AECOM (NYSE:ACM), the world’s premier infrastructure consulting
firm, will host a virtual Investor Day today at noon Eastern
Time.
Key Themes of the Event
- A growth strategy that is focused on capitalizing on existing
strengths as the leading transportation, water and environment
consulting firm to best advise clients who are increasingly
investing to address critical ESG and sustainability
priorities.
- New organization structure to complement a strong
growth-oriented leadership team and a strategy that is focused on
growing advisory, program management and digital consulting
practices to leverage the Company’s strengths and to address
clients’ most complex and challenging projects.
- Technology and innovation deployed at scale to transform how
the Company works and delivers, leveraging its leadership position
to accelerate design efficiencies and to increase quality and value
for clients.
Key Financial Highlights and
Targets
- Commitment to outgrow the industry organically by executing the
Company’s growth plan.
- Setting a target to achieve a 15%+ segment adjusted1 operating
income margin2 by fiscal 2024.
- Continued focus on investing in growth and innovation to
support organic growth, and leveraging a culture of continuous
improvement to ensure even more efficient delivery and higher
margins.
- More than doubling adjusted1 EPS and free cash flow3 from
fiscal 2020 to fiscal 2024, including greater than $4.30 of
adjusted EPS and greater than $680 million of free cash flow in
fiscal 2024.
- Deliver $2.5 billion of cumulative free cash flow3 from fiscal
2021 to fiscal 2024, supported by a reiterated expectation to
convert 75% of adjusted1 EBITDA5 to attributable, unlevered free
cash flow on a normalized basis4.
- Returning substantially all cash and free cash flow to
investors through stock repurchases to enhance value created by the
Company’s strategy.
- Increasing the Company’s long-term aspirational segment
adjusted1 operating margin2 target to 17% as the organization
challenges what is possible for the Professional Services
business.
“We are as focused as ever on accelerating revenue growth and
delivering against our new financial targets,” said Troy Rudd,
AECOM’s chief executive officer. “Our leadership team is committed
to advancing our growth strategy by prioritizing investments in the
best markets and opportunities, driving collaboration across our
global platform and leading in key markets with strong demand
drivers, such as our clients’ growing focus on ESG, sustainability
and decarbonization. It bears repeating, we are the number one
environment consulting firm, number one transportation design firm,
number one facilities design firm, and we hold many top water and
green design rankings. We have an enviable position from which to
operate and we are focused on capitalizing on these advantages to
set the new standard of excellence in the Professional Services
industry.”
“Today we are making a substantial commitment to further our
margin ambitions and deliver substantial per share earnings and
free cash flow growth,” said Gaurav Kapoor, AECOM’s chief financial
officer. “We are proud of our accomplishments to date, but we are
most energized by the growth strategy we are unveiling at today’s
event and what it means for shareholder valuation creation over
time.”
AECOM reiterated its financial guidance for fiscal 2021 that
includes an expectation for adjusted1 EPS of between $2.60 and
$2.80 and adjusted1 EBITDA5 of between $790 million and $830
million, which would reflect 26% and 9% year-over-year growth,
respectively, at the mid-point of the ranges. The Company also
continues to expect free cash flow3 of between $425 million and
$625 million in fiscal 2021.
A live webcast of the event and a replay will be available
online at https://investors.aecom.com.
1 Excludes the impact of non-operating items, such as non-core
operating losses and transaction-related expenses, restructuring
costs and other items. See Regulation G Information for a complete
reconciliation of non-GAAP measures to the comparable GAAP
measures.
2 Reflects segment operating performance, excluding AECOM
Capital.
3 Free cash flow is defined as cash flow from operations less
capital expenditures, net of proceeds from equipment disposals.
4 Unlevered free cash flow is derived by adding back after-tax
adjusted interest expense at a 25% tax rate and is after
distributions to non-controlling interests. Normalized unlevered
free cash flow excludes unusual events, such as transformational
restructuring and other factors that may impact free cash flow.
5 Net income before interest expense, tax expense, depreciation,
and amortization.
About AECOM
AECOM (NYSE: ACM) is the world’s premier infrastructure
consulting firm, delivering professional services throughout the
project lifecycle – from planning, design and engineering to
program and construction management. On projects spanning
transportation, buildings, water, energy and the environment, our
public- and private-sector clients trust us to solve their most
complex challenges. Our teams are driven by a common purpose to
deliver a better world through our unrivaled technical expertise
and innovation, a culture of equity, diversity and inclusion, and a
commitment to environmental, social and governance priorities.
AECOM is a Fortune 500 firm and its Professional Services business
had revenue of $13.2 billion in fiscal year 2020. See how we
deliver what others can only imagine at aecom.com and @AECOM.
Forward-Looking Statements
All statements in this communication other than statements of
historical fact are “forward-looking statements” for purposes of
federal and state securities laws, including any statements of the
plans, strategies and objectives for future operations,
profitability, strategic value creation, coronavirus impacts, risk
profile and investment strategies, and any statements regarding
future economic conditions or performance, and the expected
financial and operational results of AECOM. Although we believe
that the expectations reflected in our forward-looking statements
are reasonable, actual results could differ materially from those
projected or assumed in any of our forward-looking statements.
Important factors that could cause our actual results, performance
and achievements, or industry results to differ materially from
estimates or projections contained in our forward-looking
statements include, but are not limited to, the following: our
business is cyclical and vulnerable to economic downturns and
client spending reductions; impacts caused by the coronavirus and
the related economic instability and market volatility, including
the reaction of governments to the coronavirus, including any
prolonged period of travel, commercial or other similar
restrictions, the delay in commencement, or temporary or permanent
halting of construction, infrastructure or other projects,
requirements that we remove our employees or personnel from the
field for their protection, and delays or reductions in planned
initiatives by our governmental or commercial clients or potential
clients; losses under fixed-price contracts; limited control over
operations run through our joint venture entities; liability for
misconduct by our employees or consultants; failure to comply with
laws or regulations applicable to our business; maintaining
adequate surety and financial capacity; high leverage and potential
inability to service our debt and guarantees; exposure to Brexit;
exposure to political and economic risks in different countries;
currency exchange rate fluctuations; retaining and recruiting key
technical and management personnel; legal claims; inadequate
insurance coverage; environmental law compliance and adequate
nuclear indemnification; unexpected adjustments and cancellations
related to our backlog; partners and third parties who may fail to
satisfy their legal obligations; AECOM Capital real estate
development projects; managing pension cost; cybersecurity issues,
IT outages and data privacy; risks associated with the benefits and
costs of the Power transaction and other recent acquisitions and
divestitures, including the risk that the expected benefits of such
transactions or any contingent purchase price will not be realized
within the expected time frame, in full or at all; the risk that
costs of restructuring transactions and other costs incurred in
connection with recent acquisitions and divestitures will exceed
our estimates or otherwise adversely affect our business or
operations; as well as other additional risks and factors that
could cause actual results to differ materially from our
forward-looking statements set forth in our reports filed with the
Securities and Exchange Commission. Any forward-looking statements
are made as of the date hereof. We do not intend, and undertake no
obligation, to update any forward-looking statement.
Non-GAAP Financial Information
This press release contains financial information calculated
other than in accordance with U.S. generally accepted accounting
principles (“GAAP”). The Company believes that non-GAAP financial
measures such as adjusted EPS, adjusted EBITDA, and free cash flow
provide a meaningful perspective on its business results as the
Company utilizes this information to evaluate and manage the
business. We use adjusted EBITDA and adjusted EPS to exclude the
impact of non-operating items, such as amortization expense, taxes
and non-core operating losses to aid investors in better
understanding our core performance results. We use free cash flow
to represent the cash generated after capital expenditures to
maintain our business.
Our non-GAAP disclosure has limitations as an analytical tool,
should not be viewed as a substitute for financial information
determined in accordance with GAAP, and should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP, nor is it necessarily comparable to non-GAAP
performance measures that may be presented by other companies. A
reconciliation of these non-GAAP measures is found in the
Regulation G Information tables at the back of this release.
When we provide our long term projections for adjusted EPS and
free cash flow on a forward-looking basis for fiscal year 2024, the
closest corresponding GAAP measure and a reconciliation of the
differences between the non-GAAP expectation and the corresponding
GAAP measure generally is not available without unreasonable effort
due to the length, high variability, complexity and low visibility
associated with the non-GAAP expectation projected against the
multi-year forecast which could significantly impact the GAAP
measure.
FY21 GAAP EPS
Guidance based on Adjusted EPS Guidance
(all figures approximate)
Fiscal Year End 2021
GAAP EPS Guidance
$2.30 to $2.50
Adjusted EPS excludes:
Amortization of intangible assets
$0.13
Amortization of deferred financing
fees
$0.03
Restructuring
$0.26
Tax effect of the above items
($0.12)
Adjusted EPS Guidance
$2.60 to $2.80
FY21 GAAP Net
Income Attributable to AECOM from Continuing Operations Guidance
based on Adjusted EBITDA Guidance
(in millions, all figures approximate)
Fiscal Year End 2021
GAAP net income attributable to AECOM from
continuing operations guidance
$346 to $376
Adjusted net income attributable to AECOM
from continuing operations excludes:
Amortization of intangible assets
$20
Amortization of deferred financing
fees
$5
Restructuring*
$40
Tax effect of the above items
($19)
Adjusted net income attributable to AECOM
from continuing operations
$392 to $422
Adjusted EBITDA excludes:
Adjusted interest expense, net
$109
Depreciation
$132
Income tax expense, including tax effect
of above items
$157 to $167
Adjusted EBITDA Guidance
$790 to $830
________________
*Calculated based on the mid-point of
AECOM’s fiscal year 2021 guidance.
Reconciliation of
FY21 Operating Cash Flow Guidance to Free Cash Flow
Guidance
(in millions, all figures approximate)
Fiscal Year End 2021
Operating Cash Flow Guidance
$535 to $735
Capital expenditures, net of proceeds from
equipment disposals
($110)
Free Cash Flow Guidance
$425 to $625
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210216005454/en/
Investors: Will Gabrielski Senior Vice President,
Finance, Investor Relations 213.593.8208
William.Gabrielski@aecom.com
Media: Brendan Ranson-Walsh Vice President, Global
Communications & Corporate Responsibility 213.996.2367
Brendan.Ranson-Walsh@aecom.com
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