastructure Engineering
› Transfer of deep pool of knowledge and expertise to legacy Canadian Infrastructure Engineering through integration with EDPM › Facilitates sharing of world class digital capabilities
Realization of cost synergies
Successfully executed integration plan and delivered targeted $120M cost synergies within 18 months post acquisition
Driving revenue and cost synergies
Successful integration
EDPM growth strategy
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Grow our Core
UK&E, MEA, North America, AsiaPAC Maximise position on Transformational projects
New Growth Areas
North East and North West USA Australia
Harnessing Data and Technology
Design Transformation Digital Asset Management Intelligent Mobility
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Levers to drive continued growth
Lead the transformation of the infrastructure sector by harnessing data and technology across our services
1 3
UK & Europe
Continued pursuit of infrastructure opportunities, focusing on roads, rail, water, defense and security Continued diversification from public infrastructure in Hong Kong Focus on urban planning, architecture and design in mainland China Multidisciplinary integrated services emphasizing
- n major projects
Asia Pacific Middle-East & Africa
1 Grow our core
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North America UK & Europe Asia Pacific ME A
Significant growth potential across core geographies
Invest for further scale to capture the tailwinds in the transportation market Attractive Canadian market with projected infrastructure spending of $165B across all levels of government
North America
North East and North West United States
Ability to enter in underpenetrated markets in growing US infrastructure sector Continued momentum in gaining further market share Strong industry tailwinds
Australia
EXISTING HUBS NEW SOUTH WALES WHITE SPACE VICTORIA FUTURE WHITE SPACE
Midwest Mid Atlantic
2 New growth areas
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Opportunity to expand in US & Australia
FUNCTION BENEFIT DIGITAL EXPERTISE OUR FUTURE VALUE DEPENDS ON OUR ABILITY TO EXTRACT VALUE FROM ASSET DATA 21
3 Harnessing data & technology
EDPM
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To revolutionize client outcomes
3 Harnessing data & technology
The future of our industry is about transforming each stage of the lifecycle by creating design and engineering solutions for the future of the asset, making the build more certain and providing data rich asset management. Whilst we remain engineers, to be the disruptor not the disrupted, we are equipping ourselves to be the industry experts in information management and data analytics.
TIME DIGITAL TRANSFORMATION NOW
THE EVOLUTION WE ARE ALL ON PREPARING THE FOUNDATIONS SINCE 2016 TIME TO JUMP OFF THE CURVE DELIVER AHEAD OF CLIENT EXPECTATIONS & TRANSFORM THE SECTOR HARNESSING THE POWER OF TECHNOLOGY AND COLLABORATIVE WORKING
Creating a “mature” truly digital company
An environment for innovation and collaboration Opportunities for new business models
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To transform consultancy sector
3 Harnessing data & technology
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THROUGH AUTOMATION + ACTIONABLE INSIGHT
1
ENGINEERING DESIGN
2
PROJECT MANAGEMENT/PMO
3
CONSULTANCY
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To evolve our services and drive better outcomes
3 Harnessing data & technology
Task Based Projects Work Package Programs Clients GDC + HVEC Integration GDC2.0 Launch
+2,500
EMPLOYEES
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OFFICES
2,100
TECHNICAL RESOURCES
24x7
OPERATIONS
72%
BELOW AGE OF 35
97
CHARTERED/ PROFESSIONAL ENGINEERS
24%
WOMEN; 6% OF MANAGEMENT
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TECHNICAL AUTHORITIES
Highly-skilled resources providing technical support for global operations and project delivery
2 5
To exploit the potential of our global design centre
3 Harnessing data & technology
2007 2009 2011 2013 2015 2018-19
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THE DIGITAL AIRPORT
$20M
Queue measurement and management
We are installing camera sensors and a back- end analytics system across the airport to monitor and enhance the flow of passengers.
REVENUE POTENTIAL OVER 18 MONTHS
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25%
TIME SAVING FOR US AND THE CLIENT
Machine learning
Using artificial intelligence technology,we applied machine learning to the analysis of pavements and roads for a project that covers 4,000 miles of data. The expectation was to reduce the time stress detection took – a time frame that has never been met
- before. The client benefited from faster
access to data and the ability to make faster decisions about issues.
Data Transfer Systems
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MARKET LEADERS
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$77M
REVENUE
Cyber delivery partner
For this security client we have provided technology, delivery and engineering consultancy across their cyber portfolio, reducing their exposure to cyber risks. Our full range of cyber consulting services include strategy, asset management, threat identification, programme management and education.
Confidential Client
$8B
- EST. UK MARKET
$106M
3 YEAR PIPELINE
Atkins is delivering on the East West Rail Project Phase 2 - a major programme establishing a strategic railway connecting East Anglia with Central, Southern and Western England. Having developed an augmented reality mobile app displaying all utilities and modelling data in real-time, we are simplifying the communication of complex data quickly and reliably across all project stakeholders.We are also applying BIM across all elements of the project.
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EAST WEST RAIL PROJECT PHASE 2
$115M
REVENUE OVER 3 YEARS
~$49M
REVENUE THIS YEAR
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Attracting & Retaining Top Engineering Talent
› Our growth relies on attracting and retaining the most talented and capable people in the sector › The Atkins and F+G brands are key to attraction globally – in the UK&E in 2019, we’ll recruit 400 graduates from over 12,000 applications › Headcount has grown significantly since acquisition › We aim to be the employer of choice in our sector, championing diversity, inclusion and wellbeing - acknowledged through numerous awards
Recent Employer Awards
Global Workforce Growth & Declining Attrition
2017A 2018A 2019F
18,200 20,000 21,000
Canada EDPM excl.Canada
Atkins a Member of the SNC-Lavalin Group is a premier employer in the industry
Driving growth
3 4
World-Class Global Consultancy Business
World-Class global consultancy business with highly respected Atkins and F&G brands with 80+ years of design and engineering history
Robust Growth Prospects Through Well Funded Global Infrastructure Markets
Robust growth prospects driven by in core UK and European markets and significant opportunities in underpenetrated North American and APAC markets
Leading Edge Digital Capability
Leadership in digital innovation to enhance customer delivery and expand service offerings
Highly diverse and dedicated workforce
Multidisciplinary team of ~21,000 professionals that delivers comprehensive end-to-end project solutions across design, engineering and project management consultancies
$
Key takeaways
›World-class31