• AECOM expects to deliver another year of record profitability for the Professional Services business with accelerating NSR growth, margin expansion, and strong per share profit growth including:
  • Organic NSR² growth accelerating to approximately 8%; actual NSR growth, which incorporates the impact of the strong U.S. dollar, is forecasted to increase by approximately 4%.
  • An adjusted¹ operating margin of approximately 14.6%, a 40 basis point increase from the prior year, which includes strong underlying performance, an estimated 10 to 20 basis point impact from foreign exchange rate translation, and ongoing investments in growth.
  • Adjusted¹ EBITDA⁴ of between $935 million and $975 million, an increase of 10% on a constant-currency basis at the mid-point.
  • Adjusted¹ EPS of between $3.55 and $3.75, an increase of 10% on a constant-currency basis at the mid-point, which does not include expected incremental share repurchases.
  • Excluding changes in foreign exchange rates since the start of fiscal 2022, fiscal 2023 adjusted¹ EBITDA⁴ guidance would have exceeded $1 billion at the mid-point, which is ahead of the performance contemplated in the Company’s fiscal 2024 financial targets driven by accelerating NSR growth and strong profitability.
• Other assumptions incorporated into guidance:
  • An average fully diluted share count of 141 million, which reflects only shares repurchased to-date, though the Company intends to continue repurchasing stock that would provide a benefit to per share earnings.
  • An effective tax rate of between 24% and 26%.
• The Company expects free cash flow⁵ of between $475 million and $675 million, reflecting continued strong underlying cash conversion within the Professional Services business.
  • The stronger U.S. dollar equates to an approximately $25 million year-over-year headwind to free cash flow.

Long-Term Fiscal 2024 Financial Targets, Including Increased ROIC Target

• AECOM is on track to deliver on its long-term fiscal 2024 financial targets, including adjusted¹ EPS of $4.75+ and a 15% segment adjusted¹ operating margin³.
• Underpinning this guidance is operational outperformance to date, including accelerating organic NSR growth and continued margin expansion.
• Additionally, the Company is increasing its fiscal 2024 return on invested capital⁶ target to 17% from 15%, which reflects strong margin performance and working capital management.
• Importantly, the Company is more profitable than ever with an expanded long-term earnings power, reflecting the benefits of its Think and Act Globally strategy and strong business execution.

Fourth Quarter and Full Year Fiscal 2022 Highlights

• Fourth quarter revenue increased 2% to $3.4 billion, operating income increased 8% to $184 million, the operating margin increased 30 basis points to 5.4%, net income increased 21% to $115 million and diluted earnings per share increased 26% to $0.82.
• Fourth quarter NSR² growth in the design business, which accounts for approximately 90% of NSR and adjusted EBITDA, accelerated to 9%, a high point for the year and the highest quarterly growth rate in more than a decade.
• The segment adjusted¹ operating margin³ was 14.6% in the fourth quarter, which contributed to a full year margin of 14.2%, which is a 40 basis point increase over the prior year and exceeded the Company’s guidance.
  • The Company continued to expand margins while investing in growth and despite the impacts from the stronger U.S. dollar.
• Full year adjusted¹ EBITDA⁴ increased by 9% and adjusted¹ EPS increased by 23%.
  • Adjusted for foreign exchange impacts to fiscal 2022 results as compared to initial guidance, adjusted EBITDA and adjusted EPS increased by 10% and 26%, respectively.
• Total backlog in the design business increased by 8%⁷, including a 1.2 book-to-burn ratio⁸ in the Americas design business in the fourth quarter.

Cash Flow, Balance Sheet and Capital Allocation Update

• Fourth quarter operating cash flow of $316 million and free cash flow⁵ of $257 million contributed to full year operating cash flow of $714 million and free cash flow of $586 million, which resulted in achieving the Company’s free cash flow guidance for an eighth consecutive year.
• The Company’s capital allocation policy is built on deploying capital to the highest returning opportunities, including investments in organic growth and the continued intent to return substantially all available cash flow to stockholders through share repurchases and dividends.
  • Returned nearly $500 million to stockholders in fiscal 2022 through share repurchases and dividends.
  • Capital returns over the past 12 months equate to approximately 5% of the Company’s current market capitalization.
  • Repurchased 16% of shares outstanding since the initiation of the repurchase program in September 2020.
• The Company continues to benefit from a strong balance sheet that provides a competitive advantage, with approximately 80% of its debt fixed, swapped to fixed, or capped over the next several years and no bond maturities until 2027.

“We delivered another year of strong performance, expanded the earnings power of the company, furthered our competitive advantages, and won transformative projects that speak to our technical leadership and create increased visibility,” said Troy Rudd, AECOM’s chief executive officer. “Our performance is enabling us to invest in our teams like never before, including enhancing our healthcare program and expanding leadership development opportunities. Investing in our teams is critical to creating the best platform in the industry where our professionals can build meaningful careers. As we look ahead, our guidance reflects the strength of our backlog, driven by an all-time high win rate and a returns-focused approach to allocating resources. This is balanced against varied macroeconomic trends across our markets. Importantly, the long-term growth drivers for our business are well intact, and we have built an agile organization with a proven ability to grow through periods of uncertainty.”

“Through the realization of our Think and Act Globally strategy and as leaders in the high-value transportation, water, environment and green design markets, we are better positioned than ever to capitalize on multiple secular growth drivers that are positively impacting our markets,” said Lara Poloni, AECOM’s president. “These trends include a global infrastructure investment renaissance, growing demand for sustainability and resilience-related services, and post-COVID supply chain and resource adaptation. Our clients are prioritizing investments in these areas. Our earnings growth, record win rate and pipeline, and our backlog growth are a testament to our ability to deploy our industry-leading technical expertise at scale.”

“Our disciplined focus on high-returning organic growth, expanding margins and returning capital to our shareholders through repurchases and our quarterly dividend program are a reflection of our commitment to shareholder value creation,” said Gaurav Kapoor, AECOM’s chief financial officer. “Our balance sheet remains in a strong position and we delivered another year of cash flow above the mid-point of our guidance range. We will continue to benefit from a high degree of balance sheet and cash flow certainty, which furthers our competitive advantages.”

Business Segments

Americas

Revenue in the fourth quarter was $2.6 billion, a 1% increase from the prior year. Full year revenue was $9.9 billion, a 3% decline from the prior year.

NSR² in the fourth quarter was $947 million, a 4% increase from the prior year, led by 5% growth in the design business. This growth is the result of a continued record high win rate and strong execution against a near-record backlog. Full year NSR was $3.7 billion, a 3% increase from the prior year. The fourth quarter adjusted operating margin on NSR was 18.4%.

Fourth quarter operating income declined by 5% over the prior year to $169 million. On an adjusted¹ basis, operating income declined by 5% to $174 million. For the full year, operating income was $654 million, a 2% increase over the prior year, and on adjusted basis, increased by 2% to $671 million. The full year adjusted operating margin on NSR of 18.1% reflected strong underlying execution and included ongoing investments in organic growth to capitalize on a record high pipeline of opportunities.