SNC-Lavalin Chief Neil Bruce Steps Down; COO Ian Edwards is Interim Successor
As it now faces trial on lingering federal bribery charges and market woes that have battered recent results, Canada design-build giant SNC Lavalin Group Inc. will have new leadership.
The Montreal firm said June 11 that Chief Operating Officer Ian Edwards will become Interim president and CEO and join its board. He was named to succeed Neil Bruce, in the role since 2015, who engineered its transformational buys of leading U.K. engineers Kentz Corp. and Atkins, to build a global firm with 2018 revenue of more than $7.5 billion and $11.3 billion in backlog.
The transition has been in the works for months, says the Canadian Press.
But Bruce, who will retire, struggled to push SNC-Lavalin past its legal woes, triggered by the 2015 bribery charges linked actions by to former executives before 2011, and the government’s refusal to reach a deferred prosecution deal based on the firm’s ethics revamp.
A judge in May ordered the trial to start this year. The firm has said it will plead not guilty.
With the legal overhang and unrelated market and project setbacks abroad that prompted a surprise quarter loss in January, SNC Lavalin’s board has tasked Edwards, who formerly led its infrastructure unit and is a veteran industry megaproject executive, to rush a “strategic review of current operations … to de-risk the business model and generate sustainable free cash flow” the firm said.
Bruce will remain an advisor until year end, but in response to an ENR query on when or whether Edwards’ interim status will change or a wider CEO search is planned, a spokesman said: “If there is a change in status, we will update markets in due time.”
SNC-Lavalin stock rose 7%, to $19.08 at midday June 11, cutting its year loss to 57%, said Bloomberg.
“The market has gotten tired of promises of improved execution,” said Toronto-base National Bank of Canada financial analyst Maxim Sytchev, who advocates selling resources or taking the corporate parent private.
In a June 9 note, he said “the biggest risk to Atkins operations is not Brexit but engineering talent leaving for greener pastures, especially amid SNC’s cost-cutting drive.”
WSP Global said on June 6 that Greg Kelly, president and CEO of its U.S. unit, will assume a “newly created role” as global director of major projects and programs. He also keeps his current roles until a successor is named.
WSP hired recruiter Korn Ferry for a global search, said an industry source with knowledge of the action.