global rail opportunities
TRANSCRIPT
Global rail opportunities 6 March 2014
Douglas McCormick Managing director, Rail (UK)
Agenda
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• Safety • Worldwide rail market • Regional review
− UK and Europe − Middle East − Asia Pacific − North America
• Summary
Safety leadership, culture and engagement “Nothing is more urgent or important than safety and security at the workplace and on our project sites. Don’t hesitate for a second to tell a manager or act yourself if you think it is unsafe. Always ensure the safety of yourself, your colleagues and of the people whose lives and environments we touch.” Uwe Krueger
Worldwide rail markets
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Region CAGR (%)
Rail type (forward looking)
Europe (Western including UK, and Eastern)
1.9 (Western Europe) and
3.2 (East Europe)
Western Europe: High speed, and freight (enhancements/ upgrades). Eastern Europe: Mainline, light rail, and freight (enhancements/ upgrades).
North America 2.8 Freight and light rail/metro (enhancements/upgrades)
Asia-Pacific 1.9 High speed and metro/light rail (new build)
Middle East (including Africa)
8.1 Metro, light rail, freight, high speed (new build)
Latin America 7.0 Freight, monorail/light rail (new build, upgrades).
Source: UNIFE, 2012. Projected 2017 market
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Accessible market £95bn
Europe
North America
Asia Pacific
Middle East
Latin America
Market drivers • urbanisation • environmental concerns • technological advances − automation − electrification − communications − design tools.
Our international presence and resources
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Atkins’ USP • High technical capability • Complex projects • High margin consultancy • World class portfolio • Transferrable skills and
expertise.
Rail is our most significant sector
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17%
18%
14% 11%
8%
8%
7%
7%
2% 8% Roads
Rail (including mass transit/metro)
Energy
Water/environment
Defence security
Buildings - commercial/residential
Urban development
Aerospace/aviation
Education
Other
Atkins’ revenue by end market (FY13)
NB excluding UK Highways services business
Atkins’ capabilities – across the infrastructure life cycle
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Asset management
Procurement of services and site supervision
Project management Design Project
planning Consultancy technical services
Industry navigator
Scheme identification and feasibility
Policy and standards advice
• Atkins has a strong brand and reputation
• We can leverage our Group resource and skillbase
• Local delivery is supported by our international expertise
• Strategic partnerships with clients, contractors and manufacturers.
Atkins’ rail value-volume pyramid
9 Volume
Valu
e
Mar
gin
Service offering • Business advisory, strategy and financial planning
including lenders technical advisor • Economic feasibility and options analysis • Preliminary design, planning and high-level modelling
strategic asset management safety, regulatory, standards and governance services
• Project management consultancy and programme
management • Rail infrastructure design (civils) • Rail systems design • Passenger systems design and implementation • Programme detailed specification
• Service/design verification, assurance.
Mgmt & strategy
consultancy
Planning, engineering, technical consultancy
Engineering, assurance implementation and operations services
Key rail competitors
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UK and Europe
UK and Europe – rail market
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• CP5 in UK, Network Rail’s business plan (2014-19) for £38bn of spend
• Annual Scandinavian rail investment around £4bn of which consulting services account for c8%
Scale
Dynamics
• Renewals and enhancements
• Train control systems
• Electrification
• Stations
• Major investment programmes eg HS2, Crossrail 2.
Atkins’ profile in UK and Europe
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• Consultancy leadership • Complete design spectrum across rail • Engineering design and implementation in signalling and
communications
• High technical competencies
• Scalability/capacity/complexity
• Strong brand
• Investment in innovation and technology capabilities
• Supporting international growth.
Capabilities
USP
Future
Stafford Area Improvements Programme Steve Higham, Atkins managing director, rail engineering projects
Stafford Alliance
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The problem • Major bottleneck on West Coast Main Line • Infrastructure prone to failure • Speed limitations over 30 miles
The alliance team:
The solution • £250m programme of works including:
• Line-speed improvements
• Re-signalling
• Elevated rail junction.
Stafford Alliance
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Project scope • First rail industry alliance contract –
future direction of travel in UK
• 10km new track and electrification
• 12 new bridges
• 4 river diversions
• 80 new signal structures
Why Atkins? • Shortlisted from 50, tender won against
four alliances
• Tender award based on 30% price, 70% technical and behavioural
• Our multi-functional design and engineering capability
• Delivered from UK and our Indian offices.
Middle East Julian Hill, managing director, Rail (Middle East)
Middle East – rail market
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• Investing £70bn in rail projects through to 2020, with Saudi Arabia, Qatar and UAE representing the biggest markets (Frost & Sullivan)
• Qatar offers opportunities for UK companies with £140bn infrastructure forecast spend over the next 10 years (UKTI, July 2013)
• Urbanisation key driver – metro demand
• Minimal local technical competence – international expertise needed
• Freight railways linking critical mining/ manufacturing areas with ports/airports across the Middle East
• Design and build procurement strategy for new build metro systems
• Religious tourism is the driver around Makkah and Medina.
Scale
Dynamics
Atkins’ profile in the Middle East
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Capabilities
USP
Future
• Team of multidisciplinary metro experts each with 20+ years experience in complex design and build metro systems
• Proven value engineering at the tender stage • Chosen design partner for international contractors
• Core resources based in region – client facing • Strong brand, substantial credibility, proven delivery • Global design centre – capacity and capability to deliver major rail
projects
• Huge pipeline of metro opportunities – our focus in Saudi Arabia, Qatar and United Arab Emirates
• Intermodal transport networks • Diversification into systems and project management consultancy.
Pre-eminent position in the rail market
Dubai Metro Lusail LRT Al Mashaaer Metro Riyadh Metro Package 3
Doha metro systems/depots Dubai metro extensions
Makkah city metro
Doha metro red line south
Abu Dhabi metro
Future major rail projects
Past/current major rail projects
Working with international contractors
Future Middle East metro opportunities
• Depot and stabling yard for 90 train sets • Rail systems & rolling stock for phase 1 of
Doha metro – 38 stations and 84 km of track
• 33km track • 26 stations (at-grade) • 7 stations (underground) • 1 depot, maintenance/storage facility
& test track
2.6 bn
4-6 bn
1.8 bn
Capital cost (£)
Doha metro depot & systems
Doha metro gold line
Lusail LRT
• 14 stations • Pedestrian subways and entrance pods • 14km of twin bored tunnels • Switch boxes / cross passages
Future Middle East metro opportunities
• Phase 1 comprises 18km track • 4 underground stations • 8 elevated stations
Phase 1 • Two Civil works packages • 23km of tunnel and 9 underground
stations • 20km of viaduct, 10 elevated
stations and 1 depot
• Metro phase 1,2,3 • 152km track • 92 stations
2.6 bn
4.0 bn
10.6bn
Abu Dhabi metro
Makkah metro civil works
Jeddah metro
Capital cost (£)
Asia Pacific
Asia Pacific – rail market
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• By 2020 the urban rail market across Asia Pacific is expected to grow to £60bn (CAGR 5.6%)*
• Relatively mature rail consultancy market
• New build metro and light rail in highest demand
• Major rail infrastructure programmes starting in Malaysia and Vietnam
• Ongoing rail infrastructure development in Singapore.
Scale
Dynamics
* Frost & Sullivan, 2013
Atkins’ profile in Asia Pacific
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• Analysis, design and detailing of internal tunnel works for Hong Kong’s rail network
• Delivering multidisciplinary services including stations, tunnels and viaducts
• Transport orientated design
• Strong brand associated with quality and efficiency • Ability to bring international best practice • Complexity
• Partnering with local companies in South East Asia
• Broader geographic footprint
• Working with Chinese contractors.
Capabilities
USP
Future
Core capability – rail infrastructure
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Atkins has held lead design roles on the four major rail projects in Hong Kong: • Express rail link to mainland China • West Island line extension • South Island line • Shatin central link
Work includes: stations, tunnels, viaducts and significant utility and highway diversions
We are undertaking a feasibility study for the South Island line west which will start a new phase of metro development.
Atkins’ role in Hong Kong’s current rail network expansion
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North America
North America – rail market
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• By 2020 US rail transit market expected to grow towards £44bn* pa in capital expenditure, including over £6.5bn* in engineering services
• By 2017 approx. £22bn* will be accessible to European companies (around 50% of the market)
Scale
Dynamics
* Frost & Sullivan, 2013
• Mature market for engineering design consultancies
• PPP potential funding model given public funding constraints.
Atkins’ profile in North America
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• Access to worldwide skills base, particularly in specialist engineering services
• Level of local knowledge
• Asset management
Capabilities
USP
Future
• Emerging brand image
• Leveraging Group capabilities particularly in brownfield projects
• Targeting advisory roles and technology use as a differentiator rather than a more commoditised role
• Developing metro market – urbanisation driver
• Focusing on key states/regions.
Summary
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Highly differentiated business with good growth and attractive margins
• Well positioned with strong market share in UK, and good exposure to stable Scandinavian markets
• Significant pipeline of Middle East metro opportunities – our focus in Saudi Arabia, Qatar and United Arab Emirates
• Expansion into South East Asia from historic MTRC client base in Hong Kong
• North America – future growth potential, particularly in brownfield projects
• Ability to leverage Group capabilities.
Disclaimer
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The information in this presentation pack, which does not purport to be comprehensive, has been provided by Atkins and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by Atkins as to or in relation to the accuracy or completeness of this presentation pack or any other written or oral information made available as part of the presentation and any such liability is expressly disclaimed. Further, whilst Atkins may subsequently update the information made available in this presentation, we expressly disclaim any obligation to do so.
The presentation contains indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group’s results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.