SNC-Lavalin is changing its name to AtkinsRéalis as it faces an “inflection point” in its 112-year history, according to CEO Ian Edwards, after a tumultuous decade for the engineering giant.
The rebrand follows 11 years marked by trouble with the law, including the Libya corruption scandal that tarnished its reputation and ensnared the highest office of the Canadian government, as well as lacklustre earnings at times.
The company also hopes to shed the costly backlog of big, over-budget rail contracts that has plagued it for years and launch expansion plans after a steady slim-down regimen and, until 2021, declining revenue and headcount.
“Four years ago when I became the CEO, I think we were very transparent. We said there’s a part of the company which is excellent, performs really well. There’s parts of the company which don’t … We’re going to stop doing what’s not working, we’re going to do more of what working really well,” Edwards told The Canadian Press in an interview.
“From here, it’s all about growth.”
The company sold its unprofitable activities in the oil sector two years ago for a fraction of what it had paid in 2014 and no longer bids on fixed-price construction contracts due to the frequent cost overruns, which are typically borne by the contractor.
Last month, less than five years after SNC embarked on its streamlining program, Edwards told analysts on a conference call the company aimed to blaze a “methodical” trail of mergers and acquisitions starting as early as 2024—”but we’re not quite there yet.”
The name change to AtkinsRéalis also signifies an “inflection point” for the firm and offers a greater sense of belonging to employees who work for its subsidiaries, Edwards said.
The hoped-for turning point could mark the end of a long purgatory for SNC investors. The stock has traced a solid recovery since the start of the year, rising more than 75 percent to top $43 per share. But the price remains at levels comparable to 2012, when questionable practices first surfaced and prompted the departure of former chief executive Pierre Duhaime.
Doubts persist in the financial community that SNC’s newfound momentum will continue, particularly given its inconsistent performance over the years, said National Bank analyst Maxim Sytchev. But those doubts can overlook the fact the company has a new management team and board of directors, he added.
“While we think that while margin expansion is certainly possible, it is by no means an easy task,” he said.
The company said its symbol on the Toronto Stock Exchange will change from SNC to ATRL as of Monday, Sept. 18.