By Ian L. Edwards, President and CEO of SNC-Lavalin
2020 has been a year like no other in recent memory and has underscored for many of us the importance of focusing on the things that truly matter. We have seen individuals, governments, and corporations come together in a unity of purpose to not only safeguard the things we hold dear, but to take the steps necessary to secure a brighter future.
It is incredible to think that we began 2020 with the first murmurings of a deadly virus affecting China, and are ending the year with the first COVID-19 vaccines being delivered. It is a testament to what can be achieved through innovation, collaboration and determination. It has not been easy, for anyone, but I am extremely proud of how SNC-Lavalin and our 40,000 employees, many of whom work on essential projects around the world, have come together to support each other and the clients who rely on us.
As a 110-year-old company that has adapted through more than a century of disruption and technological change, 2020 is an important reminder of the fundamental role that engineering occupies in helping to meet critical needs and facilitate societal transformation. This year SNC-Lavalin has risen to the challenge, while advancing its own transformation.
Contributing to sustainable infrastructure and Net Zero
There is perhaps no better example than the role SNC-Lavalin has and will continue to play in designing, assessing, testing and project managing environmentally sustainable infrastructure, whether that be light rail transit, carbon-free nuclear energy, electric aircraft, hydrogen storage, wind energy, or the use of data and digital technology and modular manufacturing to reduce the environmental footprint of construction.
Our Nuclear Services business, which has continued to grow this year with strong EBIT margins, is an important partner in the carbon net zero targets of several countries. Over the past year, we have won new mandates from Korea to Romania and the UK, where we are in the midst of a 10-year program to build a new nuclear power station that will provide energy to six million homes and furnish 7% of the country’s electricity. In the US, we are working with the federal government on the nationwide deactivation and renewal of nuclear sites.
Some of our most important nuclear work, however, is happening here in Canada; we are working on the country’s two largest clean energy projects – the refurbishment of the Darlington Nuclear Generating Station and Bruce Power, which together supply approximately half of Ontario’s energy. We are also quickly pivoting our nuclear expertise and propriety CANDU technology to move into the evolving field of small modular reactors (SMRs), which has become a priority for governments looking to reduce dependency on carbon-emitting power sources.
In Louisiana, SNC-Lavalin, was recently awarded a contract to support the state’s flood mitigation efforts, an important consideration for managing climate change risk. This work builds on the expansion of our US business, one of our core markets, where over the past year we have won new mandates with the department of transportation in the states of Texas, Georgia, North Carolina and Louisiana. We also expanded our presence in southern California, to support new work on the Los Angeles metro, airport and port.
We continue to deploy our growing digital expertise on a number of projects that will help reduce environmental footprint and transform legacy infrastructure. A great example of this is in the UK where we have been chosen to lead the digital transformation of the East Coast Main Line railway, to improve network performance. By the same token, our Resources Service business is actively working with clients to design clean energy solutions and meet carbon reduction targets. SNC-Lavalin is the engineer and integrator for HyNet, the world’s first low carbon hydrogen project located in the northern UK, and this year we delivered designs for three offshore wind projects in northern Europe. We are also supporting oil and gas multinational, bp, in its ambitious carbon reduction efforts.
The project, however, that perhaps best showcases SNC-Lavalin’s broad, end-to-end capabilities and integrated approach to sustainability is Montreal’s Réseau express métropolitain, or REM. The latest in a long track record of signature light-rail transit projects that SNC-Lavalin has helped to design, build, operate and maintain, the 67-km REM is the largest public transit project of the past 50 years in Quebec. An electric and fully automated network that will connect the Montreal region, it is being designed and built using advanced digital solutions and offsite modular manufacturing of the line’s 26 stations.
SNC-Lavalin’s work on complex, leading edge projects like REM continued to garner the company a number of awards, including the prestigious Schreyer Award and Award of Excellence for “the highest degree of technical merit” at the 2020 Canadian Consulting Engineering Awards for our work on the Samuel De Champlain Bridge. Atkins, an SNC-Lavalin Group company, was also recognized with a 2020 Hong Kong Institution of Engineers Innovation Award for its cofferdam design work on the world’s longest and largest subsea road link between Hong Kong and Macau.
Looking ahead
In short, we have a lot to be proud of and much to look forward to. Our decision in 2019 to refocus the business on Engineering Services and exit lump-sum turnkey construction contracting (LSTK) was clearly the right one as Engineering Services has proven resilient through the pandemic with a robust pipeline of new business as we head into 2021.
We also continued to reduce the LSTK backlog by $800-million as of the end of the third quarter. In its stead, we are working with our partners to develop new, more collaborative contracting models, which, as I outlined in presentations to both the Montreal Chamber of Commerce and Toronto Board of Trade this past Fall, will allow the industry to more fully leverage digital capabilities as part of a more integrated focus on sustainable infrastructure development.
That foundation positions us well as we look to provide solutions to the world’s most pressing challenges. It also allows us to contribute and give back to our communities in other ways. Earlier this month, SNC-Lavalin announced a donation to two leading hospital foundations, the McGill University Health Centre (MUHC) and the Montreal Children’s Hospital Foundations. That is in addition to other contributions, including donating to Feeding America, the largest hunger-relief network in the US, and supporting St. Mary’s Hospital in London, UK.
As a leading Canadian headquartered global company, we see it as our role to step up as corporate citizens and contribute to improving people’s daily lives, whether it be by supporting important causes, or advancing sustainability, including our own. This year SNC-Lavalin was ranked among the top ten of 267 peers in Sustainalytics’ Environmental, Social and Governance (ESG) rankings.
The key to moving forward is continued collaboration, among colleagues, with clients and with governments, to continue to deliver on the critical and transformational infrastructure that we all rely on to improve people’s lives. We have an important opportunity to build a better future, and SNC-Lavalin plans to be an integral part of that. As this unprecedented year draws to a close, I want to take this opportunity to thank our employees, clients, partners and investors, who have been on this road with us, and I look forward to breaking new ground in our transformation journey and making a positive impact together in 2021.