Full Transcript: AtkinsRéalis Group Inc Q2 2026 Earnings Call

AtkinsRéalis Group Inc (TSX: ATRL ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary AtkinsRéalis Group Inc reported a strong second quarter with a 10% year-over-year revenue increase, driven by significant growth in their nuclear sector and engineering services. The company achieved a quarterly record high adjusted EBITDA of $293 million, marking a 14% increase, and a 20% increase in adjusted EPS year over year. 4 billion, indicating robust demand, especially in the nuclear sector. Strategic acquisitions in Australia and Ireland were announced to enhance local presence and technical capabilities, aligning with the company's land-and-expand strategy.

The company is investing in AI to enhance project design, delivery, and management, aiming to improve safety, quality, productivity, and predictability. S. market. 7 billion, with continued focus on operational excellence and margin improvement.

Management expressed confidence in the long-term growth opportunities in nuclear and engineering services, supported by a strong balance sheet and strategic investments. Full Transcript OPERATOR Good day, and thank you for standing by. Welcome to the AtkinsRéalis second quarter 2026 conference call. At this time, all participants are in a listen-only mode.

After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, one, and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star, one, and one again.

Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Denis Yasma. Please go ahead. Denis Yasma, Investor Relations Thank you, Sarah.

Bonjour, monde. Good morning, everyone, and thank you for joining us today. For those dialing in, we invite you to view the slide presentation that we have posted in the Investors section of our website, which we will refer to during this call. Today's call is also webcast.

With me today are Ian Edwards, Chief Executive Officer, and Jeff Bell, Chief Financial Officer. Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all analysts have an opportunity to participate. You are welcome to return to the queue for any follow-up questions. I would like to draw your attention to Slide 2.

Comments made on today's call may contain forward-looking information. This information, by its nature, is subject to assumptions, risks and uncertainties, and as such, actual results may differ materially from the views expressed today. For further information on these assumptions, risks and uncertainties, please consult the company's relevant filings on SEDAR+. These documents are also available on our website.

Also, during the call we may refer to certain non-IFRS financial measures. Reconciliations of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ and our website. And now I'll pass the call over to Ian Edwards. Ian Edwards, President and Chief Executive Officer Thank you, Denis.

Good morning, everyone, and thank you for joining us today. I'm going to begin today's call by providing an overview of our performance for the second quarter before I pass it to Jeff to provide more detail on our financial results. We'll then open it up for questions. We executed another strong quarter driven by significant nuclear growth and consistent demand for our end-to-end engineering services capabilities.

Total revenue grew 10% year over year, or 8% on an organic basis. We also grew adjusted EBITDA by 14% to a quarterly record high of $293 million, which translated into a 20% increase in adjusted EPS year over year. 4 billion. It's particularly pleasing to see the momentum continuing to build for our nuclear capabilities, as evidenced by the Canadian government's recently launched Nuclear Energy Strategy, which reinforces CANDU as a world-class Canadian energy technology applicable both at home and around the world.

S. market, another important step in expanding its role internationally. Following our success in Romania, we'll share more on our growing confidence in our nuclear outlook shortly. Strong demand and efficient operations across the group led to a second consecutive quarter of positive operating cash flow, which we utilized to support our value-focused capital allocation priorities.

In the quarter, we repurchased a significant number of shares and continued to advance our land-and-expand strategy through three announced acquisitions. In Australia, we entered into agreements to acquire WGA and Chorus Solutions. These additions strengthen our local presence and technical capabilities in high-growth opportunities across defence, transportation, water and power, and renewables. Additionally, in Ireland we recently closed our acquisition of Tobin, which will expand our presence in the region and solidify a market-leading position in engineering and project management across the infrastructure and transportation markets.

We are also continuing to invest internally to accelerate the deployment of artificial intelligence across our business. AI is enhancing how we design, deliver and manage projects, improving safety, quality, productivity and predictability, while enabling our teams to develop more innovative solutions for our clients across our global operations. We're embedding AI into engineering workflows and corporate functions while making AI training a core component of learning and development for our 41,000 employees.

This is strengthening our competitive position, increasing the value we deliver to clients, and supporting our continued focus on operational excellence and margin improvement. As part of our focus on maximizing the value of our AI investment, we recently welcomed Amy Bunzel and William Wu to our Board of Directors. Both bring extensive experience scaling technology-driven businesses and deploying AI-enabled solutions in industries closely aligned with our core markets. Their expertise will help guide AtkinsRéalis as we continue to integrate advanced technologies across our operations and service offerings.

Year two of our Delivering Excellence and Driving Growth strategy is performing as planned, and we continue to showcase our value-creation opportunities for all stakeholders. Turning to Slide 4, second quarter revenue in our Engineering Services Regions business increased 5% year over year. On an organic revenue basis, Engineering Services Regions grew 2% year over year. Excluding EMEA, which continues to be affected by project reprioritizations and the conflict in the Middle East, we would have delivered 5% organic revenue growth.

Segment adjusted EBITDA over net revenue margin was 16%, a 70-basis-point improvement. Margins grew year over year as we continue to see the benefits of our operational improvement initiatives. 4 billion as of June 30, 2026, mainly driven by growth in UK&I, USLA and EMEA business. Beginning on Slide 5, we provide an overview of each of our four regions and their performance this quarter.

In Canada, revenue in the second quarter increased 13% organically year over year, while segment adjusted EBITDA grew to $43 million with an 18% margin, a roughly 300-basis-point improvement year over year. Performance comes on the heels of strong margin growth during the first quarter, highlighting our initiatives in cost optimization, enhanced bid discipline and more efficient project delivery. 6 billion, mainly due to revenue delivery in the quarter. Across Canada, we're seeing persistent demand for our unique end-to-end capabilities across our end markets, but specifically in power and renewables and transportation.

We are currently providing professional services on two major transportation projects, Tram City, a major public transit infrastructure project in Quebec City, and Alto, the high-speed rail project between Quebec City and Toronto. These are examples of how our global capabilities in systems integration, engineering and major project delivery support government initiatives in building complex transit infrastructure. Clients continue to view us as critical partners in supporting new infrastructure projects, and we are strategically positioned to capture this demand.

From a macro perspective, our expertise in defence is setting up opportunities for us to take on work under the Canadian government's $35 billion spending forecast aimed at bolstering the country's defence positioning in the Arctic and Northern regions. A long-standing presence in the market and strong relationships with government entities continue to be a competitive advantage for AtkinsRéalis in the UK and Ireland. Second quarter revenue grew 8% and organically grew 6% year over year, driven primarily by sustained growth in water and transportation markets. Segment adjusted EBITDA grew to $102 million in the quarter, representing an 18% EBITDA margin.

Our concentrated presence in this growing region continues to bear fruit and drives strong operating performance. 1 billion, driven mainly by wins in the transportation, power, renewables, defence and buildings and places markets. We recently announced that AtkinsRéalis has been named as a supplier on a major UK government framework to support the design, delivery and optimization of major infrastructure and building programs. We anticipate this work will occur over the next four years, focused on the defence and nuclear sectors.

This selection reflects our ability to deliver complex programs and our depth of experience across multiple sectors, underlying our position as a true end-to-end engineering services provider. Lastly, in Ireland, our acquisition of Tobin, which has approximately 200 professionals, is a major milestone, expanding our regional business to more than 700 employees and reinforcing our position in one of Europe's fastest-growing infrastructure markets. In the USLA region, second quarter revenue was $529 million, up 3% year over year but down 2% organically.

Underlying performance in the quarter reflected sustained strength in transportation, offset by client delays in awarding and executing longer-term framework agreements and reduced levels of emergency response work. Backlog increased 12% year over year to a new record high of $2 billion, showing continued momentum and healthy client demand across our end markets. The timelines from procurement award to actual work order releases are improving, although timelines remain longer than prior periods. However, continued backlog growth gives us confidence in achieving our revenue growth outlook.

Despite these challenges, transportation continues to be a particular source of strength in the region, especially in highways, power, renewables, rail and transit. Beyond these growth factors, we're seeing opportunity to continue to develop across buildings and places, industrial, water, minerals and metals. Our focus on growing in these markets is working as our pipeline continues to build. 7% in the prior year.

On a year-over-year basis, margins continue to be impacted by reduced emergency response work, which was strong in the second quarter of 2025. S. I'd like to also thank Steve Morriss, who will be retiring at the end of the year. The USLA business has grown and strengthened significantly over the last five years under his leadership.

In EMEA, revenue was $287 million in the quarter, down 7% year over year, 12% on an organic basis, primarily reflecting lower revenue on major buildings and places projects in the Middle East, with the conflict in the region being a contributing factor. This was partially offset by higher revenue in Asia and Australia. Segment adjusted EBITDA was $26 million, representing a 14% margin on net revenue compared with 16% in the prior period. The decline was primarily driven by a less favorable business mix in the Middle East, including the reprioritization of certain higher-margin buildings and places projects.

Despite the recent revenue decline in the Middle East, the market is showing some signs of resilience, as demonstrated by EMEA's backlog growth of 27% in the quarter to a new record high. This included key wins for projects in mainly the transportation end market in Asia. We continue to see higher volume in the transportation market, particularly in Hong Kong, where the Northern Metropolis development and related Projects such as the Northern Link are expected to support demand into 2027. In Australia, market activity is picking up in power, as evidenced by a hydro project in Queensland that recently received government funding and approval.

Our global expertise in transportation and infrastructure work is leading to opportunities in other markets such as highway redevelopment work. Additionally, the recently announced WGA and CHORUS acquisitions, which we expect to close this quarter, will further strengthen our platform and enhance our ability to capture opportunities across multiple sectors. I'd like to now move to Slide 9 and discuss our second quarter results for our nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 18% compared to the second quarter of 2025.

Growth this quarter was mainly driven by higher volumes from life extension projects in our CANDU business. Operating margins continue to be strong and within our 2026 outlook target range. 2 billion, down 25% from June 2025, primarily reflecting continued progress on the ongoing projects, particularly the OPG Pickering Life Extension project. We see this reduction in backlog as only being one of timing before additional phases of projects under contract are expected to be realized over the next few quarters.

On Slide 10 we highlight some achievements across nuclear CANDU and services portfolios. In our CANDU business, we're making strong progress on the Ontario and Cernavoda Life Extension projects. S. S.

energy security using natural uranium. S. with reliable, affordable, safe, large-scale nuclear power. In services, in the UK we signed a new five-year framework agreement to remain the Civil Design Works partner for Sizewell C, building on our long-standing involvement in the project and leveraging the experience gained from our work at Hinkley Point C.

S. we signed a 20-year agreement for engineering services with First American Nuclear where we will serve as the exclusive engineering, procurement and construction management provider for their small modular reactor projects across North America. Through it all, we continue to invest in the development of our new CANDU Monarch Gigawatt reactor alongside key clients. Turning to Slide 11 you can see our pictorial reminder of these near-term CANDU revenue opportunities within our Nuclear business.

We have now been working hard to bolster our backlog with high-quality wins which reinforces the bright future we have ahead. Additionally, Canada's recently published National Energy Strategy highlights the focus on expanding nuclear power as a core pillar of energy security and decarbonization. Importantly, the strategy reinforces Canada's homegrown nuclear technology and supply chain, directly supporting our core CANDU business. We anticipate this increased investment will drive a larger, more visible pipeline of domestic nuclear projects and we are well positioned to capture that opportunity.

Outside of Canada, I continue to meet with global ministers and leaders to discuss the importance of energy security for the future. The common thread is strong momentum behind nuclear as a clean and secure energy solution. These conversations, coupled with the recent announcement by our home government, makes us even more excited about the long-term growth trajectory of our nuclear business. With that, now turn it over to Jeff to discuss our financial results.

Jeff Bell, Chief Financial Officer Thank you, Ian, and good morning, everyone. As Ian said, Q2 was a strong quarter, delivering year-over-year increases in revenue, adjusted EBITDA and adjusted diluted EPS. We also have a strong balance sheet with significant financial flexibility and a solid backlog. Turning to Slide 13, total revenues in the quarter increased 10% year over year to $3 billion, driven by both Engineering Services and Nuclear.