Press Releases

  • Tuesday, November 11, 2014
    WSP Reports Solid Performance for the Third Quarter of 2014

    MONTREAL, QUEBEC--(Marketwired - Nov. 11, 2014) - WSP Global Inc. (TSX:WSP) ("WSP" or the "Corporation") today announced its financial and operating results for the third quarter and first nine months of the year ended September 27, 2014. The third quarter results cover the period from June 29, 2014 to September 28, 2014.

    2014 THIRD QUARTER FINANCIAL HIGHLIGHTS

    • Revenues and net revenues of $630.7 million and $537.4 million, up 28.6% and 31.8%, respectively. Global organic growth of 12.3%; 6.0% organic growth on a constant currency basis, 6.3% favourable foreign exchange impact.

    • EBITDA of $66.4 million, up $16.2 million or 32.3%. EBITDA margin stable at 12.3% of net revenues.

    • Net earnings attributable to shareholders excluding amortization of intangible assets related to acquisitions (net of income taxes) at $33.6 million, or $0.54 per share up 29.2% and 8.0%, respectively.

    • Net earnings attributable to shareholders of $29.1 million, or $0.46 per share, on a dilutive basis. Excluding non-operating expenses, related to the acquisition of Parsons Brinckerhoff, net earnings attributable to shareholders at $34.4 million, or $0.55 per share, on a dilutive basis, up 40.4% and 17.0%, respectively.

    • Backlog at $1,881.8 million representing approximately 9.2 months of revenues, up $49.6 million or 2.7% compared to Q2 2014.

    • DSO stood at 86 days, slight increase compared to prior quarter.

    • Quarterly dividend declared of $0.375 per share, with a 48.3% Dividend Reinvestment Plan ("DRIP") participation.

    • Net debt to trailing twelve month EBITDA ratio at 1.2x.

    2014 THIRD QUARTER OPERATIONAL HIGHLIGHTS

    • On September 3, 2014, the Corporation announced that it had entered into a stock purchase agreement with Balfour Beatty plc and certain of its subsidiaries ("Balfour Beatty") in connection with the acquisition (the "Acquisition") of all of the issued and outstanding capital stock of the entities comprising the business of Parsons Brinckerhoff Group Inc. (collectively, "Parsons Brinckerhoff"), the professional services arm of Balfour Beatty, for consideration of US$1.242.5 billion plus an additional consideration for cash retained by Parsons Brinckerhoff of up to US$110.0 million, subject to certain closing and post-closing adjustments. The acquisition was completed on October 31, 2014.

    • The acquisition of Parsons Brinckerhoff was financed in large part by a public bought-deal and private placements made with the Canada Pension Plan Investment Board ('CPPIB') and the Caisse de dépôt et placement du Québec ('the Caisse'), the Corporation's largest institutional shareholders. The Corporation issued a total of 26,160,000 common shares for aggregate gross proceeds of approximately $938.0 million. In conjunction with the acquisition, the Corporation also obtained new credit facilities consisting of a US$800.0 million revolver and a US$400 million term loan.

    "I am pleased with our overall performance and with the progress we made with respect to executing our growth strategy, both on the organic and acquisition fronts," said Pierre Shoiry, President and Chief Executive Officer of WSP. "Our employees and clients have responded very positively to our recent acquisitions and to the expanded scale and scope of our offerings and operations. We will now focus on integration and revenue synergies, which should create incremental and long-term value for all stakeholders".

    DIVIDEND

    The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about January 15, 2015, to shareholders of record at the close of business on December 31, 2014.

    FINANCIAL REPORT

    This release includes, by reference, the 2014 third quarter financial reports, including the unaudited interim condensed consolidated financial statements and the Management's Discussion and Analysis ("MD&A") of the Corporation.

    For a copy of our full financial results for the third quarter of 2014, including the MD&A and the unaudited interim condensed consolidated financial statements, please visit our website at www.wspgroup.com.

    CONFERENCE CALL

    WSP will hold a conference call at 4 p.m. (Eastern Time) on November 11, 2014, to discuss these results. The telephone numbers to access the conference call are 1-647-788-4922 or 1-877-223-4471 (toll-free).

    A presentation of the 2014 third quarter highlights and results will be available on the same day at www.wspgroup.com in the Investors section, under Presentations & Events.

    A replay of the call will be available until November 15, 2014. The telephone numbers to access the replay of the call are 1-416-621-4642 or 1-800-585-8367 (toll-free), access code 17064557. The replay of the conference call will also be available in the Investor section of the WSP website in the days following the call.

    RESULTS OF OPERATIONS

    Q3 YTD
    2014 2013 2014 2013
    (in millions of dollars, except number of shares and per share data) For the
    period from
    June 29 to
    September 27
    For the
    period from
    June 30 to
    September 28
    For the
    period from
    January 1 to
    September 27
    For the
    period from
    January 1 to
    September 28
    Revenues $630.7 $490.5 $1,744.3 $1,485.6
    Less: Subconsultants and direct costs $93.3 $82.9 $253.2 $244.5
    Net revenues* $537.4 $407.6 $1,491.1 $1,241.1
    Personnel costs $393.4 $295.4 $1,118.1 $922.5
    Other operational costs(1) $79.4 $63.9 $217.5 $193.8
    Share of earnings of associates ($1.8 ) ($1.9 ) ($7.9 ) (6.6 )
    EBITDA* $66.4 $50.2 $163.4 $131.4
    Non-operating expenses $5.4 $3.1 $8.0 $5.2
    Amortization of intangible assets $9.8 $8.5 $27.9 $25.3
    Depreciation of property, plant and equipment $7.9 $6.0 $21.7 $18.3
    Financial expenses $1.9 $4.2 $8.7 $11.0
    Share of depreciation of associates $0.4 $0.7 $1.8 $2.2
    Earnings before income taxes $41.0 $27.7 $95.3 $69.4
    Income tax expenses $11.3 $5.8 $23.6 $15.4
    Share of tax of associates $0.4 $0.4 $1.9 $1.4
    Net earnings $29.3 $21.5 $69.8 $52.6
    Attributable to:
    - Shareholders $29.1 $22.1 $70.7 $53.8
    - Non-controlling interests $0.2 ($0.6 ) ($0.9 ) ($1.2 )
    Basic net earnings per share $0.47 $0.43 $1.14 $1.04
    Diluted net earnings per share $0.46 $0.43 $1.14 $1.04
    Basic weighted average number of shares 61,909,430 51,999,669 61,891,105 51,676,724
    Diluted weighted average number of shares 62,682,469 51,999,669 62,286,096 51,676,724
    * Non-IFRS measures as described in the "Glossary" section.
    (1) The Other operational costs include operation exchange loss or gain and interest income.

    NON-IFRS MESURES

    The Corporation reports its financial results in accordance to IFRS. However, the following non-IFRS measures are used by the Corporation: net revenues; EBITDA; EBITDA margin; adjusted EBITDA; adjusted EBITDA margin; net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes); net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) per share; backlog; funds from operations; funds from operations per share; free cash flow; free cash flow per share; days sales outstanding ("DSO") and net debt to EBITDA.

    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 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.

    Net revenues

    Net revenues are defined as revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients. Net revenues are not an IFRS measure and do not have a standardized definition within IFRS. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are advised that net revenues should not be construed as an alternative to revenues for the period (as determined in accordance with IFRS) as an indicator of the Corporation's performance.

    EBITDA

    EBITDA is defined as earnings before non-operating expenses identified by Management, financial expenses, income tax expenses, depreciation and amortization. EBITDA is not an IFRS measure and does not have a standardized definition within IFRS. Investors are cautioned that EBITDA should not be considered an alternative to net earnings for the period (as determined in accordance with IFRS) as an indicator of the Corporation's performance, or an alternative to cash flows from operating, financing and investing activities as a measure of the liquidity and cash flows. The Corporation's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Corporation's EBITDA may not be comparable to similar measures used by other issuers.

    EBITDA margin

    EBITDA margin is defined as EBITDA expressed as a percentage of net revenues. EBITDA margin is not an IFRS measure.

    Adjusted EBITDA

    Adjusted EBITDA is defined as EBITDA excluding global corporate costs. Global corporate costs are expenses and salaries related to centralized functions, such as global Finance, Human Resources and Technology teams, which are not allocated to operating segments. This measure is not an IFRS measure. It provides Management with comparability from one region to the other.

    Adjusted EBITDA margin

    Adjusted EBITDA margin is defined as adjusted EBITDA expressed as a percentage of net revenues. Adjusted EBITDA margin is not an IFRS measure.

    Net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) and net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) per share

    Net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) is not an IFRS measure. It provides a comparative measure of Corporation performance in a context of significant business combinations. This measure is defined as net earnings (loss) attributable to shareholders excluding the amortization expense of backlogs, customer relationships and non-competition agreements accounted for in business combinations and the income tax effects related to this amortization. Net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) per share is calculated using the basic weighted average number of shares.

    Backlog

    Backlog is not an IFRS measure. It represents future revenues stemming from existing signed contracts to be completed. The Corporation's method of calculating backlog may differ from the methods used by other issuers and, accordingly, may not be comparable to similar measures used by other issuers.

    Funds from operations and funds from operations per share

    Funds from operations is not an IFRS measure. It provides Management and investors with a proxy for the amount of cash generated from (used in) operating activities before changes in non-cash working capital items.

    Funds from operations per share is calculated using the basic weighted average number of shares.

    Free cash flow and free cash flow per share

    Free cash flow is not an IFRS measure. It provides a consistent and comparable measurement of free cash flow generated from operations and is used as an indicator of financial strength and performance. Free cash flow is defined as cash flows from operating activities as reported in accordance with IFRS, less maintenance capital expenditures.

    Free cash flow per share is calculated using the basic weighted average number of shares.

    Days Sales Outstanding ("DSO")

    DSO is not an IFRS measure. It represents the average number of days to convert our trade receivables and costs and anticipated profits in excess of billings into cash, net of sales taxes. The Corporation's method of calculating DSO may differ from the methods used by other issuers and, accordingly, may not be comparable to similar measures used by other issuers.

    Net Debt to EBITDA

    Net Debt to EBITDA is not an IFRS measure. It is a measure of our level of financial leverage net of our cash and cash equivalents and is calculated on our trailing twelve month EBITDA.

    ABOUT WSP

    WSP, through its acquisition of Parsons Brinckerhoff, is one of the world's leading professional services firms in its industry, working with governments, businesses, architects and planners and providing integrated solutions across many disciplines. The firm provides services to transform the built environment and restore the natural environment, and its expertise ranges from environmental remediation to urban planning, from engineering iconic buildings to designing sustainable transport networks, and from developing the energy sources of the future to enabling new ways of extracting essential resources. It has approximately 31,500 employees, mainly engineers, technicians, scientists, architects, planners, surveyors, other design professionals, as well as various environmental experts, based in more than 500 offices, across 39 countries, on 5 continents. WSP, including Parsons Brinckerhoff, had pro forma revenues of $4.5 billion for the 12 months ended December 31, 2013. www.wspgroup.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 Discussion and Analysis for the fourth quarter and year ended December 31, 2013, which are 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.

    Alexandre L'Heureux
    Chief Financial Officer
    WSP Global Inc.
    514-340-0046, ext. 5310
    alexandre.lheureux@wspgroup.com

    Isabelle Adjahi
    Director, Communications and Investor Relations
    WSP Global Inc.
    514-340-0046, ext. 5648
    isabelle.adjahi@wspgroup.com