WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”) today
announced financial and operating results for the third quarter
ended on September 25, 2021.
Performance in line with management's
expectations with organic revenue growth in all segments and
favorable results from recent acquisitions.
THIRD QUARTER 2021 FINANCIAL
HIGHLIGHTS
- Revenues and net
revenues* for the quarter reached $2.7 billion and $2.0 billion, up
24.0% and up 20.1%, respectively, compared to Q3 2020. The increase
was driven by acquisition growth of 20.1%, as well as overall
organic growth of 4.3%, with all segments showing positive organic
growth.
-
Continued positive momentum at Golder in the third quarter of 2021
with integration activities progressing according to plan.
- Backlog*
as at September 25, 2021 stood at $10.0 billion, representing
11.6 months of revenues, up 19.1% in the nine-month period, due to
acquisition growth and steady organic growth. On a constant
currency basis, backlog grew organically by 5.5% compared to
backlog as at December 31, 2020. Overall proposal activity
continues to be robust across the business.
- Adjusted
EBITDA* in the quarter of $377.7 million, up $80.6 million or
27.1%, compared to $297.1 million in Q3 2020, largely due to the
contribution of recent acquisitions. No significant government
subsidies were recognized during the third quarter of 2021.
- Adjusted
EBITDA margin* for the quarter reached 18.6%, compared to 17.6% in
Q3 2020. The improvement in adjusted EBITDA margin is mainly
attributable to the higher margin profile of recent acquisitions
and improved market conditions in multiple regions.
- Earnings
before net financing expense and income taxes in the quarter of
$221.2 million, up $77.0 million, or 53.4%, compared to Q3 2020,
mainly due to increased adjusted EBITDA and lower acquisition,
integration and restructuring costs.
- Adjusted
net earnings* for the quarter of $179.7 million, or $1.53 per
share, up $48.0 million and $0.37, respectively, compared to Q3
2020. The increase in these metrics is mainly attributable to
higher adjusted EBITDA.
- Net
earnings attributable to shareholders for the quarter of $139.0
million, or $1.18 per share, up 33.3% and 28.3%, respectively, when
compared to Q3 2020. The increase is mainly attributable to higher
adjusted EBITDA and lower acquisition, integration and
restructuring costs, partially offset by higher net financing
expense and amortization and depreciation expense.
- DSO* as
at September 25, 2021 stood at 73 days, compared to 72 days as
at September 26, 2020.
- Free
cash flow* of $276.2 million for the nine-month period.
Trailing twelve-months of free cash flow amounted to
$540.7 million, representing 1.3 times net earnings
attributable to shareholders.
- Cash
inflows from operating activities of $546.9 million in the
nine-month period ended September 25, 2021, compared to
$743.3 million in the comparable period in 2020. The variance
is mainly due to the fact that the comparable period in 2020
benefitted from a deferral of income tax and other remittances in
some jurisdictions. In addition, organic growth in revenues in 2021
resulted in an increased investment in working capital.
- The net
debt to adjusted EBITDA ratio* stood at 0.9x, compared to 0.1x as
at December 31, 2020, mainly due to the acquisition of Golder
Associates.
-
Quarterly dividend declared of $0.375 per share, with a 54.2%
Dividend Reinvestment Plan (“DRIP”) participation.
-
Financial outlook for 2021 issued and updated in the Q2 2021 press
release is reaffirmed with an adjusted EBITDA range narrowed and
now expected to be between $1.30 billion to $1.32 billion
(previously expected to fall in the range of $1.275 billion to
$1.325 billion).(1)
“I am pleased with the continued momentum we
have experienced in the third quarter. Our results are in line with
our improved financial guidance disclosed this past August and
reflects strong performance from our platform and our 2021
acquisitions. We are confident that we will achieve our 2019-2021
ambitions,” said Alexandre L’Heureux, President and CEO of WSP.
“Our 2021 performance to date, combined with a healthy backlog and
favorable fundamentals, set the stage for our next strategic cycle.
Despite the current context and related uncertainties, which we
will continue to navigate with discipline, we see significant
opportunities for WSP to continue to succeed,” he added.
DIVIDENDThe Board of WSP
declared a dividend of $0.375 per share. This dividend will be
payable on or about January 15, 2022, to shareholders of record at
the close of business on December 31, 2021.
FINANCIAL REPORTThis release
includes, by reference, the financial reports for the third quarter
of 2021, including the unaudited interim condensed consolidated
financial statements and the Management’s Discussion & Analysis
(“MD&A”) of the Corporation.
For a copy of our financial reports for the
third quarter of 2021, including the MD&A and the unaudited
interim condensed consolidated financial statements, please visit
our website at www.wsp.com.
CONFERENCE CALL WSP will hold a
conference call and webcast at 8 a.m. (Eastern Time) on November
10, 2021 to discuss these results.To participate in the conference
call, dial 1-438-801-4068 or 1-888-500-2848 (toll free). A live
webcast of the conference call will also be available at
www.wsp.com/investors.
A presentation of the third quarter of 2021
highlights and results will be accessible on November 9, 2021
after market close under the “Investors” section of the WSP
website. For those unable to attend, a replay will be available
within 24 hours following the call.
*Non-IFRS measures. These measures are defined
in section 19, “Glossary of non-IFRS measures and segment reporting
measures” of the Corporation's Management's Discussion &
Analysis for the third quarter and nine-month period ended
September 25, 2021. Please refer to the "Non-IFRS measures"
disclaimer below.
(1) 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.
RESULTS OF OPERATIONS
|
Third quarters ended |
Nine-month periods ended |
(in millions of dollars, except number of shares and per share
data) |
September 25,2021 |
September 26,2020 |
September 25,2021 |
September 26,2020 |
Revenues |
$2,650.2 |
$2,137.8 |
$7,388.1 |
$6,555.6 |
Less:
Subconsultants and direct costs |
$623.6 |
$450.2 |
$1,665.9 |
$1,384.8 |
Net revenues* |
$2,026.6 |
$1,687.6 |
$5,722.2 |
$5,170.8 |
Earnings before net financing expense and income
taxes |
$221.2 |
$144.2 |
$539.4 |
$354.1 |
Net
financing expense |
$33.3 |
$2.1 |
$65.2 |
$71.6 |
Earnings before income taxes |
$187.9 |
$142.1 |
$474.2 |
$282.5 |
Income
tax expense |
$48.7 |
$37.3 |
$126.9 |
$75.1 |
Net earnings |
$139.2 |
$104.8 |
$347.3 |
$207.4 |
Net earnings attributable to: |
|
|
|
|
Shareholders of WSP Global Inc. |
$139.0 |
$104.3 |
$346.9 |
$207.1 |
Non-controlling interests |
$0.2 |
$0.5 |
$0.4 |
$0.3 |
Basic net earnings per share
attributable to shareholders |
$1.18 |
$0.92 |
$2.99 |
$1.90 |
Diluted
net earnings per share attributable to shareholders |
$1.18 |
$0.92 |
$2.98 |
$1.90 |
Basic weighted average number of shares |
117,450,897 |
113,197,718 |
116,051,818 |
108,793,496 |
Diluted
weighted average number of shares |
117,852,564 |
113,402,269 |
116,423,651 |
109,007,522 |
*Non-IFRS measure. This measure is defined in section 19,
“Glossary of non-IFRS measures and segment reporting measures” of
the Corporation's Management's Discussion & Analysis for the
quarter and nine-month period ended September 25, 2021.
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITIONReferences to notes refer to notes in the
financial statements
As at |
September 25, 2021 |
December 31, 2020 |
|
$ |
$ |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents (note 15) |
638.2 |
|
437.1 |
|
Trade receivables and other receivables |
1,888.0 |
|
1,598.8 |
|
Cost and anticipated profits in excess of billings |
1,311.6 |
|
950.5 |
|
Other financial assets |
135.6 |
|
118.1 |
|
Prepaid expenses |
131.8 |
|
168.7 |
|
Income taxes receivable |
24.1 |
|
27.5 |
|
|
4,129.3 |
|
3,300.7 |
|
Non-current assets |
|
|
Right-of-use assets (note 10) |
935.7 |
|
894.3 |
|
Property and equipment |
344.3 |
|
314.9 |
|
Intangible assets |
463.3 |
|
275.5 |
|
Goodwill (note 11) |
4,816.8 |
|
3,731.9 |
|
Deferred income tax assets |
176.5 |
|
169.2 |
|
Other assets |
197.7 |
|
150.9 |
|
|
6,934.3 |
|
5,536.7 |
|
Total assets |
11,063.6 |
|
8,837.4 |
|
|
|
|
Liabilities |
|
|
Current liabilities |
|
|
Accounts payable and accrued liabilities |
2,034.6 |
|
1,718.2 |
|
Billings in excess of costs and anticipated profits |
752.3 |
|
708.5 |
|
Income taxes payable |
162.8 |
|
119.1 |
|
Provisions |
57.1 |
|
71.4 |
|
Dividends payable to shareholders (note 14) |
44.1 |
|
42.5 |
|
Current portion of lease liabilities (note 10) |
259.8 |
|
233.1 |
|
Current portion of long-term debt (note 12) |
51.4 |
|
296.9 |
|
|
3,362.1 |
|
3,189.7 |
|
Non-current liabilities |
|
|
Long-term debt (note 12) |
1,734.9 |
|
277.3 |
|
Lease liabilities (note 10) |
844.4 |
|
785.3 |
|
Provisions |
189.0 |
|
180.9 |
|
Retirement benefit obligations |
213.8 |
|
232.4 |
|
Deferred income tax liabilities |
114.6 |
|
90.4 |
|
|
3,096.7 |
|
1,566.3 |
|
Total liabilities |
6,458.8 |
|
4,756.0 |
|
|
|
|
Equity |
|
|
Equity attributable to shareholders of WSP Global Inc. |
4,604.2 |
|
4,080.4 |
|
Non-controlling interests |
0.6 |
|
1.0 |
|
Total equity |
4,604.8 |
|
4,081.4 |
|
Total liabilities and equity |
11,063.6 |
|
8,837.4 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWSReferences
to notes refer to notes in the financial statements
|
Third quarters ended |
Nine-month periods ended |
|
September 25,2021 |
September 26,2020 |
September 25,2021 |
September 26,2020 |
|
$ |
$ |
$ |
$ |
Operating
activities |
|
|
|
|
Net earnings |
139.2 |
|
104.8 |
|
347.3 |
|
207.4 |
|
Adjustments (note 15) |
144.8 |
|
103.7 |
|
339.9 |
|
325.5 |
|
Net financing expense (note
8) |
33.3 |
|
2.1 |
|
65.2 |
|
71.6 |
|
Income tax expense |
48.7 |
|
37.3 |
|
126.9 |
|
75.1 |
|
Income taxes paid |
(27.6 |
) |
(31.7 |
) |
(100.0 |
) |
(64.9 |
) |
Change
in non-cash working capital items (note 15) |
(102.3 |
) |
17.2 |
|
(232.4 |
) |
128.6 |
|
Cash inflows from operating activities |
236.1 |
|
233.4 |
|
546.9 |
|
743.3 |
|
Financing activities |
|
|
|
|
Issuance of senior unsecured
notes (note 12) |
— |
|
— |
|
500.0 |
|
— |
|
Net (repayment) proceeds of
borrowings under credit facilities |
(14.2 |
) |
(239.0 |
) |
443.7 |
|
(518.6 |
) |
Issuance of common shares, net
of issuance costs (note 13) |
2.1 |
|
— |
|
303.3 |
|
549.6 |
|
Lease payments (note 10) |
(79.3 |
) |
(71.2 |
) |
(220.5 |
) |
(213.7 |
) |
Dividends paid to shareholders
of WSP Global Inc. |
(19.3 |
) |
(19.5 |
) |
(60.5 |
) |
(68.6 |
) |
Net financing expenses paid,
excluding interest on lease liabilities |
(8.8 |
) |
(2.7 |
) |
(36.7 |
) |
(40.8 |
) |
Dividends paid to a non-controlling interest |
(0.8 |
) |
(0.3 |
) |
(0.8 |
) |
(0.4 |
) |
Cash inflows (outflows) from financing
activities |
(120.3 |
) |
(332.7 |
) |
928.5 |
|
(292.5 |
) |
Investing activities |
|
|
|
|
Net disbursements related to
business acquisitions |
(1.8 |
) |
(6.3 |
) |
(1,220.3 |
) |
(52.0 |
) |
Additions to property and
equipment, excluding business acquisitions |
(15.8 |
) |
(11.7 |
) |
(46.7 |
) |
(50.5 |
) |
Additions to identifiable
intangible assets, excluding business acquisitions |
(3.2 |
) |
(2.7 |
) |
(12.9 |
) |
(11.9 |
) |
Proceeds from disposal of
property and equipment |
0.5 |
|
2.5 |
|
9.4 |
|
3.6 |
|
Proceeds from sale of
investment in an associate |
— |
|
— |
|
4.4 |
|
0.4 |
|
Repurchase of minority
interest |
(0.6 |
) |
— |
|
(0.6 |
) |
— |
|
Net increase in investments in
securities |
— |
|
— |
|
(7.3 |
) |
— |
|
Net cash received on a loan
from associate |
— |
|
— |
|
0.3 |
|
— |
|
Dividends received from
associates |
4.8 |
|
6.5 |
|
4.9 |
|
10.3 |
|
Cash outflows from investing activities |
(16.1 |
) |
(11.7 |
) |
(1,268.8 |
) |
(100.1 |
) |
Effect of exchange rate change on cash and cash equivalents |
5.6 |
|
(7.2 |
) |
(9.2 |
) |
4.2 |
|
Change in net cash and cash equivalents |
105.3 |
|
(118.2 |
) |
197.4 |
|
354.9 |
|
Cash
and cash equivalents, net of bank overdraft – beginning of
period |
526.8 |
|
710.4 |
|
434.7 |
|
237.3 |
|
Cash and cash equivalents, net of bank overdraft - end of
period (note 15) |
632.1 |
|
592.2 |
|
632.1 |
|
592.2 |
|
NON-IFRS MEASURESThe
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; 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 ratio. Additional details for these
non-IFRS measures, including reconciliations of most measures to
the most directly comparable IFRS measures, can be found in WSP’s
MD&A for the quarter and nine-month period ended
September 25, 2021, which is posted on WSP’s website at
www.wsp.com, and filed on 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.
FORWARD-LOOKING
STATEMENTSCertain information regarding WSP contained
herein may constitute 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 are based on a number of assumptions believed by the
Corporation to be reasonable as at November 9, 2021, including
assumptions about general economic and political conditions; the
state of the global economy and the economies of the regions in
which the Corporation operates; the state of and access to global
and local capital and credit markets; the anticipated impacts of
the COVID-19 pandemic on the Corporation’s businesses, operating
results, cash flows and/or financial condition, including the
effect of measures implemented as a result of the COVID-19
pandemic; the expected benefits of the Golder Acquisition and other
acquisitions, the expected synergies to be realized as a result of
the Golder Acquisition and other acquisitions.
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, including risks relating
to the COVID-19 pandemic. 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 included in WSP's Management’s
Discussion and Analysis for the year ended December 31, 2020
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.
ABOUT WSPAs one of the world’s
leading professional services firms, WSP provides engineering and
design services to clients in the Transportation &
Infrastructure, Property & Buildings, Earth & Environment,
Power & Energy, Resources and Industry sectors, as well as
offering strategic advisory services. WSP's global experts include
engineers, advisors, technicians, scientists, architects, planners,
environmental specialists and surveyors, in addition to other
design, program and construction management professionals. Our
talented people are well positioned to deliver successful and
sustainable projects, wherever clients need us. wsp.com.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Alain MichaudChief Financial OfficerWSP Global
Inc.alain.michaud@wsp.com Phone: 438-843-7317
WSP Global (TSX:WSP)
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