Unveils 2025 – 2027 Strategic Plan to Deliver
Excellence and Drive Growth, Introduces New Financial
Targets
AtkinsRéalis' strategic plan aims to:
Deliver, for the 2025 – 2027 period, organic
revenue Compound Annual Growth Rate ("CAGR")1,2 of
greater than 8% in Engineering Services Regions3, with a
Segment Adjusted EBITDA to segment net revenue ratio1,4
of between 17% and 18% by 2027
Deliver, by 2027, between $1.8 and $2.0
billion of annual revenue in Nuclear, with a Segment
Adjusted EBIT to segment revenue ratio of between 12% and
14%
Maintain, on an annual basis, a Net limited
recourse and recourse debt to Adjusted EBITDA ratio1,5
of between 1.0 and 2.0 times and between ~80% and 90% Free cash
flow to Adjusted net income ratio1,6
Sell, before the end of 2027, AtkinsRéalis'
interest in Highway 407 ETR
MONTREAL, June 13,
2024 /CNW/ - AtkinsRéalis Group Inc. (TSX:
ATRL), a fully integrated professional services and project
management company with offices around the world, will host its
2024 Investor Day in Toronto today
and releases the highlights of its 2025 – 2027 strategic plan.
Ian L. Edwards, President and
Chief Executive Officer, and Jeff
Bell, Chief Financial Officer, will be joined by other
members of the executive team to present an in-depth review of the
Company's 2025 – 2027 strategic plan, "Delivering Excellence,
Driving Growth" including its capital allocation framework, key
initiatives for revenue growth and margin expansion, and subsequent
financial targets.
"We are excited to introduce our 'Delivering Excellence, Driving
Growth' strategy, which has been enabled by the success of the
'Pivoting to Growth' strategy we announced at our 2021 Investor
Day," said Ian L. Edwards, President
and Chief Executive Officer. "Our chosen high-growth geographies
and customer end markets, combined with our unique end-to-end
capabilities, position us well to continue to create value for our
stakeholders – and deliver on our purpose of creating a better
future for our planet and its people. We have confidence in
advancing our world-class engineering services and nuclear
capabilities, powered by our operational scale and rigor and our
38,000 dedicated employees. Our new 2025 – 2027 financial targets
reflect our confidence in driving growth, improving margins and
delivering excellence for our customers."
Delivering Excellence, Driving
Growth Strategy
The strong growth and continuous success of the current 2022 –
2024 "Pivoting to Growth" strategy have been enabled by the
Company's collaborative and connected environment, as well as its
deep expertise and end-to-end capabilities. AtkinsRéalis is pleased
to announce the next phase of its growth journey by unveiling its
2025 – 2027 "Delivering Excellence, Driving Growth" strategy
underpinned by three pillars:
- Optimize the business: AtkinsRéalis is expected to
leverage its newly created Chief Operating Officer ("COO") office
to pursue margin expansion and growth, and drive industry leading
performance.
- Accelerate value creation: AtkinsRéalis plans to expand
investments in rapidly growing markets, including executing
strategic initiatives in Engineering Services across the U.S.,
utilizing Nuclear expertise to capitalize on the super cycle and
investing in accretive M&A to build scale and depth.
- Explore untapped potential: AtkinsRéalis will identify
the next phase of major value-creation opportunities, such as
growing existing foothold geographies, building further scale to
advance energy transition and pursuing adjacencies.
In addition, AtkinsRéalis remains committed to its disciplined
capital allocation strategy, for which the priorities are
maintaining a strong balance sheet with debt leverage ratios
consistent with an investment grade credit rating, investing in the
business, through organic and inorganic investments, and returning
capital to shareholders through dividends and/or share buybacks.
The Company also intends to sell its interest in Highway 407 ETR by
the end of 2027 to further AtkinsRéalis' strategic goal of creating
a company focused on the engineering services and nuclear
businesses.
2025 – 2027 Financial Targets
|
2025 –
2027
Target
|
2023
Actual
|
Engineering Services
Regions3
|
|
|
Organic revenue
growth1,2 CAGR 2025 – 2027
|
>8%
|
20.9%
(vs 2022)
|
Segment Adjusted EBITDA
to segment net revenue ratio1,4 by 2027
|
Between
17% and
18%
|
15 %
|
|
|
|
Nuclear
|
|
|
Annual revenue by
2027
|
Between
$1.8B to
$2.0B
|
$1.0B
|
Segment Adjusted EBIT
to segment revenue ratio
|
Between
12% and 14%
|
13.9 %
|
|
|
|
Net limited recourse
and recourse debt to Adjusted EBITDA ratio1,5
|
Between
1.0 and 2.0
|
1.8
|
Free cash flow to
Adjusted net income ratio1,6
|
Between
~80% and 90%
|
(8.2) %
|
These key financial targets are meant to assist analysts and
shareholders in forming their respective views on the Company's
strategy. The reader is cautioned that using this information for
other purposes may be inappropriate. These measures are subject to
change. The financial targets presented above were prepared
assuming current foreign exchange rate markets in which the Company
operates. The Company considered numerous economic and market
assumptions regarding the competitive landscape, political
environment and economic performance of each region where it
operates. In preparing its 2025 – 2027 "Delivering Excellence,
Driving Growth" strategy forecast, the Company also assumed that
economic factors and market competition in regions where it
operates would remain stable.
The 2025 – 2027 "Delivering Excellence, Driving Growth" strategy
forecast was prepared and based on the same methodology described
in the Company's Annual 2023 Management's Discussion and Analysis
under the heading "How We Budget and Forecast Our Results"
(extrapolated out through 2027) and the "Forward-Looking
Statements" section below and is subject to the risks and
uncertainties summarized therein and in the Company's 2023 Annual
Management's Discussion and Analysis and as updated in the
Company's first quarter 2024 Management's Discussion and
Analysis.
2024 Investor Day Event
Details
Join the webcast today, beginning at 8:30
a.m. Eastern Time. The event will include formal
presentations and two question and answer panel sessions with the
executive team and is expected to conclude at 12:30 p.m. Eastern Time.
The live webcast of the presentation, including the question and
answer sessions, is available on the Company's dedicated
2024 Investor Day webpage. Registration is
required and can be completed by clicking here.
The full agenda, the list of speakers and the presentation
slides are already available on the Company's dedicated 2024
Investor Day webpage.
A recording and a transcript of the webcast will be available
and archived shortly after the conclusion of the event on
the 2024 Investor Day and Investor's
Briefcase webpages.
About AtkinsRéalis
Created by the integration of long-standing organizations dating
back to 1911, AtkinsRéalis is a world-leading professional services
and project management company dedicated to engineering a better
future for our planet and its people. We create sustainable
solutions that connect people, data and technology to transform the
world's infrastructure and energy systems. We deploy global
capabilities locally to our clients and deliver unique end-to-end
services across the whole life cycle of an asset including
consulting, advisory & environmental services, intelligent
networks & cybersecurity, design & engineering,
procurement, project & construction management, operations
& maintenance, decommissioning and capital. The breadth and
depth of our capabilities are delivered to clients in strategic
sectors such as Engineering Services, Nuclear and Capital. News and
information are available at www.atkinsrealis.com or
follow us on LinkedIn.
Non-IFRS Financial Measures and Ratios, Supplementary
Financial Measures, Total of Segments Measures and Non-Financial
Information
The Company reports its financial results in accordance with
International Financial Reporting Standards ("IFRS"). However, the
following non‑IFRS financial measures and ratios, supplementary
financial measures, total of segments measures and non-financial
information are used by the Company in this press release: Organic
revenue growth, EBITDA, Adjusted EBITDA, Segment Adjusted EBITDA to
segment net revenue ratio, Segment net revenue, Net limited
recourse and recourse debt to Adjusted EBITDA ratio, Net limited
recourse and recourse debt, Free cash flow and Free cash flow to
Adjusted net income ratio, as well as certain measures for various
reportable segments that are grouped together, such as revenue for
the various Engineering Services Regions segments and the various
segments that comprise the AtkinsRéalis Services line of business.
Additional details for these non-IFRS financial measures and
ratios, supplementary financial measures, total of segments
measures and non-financial information can be found below and in
Sections 4, 6 and 9 of the Company's Management's Discussion and
Analysis ("MD&A") for the first quarter of 2024, which sections
are incorporated by reference into this press release, filed with
the securities regulatory authorities in Canada and available on SEDAR+ at
www.sedarplus.com and on the Company's website at
www.atkinsrealis.com under the "Investors" section.
Non-IFRS financial measures and ratios, supplementary financial
measures, total segments measures and non-financial information do
not have any standardized meaning under IFRS and other issuers may
define these measures differently and, accordingly, they may not be
comparable to similar measures prepared by other issuers. Such
non-IFRS financial measures and ratios, supplementary financial
measures, total of segments measures and non-financial information
have limitations and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
However, management believes that, in addition to conventional
measures prepared in accordance with IFRS, these non-IFRS financial
measures and ratios, supplementary financial measures, total of
segments measures and non-financial information provide additional
insight into the Company's operating performance and financial
position and certain investors may use this information to evaluate
the Company's performance from period to period.
(1)
|
Non-IFRS financial
measure or ratio or supplementary financial measure.
|
(2)
|
Organic revenue
growth (contraction) is a non-IFRS ratio comparing organic
revenue (which excludes foreign exchange and acquisition and
disposal impacts), itself a non-IFRS financial measure, between two
periods.
|
(3)
|
Total of segments
measure.
|
(4)
|
Segment Adjusted EBITDA
to segment net revenue ratio for the Engineering Services Regions
is a non-IFRS ratio based on Segment Adjusted EBITDA and segment
net revenue, both of which are non-IFRS financial
measures.
|
(5)
|
Net limited recourse
and recourse debt to Adjusted EBITDA ratio is a non-IFRS ratio
based on net limited recourse and recourse debt at the end of a
given period and Adjusted EBITDA of the corresponding trailing
twelve-month period, both of which are non-IFRS financial
measures.
|
(6)
|
Free cash flow to
Adjusted net income ratio is a non-IFRS ratio based on free cash
flow and adjusted net income (loss) attributable to AtkinsRéalis
shareholders, both non-IFRS financial measures.
|
Forward-Looking
Statements
References in this press release, and hereafter, to the
"Company", "AtkinsRéalis", "we", "us" and "our" mean, as the
context may require, AtkinsRéalis Group Inc. and all or some of its
subsidiaries or joint arrangements or associates, or AtkinsRéalis
Group Inc. or one or more of its subsidiaries or joint arrangements
or associates.
Statements made in this press release 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", "forecasts", "goal",
"intends", "likely", "may", "objective", "outlook", "plans",
"projects", "should", "synergies", "target", "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, project- or
contract-specific cost reforecasts and claims provisions, 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 press release 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 2023 Annual MD&A (particularly in the
sections entitled "Critical Accounting Judgements and Key Sources
of Estimation Uncertainty" and "How We Analyze and Report Our
Results"). 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 risks include, but are not limited to, matters
relating to: (a) fixed-price contracts or the Company's failure to
meet contractual schedule, performance requirements or to execute
projects efficiently; (b) backlog and contracts with termination
for convenience provisions; (c) contract awards and timing;
(d) being a provider of services to government agencies; (e)
international operations; (f) nuclear liability; (g) ownership
interests in investments; (h) dependence on third parties;
(i) supply chain disruptions; (j) joint arrangements and
partnerships; (k) information systems and data and compliance with
privacy legislation; (l) artificial intelligence ("AI") and other
innovative technologies; (m) qualified personnel; (n)
strategic direction; (o) competition; (p) professional liability or
liability for faulty services; (q) monetary damages and
penalties in connection with professional and engineering reports
and opinions; (r) gaps in insurance coverage; (s) health and
safety; (t) work stoppages, union negotiations and other labour
matters; (u) epidemics, pandemics and other health crises; (v)
global climate change, extreme weather conditions and the impact of
natural or other disasters; (w) environmental, social and
governance ("ESG"); * divestitures and the sale of
significant assets; (y) intellectual property; (z) liquidity and
financial position; (aa) indebtedness; (bb) impact of operating
results and level of indebtedness on financial situation;
(cc) security under the CDPQ Loan Agreement (as defined in the
Company's 2024 first quarter MD&A); (dd) dependence on
subsidiaries to help repay indebtedness; (ee) dividends; (ff)
post-employment benefit obligations, including pension-related
obligations; (gg) working capital requirements; (hh) collection
from customers; (ii) impairment of goodwill and other
non-current intangible and tangible assets; (jj) the impact on the
Company of legal and regulatory proceedings, investigations and
dispute settlements; (kk) employee, agent or partner misconduct or
failure to comply with anti-corruption and other government laws
and regulations; (ll) reputation of the Company; (mm) inherent
limitations to the Company's control framework;
(nn) environmental laws and regulations;
(oo) global economic conditions; (pp) inflation; (qq)
fluctuations in commodity prices; and (rr) income taxes.
The Company cautions that the foregoing list of factors is
not exhaustive. For more information on risks and uncertainties,
and assumptions that could cause the Company's actual results to
differ from current expectations, please refer to the sections
"Risks and Uncertainties", "How We Analyze and Report Our Results"
and "Critical Accounting Judgements and Key Sources of Estimation
Uncertainty" in the Company's 2023 Annual MD&A and as updated
in the first quarter 2024 MD&A filed with the securities
regulatory authorities in Canada
and available on SEDAR+ at www.sedarplus.com and
on the Company's website at
www.atkinsrealis.com under the "Investors"
section.
The forward-looking statements herein reflect the Company's
expectations as at the date of this press release and are subject
to change after this date. The Company does not undertake to update
publicly or to revise any written or oral forward-looking
information or statements whether as a result of new information,
future events or otherwise, unless required by applicable
legislation or regulation. The forward-looking information
and statements contained herein are expressly qualified in their
entirety by this cautionary statement.
SOURCE AtkinsRéalis