a deep dive into edpm · edpm world-class global consultancy business with highly respected atkins...
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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 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
other 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
objectives, 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 OfferingWith 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 business and with
over 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
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Consultancy
Large Programmes
Frameworks
38%
30%
32%Consultancy
Design
Project & Program
Management
35%
21%
6%
Rail
Roads
E&W
Buildings
Defence
Airports
Industrial/ Other22%
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
our portfolio mitigates risk and volatility
Industry Leading Profitability
Strategic focus on profitability by focusing
on 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
2LTM Q3 2019FY 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&A
Highly 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
9
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 ofthe 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
on 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 SPACEMidwest Mid Atlantic
2 New growth areas
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Opportunity to expand in US & Australia
›To position EDPM ahead of its competitors
FUNCTION BENEFIT
DIGITAL
EXPERTISE
OUR FUTURE VALUE DEPENDS ON OUR ABILITY TO EXTRACT VALUE FROM
ASSET DATA
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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
DIG
ITA
L T
RA
NS
FO
RM
AT
ION
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
1ENGINEERING
DESIGN
2PROJECT
MANAGEMENT/PMO
3CONSULTANCY
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To evolve our services and drive better outcomes
3 Harnessing data & technology
Task Based ProjectsWork Package Programs Clients GDC + HVEC Integration
GDC2.0 Launch
+2,500EMPLOYEES
4OFFICES
2,100TECHNICAL
RESOURCES
24x7OPERATIONS
72%BELOW AGE OF 35
97CHARTERED/
PROFESSIONAL
ENGINEERS
24%WOMEN; 6% OF
MANAGEMENT
39TECHNICAL
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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$77MREVENUE
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
$8BEST. UK MARKET
$106M3 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
$115MREVENUE
OVER 3 YEARS
~$49MREVENUETHIS YEAR
›Through our people
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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 4World-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-class
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