AtkinsRéalis Group Inc.

Thank you for standing by. This is the conference operator. Welcome to SNC-Lavalin's first quarter 2021 conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Denis Jasmine, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining the call. Our Q1 earnings announcement was released this morning, and we have posted a corresponding slide presentation on the investors section of our website. The recording of today's call and its transcript will also be available on our website within 24 hours. With me today are Ian Edwards, President and Chief Executive Officer, and Jeff Bell, Executive Vice President and Chief Financial Officer. Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all analysts have an opportunity to participate. You are welcome to return to the queue for any follow-up questions. I would like to draw your attention to slide two. Comments made on today's call may contain forward-looking information. This information, by its nature, is subject to risk and uncertainties And as such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult the company's relevant filings on CDAR. These documents are also available on our website. Also during the call, we may refer to certain non-IFRS measures. These measures are defined and reconciled with comparable IFRS measures in RMDNA, which can be found on CDAR in our website. Management believes that these non-IFRS measures provide additional insight into the company's financial results, and certain investors may use this information to evaluate the company's performance from period to period. Now, I'll pass the call over to Ian Edwards. Ian?

Thank you, Denis, and good afternoon, everyone. First, turning to slide four, well, we're off to a good start in the year with a solid performance across all three segments of engineering services. Engineering services generated revenues of $1.5 billion last and a segment adjusted EBIT margin of 8.8%. Revenues are essentially on par with Q1 2020, while margins have rebounded to their traditional levels. The backlog also remains robust, with $1.7 billion in new bookings in the quarter. On SNCL projects, we continue to make good progress reducing the LSTK backlog, bringing the total outstanding backlog down to $1.6 billion. Overall, it was a really solid quarter. Turn into slide five, and the Q1 results for EDPM. EDPM had a strong quarter, generating $81 million in segment-adjusted EBIT. Margins increased year over year to 8.6%. The strong performance was due to a combination of factors, which includes strong revenue growth in the U.K., in project management, transport, and defense, successful efforts to right-size the business and reduce costs in the Middle East, and recovery in certain markets impacted by COVID in Q1 2020. The backlog also continued to grow at a really impressive pace. In Q1, EDPM added $1 billion in new wins, an increase of just over 10%. This is in addition to the nearly 9% growth in Q4 2020. and puts the EDPM backlog at a three-year high of just under $3 billion. New wins include rail, road, water projects in the core geographies of UK, Canada, and the US. This includes an engineering services for the US State of Georgia Department of Transport and the long-term renewal of a master services agreement with Intel for project and program management. Looking ahead, the pipeline remains strong at $27 billion, and we remain optimistic across our core markets as governments look to invest in infrastructure to support the twin goals of economic recovery and carbon net zero targets. Turning to slide six and the nuclear segment, nuclear revenues were broadly in line with last year, with the EBIT in line with expectations, albeit lower year on year, due to a lower contribution from our Canadian refurbishment works. We continue to see good demand for reactor engineering, for field service work, waste management, as well as for our proprietary tools and technologies, including robotics and digital twins. Having completed our work on the first reactor at Darlington, we've now ramped up and are progressing well on the second unit. And we're moving into 2021 with several really significant opportunities and growth catalysts on the horizon. These include continued demand for reactor support and decommissioning, intensified tendering by the U.S. Department of Energy for environmental management work across a number of nuclear sites, and continued momentum in the U.K. with the Hinkley Power Station and the proposed new nuclear sizeable seed project. Moving to slide seven on infrastructure services, The segment had a solid quarter and a segment-adjusted EBIT margin ratio of 5.8%, an increase compared to Q1 2020, resulting from improved profitability and increased activity in O&M and health services. Infrastructure services won a number of new mandates in the quarter, including a first-of-its-kind contract to retrofit the 100-year-old dam in Pennsylvania, with three hydroelectric power stations to generate renewable energy. It also won an additional five-year renewal of a logistics and project management program in Canada. At just over $7 billion, Backlog remains strong, underscoring both the long-term and essential nature of infrastructure services. Looking ahead, we see a number of opportunities in Canada and the US in rail and transit and social infrastructure. Major projects will be a key focus as we pursue new collaborative liability-capped contracting models like the East-West Rail project in the UK that we were awarded in February. We also see a strong pipeline of opportunities for links in transportation and offshore wind. Turning to slide eight and the capital segment, the segment continued to be impacted by the lockdown in Ontario, which has resulted in reduced traffic volume on the Highway 407 ETR. As a result, there was no dividend payment in the quarter. Our other concessions continue to perform well. Looking ahead, we see an interesting pipeline of new public-private partnership opportunities where we can leverage our engineering and O&M capabilities. These include several PPPs in Canada and the UK in the sewage and water treatment and hospital space. Moving to slide nine, an infrastructure EBC projects. We continue to make good progress reducing the LSTK construction backlog by over $200 million in the quarter. The LSTK backlog, which is comprised of the three remaining Canadian LRC projects, is $1.5 billion at the end of March. The segment recorded a negative adjusted EBIT for the quarter of $11 million, turning to slide 10 and the resources segment. We continue to target completion of the sale of our oil and gas business in Q2. Our M&M services business is performing well. We are seeing growth in revenue and profitability, which is really being driven by increased demand for the materials used in clean energy storage, including electric vehicles. Moving to slide 11, as you may have seen earlier today, we released our ESG targets and commitments, including a commitment to reaching carbon net zero by 2030. We've developed a detailed plan to achieve this ambitious target, which brings a low-carbon lens to everything we do, from our travel policy and electric vehicle leasing to reduced energy consumption within our real estate footprint. To reach our goal, we have set annual targets that will be verified by third parties and published to the Carbon Disclosure Project. Overall, we've identified 12 ESG priority areas, including protecting and enhancing human rights, corporate integrity, and diversity and inclusion. With regard to EDI specifically, we've set clear targets to increase the representation of women at all levels of the company. And as you can tell from our commitments, we see ESG as an integral part of the company's future growth and sustainability. With that, I'll now turn the call over to Jeff.