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WSP Reports Strong Q3 2019 and Year-To-Date Results

MONTREAL, Nov. 05, 2019 (GLOBE NEWSWIRE) -- WSP Global Inc. (WSP.TO) (“WSP” or the “Corporation”) today announced financial and operating results for the third quarter of fiscal 2019, which ended on September 28, 2019.


  • Revenues and net revenues* for the quarter reached $2.2 billion and $1.7 billion, up 15.2% and 15.3%, respectively, compared to Q3 2018. Organic growth in net revenues achieved 4.4% for the quarter and 3.3% year-to-date, remaining in line with Management's expectations for the year.

  • Earnings before net financing expense and income taxes in the quarter of $168.7 million, up $44.2 million, or 35.5%, compared to Q3 2018.

  • Adjusted EBITDA* in the quarter of $288.2 million, up $100.7 million or 53.7%, compared to $187.5 million in Q3 2018. The significant increase in adjusted EBITDA is due, in large part, to the adoption of IFRS 16 - Leases, effective January 1, 2019. Excluding the estimated impact of IFRS 16 - Leases, pro forma adjusted EBITDA* for Q3 2019 would have stood at $224.0 million, an increase of $36.5 million or 19.5% compared to Q3 2018.

  • Adjusted EBITDA margin* for the quarter reached 17.0%, compared to 12.7% in Q3 2018. The significant increase in adjusted EBITDA margin is due, in large part, to the adoption of IFRS 16 - Leases. Excluding the estimated impact of IFRS 16 - Leases, pro forma adjusted EBITDA margin* would have stood at 13.2%.

  • Net earnings attributable to shareholders for the quarter of $93.7 million, or $0.89 per share, up $6.0 million and $0.05, respectively, compared to Q3 2018. Excluding the estimated impact of IFRS 16 - Leases, pro forma net earnings attributable to shareholders** would have stood at approximately $98.8 million or $0.94 per share.

  • Adjusted net earnings* for the quarter of $99.8 million, or $0.95 per share, up $0.5 million and stable, respectively, compared to Q3 2018. Excluding the estimated impact of IFRS 16 - Leases, pro forma adjusted net earnings would have stood at approximately $104.9 million or $1.00 per share.

  • Backlog* as at September 28, 2019 stood at $7.9 billion, representing 10.5 months of revenues, up $227.0 million or 3.0% from $7.7 billion as at December 31, 2018 and up $1.4 billion or 21.5% when compared to September 29, 2018.  Backlog* organic growth reached 2.4% compared to December 31, 2018 and 4.7% compared to September 29, 2018.

  • DSO* as at September 28, 2019 stood at 80 days, in line with Management expectations, and slightly higher than 76 days as at September 29, 2018 mainly due to the acquisition of Berger Group Holdings, Inc. ("Louis Berger"). Excluding the impact of Louis Berger, pro forma DSO as at September 28, 2019 would have been 76 days.

  • Cash flows from operating activities of $388.8 million in the nine-month period ended September 28, 2019, compared to $332.3 million in the comparable period in 2018.

  • Trailing twelve-month free cash flow* of $423.9 million, representing 147% 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, within our target range. Excluding the estimated impact of the adoption of IFRS 16 - Leases, incorporating a full twelve-month pro forma adjusted EBITDA* for all acquisitions, net debt to adjusted EBITDA ratio* would have stood at 1.7x.

  • Quarterly dividend declared of $0.375 per share, with a 51.2% Dividend Reinvestment Plan (“DRIP”) participation.

  • The integration and restructuring of Louis Berger's operations is proceeding according to plan.

“We are pleased with our Q3 2019 performance, which following a slow start to the year in certain countries, demonstrates the resilience of our business model and the benefits stemming from our scale, and geographic and market diversification. Additionally, our recently-completed acquisitions keep us on track to achieve our 2019-2021 Global Strategic Plan objectives,” said Alexandre L’Heureux, President and CEO of WSP. “With our solid year-to-date performance, we now expect our full year 2019 net revenues and adjusted EBITDA to reach the high end of the outlook range provided in the
Q2 MD&A” he added.

WSP announced today that, effective March 2020, Alain Michaud, currently Senior Vice-president, Operational Performance and Strategic Initiatives will assume the position of Chief Financial Officer. This follows the announcement that after a successful 3-year tenure, Bruno Roy will be leaving WSP at the end of March 2020 to pursue new professional and personal opportunities. Until then, Bruno will continue in his current role and will work closely with Alain, to ensure a smooth transition.

“On behalf of everyone at WSP and our Board of Directors I would like to thank Bruno for his financial leadership during the last 3 years and many contributions to our improved business performance. Bruno has been a valued member of our Global Leadership Team and has contributed not only to the successful completion of WSP’s 2015-2018 Global Strategic Plan, but also, as demonstrated by year-to-date results, to the successful start of the 2019-2021 Global Strategic Plan,” said Alexandre L’Heureux, WSP’s President and Chief Executive Officer. “I wish him every success in all his future endeavours.”

Bruno Roy commented: “I would like to personally thank the Board of Directors, Alex and our Global Leadership Team for the privilege of serving as CFO of WSP. I have been with the firm for three years and take pride in our accomplishments to date. I leave the company both financially and operationally strong and I am very confident that WSP will continue to deliver value for employees, clients and shareholders. I am proud to have been part of WSP and its talented team.”

Alain Michaud joined WSP in March 2019 as Senior Vice President, Operational Performance and Strategic Initiatives. In his new role, he will be leading WSP’s overall financial activities and global finance organization, including financial planning and analysis, capital structure, tax, management of corporate assets and risks, internal audit and treasury. Alain brings over 25 years of global finance experience, mostly as senior partner at PwC Canada. He holds a bachelor’s degree in business administration from the University of Sherbrooke and obtained his CPA, CA designation in 1997. Alain will continue to report to Alexandre L’Heureux and will remain a member of WSP’s Global Leadership Team.

“We are pleased to welcome Alain to his new role. Since joining WSP, he has already made an impact in providing leadership to our team. Alain’s professional experience, his intimate knowledge of WSP and his professional services background make him ideally suited for this key leadership role and to supporting WSP’s vision and growth objectives. The process to develop a transition plan for Alain’s current role is underway” added Alexandre L’Heureux. 

The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about January 15, 2020, to shareholders of record at the close of business on December 31, 2019.

This release includes, by reference, the 2019 third quarter financial report, including the unaudited interim consolidated financial statements and the MD&A of the Corporation.

For a copy of our full financial results for the third quarter of 2019, including the MD&A and the unaudited interim consolidated financial statements, please visit our website at www.wsp.com.

WSP will hold a conference call at 8 a.m. (Eastern Time) on November 6, 2019 to discuss these results.

To participate in the conference call, dial 1-647-427-2309 or 1-866-521-4907 (toll free).

A presentation of the 2019 third quarter results 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.

  Third quarter ended Nine months ended
(in millions of dollars, except number of shares and per share data) September 28,

  September 29,

  September 28,

  September 29,

Revenues $2,221.5   $1,927.6   $6,706.8   $5,864.2  
Less: Subconsultants and direct costs $527.9   $458.8   $1,581.2   $1,384.6  
Net revenues* $1,693.6   $1,468.8   $5,125.6   $4,479.6  
Adjusted EBITDA* $288.2   $187.5   $770.5   $490.5  
Acquisition, integration and restructuring costs $8.3   $15.2   $32.7   $40.6  
EBITDA* $279.9   $172.3   $737.8   $449.9  
Amortization of intangible assets $23.1   $23.7   $72.0   $72.7  
Depreciation of property and equipment $24.9   $22.9   $73.2   $67.2  
Depreciation of right-of-use assets $60.6   $—   178.8   $—  
Share of depreciation and taxes of associates $2.0   $0.3   $5.1   $1.0  
Deduct: Interest income ($0.6 ) ($0.9 ) ($3.6 ) ($2.6 )
Earnings before net financing expense and income taxes $168.7   $124.5   $405.1   $306.4  
Net financing expense $41.5   $9.8   $73.6   $36.8  
Earnings before income taxes $127.2   $114.7   $331.5   $269.6  
Income tax expense $33.5   $26.8   $86.6   $64.2  
Net earnings $93.7   $87.9   $244.9   $205.4  
Net earnings attributable to:        
Shareholders of WSP Global Inc. $93.7   $87.7    $246.0   $204.8   
Non-controlling interests $—   $0.2    $(1.1 ) $0.6   
Basic net earnings per share $0.89   $0.84   $2.34   $1.97  
Diluted net earnings per share $0.89   $0.84   $2.33   $1.97  
Basic weighted average number of shares 105,317,110   104,071,770   105,012,335   103,861,665  
Diluted weighted average number of shares 105,735,978   104,338,927   105,439,494   104,109,088  

*     Non-IFRS measures and reference to the reconciliation to the most directly comparable IFRS measure, where applicable, are described in the “Glossary” section of the Corporation’s MD&A for the third quarter ended September 28, 2019.
**   Pro forma net earnings attributable to shareholders is a proxy calculation of net earnings attributable to shareholders as if the Corporation had not adopted of IFRS 16 - Leases effective January 1, 2019. This is a non-IFRS measure without a standardized definition within IFRS. Other issuers may define a similarly-named measure differently and, accordingly, this measure may not be comparable to similar measures used by other issuers. This metric provides a comparative measure of the Corporation’s performance in 2019 as compared to 2018.

      As at  
(in millions of Canadian dollars) September 28, 2019   December 31, 2018  
Assets $   $  
Current assets    
Cash (note 4) 215.2   254.7  
Trade receivables, prepaid expenses and other receivables 1,799.2   1,857.6  
Income taxes receivable 13.3   13.6  
Cost and anticipated profits in excess of billings 1,165.4   1,116.1  
  3,193.1   3,242.0  
Non-current assets    
Right-of-use assets (note 5) 909.0    
Property and equipment 324.6   350.6  
Intangible assets 297.3   367.7  
Goodwill (note 6) 3,448.2   3,493.2  
Deferred income tax assets 121.9   116.1  
Other assets 213.4   197.0  
  5,314.4   4,524.6  
Total assets 8,507.5   7,766.6  
Current liabilities    
Accounts payable and accrued liabilities 1,578.8   1,787.5  
Billings in excess of costs and anticipated profits 653.9   678.3  
Income taxes payable 53.0   52.1  
Dividends payable to shareholders (note 12) 39.6   39.2  
Current portion of lease liability (note 5) 196.9    
Current portion of long-term debt (note 7) 41.5   56.8  
  2,563.7   2,613.9  
Non-current liabilities    
Long-term debt (note 7) 1,475.8   1,467.9  
Lease liability (note 5) 822.9    
Provisions 77.1   153.1  
Retirement benefit obligations 221.6   197.7  
Deferred income tax liabilities 70.5   74.3  
  2,667.9   1,893.0  
Total liabilities 5,231.6   4,506.9  
Equity attributable to shareholders of WSP Global Inc. 3,282.0   3,259.0  
Non-controlling interest (6.1 ) 0.7  
Total equity 3,275.9   3,259.7  
Total liabilities and equity 8,507.5   7,766.6  

  Third quarter ended
    Year-to-date ended
(in millions of Canadian dollars) September 28,
  September 29,
    September 28,
  September 29,
  $   $     $   $  
Operating activities          
Net earnings for the period 93.7   87.9     244.9   205.4  
Adjustments (note 13a) 110.4   17.3     290.8   98.4  
Income tax expense 33.5   26.8     86.6   64.2  
Income taxes paid (21.4 ) (10.7 )   (68.4 ) (51.8 )
Net financing expense (note 11) 41.5   9.8     73.6   36.8  
Change in non-cash working capital items (note 13b) 6.8   130.3     (238.7 ) (20.7 )
Cash flows from operating activities 264.5   261.4     388.8   332.3  
Financing activities          
Dividends paid to shareholders of WSP Global Inc. (19.1 ) (19.5 )   (58.3 ) (59.3 )
Net repayment of long-term debt (135.7 ) (180.7 )   (1.1 ) (120.0 )
Net financing expenses paid (28.3 ) (11.0 )   (47.1 ) (37.7 )
Lease payments (note 5) (63.7 )     (193.7 )  
Issuance of common shares, net of issuance costs 12.3   0.4     12.8   1.4  
Dividends paid to a non-controlling interest (5.7 )     (5.7 )  
Cash flows from financing activities (240.2 ) (210.8 )   (293.1 ) (215.6 )
Investing activities          
Business acquisitions (39.5 ) (1.5 )   (95.0 ) (47.1 )
Additions to property and equipment (20.1 ) (17.5 )   (56.5 ) (56.1 )
Proceeds from disposal of property and equipment 2.2   1.1     10.6   2.3  
Additions to intangible assets (5.6 ) (6.8 )   (15.7 ) (21.5 )
Other   0.1       0.9  
Net investment decrease in associates and joint ventures 3.8       3.8    
Cash flows from investing activities (59.2 ) (24.6 )   (152.8 ) (121.5 )
Effect of exchange rate change on cash (1.4 ) (5.1 )   (8.8 ) (2.2 )
Change in net cash (36.4 ) 20.9     (66.0 ) (7.0 )
Cash, net of bank overdraft – beginning of period 224.3   150.7     253.9   178.6  
Cash, net of bank overdraft - end of period (note 4) 188.0   171.6     188.0   171.6  

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 third quarter ended September 28, 2019, 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 meanings 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.

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. 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 49,500 talented people globally, we are uniquely positioned to deliver successful and sustainable projects, wherever our clients need us. wsp.com 

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, 2018, 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. 


Isabelle Adjahi
Senior Vice President, Investor Relations and Communications
WSP Global Inc.
Tel: (438) 843-7548