MONTREAL, March 1, 2024 /CNW/ – AtkinsRéalis [SNC-Lavalin Group Inc.] (TSX:ATRL), a fully integrated professional services and project management company with offices around the world, today announced its financial results for the full year and fourth quarter ended December 31, 2023, and introduces its 2024 outlook.
AtkinsRéalis delivered strong Q4 and full year results in 2023, with significant year over year increases in revenue, Segment Adjusted EBIT and EPS. The Company’s operating cash flow was positive for a second consecutive quarter, with a significant increase year over year, strengthening the Company’s balance sheet and lowering the debt leverage ratio to within the Company’s target range. The Company’s backlog continued to achieve record highs with strong increases in the Engineering Services, Nuclear and Linxon segments.
“We are extremely proud of our performance in 2023 with exceptional results across our businesses and in our core geographies,” said Ian L. Edwards, President and CEO of AtkinsRéalis. “We ended the year on a high note with strong fourth quarter financial results, including significant positive operating cash flows. Consequently, our balance sheet achieved our targeted debt leverage ratio a year earlier than expected. Our operational focus and the continued demand for our capabilities, coupled with a stronger balance sheet, provide us with the financial flexibility to drive further value creation in the coming year. This past year proved again that our strategy is working. We have the right people in place to achieve our goals in 2024 and beyond, and I would like to thank them for their loyalty and diligence.”
Q4 2023 Financial Highlights
(All results reflect comparisons to prior-year period of Q4 2022, except as otherwise indicated)
AtkinsRéalis Services revenue reached a quarterly record-high of $2.2 billion, an increase of 24.2%, or 24.6% on an organic revenue growth(1)(2) basis, above the Company’s full year outlook range, with strong organic revenue growth in the Engineering Services, Nuclear and Linxon segments
AtkinsRéalis Services Segment Adjusted EBIT increased by 29.2% to $201.3 million, representing a 9.4% margin, an increase of 36 basis points
Segment Adjusted EBIT for Engineering Services increased by 25.8% to $149.9 million, representing a margin of 9.6%, while the Segment Adjusted EBITDA to segment net revenue ratio(1)(3) was 15.5%
Segment Adjusted EBIT margin for Nuclear was 14.8%
LSTK Projects Segment Adjusted EBIT was negative $23.6 million
Adjusted EBITDA from PS&PM(1) increased to $186.5 million from $20.2 million
Net income attributable to AtkinsRéalis shareholders from continuing operations totaled $90.0 million, or $0.51 per diluted share, compared to a net loss of $54.4 million, or $(0.31) per diluted share in Q4 2022
Adjusted net income attributable to AtkinsRéalis shareholders from PS&PM(1) totaled $79.5 million, or $0.45 per diluted share, compared to an adjusted net loss of $32.5 million, or $(0.19) per diluted share in Q4 2022
Net cash generated from operating activities was $272.8 million
Limited recourse and recourse debt decreased by $310.7 million compared to September 30, 2023 and Net limited recourse and recourse debt to Adjusted EBITDA ratio(1)(5) improved to 1.8 as at December 31, 2023 from 2.7 as at September 30, 2023
Full Year 2023 Financial Highlights
(All results reflect comparisons to full year 2022, except as otherwise indicated)
AtkinsRéalis Services revenue reached a yearly record-high of $8.0 billion, an increase of 20.3%, or 18.3% on an organic revenue growth(1)(2) basis, above the Company’s full year outlook range, with strong organic revenue growth in the Engineering Services and Nuclear segments
AtkinsRéalis Services Segment Adjusted EBIT increased by 22.5% to $711.9 million, representing an 8.9% margin
Segment Adjusted EBIT for Engineering Services increased by 30.6% to $519.6 million, representing a margin of 8.8%, while the Segment Adjusted EBITDA to segment net revenue ratio(1)(3) was 14.4%
Segment Adjusted EBIT margin for Nuclear was 13.9%
LSTK Projects Segment Adjusted EBIT was negative $58.6 million
Adjusted EBITDA from PS&PM(1) increased by 74.8% to $678.2 million
AtkinsRéalis Services backlog reached a record-high and totaled $13.7 billion as at December 31, 2023, an increase of 16.1%, with strong booking-to-revenue ratios and backlog increases in the Engineering Services, Nuclear and Linxon segments. Bookings in 2023 totaled $10.0 billion, representing a 1.26 booking-to-revenue ratio(1)(4)
Net income attributable to AtkinsRéalis shareholders from continuing operations totaled $287.2 million, or $1.64 per diluted share, compared to $16.6 million, or $0.09 per diluted share in 2022
Adjusted net income attributable to AtkinsRéalis shareholders from PS&PM(1) totaled $274.1 million, or $1.56 per diluted share, compared to $112.8 million, or $0.64 per diluted share in 2022
2024 Financial Reporting – New Operational Structure to Sustain Growth
Beginning in 2024, AtkinsRéalis has evolved and implemented a new operational structure to unify and simplify the Company in the regions where it operates. Under the new structure, the Engineering Services and O&M segments will be merged and managed by region. Therefore, the Segment disclosure in the Company’s 2024 financial statements and Management’s Discussion and Analysis will include, under Engineering Services Regions: Canada, United Kingdom & Ireland (“UKI”), United States & Latin America (“USLA”), and Asia, Middle East, & Australia (“AMEA”).
In addition, to drive margin expansion and operational excellence through the development, optimization, and deployment of AtkinsRéalis’ global capabilities, a permanent Chief Operating Officer (“COO”) office has been created.
“Our new operational structure will produce a more effective deployment of our global capabilities locally to all stakeholders. This change will yield even greater value creation for our clients and strengthens our ability to capture key wins,” added Mr. Edwards. “We enter 2024 confident that the recent foundational changes we have made – our new operational structure, our new brand – coupled with the strong demand for our global services should further drive sustainable profitable growth and shareholder value creation.”
In 2024, the Company will restate its 2023 comparative information of segment results to conform with its new reporting structure. As such, reconciliations of the segment results under the current reporting structure and the new reporting structure for the four quarters of 2023 and the year ended December 31, 2023 are provided in Section 13.5 of the Company’s 2023 Annual Management’s Discussion and Analysis (the “Annual MD&A”).
2024 Outlook
Engineering Services Regions organic revenue growth(1)(2) expected to be between 8% and 10%, compared to 2023, with a Segment Adjusted EBITDA to segment net revenue ratio(3) expected to be between 15% and 17%, an increase of 100 basis points above the Company’s previously published targets
Nuclear organic revenue growth(1)(2) expected to be between 12% and 15%, compared to 2023, with a Segment Adjusted EBIT to segment revenue ratio between 13% and 15%
Net cash generated from operating activities is expected to be in excess of $400 million for 2024, as cash inflows from AtkinsRéalis Services and Capital are expected to be significantly higher than the declining cash outflows from LSTK Projects
Fourth Quarter Financial Results
Professional Services & Project Management are collectively referred to as “PS&PM” to distinguish them from “Capital” activities. PS&PM groups together five of the Company’s segments, namely Engineering Services, Nuclear, Linxon, Operation & Maintenance (“O&M”), and Lump-Sum Turnkey (“LSTK”) Projects, while Capital is its own reportable segment and separate from PS&PM.
IFRS Financial Highlights
Q4 2023
Q4 2022
2023A
2022A
Revenues
From PS&PM
2,215.5
1,850.7
8,495.6
7,439.9
From Capital
64.1
49.4
138.7
109.2
2,279.6
1,900.1
8,634.3
7,549.0
Attributable to AtkinsRéalis shareholders
Net income (loss) from continuing operations:
From PS&PM
46.2
(90.6)
213.0
(45.0)
From Capital
43.8
36.3
74.2
61.6
90.0
(54.4)
287.2
16.6
Diluted EPS from continuing operations:
From PS&PM ($)
0.26
(0.52)
1.21
(0.26)
From Capital ($)
0.25
0.21
0.42
0.35
0.51
(0.31)
1.64
0.09
Net loss from discontinued operations
–
–
–
(6.9)
Net income (loss)
90.0
(54.4)
287.2
9.8
Non-IFRS Financial Highlights
Q4 2023
Q4 2022
2023A
2022A
Attributable to AtkinsRéalis shareholders
Adjusted net income (loss) from PS&PM(1)
79.5
(32.5)
274.1
112.8
Adjusted diluted EPS from PS&PM(1)(6) ($)
0.45
(0.19)
1.56
0.64
Adjusted EBITDA from PS&PM(1)
186.5
20.2
678.2
387.9
Segment Performance
Q4 2023
Q4 2022
2023A
2022A
Segment revenues
Engineering Services
1,568.9
1,242.9
5,897.3
4,686.2
Nuclear
278.1
223.6
1,044.1
896.0
O&M
129.9
131.6
469.6
497.2
Linxon
173.9
133.9
577.8
561.2
AtkinsRéalis Services
2,150.9
1,732.1
7,988.8
6,640.6
LSTK Projects
64.6
118.6
506.7
799.3
Capital
64.1
49.4
138.7
109.2
2,279.6
1,900.1
8,634.3
7,549.0
Segment Adjusted EBIT
Engineering Services
149.9
119.2
519.6
397.7
Nuclear
41.2
40.6
145.5
144.0
O&M
12.3
10.2
45.9
49.1
Linxon
(2.1)
(14.2)
0.9
(9.8)
AtkinsRéalis Services
201.3
155.9
711.9
581.0
LSTK Projects
(23.6)
(150.2)
(58.6)
(261.3)
Capital
54.5
45.2
112.6
93.3
232.2
50.9
766.0
413.1
Backlog as at December 31
Engineering Services
5,430.9
4,662.1
Nuclear
1,854.0
936.6
O&M
5,021.8
5,353.9
Linxon
1,439.2
881.8
AtkinsRéalis Services
13,745.8
11,834.4
LSTK Projects
364.6
685.5
Capital
23.0
31.6
14,133.4
12,551.4
All figures in millions of Canadian dollars, except as otherwise indicated
Certain totals and subtotals may not reconcile due to rounding
A For the year ended December 31
2024 Outlook
This outlook is provided as at March 1, 2024, to assist analysts and investors in formulating their respective views on the year ending December 31, 2024. The following information is based on current expectations. This information is forward-looking and the actual results could differ materially. The 2024 Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.
This outlook is based on the assumptions and methodology described in the Annual MD&A under the heading “How We Budget and Forecast Our Results” and the “Forward-Looking Statements” section below and is subject to the risks and uncertainties summarized therein and in the Annual MD&A.
The Company now expects organic revenue growth for the Engineering Services Regions and Nuclear segment in 2024 should be higher than the Company’s 2022-2024 long-term target range outlined in the Company’s “Pivoting to Growth” strategy presented during the September 2021 Investor Day.
AtkinsRéalis is providing the following targets for the full year 2024:
2024 Target
2023 Actual
Engineering Services Regions organic revenue growth(1) (2)
Between
8% and 10%
20.9 %
Nuclear organic revenue growth(1) (2)
Between
12% and 15%
14.3 %
Engineering Services Regions Segment adjusted EBITDA to segment net …