MONTREAL, May 12, 2021 (GLOBE NEWSWIRE) -- WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”) today announced financial and operating results for the first quarter ended on March 27, 2021.
WSP is very pleased with its performance in the first quarter of 2021 starting the year with significant increases in adjusted EBITDA*, adjusted EBITDA margin and adjusted net earnings per share* due to robust productivity levels. WSP is also reporting net revenues* in line with Management's expectations, in addition to a healthy backlog* and observing positive momentum in most of our key markets. Balance sheet and cash collection remain solid for the quarter.
FIRST QUARTER 2021 FINANCIAL HIGHLIGHTS
- In line with Management's expectations, revenues and net revenues* for the quarter reached $2.1 billion and $1.7 billion, down 4.8% and 4.0%, respectively, compared to the corresponding period in 2020. The impact of 2 less billable days in the first quarter of 2021 than the comparable period in 2020 represents approximately half of the organic contraction of 4.5%. Adjusted for the number of billable days and considering acquisition growth, net revenues were essentially flat compared to Q1 2020.
- The Corporation anticipates low-single digit consolidated organic growth in its second quarter ending June 26, 2021.1
- Backlog* as at March 27, 2021 stood at $8.4 billion, representing 11.5 months of revenues. On a constant currency basis, backlog grew organically by 1.7% compared to backlog as at December 31, 2020. Overall proposal activity is high across the business.
- Adjusted EBITDA* in the quarter of $241.0 million, up 10.3%, compared to $218.4 million in 2020, despite 2 less billable days. Adjusted EBITDA margin for 2021 increased to 14.4%, compared to 12.6% in 2020. The improvement in adjusted EBITDA margin is mainly attributable to better productivity across the regions.
- Earnings before net financing expense and income taxes in the first quarter of 2021 of $129.0 million, up 46.6%, compared to 2020, mainly due to higher adjusted EBITDA margins.
- Government subsidies of $8.1 million were offset by additional discretionary employee compensation thereby bearing no impact on adjusted EBITDA or earnings before net financing expense and income taxes.
- Net earnings attributable to shareholders of $87.9 million in the first quarter of 2021, or $0.77 per share, up $73.7 million, or $0.64 per share, compared to the first quarter of 2020. The increase was mainly due to higher adjusted EBITDA, lower net financing expense and lower acquisition, integration and restructuring costs.
- Adjusted net earnings*2 for the first quarter of 2021 of $94.2 million, or $0.83 per share, up $30.9 million or $0.23 per share, compared to first quarter of 2020. The increase in these metrics is mainly attributable to higher adjusted EBITDA and lower interest expense related to credit facilities.
- DSO as at March 27, 2021 reached 68 days, compared to 77 days as at March 28, 2020.
- Strong free cash flow* of $85.3 million for the quarter. Trailing twelve-months of free cash flow amounted to $910.9 million, representing 2.6 times net earnings attributable to shareholders.
- Cash inflows from operating activities of $163.4 million in the three-month period ended March 27, 2021, compared to $3.2 million in the comparable period in 2020.
- The net debt to adjusted EBITDA ratio* stood at 0.2x, compared to 0.1x as at December 31, 2020.
- Quarterly dividend declared of $0.375 per share, or $42.7 million, with a 49.1% Dividend Reinvestment Plan (“DRIP”) participation.
“I am pleased with our solid start to the year. Despite starting the first quarter with a reduced headcount and two less billable days, resulting in the expected decrease in our net revenues, our productivity levels remained high allowing us to deliver strong margins,” said Alexandre L’Heureux, WSP’s President and CEO. “With the recent closing of the Golder acquisition, the increased diversification of our capital structure, and cementing our purpose to create a more sustainable world for all our stakeholders, our commitment to remaining operationally resilient is stronger than ever. Given our performance to date, our strong balance sheet, healthy backlog and proposal activity, we are optimistic that we will return to growth in Q2 and are reiterating our outlook. We believe this positions us favorably to achieve our 2019-2021 strategic ambitions notwithstanding these unprecedented times,” he added.
The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about July 15, 2021, to shareholders of record at the close of business on June 30, 2021.
This release includes, by reference, the 2021 first quarter financial reports, including the unaudited interim condensed consolidated financial statements and the Management’s Discussion & Analysis (“MD&A”) of the Corporation.
For a copy of our 2021 first quarter financial results, including the MD&A and the unaudited interim condensed consolidated financial statements, please visit our website at www.wsp.com.
WSP will hold a conference call and webcast at 8 a.m. (Eastern Time) on May 13, 2021 to discuss these results.
To participate in the conference call, dial 1-647-427-2309 or 1-866-521-4907 (toll free).
A live webcast of the conference call will also be available at www.wsp.com/investors.
A presentation of the 2021 first quarter and fiscal highlights and results will be accessible on May 12, 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 quarter ended March 27, 2021. Please refer to "Non-IFRS measures" disclaimer below.
(1) 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. Please refer to the forward-looking statements below.
(2) Management has amended its definition of adjusted net earnings, effective January 1, 2021, to also exclude amortization of intangible assets related to acquisitions. Absent of such amendment, adjusted net earnings and adjusted net earnings per share for the quarter ended March 27, 2021 would have been $84.3 million and $0.74, respectively. The comparative period has been restated.
RESULTS OF OPERATIONS
| ||First quarters ended|
|(in millions of dollars, except number of shares and per share data)|| ||March 27, 2021|| || ||March 28, 2020|| |
|Revenues||$2,104.8|| ||$2,210.0|| |
|Less: Subconsultants and direct costs||$438.0|| ||$473.9|| |
|Net revenues*||$1,666.8|| ||$1,736.1|| |
|Earnings before net financing expense and income taxes||$129.0|| ||$88.0|| |
|Net financing expense||$8.4|| ||$68.3|| |
|Earnings before income taxes||$120.6|| ||$19.7|| |
|Income tax expense||$32.6|| ||$5.4|| |
|Net earnings||$88.0|| ||$14.3|| |
|Net earnings attributable to:|| || |
|Shareholders of WSP Global Inc.||$87.9|| ||$14.2|| |
|Non-controlling interests||$0.1|| ||$0.1|| |
|Basic net earnings per share attributable to shareholders||$0.77|| ||$0.13|| |
|Diluted net earnings per share attributable to shareholders||$0.77|| ||$0.13|| |
|Basic weighted average number of shares|| ||113,722,122|| || ||106,086,809|| |
|Diluted weighted average number of shares|| ||114,053,906|| || ||106,291,753|| |
*Non-IFRS measure. This measure is defined in section 19, “Glossary of non-IFRS measures and segment reporting measures” of the Corporation's Management's Discussion & Analysis for the quarter ended March 27, 2021.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
References to notes refer to notes in the financial statements
|As at||March 27, 2021|| ||December 31, 2020|| |
| ||$|| ||$|| |
|Assets|| || |
|Current assets|| || |
|Cash and cash equivalents (note 15)||439.8|| ||437.1|| |
|Restricted cash (note 13)||310.0|| ||—|| |
|Trade receivables and other receivables||1,611.9|| ||1,598.8|| |
|Cost and anticipated profits in excess of billings||999.4|| ||950.5|| |
|Other financial assets||117.4|| ||118.1|| |
|Prepaid expenses||145.9|| ||168.7|| |
|Income taxes receivable||24.5|| ||27.5|| |
| ||3,648.9|| ||3,300.7|| |
|Non-current assets|| || |
|Right-of-use assets (note 10)||824.3|| ||894.3|| |
|Property and equipment||300.6|| ||314.9|| |
|Intangible assets||312.7|| ||275.5|| |
|Goodwill (note 11)||3,711.8|| ||3,731.9|| |
|Deferred income tax assets||153.5|| ||169.2|| |
|Other assets||163.7|| ||150.9|| |
| ||5,466.6|| ||5,536.7|| |
|Total assets||9,115.5|| ||8,837.4|| |
| || || |
|Liabilities|| || |
|Current liabilities|| || |
|Accounts payable and accrued liabilities||1,788.0|| ||1,718.2|| |
|Billings in excess of costs and anticipated profits||667.2|| ||708.5|| |
|Subscription receipts held for investors (note 13)||310.0|| ||—|| |
|Income taxes payable||115.5|| ||119.1|| |
|Provisions||55.9|| ||71.4|| |
|Dividends payable to shareholders (note 14)||42.7|| ||42.5|| |
|Current portion of lease liabilities (note 10)||225.2|| ||233.1|| |
|Current portion of long-term debt (note 12)||307.7|| ||296.9|| |
| ||3,512.2|| ||3,189.7|| |
|Non-current liabilities|| || |
|Long-term debt (note 12)||314.2|| ||277.3|| |
|Lease liabilities (note 10)||729.1|| ||785.3|| |
|Provisions||167.0|| ||180.9|| |
|Retirement benefit obligations||206.8|| ||232.4|| |
|Deferred income tax liabilities||85.6|| ||90.4|| |
| ||1,502.7|| ||1,566.3|| |
|Total liabilities||5,014.9|| ||4,756.0|| |
| || || |
|Equity|| || |
|Equity attributable to shareholders of WSP Global Inc.||4,099.5|| ||4,080.4|| |
|Non-controlling interests||1.1|| ||1.0|| |
|Total equity||4,100.6|| ||4,081.4|| |
|Total liabilities and equity||9,115.5|| ||8,837.4|| |
CONSOLIDATED STATEMENTS OF CASH FLOWS
References to notes refer to notes in the financial statements
| ||First quarters ended|| |
| ||March 27,|
| ||March 28,|
|Operating activities|| || |
|Net earnings||88.0|| ||14.3|| |
|Adjustments (note 15)||96.8|| ||97.3|| |
|Net financing expense (note 8)||8.4|| ||68.3|| |
|Income tax expense||32.6|| ||5.4|| |
|Income taxes paid||(25.6||)||(25.1||)|
|Change in non-cash working capital items (note 15)||(36.8||)||(157.0||)|
|Cash inflows from operating activities||163.4 || ||3.2 || |
|Financing activities|| || |
|Net (repayment) proceeds of long-term debt||(11.9||)||803.1|| |
|Net financing expenses paid, excluding interest on lease liabilities||(4.8||)||(23.5||)|
|Dividends paid to shareholders of WSP Global Inc.||(19.5||)||(22.9||)|
|Dividends paid to a non-controlling interest||—|| ||(0.1||)|
|Issuance of common shares, net of issuance costs (note 13)||2.6|| ||—|| |
|Cash inflows (outflows) from financing activities||(95.5||)||686.2 || |
|Investing activities|| || |
|Net disbursements related to business acquisitions||(45.2||)||(44.8||)|
|Additions to property and equipment, excluding business acquisitions||(13.5||)||(16.5||)|
|Additions to identifiable intangible assets, excluding business acquisitions||(3.0||)||(6.9||)|
|Dividends received from associates||—|| ||3.8|| |
|Proceeds from disposal of property and equipment||0.3|| ||0.3|| |
|Proceeds from sale of investment in an associate||4.4|| ||—|| |
|Net cash received on a loan from associate||0.3|| ||—|| |
|Cash outflows from investing activities||(56.7||)||(64.1||)|
|Effect of exchange rate change on cash and cash equivalents||(8.2||)||27.9|| |
|Change in net cash and cash equivalents||3.0 || ||653.2 || |
|Cash and cash equivalents, net of bank overdraft – beginning of year||434.7|| ||237.3|| |
|Cash and cash equivalents, net of bank overdraft - end of period (note 15)||437.7 || ||890.5 || |
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; 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 a reconciliation of such measures to the most directly comparable IFRS measures, can be found in WSP’s MD&A for the quarter ended March 27, 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.
As 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.
Certain 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 May 12, 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 sufficiency of WSP’s liquidity and working capital requirements for the foreseeable future; 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, the expected synergies and certain expected financial ratios to be realized as a result of the Golder Acquisition.
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 forward-looking statements 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 quarter ended March 27, 2021, 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.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Chief Financial Officer
WSP Global Inc.