ACM - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the AECOM's Third Quarter 2019 Earnings Conference Call.

I would like to inform all participants this call is being recorded at the request of AECOM. This broadcast is copyrighted property of AECOM, any rebroadcast of this information in whole or part without prior written permission of AECOM is prohibited.

As a reminder, AECOM is also simulcasting this presentation with slides at the Investors selection at www.aecom.com. Later, we will conduct a question-and-answer session. Instructions]. [Operator

to Relations. over like Vice Will the Investor President, turn would to call Gabrielski; I

Will Gabrielski

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

progress, earnings financial in Please reconciliations website. which non-GAAP using press are release accompanying GAAP with our a except posted guidance as this appropriate discussion is presentation. note and call. metrics, financial and financial noted, refers that We incorporated presentation, filed earnings into measures and adjusted year-over-year our all our The our reconciled today's percentages presentation defined of results the SEC, on are to in referred to as

that impacts today's organic Burke Executive basis, comments later discussion Chairman Today's Today's call a year. this businesses. non-core Mike? to restructuring Officer, of Mike commence to are is adjusted exclude is and about constant expected and year-over-year presentation on currency Chief is of Beginning growth includes AECOM's activities and

Mike Burke

Welcome Thank you everyone. Will.

our I across Joining Officer. trends with greater begin financial performance increase will will our will AECOM's then me today shareholder our are and outlook year, actions have in value Troy discussion Troy the provide that resulted in Rudd, also our update in detail. a a substantial Chief Wotring, Chief on an strategic I our review Financial and Officer Operating results, and of business. Randy this

question-and-answer call over the turning a with Before session. for

This in X. our DCS record shareholder businesses. apparent and plan. on with Slide restructuring higher entered progress segment, in to to the is maximize to are half a we and sharper the executed a first no clear plan turn separate against margin than we ongoing delighted services this near the value, margin risk in plan actions progress and our the focus resulting Services more professional Management to year our with focus year, the Please commitment from We lower the and our of

continuing Importantly, to our margin enterprise, inherent are to today. pursue we the announced enhancing value avenue the unlock actions every including we across restructuring additional

third results. of quarter Turning $XXX of delivered ahead our EBITDA was to million, adjusted We our expectations. which

by at As EBITDA our a delivering XX% increased on result adjusted year-to-date confident the adjusted full-year midpoint. growth remain XX% for EBITDA in we and guidance

by the increased have our To the highest highlighted quarter restructuring. which the segment by points success of our the basis that XXX in prior was margin DCS years, year. of from in year-to-date DCS is point, the clear The past a three indication margins

full XXX at with XXXX. basis improvement expect another basis continue least We for in fiscal increase XXX point to year the point now expected

in This ongoing our deep growth several of the Services fourth nearly years. Management rate returns investments, We G&A that builds for on review conclusions delivered our win development margin expansion, Bain reflecting past reached our a the completed double-digit result we with on our XX% consecutive resulted year over reduction. quarter higher last the business opportunities in in million segment, consultation validates $XXX of including and

saw US of Islands, Virgin addition, the continued In recovery in growth. anticipated Americas despite reduction underlying the work business our storm design

wins year-to-date our a markets is reflect strong, of and XX% than from the book-to-bill billion prior our $XX more year. ratio is across up Momentum backlog X.X

at which backlog growth. near-record have segments our levels, our future and the of indicator of all best is in the result, of success a As marketplace

was our below but Free cash flow is positive, expectations.

FEMA-funded we Islands. Virgin storm balance sizable a executed in pursuing for are US outstanding the the work recovery We

cash long-term to collect deliver is allocation to flow what us and our goals. on expect and owed We capital

X. Slide to turn Please

the separate on have shareholder Management announced to progress taken intent value. significant June, to Services and to drive our strategic we made take our margins the In have continue actions and segment. improve we We

comment We early to that this the are are and aggressively can't reactions moving steps our we specifics, valued forward, have highly view initial are ahead we on in this of received process, have but schedule, are a very validated process We date. and confident is in that positive asset.

we our value confident, for remain We unlock will owners.

on XX business our are of countries. to least Additionally, simplify we plan at the track exit with through our

of completed our review international exposure zero which recently are the are businesses, production against we self-perform oil risk construction. construction portfolio gas at-risk with We portfolio. a plans. goal well also of Development and derisking services And conducting progressing our further the having at and all We sales our de-risk of

cost from Importantly, we and also streamlined announced more all structure additional businesses. generated higher nearly risk our operating and returning the strategic extensive our revenue conducted with upon team Building process efficient completion and in our our actions has Board, align overall lower of on that work profile. with be partnership further will today financial this restructuring

and These success actions of fiscal and $XXX significantly G&A are previous XXXX build million benefit reduction EBITDA. margins to our expected the on

a fiscal our from fiscal to XXXX this basis basis XXX expectation XXXX adjusted increasing at point are for the margin As segment, our XXXX. and XXX our of and we result from operating to increase date, progress in fiscal target a plan, a from increase least X%, point anticipated DCS benefits reflecting

in These strong adjusted in actions confidence growth, excess billion, delivering $X expectation in continued EBITDA earnings including our fiscal bolster our XXXX. of for further

in November our provide with financial results. formal will We fourth quarter guidance

on for and conditions. approximately The X clients, of XX% and solid Slide trends. account which spending Beginning are of of we robust. local to turn is business infrastructure capitalizing Please in US our in health our segment state market fiscal a discussion favorable DCS delivered the Americas, very for results the

cycle receipts an all-time State revenues increases the fiscal nature in high, rainy-day expected XXXX. are increasing, late are reflecting funds at with and tax further of

of proposals states specific voters tax prioritizing for with with another As a increases increase spending XXXX budgets investment call five states, taxes fiscal in gas projects, XXXX billion nearly and result, year. next are including X% proposed state remains will $X set to another Infrastructure growth. transportation transportation popular for for

projects on double-digit to our also large growth, The and transportation. Canadian in by continues market is market, largest led execution result robust revenue

international our in the to markets, EMEA Turning beginning region.

capitalizing of set of a in strongest revenue Arabia, in and years. ambition of recently recognition $XXX substantial billion as the third our opportunities Bay strength the for to are mega wins marked growth size, capabilities Saudi announced in several on speak our X this city We client the of leaders quarter development, of development. We selection Phase scale NEOM on projects our

pressured concerns. The Brexit from UK remains lingering market

to appointment last month. Prime already infrastructure, national his substantial demand infrastructure long-term Johnson Minister since in remains However, strong. investment the announced commitment

we and In to well infrastructure support front in fact, focus was significant need acceptance on investment and minister's center the initiatives. these for to speech, changes and the support prime positioned are the post-Brexit

to Asia-Pacific Pivoting region. the

we led We largest and so, are execute a growth level the Hong and Australia. Hong mindful continuing Kong. to economic geopolitical on Even markets, in by in to potential uncertainty backlog Kong of near-record our are of impacts

degree While is for us, of backlog slow. awards creates certainty our of pace the a

and We that to expect demand current are resolved the once capitalize. issues we will positioned well reaccelerate, are

for wins. Management benefited in large a tough comparisons year of we the despite revenue from Services the that delivered quarter revenue to in prior several fourth growth, consecutive initial Turning segment, the double-digit ramp-up

business Our team. by and our on high billion, development near superior investments an leadership all-time remains at $XX nearly reflecting backlog execution our strong returns

our our performance rated record performance award for for with July, of was client Site and This our validates year than and the fifth confidence, a our excellent strong consecutive more was robust River of In execution Energy Savannah earned environment. fee reinforces at Department highly our the bid XX%. further track

added close, continue our that to And million opportunities our site large of in several pipeline pursue quarter contract the DOE the related backlog In fiscal addition, decisions will to approximately a Savannah $XX we after on shortly sizable with we growth $XXX expected to at River XXXX. contribute billion to pursuits.

Budget our our by XX% more strong. four is the outlook have Execution, business that and defense under President removes has annual Pivoting spending to spending The we than Construction was supports the to and agreement Backlog increased years Services. Act, Bipartisan defense risk spending Control backlog. Building in the outlook. certainty strong. Construction add record ahead, revenue the imposed in signed of of caps lower Budget risk continued a Looking nearly

York, largest evidenced market, several third by strong quarter. substantial demand by for in during leases space was office long-term our New signed the instance, large the For technology companies

over rezoning and of XX execution approximately the create of XX% markets, markets, primarily core is and business our competitive York these scale the XX% in Angeles. construction history, York the building prime in in in track decade. Los our nearly played past to in over presence record is blocks strong New In addition, New advantages. of feet Manhattan four market our and our Midtown Today, City, having strengths, revenue estate buildings a X,XXX real In of built our all

to risk profile, benefit the from our low continue of this high revenue pass-through capital. on professional nature after excluding on a highest margins work, will generates costs provides and return services for We that

to Please X. turn Slide

our As businesses almost end-state entirely this higher returning enhance our for strong our flow. Today, for we will toward design consistent which businesses, of and our results. have account reposition delivering demonstrates, portfolio are quarter of taken lower-risk and approximately the profitability our to and actions total businesses XX% businesses, and revenue. be construction execution, management strategic cash Upon our comprised of strong portfolio of returns completion actions, provides lower-risk these

we quarter gross results will our will on Investor our and to consistent financial the detail nature revenue reporting report in will fourth today. report As continue changing align portfolio, how revenue we basis of with Day December, we on with at specifically we our our a

into revenue addition, our direct component services In will with net reporting excludes insight which practices the basis performance greater is revenue, across of a professional that business our revenue on and costs. peer NSR, other self-perform and subcontractor This provide presentation group. level will consistent a or contractor we report is the of

We same provide report for also guidance on margins to and basis. on will begin the

who I call over more the turn discuss now to in quarter the Troy, will detail. will

Troy Rudd

Slide X. Thanks Mike. turn to Please

growth, Our quarter included adjusted adjusted key growth. measures, third XX% profitability double-digit XX% by in EBITDA and EPS results all highlighted growth

growth, billion of similar results $XX backlog. year-to-date a a billion continued adjusted more growth XX% and with Our $XX wins tells than story, revenue EBITDA

efficient benefiting of are from the actions, in half the restructuring company. more these of the We are executed profitable and first we we Because focused year. actions

the will we announced our results, three-year evidenced, by the benefit profitability year. at the primarily XXXX DCS our aligning benefit the DCS this by basis margin actions The profitability business. of segment real additional in ongoing financial actions increase planned momentum, to XX on reiterated is fiscal X%. increased portfolio, today these by of for least target where and have operating we with for transformation points to adjusted estate efficiencies guidance restructuring the our This further Building and high

fiscal XXX above This XXXX points is basis the results.

We continue for improvement. opportunities margin additional evaluate to

fiscal for cadence. ranges will in fourth We guidance with XXXX on details and provide our the restructuring consistent usual earnings, our more fiscal formal quarter

Please to Slide this DCS high. XXX turn completed operating was benefits to segment, performance on actions year of margin near a adjusted increase to was X. a the basis X.X%, led the point earlier the underlying restructuring which we record and strong

impacted revenue Islands Virgin the uncertainty. US Asia-Pacific lower in in by a to recovery storm due Our quarter, anticipated was headwind decline geopolitical and from negatively the work the region related

for digits. accounting low-single the recovery lower after the Importantly storm work, in increased revenue

Our best increased year. the of indicator is growth contracted the revenue over backlog which coming

underlying the While increase. storm we recovery US comparisons will in expect well, to in from quarter the reduced as fourth challenge the headwind Virgin work our Islands revenue

was growth. to The by XX% fourth the expectations a in for with year. increased segment adjusted turn consistent Revenue Slide double-digit margin quarter the consecutive XX. marking operating MS of Please our

flow Importantly, consistent grow, produces of of best margin, and model, and EBITDA convert little rate invested financial although a to revenue report which a capital each the high is our return capital with measure business we at requires dollar on higher returns. our cash due peers, a this to to very peers capital-light

we continued of higher mix was backlog ahead, note, work the of backlog business clients Adjusting key from for a to unchanged the impact, strong prior to the funding our of in by we our and related sale margin committed target non-core levels our removed Looking from an in increasing margin remain US supported should million approximately government mostly this long-term DOE. $XXX from X%, year. I the the quarter.

combined result included Please Organic This extract our ourself fixed decision decline price Slide the cycle power Power turn from gas anticipated CS X%. to revenue market. XX. in to business, the in by declined following

record the combined expect plant this ago Revenue to of declined Alliant complete against later construction construction year. the cycle We year calendar building in power, business revenue period.

visibility strong have wins we backlog growth and XXXX, is contribute into into robust. pipeline as begin However, recent to our

business pass gross substantial business The building revenue execution. was adjusted that on in reflecting operating a construction margin the include dilute the solid through Recall percentage basis. X.X%, cost this margin

revenue the are typically margins in net high-teens. costs, basis these Excluding a on

expected in capital building CS our of we no generated where deploy generate segment all to high completion and derisking, management Upon capital. virtually on the returns risk is be the business, from nearly construction lower our revenue working

to turn flow Year-to-date million. Slide a Please $XX was million million. flow cash $XX and was was flow use of XX. Operating $XX free cash free cash

work We Virgin which continue net Islands, be to million the in FEMA. recovery than for by client to storm from a more funded US fully pursue is outstanding $XXX balance expected our

are the the the year. within exact confident year, weeks in will these precision seven collections, We collections with in only if we determine but the cannot fall left fiscal

the flow cash now in typically our flow $XXX million flow. we end to year's $XXX a As quarter, $XXX targeting of generated weighted be cash free of second-half are range. million million free last and result, we our low guidance to fourth the is Recall, cash at

some flow cash we time. confident, the provides insight historical cash remain strong into generation why performance Our over in

of includes through annual flow from of $X.X XXXX, years. these midpoint of in performance the performance each This including billion generated cash free the range near XXXX

record based As cash upon on our track a flow have result, our of an guidance. we delivering industry-leading yield

our the has generated changed. not business nature highly Importantly, of cash

in to a allocation, will Turning capital continue we capital shareholder maximizing manner, on allocate focused to returns. balanced

over $XX $XX declined the total by million debt year. million by and sequentially, Our prior

million We our authorization. $XXX have stock, $X also last repurchased August under billion of since

achieve with we our As leverage toward targets. to we separate to the reduction the continue primarily segment, progress to our allocate MS debt will capital, plan

strong With are XXXX our EBITDA XX. adjusted growth results, or fiscal at confident Slide adjusted $X.XX we and and $X.XX. the our year-to-date XX% to midpoint reiterating between turn in Please of guidance EPS

ready Operator, With that, questions. I Q&A. we're for will turn the call over for

Operator

you. Thank

now session. a question-and-answer [Operator with begin question. Kaplowitz will We with on Instructions]. Andy line is the Citi

Andy Kaplowitz

about about you it you'd help the big more guys. said in the think I restructuring know, does more program restructuring in million that the already later. could margin give you of new context benefit think program. do program X% the over reflects the programs, expected announced? Good million past or time release, Mike, XXXX? us DCS in it But, how the executed that that as Could morning, details us program in then, in actually and $XXX either mean $XXX DCS the can you the you additional we G&A said the X% than margin FY from so result be

Mike Burke

for you the So, Andy. thank question,

all, So, the with first of reduction. the execution based $XXX had on million success we the of

beginning You impact previous point that an execute saw that year. of we were had the able improvement to the has on XXX basis fairly quickly of over at the It year.

previously said XXXX FY improvement run basis then points. XXXX, basis point XXX and had that full-year Right. we have the expected to another we when FY that XX be that would in We rate be in

our through basis hard our look counting sure business as already a we structure, another estate expectations went real our next were So, for new The points future. additional for exercise this and footprint evaluate with that our and the are to We is we the cost year. our on make at footprint our XXX portfolio XX year. aligned to took evolves, model real for estate

XX We at basis expect announcement made in also Centers, our evolution that another our continue higher of today would took and advantage design that another centers taking we the we Shared our hard improvement. utilization is Services look that to in point

rate round FY basis would would margins. points. the impact a basis improvement another margins XX basis of XXXX So, XXX restructuring point for be full This XXX first at points run by over

Andy Kaplowitz

All right.

gears shift then and cash. about So, Troy ask let Mike me

has Virgin the or are Is Islands, below it as been on difficulty that had been more projects color can projects any well executing are expected, the not your far that you've so there the other collecting us reasons maybe So, just why or there cash. cash as expectations. to you give you've maybe

So is if any really you just, the had Islands give of Virgin or slipped? reasons that the us it just

Troy Rudd

Yeah.

then some you headline give a let me Andy, and So detail.

think not what projects, on Virgin experiencing some US on is headline putting Islands collection timing I is, collectability first, we're the but the we're experiencing issues -- projects. the the some of those the with is aside it's of

So, flow we second-half and this year. expect cash we the it weighted a clearly historically, same have

we that So, projects QX beyond had we've items. and QX. little We've a collect some some expected already moved had the in US QX, in a Virgin QX those those Islands, to into collected on of which and in collections number

the made view And our with is Virgin with and and downgraded actually we we'd better. getting experienced reason -- respect invoices in not our that end to on Islands with to weeks those the up -- the those actually US they -- actually with worse, -- itself, FEMA, and customer we collections because the range where we've bureaucracy with we've bureaucracy getting seven said go,

has I that it's execution. that on certainly our So, just an issue is, view highlight of or collectability and again but our changed timing expectations, projects not any

Andy Kaplowitz

QX? Troy some the collecting? And did but you've that, need. that $XXX already that visibility cash million to you Besides $XXX year, need the of of the Islands comment last cash. have collect understand Virgin that Do couple could you the of like million in you you visibility We do collected toward slip, have here already to you of

Troy Rudd

Yes got do in Andy. that a pathway We've QX. to

Operator

Suisse Cook with a Jamie line is the question. Credit on with

Jamir Cook

in guess Hi, a one X%. I couple questions, good margins least improvement morning. the of Mike at of to back DCS the

of You what an that about out, or add of know, XXXX before on we so talked guidance $X estimates. above can figure broad just to expecting I'm does to XXXX $X.XX we were billion you additional EBITDA sort trying mean whatever,

additive back And targets? $XXX then, Virgin I'm slips couple think view bigger guidance XXXX at do flow Thanks. then divestiture? if the Islands of Mike my again, update be XXXX, that into XXXX it, at cash relative last, end for flows, guidance the that second on we are of range million. raise $XXX trying on your least should construction just the cash cash so to of a is as of EBITDA the just from the question to And So, high on free an also million you free where flow Troy, picture the just we you, to

Mike Burke

Jamie. Thanks Great.

So, parts the guidance the answer I'll CS. come flow, and I'll first question. and answer back on the let on question cash why two answer then I don't Troy and

Troy Rudd

Yeah.

in the that said, we of we -- QX So being as Jamie, the formal guidance XXXX cash DCS in And to gave our over guidance, get we that cash when that so we following guidance range that answer to of period, flow, do the to with give a in earnings. early But, again improvement, additive we'll guidance terms three-year end extent to yes. would some process as We the XXXX. the too moving into the it's to said that there margin in fiscal additive respect the the to year in do terms I see year. is being see is was of moves following and us the higher or

Mike Burke

that years it's very year five to changing We and long-range move we all, if -- I'd a in about anything We've into underscore from We difference had does it. just cash flow. that don't of feel timing that Yeah. see overall good QX just a Jamie. cash incredible next have industry-leading our still QX row now flow. at

business have end be to we of of at-risk With by have said, this self-perform year. the as clear to change CS, a we no calendar we -- out So, are goal respect construction there. the

We are in market. the

we'll front. with progress have announce you for soon that update that actively are we there, business buyers as something power as engaged We potential with civil and and continues the on to to and discussions

be at-risk end But, of think out fully we part expect calendar business. the this that of to entirely the is self-perform important year, the I by

business a a We business, high-margin, NSR calendar will business a based on low professional services into have risk high-margin an and portfolio a of going on certainly XXXX. management construction changed

Jamir Cook

get Okay, I'll queue. you. in thank back

Operator

with is a question. with KeyBanc Tahira Afzal line Capital on

Sean Eastman

for team. today. is Sean on Tahira This Hi

hit XXXX, would backlogs already savings target that drilling how holding just overall versus and me, of margin out got locked with for the cost characterize on locked the economy DCS for last these So, on dependence to in the you've FY kind in through what you macro two the in target programs?

Troy Rudd

is that Troy. look in our expectation an into this XXXX not you growth at it's of in I think of -- terms when we're Look, Sean, building significant that. margins, So guidance,

But, growth the Now that have clearly, backlog the we're on certainly market third contracted the we've guide. end business. margin up, so to that based restructuring support in the that that and and going confidence take, out see of indicates taken business, actions we're at conditions being we backlog that the in growth that really we the X% in see that quarter through seeing that we

Sean Eastman

coming wise, on bigger I'd get helpful. really And it other the in do is months. an some decisions in there hear in space. wanting considering MS then That's just several sounds of prospects being be DOE update right. positioning that competitive contract like All made about AECOM's realm, bigger DOE kind to like to the we talk companies

an So, there update great. would be

Randy Wotring

Sure, this is Randy.

look, it previously, to be four opinion, made of But the I in as delayed. have is Hanford three in award best any it the will Plateau contract at probably contract the could we expect subsequent next is Other my we This mean, to million go be we the on in the Mike There as term. that said, up at weeks. the Central back will than -- performance to at existing that, will it is sometime announcement be the the end, time received award the contract. over the tank funding we extended. success contracts. indicator to next Savannah $XXX And and in competition another It River Hanford, the that, for contract saw future. into increment near our stated future contract go on quarter op, I've that quarter, another

XX%. rated within fee Mike contracts our in award very last as was our over prepared highly. his of remarks, are And mentioned All at just, River score DOE Savannah

been bullish future. and years, contracts, this to on continue XX in over outstanding market perform very the on an DOE remain in of top been in activities over our and for We've consistently we our we all a have performer. and for manner bidding So,

bullish future. on the very we're So,

Sean Eastman

turn I'll so Helpful. it Thanks over much. there.

Operator

the Wittmann Baird is on with line a Andy with question.

Andy Wittmann

just that wanted just Virgin you US clarify, the business a precise bit was better can USVI despite context maybe of business? core headwind get that, just Islands so tell what was, I You so can us of the revenue? a the Great. impact little the to that sense get on year-over-year mentioned up underlying we

Mike Burke

Yeah, it was of revenue in is about Andy, headwind. X% the terms

Andy Wittmann

that Got relatively fourth be should and through that year, it. similar difficult next quarter, I fairly to in but I And you? I with the guess think stays wanted that compare of quarter confirm second

Mike Burke

from similar. something I XXX It's Yes. fourth It think points points be the basis headwind XXX will in is basis the quarter, to that.

Andy Wittmann

into And well, about year, that be we thinking should it. Got that as ? next

Mike Burke

thing first quarter in year was even again but and one to XXXX. as will into to we headwind. year, we -- for that Yes, second business half next we'll in in growth forward, absent of absolutely Yeah, the the add do that I the going too, see year. quarter, have that, first we just opportunity the next the look again same do

Andy Wittmann

Certainly.

P&L. Okay. be in there, come obviously, next just, your the Do of the terms cost looking savings, other it you nature? do the that of cost expect cost to words, expect between to wave? to as then points ratio can cost the do cost you're out of math expecting achieve to first this you relationship of primarily to we cash XX to on consistent be basis And restructuring out and how much structure with In the DCS, at or in non-cash wave in you're achieve somewhat the

Mike Burke

a as just of and couple again, we details. Yeah, so -- Andy, a again headline

larger reason we yes, it relates this real slightly cost estate. actually is, a the is, to see having and First

So, respect the it's estate, point on that detail. with time, to in there fairly early significant, for component. But, is this as me too but non-significant at non-cash give guidance quite is return a not to real

Andy Wittmann

Yeah, totally understand. I'll and you. Thank it leave there. That's helpful

Mike Burke

Thanks Andy.

Operator

line with a is Chad Bank question. Dillard Deutsche with on

Chad Dillard

everyone. Hi, good afternoon

you MS hit side, you about your there full you actually wanted time that you to on -- are actually kind then on to else and wanted long the also at revenue just -- right you need how the of to the takes guys get do -- understand now? just case just backlog there some I more and the segment, ramp-up anything So, it's that just X% in kind projects thinking How and least that the ramp spend the target? that is just for that rate, to run it the committed and understand, of margins margin to to or whether are to it's business needing hit have

Randy Wotring

is this Chad, Randy. Hi

Again, to to slow but talk about growth grow this -- believe me Let tougher, and that down, revenue opportunities will seen very large ramp. the continue remains we double-digit pipeline again, business. revenue last we've so at see the the four will slow quarters the that down, get comps we but

going rates bidding our that business this rate, see continuing at our the really and comps forward. albeit that billion grow, activity $XX remains of and win we given pipeline maybe remain high, from healthy a have standpoint, see a lower We to we

months in higher two of years. In addition, we XX bids DOE see content type to a next

the about talk Troy, margins. let I'll So,

Troy Rudd

Yes. Defense, you award had awards DOE Randy future. heard fourth client are there of mix mix of award, recall coming in Chad, DOE by driven the of in the business, the past, business, we'd of we of our work are that's a won number with and another that the in Department really and you from and margins at significant quarter, if the the so amount as a

in improvement of our make to backlog over ours percentage to a see its have business in see in as in at think at see that our the actually revenues of a of looking and is as -- of terms actual another capital-intensive business backlog, total percentage of cash conversion, when peers business, lot look because look in produces, our peers. we at for management the we that, revenues of result client, fact may business X% cash services to those our want at it margin is time, all which when in is in businesses, it's point, compared the increase important to you look of that, margins, fact, the change peers also the a a lower, impact right as but amount to related a you percentage cash capital-light line and but we be So, when of I it in equalizes because DOE an very margins that to look also our peers, our the our very a X% at with I

Chad Dillard

see, call Capital, million That's helpful. And as sense AECOM into of but get after the wanted realization? XXXX? Do $XX million. go nice guys this think of a then, is pretty actually to how equity you I EBITDA there it just year, that capture pipeline on the you're seeing and level I like you to to just up a services we saw side, earnings on about similar the And another monetization the ability for construction healthy question guess, just the $XX bump

Just sustainable get is? clarity that wanted on to some how

Mike Burke

for start give subcomponent quick I on next with there. update Capital, AECOM to guidance So to -- but year respect a to want just don't

give realization XXXX. call when on been will but so, November we've to them the that dissimilar entirely of that of for to the to fund full-year we'll our be to by would The complete be guidance from hone earnings what gains should restructuring give this expect that experienced, almost using and expect we somewhat the has guidance you outside We there process the the come end activity, to constant, so quarter. focus more expect capital not external be fundraising We recently successful.

of was And your question the about CS second part so...

Chad Dillard

little earnings understand know just million, was kind of pop like the that? that what I there and to just and I Yeah. in equity that wanted how sustainable nice drove a $XX is

Mike Burke

our sustainable look related or I project that have ventures, that a we projects through at as wouldn't actually path. coming of being joint in a the line happened and the it of and our projects segment, a in and execution we just through Andy, that are we joint that Yeah. of Again, quarter saw impact within number CS to consolidate ventures. number JV that

Chad Dillard

Okay, pass thanks. on. I'll it

Operator

line Research on Vertical with with Dudas question. Michael Instructions]. is a [Operator

Michael Dudas

your you prepared have monetize of seeing since announcement, received What's into different or interest value get to? feedback from the out the structures some parties delve remarks confidence? to more you the you to that wanted businesses? giving MS of other that? that of I And and regarding Mike, gentlemen. spin morning indication referred What's how about Good you're the

Mike Burke

no And would the thanks really that unlock. question. that so, with I that just for the on did that based we're specifics because we're than is valued right the process MS can't here. belief and steps we initial that initial even confident very process which it's initiated in dialogs on validated and but our there the the We separation comment this highly a process, question We view we're have Mike business the early held the value the confident about path in on announcement, before asset, that considerable more today this belief and feel the

in at where that given much as that. I'll can want we comment that process. too are I specifics, you it about leave the understand So, Mike, don't to

Michael Dudas

in to like totally you range? back a what and I is understand, talked quarter similar about timing or so within June

Mike Burke

Yeah.

ahead let's are schedule that. of say right We moving now,

Michael Dudas

big in market in concern have the you especially Do there'll the more about We the any business they have out with California, with expand markets pause/concern, the etc. called CS for of opportunities visibility, are with, boom next folks arenas, construction non-res market seeing in the Angeles can key you Los the we or some developers enough or is, and coming see to follow-up there there continue the these years? has for you York, late guys tape sports game hope down costs still are that several your maybe some really that we from concern indication watching New core assuming in especially this built funding out the there and And about some been Excellent. be is economy, on

Mike Burke

just Yeah. to us. market in still have of Mike, legs the seems front

has have, of first about years backlog now. of all, right that We business four

But, XX% that, having -- to busy we backlog the that continues is said the So, and wins four years. us there our the is grow. plenty keep backlog of total in so CS have seen to up for next backlog

$XXX strong that's which Park next heard that is you've course on of the sports the I a a over in we a that US are in there the you headquarter for very in York, in areas, -- in an space. a several investment airports New just aviation where market, large leader alone, continues the are be market player think there's Avenue expectation core, the arena of are marketplace, the project. in JPMorgan the of other growth seeing years billion where in really mentioned a in we us even But, interesting robust to building building and non-residential market, a we mentioned number past,

is for seeing York and demand about technology space York New amounts high-rise lot entire in section that of taking up what's New to allow But, that rezoning Manhattan of of we're lot We're seeing a significant City. significant of companies of a Midtown the in additional buildings, City.

to legs, is, to of we So, the have market quite part still a continue work. that seems but win bit important

we waiting $XX to work. about have for expect construction we're next management decisions We in six billion on the of that made that months be

Michael Dudas

to me, tell what you Midtown Mike? several it's next that around get So, Manhattan difficult still the you're for going be saying, Is years. to

Mike Burke

correct. That's

Michael Dudas

Thanks gentlemen.

Mike Burke

Sure.

Operator

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

Mike Burke

you operator. Thank Okay.

upon success, I today. marketplace. based perspective, to to deliberate very best two us a concluding a in before points of shareholder position the was to seeing transform in So, began business; years long-term It number emphasize quarter that process throughout that for we changes accomplishments third we this the maximize ago just call to session. were want few our made value right the Q&A we've and put and the today a throughout that discussion the

where on shareholders to under XXXX you and authorization. both repurchases are we our policy, back allocation our focused our And that debt commitment saw returning in share billion stock through with reduction capital capital $X the

moved resulted that we $XXX then and we deep analysis cost year, consultation earlier today. structure, completed restructuring that We Directors, Bain the a plan our this and of further in our of with the in million into which with restructuring announced a Board effort additional incremental

of We XX businesses. from cycle risk the and wasn't We on that than to so returning exiting and de-risk believe portfolio, ourselves path higher extract decision gas we the rewards, focus announced the commensurate the to power early with the and embarked sale XXXX combined fully non-core construction business, started the our were we a could self-perform, lower-risk ourselves then business. we the assets we part with to more that that the of from extract at-risk where announced countries, on we in announced our intent

way, those our all of fronts. are we on And well on

in quarter half third year-to-date Our We've years results our value several that provide DCS we growth continue year, our and business the are highest margin creating from that in of evidence really actions levels. and adjusted for in we've investors. record strategic the near EBITDA the strongest first backlog the these to real XX% seen delivered our benefit

unlocking as for drive in in So, confident continue we for opportunity our we clients, employees company that, in evaluate but to to of our and June our of and to incredible opportunities for business pursue to back announced for great avenues value organization; our additional inherent our course front incredibly growth we to value to further we'll long-term investors. value, deliver remain services to value do that in unlock position separation continue this us the strategic the of ability provide the management every to

we are quarter, path. the delighted And, employees the seeing our past I and in you're again, that of this snow the the tracks to this leadership transform over all down once that with made So, our progress two think team years. business has

thank today. to for discussion. joining next with us again that, forward And the So, I Thank you. you look

Operator

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

You may disconnect. now

AECOM (ACM) 6 Aug 192019 Q3 Earnings call transcript