AtkinsRéalis Group Inc.

Thank you for standing by. This is the conference operator. Good morning and welcome to SNC-Lavalin's first quarter 2023 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Denis Jesmin, Vice President, Investor Relations. Please go ahead.

Thank you, Cherise. Bonjour tout le monde. Good morning, everyone, and thank you for joining us today. For those dialing in, we invite you to view the slide presentation that we have posted in the Investors section of our website, which we will refer to during this call. Today's call is also webcast. With me today are Yin 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 speak. 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 assumptions, risks, and uncertainties, and as such, actual results may differ materially from the views expressed today. For further information on these assumptions, 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 financial measures, Reconciliation of these amounts to the corresponding RFRS financial measures are reflected in our earnings release and MD&A, which can be found on CDAR and on our website. And now I'll pass the call over to Ian Edwards. Ian?

Thank you, Denis. Good morning, everyone, and thank you for joining us today. We began the year on a strong footing, as Q1 results were solid across our SNCL services businesses. Our core purpose? Is engineering a better future for the planet and its people? And we're only able to do so through the hard work and dedication of our employees whose contributions help us achieve our long-term growth aspirations. I'm very proud of this growing team. On slide three, we outline our accomplishments in relation to our pivoting to growth strategy as we have become a professional services and project management company. As a reminder, our goal was to wind down our LSDK projects and grow our SNCL services businesses in our chosen geographies to drive long-term value creation. Our results in Q1 further emphasize that our plan is now working. SNCL services continued to grow, expanding its revenue by 10.8% year on year, while segment-adjusted EBIT grew 23.4% as we were able to deliver strong margin percentages. we achieved another record backlog this quarter, totaling $12.1 billion at March 31, as demand for our services remains very strong in our core end markets and geographies. We purposely pivoted into these geographies when we developed our strategy, and we are excited by the progress we've made in these markets. We continue to be recognized as leaders in the nuclear sector. During the first quarter, our backlog grew 23% year over year to just under a billion dollars. This quarter's growth represents the largest backlog growth since 2016 and highlights the long-term potential of this business. As we indicated last quarter, our two Ontario LSDK projects are largely physically complete. Testing and commissioning is proceeding as planned and they remain on track to be handed over to our clients later this year. We recognized the $9 million loss in this quarter in line with the expectations we provided on the fourth quarter call. And as anticipated, the robust cash flow generated from our SNCL services business offset the cash used on our LSTK projects. Our success this past quarter further emphasizes that the strengths of our new strategy, the resilience of the business through times of uneconomic certainty, and our growth opportunities are unfolding as planned. We continue to have great confidence in our forward trajectory, and we are well on track to deliver our stated goals for 2023. On slide four, we highlight our backlog growth across SNCL services. Our 8% growth in the first quarter of 2023 versus the first quarter of last year was mainly driven by wins across our engineering services and nuclear businesses. The public sector focus on converting to a greener grid for baseload power for greener infrastructure has resulted in continued key wins across our core geographies, as well as in other markets, such as Saudi Arabia. Turning to slide five, our engineering services business continues to drive robust growth for S&C Loveland and outperformed year over year during the first quarter. Acceleration across our core geographies led to a 17.5% organic revenue growth versus the first quarter of 2022. Our year-over-year progression highlights our ability to capture market share and provides a clear roadmap for near-term and long-term growth prospects for sustainable infrastructure demand. Segment adjusted EBIT margin and segment adjusted EBITDA over net revenue margin were 8.4 percent and 14 percent, respectively, during the quarter. We continue to achieve record backlog results with another quarter of growth. It now stands at approximately $4.8 billion, which represents 25 percent growth versus our backlog as at March 31, 2022. On slide six, we provide further insight into each of our core geographies of the UK, the US, and Canada. In addition to organic revenue growth, we also earn several key wins across these markets that touch all of the engineering services that S&C Loveland provides. In the UK and Europe, we saw continued revenue growth, which speaks to the focus of governments to spend on defense and energy. Performance this quarter emphasizes the resilience of our business as market dynamics appear positives, despite underlying uncertainty in global economies. Our key wins this quarter include a contract to upgrade railways in the south of England over the next five years and leading the design of the new Dublin Metrolink in Ireland. In the US, we continue to achieve record high backlog in this growing market. Our positioning in the U.S. is a key pillar of our pivoting to growth strategy. Our robust pipeline and long-term commitment by the governments to expand infrastructure spending, as evidenced by Windsor's quarter, sets us up well to maintain and accelerate our recent revenue and margin performance. At home in Canada, we're also seeing increased government spending on infrastructure. Growth in markets include the focus on energy transition, energy storage, and mining operations. We secured a number of key wins in Canada across the industrial power and EV battery markets, as well as road improvements. Looking out, demand remains robust for our services, driven by generational investments in infrastructure and climate resiliency, reshoring of manufacturing, and the energy transition. Here in Canada, for example, the $180 billion infrastructure investments program spread over 12 years and established in 2016 by the government of Canada still has more than half of the budget left to spend. In the U.S., the Infrastructure Investment and Jobs Act and the Inflation Reduction Act provide a strong tailwind for future growth opportunities. Our robust pipeline sets us up well for top-line and bottom-line growth in our engineering services business across each of the geographies for the foreseeable future. I'd now like to move to slide seven and the results of our nuclear business. Our positioning in the expanding nuclear marketplace continues to bear fruit as we achieved approximately 5% organic revenue growth versus the first quarter of 2022 and see strong demand trends across each of our core geographies, with particularly noteworthy growth in Europe. Our nuclear backlog now stands at $986 million, which represents a 23% growth versus our backlog at March 31, 2022. This backlog growth further confirms SNC-Lavalin's position as a leader in the nuclear services marketplace. Results this quarter highlight the long-term growth trajectory of this business as public entities continue to seek alternative energy sources for a cleaner planet. Commitments to net zero carbon by 2050 will significantly increase demand for low-carbon sources of reliable baseload power, where nuclear facilities are poised to meet that demand. On slide eight, we highlight achievements in each of our nuclear services business that we provide. Nuclear new bills represent a significant potential opportunity for SNC-Lavalin. Across the globe, nuclear facilities are being seen as low carbon energy source alternatives. We're underway on small modular reactor projects in the UK and Canada, while we are well positioned for upcoming major new bill projects in Romania and the UK. We remain active in reactor support and life extension projects, as indicated by our work across many of our core geographies. In Ontario, we continue to be actively supporting can-do life extension work at Darlington and the Bruce Power sites, where we're making excellent progress. In Romania, we signed our second pre-engineering contract for the Cernavoda-1 can-do reactor life extension program. the primary contributor to the increased nuclear backlog this quarter. While in UK, we are providing support to the EDF fleet reactors. Furthermore, we see opportunity for continued work on life extensions in the coming years. On waste management and decommissioning, we're seeing continued progress in the UK and the UAE on two major projects. In the US, our subsidiary, Isotec, continues to remediate nuclear waste and produce critical medical isotopes. The pipeline in the US for our decommissioning and waste management services remains robust. And now, moving to slide nine, and our O&M and links on business. Our O&M segment generated $126 million in revenue during the first quarter, a 9% organic revenue decrease due to lower additional services year over year on existing contracts. Segment adjusted evening margin was 7.5% above our long-term target of 5% to 7%. And we're well prepared for our Eglinton, Trillium, and REM South Shore branch projects moving into operation this year. We continue to see opportunity for growth and expansion in the UK through building and road infrastructure improvements. and we're also utilizing our strategic partnerships with key industry players and leveraging our capital group to maximize bidding opportunities for future growth in our core markets. Our links on business saw growth in new orders across the US and the Middle East, which added to the backlog in Q1, which now stands at just under a billion dollars at March 31. However, revenue was lower compared to the same period last year, due to lower backlog generated in 22 and equipment supply chain delays in Q1. Our strategic review to optimize our portfolio of businesses, including LinksOn, remains ongoing, and we will provide an update when applicable. Moving to slide 10 and our LSDK projects in capital business. As we announced in March, our two Ontario projects, Eglinton and Trillium, are largely physically complete. Our last project REM continues to progress really well and is more than 75% complete at the end of March 23. The quarterly loss is in line with our outlook. We believe a significant portion of the additional costs related to the pandemic, supply chain disruption, inflation and labour strike action should be recoverable under the contracts we have with our customers. and discussions remain ongoing as we vigorously pursue recovery of these losses. Turning to our capital business, first quarter revenues and segment-adjusted EBIT were flat as we did not receive any dividend from our holding interest in the Highway 407 ETR. However, in April 23, we received $10.2 million in dividend payments. Traffic volumes continue to accelerate albeit at levels lower than pre-pandemic, as traffic volume grew 28% compared to the first quarter 2022. With that, I'll now turn it over to Jeff to discuss the financial highlights.