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Business Strategy

Vision 2020 update

In 2018, while we made strides in realizing our strategic objectives to become a premier global fully integrated professional services and project management company in both profitability and profit growth, our growth slowed due to  unforeseen geopolitical events and encountered operations set-back in the Company’s Mining & Metallurgy and Oil & Gas segments. 

In 2019 we will be focusing on sustainable growth, project execution and cash generation. As part of a complete review of our capital allocation strategy, the Company is taking a series of immediate actions, which are aimed to strengthening the balance sheet, building additional flexibility and maximizing long-term shareholders return. As for the project execution, management will review and evaluate the Company’s segments portfolio and geographic footprint. We also expect to review and further strengthen our execution and delivery capabilities, from the bid stage to project completion across all segments of the Company. 

Furthermore, the unfortunate decision taken by the Director of the Public Prosecution Service of Canada (“PPSC”) in October 2018 not to invite the Company into a remediation agreement negotiation has negatively impacted the confidence in the business with clients and partners on new work prospects. This will impact on how the company looks to the future from a strategic and operational standing, and it may lead to a review of options to maintain / maximize shareholder value. 

Position for the future

We will focus on organic growth in our chosen businesses, while continuing to focus on 1) progress in operational excellence, 2) building a client-centric organization, 3) developing a performance-driven culture, and 4) growing our business and delivering superior shareholder returns. As such, our current overall strategy is anchored on the following:

At SNC-Lavalin we are continuing to leverage our strengthened position in key sectors and geographic markets. Our expanded breadth of capabilities makes us one of the few fully integrated professional services and project management companies able to take on large, complex, multi-billion dollar projects from start to finish or to be able to offer tailored services.

In the infrastructure market, we will continue our emphasis on serving our key P3 and engineering markets in Canada and the U.K., expand our already strong engineering position in the US, and as well as growing globally our leading global footprint in rail and transit and other infrastructure engineering markets (including buildings, roads and airports). We will maintain our focus on engineering markets in the Middle East and Asia-Pacific. The additional competencies in engineering and digital coupled by the extensive geographic penetration of key core markets has allowed the 2017 Atkins acquisition to further consolidate and strengthen our existing P3 capability. Our Engineering Design Project Management segment will continue to build long-term trusted partnerships to create a world where lives are enriched through the implementation of innovative ideas.

In the oil & gas market, we will continue to apply commercial and technical advisory, turnkey modular solutions and field and technical support services to support international and national oil and gas companies by bringing their projects to market more efficiently. Our Oil & Gas segment will continue supporting its clients in its existing markets with a greater focus on North America and a continued focus on Asia Pacific. The Middle East will remain an important market for us, although we will be more selective in our project pursuits amid the continuing issues between the government of Canada and Saudi Arabia.

In the mining & metallurgy market, we will continue our services in sustaining capital, complementing traditional studies and expansionary capital projects, thus enhancing our ability to support clients across their project needs. We have decided to cease biding on lump-sum EPC contracts going forward. 

In the nuclear market, we will continue growing by capitalizing on broadened capabilities in new build services, refurbishment, decommissioning and waste management, as well as a significantly enhanced U.S., U.K. and European presence and coordinated Asia-Pacific activities. In particular, we will leverage our Comprehensive Decommissioning International LLC (CDI) joint venture with Holtec, which has already won significant projects in the U.S. and will be used selectively for opportunities outside the US.

In clean power market, we have expanded our capabilities in transmission & distribution through the acquisition of Linxon Pvt Ltd (“Linxon”), our new subsidiary partly held by ABB, and will leverage these capabilities globally. We will also capitalize on growth opportunities in renewables, including offshore wind, and grow our services business in intelligent networks & cybersecurity, energy storage, and digital asset management.

We will continue to play a key role in selectively developing opportunities and growing our P3 footprint, particularly for large and complex projects in Canada, while judicially invest in projects and carefully manage our portfolio of assets in line with targeted returns. 

Supporting the building blocks of our sustainable and profitable growth

We continue to invest in reinforcing the building blocks of sustainable and profitable growth by promoting a performance-driven culture while maintaining world-class practices related to ethics, governance, health and safety, resource sharing, business de-risking and capital allocation.  

In support of our performance-driven culture, we continue to improve collaboration across regions and business units to put clients at the centre of our organization and to bolster an enhanced customer experience across our project services/solutions and our offices worldwide. 

A cornerstone of our sustainable growth strategy involves maintaining a steadfast commitment to world-class ethics, governance, health and safety and overall operational excellence. A focus on ethics and compliance, governance and health and safety remains at the heart of every decision. They are an integral part of SNC-Lavalin’s culture, processes and project delivery methods, and they will continue to be the foundation of our operations and strategy. From an operational excellence standpoint, we continue to focus on efficient and effective resource sharing, rigorous risk mitigation and disciplined capital allocation. 

Meeting the digital future head-on

Looking ahead, we continue to believe we can best differentiate ourselves from the competition by enhancing our technology capability and implementation expertise. As such, we are driving an aggressive digital agenda to deliver an integrated and focused digital platform that enhances project delivery methods and expands our services offerings. 

Digital technologies that enable more efficient ways of delivering our services, as well as developing new and innovative products, are key to unlocking new sources of value and growth.  By combining new technological skills with our traditional engineering expertise, we are able to help clients develop digital solutions that improve their business performance. We already have a wealth of digital innovations – many of which have contributed to significant margin growth on projects, as well as capturing revenues from outside our traditional markets.  While continuing to evolve new ideas in collaboration with our clients, we are increasing our focus on our digital footprint across our client delivery, positioning SNC-Lavalin at the forefront of digital engineering and innovation.