WSP GLOBAL INC. As it completes the first year of its 2019-2021 Global Strategic Plan, WSP is pleased with its performance, which provides a solid basis for continued growth.
FOURTH QUARTER 2019 FINANCIAL HIGHLIGHTS
- Revenues and net revenues* for the quarter reached
$2.2 billion and$1.8 billion , up 8.1% and 14.3%, respectively, compared to Q4 2018. Organic growth in net revenues achieved 4.0% for the quarter, spanning across all reportable segments except EMEIA which was flat. - Earnings before net financing expense and income taxes in the quarter of
$82.7 million , down$9 .0 million, or 9.8%, compared to Q4 2018. This metric was negatively impacted by non-cash items, including a$25.3-million write-off of leasehold capital assets related to our US operations, as well as increased amortization, mainly due to the finalization of fair values of intangible assets acquired in the Louis Berger acquisition fromDecember 2018 . - Adjusted EBITDA* in the quarter of
$266.3 million , up$96.8 million or 57.1%, compared to$169 .5 million in Q4 2018. The impact of adopting IFRS 16 - Leases, effectiveJanuary 1, 2019 , represents$58 .4 million of the increase. The remaining increase of$38 .4 million or 22.7%, compared to Q4 2018, stems mainly from an overall increase in net revenues and increased margins inCanada , theUK andMiddle East , as well as lower head office corporate costs. - Adjusted EBITDA margin* for the quarter reached 15.1%, compared to 11.0% in Q4 2018. The impact of adopting IFRS 16 - Leases represents 3.3% of net revenues. The remaining increase, compared to Q4 2018, stems mainly from increased margins in
Canada , theUK andMiddle East , as well as lower head office corporate costs. - Net earnings attributable to shareholders for the quarter of
$40.5 million , or$0.38 per share, down$2 .8 million and$0.03 , respectively, compared to Q4 2018. The impact of adopting IFRS 16 - Leases represents a decrease of approximately$5 .9 million or$0.06 per share. Net earnings was also negatively impacted by non-cash items, including a write-off of leasehold capital assets related to US operations with after-tax impact of$18.5 million or$0.18 per share, as well as increased amortization, mainly due to the finalization of fair values of intangible assets acquired in the Louis Berger acquisition fromDecember 2018 . - Adjusted net earnings* for the quarter of
$56.6 million , or$0.53 per share, down$2.5 million and$0.04 , respectively, compared to Q4 2018. The impact of adopting IFRS 16 - Leases represents a decrease of approximately$5 .9 million or$0.06 per share. Adjusted net earnings was negatively impacted by non-cash items, including a write-off of leasehold capital assets related to US operations with after-tax impact of$18 .5 million or$0.18 per share, as well as increased amortization, mainly due to the finalization of fair values of intangible assets acquired in the Louis Berger acquisition fromDecember 2018 . - Quarterly dividend declared of
$0.375 per share, with a 42.3% Dividend Reinvestment Plan (“DRIP”) participation.
FISCAL YEAR 2019 FINANCIAL HIGHLIGHTS
- Revenues and net revenues for the year reached
$8.9 billion and$6.9 billion , up 12.7% and 14.4%, respectively, compared to 2018. Organic growth in net revenues of 3.5% for the year, spanning across all reportable segments, in line with Management's expectations for the year. - Earnings before net financing expense and income taxes in 2019 of
$487.8 million , up$89 .7 million, or 22.5%, compared to 2018. This metric was negatively impacted by non-cash items, including a$25 .3‑million write-off of leasehold capital assets related to US operations. - Adjusted EBITDA in the year of
$1,036.8 million , up$376.8 million or 57.1%, compared to$660.0 million in 2018. The impact of adopting IFRS 16 - Leases, effectiveJanuary 1, 2019 , represents$250 .1 million of the increase. The remaining increase of$126.7 million or 19.2% compared to 2018, stems mainly from an overall increase in net revenues, increased margins inCanada and lower head office corporate costs. - Adjusted EBITDA margin for 2019 reached 15.1%, compared to 11.0% in 2018. The impact of adopting IFRS 16 - Leases represents 3.6% of net revenues. The remaining increase, compared to 2018, stems mainly from increased margins in
Canada and lower head office corporate costs. - Net earnings attributable to shareholders of
$286.5 million in 2019, or$2.72 per share, up$38 .4 million and$0.34 , respectively, compared to 2018. The impact of adopting IFRS 16 - Leases represents a decrease of approximately$23 .2 million or$0.22 per share. Net earnings was also negatively impacted by non-cash items, including a write-off of leasehold capital assets related to US operations, with after tax impact of$18 .5 million, or$0.18 per share. - Adjusted net earnings for 2019 of
$326.7 million , or$3.10 per share, up$31.5 million compared to 2018. The impact of adopting IFRS 16 - Leases represents a decrease of approximately$23 .2 million or$0.22 per share. Adjusted net earnings were negatively impacted by non-cash items, including a write-off of leasehold capital assets related to US operations, with after tax impact of$18 .5 million, or$0.18 per share. - Backlog* as at
December 31, 2019 stood at$8.1 billion , representing 10.6 months of revenues, up$453 .1 million or 5.9% from$7.7 billion as atDecember 31, 2018 . Backlog organic growth reached 3.6% compared toDecember 31, 2018 . - DSO* as at
December 31, 2019 stood at 74 days, slightly better than 76 days as atDecember 31, 2018 . - Cash inflows from operating activities of
$814.3 million in the year endedDecember 31, 2019 , compared to$669.7 million in the comparable period in 2018. - Free cash flow* of
$441 .6 million, representing 154% of net earnings attributable to shareholders. - Incorporating a full year adjusted EBITDA for all acquisitions*, net debt to adjusted EBITDA ratio* stood at 1.1x, within Management's 2019 outlook target range.
- Full year dividends declared of
$1.50 per share, or$158.0 million , with cash payout of$80.9 million or 51.2%.
“As we close the first year of our 2019-2021 Global Strategic Plan, I am pleased with our 2019 performance, which was fueled by both organic and acquisitive growth. I would like to thank all employees for delivering this performance and for their continued dedication to WSP. Once again, I would also like to welcome all of our new colleagues who had joined us from near and far over the last year, and whose addition will continue to evolve how we serve our clients,” said Alexandre L’Heureux, President & CEO of WSP. “With our differentiated capabilities we have built across geographies and the disciplined management of our business, we are well-positioned to continue driving sustainable, profitable growth and delivering value for our clients, people and shareholders. We remain confident in our ability to meet our 2019-2021 Global Strategic Plan ambitions by the end of 2021.”
OUTLOOK FOR 2020
This outlook is provided as at
Management expects the Corporation's results for the year ending
| 2020 TARGET RANGE | |
| Net revenues* | Between |
| Adjusted EBITDA* | Between |
| Seasonality and adjusted EBITDA* fluctuations | Between 18.5% and 30.5%, Q1 being the lowest and Q3 being the highest |
| DSO* | 75 to 80 days |
| Net capital expenditures** | Between |
| Acquisition, integration and restructuring costs | Between |
| * | Non-IFRS measures. These measures are defined in section 22, “Glossary of non-IFRS measures and segment reporting measures” and reconciliations to IFRS measures can be found in section 8, "Financial Review" of the management's discussion and analysis for the year ended |
| ** | Capital expenditures pertaining to property and equipment and intangible assets, net of proceeds from disposal and lease incentives received. |
Underlying Assumptions
The Corporation cautions that the assumptions used to prepare the 2020 outlook could be incorrect or inaccurate. Accordingly, the Corporation’s actual results could differ materially from the Corporation’s expectations as set out in this press release.
The target ranges presented in the preceding table were prepared assuming no fluctuations in foreign exchange rates in markets in which the Corporation operates. In the 2020 forecasts, the Corporation did not consider any dispositions, mergers, business combinations and other transactions that may occur after the publication of this press release. In the 2020 target ranges, the Corporation considered numerous economic and market assumptions regarding the competition, political environment and economic performance of each region where it operates. In preparing its 2020 forecasts, the Corporation also assumed that economic factors and market competition in regions where it operates would remain stable.
The forecasts were prepared using tax rates enacted as of
The Corporation manages it capital structure to achieve a net debt to adjusted EBITDA ratio between 1.0 and 2.0.
For 2020, the Corporation anticipates consolidated organic growth in net revenues, spanning across all reportable segments, on a constant currency basis, in the range of 2% to 5%. Head office corporate costs for 2020 are expected to range between
The Corporation anticipates mid-single-digit organic growth in net revenues for its Canadian operations as Management expects public sector delays in transportation project starts in
The Corporation anticipates growth for the US operations as revenue synergies with
In
On a consolidated basis, we anticipated mid-single-digit organic growth in net revenues for the
EMEIA (
As a whole, the EMEIA reportable segment is anticipated to deliver low-single-digit organic growth in net revenues by segment in 2020.
In the Nordics region, economic indicators continue to point towards a cooling off period. In the
APAC (
The Corporation anticipates another solid year from its Australian and
Asian operations posted mid-single-digit organic growth in net revenues in 2019. As a whole, Management anticipates low-single-digit organic growth in net revenues for 2020 for
As a whole, we anticipate the APAC region to deliver mid- to high-single-digit organic growth in net revenues in 2020.
DIVIDEND
FINANCIAL REPORT
This release includes, by reference, the 2019 financial reports, including the audited consolidated financial statements and the Management’s Discussion & Analysis (“MD&A”) of the Corporation.
For a copy of our 2019 financial results, including the MD&A and the audited consolidated financial statements, please visit our website at www.wsp.com.
CONFERENCE CALL
WSP will hold a conference call at
A presentation of the 2019 fourth quarter results and fiscal highlights will be available on the same day at www.wsp.com in the Investors section, under Presentations & Events.
The conference call and slideshow presentation will also be broadcasted live and archived in the Investors section of the WSP website.
RESULTS OF OPERATIONS
| Fourth quarters ended | Year ended | |||||||||||
| (in millions of dollars, except number of shares and per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||
| Revenues | $2,209.3 | $2,043.9 | $8,916.1 | $7,908.1 | ||||||||
| Less: Subconsultants and direct costs | ||||||||||||
| Net revenues* | $1,760.7 | $1,541.0 | $6,886.3 | $6,020.6 | ||||||||
| Earnings before net financing expense and income taxes | $82.7 | $91.7 | $487.8 | $398.1 | ||||||||
| Net financing expense | ||||||||||||
| Earnings before income taxes | $54.3 | $59.7 | $385.8 | $329.3 | ||||||||
| Income tax expense | ||||||||||||
| Net earnings | $40.8 | $43.4 | $285.7 | $248.8 | ||||||||
| Net earnings attributable to: | ||||||||||||
| Shareholders of | ||||||||||||
| Non-controlling interests | ||||||||||||
| Basic net earnings per share | $0.38 | $0.41 | $2.72 | $2.38 | ||||||||
| Diluted net earnings per share | $0.38 | $0.41 | $2.71 | $2.38 | ||||||||
| Basic weighted average number of shares | 105,885,503 | 104,387,699 | 105,235,267 | 104,150,041 | ||||||||
| Diluted weighted average number of shares | 106,076,127 | 104,614,276 | 105,613,623 | 104,392,368 | ||||||||
| * | Non-IFRS measures. These measures are defined in section 22, “Glossary of non-IFRS measures and segment reporting measures” and reconciliations to IFRS measures can be found in section 8, "Financial Review" of the management's discussion and analysis for the year ended |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (AUDITED)
References to notes refer to notes in the financial statements
| As at | 2019 | 2018 |
| $ | $ | |
| Assets | ||
| Current assets | ||
| Cash | 255.6 | 254.7 |
| Trade receivables and other receivables (note 14) | 1,767.8 | 1,758.6 |
| Cost and anticipated profits in excess of billings (note 15) | 995.7 | 1,116.1 |
| Other financial assets (note 16) | 114.5 | 100.6 |
| Prepaid expenses | 104.2 | 99.0 |
| Income taxes receivable | 18.8 | 13.6 |
| 3,256.6 | 3,342.6 | |
| Non-current assets | ||
| Right-of-use assets (note 17) | 913.4 | — |
| Property and equipment (note 18) | 347.7 | 350.6 |
| Intangible assets (note 19) | 355.4 | 367.7 |
| 3,568.8 | 3,493.2 | |
| Deferred income tax assets (note 12) | 145.8 | 116.1 |
| Other assets (note 21) | 88.4 | 96.4 |
| 5,419.5 | 4,424.0 | |
| Total assets | 8,676.1 | 7,766.6 |
| Liabilities | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (note 22) | 1,650.7 | 1,693.7 |
| Billings in excess of costs and anticipated profits (note 15) | 629.0 | 678.3 |
| Income taxes payable | 125.3 | 52.1 |
| Provisions (note 23) | 71.8 | 93.8 |
| Dividends payable to shareholders (notes 12 and 27) | 39.7 | 39.2 |
| Current portion of lease liabilities (note 17) | 211.7 | — |
| Current portion of long-term debt (note 24) | 307.8 | 56.8 |
| 3,036.0 | 2,613.9 | |
| Non-current liabilities | ||
| Long-term debt (note 24) | 1,091.9 | 1,467.9 |
| Lease liabilities (note 17) | 838.9 | — |
| Provisions (note 23) | 72.8 | 153.1 |
| Retirement benefit obligations (note 9) | 213.4 | 197.7 |
| Deferred income tax liabilities (note 12) | 91.2 | 74.3 |
| 2,308.2 | 1,893.0 | |
| Total liabilities | 5,344.2 | 4,506.9 |
| Equity | ||
| Equity attributable to shareholders of | 3,330.8 | 3,259.0 |
| Non-controlling interests | 1.1 | 0.7 |
| Total equity | 3,331.9 | 3,259.7 |
| Total liabilities and equity | 8,676.1 | 7,766.6 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (AUDITED)
References to notes refer to notes in the financial statements
| For the years ended | 2019 | 2018 | ||
| $ | $ | |||
| Operating activities | ||||
| Net earnings | 285.7 | 248.8 | ||
| Adjustments (note 28) | 435.4 | 171.1 | ||
| Net financing expense (note 11) | 102.0 | 68.8 | ||
| Income tax expense (note 12) | 100.1 | 80.5 | ||
| Income taxes paid | (79.8 | ) | (73.9 | ) |
| Change in non-cash working capital items (note 28) | (29.1 | ) | 174.4 | |
| Cash inflows from operating activities | 814.3 | 669.7 | ||
| Financing activities | ||||
| Dividends paid to shareholders of | (77.6 | ) | (78.1 | ) |
| Net (repayment) proceeds of long-term debt | (96.6 | ) | 213.5 | |
| Net financing expenses paid | (69.0 | ) | (59.1 | ) |
| Lease payments (note 17) | (260.7 | ) | — | |
| Issuance of common shares, net of issuance costs | 13.3 | 1.4 | ||
| Dividends paid to a non-controlling interest | (6.2 | ) | — | |
| Cash (outflows) inflows from financing activities | (496.8 | ) | 77.7 | |
| Investing activities | ||||
| Net disbursements related to business acquisitions | (220.9 | ) | (556.7 | ) |
| Lease incentives received | 25.3 | — | ||
| Additions to property and equipment, excluding business acquisitions | (122.4 | ) | (98.1 | ) |
| Additions to identifiable intangible assets, excluding business acquisitions | (26.6 | ) | (28.7 | ) |
| Proceeds from disposal of property and equipment | 11.7 | 4.5 | ||
| Dividends received from associates | 10.8 | — | ||
| Other | — | 0.9 | ||
| Cash outflows from investing activities | (322.1 | ) | (678.1 | ) |
| Effect of exchange rate change on cash | (12.0 | ) | 6.0 | |
| Change in net cash | (16.6 | ) | 75.3 | |
| Cash, net of bank overdraft – beginning of the year | 253.9 | 178.6 | ||
| Cash, net of bank overdraft - end of the year (note 28) | 237.3 | 253.9 | ||
NON-IFRS MEASURES
The Corporation reports its financial results in accordance with IFRS. However, in this press release, the following non-IFRS measures are used by the Corporation: net revenues; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted net earnings; adjusted net earnings per share; backlog; free cash flow; days sales outstanding (“DSO”) and net debt to adjusted EBITDA. Additional details for these non-IFRS measures can be found in WSP’s MD&A for the year ended
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 meanings prescribed under IFRS and may differ from similarly named 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 engineering and design services to clients in the Transportation & Infrastructure, Property & Buildings, Environment, Power & Energy, Resources and Industry sectors, as well as offering strategic advisory services. WSP experts include engineers, advisors, technicians, scientists, architects, planners, environmental specialists and surveyors, in addition to other design, program and construction management professionals. With approximately 50,000 talented
people globally, WSP is uniquely positioned to deliver successful and sustainable projects, wherever clients need us. 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
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Senior Vice President, Investor Relations and Communications
Tel: (438) 843-7548
isabelle.adjahi@wsp.com
2020 GlobeNewswire, Inc., source
