- Q1 2022 revenue of
$1.9 billion , a 3.8% increase compared to Q1 2021 - Net income from continuing operations attributable to
SNC-Lavalin shareholders of$24.8 million , or$0.14 per diluted share, compared to a net income of$67.7 million , or$0.39 per diluted share in Q1 2021 - SNCL Services revenue of
$1.7 billion , an increase of 6.8%, or 8.4% based on organic revenue growth(1)(6), compared to Q1 2021, representing a higher growth rate than the Company's full year outlook - SNCL Services Segment Adjusted EBIT of
$126.7 million , representing a 7.6% margin - Increased market opportunities through our Pivoting to Growth Strategy led to elevated bidding and business development expenses, impacting margins
- LSTK Projects Segment Adjusted EBIT of negative
$30.5 million - SNCL Services backlog continued to be strong at
$11.2 billion as atMarch 31, 2022 ; LSTK Projects backlog reduced by$210.3 million from the prior quarter - Net cash used for operating activities of
$134.0 million - Reaffirming the Company's full year 2022 outlook, announced on
March 3, 2022
"Our SNCL Services business continued its momentum from prior quarters and reported another period of revenue growth. We also progressed on the winding down of our last LSTK projects, decreasing the LSTK Projects backlog by 18% in the first three months of the year," said
"Our net zero carbon focus and dedication to develop clean energy and infrastructure decarbonization solutions for our customers and our planet will continue to drive growth. We recently committed to the Science Based Targets Initiative, outlining our own path to Net Zero. We are excited about the vast potential of our best-in-class services portfolio and the opportunity to leverage our end-to-end services expertise to lead in solving the challenges driven by a world that is heavily reinvesting for sustainability, resilience, and impact in the built environment," added
First Quarter Results
Professional Services & Project Management are collectively referred to as "PS&PM" to distinguish them from "Capital" activities. PS&PM groups together five of the Company's segments, namely Engineering Services, Nuclear,
IFRS Financial Highlights
Q1 2022A | Q1 2021A | |||
Revenue | ||||
From PS&PM | 1,871.7 | 1,798.0 | ||
From Capital | 16.4 | 21.7 | ||
Total | 1,888.1 | 1,819.7 | ||
Attributable to | ||||
Net income from continuing operations: | ||||
From PS&PM | 16.6 | 61.0 | ||
From Capital | 8.2 | 6.7 | ||
Total | 24.8 | 67.7 | ||
Diluted EPS from continuing operations: | ||||
From PS&PM ($) | 0.09 | 0.35 | ||
From Capital ($) | 0.05 | 0.04 | ||
Total ($) | 0.14 | 0.39 | ||
Net income from discontinued operations | - | 5.3 | ||
Net income | 24.8 | 73.0 | ||
Net cash generated from (used for) operating activities | (134.0) | 5.6 | ||
Backlog from continuing operations as at | ||||
SNCL Services | 11,182.1 | 11,464.0 | ||
Capital | 35.0 | 153.4 | ||
LSTK Projects | 956.6 | 1,596.6 | ||
Total | 12,173.7 | 13,214.0 |
Non-IFRS Financial Highlights
Q1 2022A | Q1 2021A | |||
Attributable to | ||||
Adjusted net income from PS&PM(1) | 39.4 | 83.4 | ||
Adjusted diluted EPS from PS&PM(1)(2) ($) | 0.22 | 0.48 | ||
Adjusted EBITDA from PS&PM(1) | 112.6 | 164.1 | ||
Adjusted EBITDA from PS&PM to revenue from PS&PM ratio(1)(3) | 6.0% | 9.1% |
All figures in millions of dollars, except otherwise indicated |
Certain totals and subtotals may not reconcile due to rounding |
A For the three-month period ended |
Lines of Business Performance
SNCL Services
Q1 2022A | Q1 2021A,B | |||
Segment revenue | ||||
Engineering Services | 1,138.2 | 1,049.6 | ||
Nuclear | 232.1 | 229.1 | ||
O&M | 136.5 | 141.6 | ||
| 150.5 | 131.9 | ||
Total | 1,657.3 | 1,552.3 | ||
Segment Adjusted EBIT | ||||
Engineering Services | 85.2 | 86.2 | ||
Nuclear | 34.3 | 31.8 | ||
O&M | 11.7 | 12.4 | ||
| (4.5) | 6.1 | ||
Total | 126.7 | 136.5 | ||
Segment Adjusted EBIT to segment revenue ratio | 7.6% | 8.8% | ||
Backlog as at | ||||
Engineering Services | 3,861.1 | 3,617.3 | ||
Nuclear | 802.2 | 881.7 | ||
O&M | 5,598.4 | 5,926.2 | ||
| 920.4 | 1,038.7 | ||
Total | 11,182.1 | 11,464.0 |
All figures in millions of dollars |
A For the three-month period ended |
B Comparative figures have been restated to reflect the new reportable segments effective as of |
The SNCL Services line of business (comprised of the Engineering Services, Nuclear, O&M and
- Q1 2022 revenue of
$1,657.3 million , was up 6.8% compared to Q1 2021. SNCL Services had an organic revenue growth(1)(6) of 8.4% in Q1 2022 compared to Q1 2021, a higher growth rate than the Company's full year outlook range. - Primarily driven by an organic revenue growth(1)(6) of 10.0% in Engineering Services and 21.3% in
Linxon . - Q1 2022 Segment Adjusted EBIT was
$126.7 million , representing a margin of 7.6%, slightly lower than the Company's full year outlook range. Increased market opportunities through our Pivoting to Growth Strategy led to elevated bidding and business development expenses, impacting margins in Q1 2022. - Engineering Services Segment Adjusted EBIT of
$85.2 million represents a margin of 7.5%. - Engineering Services segment adjusted EBITDA to segment net revenue ratio(1)(7) of 13.0%.
- Nuclear Segment Adjusted EBIT of
$34.3 million represents a margin of 14.8%. - O&M Segment Adjusted EBIT of
$11.7 million represents a margin of 8.6%. - Linxon Segment Adjusted EBIT of
$(4.5) million represents a margin of (3.0)%. - Total SNCL Services backlog amounted to
$11.2 billion as atMarch 31, 2022 , which included$1.5 billion of bookings in Q1 2022, representing a 0.94 booking-to-revenue ratio(1)(4). - Engineering Services backlog increased 6.7%, compared to
March 31, 2021 , totaling$3.9 billion as atMarch 31, 2022 . Bookings in Q1 2022 totaled$1.2 billion , representing a 1.08 booking-to-revenue ratio(1)(4).
LSTK Projects
Q1 2022A | Q1 2021A,B | |||
Revenue | 214.4 | 245.8 | ||
Segment Adjusted EBIT | (30.5) | (11.9) | ||
Backlog decrease | 210.3 | 241.5 | ||
Backlog as at | 956.6 | 1,596.6 |
All figures in millions of dollars |
A For the three-month period ended |
B Comparative figures have been restated to reflect the new reportable segments effective as of |
The Company continues to execute its LSTK projects exit strategy.
- The LSTK Projects segment backlog decreased by 18.0% during the quarter, as the Company continued to execute and progress on its last remaining LSTK projects. Backlog totaled
$956.6 million as atMarch 31, 2022 , compared to$1.2 billion as atDecember 31, 2021 and to$1.6 billion as atMarch 31, 2021 . - Q1 2022 Segment Adjusted EBIT was negative
$30.5 million . - Recognized
$20.0 million in the quarter of previously disclosed$300 million * potential future additional financial risks to complete the projects. - Balance of negative Segment Adjusted EBIT mainly includes segment overhead costs needed to support the projects.
* Announced on |
Capital
Q1 2022A | Q1 2021A | |||
Revenue | 16.4 | 21.7 | ||
Segment Adjusted EBIT | 12.4 | 18.7 | ||
Backlog as at | 35.0 | 153.4 |
All figures in millions of dollars |
A For the three-month period ended |
The Q1 2022 Capital Segment Adjusted EBIT decrease was mainly due to the disposal of InPower BC G.P. in
Operating Cash Flow and Financial Position
- Net cash used for operating activities amounted to
$134.0 million in Q1 2022, compared to a net cash generated from operating activities of$5.6 million in Q1 2021. The negative operating cash flows in Q1 2022 were mainly due to operating cash outflows related to the LSTK projects, partially offset by operating cash inflows from SNCL Services. - Net cash generated from operating activities in SNCL Services of
$58.7 million in Q1 2022. - Cash and cash equivalents of
$506.0 million as atMarch 31, 2022 . - Recourse debt of
$1.2 billion and limited recourse debt of$0.4 billion as atMarch 31, 2022 . - Net limited recourse and recourse debt to Adjusted EBITDA ratio(1)(5) of 2.3.
Quarterly Dividend
The Board of Directors today declared a cash dividend of
First Quarter 2022 Conference Call / Webcast
Annual Meeting of Shareholders
About
Founded in 1911,
(1) Non-IFRS financial measures and ratios, supplementary financial measures and non-financial information do not have a standardized definition within International Financial Reporting Standards (IFRS), and other issuers may define these measures differently and, accordingly, these may not be comparable to similar measures used by other issuers. Refer to the sections "Non-IFRS Financial Measures and Ratios, Supplementary Financial Measures and Non-Financial Information" and "Reconciliations and Calculations" of this press release. |
(2) Adjusted diluted EPS is a non-IFRS ratio based on adjusted net income (loss), itself a non-IFRS financial measure. |
(3) Adjusted EBITDA to revenue ratio is a non-IFRS ratio based on Adjusted EBITDA, itself a non-IFRS financial measure. |
(4) Booking-to-revenue ratio is a non-IFRS ratio based on contract bookings. |
(5) Net limited recourse and recourse debt to Adjusted EBITDA ratio is a non-IFRS ratio based on net limited recourse and recourse debt at the end of a given period and Adjusted EBITDA of the corresponding trailing twelve-month period, both of which are non-IFRS financial measures. |
(6) Organic revenue growth (contraction) is a non-IFRS ratio comparing organic revenue (which excludes foreign exchange and acquisition and divestiture impacts), itself a non-IFRS financial measure, between two periods. |
(7) Segment Adjusted EBITDA to segment net revenue for the Engineering Services segment is a non-IFRS ratio based on Segment Adjusted EBITDA and net revenue, both of which are non-IFRS financial measures. |
Non-IFRS Financial Measures and Ratios, Supplementary Financial Measures and Non-Financial Information
The Company reports its financial results in accordance with IFRS. However, the following non‑IFRS financial measures and ratios, supplementary financial measures and non-financial information are used by the Company in this press release: Organic revenue growth (contraction), EBITDA, Adjusted EBITDA, Adjusted net income attributable to
Reconciliations and Calculations
Reconciliation of Adjusted net income attributable to
Q1 2022 | Q1 2021 | |||||||
Before | Taxes | After Taxes | Diluted EPS (In $) | Before | Taxes | After Taxes | Diluted EPS (In $) | |
Net income attributable to (IFRS) | 24.8 | 0.14 | 67.7 | 0.39 | ||||
Restructuring and transformation costs | 6.7 | (1.6) | 5.1 | 4.9 | (1.1) | 3.8 | ||
Amortization of intangible assets related to business combinations | 22.3 | (4.7) | 17.7 | 23.3 | (4.3) | 19.1 | ||
Gain on disposal of a Capital investment | (4.3) | (0.1) | (4.4) | - | - | - | ||
Gain on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell | - | - | - | (0.5) | - | (0.5) | ||
Total adjustments | 24.7 | (6.4) | 18.4 | 0.10 | 27.7 | (5.4) | 22.4 | 0.13 |
Adjusted net income attributable to (non-IFRS) | 43.1 | 0.25 | 90.1 | 0.51 | ||||
Net income attributable to | 8.2 | 0.05 | 6.7 | 0.04 | ||||
Gain on disposal of a Capital investment | (4.3) | (0.1) | (4.4) | - | - | - | ||
Total adjustments | (4.3) | (0.1) | (4.4) | (0.03) | - | - | - | - |
Adjusted net income attributable to (non-IFRS) | 3.8 | 0.02 | 6.7 | 0.04 | ||||
Adjusted net income attributable to (non-IFRS) | 39.4 | 0.22 | 83.4 | 0.48 |
Note that certain totals and subtotals may not reconcile due to rounding |
All figures in millions of dollars, except otherwise indicated |
Reconciliation of EBITDA and Adjusted EBITDA to IFRS net income from continuing operations
Q1 2022 | Q1 2021 | |||||
From PS&PM | From Capital | Total | From PS&PM | From Capital | Total | |
Net income from continuing operations | 13.7 | 8.2 | 21.9 | 62.0 | 6.7 | 68.7 |
Net financial expenses | 24.6 | 1.0 | 25.6 | 27.0 | 4.2 | 31.2 |
Income taxes | 3.5 | 0.5 | 4.0 | 2.9 | 0.8 | 3.6 |
EBIT | 41.8 | 9.7 | 51.5 | 91.8 | 11.7 | 103.5 |
Depreciation and amortization | 41.7 | - | 41.7 | 44.6 | - | 44.6 |
Amortization of intangible assets related to business combinations | 22.3 | - | 22.3 | 23.3 | - | 23.3 |
EBITDA | 105.8 | 9.7 | 115.5 | 159.7 | 11.7 | 171.4 |
Restructuring and transformation costs | 6.7 | - | 6.7 | 4.9 | - | 4.9 |
Gain on disposal of a Capital investment | - | (4.3) | (4.3) | - | - | - |
Gain on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell | - | - | - | (0.5) | - | (0.5) |
Adjusted EBITDA | 112.6 | 5.3 | 117.9 | 164.1 | 11.7 | 175.8 |
Note that certain totals and subtotals may not reconcile due to rounding |
All figures in millions of dollars |
Calculation of Adjusted EBITDA to revenue ratio
Q1 2022 | Q1 2021 | |||||
From PS&PM | From Capital | Total | From PS&PM | From Capital | Total | |
Revenue | 1,871.7 | 16.4 | 1,888.1 | 1,798.0 | 21.7 | 1,819.7 |
EBIT to revenue ratio (in %) | 2.2% | 59.0% | 2.7% | 5.1% | 53.7% | 5.7% |
Adjusted EBITDA to revenue ratio (in %) | 6.0% | 32.6% | 6.2% | 9.1% | 53.8% | 9.7% |
All figures in millions of dollars, except otherwise indicated |
Calculation of segment net revenue and segment adjusted EBITDA to segment net revenue ratio – Engineering Services
Q1 2022 | ||
Revenue – Engineering Services | 1,138.2 | |
Direct costs for sub-contractors and other direct expenses that are recoverable directly from clients – Engineering Services | (255.4) | |
Segment net revenue – Engineering Services | 882.9 | |
Segment Adjusted EBITDA – Engineering Services | 114.9 | |
Segment Adjusted EBITDA to segment net revenue ratio – Engineering Services (in %) | 13.0% |
All figures in millions of dollars, except otherwise indicated |
Calculation of organic revenue growth (contraction)
Q1 2022 | Q1 2021A | Variance | Foreign | Acquisition / | Organic revenue | |
Engineering Services | 1,138.2 | 1,049.6 | 88.6 | (14.5) | - | 103.1 |
Nuclear | 232.1 | 229.1 | 3.0 | (1.6) | - | 4.5 |
O&M | 136.5 | 141.6 | (5.1) | 0.1 | - | (5.2) |
150.5 | 131.9 | 18.6 | (7.8) | - | 26.5 | |
Total – SNCL Services | 1,657.3 | 1,552.3 | 105.1 | (23.8) | - | 128.9 |
All figures in millions of dollars |
Q1 2022 | Q1 2021A | Variance | Foreign | Acquisition / | Organic revenue | |
Engineering Services | 1,138.2 | 1,049.6 | 8.4% | (1.5)% | - | 10.0% |
Nuclear | 232.1 | 229.1 | 1.3% | (0.7)% | - | 2.0% |
O&M | 136.5 | 141.6 | (3.6)% | 0.1% | - | (3.7)% |
150.5 | 131.9 | 14.1% | (7.2)% | - | 21.3% | |
Total – SNCL Services | 1,657.3 | 1,552.3 | 6.8% | (1.7)% | - | 8.4% |
All figures in millions of dollars, except otherwise indicated |
A Comparative figures have been restated to reflect the new reportable segments effective as of |
Calculation of booking-to-revenue ratio
Q1 2022 | |||||
Engineering Services | Nuclear | O&M | Total SNCL Services | ||
Opening backlog | 3,769.0 | 834.9 | 5,705.4 | 974.2 | 11,283.5 |
Plus: Contract bookings during the period | 1,219.1 | 199.3 | 29.5 | 96.7 | 1,544.6 |
Less: Revenues from contracts with customers recognized during the period | 1,127.0 | 232.0 | 136.5 | 150.5 |
1,646.0 |
Ending backlog | 3,861.1 | 802.2 | 5,598.4 | 920.4 | 11,182.1 |
Booking-to-revenue ratio | 1.08 | 0.86 | 0.22 | 0.64 | 0.94 |
All figures in millions of dollars, except otherwise indicated |
Calculation of net limited recourse and recourse debt to adjusted EBITDA ratio
2022 | ||||
Limited recourse debt | 400.0 | |||
Recourse debt | 1,174.0 | |||
Less: Cash and cash equivalents | 506.0 | |||
Net limited recourse and recourse debt | 1,068.0 | |||
Adjusted EBITDA (trailing 12 months) | 467.1 | |||
Net limited recourse and recourse debt to Adjusted EBITDA ratio | 2.3 |
All figures in millions of dollars, except otherwise indicated |
Forward-Looking Statements
Reference in this press release, and hereafter, to the "Company" or to "SNC-Lavalin" means, as the context may require,
Statements made in this press release that describe the Company's or management's budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "aims", "anticipates", "assumes", "believes", "cost savings", "estimates", "expects", "forecasts", "goal", "intends", "likely", "may", "objective", "outlook", "plans", "projects", "should", "synergies", "target", "vision", "will", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. Forward-looking statements also include statements relating to the following: i) future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects; ii) business and management strategies and the expansion and growth of the Company's operations; and iii) the expected additional impacts of the ongoing COVID-19 pandemic on the business and its operating and reportable segments as well as elements of uncertainty related thereto. All such forward-looking statements are made pursuant to the "safe-harbor" provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Forward-looking statements made in this press release are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company's 2021 Annual MD&A (particularly in the sections entitled "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" and "How We Analyze and Report Our Results"). If these assumptions are inaccurate, the Company's actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company's assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risks include, but are not limited to, matters relating to: (a) ongoing and additional impacts of the COVID-19 pandemic; (b) execution of the Company's "Pivoting to Growth Strategy" unveiled in
The Company cautions that the foregoing list of factors is not exhaustive. For more information on risks and uncertainties, and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the sections "Risks and Uncertainties", "How We Analyze and Report Our Results" and "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" in the Company's 2021 Annual MD&A and as updated in the first quarter 2022 MD&A, each filed with the securities regulatory authorities in
The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake to update publicly or to revise any written or oral forward-looking information or statements whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement.
The Company's unaudited condensed consolidated interim financial statements for the three-month period ended
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