Benzinga | Feb 16, 2021 06:58AM EST

AECOM Provides Financial Highlights And Targets, Plan To 'more than double adjusted earnings per share and free cash flow from FY'20 to FY'24' Ahead Of Investor Day

AECOM (NYSE:ACM), the world's premier infrastructure consulting firm, will host a virtual Investor Day today at noon Eastern Time.

Key Themes of the Event

* A growth strategy that is focused on capitalizing on existing strengths as the leading transportation, water and environment consulting firm to best advise clients who are increasingly investing to address critical ESG and sustainability priorities.

* New organization structure to complement a strong growth-oriented leadership team and a strategy that is focused on growing advisory, program management and digital consulting practices to leverage the Company's strengths and to address clients' most complex and challenging projects.

* Technology and innovation deployed at scale to transform how the Company works and delivers, leveraging its leadership position to accelerate design efficiencies and to increase quality and value for clients.

Key Financial Highlights and Targets

* Commitment to outgrow the industry organically by executing the Company's growth plan.

* Setting a target to achieve a 15%+ segment adjusted1 operating income margin2 by fiscal 2024.

* Continued focus on investing in growth and innovation to support organic growth, and leveraging a culture of continuous improvement to ensure even more efficient delivery and higher margins.

* More than doubling adjusted1 EPS and free cash flow3 from fiscal 2020 to fiscal 2024, including greater than $4.30 of adjusted EPS and greater than $680 million of free cash flow in fiscal 2024.

* Deliver $2.5 billion of cumulative free cash flow3 from fiscal 2021 to fiscal 2024, supported by a reiterated expectation to convert 75% of adjusted1 EBITDA5 to attributable, unlevered free cash flow on a normalized basis4.

* Returning substantially all cash and free cash flow to investors through stock repurchases to enhance value created by the Company's strategy.

* Increasing the Company's long-term aspirational segment adjusted1 operating margin2 target to 17% as the organization challenges what is possible for the Professional Services business.

"We are as focused as ever on accelerating revenue growth and delivering against our new financial targets," said Troy Rudd, AECOM's chief executive officer. "Our leadership team is committed to advancing our growth strategy by prioritizing investments in the best markets and opportunities, driving collaboration across our global platform and leading in key markets with strong demand drivers, such as our clients' growing focus on ESG, sustainability and decarbonization. It bears repeating, we are the number one environment consulting firm, number one transportation design firm, number one facilities design firm, and we hold many top water and green design rankings. We have an enviable position from which to operate and we are focused on capitalizing on these advantages to set the new standard of excellence in the Professional Services industry."

"Today we are making a substantial commitment to further our margin ambitions and deliver substantial per share earnings and free cash flow growth," said Gaurav Kapoor, AECOM's chief financial officer. "We are proud of our accomplishments to date, but we are most energized by the growth strategy we are unveiling at today's event and what it means for shareholder valuation creation over time."

AECOM reiterated its financial guidance for fiscal 2021 that includes an expectation for adjusted1 EPS of between $2.60 and $2.80 and adjusted1 EBITDA5 of between $790 million and $830 million, which would reflect 26% and 9% year-over-year growth, respectively, at the mid-point of the ranges. The Company also continues to expect free cash flow3 of between $425 million and $625 million in fiscal 2021.

A live webcast of the event and a replay will be available online at https://investors.aecom.com.

1 Excludes the impact of non-operating items, such as non-core operating losses and transaction-related expenses, restructuring costs and other items. See Regulation G Information for a complete reconciliation of non-GAAP measures to the comparable GAAP measures.

2 Reflects segment operating performance, excluding AECOM Capital.

3 Free cash flow is defined as cash flow from operations less capital expenditures, net of proceeds from equipment disposals.

4 Unlevered free cash flow is derived by adding back after-tax adjusted interest expense at a 25% tax rate and is after distributions to non-controlling interests. Normalized unlevered free cash flow excludes unusual events, such as transformational restructuring and other factors that may impact free cash flow.

5 Net income before interest expense, tax expense, depreciation, and amortization.