AtkinsRéalis Group Inc.

Thank you for standing by, and welcome to Atkins Realis first quarter 2025 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Denny Jasmine, Vice President, Investor Relations. You may begin.

thank you daniel good morning everyone and thank you for joining us today for those starting in we invite you to view the strike presentation that we have posted in the investors section of our website which we will refer to during this call so this today's call is also webcast with me today are ian edwards chief executive 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 analysts have an opportunity to participate. You're 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 CEDAW+. These documents are also available on our website. Also during the call, we may refer to certain non-RFRS 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 SIDAR Plus and our website. And now I'll pass the call over to Ian Edwards. Ian?

Thank you, Denis. Good morning, everyone, and thanks for joining us today. I'm going to begin today's call by providing an overview of our performance for the last quarter, our continually growing backlog, and the current success and opportunities we are seeing across our engineering services regions and nuclear businesses. I will then pass it to Jeff to provide more detail on our financial results before we open it up for Q&A. So let's get started on slide three. We had a strong quarter with significant organic revenue growth. At kids and reality services, total revenue organically increased 10% to $2.5 billion. Engineering services regions revenue organically declined 4% to $1.7 billion, while nuclear revenue organically grew 77% to a quarterly record high of $538 million. Links on revenue organically grew 36% We also had a strong increase in EPS and adjusted EBITDA with Atkins Realis Services segment adjusted EBIT increasing 20% to $224 million. All of this has resulted in $39 million of positive operating cash flow this quarter. And our balance sheet remains strong with a 1.1 times net leverage ratio at the low end of our long-term target range. We continue to execute our three-year strategy and took further steps in the first quarter as we announced an agreement to sell our interest in the Highway 407 and acquired a majority stake in David Evans. I am proud of the recent highlights of the culture we are building at Atkins Realis. We were recently named one of the top employers in Montreal and recognized as a great place to work in the US. On slide four, you can see the continued progression of our backlog growth across Atkins Realis services. The 32% increase over the prior year was driven primarily by continued growth in nuclear, which achieved a $5 billion backlog for the first time in our history. And growth in our engineering services regions of Canada, UK and Ireland U.S. and L.A., particularly in the transport market. In nuclear, we entered into a multibillion-dollar agreement through our joint venture for Ontario's Pickering Nuclear Generating Station life extension and secured an additional contract to complete the reactor life extension of Unit 1 CANDU reactor at the Serna Voda nuclear power plant in Romania. This follows our signing last quarter to build two new CANDU reactors at Cernavoda. In engineering services, we will be delivering the East Harbour Transit Hub in Toronto. In the US, our land and expand strategy continues to yield results as we have now been contracted to manage the San Francisco Airport Improvement Programme. And in the UK, we're playing an integral role in the East Coast Digital Programme to support the delivery of the world's most complex digital railway transformation. Significant backlog growth across the majority of our regions and capabilities highlights our role as a trusted partner in supporting the global energy transition and an aging infrastructure. Turning to slide five, as we anticipated, revenue declined on an organic basis in our engineering services business, mainly due to a difficult year-over-year comparison following strong performance in Q1 2024. Completion and delays of two projects also weighed on these results. Segment adjusted EBITDA over net revenues margin was just under 15% for the first quarter, roughly flat versus the prior year. Notably, we continue to increase our backlog, which now stands at $12.7 billion, representing a 6% increase versus our backlog as of March 31, 2024. Underpinning our view, that demand for our services remains strong. Beginning on slide six, we provide an overview of each of our four regions and their performance in Q1, 2025. In Canada, backlog increased 9% year over year, mainly due to transportation and power renewable contract wins. Revenue declined 14% organically in the first quarter, mainly due to the completion of a large project in the second quarter of 2024, which had a high percentage of flow-through costs. But the remaining business continues to perform well, as shown by the increase in net revenue. Segment adjusted EBITDA was $22 million flat year over year with an 11% margin. We are committed to enhancing margins and have implemented initiatives that are expected to yield an annual year-over-year improvement. Despite softness in growth revenue the past few quarters, we are bullish on our engineering services prospects in Canada as the government continues to make commitments towards infrastructure and hydropower investments. In the meantime, we are focused on increasing our presence in Ontario and Western Canada and strengthening our position across several high growth end markets. In the UK and Ireland, revenue grew 3% organically year over year, driven primarily by volume growth in rail within the transportation market, as well as in defence and the water markets. Segment-adjusted EBITDA grew to $89 million in the quarter, representing a nearly 17% EBITDA margin, due to the results of our continuous improvement plan focused on efficient project delivery. Backlog grew 9% year-on-year to approximately $1.8 billion, driven by sizeable wins in transportation and defence. Although details surrounding the June UK government spending review remains, we are optimistic about the new budget and their 10-year infrastructure strategy. The foundation and the end market diversity we have built in the region over time is positioned as well to meet our customers' needs. In our water market, we are building on our historically strong delivery with major water companies as we enter the new funding cycle. In aviation, we continue to see strong demand for our services driven by capital programs at Heathrow, enabling us to deliver comprehensive integrated solutions. And looking ahead, Our recent rail wins highlight our commitment to innovation and excellence and secures our position in the rail sector. Turn into slide eight, and our U.S. land and expand strategy continues to make strides. We recently closed on the acquisition of a major stake in David Evans, achieved a U.S. engineering record backlog in Q1, and our pipeline of opportunities remains strong. For the first quarter, revenue organically declined 1% year over year, as strong growth in our U.S. engineering services business, particularly in transportation, infrastructure, and the industrial markets, was offset by a decrease in our global minerals and metals sector. Segment-adjusted EBITDA was $47 million, slightly above first quarter 2024 results. Backlog increased 6%, year over year to nearly $1.7 billion as we continue to prioritize client engagement and leverage our unique end-to-end capabilities. Our 6,000 US employees are focused on expanding our footprint across the country. On the West Coast, we are taking our expertise in airports to California, while in the Southwest, we are continuing to secure key wins for transportation work in Florida North Carolina, and Texas. Our business is historically resilient during times of economic uncertainty. We are not directly impacted by tariffs and we're minimally exposed to federal agency contracts. We remain believers in the long-term growth prospects of our end markets as long-term infrastructure investments continue to be strong, particularly in transportation. We will also continue to utilize our strong balance sheet and growing cash flow to enhance our footprint. Looking ahead, we're excited to leverage our David Evans colleagues' capability and to further develop the West Coast opportunity pipeline, while also focusing on enhancing our already growing presence on the East Coast. In EMEA, during the first quarter, revenue declined 9% on an organic basis and segment-adjusted EBITDA declined to $26 million, representing a 14% margin over net revenue. Total backlog in EMEA was approximately $1.3 billion, down 12% versus the first quarter of 2024. The declines in revenue of backlog were expected as the first phase of a major buildings and places project in the Middle East was completed at the end of last year. We expect to continue to grow in the region over time, but at a more moderate rate. Demand for our capabilities remains strong, evidenced by our recent award of the lead architect on the groundbreaking project at the Corinthian Dubai. In Asia, backlog has continued to grow, and we're seeing increased investments in infrastructure and transportation, specifically with the development of the Hong Kong northern metropolis. In Australia, we're focused on expanding our presence through opportunities in transportation, defence, power and grid infrastructure to ultimately deliver long-term growth. I'd like to now move to slide 10 and the results of our nuclear business. We continue to demonstrate significant growth, achieving an organic revenue increase of 77%. compared to the first quarter of 2024, driven largely by can-do life extension wins and further growth in our nuclear services business in the UK and the US. Our nuclear backlog is now $5.2 billion, 185% higher than our backlog as of March 31, 2024, driven primarily from life extension bookings in the CANDU fleet. Segment-adjusted EBIT grew 61% to $63 million in the first quarter, and the segment-adjusted EBIT margin was approximately 12%. On slide 11, we highlight the achievements across our nuclear CANDU and services portfolios. In our CANDU business, we're making excellent progress on life extension projects and new bills. In Romania, as I noted earlier, we were awarded the contract for phase two of the life extension work at Sona Voda C1. And in Canada, we entered into a multi-billion dollar contract for phase one of CANDU life extension work at the Pickering nuclear generating station. Last quarter, we also highlighted the $304 million financing from the Canadian government to develop CANDU technology, including Monarch, in Canada and for Canada. This further solidifies the government's focus on homegrown technology, which only we possess, and their commitment to build a more sustainable future for Canada. Opportunities for our CanDo expertise abound across many of the regions in which we operate. As we continue to grow, it is vital to do so more efficiently, and as such, We've concluded vendor agreements with eight companies in Canada to strengthen our supply chain. We will continue to enhance our operational capabilities under our program to deliver excellence. In our services business, new build support and decommissioning services work continues to drive growth in the UK region. In addition to our decommissioning work at Sellafield, we reached a major milestone with a successful robotics trial. This accomplishes three clear things. It opens the possibility for remote site access. It enhances safety and it increases security at nuclear sites. This is a really exciting development that was achieved through our investment in innovation. Additionally, we continue to land and expand our nuclear capabilities in the US as we have formed a joint venture with Strata G to support various missions for the Department of Energy. Our nuclear capabilities and expertise are a source of unique competitive advantage. Four and a half thousand of my colleagues are solely focused on nuclear, which we are also supplementing with the skills and talent of additional thousand people from across the rest of Atkins or Ellis. We continue to position extremely well to take advantage of the ongoing nuclear super cycle. Our first quarter nuclear performance provides a strong foundation for 2025. And as such, we are raising our full year revenue outlook to a range of $1.9 billion to $2 billion. And looking out, we see continued growth for this business and now believe by 2027, our annual nuclear revenue will be in the range of $2.2 billion to $2.5 billion. Turning to slide 12, I want to further highlight the near-term and long-term can-do revenue opportunities within our nuclear business. The potential contracts you see on this slide represent a massive opportunity for Atkins Realis and underpin our view that there is significant growth for the foreseeable future. These represent profitable contracts and highlight we have real backlog with real teams in place who are delivering real work every day. Our $5 billion nuclear backlog achievement is just the beginning as our customers continue to recognize our nuclear expertise. Total backlog does not include follow-on stages of our recent wins. and only a very small amount of can-do new builds. We cannot overstate our belief in the significant opportunity in front of Atkins Realis in the nuclear sector. Now moving to slide 13 and our links on LSTK and capital businesses. Our links on segment revenue grew organically 36% year over year. continuing its strong volume momentum from 2024. Links on realized 340 basis points of EBIT margin expansion in the first quarter, as operational improvements continue to positively flow through the business. Backlog increased 52% to a record high of $2.2 billion at the end of the quarter. Across all regions, we're seeing volume increases, and continued backlog quality improvement, aiding profitable growth for this segment. On LSDK projects, segment-adjusted EBIT was in line with expectations. As we indicated last quarter, the Trillium line went into operation in January and commissioning on Eglinton in Ontario is progressing well. Backlog decreased 33% year-over-year, primarily now consisting of the REM project. On capital, we did not receive dividends for Highway 407 during the first quarter of 2025, but the other assets performed well. I'll now turn it over to Jeff to discuss the financial results and the 2025 outlook.