AtkinsRéalis Group Inc.

Thank you for standing by. This is the conference operator. Good morning and welcome to Atkins Realis' fourth 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'll 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 Jasmine, Vice President, Investor Relations. Please go ahead.

Thank you again. Bonjour tout le monde. Good morning, everyone, and thank you for joining us today. For those signing in, we invite you to view the slide presentation that we have posted in the investor section of our website, which we'll refer to during this call. So this call is also webcast. With me today are Ian Edwards, Chief Executive Officer, and Jeff Bell, Chief Financial Officer. Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all of you 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 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 with companies relevant to filing some SIDAR plots. 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 IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SIDAR plots and on our website. And I'll pass the call over to you in a voice. Ian?

Thank you, Denis. Good morning, everyone, and thanks for joining us today. was an exceptional year at Atkins Realis and represented a pivoting point for the repositioning of our company. The new brand that we announced last year is synonymous with a dynamic company that is focused on building a strong culture and delivering excellence for our clients. We cap the year off with a robust fourth quarter results that reinforce the substantial demand for our engineering, project management and nuclear expertise across the globe. We continued to de-risk the company and significantly grew our revenues. Atkins Riales Services saw revenue growth of 20%, with an organic revenue growth of 18%. Segment-adjusted EBIT to segment revenue ratio was approximately 9%, driven by the robust top-line performance across our businesses. Backlog at the end of the year was approximately $14 billion, and represents another record high for the company. We also continued to successfully add high-quality talent in 2023, indicative of our core purpose and values. Our total headcount increased by 4,200, excluding the impact of the sale of the Scandinavian engineering business. Turning to slide four, we're proud of our results last year as we met or exceeded each of our most recent guidance targets. Of particular significance was our ability to generate positive cash flow during the second half of the year. This exceeded our expectations. Results from the third and fourth quarters offer an indication of the cash flow generation capabilities of our business in 2024 and beyond. From an employee perspective, we are highly focused on continuing to build the best-in-class culture at Atkins Realis. This is paying off as the measure of our employment engagement grew 300 basis points, so 87% at the end of 2023. We were also recognized in several publications, including top 50 employers in the UK for gender equality. We released our 2022 sustainability report in the fall which highlighted numerous accomplishments against our core purpose of providing a better future for the planet and its people. These include the elevation of our TCFD framework reporting and our announcing of the Global Parity Alliance, which is focused on advancing equality, diversity and inclusion. As we take a look back on 2023, our achievements would not be possible without the hard work and dedication of our employees. I am very proud and humbled to lead such an amazing group of talented professionals. Finally, we are introducing our 2024 full-year financial outlook, which Jeff will review in more detail shortly. We anticipate that 2024 will be another good year with continued revenue growth and strong profitability, but with stronger and more consistent positive cash flow generation. Turning to slide five, I want to focus on a few highlights from our fourth quarter. Our Atkins Realist Services business reached a quarterly record high with revenues of $2.2 billion. Organic revenue growth and segment-adjusted EBIT increased by 25% and 29%, respectively. We achieved another record backlog this quarter, totaling $13.7 billion at the end of the year, a testament to the demand for our services and our ability to continue capturing high policy wins in our core end markets and geographies. We generated strong net operating cash flow of $273 million in the fourth quarter, driven by continued growth across our Atkins Realis services businesses and strong working capital management. We ended the year with a 1.8 times net debt to Ibiza, within our target range of 1.5 to 2 times, and we delivered this result a year earlier than we forecasted when we launched our pivoting to growth strategy. We're a little more than two years since the introduction of this strategy, and the results this past year prove that this is working. It has enabled substantial growth across our businesses and positions as well for further long-term value creation. We have taken measured steps to becoming a premier fully integrated professional services and project management company. I'm extremely proud of our achievements this year and excited to prove and provide you with an update of our strategy at the investor day in June. On slide six, we highlight our backlog growth across Atkins Realis services. Our 16% growth in the fourth quarter versus the fourth quarter of last year was driven by key wins across our core engineering services and nuclear business. We continue to capture these key wins across many of the end markets in which we operate, including Can Do Life extension nuclear work in Romania, airport runway safety work in the US, transportation work in the UK, social buildings in Canada, and our recent appointment to plan the world's largest modern downtown in Riyadh, Saudi Arabia. These projects represent just a small component of the vast opportunity pipeline for Atkins Realis in the end markets in which we operate. Turning to slide seven, our engineering services business continues to drive robust organic revenue growth as we witnessed a 27% increase year over year in the fourth quarter. Our revenue generation was driven by the continuation of our ability to secure new wins across our geographic scope. Segment-adjusted EBIT margin and segment-adjusted EBITDA over net revenue margin were 9.6 and 16% respectively during the quarter. We continue to increase our backlog, which now stands at approximately $5.4 billion, representing a 16% increased growth versus our backlog as at December 31, 2022. On slide 8, we provide further insight into the engineering services growth of each of our core geographies, the UK, the US, and Canada, as well as our other targeted geographies. We continue to see strong demand for our services, fuelled by the need to replace ageing infrastructure and provide clean, affordable, and secure energy solutions. In the UK and Europe, we continue to capture key wins, utilizing our end-to-end capabilities, supporting defense, growth through infrastructure, and water facility development. Opportunities for contracts in the development of transportation, digital and technology projects, in addition to several design and project management projects remain robust. Our foothold in the marketplace, especially Our leading edge in the UK positions us well to capture bigger, higher revenue projects as our capabilities are recognized across the geography. In the US, we're seeing a high volume of work orders as major metropolitan areas seek out services for design and project management. The pipeline of transportation infrastructure projects in particular continues to look strong. There is a concerted drive on investing in water infrastructure and renewable energy through the IIJA and the IRA government spending programs, which also benefited us. Additionally, we view the minerals and metals market to have strong tailwinds, and our position gives us a competitive advantage, sets us up to capture additional revenue from this industry. In Canada, We strengthened our backlog this quarter through higher quality wins and Master Service Agreement renewables with long-standing clients. To deliver our higher backlog, we have been focused on attracting and retaining strong talent. The culture that we are developing remains a valuable attractor to candidates, which has resulted in growing our employee base in Canada. Our current client base and pipeline of prospects remains overweight in the energy transition agenda. And our strong history of delivering in the power and industrial end markets continues to help us win new mandates. I'd like to now move to slide nine and the results of our nuclear business. We continue to demonstrate robust growth with an organic revenue increase of 22% last quarter compared to the fourth quarter of 2022. Our nuclear backlog is $1.9 billion, which represents a 98% growth versus our backlog as of December 31, 2022. This is driven by new build and refurbishment contracts signed in the year and highlights the substantial long-term growth opportunities for our nuclear business. Operating margin was 15% in the quarter at the top end of our 13 to 15% target. On slide 10, we highlight achievements in each of the nuclear services that we provide. We made exceptional strides in generating new bill contracts during 2023. Our capabilities continue to be recognized across the globe by public sector entities focused on a cleaner energy future. We made a major announcement to the world in November when we introduced our latest reactor design, the 1,000 megawatt Candu Monarch reactor. We did this at the World Nuclear Exhibition in Paris. Large-scale nuclear reactors are increasingly sought to decarbonize power grids, produce stable baseload power, and increase energy security. Monarch is the evolution of the proven can-do technology that provides affordable, reliable carbon-free power and has decades-long global track record of consistent delivery and operational effectiveness. As a follow-up to our Monarch introduction, we announced last week an agreement with AECL to collaborate for the purposes of successfully deploying CANDU reactors in Canada and internationally. As we look across our core markets, we see a continued increase in the pipeline of opportunities for large and small nuclear renewables, both domestically and internationally. For example, in January, the UK government announced it will invest an additional $1.7 billion for early work to continue on the size we'll see nuclear plant. another indication of their intent to invest in a more sustainable energy future. Current projects and the pipeline of opportunities on the life extension work remains really robust. In Ontario, we continue to actively be working on the can-do life extensions at Darlington and Bruce Power. And in Europe, we are engaged in the engineering tooling procurement for the can-do retube and refurbishment program at Cernavola in Romania. We continue to see strong pipeline of opportunities on CAMDU reactor life extensions at home and abroad. On waste management and decommissioning, we're making further progress on projects in the UK and in the UAE. And in the US, we have a strong pipeline of prospects in conjunction with National Security Administration. The near-term and the long-term growth Opportunity for action and reality is significant in nuclear. And the demand for our services continues to grow year over year. We are constantly harnessing our capabilities across the globe to be a trusted partner to public entities as they seek to achieve net zero goals. Now moving to slide 11 and our O&M and LinkedIn businesses. Our O&M segment generated $130 million in revenue during the fourth quarter, relatively in line with our fourth quarter of 2022, as higher revenues from the commencement of a portion of the round project were offset by the completion of a contract in 2023. Segment adjusted even margin was 9.5% and continues to be above the long range target of 5% to 7%. Even growth was driven by lower costs and increased efficiencies across several of our contracts. Our links on segments saw a 29% year-over-year organic revenue growth in the fourth quarter and ended the full year revenues 1% higher than 2022. Backlog of $1.4 billion at the end of the quarter was 63% higher than the fourth quarter of last year. Results this quarter, particularly the backlog improvement, highlight the current and long-term growth potential of this business across many of its geographies. We've now completed our strategic review of Linksum and with our joint venture partner with Atashi Energy. We continue to be able to view that the market for the supply and installation of electrical substation equipment is attractive and growing as countries look to decarbonise and electrify. Linksum is one of only a handful of global suppliers and is well positioned to win work, as evidenced by the success in 2022 in growing both the amount and quality of its backlog. However, LinkedIn's business model for fixed-priced installation projects no longer fits with the strategy of the go-forward business of Atkins Reality. And therefore, we have agreed with our partner, Itachi Energy, that we will look to exit our shareholding in LinkedIn by exploring the sale to a third party, one that can better benefit from the value creation opportunity that the market in LinkedIn's position represents. We are actively engaged in pursuing this exit with our partners' support, but it's too early to comment on how long a successful exit will take. In the interim, we will continue to work to improve the operational delivery and resilience and capabilities of this business. Moving to slide 12 and our LSTK projects in capital business. Commissioning and testing on our Ontario LSTK projects is continuing as planned. Our backlog decreased this year by approximately 50% to $365 million, primarily representing the REM project, which continues to progress well. As we finalize the LFTK projects for our clients, we continue to pursue claims that we believe we are owed, and these discussions remain ongoing with our clients. Turning to our capital business, fourth quarter EBIT increased by $10 million, or 22%, mainly due to high dividends received from the ownership of Highway 407. As we have shown in 2023, it was an inflection point for Actions Realis. We see in 2024 another strong year of growth. We're also expecting strong operating cash flow and earnings delivery, in this final year of our pivoting to growth strategy. And to have a more effective deployment of our global capabilities locally to our clients, we have implemented a new operational structure. Under the new structure, the formerly known segments, engineering services and O&M, will be merged and managed by four regions, Canada, United States and Latin America, United Kingdom and Ireland, in Asia, Middle East, and Australia. In addition, we've also created a permanent COO office, which will be led by Phil Voll, former head of engineering services. And I'm very excited to have Phil in this role to successfully optimize our operating model across the company. This will help us fully harness our capabilities and drive operational excellence on our path to margin expansion. With that, I'll now turn it over to Jeff to discuss our financial results.