MONTREAL, Nov. 08, 2018 (GLOBE NEWSWIRE) — WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”) today announced its financial and operating results for the third quarter of fiscal 2018, which ended on September 29, 2018.
THIRD QUARTER 2018 FINANCIAL HIGHLIGHTS
WSP reports Q3 2018 results with key financial metrics in line or better than Management’s expectations. Year-to-date adjusted EBITDA margin stood at 10.9%, with DSO at 76 days and net debt to trailing-twelve-month adjusted EBITDA at 1.4 times.
- Revenues and net revenues of $1,927.6 million and $1,468.8 million, up 17.8% and 14.2%, respectively, compared to Q3 2017.
- Consolidated organic growth in net revenues of 4.1% for the quarter, spanning across all reportable segments, in line with Management’s expectations.
- Adjusted EBITDA of $187.5 million, up $27.1 million, or 16.9%, compared to Q3 2017.
- Adjusted EBITDA margin at 12.7%, compared to 12.5% in Q3 2017.
- Adjusted net earnings of $99.3 million, or $0.95 per share, up 24.9% and 23.4%, respectively, compared to Q3 2017.
- Net earnings attributable to shareholders of $87.7 million, or $0.84 per share, up 20.8% and 18.3%, respectively, compared to Q3 2017.
- Backlog at $6,509.1 million, representing 9.8 months of revenues, down when compared to Q2 2018 and up $545.2 million, or 9.1% when compared to Q3 2017. Backlog organic growth stood at 2.7% compared to Q3 2017 and 1.9% for the nine-month period ended September 29, 2018.
- DSO stood at 76 days, a ten-day improvement compared to Q3 2017, better than Management’s expectations.
- Trailing twelve-month free cash flow of $555.6 million, representing 236.3% of net earnings attributable to shareholders.
- Incorporating a full twelve-month adjusted EBITDA for all acquisitions, net debt to adjusted EBITDA ratio stood at 1.4x, slightly better than our target range.
- Quarterly dividend declared of $0.375 per share, with a 52.0% Dividend Reinvestment Plan (“DRIP”) participation.
- Full year 2018 financial outlook is once again reiterated. Net revenues and adjusted EBITDA anticipated to skew towards the higher end of ranges previously provided by Management in its 2018 outlook.
“We are pleased with our performance this quarter, as we posted 4.1% net revenues organic growth, attributable to all our operating segments. We also posted adjusted EBITDA margin of 12.7% for the quarter and 10.9% for the first nine months of the year. This performance once again demonstrates the strength of our business model based on geographical and sector diversification and our commitment to the execution of our strategy,” said Alexandre L’Heureux, President and CEO of WSP. “On the M&A front, the pending acquisition of Louis Berger represents a significant step forward in our ambition to become a top-tier global player. This transaction which is aligned with our 2015-2018 Strategic Plan, is expected to close by the end of the year, and will be financed using new term loans.” he added.
DIVIDEND
The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about January 15, 2019, to shareholders of record at the close of business on December 31, 2018.
FINANCIAL REPORT
This release includes, by reference, the 2018 third quarter financial reports, including the unaudited interim consolidated financial statements and the Management’s Discussion & Analysis (“MD&A”) of the Corporation.
For a copy of our full financial results for the third quarter of 2018, including the MD&A and the unaudited interim consolidated financial statements, please visit our website at www.wsp.com.
CONFERENCE CALL
WSP will hold a conference call at 4 p.m. (Eastern Time) on November 8, 2018, to discuss these results. To participate in the conference call, dial 1-647-788-4922 or 1-877-223-4471 (toll-free). A presentation of the 2018 third quarter highlights and results will be available on the same day at www.wsp.com in the Investors section.
The telephone numbers to access the replay of the call are 1-416-621-4642 or 1-800-585-8367 (toll-free), access code 8588118. The replay of the conference call will also be available in the Investors section of the WSP website in the days following the event.
| RESULTS OF OPERATIONS | ||||||||||||
| Q3 | YTD | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| (in millions of dollars, except number of shares and per share data) | For the period from July 1 to September 29 |
For the period from July 2 to September 30 |
For the period from January 1 to September 29 |
For the period from January 1 to September 30 | ||||||||
| Revenues | $1,927.6 | $1,636.8 | $5,864.2 | $4,987.9 | ||||||||
| Less: Subconsultants and direct costs | $458.8 | $350.6 | $1,384.6 | $1,109.9 | ||||||||
| Net revenues* | $1,468.8 | $1,286.2 | $4,479.6 | $3,878.0 | ||||||||
| Personnel costs | $1,098.2 | $953.4 | $3,407.0 | $2,958.6 | ||||||||
| Occupancy costs | $61.3 | $61.5 | $192.0 | $171.5 | ||||||||
| Other operational costs(1) | $122.1 | $111.2 | $391.8 | $334.1 | ||||||||
| Share of earnings of associates | $(0.3 | ) | $(0.3 | ) | $(1.7 | ) | $(1.4 | ) | ||||
| Adjusted EBITDA* | $187.5 | $160.4 | $490.5 | $415.2 | ||||||||
| Acquisition and integration costs* | $15.2 | $9.4 | $40.6 | $16.1 | ||||||||
| EBITDA* | $172.3 | $151.0 | $449.9 | $399.1 | ||||||||
| Amortization of intangible assets | $23.7 | $20.6 | $72.7 | $61.3 | ||||||||
| Depreciation of property and equipment | $22.9 | $19.4 | $67.2 | $57.3 | ||||||||
| Financial expenses | $10.7 | $10.0 | $39.4 | $26.6 | ||||||||
| Share of depreciation of associates | $0.3 | $0.2 | $0.9 | $0.9 | ||||||||
| Earnings before income taxes | $114.7 | $100.8 | $269.7 | $253.0 | ||||||||
| Income-tax expense | $26.8 | $28.2 | $64.2 | $69.9 | ||||||||
| Share of tax of associates | $— | $— | $0.1 | $0.1 | ||||||||
| Net earnings | $87.9 | $72.6 | $205.4 | $183.0 | ||||||||
| Attributable to: | ||||||||||||
| – Shareholders | $87.7 | $72.6 | $204.8 | $183.0 | ||||||||
| – Non-controlling interests | $0.2 | $— | $0.6 | — | ||||||||
| Basic net earnings per share | $0.84 | $0.71 | $1.97 | $1.79 | ||||||||
| Diluted net earnings per share | $0.84 | $0.71 | $1.97 | $1.79 | ||||||||
| Basic weighted average number of shares | 104,071,770 | 102,684,023 | 103,861,665 | 102,234,641 | ||||||||
| Diluted weighted average number of shares | 104,338,927 | 102,816,146 | 104,109,088 | 102,343,828 | ||||||||
| * Non-IFRS measures are described in the “Glossary” section of the MD&A | ||||||||||||
| (1) Other operational costs include operation exchange loss or gain and interest income | ||||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) | ||||
| September 29, 2018 | December 31, 2017 | |||
| Assets | $ | $ | ||
| Current assets | ||||
| Cash (note 4) | 173.9 | 185.1 | ||
| Restricted cash | 3.7 | 6.8 | ||
| Trade, prepaids and other receivables | 1,522.1 | 1,554.7 | ||
| Income taxes receivable | 16.0 | 18.0 | ||
| Costs and anticipated profits in excess of billings (note 5) | 1,014.4 | 905.0 | ||
| 2,730.1 | 2,669.6 | |||
| Non-current assets | ||||
| Other assets | 115.4 | 113.0 | ||
| Deferred income tax assets | 99.1 | 91.4 | ||
| Property and equipment | 305.2 | 315.4 | ||
| Intangible assets | 304.5 | 355.2 | ||
| Goodwill (note 6) | 3,000.0 | 2,979.0 | ||
| Total assets | 6,554.3 | 6,523.6 | ||
| Liabilities and equity | ||||
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | 1,346.0 | 1,361.9 | ||
| Billings in excess of costs and anticipated profits (note 5) | 534.5 | 483.8 | ||
| Income taxes payable | 64.4 | 47.9 | ||
| Dividends payable to shareholders (note 12) | 39.1 | 38.7 | ||
| Current portion of long-term debts (note 7) | 271.2 | 276.3 | ||
| Other current financial liabilities | 12.7 | 45.8 | ||
| 2,267.9 | 2,254.4 | |||
| Non-current liabilities | ||||
| Long-term debts (note 7) | 779.6 | 882.4 | ||
| Other non-current financial liabilities | 14.8 | 25.4 | ||
| Provisions | 126.4 | 121.2 | ||
| Retirement benefit obligations | 191.0 | 206.7 | ||
| Deferred income tax liabilities | 65.0 | 74.5 | ||
| Total liabilities | 3,444.7 | 3,564.6 | ||
| Equity | ||||
| Equity attributable to shareholders | ||||
| Share capital (note 8) | 2,636.2 | 2,577.4 | ||
| Contributed surplus | 204.6 | 204.2 | ||
| Accumulated other comprehensive income | 89.8 | 86.0 | ||
| Retained earnings | 178.4 | 91.4 | ||
| 3,109.0 | 2,959.0 | |||
| Non-controlling interest | 0.6 | — | ||
| Total equity | 3,109.6 | 2,959.0 | ||
| Total liabilities and equity | 6,554.3 | 6,523.6 | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||
| Third quarter ended | Year-to-date ended | ||||||||
| September 29, 2018 |
September 30, 2017 |
September 29, 2018 |
September 30, 2017 |
||||||
| $ | $ | $ | $ | ||||||
| Cash flows generated from (used in) operating activities | |||||||||
| Net earnings for the period | 87.9 | 72.6 | 205.4 | 183.0 | |||||
| Adjustments (note 13a)) | 17.3 | 31.5 | 98.4 | 95.4 | |||||
| Income tax expenses | 26.8 | 28.2 | 64.2 | 69.9 | |||||
| Income taxes paid | (10.7 | ) | (10.1 | ) | (51.8 | ) | (50.0 | ) | |
| Net finance expenses (note 11) | 9.8 | 9.1 | 36.8 | 23.5 | |||||
| Change in non-cash working capital items (note 13b)) | 130.3 | (91.9 | ) | (20.7 | ) | (256.8 | ) | ||
| Net cash generated from (used in) operating activities | 261.4 | 39.4 | 332.3 | 65.0 | |||||
| Cash flows generated from (used in) financing activities | |||||||||
| Dividends paid to shareholders | (19.5 | ) | (18.0 | ) | (59.3 | ) | (52.2 | ) | |
| Net variation in long-term debts | (182.9 | ) | 18.7 | (117.5 | ) | 100.2 | |||
| Net variation in other financial liabilities | 2.2 | (4.3 | ) | (2.5 | ) | (9.3 | ) | ||
| Finance expenses paid and financing costs | (11.0 | ) | (5.8 | ) | (37.7 | ) | (17.3 | ) | |
| Issuance of common shares, net of issuance costs | 0.4 | — | 1.4 | 2.3 | |||||
| Net cash generated from (used in) financing activities | (210.8 | ) | (9.4 | ) | (215.6 | ) | 23.7 | ||
| Cash flows generated from (used in) investing activities | |||||||||
| Business acquisitions | (1.5 | ) | (46.1 | ) | (47.1 | ) | (64.1 | ) | |
| Additions to property and equipment | (17.5 | ) | (14.5 | ) | (56.1 | ) | (52.6 | ) | |
| Proceeds from disposal of property and equipment | 1.1 | 0.3 | 2.3 | 2.2 | |||||
| Additions to intangible assets | (6.8 | ) | (5.3 | ) | (21.5 | ) | (17.1 | ) | |
| Other | 0.1 | 0.3 | 0.9 | (2.6 | ) | ||||
| Net cash generated from (used in) investing activities | (24.6 | ) | (65.3 | ) | (121.5 | ) | (134.2 | ) | |
| Effect of exchange rate change on cash | (5.1 | ) | (7.3 | ) | (2.2 | ) | (5.2 | ) | |
| Net change in cash | 20.9 | (42.6 | ) | (7.0 | ) | (50.7 | ) | ||
| Cash, net of bank overdraft – Beginning of period | 150.7 | 222.4 | 178.6 | 230.5 | |||||
| Cash, net of bank overdraft (note 4) – End of period | 171.6 | 179.8 | 171.6 | 179.8 | |||||
NON-IFRS MEASURES
The Corporation reports its financial results in accordance with IFRS. However, the following non-IFRS measures are used by the Corporation: net revenues; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted EBITDA before Global Corporate costs; adjusted EBITDA margin before Global Corporate costs; adjusted net earnings; adjusted net earnings per share; adjusted net earnings excluding amortization of intangible assets related to acquisitions; adjusted net earnings excluding amortization of intangible assets related to acquisitions per share; acquisition and integration costs; backlog; funds from operations; funds from operations per share; free cash flow; free cash flow per share; days sales outstanding (or DSO) and net debt to adjusted EBITDA. Additional details for these non-IFRS measures can be found in WSP’s MD&A, which is posted on WSP’s website at www.wsp.com, and filed with SEDAR at www.sedar.com.
Management believes that these non-IFRS measures provide useful information to investors regarding the Corporation’s financial condition and results of operations as they provide key metrics of its performance. These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS and may differ from similar computations as reported by other issuers, and accordingly may not be comparable. These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS.
ABOUT WSP
As one of the world’s leading professional services firms, WSP provides technical expertise and strategic advice to clients in the Transportation & Infrastructure, Property & Buildings, Environment, Industry, Resources (including Mining and Oil & Gas) and Energy sectors, as well as offering project and program delivery and advisory services. Our experts include engineers, advisors, technicians, scientists, architects, planners, surveyors and environmental specialists, as well as other design, program and construction management professionals. With approximately 44,000 talented people in 550 offices across 40 countries, we are uniquely positioned to deliver successful and sustainable projects, wherever our clients need us. www.wsp.com
FORWARD-LOOKING STATEMENTS
Certain information regarding WSP contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although WSP believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. WSP’s forward-looking statements are expressly qualified in their entirety by this cautionary statement. The complete version of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect WSP’s actual or projected results are included in the Management’s Discussion and Analysis for the year ended December 31, 2017, which is available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and WSP does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Isabelle Adjahi
Senior Vice President, Investor Relations and Communications
WSP Global Inc.
Tel: (438) 843-7548
isabelle.adjahi@wsp.com