Atkins global rail opportunities 6th March 2014

1. Global rail opportunities
6 March 2014

2. Douglas McCormick
Managing director, Rail (UK)

3. Agenda
•
Safety
•
Worldwide rail market
•
Regional review
− UK and Europe
− Middle East
− Asia Pacific
− North America
•
Summary
3

4. 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

5. 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

6. Our international presence and resources
Atkins’ USP
• High technical capability
• Complex projects
• High margin consultancy
• World class portfolio
• Transferrable skills and
expertise.
6

7. 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

8. 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

9. 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

10. Key rail competitors
10

11. UK and Europe

12. 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

13. 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

14. Stafford Area Improvements Programme
Steve Higham, Atkins managing director,
rail engineering projects

15. 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

16. 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

17. Middle East
Julian Hill, managing director, Rail (Middle East)

18. 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

19. 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

20. Pre-eminent position in the rail market

21. 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

22. 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

23. 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

24. Asia Pacific

25. 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

26. 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

27. 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

28. Atkins’ role in Hong Kong’s current
rail network expansion
28

29. North America
29

30. 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

31. 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

32. 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

33. 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