aecom earnings call transcript

Wins for the quarter totaled nearly $9 billion, a record for the Professional Services business. I will begin today's discussion with a review of our financial and strategic accomplishments. But I'll tell you, Hong Kong is our biggest market in Asia where we've got almost 5,000 employees in Hong Kong alone. And what would you expect to see moving forward? Sure. Thanks, good morning guys. Gaurav Kapoor - … Michael S. Burke -- Chairman and Chief Executive Officer. AECOM is a Fortune 500 firm with revenue of approximately $20.2 billion during fiscal year 2018. I appreciate it. I would like to turn the call over to Will Gabrielski, Senior Vice President, Investor Relations. Good morning, and welcome to the AECOM's Third Quarter 2019 Earnings Conference Call. Importantly, we have built significant momentum across the business, including a sixth consecutive quarter of double-digit adjusted EBITDA growth and substantial margin improvement. Prepared Remarks: Operator. So first of all, in the first half of the year, we had within our guidance, we had predicted a number of the items that have impacted cash flow. And so that gives you a sense of what we saw. Second, when conditions normalize, we will look to return substantially all available excess capital to our stockholders. Just, Troy, on the free cash flow bridge, I think I missed a few things. Questions and Answers. Your next question comes from the line of Michael Dudas with Vertical Research. AECOM Q4 2009 Earnings Conference Call Transcript. Sean Eastman -- KeyBanc Capital Markets -- Analyst. And we are, as we indicated, in discussions there to exit that contract. Market data powered by FactSet and Web Financial Group. First and foremost, we are in a fortunate position with excess liquidity at a time when liquidity is scarce. We did at the Investor Day give a guide. And our future is built upon improvement in productivity and efficiency in the business. Please turn to slide eight. That will mean that you only have maybe a couple of hundred million dollars of net debt, plus you have a U.S. Virgin Islands big receivable that's getting paid, albeit slowly that's on there. Just you asked about what are the positives that we are seeing coming out of COVID-related work or what are the plus-ups. Thank you for all your support, and stay safe and sane in these difficult times. Have you observed the pickup in April on working cap phasing in collections to give you that confidence as well? Thanks, Mike. Now it's about 13% of our year-to-date NSR and about 1/3 of our backlog. We will continue to prioritize maintaining excess liquidity and reiterate our long-term net leverage target range of two to 2.5 times. So all told, we see there being potentially up to $100 million tailwind just from government programs that would support our view of being within that guidance range. In addition, we have recently closed on a $400 million delayed draw term loan. There's typically money set aside. Contents: Prepared Remarks. But I don't want to leave anybody with the wrong impression here. Importantly, as Mike noted, we are also successfully mitigating the headwind from 10 lost workdays in Mainland China, and we are seeing market conditions begin to normalize. And do you think that federal help will all come in, in time to have the states avoid having any deferral of projects in a meaningful way basically over the summer in your fiscal fourth quarter? Yes, great. Or is there incremental work to do there? And specifically, what I'm referring to, as we've gone through the work-from-home remote working process where 90% of our people are working remotely, we have seen an employee engagement that is higher than it was working in the office. And I was wondering if you could address that. Because of this and our agility in repositioning our workforce, we have retained nearly 99% of our employees, which positions us even better to respond directly as economic trends recover and client demand accelerates. Cumulative Growth of a $10,000 Investment in Stock Advisor, AECOM (ACM) Q2 2020 Earnings Call Transcript @themotleyfool #stocks $ACM, AECOM (ACM) Q3 2020 Earnings Call Transcript, AECOM (ACM) Q1 2020 Earnings Call Transcript, AECOM (ACM) Q4 2019 Earnings Call Transcript, AECOM (ACM) Q3 2019 Earnings Call Transcript, Copyright, Trademark and Patent Information. We are actively negotiating with a potential buyer for our share of the San Onofre nuclear decommissioning project, which would result in a substantial milestone in our derisking strategy. AECOM (ACM) CEO Mike Burke on Q3 2020 Results - Earnings Call Transcript Zacks Investment Research - 5 months ago Aecom Technology (ACM) Tops Q3 Earnings and Revenue Estimates AECOM (ACM) CEO Troy Rudd on Q4 2020 Results - Earnings Call Transcript 3:18PM ET 11/16/2020 Seeking Alpha. And then along came the pandemic, and the Board asked and I agreed to stay on and lead us through the crisis and making a rapid change during the crisis was not a good idea. Thanks for taking my questions. The mandated accounting treatment for this collection is that it be recognized in the investing section of our cash flow statement. One of the significant items that has an impact on that obviously is compensation. Questions and Answers. Can you just talk historically, like maybe what percentage of either gross or net revenue your travel cost has represented over the period of time just so we can have some context as to how much that's benefiting you? Well, New York is yes, New York is one of the things that you look at the big markets. Obviously, 70% to 75% of the business is New York and L.A., as well as you have a big focus on sports. And I think it may be the way of working in the future. There's some claims that certainly could be a source of cash in the next couple of years that are on your balance sheet as well. So we're focused on the right markets that had strength coming into it. Thanks, Mike. The company earned $3.57 billion during the quarter, compared to the consensus estimate of $3.34 billion. We have a history of converting EBITDA to cash flow on a fairly consistent basis. This includes exiting underperforming businesses and markets, optimizing overhead, consolidating our real estate portfolio and expanding the use of best cost design and shared service centers. So given that we've got four years of backlog in that space, I feel pretty good. Michael Dudas -- Vertical Research -- Analyst. So we're actually doing better than our plan despite the COVID shutdown. Great. As a reminder, AECOM is also simulcasting this presentation and slides at the Investors section at www.aecom.com. We are also continuing to progress on our plan to exit our remaining self-perform at-risk construction businesses. And how confident are you in the backlog that you have in getting there? So the stimulus money that might be brought to bear on the states in later in the year will just support the outlook for 2021 and forward. Or is the Board thinking it makes sense to keep you there indefinitely in particular in an environment like this given your history with the company? Lara Poloni - President. But we have modeled it, of course, as we do a lot of modeling these days. But I really wanted to just ask you about what the status is of your specific 2021 expectations that you had out there. Call Participants. And that's been consistent with the past. While the forecast of tax receipts is clearly lower today, contributions from the CARES Act and the Federal Reserve are set to provide $700 billion of funding capacity to our clients. Our adjusted operating margin for the second quarter was 5.9%, a 240 basis point increase over the prior year. So the bulk of our travel costs are actually funded by our clients. Your line is open. Your line is open. Yes. We had been preparing for this for quite some time on the IT side. Thanks gentlemen and stay healthy. Your next question comes from the line of Adam Thalhimer with Thompson, Davis. AECOM had a positive return on equity of 9.13% and a negative net margin of 1.41%. Additionally, state and local clients are bracing for steep tax revenue declines. ET Contents: Prepared. As I think I may have mentioned this a little bit earlier, our April results were ahead of our expectations on NSR, earnings and cash. So we're not expecting to see a decline. In fact, coming out of this, we are beating our plan in Hong Kong right now despite COVID. One is the second round of the CARES Act, the economic relief that we're expecting is probably more like a May, June time frame where the governors are asking for an additional $500 billion in aid. I mean it seems like there could be an option to do more share repurchase as there's cash that's coming in even this fiscal year. Please turn to slide nine. » AECOM Technology's CEO Discusses F4Q 2011 Results - Earnings Call Transcript » AECOM Technology's CEO Discusses Q3 2011 Results - Earnings Call Transcript. These reductions, when achieved, would be equivalent to eliminating the environmental impact of burning nearly 40 million pounds of coal every year. See how we deliver what others can only imagine at aecom.com and @AECOM. Thank you, Will. Good morning guys, hope you're well. Although we encountered challenges as we close out the Alliant combined cycle power plant that has increased the cost to complete, the plant is now generating power and is moving through the MISO certification, which is expected to be completed over the next several days. AECOM (ACM) CEO Mike Burke on Q3 2020 Results - Earnings Call Transcript. The Americas segment had a 15.6% adjusted operating margin, which marked a 160 basis point improvement over the prior year and was ahead of our expectations for the quarter. And I don't know how to handicap it, Adam. We didn't stop when we got through that first tranche, and we're not going to stop as we get through this next tranche of margin improvement opportunities. Now that's only 45%. Let me hear your thoughts on general stimulus, what comes out. Mike, that's helpful. Edited Transcript of ACM earnings conference call or presentation 5-May-20 4:00pm GMT fool. So it's not just the cost of the airplane, checking in hotels. So again, I mean in this case, our IT tools not only let us continue to perform and work effectively from home but we believe give us a differentiator in the near term and in the future. So that is a piece of the business we feel very confident in because of the backlog and because of the diversity. It's also helpful remembering that people that are traveling are also billable to clients. Sure. AECOM (ACM) Q3 2020 Earnings Call Transcript fool.com Aug 14, 2020 12:01 am; AECOM announces executive leadership updates, appointments to its Board of Directors and independent Board chair finance.yahoo.com Aug 11, 2020 6:55 am; Southwest light rail delays add up to a $21 million contract extension for AECOM So Sean, let me start off with that, and then I'll let Troy kick off any further color on the guidance. Wall Street Breakfast: The Week Ahead 6:46AM ET 11/15/2020 Seeking Alpha. Okay. For instance, we now recognize how productive our employees can remain while working remotely. And kind of what does that tell us to expect elsewhere in the world as we restart? Importantly, as our performance in Professional Services business underscores, we are benefiting from our lower risk profile, which validates our strategy. That's probably more like a June or July time frame. So that characteristic remains unchanged. However, coming into this crisis, rainy day funds were at a record high, and the CARES Act and federal reserve actions are expected to deliver $700 billion of direct support. Michael Feniger -- Bank of America -- Analyst. The gross margin in those projects is significantly up. But we're closely following a couple of new developments. Or do you see some risk that some of this moves into the next fiscal year? So the first round of the CARES Act provided quite a bit of access to capital to the state governments through mostly through lending-type activity. We still again look forward and we think that based on the underlying nature of our business and the marketplaces that we're in, that we have the ability to deliver profitable growth into 2021. I would like to direct your attention to the safe harbor statement on Page one of today's presentation. 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These type of projects are precisely where AECOM excels as evidenced by our number one ranking in the transportation and general building design markets, which was reaffirmed last week by ENR. Our team's efforts, combined with acting quickly to react to the impact of COVID-19, underscores our confidence in our updated range. And so we see 75% of the earnings in 2021 converting to unlevered free cash flow for use in the business. We've got a lot of confidence in next year based on the backlog we have, the continued very high win rates and the expanse of that backlog. Mr. Burke, I turn the call back over to you. We are delivering on our commitments to simplify and derisk our business and expand our margins. Okay. Let me walk through the details of our cash flow. The sale of the Management Services business closed on January 31. So and that work is widely various. Contents: Prepared Remarks. In our Americas and EMEA regions, 90% of our people are working remotely. In April, we won more than $200 million of work to deliver thousands of hospital beds in short order, and we are engaged with clients globally to provide additional services, including developing return-to-work strategies for our clients. This includes a more than $700 billion infrastructure investment program in the U.K., along with approximately $100 billion of stimulus funding in Australia and Hong Kong. AECOM Common Stock (ACM) Stock Quotes - Nasdaq offers stock quotes & market activity data for US and global markets. Welcome, everyone. Troy, you want to give some guidance on that? And then the other thing I'd point out is that historically, our business does have a ramp-up in the second half of the year based on activity and volume. I would like to inform all participants this call is being recorded at the request of AECOM. Please turn to slide three. And then maybe you can drill down a little bit more in your historic work you've done in New York City. So there may be an impetus to accelerate some of the infrastructure work in the New York area. And even with this significant ramp that we've seen, with more than 90% of our employees, almost overnight, working remotely, our IT systems not only performed well but, as Mike said, provided us with a differentiator in the marketplace. AECOM Technology (NYSE: ACM) Q1 2019 Earnings Conference Call Feb. 5, 2019 12:00 p.m. And the good news is we are not expecting a 10% drop in revenue in any way. And my follow-up for you, Mike or Troy, is that, can you maybe share a little bit how your customer base is adapting toward the new world that we're in, especially with working remotely and being able to engage from plans that you're sending or in your conference calls or getting documents to your clients in an efficient manner so they can continue to work on their front? Underlying cash generation in the quarter was mostly consistent with our expectations, and we remain confident in achieving our outlook for the full year. Prior to the impacts of COVID-19, state and local tax receipts were trending positively through April, which provided for a solid base of project funding. So the impact, I would classify it as in the bundle of travel costs and other types of out-of-pocket amounts that we spend in the business. And as we see the market stabilize, we'll become again, we'll become more confident about our ability to deliver against those future numbers. Your line is open. And again, as we reach a point where we start to see there'd be some more stability in the marketplace, it becomes just, as I said, a matter of timing where we will return and start buying back stock. Your next question comes from the line of Andy Kaplowitz with Citi. Out of the shadow of AECOM, Amentum takes the spotlight. That allowed us to complete the first U.S. ever digital EIS for the U.S. Army Corps of Engineers. Got it. AECOM Q2 2020 Earnings Call Transcript businesswire. In New York, there has been some nonessential construction that is put on halt. So maybe, Randy, you could give us a little overview on what we've done on the IT side. We have transformed our balance sheet with substantially reduced leverage and ample liquidity. I heard the comments on the SONGS job, but how realistic is it still here today that these can be completed this fiscal year like you previously anticipated? Realogy Holdings Corp. (NYSE: RLGY) is the leading and most integrated provider of U.S. residential real estate services, encompassing franchise, brokerage, relocation, and title and settlement businesses as well as a mortgage joint venture. I'll jump in and take that. We have consistently exceeded our financial targets over the past six quarters while delivering 300 basis points of margin improvement since fiscal 2018. Sean, was your question relative to stimulus limited to cash flow or was it a broader question? So just curious, what is the status of your 2021 targets? There is just a natural kind of unwind of working capital in the second half of the year based on increased activity. In fact, in Asia, despite the challenges presented, we achieved our profitability target and exceeded our cash flow target for the quarter. Edited Transcript of ACM earnings conference call or presentation 3-Feb-20 5:00pm GMT. Nice quarter. During the same period in the prior year, the firm earned $0.79 earnings per share. So it's a combination of the things that we've been talking about consistently for the last few quarters, which is improving our real estate profile, taking advantage of our design centers and our shared service centers. Yes, certainly. So they have a bit of a head start. And Jamie, the restructuring actions that we've taken beginning last year and we continue to take this year what those are that's what's driving the margin improvement. But the House Democrats are moving forward on a 5-year $760 billion stimulus program. In fact, we've got 50,000 projects going on at any one point in time around the world. Returns as of 01/14/2021. And then there's a number of other programs within Australia and Canada and the U.K. that will provide deferral of expenses or payment of certain things like taxes that provide a tailwind. The construction management business, first of all, it's more diversified today than it's ever been. Yes. I should note that excluding the impact of elevated levels of storm recovery work from the prior year, organic NSR in our design business increased by 2%. Before concluding my remarks, I'd like to thank our employees for their tireless commitment to our success and to delivering for our clients during these challenging times. ET. I know you mentioned that 85% of your work has continued. Have you factored potential CM weakness into your guidance? Not at all. We have repaid all of our secured debt, and we exited the second quarter with a $1.3 billion cash balance and net leverage of 1.2 times. Yes, sorry, I got confused. And then in terms of what we're seeing as a result of the pandemic and government stimulus, we haven't planned any of the stimulus into our guidance. So again, supporting that bridge, in fact, is having us actually collect beyond what we expected in April, so supporting an improvement in working capital in the second half of the year. They're looking out 10, 20 years what they're going to need at JFK, for instance. But I think even beyond that, as we look forward, the business itself has a number of attributes that we made reference to and Mike made reference to a little bit earlier that allow us to be adaptable to the environment. I'm just curious whether there's been a reassessment on the potential for those programs, whether some of those actions can be accelerated or expanded and just to what extent a weaker macro backdrop extends the time line to achieve the financial targets you outlined. We began aggressively stress-testing and developing mitigation plans in early February. Q1 2020 AECOM Earnings Call...finance yahoo. As we move into the second half of the year, we've got again a clear line of sight to that range of cash flow. And if we take just the low end of your ranges this year, the $100 million of free cash flow and the $700 million of EBITDA, let's say you don't grow EBITDA next year and you hold the line at $700 million. Or is this really kind of like we saw last year, a very fourth quarter type of phenomenon? As a result, our momentum has continued into the third quarter. With that, operator, we're now ready for questions. We do make accruals during the course of the year for some of our compensation that gets paid out the following the first quarter of the following year. AECOM reports second quarter fiscal year 2020 results Montag, 4 Mai 2020 markets.ft. But we're certainly within the range. And it was focused on the conversion of our earnings, EBITDA, to unlevered free cash flow. Mike? Andy, it's Troy. Motley Fool Transcribers, The Motley Fool. Thanks, Mike. We did that just at the right time coming into this pandemic, which gives us a lot of flexibility on capital allocation with a lot of liquidity. There are no further questions at this time. Just to pick up on that last bit of discussion about 2021, I fully recognize that most companies have pulled their 2020 guidance, let alone have anything out there for 2021. Okay. There's a benefit in the year but an additional run rate impact in subsequent years. And right now, when I look at the pipeline of opportunities, the number of projects in our pipeline is up double digits. In late January, we closed the sale of the Management Services business for $2.4 billion, capitalizing on record-high valuations for government services companies. And two months of those results, I'm going to call them March and April, have us operating in the pandemic environment that we're in. 29 mins What a Covid Vaccine Means for Retail Stocks, and Why E-Commerce Didn’t Join the Rally – Barron’s Barron's 29 mins NASDAQ tumbles into the close. Our discussion of margins will be on an NSR basis unless otherwise noted. AECOM 2020 Q4 - Results - Earnings Call Presentation 12:21PM ET 11/17/2020 Seeking Alpha. Second, our Professional Services business has a highly variable cost structure. Yes, sure. I am very pleased with our performance in both the second quarter and the first half of the year, which reflects the benefits of the many actions we have taken over the past two and half years toward achieving our long-term financial and strategic objectives. Okay. With the most talented workforce in our industry, I remain confident that the best days for AECOM are yet ahead. Aecom Technology (ACM) Tops Q3 Earnings and Revenue Estimates. Clearly, in this environment where people are concerned about delay in payment, we have a highly engaged group of people here that are focused on making sure that they're on top of that. We now expect to deliver adjusted EBITDA of between $700 million and $740 million, which reflects 10% growth at the midpoint. AECOM last released its quarterly earnings data on November 15th, 2020. AECOM (ACM) CEO Mike Burke on Q3 2020 Results - Earnings Call Transcript Aug. 4, 2020 at 5:33 p.m. Published Nov 12, 2009. Is that sustainable as you look to the back half of the year just given we don't have history there in terms of how the business performs on a quarterly basis? Most major global metros have instituted shelter-in-place orders and halted nonessential activities, including nonessential construction. The governor has said they expect to start back by May 15, although they've asked us to put forth a plan to start even earlier, which we're working on. In fact, we are ranked number one in our industry in terms of work won for the U.S. federal government for COVID-19. We rarely see anything drop out of backlog. First, following the completion of the MS sale in January, we terminated the receivable sales program associated with that business, which resulted in a $180 million impact to cash flow. How does that play through? Thank you, operator. Finally, the MS business delivered cash flow below our expectations for January, resulting in an approximately $130 million impact. Andy, this is Randy. And how does it impact on what you do and how those agencies use AECOM to work through that? And then beyond that, there are the normal things that we typically see in the business. And they were built around real estate improvements, design centers, built around use of our shared service center. Good morning, afternoon, everybody. And we're just going to be working through this and make sure that we gain more confidence about what's going on in the marketplace before we start trading off liquidity for repurchases. Beginning in February, we built robust mitigation plans to assess different potential virus durations and impacts, put in place a freeze on new hiring and discretionary spending and instituted a global travel freeze. To the extent you can bridge us back between just underlying AECOM free cash flow, any discrete items helping you get back there and then, of course, some of the benefits from some of those stimulus programs that are going to help in the back half as well. The underlying nature of our business, the conversion of earnings to cash is consistent. Products. In fact, last month, we announced an innovative virtual consultation tool, which has garnered very positive client reactions since launch. But I guess my question is, how much liquidity is too much liquidity? We don't see any slowdown in achieving the margin targets that we set out previously. So we're making progress, and it'll likely be happen in lumps, but we expect to make that happen over the as soon as the market opens up. And our agility as an organization has proven to be a key competitive advantage as we quickly mobilized contingency plans for our people to support our clients in the face of unprecedented change. AECOM (NYSE:ACM) Q3 2019 Earnings Conference Call - Final Transcript Good morning, and welcome to the AECOM's Third Quarter 2019 Earnings Conference Call. I guess first of all, Andy, just in terms of our guidance, when we look forward, typically, we have six months under our belt and we're forecasting the next six months of the year. Maybe as an addendum on that, you guys have talked about these dispositions that are in discontinued operations today, either oil and gas, certainly the civil, power. Most of the work is already behind us. We are seeing similar impacts from COVID-19 across other markets. Okay. Most of the states have a June year-end. And one of the things that we hear the New York government agencies talking quite a bit about is this may be an opportunity to accelerate infrastructure spending, the reason being is it's a lot less expensive to undertake infrastructure projects during certainly during a time when there's less traffic, whether it be airport traffic, whether it be mass transit traffic. Just help me understand like the sensitivity of your business with the high variable cost structure. Troy will then review our performance and outlook in greater detail before turning the call over for a question-and-answer session. But we're not concerned about the next couple of quarters here. It allows NEPA to be performed better, faster, cheaper with greater margins. Troy? The last few months have impacted all of us in profound ways, and the resilience of our people inspires a great deal of pride. Your next question comes from the line of Jamie Cook with Credit Suisse. This is largely due to having nearly 60% of our NSR from public sector clients where spending is often inversely correlated to GDP due to government stimulus investment in infrastructure that increases during periods of weaker economic activity. This is a timing-only impact, and our full year free cash flow guidance includes this collection. It's all being done remotely. Will Gabrielski -- Vice President of Investor Relations. Got it, great. This was also contemplated in our original guidance. As a group, sell-side analysts predict that AECOM will post 2.6 earnings per share for the current fiscal year. Tuesday, Aug 6, 2019 at 12:00 PM EDT Webcast Presentation. Mike, so that all sounds pretty good. Based on our global experience with COVID-19, we expect that shelter-in-place orders and construction shutdowns in the Americas and EMEA regions will begin to ease in the third quarter. Our updated guidance balances the near-term uncertainties posed by COVID-19 against the strong backlog growth and underlying momentum in the business.
aecom earnings call transcript 2021