AECOM reports first quarter fiscal year 2020 results

“We delivered exceptional first quarter results highlighted by adjusted EBITDA that exceeded our expectations, which provides us with tremendous confidence in achieving our financial and strategic priorities this year and beyond,” said W. Troy Rudd, AECOM’s chief financial officer. “Our cash flow was mostly consistent with our expectations, adjusted for timing-related impacts in the Management Services business that were mostly recovered in January. As a result, we reiterated our full year free cash flow guidance, which reflects the highly-cash generative nature of the business. As our strong margin improvements over the past five quarters indicate, we are delivering the benefits of our restructuring actions to the bottom line and are confident in achieving our full year and long-term financial targets.”

Wins and Backlog

Wins were $3.3 billion and resulted in a book-to-burn ratio8 of 1.0, including solid performance across the business. Total backlog increased by 2%5 over the prior year to $36.5 billion, which remains at a near-record level.

Business Segments

AECOM is a Professional Services firm that delivers planning, design, engineering, consulting and construction management services to public- and private-sector clients worldwide in markets spanning transportation, buildings, water, governments, energy and the environment.

AECOM reports based on three segments: Americas, which consists of the Company’s business in the United States, Canada and Latin America; International, which consists of the Company’s business in Europe, the Middle East, Africa and the Asia-Pacific regions; and AECOM Capital.

In addition, the MS business, which was sold on January 31, 2020, and the at-risk, self-perform construction businesses that the Company intends to exit are reported as discontinued operations.


Revenue in the first quarter was $2.5 billion, a 4% decrease from the prior year, primarily due to the expected reduction in disaster recovery activity in the U.S. Virgin Islands.

Net service revenue2 was $906 million in the first quarter and increased by 2% on a constant-currency organic5 basis reflecting strong underlying performance across nearly every end-market.

Operating income was $146 million compared to $113 million in the year-ago period. On an adjusted basis1, operating income was $151 million compared to $128 million in the year-ago period. The adjusted operating margin on an NSR2 basis of 16.6% was a 220 basis point increase over the prior year, and reflects the benefits from the execution of strategic actions to enhance margins, solid execution against a near-record level of backlog and continued favorable trends across markets.


Revenue in the first quarter was $783 million, a decrease of 1% from the prior year.

Net service revenue2 was $634 million in the first quarter and was effectively unchanged from the prior year on a constant-currency organic5 basis. This performance included growth in the U.K. and Australia-New Zealand, which was offset by the expected decline in Hong Kong.

Operating income was $29 million compared to $15 million in the year-ago period. On an adjusted basis1, operating income was $30 million compared to $17 million in the year-ago period. The adjusted operating margin on an NSR2 basis increased by 210 basis points over the prior year to 4.7% due to improved profitability in the U.K. and steps taken to consolidate the Company’s geographic footprint through the planned exit of more than 30 countries, which is now more than 50% complete.

AECOM Capital (ACAP)

The ACAP segment invests in and develops real estate projects. Revenue in the first quarter was $0.5 million and operating loss was $1.2 million. The Company reiterated its expectation for approximately $10 million of AECOM Capital earnings in fiscal 2020.

Tax Rate

The effective tax rate was 31.3% in the first quarter. On an adjusted basis, the effective tax rate was 29.1%. The adjusted tax rate was derived by re-computing the annual effective tax rate on earnings from adjusted net income.9 The adjusted tax expense differs from the GAAP tax expense based on the taxability or deductibility and tax rate applied to each of the adjustments. The adjusted tax rate was higher than expected due to non-deductible expenses associated with executive transitions.

Cash Flow

Operating cash flow for the first quarter was ($207) million and free cash flow6 was ($238) million. Excluding timing-related delays on collections in the Management Services business, cash flow improved from the prior year. The Company remains on track to achieve its annual free cash flow guidance of $100 million to $300 million for fiscal 2020.

Balance Sheet and Capital Allocation

As of December 31, 2019, AECOM had $887 million of total cash and cash equivalents, $3.6 billion of total debt, $2.7 billion of net debt inclusive of discontinued operations and $1.19 billion in unused capacity under its $1.35 billion revolving credit facility.

Restructuring Update

AECOM continues to make strong progress on its previously-announced restructuring actions that are expected to deliver substantial margin improvement, and the Company expects to incur the following in fiscal 2020:

  • Restructuring expenses of between $160 million and $190 million, which now include costs associated with recent executive transitions.
  • Total cash restructuring costs of between $185 million to $205 million, including capital expenditures associated with real estate restructuring of approximately $40 million.

As previously disclosed, the Company adopted the new lease accounting standard (ASC 842) in the fourth quarter of fiscal 2019, which resulted in an $88 million one-time, non-cash reduction to equity in the first quarter.

Conference Call

AECOM is hosting a conference call today at 12 p.m. Eastern Time, during which management will make a brief presentation focusing on the Company's results, strategies and operating trends. Interested parties can listen to the conference call and view accompanying slides via webcast at The webcast will be available for replay following the call.

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.
2 Revenue, net of subcontractor and other direct costs.
3 Organic growth is year-over-year at constant currency and reflects revenue associated with continuing operations. Results expressed in constant currency are presented excluding the impact from changes in currency exchange rates.
4 Excluding AECOM Capital.
5 On a constant-currency basis.
6 Free cash flow is defined as cash flow from operations less capital expenditures net of proceeds from disposals.
7 Net debt-to-EBITDA, or net leverage, is comprised of EBITDA as defined in the Company’s credit agreement, which excludes stock-based compensation, and net debt as defined as total debt on the Company’s financial statements, net of total cash and cash equivalents.
8 Book-to-burn ratio is defined as the amount of wins divided by revenue recognized during the period, including revenue related to work performed in unconsolidated joint ventures.
9 Inclusive of non-controlling interest deduction and adjusted for financing charges in interest expense, the amortization of intangible assets and is based on continuing operations.


AECOM (NYSE: ACM) is the world’s premier infrastructure firm, delivering professional services across the project lifecycle – from planning, design and engineering to consulting and construction management. We partner with our clients in the public and private sectors to solve their most complex challenges and build legacies for generations to come. On projects spanning transportation, buildings, water, governments, energy and the environment, our teams are driven by a common purpose to deliver a better world. AECOM is a Fortune 500 firm with revenue of approximately $20.2 billion during fiscal year 2019. See how we deliver what others can only imagine at and @AECOM.

Forward-Looking Statements

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