(MENAFN- GlobeNewsWire - Nasdaq) MONTREAL, Nov. 06, 2024 (GLOBE NEWSWIRE) -- WSP Global Inc. (TSX: WSP) (“WSP” or the“Corporation”), one of the world's leading and largest professional services firms, today announced financial and operating results for the third quarter ended September 28, 2024.
| | Third quarters ended | Nine-month periods ended |
| (in millions of dollars, except percentages, per share data, DSO and ratios) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 |
| Revenues | $3,983.9 | $3,597.4 | $11,501.9 | $10,712.9 |
| Net revenues(1) | $2,996.9 | $2,734.8 | $8,778.2 | $8,141.0 |
| Earnings before net financing expense and income taxes | $351.7 | $292.7 | $923.2 | $736.5 |
| Adjusted EBITDA(2) | $585.4 | $521.5 | $1,551.4 | $1,396.4 |
| Adjusted EBITDA margin(2) | 19.5% | 19.1% | 17.7% | 17.2% |
| Net earnings attributable to shareholders of WSP Global Inc. | $203.6 | $156.2 | $514.5 | $419.4 |
| Basic net earnings per share attributable to shareholders | $1.63 | $1.25 | $4.13 | $3.37 |
| Adjusted net earnings(2) | $279.8 | $246.4 | $709.6 | $612.2 |
| Adjusted net earnings per share(2) | $2.24 | $1.98 | $5.69 | $4.91 |
| Cash inflows from operating activities | $415.5 | $149.5 | $608.6 | $209.7 |
| Free cash flow(2) | $291.8 | $21.1 | $242.0 | $(177.2) |
| As at | | | September 28, 2024 | September 30, 2023 |
| Backlog | | | $14,838.7 | $14,276.4 |
| Approximate number of employees | | | 69,900 | 67,000 |
| DSO(3) | | | 80 days | 77 days |
| As at | | | September 28, 2024 | December 31, 2023 |
| Net debt to adjusted EBITDA ratio(3) | | | 1.5 | 1.5 |
| (1) | Quantitative reconciliations of net revenues to revenues are presented below under the caption "Non-IFRS and other financial measures". |
| (2) | Non-IFRS financial measure or non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar measures or ratios used by other issuers. Quantitative reconciliations of non-IFRS financial measures to the most directly comparable IFRS measures are presented below under the caption "Non-IFRS and other financial measures". Adjusted EBITDA margin is defined as adjusted EBITDA expressed as a percentage of net revenues. Adjusted net earnings per share is the ratio of adjusted net earnings divided by the basic weighted average number of shares outstanding for the period. This press release incorporates by reference section 19,“Glossary of segment reporting, non-IFRS and other financial measures”, of WSP's MD&A for the third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at , which includes explanations of the composition and usefulness of these non-IFRS financial measures and non-IFRS ratios. |
| (3) | This press release incorporates by reference section 19,“Glossary of segment reporting, non-IFRS and other financial measures”, of WSP's MD&A for the third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at , which explains the composition of the supplemental financial measures, as well as the usefulness of the net debt to adjusted EBITDA ratio, which is a capital management measure composed of the ratio of net debt to adjusted EBITDA for the trailing twelve-month period. Net debt is defined as long-term debt, including current portions but excluding lease liabilities, and net of cash. Adjusted EBITDA and earnings before net financing expense and income taxes for the trailing twelve months ended September 28, 2024 amounted to $2,076.3 million and $1,134.2 million, respectively. Days sales outstanding (“DSO”) represents the average number of days to convert the Corporation's trade receivables (net of sales taxes) and costs and anticipated profits in excess of billings, net of billings in excess of costs and anticipated profits, into cash. |
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THIRD QUARTER OF 2024 FINANCIAL HIGHLIGHTS
In the third quarter of 2024, WSP delivered solid growth in net revenues, improved profitability, strong cash flows from operations and a record-high backlog.
Revenues and net revenues for the quarter reached $3.98 billion and $3.00 billion, up 10.7% and 9.6%, respectively, compared to the third quarter of 2023. Net revenue organic growth of 7.2%(1) in the quarter is attributable to all reportable segments, led by the US, Canada, the Middle East and the UK.
Backlog as at September 28, 2024 reached a new record level of $14.8 billion, representing 11.6 months of revenues(2).
Adjusted EBITDA in the quarter grew to $585.4 million, compared to $521.5 million in the third quarter of 2023, an increase of 12.3%.
Adjusted EBITDA margin for the quarter increased by 40 basis points ("bps") to 19.5%, compared to 19.1% in the third quarter of 2023. The improvement is mainly attributable to increased productivity, partially offset by lower performance in the APAC reportable segment.
Earnings before net financing expense and income taxes in the quarter stood at $351.7 million, up $59.0 million or 20.2%, compared to the third quarter of 2023.
Adjusted net earnings for the quarter reached $279.8 million, or $2.24 per share, up 13.6% and 13.1%, respectively, compared to the third quarter of 2023. The increase is mainly attributable to higher adjusted EBITDA.
Net earnings attributable to shareholders for the quarter reached $203.6 million, or $1.63 per share, up 30.3% and 30.4%, respectively, compared to $156.2 million, or $1.25 per share, in the third quarter of 2023. The increase is mainly due to higher adjusted EBITDA, partially offset by higher net financing expenses.
DSO as at September 28, 2024 stood at 80 days, and is expected to return within Management's outlook range by year end.(3)
Cash inflows from operating activities were $608.6 million in the nine-month period ended September 28, 2024, increased compared to $209.7 million in the corresponding period in 2023. Free cash inflow was $242.0 million for the nine-month period ended September 28, 2024, representing an improvement of $419.2 million compared to free cash outflow of $177.2 million in the corresponding period in 2023. The trailing twelve months of free cash flow amounted to $852.3 million, representing 1.3 times the net earnings attributable to shareholders (the trailing twelve months of cash inflows from operating activities was $1,385.2 million).(4) The improvement in free cash flow is mainly due to lower usage of working capital, higher adjusted EBITDA, and lower income taxes paid.
Net debt to adjusted EBITDA ratio stood at 1.5x, within Management's target range of 1.0x to 2.0x.
Quarterly dividend declared of $0.375 per share, or $46.8 million, which was paid subsequent to the end of the third quarter on October 15, 2024.
Mr. Mark Naysmith was appointed to the role of Global Chief Operating Officer effective January 2025.
| (1) | Supplemental financial measure. Net revenue organic growth represents the period-over-period change in net revenues, excluding net revenues of businesses acquired or divested in the twelve months following the acquisition or prior to the divestiture, expressed as a percentage of the comparable period net revenues, adjusted to exclude net revenues of divested businesses, all calculated to exclude the impact of foreign exchange. |
| (2) | Based on revenues for the trailing twelve-month period, incorporating a full twelve months of revenues for all acquisitions. |
| (3) | This information constitutes forward-looking information, based on multiple estimates and assumptions about future events. The reader is cautioned that using this information for other purposes may be inappropriate. Actual results may differ and such differences may be material. Refer to section 16, "Forward-Looking Statements" of WSP's MD&A for the third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at , for additional information. |
| (4) | Non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar ratios used by other issuers. The ratio is defined as the trailing twelve months of free cash flow to trailing twelve months of net earnings attributable to shareholders. The ratio of free cash flow to net earnings attributable to shareholders for the twelve months ended September 30, 2023 was 0.5. Refer to section 19,“Glossary of segment reporting, non-IFRS and other financial measures” of WSP's MD&A for the third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at , for references to the non-IFRS financial measure which is a components of this non-IFRS ratio, and the usefulness of this non-IFRS ratio. |
| | |
“Building on our strong first half of the year, our teams have delivered robust organic growth and profitability,” said Alexandre L'Heureux, President and CEO, WSP Global.“This is a testament to the strength of our platform and the sustained demand for the high quality services offered by our scientists and engineers. We are excited to be onboarding our new colleagues from POWER Engineers while executing on our strategy with discipline. I am also pleased to announce the appointment of Mark Naysmith to the role of Global Chief Operating Officer and am confident he will help drive growth and operational excellence to further leverage the scale of our business.”
OUTLOOK FOR 2024
The Corporation's financial outlook for 2024 is intended to assist analysts and shareholders in formalizing their respective views on the year ending December 31, 2024. The reader is cautioned that using this information for other purposes may be inappropriate. This information constitutes forward-looking information, based on multiple estimates and assumptions about future events. Actual results may differ, and such differences may be material. Expectations are also subject to a number of risks and uncertainties as well as material assumptions contained in this press release and in WSP's MD&A for the fourth quarter and year ended December 31, 2023. Please see the section below entitled:“Forward-Looking Statements”. The Corporation cautions that the assumptions used to prepare the 2024 outlook could prove to be incorrect or inaccurate. Accordingly, WSP's actual results could differ materially from the Corporation's expectations as set out in this press release.
Additionally, the following assumptions are to be taken into consideration: (i) the outlook has been revised to include the acquisition of POWER, completed on October 1st, 2024. Acquisition, integration and reorganization costs to include the acquisition costs of POWER and accruals of incentive awards to be paid to a significant number of employees of POWER and (ii) the Corporation anticipates organic growth in net revenues by segment will be in the mid- to high-single digits in its Canadian operations and Americas operations, in the mid-single digits in its EMEIA operations and in the low single digit in its APAC operations.
The target ranges were prepared assuming no fluctuations in foreign exchange rates in markets in which the Corporation operates. The Corporation did not consider any reorganizations, dispositions, mergers, business combinations or other transactions that may occur after the publication of this press release. In the 2024 target ranges, the Corporation considered numerous economic and market assumptions regarding the competition, political environment and economic performance of each region where it operates.
The 2024 financial outlook* issued on February 28, 2024 (as reiterated on May 8, 2024 and revised on July 29, 2024) is reiterated, as well as key related assumptions, with the exception of the following changes:
| | Revised outlook range | Previous outlook range | Fiscal 2023 Results |
| Revenues | N/A | N/A | $14.44 billion |
| Net revenues | Between $11.8 and $12.1 billion | Between $11.4 billion and $11.8 billion | $10.90 billion |
| Adjusted EBITDA | Between $2.155 billion and $2.175 billion | Between $2.10 billion and $2.14 billion | $1.92 billion |
| Earnings before net financing expense and income taxes | N/A | N/A | $947.5 million |
| Acquisition, integration and reorganization costs | Between $120 million and $135 million | Between $45 million and $65 million | N/A |
| * | This information constitutes forward-looking information, based on multiple estimates and assumptions about future events. The reader is cautioned that using this information for other purposes may be inappropriate. Actual results may differ and such differences may be material. Please refer to the "Forward-Looking Statements" disclaimer below. |
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LEADERSHIP APPOINTMENT
The Corporation is pleased to announce the appointment of Mark Naysmith to the role of Global Chief Operating Officer, effective January 2025. Mr. Naysmith is currently President, EMEIA and has over 35 years of experience in various leadership roles with WSP. In this new role, he will oversee global operations and promote growth, financial performance and collaboration while further leveraging the global scale of the business.
The Corporation is also pleased to confirm that Paul Reilly, who is currently Deputy CEO - UK and Ireland has been appointed as President and Managing Director, WSP UK and Ireland, and will join the Global Leadership Team, effective January 2025.
2025-2027 GLOBAL STRATEGIC ACTION PLAN AND INVESTOR DAY
WSP will launch its 2025-2027 Global Strategic Action Plan on February 12, 2025. A hybrid (in person and virtual) Investor Day will be held on February 13, 2025 in Toronto, Ontario, Canada to discuss the Corporation's new three-year ambitions. This event will include insights from several key WSP leaders.
To participate in the event, register by accessing .
DIVIDEND
The Board of Directors of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about January 15, 2025, to shareholders of record at the close of business on December 31, 2024.
FINANCIAL REPORT
This release incorporates, by reference, the financial reports for the third quarter of 2024, including the unaudited interim condensed consolidated financial statements and the Management's Discussion and Analysis ("MD&A") of the Corporation for the third quarter and nine-month period ended on September 28, 2024, which are available on our website at . These documents are also available on SEDAR+ at .
WEBCAST
WSP will hold a conference call and webcast from 8:00 a.m. to 9:00 a.m. (Eastern Time) on November 7, 2024, to discuss these results.
To participate in the conference call, please pre-register using this link . Registrants will receive a confirmation with dial-in details. A live webcast of the conference call can be accessed using this link .
For those unable to attend, a replay will be available within 24 hours following the call under the "Investors" section of the website.
A presentation of the third quarter of 2024 highlights and results will be accessible on November 6, 2024, after market close under the“Investors” section of the WSP website at .
RESULTS OF OPERATIONS
| | Third quarters ended | Nine-month periods ended |
| (in millions of dollars, except number of shares and per share data) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 |
| Revenues | $ 3,983.9 | $ 3,597.4 | $11,501.9 | $10,712.9 |
| Less: Subconsultants and direct costs | $987.0 | $862.6 | $2,723.7 | $2,571.9 |
| Net revenues | $ 2,996.9 | $ 2,734.8 | $ 8,778.2 | $ 8,141.0 |
| Earnings before net financing expense and income taxes | $ 351.7 | $ 292.7 | $ 923.2 | $ 736.5 |
| Net financing expense | $79.4 | $74.6 | $222.3 | $155.2 |
| Earnings before income taxes | $ 272.3 | $ 218.1 | $ 700.9 | $ 581.3 |
| Income tax expense | $68.7 | $61.0 | $186.4 | $159.6 |
| Net earnings | $ 203.6 | $ 157.1 | $ 514.5 | $ 421.7 |
| Net earnings attributable to: | | | | |
| Shareholders of WSP Global Inc. | $203.6 | $156.2 | $514.5 | $419.4 |
| Non-controlling interests | - | $0.9 | - | $2.3 |
| Basic net earnings per share attributable to shareholders | $ 1.63 | $ 1.25 | $ 4.13 | $ 3.37 |
| Diluted net earnings per share attributable to shareholders | $ 1.63 | $ 1.25 | $ 4.11 | $ 3.36 |
| Basic weighted average number of shares | 124,687,754 | 124,626,810 | 124,686,424 | 124,589,056 |
| Diluted weighted average number of shares | 125,088,690 | 124,963,588 | 125,077,815 | 124,919,495 |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in millions of Canadian dollars)
References to notes refer to notes in the unaudited interim condensed consolidated financial statements of the relevant period.
| As at | September 28, 2024 | December 31, 2023 |
| | $ | $ |
| Assets | | |
| Current assets | | |
| Cash and cash equivalents (note 15) | 1,373.2 | 378.0 |
| Restricted cash (note 12) | 1,144.2 | - |
| Trade receivables and other receivables | 3,009.3 | 2,726.4 |
| Cost and anticipated profits in excess of billings | 2,482.2 | 1,911.6 |
| Prepaid expenses | 225.5 | 239.4 |
| Other financial assets | 141.7 | 123.3 |
| Income taxes receivable | 18.8 | 38.4 |
| | 8,394.9 | 5,417.1 |
| Non-current assets | | |
| Right-of-use assets (note 9) | 912.8 | 824.2 |
| Intangible assets | 972.3 | 1,104.1 |
| Property and equipment | 432.6 | 435.3 |
| Goodwill (note 10) | 7,399.5 | 7,155.8 |
| Deferred income tax assets | 529.2 | 429.3 |
| Other assets | 240.8 | 217.3 |
| | 10,487.2 | 10,166.0 |
| Total assets | 18,882.1 | 15,583.1 |
| | | |
| Liabilities | | |
| Current liabilities | | |
| Accounts payable and accrued liabilities | 2,634.7 | 2,738.2 |
| Billings in excess of costs and anticipated profits | 1,554.4 | 1,158.0 |
| Subscription receipts held for investors (note 12) | 1,144.2 | - |
| Income taxes payable | 235.8 | 171.0 |
| Provisions | 114.3 | 134.9 |
| Dividends payable to shareholders (note 14) | 46.8 | 46.8 |
| Current portion of lease liabilities (note 9) | 265.7 | 257.5 |
| Current portion of long-term debt (note 11) | 661.5 | 204.2 |
| | 6,657.4 | 4,710.6 |
| Non-current liabilities | | |
| Long-term debt (note 11) | 3,864.1 | 3,058.3 |
| Lease liabilities (note 9) | 806.3 | 744.6 |
| Provisions | 383.7 | 399.3 |
| Retirement benefit obligations | 185.7 | 187.5 |
| Deferred income tax liabilities | 159.9 | 149.4 |
| | 5,399.7 | 4,539.1 |
| Total liabilities | 12,057.1 | 9,249.7 |
| | | |
| Equity | | |
| Equity attributable to shareholders of WSP Global Inc. | 6,825.0 | 6,328.9 |
| Non-controlling interests | - | 4.5 |
| Total equity | 6,825.0 | 6,333.4 |
| Total liabilities and equity | 18,882.1 | 15,583.1 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
References to notes refer to notes in the unaudited interim condensed consolidated financial statements of the relevant period.
| | Third quarters ended | Nine-month periods ended |
| | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 |
| | $ | $ | $ | $ |
| Operating activities | | | | |
| Net earnings | 203.6 | 157.1 | 514.5 | 421.7 |
| Adjustments (note 15) | 141.0 | 134.3 | 428.8 | 433.5 |
| Net financing expense (note 7) | 79.4 | 74.6 | 222.3 | 155.2 |
| Income tax expense | 68.7 | 61.0 | 186.4 | 159.6 |
| Income taxes paid | (69.5) | (41.8) | (193.8) | (250.4) |
| Change in non-cash working capital items (note 15) | (7.7) | (235.7) | (549.6) | (709.9) |
| Cash inflows from operating activities | 415.5 | 149.5 | 608.6 | 209.7 |
| Financing activities | | | | |
| Issuance of senior unsecured notes (note 11) | 995.5 | - | 995.5 | - |
| Net proceeds (repayment) of long-term debt | (187.6) | 13.0 | 170.1 | 542.9 |
| Lease payments (note 9) | (91.5) | (90.4) | (273.8) | (278.8) |
| Net financing expenses paid, excluding interest on lease liabilities | (63.1) | (49.8) | (170.8) | (144.1) |
| Dividends paid to shareholders of WSP Global Inc. | (46.8) | (46.8) | (140.3) | (115.6) |
| Issuance of common shares, net of issuance costs (note 12) | 2.2 | 0.5 | 4.5 | 2.5 |
| Dividends paid to non-controlling interests | - | (0.2) | - | (0.2) |
| Cash inflows from (outflows used in) financing activities | 608.7 | (173.7 ) | 585.2 | 6.7 |
| Investing activities | | | | |
| Net (disbursements) proceeds related to business acquisitions and disposals of businesses | (7.7) | 57.8 | (133.7) | (353.3) |
| Additions to property and equipment, excluding business acquisitions | (30.1) | (36.1) | (87.2) | (98.6) |
| Additions to identifiable intangible assets, excluding business acquisitions | (3.8) | (2.6) | (12.1) | (11.2) |
| Proceeds from disposal of property and equipment | 1.7 | 0.7 | 6.5 | 1.7 |
| Dividends received from associates | 7.9 | 6.5 | 11.5 | 7.8 |
| Other | - | - | (3.6) | 1.0 |
| Cash inflows from (outflows used in) investing activities | (32.0 ) | 26.3 | (218.6 ) | (452.6 ) |
| Effect of exchange rate change on cash and cash equivalents | 3.7 | 0.1 | 1.9 | (9.4) |
| Change in net cash and cash equivalents | 995.9 | 2.2 | 977.1 | (245.6 ) |
| Cash and cash equivalents, net of bank overdraft - beginning of the period | 343.1 | 243.2 | 361.9 | 491.0 |
| Cash and cash equivalents, net of bank overdraft - end of period (note 15) | 1,339.0 | 245.4 | 1,339.0 | 245.4 |
All amounts shown in this press release are expressed in Canadian dollars, unless otherwise indicated. All quarterly information disclosed in this press release is based on unaudited figures.
NON-IFRS AND OTHER FINANCIAL MEASURES
The Corporation reports its financial results in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. WSP uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures are not calculated in accordance with IFRS. Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure (“Regulation 52-112”) prescribes disclosure requirements that apply to the following types of measures used by the Corporation: (i) non-IFRS financial measures; (ii) non-IFRS ratios; (iii) total of segments measures; (iv) capital management measures; and (v) supplemental financial measures.
In this press release, the following non-IFRS and other financial measures are used by the Corporation: net revenues; adjusted EBITDA; adjusted EBITDA margin; adjusted net earnings; adjusted net earnings per share; free cash flow; trailing twelve months of free cash flow to trailing twelve months of net earnings attributable to shareholders; organic net revenue growth (contraction), acquisition net revenue growth; divestiture net revenue impact; organic backlog growth (contraction); days sales outstanding (“DSO”); and net debt to adjusted EBITDA ratio. Additional details for these non-IFRS and other financial measures can be found in section 19,“Glossary of segment reporting, non-IFRS and other financial measures” of WSP's MD&A for the third quarter and nine-month period ended September 28, 2024, which is posted on WSP's website at , and filed on SEDAR+ at . Reconciliations of non-IFRS financial measures and total of segments measures to the most directly comparable IFRS measures are provided below.
Management believes that these non-IFRS and other financial 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 and other financial 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.
| | Reconciliation of net revenues | |
| | The following table reconciles net revenues to the most comparable IFRS measure: | |
| | | Third quarters ended | Nine-month periods ended | Year ended | |
| | (in millions of dollars) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | December 31, 2023 | |
| | Revenues | $ 3,983.9 | $ 3,597.4 | $ 11,501.9 | $ 10,712.9 | $ 14,437.2 | |
| | Less: Subconsultants and direct costs | $987.0 | $862.6 | $2,723.7 | $2,571.9 | $3,540.2 | |
| | Net revenues* | $ 2,996.9 | $ 2,734.8 | $ 8,778.2 | $ 8,141.0 | $ 10,897.0 | |
| | * Total of segments measure. | | |
| | Reconciliation of adjusted EBITDA | | |
| | The following table reconciles this metric to the most comparable IFRS measure: | | |
| | | Third quarters ended | Nine-month periods ended | Year ended | |
| | (in millions of dollars) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | December 31, 2023 | |
| | Earnings before net financing expense and income taxes | $ 351.7 | $ 292.7 | $ 923.2 | $ 736.5 | $ 947.5 | |
| | Acquisition, integration and reorganization costs | $33.4 | $37.9 | $66.3 | $78.7 | $105.0 | |
| | ERP implementation costs | $17.2 | $20.1 | $45.1 | $59.9 | $81.0 | |
| | Depreciation of right-of-use assets | $81.0 | $80.4 | $228.4 | $239.2 | $316.4 | |
| | Amortization of intangible assets | $56.7 | $49.3 | $167.6 | $163.0 | $221.7 | |
| | Depreciation of property and equipment | $35.7 | $33.7 | $99.8 | $95.4 | $135.1 | |
| | Impairment of long-lived assets | - | $1.4 | - | $5.4 | $87.1 | |
| | Share of depreciation and taxes of associates and joint ventures | $3.7 | $3.3 | $12.1 | $10.4 | $14.9 | |
| | Interest income | $6.0 | $2.7 | $8.9 | $7.9 | $12.6 | |
| | Adjusted EBITDA* | $ 585.4 | $ 521.5 | $ 1,551.4 | $ 1,396.4 | $ 1,921.3 | |
| | * Non-IFRS financial measure. | | |
| | Reconciliation of adjusted net earnings | |
| | The following table reconciles this metric to the most comparable IFRS measure: | |
| | | Third quarters ended | Nine-month periods ended | |
| | (in millions of dollars, except per share data) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | |
| | Net earnings attributable to shareholders | $ 203.6 | $ 156.2 | $ 514.5 | $ 419.4 | |
| | Amortization of intangible assets related to acquisitions | $45.7 | $40.6 | $135.4 | $134.5 | |
| | Impairment of long-lived assets | - | $1.4 | - | $5.4 | |
| | Acquisition, integration and reorganization costs | $33.4 | $37.9 | $66.3 | $78.7 | |
| | ERP implementation costs | $17.2 | $20.1 | $45.1 | $59.9 | |
| | Gains on investments in securities related to deferred compensation obligations | $(6.5) | $3.2 | $(17.4) | $(7.7) | |
| | Unrealized losses (gains) on derivative financial instruments | $8.0 | $9.0 | $29.6 | $(18.5) | |
| | Income taxes related to above items | $(21.6) | $(22.0) | $(63.9) | $(59.5) | |
| | Adjusted net earnings* | $ 279.8 | $ 246.4 | $ 709.6 | $ 612.2 | |
| | Adjusted net earnings per share* | $ 2.24 | $ 1.98 | $ 5.69 | $ 4.91 | |
| | * Non-IFRS financial measure or non-IFRS ratio. | |
| | Reconciliation of free cash flow | |
| | The following table reconciles this metric to the most comparable IFRS measure: | |
| | | Third quarters ended | Nine-month periods ended | |
| | (in millions of dollars) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | |
| | Cash inflows from operating activities | $ 415.5 | $ 149.5 | $ 608.6 | $ 209.7 | |
| | Lease payments in financing activities | $(91.5) | $(90.4) | $(273.8) | $(278.8) | |
| | Net capital expenditures* | $(32.2) | $(38.0) | $(92.8) | $(108.1) | |
| | Free cash inflows (outflows)** | $ 291.8 | $ 21.1 | $ 242.0 | $ (177.2 ) | |
| | * Capital expenditures pertaining to property and equipment and intangible assets, net of proceeds from disposal and lease incentives received. | |
| | ** Non-IFRS financial measure. | |
FORWARD-LOOKING STATEMENTS
Certain information regarding WSP contained herein are not based on historical facts and may constitute forward-looking statements or forward-looking information under Canadian securities laws (collectively,“forward-looking statements”). Forward-looking statements may include estimates, plans, strategic ambitions, objectives, expectations, opinions, forecasts, projections, guidance, outlook or other statements that are not statements of fact. Forward-looking statements made by the Corporation in this press release include statements about our 2024 strategic financial ambitions, backlog and the strength of the markets across our regions, the payment of dividends, our proposed strategy, and our operating performance, financial outlook for 2024 (including net revenues, adjusted EBITDA, seasonality and adjusted EBITDA fluctuations, DSO, net capital expenditures, acquisition, integration and reorganization costs, and ERP implementation costs), organic growth, effective tax rates, depreciation of right-of-use assets, property & equipment and amortization of software, head office corporate costs, a net debt to adjusted EBITDA ratios, and statements about the 2025-2027 Global Strategic Action Plan. These forward-looking statements are based on a number of assumptions believed by the Corporation to be reasonable as at November 6, 2024, including organic growth expectations, economic and market assumptions regarding the competition, political environment and economic performance of each region where it operates, assumptions set out through this press release, assumptions about the state of and access to global and local capital and credit markets; interest rates; working capital requirements; the collection of accounts receivable; the Corporation obtaining new contract awards; the type of contracts entered into by the Corporation; the anticipated margins under new contract awards; the utilization of the Corporation's workforce; the ability of the Corporation to attract new clients; the ability of the Corporation to retain current clients; changes in contract performance; project delivery; the Corporation's competitors; the ability of the Corporation to successfully integrate acquired businesses; the acquisition and integration of businesses in the future; the Corporation's ability to manage growth; external factors affecting the global operations of the Corporation; the current or expected state of the Corporation's backlog; the joint arrangements into which the Corporation has or will enter; capital investments made by the public and private sectors; relationships with suppliers and subconsultants; relationships with management, key professionals and other employees of the Corporation; the maintenance of sufficient insurance; the management of environmental, social and health and safety risks; the sufficiency of the Corporation's current and planned information systems, communications technology and other technology; compliance with laws and regulations; future legal proceedings; the sufficiency of internal and disclosure controls; the regulatory environment; impairment of goodwill; foreign currency fluctuation; the tax legislation and regulations to which the Corporation is subject and the state of the Corporation's benefit plans and, in relation to the acquisition of POWER specifically, the Corporation's ability to retain and attract new business, achieve synergies and maintain market positions arising from successful integration plans relating to the acquisition; the Corporation's ability to otherwise complete the integration of POWER within anticipated time periods and at expected cost levels; the Corporation's ability to attract and retain key employees in connection with the POWER acquisition; Management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the POWER acquisition and resulting impact on growth and accretion in various financial metrics; Management's expectations in relation to the future performance and economic conditions and other factors in relation to POWER; the realization of the expected strategic, financial and other benefits of the POWER acquisition in the timeframe anticipated; the accuracy and completeness of the information (including financial information) provided by POWER; and the absence of significant undisclosed costs or liabilities associated with the POWER acquisition. Specifically, in relation to the financial outlook for 2024, (i) management assumed a US/CAD average exchange rate of 1.365, a GBP/CAD average exchange rate of 1.74 and an AU/CAD average exchange rate of 0.90 and (ii) the effective tax rate in 2024 will fall between 25% and 29% and forecasts were prepared using tax rates enacted as of December 31, 2023, in the countries in which the Corporation currently operates.
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, and such risks include, but are not limited to, the deterioration of our financial position or net cash position; our working capital requirements; our accounts receivable; our increased indebtedness and raising capital; the impairment of long-lived assets; our foreign currency exposure; our income taxes; underfunded defined benefits obligations, and any other risk factors described under section 20“Risk Factors” of WSP's MD&A for the fourth quarter and year ended December 31, 2023 which is available on SEDAR+ at . WSP's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The complete version of the cautionary note regarding risk factors, which, if realized, could cause the Corporation's actual results to differ materially from those expressed or implied in forward-looking statements, are discussed in greater detail in section 20,“Risk factors” of WSP's MD&A for the fourth quarter and year ended December 31, 2023 which is available on SEDAR+ at . The forward-looking statements contained in this press release are made as of the date hereof and, accordingly, are subject to change after such date. Except to the extent required by applicable law, WSP does not assume any obligation to publicly update or revise any forward-looking statements made in this press release or otherwise, whether as a result of new information, future events or otherwise.
ABOUT WSP
As one of the largest professional services firms in the world, WSP exists to future-proof our cities and our environment. It provides strategic advisory, engineering, and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water, and mining sectors. Its 73,900 trusted professionals are united by the common purpose of creating positive, long-lasting impacts on the communities it serves through a culture of innovation, integrity, and inclusion. In 2023, WSP reported $14.4 B (CAD) in revenue. The Corporation's shares are listed on the Toronto Stock Exchange (TSX: WSP).
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Alain Michaud
Chief Financial Officer
WSP Global Inc.
...
Phone: 438-843-7317
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