Investor Presentation. April 2018

Transcription

1 Investor Presentation April 2018

2 Forward-looking statements Reference in this presentation, and hereafter, to the Company or to SNC-Lavalin means, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint arrangements, or SNC-Lavalin Group Inc. or one or more of its subsidiaries or joint arrangements. Statements made in this presentation that describe the Company s or management s budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be forward-looking statements, which can be identified by the use of the conditional or forward-looking terminology such as aims, anticipates, assumes, believes, cost savings, estimates, expects, goal, intends, may, plans, projects, target, should, synergies, vision, will, or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. Forward-looking statements also include statements relating to the following: (i) future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects; and (ii) business and management strategies and the expansion and growth of the Company s operations. All such forward-looking statements are made pursuant to the safe-harbour provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company s current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements made in this presentation are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company s 2017 Management Discussion and Analysis (MD&A). The 2018 outlook also assumes that the federal charges laid against the Company and its indirect subsidiaries SNC-Lavalin International Inc. and SNC-Lavalin Construction Inc. on February 19, 2015, will not have a significant adverse impact on the Company s business in If these assumptions are inaccurate, the Company s actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company s assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risk factors are set out in the Company s 2017 MD&A. The 2018 outlook referred to in this presentation is forward-looking information and is based on the methodology described in the Company s 2017 MD&A under the heading How We Budget and Forecast Our Results and is subject to the risks and uncertainties described in the Company s public disclosure documents. The purpose of the 2018 outlook is to provide the reader with an indication of management s expectations, at the date of this presentation, regarding the Company s future financial performance and readers are cautioned that this information may not be appropriate for other purposes. Non-IFRS financial measures and additional IFRS measures The Company reports its financial results in accordance with IFRS. However, the following non-ifrs measures and additional IFRS measures are used by the Company: Adjusted net income from E&C, Adjusted diluted EPS from E&C, Adjusted net income from Capital, Adjusted diluted EPS from Capital, Adjusted consolidated diluted EPS, EBITDA, Adjusted E&C EBITDA, Segment EBIT and Revenue backlog. Additional details for these non-ifrs measures and additional measures can be found below and in SNC-Lavalin s MD&A, which is available in the Investors section of the Company s website at Non-IFRS financial measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with IFRS, 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. However, these non-ifrs financial measures have limitations and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. 2

3 SNC-Lavalin Overview

4 Why invest in SNC-Lavalin Continued growth for value-added global engineering services The world will continue to evolve in ways that no one can foresee, but engineers will remain at the very heart of that change by designing and building projects to meet the great challenges of tomorrow, whether they be climatic, social, or resource-based High caliber international leadership supported by talented and dedicated team Leadership positions in highly attractive end markets Including Canadian PPP, Rail & Transit, Mining & Metallurgy, Nuclear, O&G sustaining capital Diversified business model with ability to provide comprehensive end-to-end project solutions including financing & asset management, consulting & advisory, digital & artificial intelligence, design & engineering, procurement, construction & project management, operations & maintenance and sustaining capital Strong, sustainable and diversified backlog with tier-1 clients Strong balance sheet Strong track record of increased dividend 4

5 A global fully integrated professional services & project management company leader Founded in 1911 SNC-Lavalin is a global fully integrated professional services and project management company, and a major player in the ownership of infrastructure Employees 50,000+ From offices around the world, SNC-Lavalin s employees are proud to build what matters, providing comprehensive end-to-end project solutions to clients in four industry sectors Revenue ~$10B Listed on TSX SNC Since 1986 Investment Grade Credit Rating 1 BBB 1 Per S&P and DBRS. 5

6 SNC-Lavalin acquired Atkins on July 3, month Revenue $1.8B month Segment EBIT 11.4% Atkins operates in a significant part of the value chain providing solutions for the complete journey of capital programs Atkins is one of the world s most respected design, engineering and project management consultancies Their core business is helping our clients to plan, design and enable major capital programs 6

7 Operating in 4 regions across the world Europe 12,000 Americas 16,000 Middle- East & Africa 21,000 Asia Pacific 3,000 Breadth of geographic exposure 2017 Revenues 1 11% Americas Middle East & Africa Asia Pacific Europe 14% 23% $9.3B 52% 1 Only includes 6 months of Atkins revenues, as it was acquired on July 3,

8 A diversified and resilient business model while improving our revenue mix 2016 Revenues 2017 Revenues Pro forma Revenues (assuming 12 months of Atkins) 2 4% 3% 19% 32% 31% 19% $8.5B 44% 3% 5% $9.3B 36% $11.1B 14% 2% 4% 30% 23% 12% 19% 60% Reimbursable 40% Fixed-price 35% Reimbursable 20% Atkins services 45% Fixed-price 29% Reimbursable 33% Atkins services 38% Fixed-price Oil & Gas Infrastructure Power Mining & Metallurgy Capital Atkins 1 Includes only 6 months of Atkins revenues, as it was acquired on July 3, revenues assume 12 months of Atkins revenues (i.e. Atkins months revenues x 2 = $3.6B) 8

9 Resilient business model with a well-balanced revenue backlog 2017 Revenues $9.3B Backlog Dec.31, 2017 $10.4B 25% Reimbursable Customers charged for actual cost incurred plus a margin 35% 20% Actual reimbursable revenues % usually higher than backlog due to book and burn works 20% 55% Atkins Services Reimbursable contracts or fixed price contracts with limited construction or procurement risks Fixed Price 45% Work completed at a predetermined lump-sum price Good balance between reimbursable, services and fixed price contracts optimizes financial risk 9

10 Recognized leader in health and safety Our safety record is world class and continues to remain strong 1.00 Total Recordable Incident Frequency (TRIF) Injury Frequency / 200,000 hrs Target 10

11 Ethics & compliance integrated in the way we work In order to protect employees, shareholders and other stakeholders, SNC-Lavalin developed an ethics and compliance system following worldwide best practices to Prevent, Detect and Respond to issues Our ethics and compliance program is an integral part of our daily activities Ethics and Compliance Organization Independent Monitor/ External Validation 11

12 A strong and experienced management From left to right: From left to right: Alexander (Sandy) Taylor President, Nuclear ~3 years with SNC-Lavalin ~35 years in industry Christian Brown President, Oil & Gas ~3 years with SNC-Lavalin ~20 years in industry James Cullens Executive Vice-President, Human Resources ~1 year with SNC-Lavalin ~25 years in human resources José J. Suárez President, Mining & Metallurgy ~6 years with SNC-Lavalin ~35 years in industry Hartland J. A. Paterson Executive Vice-President and General Counsel ~2 years with SNC-Lavalin ~30 years in legal and ethics & compliance Neil Bruce President & Chief Executive Officer ~5 years with SNC-Lavalin ~30 years in industry Chantal Sorel Executive Vice-President and Managing Director, Capital ~10 years with SNC-Lavalin ~25 years in industry Nick Roberts President, Atkins, Engineering, Design and Project Management ~1 year with SNC-Lavalin ~20 years in consulting Sylvain Girard Executive Vice-President and Chief Financial Officer ~3 years with SNC-Lavalin ~25 years in finance and accounting Marie-Claude Dumas President, Clean Power ~11 years with SNC-Lavalin ~20 years in industry Erik J. Ryan Executive Vice-President, Strategy, Marketing and External Relations ~4 years with SNC-Lavalin ~25 years in external relations and strategy Ian L. Edwards President, Infrastructure ~3 years with SNC-Lavalin ~35 years in industry 12

13 Our values Our values are the essence of our Company s identity. They represents how we act, speak and behave together, and how we engage with our clients and stakeholders. SAFETY We put safety at the heart of everything we do, to safeguard people, assets and the environment INTEGRITY We do the right thing, no matter what, and are accountable for our actions COLLABORATION We work together and embrace each other s unique contribution to deliver amazing results for all INNOVATION We redefine engineering by thinking boldly, proudly and differently 13

14 Strategy

15 Redefining SNC-Lavalin New Beginning Change senior leadership & culture Develop new strategy with focus on growth opportunity in Resources Step Change and Operational Excellence Adjust cost structure to the resources market slowdown Target $200M in G&A savings & Deliver Vision Reposition SNC-Lavalin on a path of strong profitable growth Balance portfolio across sectors geography risk profile Increased focus on Ethics & Compliance Crisis SNC-Lavalin turns documents to authorities Investigations Lawsuits Allegations 2014 Expand Resources Capabilities Kentz acquisition Expand O&G capabilities Grow O&G revenues from $500M (2013) to $4B (2015) Position SNC-Lavalin as a top 10 O&G player Focus Atkins acquisition to expand Services offering, regional breadth and Infrastructure and Nuclear expertise Deliver on operational excellence Deliver a client-centric organization Deliver a performance-driven culture 15

16 Redefining SNC-Lavalin what we ve done since New Management NEW % 100 COMPANY Culture Business Mix % New Board As of December 2017 Repositioned the company by divesting non-core businesses Balanced the sector portfolio and derisked the business model Creation of a Global organization 16

17 Our strategy is built upon 4 guiding principles 1 Continuing our progress in Operational Excellence 2 Delivering as a client-centric organization 3 Delivering a performance-driven culture 4 Growing our business & delivering superior shareholder returns 17

18 Vision Objectives Become one of the top global, fully integrated, professional services and project management companies in profitability and profit growth Be recognized as a client-centric delivery-focused organization Strong, performance-driven culture Continuous focus on operational excellence 18

19 Vision 2020 Plan to deliver adjusted consolidated EPS of $5 $5.00 $3.85 $3.60 $3.20 $2.46 $2.42 $2.58 $ Drivers: G&A expenses efficiency & operational excellence continuous improvement Project execution improvement Driving organic growth by: - Increasing our share in nuclear through an expanded offering - Capitalizing on Infrastructure investment in Canada, UK & US - Maximizing Atkins/SNC- Lavalin revenues synergies - Mining & Metallurgy recovery M&A post Atkins integration CAGR: Compound Annual Growth Rate 19

20 Scorecard SHORT-TERM MEDIUM-TERM LONG-TERM What we did in 2017 Successful acquisition of Atkins in July 2017, the largest in SNC- Lavalin s history, adding worldclass experts to our team and further diversifying our service offerings; Initiatives to improve project delivery and financial performance reflected in our 42.4% increase in adjusted diluted EPS from E&C, from $1.51 in 2016 to $2.15 in 2017; Creation of SNC-Lavalin Infrastructure Partners LP to monetize our mature Capital investments; Sale-leaseback of Montreal Headquarters. Completed Our ongoing projects Integrate Atkins operations; Refocus our business strategies on high-growth regions and in light of expanded capabilities; Adjust our brand vision; Continue our progress in operational excellence; Generate organic growth as shown by being shortlisted on several major projects and by winning major contracts across all sectors in Canada, the Middle East, the United States, South America, Europe and Australia; Concentrate our efforts in nuclear energy, clean power and engineering design and project management to create further opportunities and exit the low profit thermal EPC Power sector; Repay debt and maximize cash flow efficiency Initiatives to decrease number of lost-time incidents in 2018, compared with 2017; Evaluation of potential growth through token M&A; Achieve revenues synergies with Atkins, as well as increase cross-selling opportunities across all sectors; Deliver an integrated and focused innovation and technology agenda, including a digital roadmap. Underway Deliver an adjusted consolidated EPS of $5 by 2020 General and administrative expenses efficiency and operational excellence continuous improvement; Project execution improvement; Driving organic growth by increasing the Company s share in nuclear through an expanded offering, capitalizing on infrastructure investments in Canada, the United Kingdom and the United States, maximizing Atkins/SNC-Lavalin revenue synergies, and a Mining & Metallurgy recovery; Mergers and acquisitions, post Atkins integration. Planning 20

21 Market Outlook

22 Today, SNC-Lavalin competes in a $2.9 trillion global market impacted by diverse macro trends Macro econo mic Enviro nment These trends create a wealth of opportunities across all of our markets (Infrastructure, Power, Oil & Gas, Mining & Metallurgy) 22

23 Within project management, engineering & design Major trends we see affecting customer needs in the future: Rapid consolidation & globalization Growth on three axes Digital & Artificial Intelligence Direct & Indirect cost efficiency Geographies Services Markets Rapidly enhancing engineering analysis and productivity Delivering smarter solutions for our regional & global customers 23

24 Our market has seen significant consolidation and change Market Cap. 12,000 10,000 $ M CAD 8,000 6,000 4,000 2,000 0 Jacobs Fluor SNC-Lavalin Aecom Wood WSP CH2M * McDermott WorleyParsons Atkins Stantec Balfour Beatty AmecFW CB&I SNC-Lavalin s market Cap. was $6.1B at the end of 2012 * Estimated, as at March 28, 2018 Source: Bloomberg 24

25 Each of our markets offers numerous opportunities Global Market (1) Infrastructure Growing strong position in Rail & Transit with a focus on Canada and the U.S., expanding and P3 opportunities to leverage Capital; growing O&M and leveraging Atkins presence US$1.9 T Oil & Gas Greater regional focus - Grow strong position in Gas, expand in Downstream, selective equity investments to leverage Capital; growing Project Management and Consulting; enter offshore market using Atkins expertise US$460 B Clean Power Grow and expand renewables; very selective growth in Hydro US$200 B Nuclear Grow Nuclear (incl. decommissioning); leverage Atkins expertise Mining & Metallurgy Slow recovery in overall market; Growing sustaining capital and consulting, fertilizers; expanding focus on studies & front end work Capital Canada remains strong, selective opportunities in the US market (but competitive); Other BOOT (2) opportunities could also become attractive for customers US$100 B US$150 B US$300 B 1) Data was internally developed using multiple sources not limited to the following: Business Monitor International, Middle East Economic Digest, International Energy Agency, US Department of Energy, National and Provincial Budgets of Canada, US Congressional Budget Office, Australia Budget, National Rail budget, American Road & Transportation Builders Association, Individual company reports. 2) Build, own, operate and transfer. 25

26 2018 growth outlook We anticipate increased Segment EBIT for the M&M and Power segments, while O&G and Infrastructure are expected to be mainly in line with Atkins will include 12 months of operations and related financing vs 6 months in Q1 to be the lowest quarter of 2018, gradual increase expected throughout the remaining quarters of the year. Tax rate for the adjusted E&C business expected to be between 20% and 25% Adjusted diluted EPS from E&C Adjusted consolidated diluted EPS 1 $2.60 $2.85 $3.60 $3.85 $3.60 to $3.85 $3.20 $2.46 $2.42 $ Adjusted diluted EPS from E&C Adjusted diluted EPS from Capital Outlook range 1 Based on a WANOS of ~175M 26

27 Sectors of Activity

28 Comprehensive end-to-end service offering Capital Consulting & Advisory Digital & AI Design & Engineering Procurement Construction & Project Management Operations & Maintenance Sustaining Capital Capital Through Capital, our investment, project financing and asset management arm, we offer end-to-end capital investment services. Capital focuses on identifying and developing high-performing business opportunities across our sectors. It provides equity and debt solutions to finance projects and manages our multi-billion-dollar portfolio of infrastructure investments. With Capital, we re broadening our business development and investment opportunities while reducing our exposure and risk through strategic collaboration with financial partners. Consulting & Advisory We help clients plan, design and enable major capital projects, as well as provide expert consultancy that covers their project s full lifecycle. We strive to build strong relationships by understanding the challenges our clients face, sharing their vision and helping them bring this vision to life. Digital & AI From digital products and tools to Internet of Things (IoT), Mobility as a Service (MaaS) and strategic digital asset management solutions, our extensive digital engineering and enterprise asset management capabilities enhance both our clients and our own business performance. A lean startup methodology allows us to rapidly incubate and test innovative ideas. We re also pushing the boundaries through the increased use of automation on projects as well as our artificial intelligence (AI) and machine learning consulting services. Design & Engineering Our engineers and designers provide innovative, digitally-driven services for all our sectors. From concept and feasibility through to detailed design, we develop tailored solutions to ensure sustainable projects for our clients and their customers as well as a positive end-user experience. Our sustainable engineering capabilities and full project lifecycle know-how improve energy performance and optimize operations to generate long-term savings for clients. Procurement Construction & Project Management Operations & Maintenance Sustaining Capital Our international network of more than 500 procurement professionals in 40 countries manages $7 billion worth of goods and services annually for clients across our sectors. We strive to deliver excellence through innovative procurement solutions while respecting quality, cost and schedule requirements in an evolving sourcing market. We deliver complete lifecycle solutions for all sizes and types of projects, including public-private partnerships (P3s). Our extensive construction expertise, combined with an unwavering focus on safety and indepth financing, engineering, procurement and operations and maintenance know-how, make us a partner of choice across a broad range of industries and markets. So does our commitment to leveraging local capabilities and ensuring cost and schedule efficiencies. We re one of Canada s largest operations and maintenance service providers with a presence in many parts of the world. Our services include the operations and maintenance of airports, roads, bridges and rail systems, industrial facilities, defence and logistics support, and integrated realestate solutions. Key differentiators include our extensive P3 expertise, around-the-clock support for mission-critical activities and focus on maximizing an asset s lifecycle. With today s commodity volatility and record lows, companies are postponing growth capital expenditures and focusing on getting more out of their existing assets. We help clients rigorously manage their capital portfolio, providing solutions to reduce costs and drive productivity. We develop a holistic view of our clients assets and identify short and long-term value-driving initiatives to deliver incremental improvements that optimize their operations. 28

29 in six sectors of activity with robust growth backdrop Global Market (1) Infrastructure Airports & Aviation Defense & Security Environment Highways, Roads & Bridges Intelligent Transport Systems Ports & Harbours Industrial Urban Development Urban Transit and Rail Systems Water & Wastewater Buildings US$1.9 trillion Oil & Gas Heavy Oil Offshore LNG Unconventional O&G Refining & Petrochemicals Gas Processing Sustaining Capital Pipelines Carbon Capture and Utilization US$460 billion Clean Power Hydroelectric Transmission and Distribution Renewables Energy Storage Critical Infrastructure Protection US$200 billion Nuclear New Builds Life Extension & Upgrades Decommissioning Site M&O Waste Management Services Operations Support US$100 billion Mining & Metallurgy Aluminium Gold Copper Iron Ore Nickel Fertilizers Sulphur Products US$150 billion Capital Canada Select U.S. opportunities Other BOOT (2) opportunities US$300 billion 1) Data was internally developed using multiple sources not limited to the following: Business Monitor International, Middle East Economic Digest, International Energy Agency, US Department of Energy, National and Provincial Budgets of Canada, US Congressional Budget Office, Australia Budget, National Rail budget, American Road & Transportation Builders Association, Individual company reports. 2) Build, own, operate and transfer. 29

30 Oil & Gas ~$3.4B revenue business with ~20,000 employees 70% of revenue from blue-chip customers Relationship-based repeat business with core blue-chip IOCs & NOCs Agility to offer services and resources specific to client needs Provide world-class expertise at every phase of an asset life cycle A partner for clients in increasing efficiency and production from existing assets Strong backlog and diversified portfolio of Capex and sustaining capital projects Backlog (in B$) 2017 Revenues EBIT % % % 55% 8% 6% 4% 7.2% 2% Reimbursable Fixed-Price 0% -2%

31 Power ~$1.3B revenue business with ~3,000 employees More than a century of experience with 413,000 MW, 2,500 substations, 114,000 km transmission and distribution (T&D) lines. Enough capacity to power 35 cities the size of New York and enough T&D lines to circle the globe almost 3 times. World leader in Hydroelectric engineering End-to-end life-cycle capabilities in power generation and transmission Owner of Candu nuclear technology license Owner of first PPP hydroelectric power project in Canada In 2017, management decided to exit the fixed-price EPC thermal power business Backlog (in B$) 2017 Revenues EBIT % % % 50% 8% % 5.0% Reimbursable Fixed-Price 4%

32 Infrastructure ~$2.1B revenue business with ~6,000 employees Integrated infrastructure engineering solutions for more than a century and on every continent Strong track record of completing complex projects Leader in Canadian PPP projects Won 10 of Canada s 13 recent major transit projects Ability to address full infrastructure life cycle from equity investment and arranging financing, to EPC and O&M 8.0 Backlog (in B$) 2017 Revenues 8% 6% EBIT % 7.4% % 70% 4% 2% % -2% * 2017 Reimbursable Fixed-Price -4% *Following the completion of the sale of its non-core Real Estate Facilities Management business in Canada and its local French operations in December 2016, the Company has removed $903M from its December 31, 2016 backlog. 32

33 Mining & Metallurgy ~$500M revenue business with ~1,000 employees Five decades of combining global-caliber expertise with deep local capabilities to provide tailored solutions for projects of any size, scope or complexity Proven ability of reducing clients capital and operating costs, improving mine and processing plant efficiency, and providing project and quality assurance One-stop-shop capabilities, deep know-how, and flexible execution models for clients around the world Track record of safely and successfully delivering studies, sustaining capital services and major projects in 35 countries Backlog (in B$) 2017 Revenues EBIT % % % 75% 8% 4% 4.7% Reimbursable Fixed-Price 0%

34 (acquired July 3, 2017) ~$3.6B revenue business with ~20,000 employees Established in 1938, it is now one of the world s most respected design, engineering and project management consultancies serving infrastructure, transportation and energy sectors Operates in a significant part of the value chain providing solutions for the complete journey of capital program Strategy, advisory and analysis Concept design Detailed design and engineering Program and project management consultancy Asset management consultancy 2017 Revenues Underlying operating profit EBIT % Revenue Backlog $2.1B December 31, % 12% 10% 8% 6% 8.2% 11.4% Atkins Services 4% months

35 Capital Portfolio of value creating assets SNC-Lavalin s investment and asset management arm Portfolio of 16 investments in 5 countries (see next slide) New infrastructure vehicle created in 2017 SNC-Lavalin Infrastructure Partners LP - BBGI subscribed to units in an amount equal to 80% of the value of 4 assets - 4 North American mature assets were transferred in Q more asset (MIHG) should be transferred into the vehicle by mid-year Representing a total fair value of ~$254M 3 or ~1.9x NBV - SNC-Lavalin retains the long-term management of the assets - SNC-Lavalin acts as General Partner and Manager of the Partnership Our star investment = 407 ETR (see appendix) ~$5.0B Inv. FMV 2 per analysts $316M Inv. NBV 1 In M$ Cumulative Net income (excl. gain/loss on disposal) 1 Net Book Value as at December 31, 2017, excl. MIHG 2 Average Fair Market Value as per analysts average consensus, as at March 28, At 100%. $185M / 80% = $231M + MIHG adjustment of $23M 0 Q1 17 (3 mths) Q2 17 (6 mths) H407 Q3 17 (9 mths) Others Q4 17 (TTM) 35

36 Capital investments portfolio Name Description Held Since Concession Years Location Equity Participation Highways, Bridges & Rail 1. Highway 407 (407 ETR) 108 km electronic toll road Canada (Ontario) 16.8% 2. InTransit BC* Rapid transit line Canada (B.C.) 6.7% 3. Okanagan Lake* Floating bridge Canada (B.C.) 20% 4. TC Dôme** 5.3 km electric cog railway France 51% 5. Chinook* 25 km six-lane road Canada (Alberta) 10% EDGGP 32 km H407 East extension (Phase 1) Canada (Ontario) 50% 7. Highway Concessions One PL Fund (Roads) India 10% 8. Rideau Light rail transit system Canada (Ontario) 40% 9. Eglinton Crosstown 19 km light rail line Canada (Ontario) 25% 10. SSL New Champlain bridge corridor Canada (Quebec) 50% Power 11. SKH 1,227 MW gas-fired power plant Algeria 26% 12. Astoria II 550 MW gas-fired power plant 2008 Indefinitely USA (NY) 6.2% 13. InPower BC John Hart 132 MW generating station Canada (B.C.) 100% Health Centres 14. MIHG*** McGill University Health Centre Canada (Quebec) 50% 15. Rainbow* Restigouche Hospital Centre Canada (N.B.) 20% Others 16. Myah Tipaza Seawater desalination plant Algeria 25.5% NBV 1 = $316M 2 FMV 3 = ~$5B * Assets transferred in Q into SNC-Lavalin Infrastructure Partners LP ( Partnership ) **To be sold ***To be transferred into the Partnership 1 Net Book Value as at December 31, Excludes MIHG 3 Average Fair Market Value as per analysts calculations, as at March 28,

37 Financial Information

38 On a path of growth and improved E&C earnings Revenues from E&C Adjusted E&C EBITDA margin and adjusted net income from E&C (in M$) 9,364 8,223 9,097 (in M$) 4.6% 4.5% 6.9% ,149 7, % Adjusted E&C EBITDA margin Adjusted net income from E&C 38

39 Our capital allocation framework Sources of Funds Operating cash flows from E&C projects Operating cash flows from existing concessions and Capital Investments Divestiture of matured Capital Investments Divest non-core assets (e.g. Building) Leverage Uses of Funds Working Capital & Capex needs on new projects Equity investments driving E&C revenues Dividend payment M&A activities Opportunistic share buy back Key objectives of our Framework Drive Organic and Inorganic E&C Growth Optimize our Balance Sheet while safeguarding our Investment Grade Return Capital to shareholders 39

40 A track record of increased dividends Dividends were increased for each of the past 17 years Declared dividend per share Payout ratio* 125% 39% 41% 40% 34% (in $) Key Goals: Maintain dividend growth trajectory Stabilize dividend payout at around 30% of consolidated adjusted net income * % of consolidated adjusted net income. 40

41 Financial position (in M$) Assets December December Cash and cash equivalents 707 1,055 Other current assets 3,908 3,135 Property and equipment Capital investments accounted for by the equity or cost methods Goodwill 6,323 3,268 Intangible assets related to business combinations 1, Other non-current assets and deferred income tax asset ,762 9,298 Liabilities and Equity Short-term debt and current portion of long-term debt - recourse Short-term debt and current portion of long-term debt non-recourse from Capital Investments Other current liabilities 4,168 3,941 Long-term debt recourse 1, Long-term debt limited recourse 1,475 - Long-term debt non-recourse from Capital investments Other non-current liabilities and deferred income tax liability 1, ,539 5,402 Equity attributable to SNC-Lavalin shareholders 5,225 3,873 Non-controlling interests (2) 23 13,762 9,298 41

42 Credit facilities and long-term debt Credit facilities (recourse debt) Revolving & Term Facility $2,750M Revolving Facility maturing May 2021 $2,500M Uncommitted bilateral facilities 225M Term Facility: - 75M maturing July M maturing July 2022 Current maximum leverage ratio of 3.5 Other (recourse debt) $350M Debenture Maturity: July 2019 Interest rate: 6.19% $300M Series 1 Debenture Maturity: November 2020 Interest rate: 2.689% CDPQ (limited recourse debt) Borrower SNC-Lavalin Highway Holdings, non-recourse to SNC-Lavalin Group Amount $1,500M divided in two Tranches: - Tranche A - $1B - Tranche B - $500M Interest rate 6.5% In March 2018, $525M of three series of unsecured debentures 1 were issued. The net proceeds was mainly used to reduce the revolving and term facility. Prepayment Tranche A: non-call period of 4 years Tranche B: right to repay at all times without penalties $697M as at Dec. 31, 2017 $648M as at Dec. 31, 2017 $1,475M as at Dec. 31, $150M Series 2 Debenture, Floating Rate (3-month bankers acceptance rate (CDOR) plus 0.35%), due 2019 $175M Series 3 Debentures Floating Rate (3-month bankers acceptance rate (CDOR) plus 0.54%), due 2021 $200M Series 4 Debentures, 3.235%, due

43 Debt ratios $5.0B $2.8B $3.5B $1.5B limited recourse to SNC-Lavalin ~1.8x LTM Adj. EBITDA (1) $1.3B ~0.8x LTM Adj. EBITDA (1) ~0.6x Incorporating full LTM Adj.. EBITDA of Atkins and DTS (2) LTM Adj. EBITDA of $767M (1) $0.6B $705M cash (5) (3) Total Debt Total Recourse Debt Net Recourse Debt Fair Market Value of Capital Investments Minus Limited Recourse Debt (4) ~$0.6B net recourse debt represents 0.6x Adj. EBITDA and further supported by relatively liquid investments of ~$3.5B Note: Data as of December 31, ) Adjusted EBITDA, less interest on CDPQ limited recourse debt, LTM ended December 31, 2017; including Atkins results starting July 3, 2017; EBITDA adjusted to exclude charges related to restructuring, right-sizing and other, acquisition-related costs and integration costs, gains (losses) on disposals of E&C business, Capital investments and head office building. 2) Adjusted EBITDA, less interest on CDPQ limited recourse debt, LTM ended December 31, 2017; including full 12 months of Atkins and DTS results; EBITDA adjusted to exclude charges related to restructuring, right-sizing and other, acquisition-related costs and integration costs, gains (losses) on disposals of E&C business, Capital investments and head office building. 3) Excludes $313M non-recourse debt from capital investments. 4) Estimated as $5.0B fair market value as per street estimates as of March 28, 2018, less $1.5B CDPQ limited recourse loan. 5) Excluding cash and cash equivalents of Capital investments accounted for by the consolidation method. 43

44 Q4 Financial performance summary E&C Capital Total Q Q Q Q Q Q Revenues 2,868 2, ,918 2,211 SG&A EBITDA, adjusted Adjusted EBITDA margin 8.6% 5.0% n/a n/a 9.7% 7.0% Net income, as reported 14 (38) Net income, adjusted EPS, as reported ($) 0.08 (0.26) EPS, adjusted ($) Net recourse debt to adjusted EBITDA ratio n/a Revenue backlog 10,406 10,677 In M$, unless otherwise indicated 1 Incorporating full trailing 12-month adjusted EBITDA for the acquisition of Atkins. 44

45 Full year financial performance summary E&C Capital Total Revenues 9,097 8, ,335 8,471 SG&A 1, , EBITDA, adjusted Adjusted EBITDA margin 6.9% 4.5% n/a n/a 8.7% 6.5% Net income, as reported Net income, adjusted EPS, as reported ($) EPS, adjusted ($) In M$, unless otherwise indicated 45

46 Investment summary Recognized A recognized E&C global leader fully and integrated major player professional in the ownership services and of infrastructure, project management with a strong company and experienced and a major player management in the ownership of infrastructure Diversified business model Diversified business model Leadership positions in highly attractive end markets Focused strategy Leverage E&C diversity Focused strategy expected to result in earnings growth Reduce cost base Continuous Plan to deliver improvements adjusted consolidated of operations EPS of $5 in 2020 Solid financial position Solid financial position Track record of increased dividends Growth Growth outlook outlook 2018 adjusted diluted EPS from E&C target of $2.60 to $ adjusted diluted EPS from E&C target of $1.50 to $ adjusted diluted consolidated EPS target of $3.60 to $ annualized adjusted E&C EBITDA margin of 7% 46

47 Appendix

48 407 ETR Consistent growth and low cost of financing Gross Vehicle Kilometres Travelled (in millions KM) 2,253 2,253 2,215 2,336 2,326 2,340 2,356 2,437 2,517 2,641 2,709 Dividends (in M$) Total dividends paid by 407 ETR Dividends received by SNC-Lavalin Bond Maturity Profile (in M$) % 4.30% / 5.33% % % % % 6.47% % % % 5.75% 5.29% / 6.75% % % % 3.65% % 3.83% 3.60% % % Senior Bonds ($5.8B) Subordinated Bonds ($0.8B) Junior Bonds ($0.2B) 1 Issued in November Issued in March Issued in September

49 407 ETR information Q4 (in M$, unless otherwise indicated) Q Q Change Revenues % Operating expenses % EBITDA % EBITDA as a percentage of revenues 86.9% 85.8% 1.1% Net Income % Traffic / Trips (in millions) % Average workday number of trips (in thousands) % Vehicle kilometers travelled VKT (in millions) % Dividends paid to SNC-Lavalin % 10% increase in revenues 17% increase in net income 49

50 407 ETR information Year ended December 31 (in M$) Change Revenues 1, , % Operating expenses % EBITDA 1, % EBITDA as a percentage of revenues 87.1% 86.8% 0.3% Net income % Total EBITDA/revenues (in M$) EBITDA Revenues 1,135 1,268 Toll revenues (in M$) 1,056 1, , , % % % % 83.8%

51 Net income reconciliation Q4 (in M$, except per share amount) Net Income (loss), as reported Net charges related to the restructuring & right-sizing plan and other Acquisitionrelated costs and integration costs Acquisition Amortization of intangible assets related to business combinations Net gain on disposals of E&C business, head office building, and Capital Investments Impact of U.S. corporate tax reform Net income, adjusted (Non-IFRS) In M$ Fourth Quarter 2017 E&C 14.3 (1.9) Capital (3.1) (1.9) (3.1) Per Diluted share ($) E&C 0.08 (0.01) Capital (0.02) (0.01) (0.02) In M$ Fourth Quarter 2016 E&C (38.4) Capital Per Diluted share ($) E&C (0.26) Capital This amount includes a reversal of $1.1 million ($0.7 million after taxes) of charges which did not meet the restructuring costs definition in accordance with IFRS. 2 Tax adjustments on previously recorded gains 3 As a results of the U.S. corporate tax reform, the Company recorded a non-cash charge reflecting the estimated net impact of revaluation of its U.S. deferred tax assets and deferred tax liabilities. 4 This amount includes a reversal of $8.5 million ($8.0 million after taxes) of charges which did not meet the restructuring costs definition in accordance with IFRS. 51

52 Net income reconciliation full year (in M$, except per share amount) Net Income, as reported Net charges related to the restructuring & right-sizing plan and other Acquisitionrelated costs and integration costs Acquisition Amortization of intangible assets related to business combinations Net loss (gain) on disposals of E&C business, head office building, and Capital Investments Impact of U.S. corporate tax reform Net income, adjusted (Non-IFRS) In M$ Year Ended December 31, 2017 E&C (102.4) Capital (35.0) (137.4) Per Diluted share ($) E&C (0.63) Capital (0.21) (0.84) In M$ Year Ended December 31, 2016 E&C Capital (48.5) (3.9) Per Diluted share ($) E&C Capital (0.32) (0.02) This amount includes $5.1 million ($5.3 million after taxes) of net charges which did not meet the restructuring costs definition in accordance with IFRS. 2 This amount includes a net reversal of $4.2 million ($6.0 million after taxes) of charges which did not meet the restructuring costs definition in accordance with IFRS. 52

53 SNC-Lavalin Denis Jasmin Vice-President, Investor Relations Tel.: Ext Firm Analyst Tel Market Details AltaCorp Capital Chris Murray BMO Capital Market Devin Dodge Canaccord Genuity Yuri Lynk CIBC World Markets Jacob Bout Desjardins Securities Benoit Poirier Laurentian Bank Securities Mona Nazir Morningstar Inc David Silver National Bank Financial Maxim Sytchev Raymond James Frederic Bastien RBC Capital Markets Derek Spronck TD Newcrest Michael Tupholme Price as of March 28, 2018 $56.17 Shares outstanding Diluted 175.6M Market capitalization $9.9B 52 - week high / low $59.38 / $50.28 Dividend per share $0.287 / quarter Dividend yield ~ 2.0% 53