ACM - Earnings call transcript Q2 2019

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Operator

Good morning and welcome to the AECOM Second Quarter 2019 Earnings Conference Call. I would like to inform all participants that this call is being recorded at the request of AECOM. This broadcast is the copyrighted property of AECOM. Any rebroadcast of this information in whole or part without the prior written permission of AECOM is prohibited.

As a reminder, AECOM is also simulcasting this presentation with slides at the Investors section at www.aecom.com. a conduct will we question-and-answer session. Later, I to Will Instructions] would Relations. like over call the turn Gabrielski, to [Operator Vice Investor President,

William Gabrielski

Thank expectations. on like the SEC. would the forward-looking statements presentation. reports statements you, forward-looking in your to business contains may operator, various to and differ to future attention the from financial including Today's today's to filed uncertainties, periodic discussion our forward-looking Safe results X obligation Page direct due statement about of as Actual today's law, Harbor risks projected statements. I by in those and described no required we Except with risks significantly take our update

incorporated website. using posted measures We non-GAAP into as note The Please in presentation, financial appropriate which except all year-over-year on progress, presentation. to is percentages reconciliations noted. refer our are our our that are GAAP financial

metrics basis reconciled filed discussion growth earnings Today's currency adjusted results and year-over-year Mike? Burke, Beginning guidance Chairman this accompanying SEC press discussion presentation Mike on release to is adjusted refers earnings call. of and as financial impact a with non-core and today's the presentation is today's Our constant defined exclude and the businesses. Executive Chief of is Officer. and AECOM's of to organic the and in

Michael Burke

Will. you, Welcome Thank everyone.

year. of and session. enhance Officer. will entered Joining growth turn and over provide actions strategic actions the guidance record our that the the the year-to-date trends the me year precision important the another pleased of also we wins billion detail of substantial with growth Operating XX% We initiated series and with financial trends strategic Then to greater XX% on this for executing in EBITDA half Randy XXXX quarter, second quarter. wins Across shareholder for will our maximize our apparent. this our I to outlook $XX with a Slide review a EBITDA today long-term deliver our I performance and quarter and number ended AECOM's in discuss value. on We backlog these $X position second before From initiatives report adjusted turning the growth backlog our Troy our of Chief and markets. am financial the across business of strength, momentum of with second in are to evidenced are both our X. on call new adjusted business. a Troy first Please our begin of business by results to $XX in our Rudd, discussion are question-and-answer in our we billion. update and Chief Financial at I to profitability EBITDA across Wotring, for XX% Officer; as an objectives. will a record our billion of becoming

across is in $XXX this improvement strong, portfolio a substantial restructuring more company, margin created execution project the we have we First, our demonstrated. quarter has million executed the delivered segment profitable DCS which second, the

work these to record all market maintaining achieved successes continue Third leading have and most while position at importantly and win we a pace. a

and in the book-to-burn and flow business. XX-month Wins million quarters. design and Department our billion Turning cash higher included have million and our the increased where now and $XXX of of Americas revenue at revenue management Savannah wins of consecutive Americas for the quarter. strength ahead X.X XX% ratio Free delivered was construction by our Energy, results; building six the to quarter the for business, work in the across business increased $X was River by XX% grew site led $XX extension continued exceeded by expectations. adjusted our XX% design business second which Backlog we X% Organic strong respectively. EBITDA margin by in included for a services contributions the

to million, recovery of flow capital the discuss impacted detail, working matched our expectations. has the the support our flow now As for storm would $XXX impact, which over half greater work in Troy negatively Virgin have year. first in in this cash our will position Adjusted Islands the is our cash U.S.

Importantly, half on provide confident, taken the and we want strategic I expect continue take timing actions collections the a this turn improve we are take of and Please value. year. will the Slide drive shareholder in a X. to we profitability moment an to the only update is issue and to to to have accelerate second

substantially achieve savings. taken $XXX million all to of We actions of our G&A expected necessary the have annual

we and our a result, increases least is in year This to in margin DCS operating this increase adjusted momentum, a are at more in in record achieve which X% evident on-track more margins XXXX. of inherent wins profitable. the As X.X% all the and fiscal future DCS makes profitability than margins backlog

of construction review in in the entire Slide fully competitive construction long-term expect a the opportunities steps creation quarter $XXX completion, is board The of half in we to strong the we repurchased position turn deliver maintain we completed. under for of position visibility we to We consecutive to Slide and far are a additional a second a and services-focused professional at-risk ROIC updates progress second where authorization. margin provide operating market-leading to pursuing the in risk, in longer have our the In total, are for on no on second grown by that shares X. executed to the in in half and are business provide quarters. is of portfolio. turn of we internationally discussion Please would addition, the and thus year create our our take be this hope have to high revenue We'll have buying the and significant the markets X greatest. the the have in at-risk taken continue investors. Beginning capitalize stock. four the In franchises Please under segment existing substantial to advantages will organic long-term expect us to accelerating that flow, share We cash a lower our value be higher by we opportunity, once we repurchase each Upon backlog. this XX% DCS second double-digits trends. billion business $X has Americas, for authorization market program million plan this value in expand increased To quarter current and our year.

largest demand. planned to substantial strength storm we announced over first five which the portion a We infrastructure U.S. plans cities mechanisms more pricing domestic the city funding this billion funding activity. in New to by double New market U.S. are from identified expected the as to New are alternative Trends increased expected of more XX-year congestion plan The $XX York years. pricing. similarly U.S. is Long-term became are population York in transportation, in in Several and than infrastructure York's next implement is congesting MTA's the to revenue with announcement assets, continue well transportation turn fund expectations market, of billion the clients digits. were growth Canada meet the clients to void as of funding MTA by new cities continued one strain Americas our transportation strong major and the in growth are recovery benefit. sources. the spending Ontario. a we metros exploring positioned benefiting market, of In Overtime on existing our develop largest in continued to expect Recently, to $XX to a other putting

the of several on working in today. largest currently are Canada We transportation projects

We expect to continue. this growth

positioned leverage in best ever have this fully Importantly, because of profit better IT, services cost investments design tools, the we to to from project centers growth. actions strategic management and are systems, HR taken we global shared than and

transportation quarter, to The project Australia be demand in City growth. Zealand. in In and were long-term in deliver confidence in strengths third and our our These to infrastructure recognition services enhance Pacific the beginning the of project that largest demonstrate our the performance undertaken ever region Hong led the which strong, Auckland sector continue and is Australia Early Rail next several infrastructure Zealand. Kong, the in the region; strong the substantial mega and be billion and $XX the New Lantau country. continued Turning New reclamation project. client of River latter across project government's to begin international Tomorrow investment for of to Link the including markets wins platform land A of over Cross are expected years. in recent by we Rail public announcement to Asia the development drivers project selected is

us uncertainty position In continues the Brexit trends positions in leadership capitalize EMEA the negatively impact to in to market substantial UK. related region, opportunities. Our the on this

to we Middle in the time performing of invested offset In This best to challenges XXXX to in the of conditions executed we trends market actions have true is have expectations. us align and development. near-term improving. set business including business where market especially NEOM a capital the $XXX East opportunities, position allowed robust the the and are our billion for to Saudi in Arabia, is However, some

We that our continued have visibility to visibility across region. increase the into several awards sizable would improvement

double Turning to three XX% the increased consecutive digits was growth quarters. management services and for segment; has now organic by revenue

benefiting leading market. from the our which by XXXX, growth capabilities, a business and fiscal in are been of especially development start has We investments backlog XXX% driven the successful since classified

wins in $X the record levels, at Our year. first billion half backlog is than the including of of more

win high us our XXXX. rate House's The spending for initial of called fiscal further in position in White defense for increases budget continued ahead, levels record budget Looking growth. request

than DoD vast opportunities. Our increasing pipeline of pursuits remains at and a opportunities billion, set high-margin including $XX set of DOE of more

opportunities awarded tracking to that our we billion three DOE pipeline. add that also several the are be expect years would next We $XX more to over

in of Construction we years a even construction backlog. of at Today, This business delivered years we believe record point Building double-digit nearly new reached as records strong revenue in four total building result, level and has achieved maintain was this with years visibility growth our several are construction quarter. the inflection to we and for four as backlog and of earnings As Pivoting of revenue. organic backlog. a services. Execution new visibility

and we ahead, support including serve, the commercial and Looking low markets economic aviation. conditions strong continued across buildings, investment entertainment rates stadia, interest

XXXX. to Riverside year. than values of sight provides budget are on remains target to later $X profit performing this line completion through is fiscal expectations. on nearly Civil or which us with least plant at business more the pursuing opportunities is $XX We gas with and billion schedule greater, individually complete Alliant billion Empower power of growth The and double-digit at

We de-risk continue actions portfolio. our CS to pursue to

approximately at-risk expected We price AECOM and to have XX% a to business, a exit with we and Finishing we capital, working is $XX Partners. joint close property closed to third-party the gain on are estate fixed oil our we businesses with our quarter, gas agreements our to and contracting. continue in IRR, on the provided and progress which exit hard production real our which Canyon sale construction third investment services good million with on make quarter bid investment venture of

strong over turn the in underscores progress our inherent Our momentum year-to-date more in will with performance quarter I our now will Troy, underway the maximizing enterprise. discuss potential the business the the and in call who detail. to

Troy Rudd

Thanks, Mike. to Slide Please X. turn

second the marketplace were Our and in enterprise. billion and XX% successes across $X.X our EBITDA efficiencies cost of X% This benefits $XX the record focus performance own quarter growth highlighted having adjusted and revenue are results in underscores a the growth. strong organic by billion backlog, the wins, we of

Adjusted deliver benefit We results ago all adjusted a a rate in exceeded and three Importantly, slightly to benefited of included EPS expect tax adjusted $X.XX growth XX% from by and year across EPS year-to-date this businesses. was ago the period, for EBITDA our half. period. our have strong up lower increased year second expectations from the we

X% Please owners revenue are growth count X; a as XX% segment growth in in Americas ongoing lower activity. the Slide led repurchase DCS share organically as from increased by markets. well in turn the benefiting international to Our by our from

the against expect from to moderates tough prior noted we of in last in storm the quarter, growth year. comparisons As the slow contribution we as revenue the activities year second half

in of The revenue margin our benefits is year. growth improvement adjusted work the the However, to solid from first U.S. the the quarter. of The project operating increase the X.X% in excluding and expected for the Islands, second G&A lower our was execution. quarter half Virgin reflects

was adjusted XX% consistent backlog. XX; with X%, The MS increased X% execution large Slide in operating bottom We our adjusted the to benefit we revenue benefits and record the and expectation for margin of third and reduction for least as full the segment flow recent reflected increase wins our reflecting was cost by the in the to quarters are expect our margin the fourth Please which efforts solid year. our and reiterating the margins of turn business. across full line to operating expectations at

expect X% to adjusted continue We year. margin approximately of the this operating

our supported margin long-term to DOE of However, mix we pipeline work. to higher our favorable X%, target in remain committed by shift the

very note, Importantly, turn to in we the the little through growth civil led long-term generate a should CS least invested wins of growth, business. comparison the a to Please organic based of trajectory segment faced as our by We attractive business, businesses. a increased grow we XXXX. and on carry recent and to our we $X.X fiscal separately. profile. But for risk capital in scope has tough our revenue confident retain capital I and remain that profit work result high will in require very multi-billion the Slide including work by expectation this been backlog this and this at XX; double-digit quarter for return approximately reduced, business removed backlog from oil gas project dollar bid be our of portfolio where we a building related construction X% a billion client's a on we projects

to our for $XXX the underlying be project, was we Please million this flow our the flow Slide in was margin million expectation X% XX; flow impact $XX is remain free was and cash profit our not operating cash in turn and confident to year. The cash quarter operating expectations. met of the an of adjusted share increase expected to X.X% However, due in material.

to March, client. pace collections of of our the million related of funded more short. Islands the the storm invested work end net work capital than and completed continued our in working U.S. recovery U.S. to fall $XXX had Virgin At However, we government with our had

year ultimately $XX million where of our these from cash, guidance confident impact on cash the we the a within half collection initiatives approximately restructuring and also will of We that the in the timing the expect we collect are benefit we will savings second range. this first of half We've flow in this end spent year to year. the

remains the these be issues underlying noted, are timing to only expected business intact. of generative our Mike nature cash As and

number to million $XXX Importantly, million year within and we have $X.X fiscal a of industry-leading this cash produced between or million flow of per years range and including cash we XXXX $XXX flow flow cash XXXX for guidance expect deliver free $XXX billion year. our approximately to

Mike midpoint we over to XX% that closing Please billion we turn times a first we allocation; Turning now our flow the year. Slide expectations, have call million repurchases trading for to the With With million to $XXX as through results last net in XX. our half synchronize stock and below the X.X believe strong turn at our August to or at exceeded the X.X our value I'll with of leverage will a since achieve repurchased capital what shares EBITDA growth under authorization. price we comments. path is guidance we are of our stock range. move our cash confident $X few long-term our target adjusted

Michael Burke

Thanks, Troy.

billion on authorization. margins, repurchases our backlog We our delivered progress margin an tremendous our service growth year-to-date lower EBITDA have $X under on higher plan made improve our on growth and our risk XX% stock on and objectives, to adjusted professional XX% executing including growth and businesses, focus

drive we Importantly, evaluate shareholder transformation are our options continuing a long-term of to to number on value.

a the the the update of construction during at-risk market and have year. to review anticipate the of We second accelerated half businesses our delivering substantive

records. executed the to Company's our and while successfully revenue new history, restructuring in grow our backlog We largest to have continuing

reduce XXXX return including As that cash for Q&A. are repurchase fiscal evaluating of this billion flow. of future capitalization the fiscal costs market continuing our we or flow result best from to to commitment With turn cash value of free opportunities XX% call for stock underlies Operator, now and actions, to current additional use the our questions. our expected to will we're the over our these to has highest and ready I inspired The wins. the as on maximize strong confidence of a of XXXX $X.X

Operator

you, [Operator Kaplowitz of question Thank Instructions] Our the comes from sir. of Citi. Andy first line

line Your open. is

Andrew Kaplowitz

guys. the UK loaded Nice that about probably back-end should goal benefits of conviction uncertainty linger restructuring isn't the need quarter. mid-X or plus are margin your helping can morning, utilization? in Good be your sort you DCS. that your that here you know especially that talk level Mike, which DCS meet considering But might we in of X% year, is to for

Michael Burke

it talk detail. always for which and Sure, year out showed to were would before accelerate ramping course through as revenue and laid the does. taken had through the Andy. that rate We Troy on I'll expecting savings more year, because profitability talked run my to the cost tell a QX. the it our were some conviction about for this turn I We you about the of QX year over the that we year actions in

gives going all at detail. the and that margin certainly of I'll Troy to So, conviction a EBITDA we're achieve targets the that about But that let speak more year. me set the beginning that out little in we targets

Troy Rudd

Yes.

in the we when supported Andy, course at by restructuring year. growth of actually the business you growth the of the our year, the can and in So, of the impact the see impact the of the first in look half backlog

improving. So, half that second benefit work completed and we We the year. all the in restructuring the of of see the effectively in of second quarter see that margins we'll

done done and had make that year restructured fit our and of the particular profile X%, opportunity business second backlog so that's that restructuring by behind the with year. the of organic work year in is the us last it in have in UK was part that and we So, growth grown that sure our and of half marketplace. to Brexit we this business business, Design we which had current DCS supports Americas The UK, respect the overall the to

conviction year. So, actually as the we Mike around the margin have full targets said, for

Andrew Kaplowitz

about That's but of the helpful review ask risk I you help Then can't portfolio. about your commentary accelerating Mike, guys. the construction entire

this, circuit So for gift The begun You've one of peers AECOM change have this evaluations let about to follow, another a in sort got lower Is picture me going of growth to ask one at the AECOM well you as that the things? we should this that's that profile. how card your to like roadmap big firm. higher point? in that the to perceived for respond of services this government risk think design

Michael Burke

We've talking for direction. time Yes, the absolutely Andy. some about points been quite our of key strategic

plan, of improvement done. one all, with executing our margin which First on we've

The we services our hard all have was and professional along honing and on de-risking our construction. margin, a are that second markets higher focus taking very at-risk we risk at look lower said

have construction the at-risk totally from international We withdrawn markets. in

week, signed construction last We at-risk a oil deal the gas of sell to last our have and just assets. off bid

the are have. buyers We in that other potential at-risk market we construction about talking to businesses

roadmap after but roadmap will the -- but, be higher like landscape execute low we the look on services risk, will the a will look organization. So like margin professional

Andrew Kaplowitz

always you is in big half second it you real million. we're cash. about but have the make, of What's mean, this ramp And quantify year? got a you factor up mean Islands have the Can every sort a what that like I $XXX second then, half approximately big -- talking that obviously just that's the Troy, amount, I to the Virgin on swing ramp-up you cash flow. quickly is in

Troy Rudd

in runs year, U.S. sort the yes, ramp. during the from we the we fiscal some end way at We we net quarter, It's also about the capital that quarter. during some when invested that quarter-to-quarter working first business work the but Virgin you're Islands the of collect have of of First of but Andy of always that all, exactly at the did million during slipped. had look $XXX

do that and invest work for to continue also We client. more some

of for working of better guidance based on it there when a to us and $XXX capital our was year, are at path today, slightly just end low even be So the over full million is we free the cash exceed our where flow range. end quarter, net I the if at look we And of say under if all work is will U.S. this And we Virgin collect done. We on all work of I Virgin to were with Virgin the second that or of doing AR. quarter. of U.S. our the Islands our, that will Islands U.S. respect contracts to concluded that our we Islands during work net in our that all believe all

Michael Burke

Andy, of of the over if with I that just one just come clarification. could top point

a work find many one don't But the XX the these, have years, We disaster to for these Katrina on why long you large-scale, business, in quickly of others worked we expertise some up We the recovery. time, we about systems U.S. many, in us. process is which Sandy doing to agencies do have have storm the same government things this a of ramp rapidly history New these and at the come worked York on Hurricane agencies and on out of to payments. government place in

So where it's expected, environments payments delayed fact in into one that a understand than it's not longer typical it's little we going and in are atypical. taking This it. not these quite but is we their unusual,

Operator

you. Thank

Credit comes Our Jamie from next of Cook line question Suisse. of the

please. question Your

Jamie Cook

margins of Mike all is? you the proceeds peers questions and second and question I of divesting then construction the you talk interest One, reasons we decisions business. my of of I'm as appetite of getting I where understanding agree you're So trying profitability some -- valuations different the lot think to some a is, And the potential at of the see divestitures let's question. get with businesses and just in and One margins peers and you're the a for we now, out what the year left and business public is making, here growth you go are know. of that as types businesses we're assume portfolio that those I okay with a your of sitting at are or growth about potentially but done to and market about can from to to here balancing you're say successful level that your understand you and have the there with for better. in one are could couple MS that sort an is Thank line you margin higher some more where that urgency we strategic are? be think of there guess going the even are peers they DCS a the risk -- higher assuming after potentially portfolio the guess you. taking to forward the while

Michael Burke

Lot of markets parts to we're in that of most question. robust say in I much don't want But around. what the me are business just about let to certain market. selling of interested comment a we're pieces some too the that the in

the You the some have at infrastructure infrastructure market may right largest in were now. top five infrastructure the planet of the market a spend at spend the is country, look California California in hottest least on it world.

business, the X% double-digit in growth overall growth out. services which management design is business. business. growth is We focusing that those growth are higher our talked of where margin I into what during we our marketing Americas while We the go don't terms in we When on too to some want margin about markets, our phase. work much assets is been second double-digit but note But, great highest of business, exactly had to our in we've doing, organic is what's So, Jamie. our highest margin had quarter, are breaks important in concentrated which in that that

business highest energies. focusing And focusing and that I On that strategic dollars. so, margins, we our double-digit you quarter are those those our we're markets that We're you in once development what think have again saw on. this focusing that the was tells growth in businesses

through that Americas, quarters the margins organic Troy as now those expect business the time design our fact, are actions out same And already we Troy XXXX. At of taking talking more to further of increase at about double-digit the margin you and earlier consecutive through growth. the that costs the margins. the In them continue businesses of going again are extracting hard four in those highest look another taken. as heard to based increasing to on mentioned improve we earlier, process system have we

good of there for focus. focus ourselves we So had where countries is markets out us give we didn't a the some our might higher had low that really taking feel had we we've that the have risk away of the strategic been from margin about hoped that getting couple margins distracting dozen maybe

So getting that opportunities highest keenly the margin far we on and present it highest and focused this growth are opportunities markets those are year. we seeing the so

Jamie Cook

still just clarification think you be you're Virgin paid cash of Troy, low trying flow crystal the Troy. we Islands from for work on if even storm guide? this make the And the say but I free one want get don't I to think clear. can you the just end to

Troy Rudd

we again expectation of across I yes. didn't we answer if business but end certainly make our is, $X be we we low within create end make certainly the if that If some at cash So believe the low can point. we hard-pressed that and upside of all not would the to guidance, collecting customer, collect -- collected. from this that's that our free would the of our flow guidance

Operator

you. Thank

question next Wittmann Our of Baird. from Andrew comes

open. Your line is

Andrew Wittmann

primary where your become off you've of get doing more bottom but businesses your become as year nicely these that table. the the options profit I plans focused you is probably two government businesses the clearly guys go wanted would value well. that been more The still continue was believe the more down is sense if businesses, has of from federal on even path you to you just wondering, consider potential to buyers an very you've clear the demand federal creation broader even last to for that talking really undervalued. over think action and and there opportunity your generate little there to Mike, businesses to about company get bit and out I other look yours. I a your focused I stock certainly strategic split the are are a wanted like there lot mean I focus. the

construction valuable the and which design federal So someone strategic your splitting a thoughts on business the for consideration be else? of business, potential and could from

Michael Burke

strategic one federal to evaluate of objective business, clear years. options the one of past that continuously certainly every We is has and And is our shareholder value. those couple maximize that business of well incredibly over the them, grown

is one a of rates so improving, off 'XX to XX% our those on are every those And since suggest considering maximize to a our win is regular are continue to but of shareholder beginning Our of value. basis is of every and want it wouldn't up XXX% one hot do we FY the there, anything are options business, backlog margins that north always part of strategic table. I at so. look the We

Andrew Wittmann

just mundane mentioned on other services us quarter comment questions the gas and you quarter. subsequent business the of average the shares and then Troy, closed price? that but give and oil part production couple you the could of to a And here, maybe number the in quarter more your that in here also

Troy Rudd

Sure.

So services, that the with production closed quarter. respect place deals to during we will have in

they the quarter. in got will we've close the in later So deals place,

price, respect million on we quarter you have expectation Production buyback. to beyond and business. So to I I give close we'll have to that Services but but our exited anything spent don't And $XX average I'll the don't the during that, shares, the And with have say the it's separately. we it will

Operator

Thank you.

the next comes from of of line Our UBS. Fisher Steven question

Your line is open.

Steven Fisher

morning. good Thanks,

cash revenue the visibility of you harvesting from particularly think growth more do on what's quarters. quarters backlog we're had you guys into mode early and string in bookings good really of that a sustainment have I a guess, and visibility here or the the flow? then you now in actual Mike, So, with

Michael Burke

Randy, speak to that.

Randall Wotring

Yes.

are think market-rich environment. a were, I we we in still

over federal double-digits The are confidence of market strong. growing Looking the $XX front that is federal first as us DOE billion stay year we our service have billion. today budgets at Mike over evaluation forward for hit and billion markets is foreseeable there's that improve DOE and continued is future. primary of has And backlogs a both Those under XX% robust We this rates great of serve the $XX win budgets $XX budget. are which in and and of are pipeline we alone. half still the to largest and the to in and they our DoD the MS $XX going and that rate looking opportunities mentioned, billion currently have

business So well that a place are process and working, very we, how development that process we feel we have of to in good that's run people positioned, we're know that group a bullish. we

We are opportunities DCS in significant We're Middle also our the seeing East. opportunities across seeing business.

New Zealand Troy in seeing even UK great Hong the Pacific we're as the Middle soft, Kong. in soft, opportunities East Asia remains in opportunities market in and Although and seeing we're UK Australia, the remains mentioned

of markets the rates think growth get our especially still exist. MS, we opportunities seen the comps because growth but So we've there, tougher that in

Michael Burke

construction didn't the the side management have we the this the will business over months. the each. is building XX business, which, construction of also And XX on projects in construction Randy mention billion It risk low of next be $X decided

in is front while shortage that no that grown of $XX segment. opportunities to So, backlog billion us. of CS has There in about

doing everything organic possible revenue quarter,. we course, we're our growth the evidenced to So convert backlog the to to X% are, as continue in by of

on and down development. investing slowing not business are We

Randall Wotring

one expect has said, the in more do and, quarters performance just coming good future contracts of and indicator as add. to execution on of good of off and been a mean, we we've is I the Mike it's growth. regarding growth with how strong I existing have Yes, really indicator best been

Michael Burke

and your of XX% anomaly now. a Steven, for a I couple business time tends in we to at tell for bidding space XX% It tell business, are that some And running of so might if the that you're enough. in MS that we've have rate hit tell you look been you that over it quite if so that -- might than is not been it you more and that proposals, years and that doing an you winning

but And anything it's so think I harvesting.

especially add to is I we that turn we've today up in the billion. segment which to -- already at be that should to continuing MS think $XX to volume, continue backlog,

Steven Fisher

the Troy design that I about should reference it just have storm follow-up. be where made on X% mean think storm slow quarter. number quarter a the just next hang the modeling for expectations design kind curious double-digit then kind And said work, of think of think you exclude Americas we to shouldn't growth in helpful. help the growth very business in all with what purposes Americas I for we the that's Okay, quarters? is I as of the to last you Americas you X% How design low going when of as couple a growth to? market, to this should

Michael Burke

take good Yes. question. Troy question. a that that's let But I'll

Troy Rudd

Yes.

have third was that growth the right year, storm we're we by and our doing. partially quarter work driven you're last in of some fourth So in and growth did the of business Americas

the of when growing So half the head really business. Overall, that as I perform, we business But, which the revenue margin the line that second into facing that at tough look we see though we are in year. comparables drives do this work digits. gross single we at

that business backlog. growth expect -- contracted that to our We be in-line to with be

over in contracted of the good would So a our was second XX months. if we up half I year. the look forward, the expect prognosticator backlog X% it's next coming

and would around business our to in I the number. should expect that growth rate DCS outperform able something be So largest Americas being that business

Steven Fisher

lot. a thanks Terrific,

Operator

Thank you.

Our next Afzal of Tahira to from question comes KeyBanc.

open. Your line is

Tahira Afzal

Congrats the on of half quarter. guidance stronger expectations; first internal not the reason, any midpoint was your you're had mentioned question, the first strong matching the up? Troy than guess I

Michael Burke

two guidance. our Listen, quarters really of above we feel delivered We good. consecutive EBITDA

target We growing are at XXXX. the XX% then in growth highly in confident achieving and range of midpoint the again the

year top this XXXX, EBITDA of growth are next at plus midpoint. XX% again of which billion almost again On the reiterating for year. $X is the We X% growth

track about still And as continue building so achieving quarters our couple a mentioned, we Troy storm here. feel for the that of even yes, But, year. this we we're to tough a And to want pretty record perform good comp targets against we comps against of see the over full up year, wisdom too that this of and point. skis to our hopefully But, out beyond and hope. get throughout far a at expectations exceed expectations move I midpoint, our that's opportunities but any have There's we range. wide we -- don't there

Tahira Afzal

Fair portions be right there's thoughts Andy, SNC-Lavalin seeing we which interesting your about the within some group but enough, live some you today, up, Mike. -- breaking I forward? them, as thing on went And on I you're peer might [ph]. look think guess competitive happening do talked believe question Mike, landscape I of earlier any things second have

Michael Burke

feel landscape, good. competitive we still pretty the So,

I think we at we market in. look we're When share. taking the believe markets participating that we're

proposals As MS winning market the I leading mentioned we're business which half win is more the we've we think forth, than put rates. in of

digits quarters we're DCS the growing more In four the growing in space. So, competitive a that's here in in faster double space that think market. We row than for Americas. we the think than

been we of we market construction years market So leading. We through double-digit is that think share construction,-the-building we're have organic think four taking there. growth. The business

quite in So well our and we proposal think we are up bid process. competitors against squaring the

Operator

you. Thank

comes Our question Michael Vertical of from next Dudas Research.

line Your is open.

Michael Dudas

the the is, we've your America about My you maybe, term cap can been elaborate sector are little people witnessing the primarily North gyrations of investment to despite on bit first a there relationship how macro maybe looking longer and you trends question spend customers globally some in continue see private basis? still

Michael Burke

of to been has a significantly. granular third really client a got big understand of to growing business is that building our our our so construction. more private you So that's private and business business get or a That part you little clients,

We space. have that of in about four years backlog

Los New York, that, building continue for sure. the still to in we boom big urban is and add to So a there Angeles markets like

having part been and business, four not business. some the our to from good not up that market we're about have is mining We're are oil in a of not in us front years backlog and participating as commodity of obviously, but and gas side of already. of slow big a retrenchment at feel cycle, so what so we point, it And seeing that XX-year any market's will

part business world of work. almost $X I is demand our which is of increasing, don't around business, us engineering which that $X environmental increasing regulations sector of business only for The the our know for almost big private is billion the environmental and -- billion other are

slowdown So Brexit things UK other the all CapEx related than in seem pretty positive. the

Michael Dudas

of is, you not give I, come Washington out hold Michael. won't what you to little but a you, My Thank on maybe may you that certainty we can follow-up this, see DC? or and may redone

Michael Burke

I've now. since my Well, on infrastructure been Wow. for wrong two on years prognostication build

Michael Dudas

Mike, wanted right. that, I output on just [Indiscernible] the

Michael Burke

comes a local that state progress governments infrastructure that almost had continue measure saw valid federal some those So, if us. there, this and years Pelosi going state out item spending two last out and think agenda lot to I positive the from big it local happens states be, XX see point the a like did we the related of to be the not so the In important progress be with the to and November anything clearly elections of also rating. turn listen infrastructure XX% week at the I with a of to I and first to see it's it and for level. we type ago, out from approval was administration and didn't government Schumer XX% of President will But thought to passed

And states their over so you're years. gas three or seeing last ballot have so the the we're seeing states increased moving forward tax XX with measures,

will at Washington top of generating on comes seeing And we're of the is the a plans positive local level state our and it growth counting into that's So out lot not be for built into business. we're activity plans. a anything of that, that not our our demand

Washington actively the advocating for be plans helping and that We it actually legislators can administration develop in are implemented. and the

but the optimistic, I'm on it. So bet I wouldn't ranch

Operator

Our Instructions] [Operator the of you. Chad line comes next of from Thank Deutsche question Dillard Bank.

please. Your question,

Chad Dillard

Hi, good afternoon, everyone.

of Maybe a for now right improvement with Can will And it achievable be the great be you We're target is it work, mentioned quarter right will long-term points or then you also execution. work, have X% the like Troy just more MS there? now work? require is X% DOE will what's segment. which of incremental XXXX. you will a to that starting most XXX of JV So, more more more kind important backlog winning get bridge that the margin be for basis

Troy Rudd

available. of a see do as we a that the mix. primary What towards if earnings move is changing. JV we mix quarter-over-quarter. DOE don't portfolio going dramatically we of that when or have opportunities that the Chad, driver look we element that is to of We're certain you The but we the certain see business have, have, are greater JV equity year-over-year, there's

work we a the doing with upside nature be and greater And some DOE of of of as work you margins lot see If improve DOE work that JVs. proportion that as was the of is and to that to comes what a of a there part last bid half, bids, and at more won deal may process. we go through of back in bidding margins -- of some Department move Defense we'll by that it we move the lower year competitive the for as the

revenue. JVs happen could creates income or win difficult we it it's some win that actually some that work a could predict. equity consolidated through That's So more to it we where

Michael Burke

And give I'm an say, and to going that. Randy going to add I to to, was opportunity sorry

Randall Wotring

price. valuation four years low criteria I ago recently was won Chad. Yes, some also the just mentioned bid when the that cases, three, government's that work primary we've was in

or now four is higher were we're last years. the they So, are the even bid, than work higher margins Department that within the -- bidding of Defense The margin. within three

from some So, moving that get forward. to we expect benefit

Chad Dillard

for the That's more a on helpful. of of we've as along picture question, funding the And far that seen industry and in cycle for the years, but big last how from in of is few municipalities infrastructure like U.S., doing or billions just in then dollars infrastructure announced design of a states that's maybe the this funding? hundreds perspective backlog of work

Troy Rudd

the ups here. well along, we're I municipality depends we're in ramp in cases think long Well, I seeing are -- In still it a we some of look it. but there's tail on middle California. obviously the

to many many, projects come. there's So yet

-- design macro I yet go so on U.S. in long to a across have the in the major we think tail the municipalities and And

Operator

back for comments. closing I we Mike And to have further at the this over call Burke now no questions time, turn will

Michael Burke

operator. you, Thank Great.

to the we're the growth a to-date. EBITDA organic revenue like yet. important we So done positioned wins bottom touched businesses not of built and new been steps and billion to with billion strong the line we drive expect. I'd with with to a half better that We're $XX We've just And upon XX% that during $XX up converting a into continue to to all first our add converting today. that year in to take the we've backlog. few of underscore never discussion we're of it results the We've first continued growth in revenue points

continue transforming this We services to most lower potential business. organization by focus to from the it professional into risk and the extract margin a take new steps on highest

to exercise, and which has We million at work resulted have on strengthened completed our restructuring a we project win execution the It a continue $XXX pace. in profitable culture more company. record-setting

the direction get we're feeling growth. we as expect our about through which see million $XXX to so we we once pretty initiate to $X trajectory the billion. good initial repurchases the additional why to the and stock We authorization continuing opportunities would is earnings of our And of billion accelerate $X back our since authorization bought buy and we're company, August back stock last under of

value So our is us and create the to exceptionally right we're ability all in of confident direction our this in owners. for leading

So today. with discussion thank next forward and that to you I'll look for participating our

Operator

Thank you conference. today's concludes for This participating. gentlemen. and ladies you, Thank

now You may disconnect.

AECOM (ACM) 8 May 192019 Q2 Earnings call transcript