WS Atkins plc Half year results for the six months ended 30 - - PDF document

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WS Atkins plc Half year results for the six months ended 30 - - PDF document

Dec 08, 2023 141 likes •326 views

Celebrating 75 years of design, engineering and project management excellence WS Atkins plc Half year results for the six months ended 30 September 2013 14 November 2013 Uwe Krueger Chief executive officer Delivering the strategy Good

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SLIDE 1

Celebrating 75 years of design, engineering and project management excellence

WS Atkins plc

Half year results for the six months ended 30 September 2013

14 November 2013

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SLIDE 2

Uwe Krueger

Chief executive officer

Delivering the strategy

Good results

4

  • Underlying profit before tax up 8.2% to £44.7m, on revenue 12.2% ahead
  • Strong UK performance with revenue up 16%, good growth in focus areas
  • f Energy and Asia Pacific
  • Strategic progress with the sale of UK highways services and Peter

Brown construction management disposal

  • Confluence project management business acquired on 4 October 2013
  • Improved operating cash performance with net funds at September 2013
  • f £136.1m
  • Financial position remains strong, with new five year revolving credit

facility secured

  • Interim dividend increased by 5%
  • Full year outlook slightly ahead of expectations.
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SLIDE 3

Heath Drewett

Group finance director

30 Sep 2013 30 Sep 2012 Revenue £915.4 m £815.7 m 12.2 % Operating profit £49.7 m £44.8 m 10.9 % Operating margin 5.4 % 5.5 % (10) bp Underlying operating profit £50.7 m £45.9 m 10.5 % Underlying operating margin 5.5 % 5.6 % (10) bp Underlying profit before tax £44.7 m £41.3 m 8.2 % Underlying fully diluted eps 35.9 p 32.9 p 9.1 % Dividend per share 10.5 p 10.0 p 5.0 % Work in hand 87.7 % 88.3 % Average staff numbers 17,715 17,482 1.3 % Net funds £136.1 m £83.7 m 30 Sep 2013 31 Mar 2013 Closing staff numbers 17,407 17,899

Note: numbers above include UK highways services staff 169 1,128

Financial summary

6

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SLIDE 4

Segmental summary

7

£m Revenue Operating profit Operating margin UK and Europe 525.4 27.7 5.3 % North America 205.4 8.4 4.1 % Middle East 82.6 4.2 5.1 % Asia Pacific 49.2 3.4 6.9 % Energy 83.4 6.4 7.7 % Total for segments 946.0 50.1 5.3 % Joint ventures included above (30.6) 0.6 Total before unallocated items 915.4 50.7 5.5 % Unallocated central items

  • (1.0)

Total for Group 915.4 49.7 5.4 %

UK and Europe

New segmental reporting

8

30 Sep 2013 30 Sep 2012 Revenue (£m) 525.4 457.3 14.9 % Operating profit (£m) 27.7 28.2 (1.8) % Operating margin 5.3 % 6.2 % (90) bp Work in hand 87 % 89 % Average staff numbers 9,924 9,791 1.4 % 30 Sep 2013 31 Mar 2013 Staff numbers 9,606 10,134 (5.2) %

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SLIDE 5

UK performance

Strong top line growth

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  • Revenue growth across all sectors, particularly strong in rail and highways
  • Operating margin of 6.0%, excluding highways services business
  • Underlying headcount growth of 5.6% since 31 March.

30 Sep 2013 30 Sep 2012 Revenue (£m) 488.4 420.5 16.1 % Operating profit (£m) 26.2 24.8 5.6 % Operating margin 5.4 % 5.9 % (50) bp Work in hand 88 % 90 % Average staff numbers 9,184 9,002 2.0 % 30 Sep 2013 31 Mar 2013 Staff numbers 8,878 9,374 (5.3) % Note: above includes highways services staff 169 1,128

Europe

Steady markets in Scandinavia

10

30 Sep 2013 30 Sep 2012 Revenue (£m) 37.0 36.8 nm Operating profit (£m) 1.5 3.4 (56) % Operating margin 4.1 % 9.2 % (510) bp Work in hand 78 % 80 % Average staff numbers 740 790 (6.3) % 30 Sep 2013 31 Mar 2013 Staff numbers 728 760 (4.2) %

  • Revenue flat despite headcount reductions, predominantly in Denmark
  • Tough comparatives due to provision release in H1 2012/13
  • Work in hand position stable, underpinning delivery of second half numbers.
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SLIDE 6

North America

Improved performance

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  • Overall market remains stable
  • Headcount reduction driven by Peter Brown disposal – completed in August
  • Roll out of operational excellence will focus on reducing overhead and

complexity in the business, driving margin improvement over time.

30 Sep 2013 30 Sep 2012 Revenue (£m) 205.4 195.7 5.0 % Operating profit (£m) 8.4 6.6 27.3 % Operating margin 4.1 % 3.4 % 70 bp Work in hand 91 % 89 % Average staff numbers 3,016 3,127 (3.5) % 30 Sep 2013 31 Mar 2013 Closing staff numbers 2,994 3,039 (1.5) %

North America analysis

Peter Brown losses impacted overall performance

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30 Sep 2013 30 Sep 2012 31 Mar 2013 31 Mar 2012 Revenue (£m) Consultancy 164.1 152.5 303.4 286.4 Peter Brown 6.9 13.6 24.4 80.9 Faithful+Gould 34.4 29.6 61.9 54.6 North America 205.4 195.7 389.7 421.9 Operating profit (£m) Consultancy 9.4 8.6 18.1 18.9

Margin 5.7 % 5.6 % 6.0 % 6.6 %

Peter Brown (3.3) (3.4) (6.5) (1.1) F+G 2.3 1.4 3.7 3.4

Margin 6.7 % 4.7 % 6.0 % 6.2 %

North America 8.4 6.6 15.3 21.2 Margin (%) 4.1 % 3.4 % 3.9 % 5.0 %

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SLIDE 7

Middle East

Good cash collection in a difficult first half

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  • First half impacted by ongoing project delays and restructuring in Kuwait

and Bahrain

  • Focus on infrastructure, the re-emerging property market in United Arab

Emirates (UAE) and metro/rail opportunities in Qatar, UAE and Kingdom of Saudi Arabia

  • Key metro wins underpin second half outlook.

30 Sep 2013 30 Sep 2012 Revenue (£m) 82.6 79.8 3.5 % Operating profit (£m) 4.2 5.1 (17.6) % Operating margin 5.1 % 6.4 % (130) bp Work in hand 90 % 89 % Average staff numbers 1,979 2,004 (1.2) % 30 Sep 2013 31 Mar 2013 Staff numbers 1,971 1,979 nm

Asia Pacific

Strong growth

14

  • Revenue increase of almost 20% reflects successful diversification strategy
  • Confluence acquisition complements our existing project management

business in the region

  • Investment in expanding footprint in SE Asia will support further growth
  • ver time.

30 Sep 2013 30 Sep 2012 Revenue (£m) 49.2 41.2 19.4 % Operating profit (£m) 3.4 2.9 17.2 % Operating margin 6.9 % 7.0 % (10) bp Work in hand 93 % 91 % Average staff numbers 1,317 1,241 6.1 % 30 Sep 2013 31 Mar 2013 Closing staff numbers 1,341 1,295 3.6 %

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SLIDE 8

Energy

Significant bidding activity

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  • Strong revenue and profit growth in the period
  • Ongoing investment in partnerships and larger scale projects
  • Outlook remains positive given buoyant market conditions.

30 Sep 2013 30 Sep 2012 Revenue (£m) 83.4 72.5 15.0 % Operating profit (£m) 6.4 5.6 14.3 % Operating margin 7.7 % 7.7 % nm Work in hand 78 % 81 % Average staff numbers 1,401 1,249 12.2 % 30 Sep 2013 31 Mar 2013 Closing staff numbers 1,420 1,376 3.2 %

Cash flow

Increased cash flow from operating activities

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£m 30 Sep 2013 30 Sep 2012 Operating profit 49.7 44.8 Depreciation/amortisation 11.4 10.0 Working capital (33.5) (54.9) Pension (16.0) (11.0) Provisions/other (2.0) (1.5) Cash flow from operating activities 9.6 (12.6)

  • Continued focus on cash across the Group
  • Improved working capital performance, supported by good collections in the

Middle East

  • Net funds significantly ahead year on year at £136.1m (Sep 2012: £83.7m).
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SLIDE 9

Working capital

Composition of first half movement

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£m 30 Sep 2013 31 Mar 2013 D Trade receivables 283.4 290.6 Amounts recoverable on contracts 109.5 106.5 Fees invoiced in advance (157.1) (165.9) Lockup 235.8 231.2 (4.6) Other receivables/prepayments 59.3 52.1 (7.2) Trade payables (59.3) (74.3) (15.0) Other payables/accruals (239.9) (246.5) (6.6) Inventories/other (0.1) Movement in working capital (33.5)

Financial strength

Positive cash performance

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  • Net funds significantly ahead year on year at £136.1m

(Sep 2012: £83.7m)

  • New five year revolving credit facility
  • Enlarged facility of £200m
  • Four existing lenders (BAML, Barclays, HSBC and RBS)
  • Three new banks (National Bank of Abu Dhabi, Santander

and United Overseas Bank)

  • Diverse, wider banking group more closely reflects our

international footprint

  • Matures in October 2018.
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SLIDE 10

Pension

Impacted by lower asset returns

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  • £263m IAS 19 deficit net of

deferred tax at 30 Sept 2013 (March 2013: £217m)

  • Weak asset performance
  • Triennial valuation, based
  • n 31 March 2013 position,

in progress.

302 317 342 249 206 187 242 217 263

Sep 2009 Mar 2010 Sep 2010 Mar 2011 Sep 2011 Mar 2012 Sep 2012* Mar 2013* Sep 2013

IAS19 deficit net of deferred tax (£m)

* Restated for IAS19 revision

Outlook

Continued progress across all divisions

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  • We continue to deliver on our strategy
  • Diversified portfolio with good work in hand
  • Outlook for the remainder of 2013/14 is for underlying growth

and performance slightly ahead of expectations.

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SLIDE 11

Uwe Krueger

Chief executive officer

Delivering the strategy

A half year of further progress

22

Successes

  • Roll out of operational excellence into North America and Middle East
  • Successful sale of UK highways services and disposal of Peter Brown
  • Confluence acquisition adds to our project and cost management

capability in Asia Pacific and Middle East

  • Good growth in Energy, Aerospace, Defence/Security and Asia Pacific
  • Strong cash performance

Challenges

  • Non-transportation consultancy business in North America
  • Middle East project delays and resource management.
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SLIDE 12

Our overall objective is value creation

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Drive margins >8%

+

Reduce dependence on UK (long term aspiration <25%)

+

Grow organically and by acquisition Increased shareholder value

UK and Europe

24

Performance Strong growth driven by

  • Steadfast Government commitment to

infrastructure spend

  • Diversified water and environmental

services offering and international growth

  • Early rail electrification projects

providing good workload Strategy

  • Disposal of highways services business
  • Growth in aerospace (organic

expansion in US) and defence

  • Large scale opportunities

– Rail electrification.

Rail electrification Airbus A320 sharklet

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SLIDE 13

North America

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Performance

  • Improved operating margin
  • Non-transportation consultancy

business remains challenging

  • New management team in place

Strategy

  • Disposal of Peter Brown
  • Operational excellence will improve

underlying business performance

  • Targeting larger projects in our

infrastructure and environment business.

Tampa airport terminal design Colorado I-70 tunnel widening

Middle East

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Performance

  • Key rail wins in the first half
  • Refocusing resources
  • Underlying headcount moving ahead

Strategy

  • Focus on rail and infrastructure in

KSA, Qatar and the UAE

  • Capture re-emergence of property

activity in Dubai and Abu Dhabi.

  • Confluence adds to our client base

and skillset in the region.

Central planning office, Qatar Dubai opera house

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SLIDE 14

Asia Pacific

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Performance

  • Strong turnover growth at attractive

margins

  • Ongoing investment in people and

infrastructure

  • Headcount growth across the region

Strategy

  • Urbanisation and intelligent

partnering are key for growth

  • Focused organic growth in Malaysia,

Singapore and Vietnam

  • Confluence acquisition increases

private sector exposure.

Mexi Lake, Changsha - Eco City Hong Kong Harbour Area Treatment scheme (HATS)

Energy

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Performance

  • Strong growth continuing
  • Investing in partnering and large bid
  • pportunities

Strategy

  • Expanding our design capabilities
  • Targeting growth in UK, North

America and the Middle East

  • Well positioned to capture nuclear

new build workloads

  • M&A potential.

Solan marginal field development ITER – Tokamak pit

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SLIDE 15

Our people

Key to our business

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  • 550 graduates expected in 2013 (including c.330 in the UK,

up from 250 in 2012)

  • Additionally targeting 80-100 apprentices
  • Focus on diversity
  • Total vacancies around 1,850 (including 1,000 in the UK)
  • Increased brand recognition helping recruitment efforts.

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  • Good first half results
  • Delivering on our strategy
  • Full year outlook slightly ahead of expectations.

Summary

Progress on our strategy

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WS Atkins plc

Half year results for the six months ended 30 September 2013

14 November 2013

Appendices

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SLIDE 17

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Profit bridge

Underlying profit before tax

50.4 43.9 41.3 44.7 54.8 7.6 1.1 2.6 4.8 1.4 11.1 1.0

  • Sept. 2012

reported Profit on disposal PBSJ amortisation Underlying 2012 Adjustment for IAS 19 Underlying 2012 (restated) Underlying

  • perating profit

Joint venture/interest costs Underlying 2013 Profit on disposal PBSJ amortisation

  • Sept. 2013

reported

Working capital movement

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Regional lock-up

£m Sep 2013 Mar 2013 Inc/(Dec) Lock-up UK 103.1 93.0 10.1 North America 72.6 80.5 (7.9) Middle East 67.4 76.7 (9.3) Other (net) (7.3) (19.0) 11.7 Total 235.8 231.2 4.6

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SLIDE 18

Net funds reconciliation

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Disclaimer

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The information in this presentation pack, which does not purport to be comprehensive, has been provided by Atkins and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by Atkins as to or in relation to the accuracy or completeness of this presentation pack or any other written or oral information made available as part

  • f the presentation and any such liability is expressly disclaimed. Further, whilst Atkins may

subsequently update the information made available in this presentation, we expressly disclaim any

  • bligation to do so.

The presentation contains indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group’s results, strategy and prospects. Forward-looking statements involve risks, uncertainties and

  • assumptions. They relate to events and/or depend on circumstances in the future which could cause

actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.