Published on March 6, 2014
Global rail opportunities 6 March 2014
Douglas McCormick Managing director, Rail (UK)
Agenda • Safety • Worldwide rail market • Regional review − UK and Europe − Middle East − Asia Pacific − North America • Summary 3
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 Accessible market £95bn Region Europe (Western including UK, and Eastern) CAGR (%) 1.9 (Western Europe) and 3.2 (East Europe) Europe Rail type (forward looking) Western Europe: High speed, and freight (enhancements/ upgrades). Eastern Europe: Mainline, light rail, and freight (enhancements/ upgrades). 6 North America 5 Asia Pacific 39 Middle East 23 Latin America 22 North America 2.8 Freight and light rail/metro (enhancements/upgrades) Asia-Pacific 1.9 High speed and metro/light rail (new build) Market drivers • urbanisation Middle East (including Africa) 8.1 Metro, light rail, freight, high speed (new build) • environmental concerns • technological advances Latin America 7.0 Freight, monorail/light rail (new build, upgrades). Source: UNIFE, 2012. Projected 2017 market − automation − electrification − communications − design tools. 5
Our international presence and resources Atkins’ USP • High technical capability • Complex projects • High margin consultancy • World class portfolio • Transferrable skills and expertise. 6
Rail is our most significant sector Atkins’ revenue by end market (FY13) Roads 2% 8% 17% Rail (including mass transit/metro) 7% Energy Water/environment 7% Defence security 18% 8% Buildings - commercial/residential Urban development 8% Aerospace/aviation 14% 11% Education Other NB excluding UK Highways services business 7
Atkins’ capabilities – across the infrastructure life cycle Policy and standards advice Scheme identification and feasibility Industry navigator Consultancy technical services Project planning Design Project management Procurement of services and site supervision Asset management • 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. 8
Atkins’ rail value-volume pyramid Service offering Value Planning, engineering, technical consultancy Margin Mgmt & strategy consultancy • 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. Engineering, assurance implementation and operations services Volume 9
Key rail competitors 10
UK and Europe
UK and Europe – rail market • 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% • Renewals and enhancements • Train control systems • Electrification • Stations • Major investment programmes eg HS2, Crossrail 2. Scale Dynamics 12
Atkins’ profile in UK and Europe • Engineering design and implementation in signalling and communications High technical competencies • Scalability/capacity/complexity • Strong brand • Future Complete design spectrum across rail • USP • • Capabilities Consultancy leadership Investment in innovation and technology capabilities • Supporting international growth. 13
Stafford Area Improvements Programme Steve Higham, Atkins managing director, rail engineering projects
Stafford Alliance The problem • • • Major bottleneck on West Coast Main Line Infrastructure prone to failure Speed limitations over 30 miles The solution • £250m programme of works including: • Line-speed improvements • Re-signalling The alliance team: • Elevated rail junction. 15
Stafford Alliance Project scope Why Atkins? • First rail industry alliance contract – future direction of travel in UK • Shortlisted from 50, tender won against four alliances • 10km new track and electrification • • 12 new bridges Tender award based on 30% price, 70% technical and behavioural • 4 river diversions • • 80 new signal structures Our multi-functional design and engineering capability Delivered from UK and our Indian offices. • 16
Middle East Julian Hill, managing director, Rail (Middle East)
Middle East – rail market • Investing £70bn in rail projects through to 2020, with Saudi Arabia, Qatar and UAE representing the biggest markets (Frost & Sullivan) Scale • 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 Dynamics • 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. 18
Atkins’ profile in the Middle East • USP • • • • Core resources based in region – client facing Strong brand, substantial credibility, proven delivery • Global design centre – capacity and capability to deliver major rail projects • Capabilities 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 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. Future 19
Pre-eminent position in the rail market
Working with international contractors Doha metro red line south Makkah city metro Doha metro systems/depots Dubai metro extensions Abu Dhabi metro Future major rail projects Dubai Metro Al Mashaaer Metro Lusail LRT Past/current major rail projects Riyadh Metro Package 3
Future Middle East metro opportunities Doha metro gold line Capital cost (£) • • • • 14 stations Pedestrian subways and entrance pods 14km of twin bored tunnels Switch boxes / cross passages 2.6 bn Doha metro depot & systems • 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 4-6 bn Lusail LRT • • • • 33km track 26 stations (at-grade) 7 stations (underground) 1 depot, maintenance/storage facility & test track 1.8 bn
Future Middle East metro opportunities Abu Dhabi metro Capital cost (£) • Phase 1 comprises 18km track • 4 underground stations • 8 elevated stations 2.6 bn Makkah metro civil works Phase 1 • Two Civil works packages • 23km of tunnel and 9 underground stations • 20km of viaduct, 10 elevated stations and 1 depot 4.0 bn Jeddah metro • Metro phase 1,2,3 • 152km track • 92 stations 10.6bn
Asia Pacific – rail market Scale • By 2020 the urban rail market across Asia Pacific is expected to grow to £60bn (CAGR 5.6%)* • • Dynamics 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. * Frost & Sullivan, 2013 25
Atkins’ profile in Asia Pacific • • • Future • Ability to bring international best practice Complexity • USP Strong brand associated with quality and efficiency • Capabilities 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 Partnering with local companies in South East Asia • Broader geographic footprint • Working with Chinese contractors. • 26
Core capability – rail infrastructure 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 • Work includes: stations, tunnels, viaducts and significant utility and highway diversions Shatin central link We are undertaking a feasibility study for the South Island line west which will start a new phase of metro development. 27
Atkins’ role in Hong Kong’s current rail network expansion 28
North America 29
North America – rail market • 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) • Mature market for engineering design consultancies • PPP potential funding model given public funding constraints. Scale Dynamics * Frost & Sullivan, 2013 30
Atkins’ profile in North America • • Level of local knowledge • Capabilities Access to worldwide skills base, particularly in specialist engineering services Asset management • USP Emerging brand image • Leveraging Group capabilities particularly in brownfield projects • Future 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. 31
Summary 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. 32
Disclaimer 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. 33
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