WSP Reports Q1 2020 Results

MONTREAL, May 06, 2020 (GLOBE NEWSWIRE) -- WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”) today announced financial and operating results for the first quarter of fiscal 2020 ended on March 28, 2020.


Operational performance in line with Management's expectations during the first quarter of 2020. Net earnings were mainly impacted by non-cash items resulting from extreme market volatility.

  • Revenues and net revenues* for the quarter reached $2.2 billion and $1.7 billion, up 1.7% and 4.4%, respectively, compared to Q1 2019. Organic growth in net revenues achieved 1.1% for the quarter. Excluding the impact of one less billable day in Q1 2020 compared to Q1 2019, our performance in Western Canada affected by the impact of the depressed oil and gas industry and the performance of our Asian operations affected by the COVID-19 pandemic, organic growth in net revenues is in-line with Management’s expectations.

  • Strong backlog* as at March 28, 2020 stood at $8.5 billion, representing a record high of 11.1 months of revenues, up $349.2 million or 4.3% from $8.1 billion as at December 31, 2019 and up $607.9 million or 7.7% when compared to March 30, 2019. Backlog organic growth reached 3.7% compared to December 31, 2019 and 5.3% compared to March 30, 2019.

  • Adjusted EBITDA* in the quarter of $218.4 million, up $1.5 million or 0.7%, compared to $216.9 million in Q1 2019. Adjusted EBITDA margin* for the quarter reached 12.6%, compared to 13.0% in Q1 2019. Adjusted EBITDA is in line with Management's expectations despite one less billable day in Q1 2020 compared to Q1 2019 and severances recorded in the quarter resulting from the continuous optimization of our operations.

  • Earnings before net financing expense and income taxes in the quarter of $88.0 million, down $7.9 million, or 8.2%, compared to Q1 2019, mainly due to higher amortization and depreciation related to recent acquisitions.

  • Net earnings attributable to shareholders for the quarter of $14.2 million, or $0.13 per share, down from $63.6 million, or $0.61 per share, in Q1 2019. The decrease is mainly attributable to extreme market volatility resulting in a non-cash reduction in value of investments related to a US employees' deferred compensation plan and the reduction in value of foreign exchange forward contracts existing at the end of the quarter which will be used to hedge future transactions, as well as higher amortization and depreciation related to recent acquisitions.

  • Adjusted net earnings* for the quarter of $47.5 million, or $0.45 per share, down $8.9 million and $0.09, respectively, compared to Q1 2019. The decrease is mainly due to higher amortization and depreciation related to recent acquisitions.

  • DSO* as at March 28, 2020 stood at 77 days, compared to 78 days as at March 30, 2019.

  • Cash inflows from operating activities of $3.2 million in the three-month period ended March 28, 2020, compared to $27.7 million in the comparable period in 2019.

  • Free cash outflow* of $90.3 million for the quarter. Trailing twelve-months of free cash flow amounted to $409.5 million, representing 173% of net earnings attributable to shareholders.

  • Incorporating a full twelve-month adjusted EBITDA for all acquisitions, net debt to adjusted EBITDA ratio* stood at 1.3x, within Management's target range, and slightly higher than 1.1x as at December 31, 2019 due mainly to non-cash foreign exchange impacts resulting from market volatility in March 2020.

  • Quarterly dividend declared of $0.375 per share, with a 34.1% Dividend Reinvestment Plan (“DRIP”) participation.

In December 2019, a novel strain of coronavirus, COVID-19, was reported in China and has now spread globally. In March 2020, the World Health Organization officially declared COVID-19 a pandemic. Containment efforts implemented by governments around the world have intensified, causing broad disruptions in the global economy.

In response to the pandemic, the Corporation has implemented business continuity plans with most of its people currently working remotely. Leveraging technology investments, our people are collaborating to deliver projects and pursue new assignments. In most of WSP’s major hubs, many of the services or projects are considered as essential services and the Corporation has, to date, maintained good productivity levels and our clients have thus far generally remained committed to their projects, particularly in the public sector. In Hong Kong and mainland China, the Corporation has, since early March, seen an improvement in its operations. Lastly, the first quarter of 2020 has seen a high level of volatility and uncertainty in the oil and gas sector.

The Corporation has proactively implemented measures to adjust its cost structures and has postponed non-essential capital expenditures. WSP is closely following developments in each of the regions in which it operates and will consider additional initiatives if warranted.

“In addressing the complex and evolving challenges created by the COVID-19 pandemic, our top priority remains to ensure the health and safety of our employees, clients, and the communities in which we operate. The resilience our people have demonstrated as they transitioned almost immediately to a new way of working has been remarkable,” said Alexandre L’Heureux, WSP’s President and CEO. “I am pleased with the operational performance of our regions for the first quarter, which is in line with our expectations. As for the second quarter, we have two objectives. The first is to maintain our free cash flow in excess of net earnings for the trailing twelve-month period ending with the second quarter. The second is to maintain an adjusted EBITDA margin profile similar to the second quarter of 2019, excluding any non-recurring expenses related to the adjustments to our cost structures.  For the third and fourth quarters, we expect to have similar ambitions and will reassess these in light of future developments. Moreover, our April results are better than we had expected going into the month. We have entered this crisis in a strong position and I am confident that, with our diversified business model, our engaged people and the disciplined management of our global business, we will come out of this pandemic on the other side an equally strong organization,” he added.

As announced on April 15, 2020, WSP recognized the unprecedented uncertainty it is facing and withdrew the 2020 financial outlook provided on February 26, 2020.

The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about July 15, 2020, to shareholders of record at the close of business on June 30, 2020.

This release includes, by reference, the 2020 first quarter financial reports, including the unaudited interim consolidated financial statements and the Management’s Discussion & Analysis (“MD&A”) of the Corporation.

For a copy of our 2020 first quarter financial results, including the MD&A and the unaudited interim consolidated financial statements, please visit our website at

WSP will hold a conference call at 8 a.m. (Eastern Time) on May 7, 2020 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 2020 first quarter results and fiscal highlights will be available on the same day at in the Investors section, under Presentations & Events.
The conference call and slide show presentation will also be broadcast live and archived in the Investors section of the WSP website.


 Three months ended
(in millions of dollars, except number of shares and per share data)March 28, 2020March 30, 2019
Less: Subconsultants and direct costs$473.9$510.2
Net revenues*$1,736.1$1,663.4
Earnings before net financing expense and income taxes$88.0$95.9
Net financing expense$68.3$10.7
Earnings before income taxes$19.7$85.2
Income tax expense$5.4$23.2
Net earnings$14.3$62.0
Net earnings attributable to:  
Shareholders of WSP Global Inc.$14.2$63.6
Non-controlling interests$0.1$(1.6)
Basic net earnings per share$0.13$0.61
Diluted net earnings per share$0.13$0.61
Basic weighted average number of shares106,086,809104,768,837
Diluted weighted average number of shares106,291,753105,031,582

*Non-IFRS measures. These measures are defined in section 20, “Glossary of non-IFRS measures and segment reporting measures” and reconciliations to IFRS measures can be found in section 9, "Financial Review" and section 10, "Liquidity" of the Management's Discussion & Analysis for the quarter ended March 28, 2020.


References to notes refer to notes in the financial statements

As atMarch 28, 2020December 31, 2019
Current assets  
Cash and cash equivalents (note 13)902.6255.6
Trade receivables and other receivables1,842.81,767.8
Cost and anticipated profits in excess of billings1,174.8995.7
Other financial assets103.3114.5
Prepaid expenses106.8104.2
Income taxes receivable22.818.8
Non-current assets  
Right-of-use assets944.2913.4
Property and equipment348.1347.7
Intangible assets350.4355.4
Goodwill (note 9)3,729.33,568.8
Deferred income tax assets169.8145.8
Other assets93.388.4
Total assets9,788.28,676.1
Current liabilities  
Accounts payable and accrued liabilities1,693.81,650.7
Billings in excess of costs and anticipated profits685.1629.0
Income taxes payable130.5125.3
Dividends payable to shareholders (note 12)39.839.7
Current portion of lease liabilities236.9211.7
Current portion of long-term debt (note 10)309.8307.8
Non-current liabilities  
Long-term debt (note 10)1,965.11,091.9
Lease liabilities852.0838.9
Retirement benefit obligations207.4213.4
Deferred income tax liabilities94.591.2
Total liabilities6,361.95,344.2
Equity attributable to shareholders of WSP Global Inc.3,425.23,330.8
Non-controlling interests1.11.1
Total equity3,426.33,331.9
Total liabilities and equity9,788.28,676.1


References to notes refer to notes in the financial statements

For the three-month periods endedMarch 28, 2020March 30, 2019
Operating activities  
Net earnings14.362.0
Adjustments  (note 13)97.394.7
Net financing expense (note 7)68.310.7
Income tax expense5.423.2
Income taxes paid(25.1)(20.4)
Change in non-cash working capital items (note 13)(157.0)(142.5)
Cash inflows from operating activities3.227.7
Financing activities  
Net proceeds of long-term debt803.164.0
Lease payments(70.4)(65.4)
Net financing expenses paid(23.5)(11.8)
Dividends paid to shareholders of WSP Global Inc.(22.9)(19.6)
Dividends paid to a non-controlling interest(0.1)
Issuance of common shares, net of issuance costs0.1
Cash inflows (outflows) from financing activities686.2(32.7)
Investing activities  
Net disbursements related to business acquisitions(44.8)(4.7)
Additions to property and equipment, excluding business acquisitions(16.5)(22.6)
Additions to identifiable intangible assets, excluding business acquisitions(6.9)(4.4)
Dividends received from associates3.8
Additional investment in associates and joint ventures
Proceeds from disposal of property and equipment0.36.5
Cash outflows from investing activities(64.1)(25.2)
Effect of exchange rate change on cash and cash equivalents27.9(6.4)
Change in net cash and cash equivalents653.2(36.6)
Cash and cash equivalents, net of bank overdraft – beginning of the period237.3253.9
Cash and cash equivalents, net of bank overdraft - end of period (note 13)890.5217.3

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 first quarter ended March 28, 2020, which is posted on WSP’s website at, and filed on SEDAR at

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, 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.

Certain information regarding WSP contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, objectives, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact, including statements regarding the sufficiency of WSP’s liquidity and working capital requirements for the foreseeable future, objective for second quarter to maintain the Corporation’s free cash flow in excess of net earnings and an adjusted EBITDA margin profile similar to same quarter last year and WSP's expectation regarding timing of a revised outlook. 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 6, 2020, 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 COVID-19 on the Corporation’s businesses, operating results, cash flows and/or financial condition, including the effect of measures implemented as a result of COVID-19.

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 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, 2019 and for the quarter ended March 28, 2020, which are available on SEDAR at 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.


Alain Michaud
Chief Financial Officer
WSP Global Inc.
[email protected]
Phone: 438-843-7317