Growth opportunities in Asia Pacific 18 September 2013
Chris Birdsong Chief executive officer, Asia Pacific
Agenda Current business Regional growth strategy ● Hong Kong ● Mainland China ● South East Asia Summary Questions and answers 3
An evolving business Over 1,200 staff, offices 1994 > 2013 across Asia Pacific Atkins acquires Haswell, Architecture and landscape design a 50 strong tunnelling Planning business in Hong Kong Water & environment (established in 1973) Rail infrastructure Safety and reliability Systems assurance Highways and transportation Tunnelling Geotechnical Civil, structural & MEP Government infrastructure Airport infrastructure Buildings and property Programme and project management.
Asia Pacific Attractive margins in a growing business FY08 FY09 FY10 FY11 FY12 FY13 Revenue (£m) 37.0 58.0 78.7 80.3 82.9 88.0 Operating profit (£m) 0.5 3.7 5.0 8.2 10.3 8.1 Operating margin (%) 1.4 6.4 6.4 10.2 12.4 9.2 Average staff numbers 974 1,044 1,158 1,152 1,206 1,260 Closing staff numbers 1,002 1,092 1,153 1,154 1,234 1,295 Ongoing diversification in Hong Kong Mainland China contribution has increased to 40% of the region’s revenue Global design centres in Bangalore and Delhi with 1,300 staff (not included above). 5
Asia Pacific Well funded markets Split by end market (FY13) Revenue by client type (FY13) Architecture & building Public sector: local engineering 22% government 29% Urban planning & 29% 32% development Water/environment Public sector: national 5% government 1% Rail (including mass transit) 1% 11% Roads 70% Private sector 70% 15% Other 15% 6
Current market position Hong Kong Mainland China South East Asia Complex infrastructure focus, Planning and architecture Project and cost Market position strength management business majority public sector funded Largest urban planning team in Top 3 infrastructure designer mainland China Flexibility - solutions Contractors’ first Differentiators Client oriented Established delivery tailored to client service choice mechanism requests Integrated team for Reputation for infrastructure Wide market reach Strong brand quality and efficiency projects
Key current competitors Building engineering Infrastructure Planning and architecture 8
Regional growth strategy 9
Overview Hong Kong Mainland China South East Asia • Mature market • Largest global • High growth markets • Future growth through • Increasing our construction market • Increased market diversification geographical spread • Focused on Malaysia, penetration through partnership with local Vietnam and Singapore • Long term opportunities in design institutes (LDIs) India, Indonesia and Philippines. Maintain and build on Develop Expand and diversify existing success 10
Samson Sin Managing director, Asia Pacific
Hong Kong Our business today – design and engineering services Structures – Civils – Buildings Geotechnical Tunnelling Mechanical, Electrical, Plumbing (MEP) – Building services – Infrastructure M&E Government Infrastructure and Contracts (GIC). 12
Hong Kong Growth strategy • Continued growth expected on the back of the government investment programme - new land released for residential development • We have effectively diversified from the previous years’ focus on the metro developments in Hong Kong – specifically the Airport Authority and the upcoming West Kowloon Cultural District • A team has been established with the sole purpose of winning government contracts • We have become a first choice/leading consultant for design and build work for contractors. 13
Design and engineering services Central reclamation III (1995-2013) 14
Rail infrastructure Viaduct, tunnel and station design for MTRC Atkins has held lead design roles on the Work includes: stations, tunnels, four major rail projects in Hong Kong: viaducts and significant utility and highway diversions • Express rail link to mainland China We are undertaking a feasibility study for • West Island line extension the South Island line west which will start • South Island line a new phase of metro development. • Shatin central link 15
Design and build infrastructure Hong Kong link road Atkins has the full design role on design and build contract for China State Construction involving: Tunnelling • • Reclamation • Viaduct • Roadworks • Buildings Ventilation • 16
Airport opportunities Expansion programme and 3rd runway Atkins has five current contracts on HK Airport covering: • Development of new apron areas • Reclamation study for 3rd runway • Scheme design for 3rd runway • Automated people mover Taxiways • • Aircraft stands. 17
Mainland China Our business today Urban masterplanning and Complemented by our Hong Kong landscaping design skills ● Economic studies ● Water engineering ● Transit orientated design ● Transport and systems engineering ● Project scale from city blocks to ● Bridge design entire cities ● Project management Architecture ● MEP ● Iconic high rise Work is undertaken in collaboration ● Mixed use design with local design institutes who complete detailed design. ● Resorts 18
Mainland China Growth strategy • Mainland China’s GDP is growing at a healthy rate of 7% and is the most significant economy in the region • Urbanisation is expected to continue for the next decade • Another 300m people to be urbanised over the next 20 years • Demand for liveable and efficient cities is increasing • Atkins’ architecture and urban planning teams have become adept at working with local partners • Our holistic approach to ‘future proofing cities’ will be used to service a wider range of clients. 19
Mainland China – a foundation for growth Urban planning and infrastructure Meixi Lake, Changsha – Eco City Huizhou Nankunshan – Wanmaping Tourist Hotel, Kejia Heritage Village and Residential Community 20
Mainland China – growing cities and resorts Architecture Lishui resort Concept through to detail design. Project under construction for a repeat client. Baoneng 550m supertower, Shenyang From concept to detail design. Project currently in design for a repeat client. 21
Growing through strategic relationships Chinese contractors – domestic and overseas opportunities Xiangtan, Tianjin – riverside new town development Liangtang Boundary Crossing Contract 6 22
South East Asia Our business today • Building and property project and programme management expertise - primarily servicing Faithful+Gould’s (F+G) multi- national, industrial client base • Key current clients include: Ikea, Rolls Royce, BASF, Merck, Roche, Michelin and GSK • Recently established presence in Malaysia and Vietnam to pursue rail and architecture opportunities • Actively looking to expand our business via M&A. 23
South East Asia • Hong Kong remains the operational centre of the business directly overseeing mainland China expansion and any further regional growth. • Singapore will act as a technical hub providing specialist services for Malaysia, Thailand and Indonesia • Vietnam will support expansion into Cambodia and Laos in due course • Indian global design centres (GDC) enable growth in the wider region and a base for exploring the local market. 24
South East Asia infrastructure Forecast growth in construction value 21% 90 80 17.6 70 17.0 60 18.4 15.4 $ Bn 50 16.1 40 12.7 19.1 17.7 30 15.1 20 26.0 23.4 10 18.3 0 2013F 2015F 2016F Malaysia Singapore Vietnam Hong Kong Source: Business monitor limited infrastructure reports 25
South East Asia focus Investment programmes Opportunities for Atkins Malaysia Infrastructure design services for key institutional Major programme of rail infrastructure just starting clients and contractors Government objective to raise standard of living to Planning services to complement / guide infrastructure “Developed Nation” by 2020 development Singapore Ongoing programme of rail infrastructure development Infrastructure and civil design services to complement existing providers Headquarters of several regional developers and major institutional clients Vietnam Architectural entry point to build brand Long term opportunities in planning, building and infrastructure Teaming with international contractors to pursue rail transport projects. Government is looking at major development and rail projects. 26
South East Asia Recent wins Hotel in Ho Chi Minh City, Vietnam Klang Valley MRT Line 1, Malaysia 27
Summary Focused approach to high growth markets • Hong Kong – continued diversification of our strong, multi-disciplinary engineering business • Mainland China – partnering with LDIs to support rapid urbanisation agenda • South East Asia – initial growth driven by rail projects and architecture in Malaysia, Singapore and Vietnam. 28
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