Press Releases

  • Thursday, October 29, 2015
    WSP Reports Solid Net Revenues and EBITDA for Q3 2015

    MONTREAL, QUEBEC--(Marketwired - Oct. 29, 2015) - WSP Global Inc. (TSX:WSP) ("WSP" or the "Corporation") today announced its financial and operating results for the third quarter and nine months ended September 26, 2015. The third quarter results cover the period from June 28, 2015 to September 26, 2015.

    THIRD QUARTER FINANCIAL HIGHLIGHTS

    In the financial highlights, results are compared to results from Q3 2014, unless otherwise stated.

    • Revenues and net revenues of $1,503.0 million and $1,124.9 million, up 138.3% and 109.3%, respectively, mainly as a result of business acquisitions.

    • On a consolidated basis, negative organic growth of 1.8% in net revenues; excluding the anticipated negative organic growth from our western Canadian oil & gas sectors, net revenues global organic growth stands at 4.9% on a constant currency basis.

    • Adjusted EBITDA of $126.2 million, up $59.8 million or 90.1%; adjusted EBITDA margin stands at 11.2% of net revenues.

    • Net earnings attributable to shareholders of $50.4 million, or $0.55 per share on a diluted basis, up 73.2% and 19.6%, respectively.

    • Net earnings attributable to shareholders, excluding acquisition and reorganization costs (net of income taxes), at $62.8 million, or $0.69 per share, up 90.3% and 30.2%, respectively.

    • Backlog of $4,891.6 million representing approximately 9.9 months of revenues and up $329.6 million or 7.2% compared to Q2 2015.

    • DSO stands at 87 days, two days higher than in Q2 2015 and stable compared to the same period in 2014.

    • Quarterly dividend declared of $0.375 per share, with a 52.5% Dividend Reinvestment Plan ("DRIP") participation.

    • Incorporating full 12-month trailing adjusted EBITDA for all acquisitions, net debt to adjusted EBITDA ratio at 1.1x compared to 1.8x at end of Q2 2015, mainly as a result of repayment of debt with funds obtained from share issuance.

    • Incorporating full 12-month trailing adjusted EBITDA for all acquisitions, including the MMM Group Limited ("MMM") acquisition (completed October 15, 2015), net debt to adjusted EBITDA ratio would stand at 1.9x.

    • Anticipated annual synergy savings related to the Parson Brinckerhoff acquisition now estimated at approximately US$40.0 million (US$30.0 million to be achieved by end of Q4 2015), exceeding previously announced US$25 million savings amount.

    THIRD QUARTER HIGHLIGHTS

    • On June 30, 2015, WSP acquired Faveo Group ("Faveo"), a leading project management firm based in Norway and Sweden. Faveo provides project management services and associated specialist services in the areas of infrastructure and energy. This acquisition added 400 employees to WSP's workforce in the Nordic countries.

    • Effective July 1, 2015, the Corporation acquired Caravel Investments Ltd. and Levelton Consultants Ltd., its wholly-owned subsidiary (collectively, "Levelton"), a leading consulting engineering firm based in British Columbia and Alberta. Levelton provides a diverse range of specialized engineering solutions in the areas of environment, geotechnical, building science and materials engineering and testing. This acquisition added 215 employees to WSP's workforce, and strengthened its leading position in professional environmental services in Canada.

    • On August 25, 2015, WSP entered into an arrangement agreement in connection with the acquisition of all of the issued and outstanding shares of MMM, one of the largest privately-owned engineering consulting companies in Canada with approximately 2,000 employees, for an aggregate purchase price of $425 million, subject to certain adjustments. MMM is a leader in public-private partnerships ("P3"), more particularly in the delivery of large-scale, complex P3 projects involving transportation, highways, bridges, transit, airports and buildings. The acquisition of MMM was completed on October 15, 2015.

    • On September 1, 2015, WSP acquired Halvorson and Partners, a
      40-person Chicago-based firm that provides structural engineering services for developers, private owners and institutions worldwide.

    • On September 15, 2015, WSP completed the sale of all of its shares in Link Arkitektur AS ("Link Arkitektur") to Multiconsult AS. The sale of these shares which represent approximately 27.9% of the issued and outstanding shares of Link Arkitektur generated total gross proceeds of approximately $5.0 million.

    • On September 16, 2015, WSP completed a bought deal public offering of common shares of the Corporation and a concurrent private placement of common shares for aggregate gross proceeds of approximately $345.0 million. WSP used the net proceeds of the bought deal offering and concurrent private placement, together with funds drawn under its current credit facilities, to fund the acquisition and a portion of the related transaction costs payable in connection with the acquisition of MMM.

    "As we reach the milestone of one year since the Parsons Brinckerhoff acquisition, we are pleased with our third quarter results, which are consistent with our expectations and 2015 guidance," commented Pierre Shoiry, WSP's President and Chief Executive Officer. "We continue to focus on increasing revenues stemming from our enhanced and diversified platform. This demonstrates the soundness of our growth model, which is based on expanding our global presence and deepening our technical expertise in the market segments that we serve. The recent acquisition of MMM is consistent with this objective and we are pleased to welcome 2,000 new colleagues to the team," he added.

    DIVIDEND

    The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about January 15, 2016, to shareholders of record at the close of business on December 31, 2015.

    FINANCIAL REPORT

    This release includes, by reference, the 2015 third quarter financial reports, including the unaudited interim condensed consolidated financial statements and the Management Discussion & Analysis ("MD&A") of the Corporation.

    For a copy of our full financial results for the third quarter of 2015, 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 October 29, 2015, 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 third quarter of 2015 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 8, 2015. The telephone numbers to access the replay of the call are 1-416-621-4642 or 1-800-585-8367 (toll-free), access code 46235964. The replay of the conference call will also be available in the Investor section of the WSP website under Presentations & Events, in the days following the call.

    RESULTS OF OPERATIONS

    Q3 YTD
    2015 2014 2015 2014
    (in millions of dollars, except number of shares and per share data) For the
    period from
    June 28 to
    September 26
    For the
    period from
    June 29 to
    September 27
    For the
    period from
    January 1 to
    September 26
    For the
    period from
    January 1 to
    September 27
    Revenues $1,503.0 $630.7 $4,403.9 $1,744.3
    Less: Subconsultants and direct costs $378.1 $93.3 $1,165.3 $253.2
    Net revenues* $1,124.9 $537.4 $3,238.6 $1,491.1
    Personnel costs $839.7 $393.4 $2,484.4 $1,118.1
    Occupancy costs $54.0 28.2 $158.1 82.4
    Other operational costs(1) $105.1 $51.2 $283.4 $135.1
    Share of earnings of associates ($0.1 ) ($1.8 ) ($4.8 ) ($7.9 )
    Adjusted EBITDA* $126.2 $66.4 $317.5 $163.4
    Acquisition and reorganization costs* $16.1 $5.4 ($26.4 ) $8.0
    Amortization of intangible assets $17.9 $9.8 $54.4 $27.9
    Depreciation of property, plant and equipment $16.1 $7.9 $44.6 $21.7
    Financial expenses $7.9 $1.9 $32.8 $8.7
    Share of depreciation of associates $0.1 $0.4 $1.0 $1.8
    Earnings before income taxes $68.1 $41.0 $211.1 $95.3
    Income tax expenses $17.4 $11.3 $35.8 $23.6
    Share of tax of associates - $0.4 $1.1 $1.9
    Net earnings $50.7 $29.3 $174.2 $69.8
    Attributable to:
    - Shareholders $50.4 $29.1 $174.1 $70.7
    - Non-controlling interests $0.3 $0.2 $0.1 ($0.9 )
    Basic net earnings per share $0.55 $0.47 $1.94 $1.14
    Diluted net earnings per share $0.55 $0.46 $1.94 $1.14
    Basic weighted average number of shares 90,951,158 61,909,430 89,697,238 61,891,105
    Diluted weighted average number of shares 91,010,663 62,682,469 89,733,790 62,286,096
    * 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; adjusted EBITDA; adjusted EBITDA margin; adjusted EBITDA before Global Corporate costs; adjusted EBITDA margin before Global Corporate costs; net earnings (loss) excluding acquisition and reorganization costs (net of income taxes); net earnings (loss) excluding acquisition and reorganization costs (net of income taxes) per share; net earnings (loss) excluding acquisition and reorganization costs and amortization of intangible assets related to acquisitions (net of income taxes); net earnings (loss) excluding acquisition and reorganization costs and 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 adjusted 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.

    GLOSSARY

    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.

    Adjusted EBITDA

    Adjusted EBITDA is defined as earnings before financial expenses, income tax expenses, depreciation and amortization and acquisition and reorganization costs. Adjusted EBITDA is not an IFRS measure and does not have a standardized definition within IFRS. Investors are cautioned that adjusted 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 adjusted EBITDA may differ from the methods used by other issuers and, accordingly, the Corporation's adjusted EBITDA may not be comparable to similar measures used by other issuers.

    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.

    Adjusted EBITDA before Global Corporate costs

    Adjusted EBITDA before Global Corporate costs is defined as adjusted 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 before Global Corporate costs

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

    Net earnings (loss) excluding acquisition and reorganization costs (net of income taxes) and net earnings (loss) excluding acquisition and reorganization costs (net of income taxes) per share

    Net earnings (loss) excluding acquisition and reorganization costs (net of income taxes) is not an IFRS measure. It provides a comparative measure of the Corporation`s performance in a context of significant business combinations in which the Corporation may incur significant acquisition and reorganization costs which the Corporation believes should be excluded in understanding the underlying operational financial performance achieved by the Corporation. This measure is defined as net earnings (loss) attributable to shareholders excluding acquisition and reorganization costs and the income tax effects related to these costs.

    Net earnings (loss) excluding acquisition and reorganization costs (net of income taxes) per share is calculated using the basic weighted average number of shares.

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

    Net earnings (loss) excluding acquisition and reorganization costs and 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 acquisition and reorganization costs and the amortization expense of backlogs, customer relationships, non-competition agreements and trade names accounted for in business combinations and the income tax effects related to this amortization.

    Net earnings (loss) excluding acquisition and reorganization costs and amortization of intangible assets related to acquisitions (net of income taxes) per share is calculated using the basic weighted average number of shares.

    Acquisition and reorganization costs

    Acquisition and reorganization costs is not an IFRS measure. Acquisition and reorganization costs are items of financial performance which the Corporation believes should be excluded in understanding the underlying financial performance achieved by the Corporation. Acquisition and reorganization costs include transaction and integration costs related to business acquisitions as well as costs of restructuring and reorganizing existing operations. In 2015, acquisition and reorganization costs included gains made on the disposal of equity investments in associates.

    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 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 adjusted EBITDA

    Net Debt to adjusted 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 adjusted 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 34,000 employees, including engineers, technicians, scientists, architects, planners, surveyors and environmental specialists, as well as other design, program and construction management professionals, based in more than 500 offices, across 40 countries, on 5 continents. 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, 2014, 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
    Vice President, Investor Relations
    and Corporate Communications
    WSP Global Inc.
    514-340-0046, ext. 5648
    isabelle.adjahi@wspgroup.com