MONTREAL, March 14, 2019 (GLOBE NEWSWIRE) -- WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”) today announced strong financial and operating results for the fiscal year and fourth quarter ended December 31, 2018.

WSP is pleased with results achieved in Q4 and fiscal 2018. Key 2015-2018 Global Strategic Plan objectives were met, providing the basis for the 2019-2021 Global Strategic Plan presented on January 30, 2019.

Q4 2018

  • Revenues and net revenues of $2,043.9 million and $1,541.0 million, up 4.6% and 4.2%, respectively, compared to Q4 2017.

  • Consolidated organic growth in net revenues stood at negative 2.4%, in line with Management’s anticipated decrease in US-based Federal Emergency Management Agency (“FEMA”) net revenues when compared to Q4 2017. Adjusted for FEMA-based net revenues in excess of Management’s expectations for Q4 2017, consolidated organic growth in net revenues for the quarter would have stood at 2.6%.

  • Adjusted EBITDA of $169.5 million, up $29.5 million, or 21.1%, compared to Q4 2017.

  • Adjusted EBITDA margin at 11.0%, compared to 9.5% in Q4 2017.

  • Adjusted net earnings of $59.1 million, or $0.57 per share, both metrics up 50.0% compared to Q4 2017. Non-cash finance expenses had a negative impact of approximately $0.14 per share.

  • Net earnings attributable to shareholders of $43.3 million, or $0.41 per share, up 42.9% and 41.4%, respectively, compared to Q4 2017.

  • Quarterly dividend declared of $0.375 per share, with a 50.1% Dividend Reinvestment Plan (“DRIP”) participation.

Fiscal 2018

  • Revenues and net revenues of $7,908.1 million and $6,020.6 million, up 13.9% and 12.4%, respectively, compared to 2017.

  • Consolidated organic growth in net revenues of 3.5%, spanning across all reportable segments, in line with Management’s expectations and outlook.

  • Adjusted EBITDA of $660.0 million, up $104.8 million, or 18.9%, compared to 2017.

  • Adjusted EBITDA margin at 11.0%, compared to 10.4% in 2017.

  • Adjusted net earnings of $295.2 million, or $2.83 per share, up 26.2% and 24.1%, respectively, compared to 2017. Non-cash finance expenses had a negative impact of approximately $0.12 per share.

  • Net earnings attributable to shareholders of $248.1 million, or $2.38 per share, up 16.3% and 14.4%, respectively, compared to 2017.

  • Backlog at $7,678.7 million, representing 10.1 months of revenues, up $1,169.6 million, or 18.0% when compared to Q3 2018 and up $1,317.1 million, or 20.7% when compared to Q4 2017. Backlog organic growth stood at 4.2% for the year.

  • Inclusive of all acquisitions made in 2018, DSO stood at 76 days, a 3-day improvement compared to 2017, ahead of Management’s expectations.

  • Full year free cash flow of $547.4 million, representing 220.6% of net earnings attributable to shareholders.

  • Incorporating a full twelve-month adjusted EBITDA for all acquisitions, net debt to adjusted EBITDA ratio stood at 1.8x, in line with our target range.

  • Full year dividend declared of $1.50 per share, or $156.0 million, with cash payout of $78.1, or 50.1%.

“We are pleased by our financial results for 2018, which marks the successful culmination of our 2015-2018 Global Strategic Plan. I am grateful to all our employees around the world for their unwavering commitment to our success. Our performance is indicative of the expertise of our talent and leadership, the strength of our diversified model and our capacity to effectively integrate acquisitions, while still delivering strong top-line and bottom-line results,” said Alexandre L’Heureux, President and CEO of WSP. “As we embark on the first leg of our 2019-2021 Global Strategic Plan, we intend to continue with our strong execution driving industry-leading financial performance, with a focus on positioning WSP as the premier professional consultancy in our industry. With a solid organizational structure of empowered country, regional and sector leaders, we are confident we have the depth and breadth of talent that will continue to support us in achieving our targets,” he added.

CHANGES TO THE CORPORATE TEAM
WSP is pleased to announce the appointment of Alain Michaud as Senior Vice President, Operational Performance and Strategic Initiatives.

In this position, Mr. Michaud will be responsible for overseeing the implementation of high impact initiatives that will support both the improvement of WSP’s operational excellence and the achievement of its strategic plan. He will also advise and support executive management, at both the Global and Regional levels, in deploying human and material resources to implement the strategic initiatives of the Corporation. Mr. Michaud, who will join WSP’s Global Leadership Team, will report to Alexandre L’Heureux, President & CEO of the Corporation.

"We are delighted to welcome someone of Alain’s caliber to the team. Alain is a respected expert and leader, with experience in accounting, finance, corporate culture and change management. He brings to WSP an impressive track record of achievements in the professional services industry, and a broad range of experience in mergers & acquisitions and strategic planning. As we work towards the achievement of our 2019-2021 Global Strategic Plan, he will add a fresh perspective and approach to operational excellence, said Alexandre L’Heureux, President and CEO of WSP.

Before joining WSP, Mr. Michaud was a senior partner at a “big four” accounting firm for over 20 years and a member of both the Canadian and Quebec Leadership Teams. Mr. Michaud holds a bachelor's degree in business administration from the University of Sherbrooke. He obtained his CPA, CA designation in 1997.

In March 2019, Mr. Steeve Robitaille, Chief Legal Officer, Executive Vice President, Merger & Acquisitions and Secretary of the Corporation, announced he will leave his position in the next few weeks to assume a new role at another firm.

“On behalf of the members of the Board of Directors and the Management team, I would like to thank Steeve for his contribution to the Corporation and wish him the very best in his future endeavours. The search process to identify a successor will be initiated shortly”.

OUTLOOK FOR 2019
Management of the Corporation ("Management") has provided guidance on 2019 operating results in the Management's Discussion & Analysis ("MD&A") for the year ended December 31, 2018. The outlook is provided to assist analysts and shareholders in formalizing their respective views on 2019. These measures are subject to change.

DIVIDEND
The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about April 15, 2019, to shareholders of record at the close of business on March 31, 2019.

FINANCIAL REPORT
This release includes, by reference, the 2018 financial reports, including the audited consolidated financial statements and the Management’s Discussion & Analysis (“MD&A”) of the Corporation.

For a copy of our 2018 financial results, including the MD&A and the audited 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 March 14, 2019. A conference call will be held on the same day at 4:00 p.m. (Eastern Time) to discuss the results.

To participate in the conference call, dial 1-647-427-2309 or 1-866-521-4907 (tollfree). A presentation of the 2018 fourth quarter and fiscal highlights and results will be available on the same day at www.wsp.com in the Investor section, under Presentations & Events.
The conference call and slideshow presentation will also be broadcasted live and archived in the Investor section of the WSP website.


RESULTS OF OPERATIONS

 

 
Q4YTD
 2018
 2017
 2018
 2017
(in millions of dollars, except number of shares and per share data)For the
period from
September 30 to
December 31
For the
period from
October 1 to
December 31
For the
period from
January 1 to
December 31
For the
period from
January 1 to
December 31
Revenues$2,043.9 $1,954.3 $7,908.1 $6,942.2 
Less: Subconsultants and direct costs$502.9 $475.7 $1,887.5 $1,585.6 
Net revenues*$1,541.0 $1,478.6 $6,020.6 $5,356.6 
Personnel costs$1,160.1 $1,154.3 $4,567.1 $4,112.9 
Occupancy costs$66.9 $56.3 $258.9 $227.8 
Other operational costs(1)$145.0 $128.4 $536.8 $462.5 
Share of earnings of associates$(0.5)$(0.4)$(2.2)$(1.8)
Adjusted EBITDA*$169.5 $140.0 $660.0 $555.2 
Acquisition and integration costs*$21.7 $12.3 $62.3 $28.4 
EBITDA*$147.8 $127.7 $597.7 $526.8 
Amortization of intangible assets$29.9 $27.9 $102.6 $89.2 
Depreciation of property and equipment$24.6 $22.3 $91.8 $79.6 
Financial expenses$33.2 $14.5 $72.6 $41.1 
Share of depreciation of associates$0.3 $0.5 $1.2 $1.4 
Earnings before income taxes$59.8 $62.5 $329.5 $315.5 
Income-tax expense$16.3 $32.2 $80.5 $102.1 
Share of tax of associates$0.1 $ $0.2 $0.1 
Net earnings$43.4 $30.3 $248.8 $213.3 
Attributable to:    
- Shareholders$43.3 $30.3 $248.1 $213.3 
- Non-controlling interests$0.1 $ $0.7   
Basic net earnings per share$0.41 $0.29 $2.38 $2.08 
Diluted net earnings per share$0.41 $0.29 $2.38 $2.08 
Basic weighted average number of shares 104,387,699  103,084,862  104,150,041  102,448,943 
Diluted weighted average number of shares 104,614,276  103,267,305  104,392,368  102,576,410 


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



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (AUDITED)

 2018 2017 
     
Assets$ $ 
Current assets  
Cash (note 6)254.7 185.1 
Restricted cash5.0 6.8 
Trade, prepaids and other receivables (note 7)1,857.6 1,554.7 
Income taxes receivable13.6 18.0 
Cost and anticipated profits in excess of billings (note 8)1,116.1 905.0 
 3,247.0 2,669.6 
Non-current assets  
Other assets (note 9)192.0 113.0 
Deferred income tax assets (note 23)116.1 91.4 
Property and equipment (note 10)350.6 315.4 
Intangible assets (note 11)367.7 355.2 
Goodwill (note 12)3,493.2 2,979.0 
Total assets7,766.6 6,523.6 
   
Liabilities and equity  
Liabilities  
Current liabilities  
Accounts payable and accrued liabilities (note 14)1,787.5 1,361.9 
Billings in excess of costs and anticipated profits (note 8)678.3 483.8 
Income taxes payable52.1 47.9 
Dividends payable to shareholders (note 24)39.2 38.7 
Current portion of long-term debts (note 15)42.3 276.3 
Other current financial liabilities (note 16)14.5 45.8 
 2,613.9 2,254.4 
Non-current liabilities  
Long-term debts (note 15)1,461.2 882.4 
Other non-current financial liabilities (note 16)6.7 25.4 
Provisions (note 14)153.1 121.2 
Retirement benefit obligations (note 17)197.7 206.7 
Deferred income tax liabilities (note 23)74.3 74.5 
Total liabilities4,506.9 3,564.6 
   
Equity  
Equity attributable to shareholders  
Share capital (note 18)2,656.5 2,577.4 
Contributed surplus204.9 204.2 
Accumulated other comprehensive income216.3 86.0 
Retained earnings181.3 91.4 
 3,259.0 2,959.0 
Non-controlling interest0.7  
Total equity3,259.7 2,959.0 
Total liabilities and equity7,766.6 6,523.6 
Commitments and contingencies (note 28)  



CONSOLIDATED STATEMENTS OF CASH FLOWS (AUDITED)

 2018 2017 
     
 $ $ 
Operating activities  
Net earnings for the period248.8 213.3 
Adjustments (note 25a))171.1 139.7 
Income tax expense (note 23)80.5 102.1 
Income taxes paid(73.9)(58.8)
Net finance expenses (note 22)68.8 36.9 
Change in non-cash working capital items (note 25b))174.4 (37.8)
Net cash generated from (used in) operating activities669.7 395.4 
Financing activities  
Dividends paid to shareholders(78.1)(70.4)
Net variation in long-term debts (note 25 c))217.7 66.8 
Net variation in other financial liabilities(4.2)(15.1)
Finance expenses paid and financing costs(59.1)(36.5)
Issuance of common shares, net of issuance costs1.4 2.6 
Net cash generated from (used in) financing activities77.7 (52.6)
Investing activities  
Business acquisitions (note 4)(556.7)(291.9)
Additions to property and equipment(98.1)(79.7)
Proceeds from disposal of property and equipment4.5 4.8 
Additions to intangible assets(28.7)(24.4)
Other0.9 (3.3)
Net cash generated from (used in) investing activities(678.1)(394.5)
Effect of exchange rate change on cash6.0 (0.2)
Net change in cash75.3 (51.9)
Cash, net of bank overdraft (note 6) – Beginning of period178.6 230.5 
Cash, net of bank overdraft (note 6) - End of period253.9 178.6 


NON-IFRS MEASURES

The Corporation reports its financial results in accordance with IFRS. However, 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; funds from operations; funds from operations per share; free cash flow; free cash flow per share; days sales outstanding (or 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, in addition to other design, program and construction management professionals. With approximately 48,000 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