MONTREAL, Aug. 08, 2019 (GLOBE NEWSWIRE) -- WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”) today announced financial and operating results for the second quarter of fiscal 2019, which ended on June 29, 2019.

SECOND QUARTER 2019 HIGHLIGHTS
Solid start to 2019 continues with key financial metrics in line with Management's expectations; full year financial outlook updated to reflect increased IFRS 16 - Leases adjustment. The Corporation adopted IFRS 16 - Leases on January 1, 2019, using the modified retrospective method, for which no restatement of prior year financial statement presentation was required.

  • Revenues and net revenues of $2,311.7 million and $1,768.6 million, up 14.1% and 14.8%, respectively, compared to Q2 2018.

  • Consolidated organic growth in net revenues stood at 2.5% for the quarter and 2.9% year-to-date, in line with Management's expectations.

  • Adjusted EBITDA of $265.4 million, up $95.9 million, or 56.6%, compared to Q2 2018. The significant increase in adjusted EBITDA is due, in large part, to the adoption of IFRS 16 - Leases.  Excluding the impact of the adoption of IFRS 16 - Leases, adjusted EBITDA would have stood at $201.7 million.

  • Adjusted EBITDA margin at 15.0%, compared to 11.0% in Q2 2018. The significant increase in adjusted EBITDA margin is due, in large part, to the adoption of IFRS 16 - Leases.   Excluding the impact of the adoption of IFRS 16 - Leases, adjusted EBITDA margin would have stood at 11.4%.

  • Adjusted net earnings of $100.2 million, or $0.95 per share, up $19.0 million and 23.4%, respectively, compared to Q2 2018.  Excluding the impact of the adoption of IFRS 16 - Leases, adjusted net earnings would have stood at $107.1 million or $1.02 per share.

  • Net earnings attributable to shareholders of $88.7 million, or $0.84 per share, on a diluted basis, up 31.6% and 29.2%, respectively, compared to Q2 2018. Excluding the impact of the adoption of IFRS 16 - Leases, net earnings attributable to shareholders would have stood at $95.6 million or $0.91 per share.

  • Backlog at $7,952.7 million, representing 10.7 months of revenues, up $79.6 million, or 1.0% when compared to Q1 2019 and up $1,245.8 million, or 18.6% when compared to Q2 2018.  Backlog organic growth stood at 2.1% compared to Q2 2018.

  • DSO stood at 80 days, 1 day higher compared to Q2 2018 due to the acquisition of Berger Group Holdings, Inc. ("Louis Berger"). Excluding the impact of Louis Berger, DSO would have been 77 days, 2 days lower than Q2 2018.

  • Trailing twelve-month free cash flow of $484.8 million, representing 171.1% of net earnings attributable to shareholders.

  • Incorporating a full twelve-month adjusted EBITDA for all acquisitions, net debt to adjusted EBITDA ratio stood at 1.6x, in line with our target range. Excluding the impact of the adoption of IFRS 16 - Leases, incorporating a full twelve-month adjusted EBITDA for all acquisitions, net debt to adjusted EBITDA ratio would have stood at 1.9x.

  • Quarterly dividend declared of $0.375 per share, with a 51.7% Dividend Reinvestment Plan (“DRIP”) participation.

  • The integration and restructuring of Louis Berger's operations is proceeding according plan. Louis Berger posted strong net revenue growth for the first half of 2019 compared to the same period last year.

“I am pleased with our second quarter results as the performance in the majority of our regions remains solid. We also continued to improve margin and DSO management, further strengthening our balance sheet, a key element supporting our growth strategy,” said Alexandre L’Heureux, President and CEO of WSP. “Based on the progress made in the first half of the year, we are confident that our efforts will further contribute to the targets set for 2019, and are therefore reiterating our 2019 outlook,” he added.

DIVIDEND
The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about October 15, 2019, to shareholders of record at the close of business on September 30, 2019.

FINANCIAL REPORT
This release includes, by reference, the 2019 second quarter financial report, including the unaudited interim consolidated financial statements and the MD&A of the Corporation.

For a copy of our full financial results for the second quarter of 2019, including the MD&A and the unaudited interim consolidated financial statements, please visit our website at www.wsp.com.

CONFERENCE CALL
WSP will hold a conference call at 4 p.m. (Eastern Time) on August 8, 2019 to discuss these results. To participate in the conference call, dial 1-647-427-2309 or 1-866-521-4907 (toll free). 

A presentation of the 2019 second quarter results will be available on the same day at www.wsp.com in the Investors section, under Presentations & Events. The conference call and slideshow presentation will also be broadcasted live and archived in the Investors section of the WSP website.

RESULTS OF OPERATIONS

 Q2YTD
 2019201820192018
(in millions of dollars, except number of shares and per share data)For the
period from March 31
to June 29
For the
period from April 1
to June 30
For the
period from January 1
to June 29
For the
period from January 1
to June 30
Revenues$2,311.7$2,025.9$4,485.3$3,936.6
Less: Subconsultants and direct costs$543.1$484.8$1,053.3$925.8
Net revenues*$1,768.6$1,541.1$3,432.0$3,010.8
Personnel costs$1,324.7$1,171.9$2,614.8$2,308.8
Other operational costs(1)$184.5$200.5$345.0$400.4
Share of earnings of associates$(6.0)$(0.8)$(10.1)$(1.4)
Adjusted EBITDA*$265.4$169.5$482.3$303.0
Acquisition, integration and restructuring costs*$15.4$18.2$24.4$25.4
EBITDA*$250.0$151.3$457.9$277.6
Amortization of intangible assets$24.5$23.8$48.9$49.0
Depreciation of property and equipment$24.3$22.6$48.3$44.3
Right-to-use asset depreciation$59.1$—118.2$—
Financial expenses$21.4$15.1$35.1$28.7
Share of depreciation of associates$0.3$0.2$0.8$0.6
Earnings before income taxes$120.4$89.6$206.6$155.0
Income-tax expense$29.9$21.7$53.1$37.4
Share of tax of associates$1.3$0.1$2.3$0.1
Net earnings$89.2$67.8$151.2$117.5
Attributable to:    
- Shareholders$88.7$67.4$152.3$117.1
- Non-controlling interests$0.5$0.4$(1.1)$0.4
Basic net earnings per share$0.84$0.65$1.45$1.13
Diluted net earnings per share$0.84$0.65$1.45$1.13
Basic weighted average number of shares105,006,741103,770,823104,858,255103,606,677
Diluted weighted average number of shares105,299,746104,015,114105,135,285103,826,962


*Non-IFRS measures are described in the “Glossary” section of the MD&A
(1)Other operational costs include operation exchange losses or gains and interest income
  

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(in millions of Canadian dollars)June 29, 2019December 31, 2018
Assets$$
Current assets  
Cash (note 4)252.8254.7
Trade, prepaids and other receivables1,900.31,857.6
Income taxes receivable18.313.6
Cost and anticipated profits in excess of billings1,138.81,116.1
 3,310.23,242.0
Non-current assets  
Other assets214.3197.0
Deferred income tax assets105.2116.1
Property and equipment349.1350.6
Intangible assets317.7367.7
Right-to-use assets (note 5)972.6
Goodwill (note 6)3,427.73,493.2
Total assets8,696.87,766.6
   
Liabilities and equity  
Liabilities  
Current liabilities  
Accounts payable and accrued liabilities1,610.81,787.5
Billings in excess of costs and anticipated profits688.0678.3
Income taxes payable38.552.1
Dividends payable to shareholders (note 12)39.439.2
Current portion of long-term debt (note 7)1.542.3
Current portion of lease liability (note 5)202.7
Other current financial liabilities41.214.5
 2,622.12,613.9
Non-current liabilities  
Long-term debt (note 7)1,596.01,461.2
Lease liability (note 5)876.4
Other non-current financial liabilities13.06.7
Provisions76.2153.1
Retirement benefit obligations206.9197.7
Deferred income tax liabilities70.174.3
Total liabilities5,460.74,506.9
   
Equity  
Equity attributable to shareholders  
Share capital (note 8)2,696.12,656.5
Contributed surplus205.7204.9
Accumulated other comprehensive income79.8216.3
Retained earnings254.9181.3
 3,236.53,259.0
Non-controlling interest(0.4)0.7
Total equity3,236.13,259.7
Total liabilities and equity8,696.87,766.6
   

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions of Canadian dollars)Second quarter endedYear-to-date ended
 June 29,
2019
June 30,
2018
June 29,
2019
June 30,
2018
 $$$$
Operating activities    
Net earnings for the period89.267.8151.2117.5
Adjustments (note 13a))85.732.7180.481.1
Income tax expense29.921.753.137.4
Income taxes paid(26.6)(29.6)(47.0)(41.1)
Net finance expenses (note 11)21.414.832.127.0
Change in non-cash working capital items (note 13b))(103.0)(97.0)(245.5)(151.0)
     
Net cash generated from (used in) operating activities96.610.4124.370.9
     
Financing activities    
Dividends paid to shareholders(19.6)(20.3)(39.2)(39.8)
Net variation in long-term debts74.619.9138.665.4
Net variation in other financial liabilities0.3(0.5)(4.0)(4.7)
Finance expenses paid and financing costs(11.3)(15.6)(18.8)(26.7)
Lease payments (note 5)(64.6)(130.0)
Issuance of common shares, net of issuance costs0.40.30.51.0
     
Net cash generated from (used in) financing activities(20.2)(16.2)(52.9)(4.8)
     
Investing activities    
Business acquisitions(50.8)(4.3)(55.5)(45.6)
Additions to property and equipment(13.8)(19.0)(36.4)(38.6)
Proceeds from disposal of property and equipment1.90.58.41.2
Additions to intangible assets(5.7)(8.5)(10.1)(14.7)
Other0.60.8
     
Net cash generated from (used in) investing activities(68.4)(30.7)(93.6)(96.9)
Effect of exchange rate change on cash(1.0)(4.6)(7.4)2.9
Net change in cash7.0(41.1)(29.6)(27.9)
Cash, net of bank overdraft – Beginning of period217.3191.8253.9178.6
     
Cash, net of bank overdraft (note 4) - End of period224.3150.7224.3150.7
     

NON-IFRS MEASURES
The Corporation reports its financial results in accordance with IFRS.  However, in this MD&A, the following non-IFRS measures are used by the Corporation: net revenues; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted EBITDA before Global Corporate costs; adjusted EBITDA margin before Global Corporate costs; adjusted net earnings; adjusted net earnings per share; adjusted net earnings excluding amortization of intangible assets related to acquisitions; adjusted net earnings excluding amortization of intangible assets related to acquisitions per share; acquisition, integration and restructuring costs; backlog; adjusted funds from operations; adjusted funds from operations per share; free cash flow; free cash flow per share; days sales outstanding (“DSO”) and net debt to adjusted EBITDA.  Additional details for these non-IFRS measures can be found in WSP’s MD&A, which is posted on WSP’s website at www.wsp.com, and filed with 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 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.

ABOUT WSP
As one of the world's leading professional services firms, WSP provides engineering and design services to clients in the Transportation & Infrastructure, Property & Buildings, Environment, Power & Energy, Resources and Industry sectors, as well as offering strategic advisory services. Our experts include engineers, advisors, technicians, scientists, architects, planners, surveyors and environmental specialists, as well as other design, program and construction management professionals. With approximately 49,000 talented people globally, we are uniquely positioned to deliver successful and sustainable projects, wherever our clients need us. wsp.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’s Discussion and Analysis for the year ended December 31, 2018, 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. 

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

Isabelle Adjahi
Senior Vice President, Investor Relations and Communications
WSP Global Inc.
Tel: (438) 843-7548
isabelle.adjahi@wsp.com