Q4 2022 Financial Highlights
(All results reflect comparisons to prior-year period of Q4 2021, except otherwise indicated)

  • SNCL Services revenue increased 1.0% to $1.7 billion, or 1.1% on an organic revenue growth(1)(5) basis, despite a $93.0 million positive impact of a favorable arbitration outcome in Q4 2021 in the Engineering Services segment
  • SNCL Services Segment Adjusted EBIT of $155.9 million, representing a 9.0% margin
  • LSTK Projects Segment Adjusted EBIT of negative $150.2 million, following what management expects is the last material cost reforecast, as the two Ontario projects have reached the major milestone of being largely physically complete
  • Net loss from continuing operations attributable to SNC-Lavalin shareholders totaled $54.4 million, or $0.31 per diluted share, compared to a net loss of $15.3 million, or $0.09 per diluted share in Q4 2021
  • Net cash generated from operating activities of $176.0 million

Full Year 2022 Financial Highlights
(All results reflect comparisons to full year 2021, except otherwise indicated)

  • Delivered on the pillars of the Company's "Pivoting to Growth" strategy
  • SNCL Services revenue increased 4.9% to $6.6 billion, or 6.8% on an organic revenue growth(1)(5) basis, in line with the high-end of the latest Company outlook range
  • SNCL Services Segment Adjusted EBIT of $581.0 million, representing an 8.7% margin, in line with the latest Company outlook range
  • SNCL Services backlog increased 4.9% to $11.8 billion as at December 31, 2022
  • LSTK Projects Segment Adjusted EBIT of negative $261.3 million. Now that the two Ontario projects are largely physically complete, focus will be on handing over the projects to the clients and pursuing the Company's claims
  • Net income from continuing operations attributable to SNC-Lavalin shareholders of $16.6 million, or $0.09 per diluted share, compared to $100.2 million, or $0.57 per diluted share in 2021
  • Net cash used for operating activities of $245.4 million, better than the latest Company outlook provided in the Q3 2022 earnings press release

2023 Outlook

  • SNCL Services organic revenue growth(1)(5) expected to be between 5% and 7%, compared to 2022, with an SNCL Services Segment Adjusted EBIT to segment revenue ratio between 8% and 10%
  • Net cash from operating activities is expected to be negative in the first half of 2023, as cash inflows from SNCL Services and Capital are expected to be more than offset by cash outflows from LSTK Projects, while net cash from operating activities is expected to be positive in the second half of 2023, as cash outflows from LSTK Projects will be significantly less

NCIB Program

  • The Board of Directors has approved a normal course issuer bid ("NCIB") program for the next 12 months, which has been approved by the Toronto Stock Exchange

MONTREAL, March 3, 2023 /CNW/ - SNC-Lavalin Group Inc. (TSX: SNC), a fully integrated professional services and project management company with offices around the world, today announced its financial results for the fourth quarter and full year ended December 31, 2022.

SNC-Lavalin Inc. Logo (CNW Group/SNC-Lavalin)

"I am pleased with our SNCL Services fourth quarter results which further demonstrate our ability to deliver on our stated "Pivoting to Growth" strategy," said Ian L. Edwards, President and CEO of SNC-Lavalin Group Inc. "Our SNCL Services business produced its seventh consecutive quarter of positive year-over-year revenue growth, and our Engineering Services segment achieved a third consecutive quarter of record high backlog, with continued growth in the U.S. Looking forward, we expect 2023 will be another strong year for our resilient services businesses with revenue growth, margins and cash flows in line with our financial targets through to 2024."

"With the LSTK challenge now largely behind us, we now turn our focus on the next phase of our transformation into a pure play Professional Services and Project Management company. As such, we are conducting a strategic review to further optimize our portfolio of businesses in order to focus on the successful growth we achieved in 2022, within our Engineering Services, Nuclear and O&M businesses. Significant opportunity lies ahead for SNC-Lavalin as governments and public entities across the world make structural decisions for a greener power grid. Our end-to-end Engineering Services and Nuclear capabilities position us as market leaders to support these global initiatives," added Mr. Edwards.

Fourth Quarter Financial Results

Professional Services & Project Management are collectively referred to as "PS&PM" to distinguish them from "Capital" activities. PS&PM groups together five of the Company's segments, namely Engineering Services, Nuclear, Linxon, Operation & Maintenance ("O&M"), and Lump-Sum Turnkey ("LSTK") Projects, while Capital is its own reportable segment and separate from PS&PM.

IFRS Financial Highlights


Q4 2022

Q4 2021

2022A

2021A

Revenue





   From PS&PM

1,850.7

1,879.7

7,439.9

7,237.1

   From Capital

49.4

65.2

109.2

134.1

Total

1,900.1

1,944.9

7,549.0

7,371.3

Attributable to SNC-Lavalin shareholders





Net income (loss) from continuing operations:





   From PS&PM

(90.6)

(67.9)

(45.0)

27.0

   From Capital

36.3

52.6

61.6

73.2

Total

(54.4)

(15.3)

16.6

100.2

Diluted EPS from continuing operations:





   From PS&PM ($)

(0.52)

(0.39)

(0.26)

0.15

   From Capital ($)

0.21

0.30

0.35

0.42

Total ($)

(0.31)

(0.09)

0.09

0.57






Net income (loss) from discontinued operations

-

(37.6)

(6.9)

566.4

Net income (loss)

(54.4)

(52.9)

9.8

666.6

Net cash generated from (used for) operating activities

176.0

115.4

(245.4)

134.2

Backlog as at December 31B





   SNCL Services



11,834.4

11,283.5

   Capital



31.6

146.6

   LSTK Projects



685.5

1,166.9

Total



12,551.4

12,597.0


Non-IFRS Financial Highlights


Q4 2022

Q4 2021

2022A

2021A

Attributable to SNC-Lavalin shareholders





Adjusted net income (loss) from PS&PM(1)

(32.5)

(25.6)

112.8

152.1

Adjusted diluted EPS from PS&PM(1)(2) ($)

(0.19)

(0.15)

0.64

0.87

Adjusted EBITDA from PS&PM(1)

20.2

4.9

387.9

433.8

All figures in millions of dollars, except otherwise indicated

Certain totals and subtotals may not reconcile due to rounding

A For the year ended December 31 

B Comparative figures have been restated to reflect the new reportable segments effective as of January 1, 2022

  • Q4 2022 net loss from continuing operations attributable to SNC-Lavalin shareholders was $54.4 million, or $0.31 per diluted share, compared to a net loss of $15.3 million, or $0.09 per diluted share in Q4 2021.
    • The variation was mainly due to a lower Segment Adjusted EBIT, higher restructuring & transformation costs and net financial expenses, partially offset by lower corporate selling, general & administrative expenses. The increase in restructuring & transformation costs was mainly due to non-cash charges incurred to right size the office real estate footprint to align with new working practices, while the increase in net financial expenses was mainly due to the increase in interest rates experienced during the year.
  • Management is undertaking a strategic review to optimize its portfolio of businesses, including Linxon, to ensure that capital and human resources are prioritized to the areas of the business with the highest value creation potential.

Lines of Business Performance

SNCL Services


Q4 2022

Q4 2021B

2022A

2021A,B

Segment revenue





   Engineering Services

1,242.9

1,216.3

4,686.2

4,366.4

   Nuclear

223.6

220.4

896.0

904.7

   O&M

131.6

114.6

497.2

470.4

   Linxon

133.9

164.3

561.2

588.4

Total SNCL Services

1,732.1

1,715.6

6,640.6

6,330.0

Segment Adjusted EBIT





   Engineering Services

119.2

189.5

397.7

464.0

   Nuclear

40.6

34.8

144.0

135.9

   O&M

10.2

11.5

49.1

54.6

   Linxon

(14.2)

3.2

(9.8)

18.2

Total SNCL Services

155.9

239.0

581.0

672.6

Segment Adjusted EBIT to segment revenue ratio

9.0 %

13.9 %

8.7 %

10.6 %

Backlog as at December 31





   Engineering Services



4,662.1

3,769.0

   Nuclear



936.6

834.9

   O&M



5,353.9

5,705.4

   Linxon



881.8

974.2

Total SNCL Services



11,834.4

11,283.5

All figures in millions of dollars, except otherwise indicated

A For the year ended December 31

B Comparative figures have been restated to reflect the new reportable segments effective as of January 1, 2022

  • Q4 2022 revenue reached $1.7 billion, up 1.0% compared to Q4 2021, or 1.1% on an organic revenue growth(1)(5) basis, despite year-over-year comparison against results including a $93.0 million positive impact of a favorable arbitration outcome in Q4 2021 in Engineering Services.
  • Q4 2022 Segment Adjusted EBIT was $155.9 million, representing a 9.0% margin.
    • Engineering Services Segment Adjusted EBIT of $119.2 million represents a strong 9.6% margin, but lower than the corresponding quarter last year, as Q4 2021 Segment Adjusted EBIT included a $93.0 million positive impact of a favorable arbitration outcome.
      • Engineering Services Segment Adjusted EBITDA to segment net revenue ratio(1)(6) of 16.0%.
    • Nuclear Segment Adjusted EBIT of $40.6 million representing an 18.2% margin.
    • O&M Segment Adjusted EBIT of $10.2 million representing a 7.8% margin.
    • Linxon Segment Adjusted EBIT of $(14.2) million representing a (10.6)% margin.
      • Linxon Segment Adjusted EBITDA to segment net revenue ratio(1)(7) of (15.2)%.
  • Backlog amounted to $11.8 billion as at December 31, 2022, which included $1.9 billion of bookings in Q4 2022, representing a 1.10 booking-to-revenue ratio(1)(3).
    • Engineering Services backlog reached a third consecutive quarter record-high and totaled $4.7 billion as at December 31, 2022, an increase of 23.7%, compared to December 31, 2021, which includes another new record-high for the UK and the United States. Bookings in Q4 2022 totaled $1.3 billion, representing a 1.03 booking-to-revenue ratio(1)(3).

LSTK Projects


Q4 2022

Q4 2021B

2022A

2021A,B

Revenue

118.6

164.1

799.3

907.2

Segment Adjusted EBIT

(150.2)

(233.0)

(261.3)

(302.6)

Backlog increase (decrease)

21.6

8.5

(481.4)

(671.2)

Backlog as at December 31



685.5

1,166.9

All figures in millions of dollars

A For the year ended December 31

B Comparative figures have been restated to reflect the new reportable segments effective as of January 1, 2022


The Company continues to execute its LSTK projects exit strategy, progressing well on the winding down of its last remaining projects. Progress on all three infrastructure projects was strong in the quarter, and the two remaining Ontario projects are now largely physically complete.

  • The LSTK Projects segment backlog slightly increased during the quarter, as the progress on the projects was mainly offset by higher forecast costs to complete the remaining projects. Backlog totaled $685.5 million as at December 31, 2022, representing a 41.3% decrease compared to December 31, 2021.
  • Q4 2022 Segment Adjusted EBIT was negative $150.2 million, following what management expects is the last material cost reforecast, as the two Ontario projects are largely physically complete. This was driven primarily by previously identified factors of high construction and materials inflation rates, supply chain disruptions and labour actions.
  • 2022 Segment Adjusted EBIT totaled negative $261.3 million and included:
    • $217 million of losses related with the previously disclosed $300 million* potential financial risks to complete the LSTK projects.
    • $44 million of losses mainly related to segment overhead costs needed to manage the completion of these projects and pursue the material cost reimbursement claims that management believes are entitled under the contracts.
  • Losses related to the LSTK Projects segment in 2023 are forecasted to be primarily contained to overhead costs to successfully hand over the projects to the clients, and to pursue the Company's claims. These overheads costs are forecasted to be at a similar level to 2022.
  • The Company is actively pursuing COVID-19 and other claims associated with the increased costs experienced on the projects. While discussions with the clients remain ongoing, and may take some time to settle, once the claims are resolved the related cash received will be incrementally positive to the Company's net cash from operating activities.

* Announced on March 3, 2022. See also the assumptions and methodology set out in Section 2.2 of the Company's 2022 Annual Management's Discussion and Analysis ("2022 Annual MD&A") under the heading "How We Budget and Forecast Our Results", particularly but not limited to the Source of Variation titled "Unforeseen impacts related to ongoing and continued duration of COVID-19 pandemic and other future national or global health crises" and the "Forward-Looking Statements" section in this press release.


Capital


Q4 2022

Q4 2021

2022A

2021A

Revenue

49.4

65.2

109.2

134.1

Segment Adjusted EBIT

45.2

60.6

93.3

119.3

Backlog as at December 31



31.6

146.6

All figures in millions of dollars

A For the year ended December 31


The Q4 2022 Capital Segment Adjusted EBIT decrease was mainly due to a decreased contribution from InPower BC G.P. (the John Hart Generating Station), since its disposal to SNC-Lavalin Infrastructure Partners LP in February 2022, as well as lower contribution from a concession driven by the shutdown of a power plant due to a planned major maintenance and the receipt of $37.2 million dividends from Highway 407 ETR, compared to $40.6 million in Q4 2021.

Operating Cash Flow and Financial Position

  • Net cash generated from operating activities amounted to $176.0 million in Q4 2022. For the year ended December 31, 2022, net cash used for operating activities amounted to $245.4 million, better than the Company's latest outlook. The positive operating cash flows in Q4 2022 were mainly due to operating cash inflows from SNCL Services and Capital, partially offset by operating cash outflows needed to complete the remaining LSTK Projects.
  • Net cash generated from operating activities in SNCL Services(1)(8) of $340.0 million in Q4 2022.
  • Cash and cash equivalents of $570.3 million as at December 31, 2022.
  • Recourse debt of $1.5 billion and limited recourse debt of $0.4 billion as at December 31, 2022.
  • Net limited recourse and recourse debt to Adjusted EBITDA ratio(1)(4) of 2.9 as at December 31, 2022.

2023 Outlook

  • This outlook is provided as at March 3, 2023, to assist analysts and investors in formulating their respective views on the year ending December 31, 2023. The following information is based on current expectations. This information is forward-looking and the actual results could differ materially. The 2023 Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.
  • This outlook is based on the assumptions and methodology described in the Company's 2022 Annual MD&A under the heading, "How We Budget and Forecast Our Results" and the "Forward-Looking Statements" section below and is subject to the risks and uncertainties summarized therein and in the Company's 2022 Annual MD&A.
  • Management expects for 2023 that SNCL Services organic revenue growth and profitability ratios should be within the ranges of its 2022-2024 targets, as outlined in the Company's "Pivoting to Growth" strategy presented during the September 2021 investor day.
  • Management also expects that in 2023 net cash flows from operating activities should be negative in the first half of the year, as cash inflows from SNCL Services and Capital should be more than offset by cash outflows from LSTK Projects, while net cash flows from operating activities should be positive in the second half of the year, as cash outflows from LSTK Projects should be significantly less.
  • SNC-Lavalin is providing the following targets for the full year 2023:

2023 Target

2022 Actual

SNCL Services organic revenue growth(1) (5)

Between

 5% and 7%

6.8 %

SNCL Services Segment Adjusted EBIT to segment revenue ratio

Between

8% and 10%

8.7 %

Segment adjusted EBITDA to segment net revenue ratio(1) (6) – Engineering Services

Between

14% and 16%

14.6 %

Corporate selling, general and administrative expenses



From PS&PM

From Capital

~$100 million

~$30 million

$99 million

$28 million

Amortization of intangible assets related to business combinations

~$90 million

$84 million

Net cash generated from (used for) operating activities

First half of the year – negative

$(263) million

Second half of the year – positive

$17 million

Acquisition of property and equipment

Between

$80 and $100 million

$110 million


Normal Course Issuer Bid ("NCIB")

In light of, among other factors, the positive results from the Company's SNCL Services for the fourth quarter and year ended December 31, 2022 and the Company's 2023 Outlook as set out above and with a view to returning capital to shareholders, the Company's Board of Directors has approved a normal course issuer bid to repurchase up to 1.5 million common shares on the Toronto Stock Exchange (the "TSX") over the course of the next 12 months, which has been accepted by the TSX.

Quarterly Dividend

The Board of Directors today declared a cash dividend of $0.02 per share, unchanged from the previous quarter. The dividend is payable on March 31, 2023, to shareholders of record on March 17, 2023. This dividend is an "eligible dividend" for Canadian federal and provincial income tax purposes.

Fourth Quarter 2023 Conference Call / Webcast

SNC-Lavalin will hold a conference call and audio webcast today at 8:30 a.m. (Eastern Time) to discuss and present its fourth quarter financial results. The live audio webcast of the conference call can be accessed through a link posted on the Company's website, as well as an accompanying slide presentation, at www.investors.snclavalin.com. The call will also be accessible by telephone, please dial toll free at 1 800 319 4610 in North America or dial 1 604 638 5340 outside North America. You can also use the following numbers: 416 915 3239 in Toronto, 514 375 0364 in Montreal, or 0808 101 2791 in the United Kingdom. A recording and a transcript of the conference call will be available on the Company's website within 24 hours following the call.

About SNC-Lavalin

Founded in 1911, SNC-Lavalin is a fully integrated professional services and project management company with offices around the world dedicated to engineering a better future for our planet and its people. We create sustainable solutions that connect people, technology and data to design, deliver and operate the most complex projects. We deploy global capabilities locally to our clients and deliver unique end-to-end services across the whole life cycle of an asset including consulting, advisory & environmental services, intelligent networks & cybersecurity, design & engineering, procurement, project & construction management, operations & maintenance, decommissioning and capital. – and delivered to clients in key strategic sectors such as Engineering Services, Nuclear, Operations & Maintenance and Capital. News and information are available at snclavalin.com or follow us on LinkedIn and Twitter.

(1) Non-IFRS financial measures and ratios, supplementary financial measures and non-financial information do not have a standardized definition within International Financial Reporting Standards (IFRS), and other issuers may define these measures differently and, accordingly, these may not be comparable to similar measures used by other issuers. Refer to the sections "Non-IFRS Financial Measures and Ratios, Supplementary Financial Measures and Non-Financial Information" and "Reconciliations and Calculations" of this press release.

(2) Adjusted diluted EPS is a non-IFRS ratio based on adjusted net income (loss) attributable to SNC-Lavalin shareholders from continuing operations, itself a non-IFRS financial measure.

(3) Booking-to-revenue ratio is a non-IFRS ratio based on contract bookings.

(4) Net limited recourse and recourse debt to Adjusted EBITDA ratio is a non-IFRS ratio based on net limited recourse and recourse debt at the end of a given period and Adjusted EBITDA of the corresponding trailing twelve-month period, both of which are non-IFRS financial measures.

(5) Organic revenue growth (contraction) is a non-IFRS ratio comparing organic revenue (which excludes foreign exchange and acquisition and divestiture impacts), itself a non-IFRS financial measure, between two periods.

(6) Segment Adjusted EBITDA to segment net revenue for the Engineering Services segment is a non-IFRS ratio based on Segment Adjusted EBITDA and segment net revenue, both of which are non-IFRS financial measures.

(7) Segment Adjusted EBITDA to segment net revenue for the Linxon segment is a non-IFRS ratio based on Segment Adjusted EBITDA and segment net revenue, both of which are non-IFRS financial measures.

(8) Net cash generated from (used for) operating activities on a line of business/segment basis is a supplementary financial measure and is identical in composition to net cash generated from (used for) operating activities as reported in the financial statements, except that it is provided on a line of business/segment basis as opposed to on a consolidated basis.


Non-IFRS Financial Measures and Ratios, Supplementary Financial Measures and Non-Financial Information

The Company reports its financial results in accordance with IFRS. However, the following non–IFRS financial measures and ratios, supplementary financial measures and non-financial information are used by the Company in this press release: Organic revenue growth (contraction), EBITDA, Adjusted EBITDA, Adjusted net income (loss) attributable to SNC-Lavalin shareholders, Adjusted diluted EPS, Booking-to-revenue ratio, Segment Adjusted EBITDA to segment net revenue ratio, Segment net revenue, Net limited recourse and recourse debt to adjusted EBITDA ratio, Net limited recourse and recourse debt and Net cash generated from (used for) operating activities on a line of business/segment basis. Additional details for these non-IFRS financial measures and ratios, supplementary financial measures and non-financial information can be found below and in Sections 8 and 13 of the Company's 2022 Annual MD&A, which sections are incorporated by reference into this press release, filed with the securities regulatory authorities in Canada, available on SEDAR at www.sedar.com and on the Company's website at www.snclavalin.com under the "Investors" section. Non-IFRS financial measures and ratios, supplementary financial measures and non-financial information do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with IFRS, these non-IFRS financial measures and ratios, and supplementary financial measures and non-financial information provide additional insight into the Company's operating performance and financial position and certain investors may use this information to evaluate the Company's performance from period to period. However, these non-IFRS financial measures and ratios, and supplementary financial measures and non-financial information have limitations and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Furthermore, certain non-IFRS financial measures, certain additional IFRS measures and ratios, and certain supplementary financial measures and other non-financial information are presented separately for PS&PM, by excluding components related to Capital, as the Company believes that such measures are useful as these PS&PM activities are usually analyzed separately by the Company. Reconciliations and calculations of non-IFRS measures to the most comparable IFRS measures are set forth below in the section "Reconciliations and Calculations" of this press release.

Reconciliations and Calculations

Reconciliation of Adjusted net income (loss) attributable to SNC-Lavalin shareholders from PS&PM to IFRS net income (loss) attributable to SNC-Lavalin shareholders from continuing operations


Q4 2022

Q4 2021


Before Taxes

Taxes

After Taxes

Diluted EPS

(In $)

Before Taxes

Taxes

After Taxes

Diluted EPS

(In $)

Net loss attributable to SNC-Lavalin shareholders from continuing operations

(IFRS)



(54.4)

(0.31)



(15.3)

(0.09)

Restructuring and transformation costs

53.9

(12.6)

41.4


30.9

(6.7)

24.2


Amortization of intangible assets related to business combinations

21.5

(4.8)

16.8


23.4

(5.2)

18.1


Loss (gain) on disposals of Capital investments

0.6

-

0.6


(5.0)

1.4

(3.7)


Total adjustments

76.0

(17.4)

58.7

0.33

49.2

(10.5)

38.7

0.22

Adjusted net income attributable to SNC-Lavalin shareholders

(non-IFRS)



4.3

0.02



23.4

0.13










Net income attributable to SNC-Lavalin shareholders from Capital



36.3

0.21



52.6

0.30

Loss (gain) on disposals of Capital investments

0.6

-

0.6


(5.0)

1.4

(3.7)


Total adjustments

0.6

-

0.6

-

(5.0)

1.4

(3.7)

(0.02)

Adjusted net income attributable to SNC-Lavalin shareholders from Capital

(non-IFRS)



36.9

0.21



48.9

0.28










Adjusted net loss attributable to SNC-Lavalin shareholders from PS&PM

(non-IFRS)



(32.5)

(0.19)



(25.6)

(0.15)

 


2022

2021


Before Taxes

Taxes

After Taxes

Diluted EPS

(In $)

Before Taxes

Taxes

After Taxes

Diluted EPS

(In $)

Net income attributable to SNC-Lavalin shareholders from continuing operations

(IFRS)



16.6

0.09



100.2

0.57

Restructuring and transformation costs

82.9

(19.2)

63.7


70.1

(16.5)

53.6


Amortization of intangible assets related to business combinations

84.3

(17.6)

66.6


89.5

(17.3)

72.1


Gain on disposals of Capital investments

(3.7)

(0.1)

(3.8)


(5.0)

1.4

(3.7)


Loss on disposals of a PS&PM business

-

-

-


0.6

-

0.6


Reversal of impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell

-

-

-


(1.3)

-

(1.3)


DPCP Remediation Agreement expense

27.4

-

27.4


-

-

-


Total adjustments

190.8

(36.9)

153.9

0.88

153.9

(32.5)

121.5

0.69

Adjusted net income attributable to SNC-Lavalin shareholders

(non-IFRS)



170.6

0.97



221.6

1.26










Net income attributable to SNC-Lavalin shareholders from Capital



61.6

0.35



73.2

0.42

Gain on disposals of Capital investments

(3.7)

(0.1)

(3.8)


(5.0)

1.4

(3.7)


Total adjustments

(3.7)

(0.1)

(3.8)

(0.02)

(5.0)

1.4

(3.7)

(0.02)

Adjusted net income attributable to SNC-Lavalin shareholders from Capital

(non-IFRS)



57.8

0.33



69.5

0.40










Adjusted net income attributable to SNC-Lavalin shareholders from PS&PM

(non-IFRS)



112.8

0.64



152.1

0.87

Note that certain totals and subtotals may not reconcile due to rounding

All figures in millions of dollars, except otherwise indicated 


Reconciliation of EBITDA and Adjusted EBITDA to IFRS net income (loss) from continuing operations


Q4 2022

Q4 2021


From PS&PM

From Capital

Total

From PS&PM

From Capital

Total

Net income (loss) from continuing operations

(101.2)

36.3

(64.9)

(67.7)

52.6

(15.1)

Net financial expenses

45.9

1.1

46.9

22.9

4.1

27.0

Income tax expense (recovery)

(38.7)

0.2

(38.5)

(49.7)

1.9

(47.8)

EBIT

(94.1)

37.6

(56.5)

(94.5)

58.5

(35.9)

Depreciation and amortization

60.3

-

60.3

68.5

-

68.5

EBITDA

(33.8)

37.6

3.9

(25.9)

58.5

32.6

Restructuring and transformation costs

53.9

-

53.9

30.9

-

30.9

Loss (gain) on disposals of Capital investments

-

0.6

0.6

-

(5.0)

(5.0)

Adjusted EBITDA

20.2

38.2

58.4

4.9

53.5

58.5

 


2022

2021


From PS&PM

From Capital

Total

From PS&PM

From Capital

Total

Net income (loss) from continuing operations

(54.6)

61.6

7.0

32.5

73.2

105.7

Net financial expenses

111.8

4.0

115.7

93.9

16.6

110.5

Income tax expense (recovery)

(31.0)

3.3

(27.8)

(28.4)

6.4

(22.0)

EBIT

26.1

68.9

95.0

98.0

96.1

194.1

Depreciation and amortization

251.4

-

251.4

266.4

0.1

266.5

EBITDA

277.5

68.9

346.5

364.4

96.2

460.6

Restructuring and transformation costs

82.9

-

82.9

70.1

-

70.1

Gain on disposals of Capital investments

-

(3.7)

(3.7)

-

(5.0)

(5.0)

Loss on disposal of a PS&PM business

-

-

-

0.6

-

0.6

Reversal of impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell

-

-

-

(1.3)

-

(1.3)

DPCP Remediation Agreement expense

27.4

-

27.4

-

-

-

Adjusted EBITDA

387.9

65.2

453.0

433.8

91.2

525.0

Note that certain totals and subtotals may not reconcile due to rounding

All figures in millions of dollars


Calculation of segment net revenue and Segment Adjusted EBITDA to segment net revenue ratio for Engineering Services and Linxon segments


Q4 2022

2022

Revenue – Engineering Services

1,242.9

4,686.2

Less: Direct costs for sub-contractors and other direct expenses that are recoverable directly from clients – Engineering Services

308.6

1,150.5

Segment net revenue – Engineering Services

934.2

3,535.7

Segment Adjusted EBITDA – Engineering Services

149.2

517.3

Segment Adjusted EBITDA to segment net revenue ratio – Engineering Services

16.0 %

14.6 %

 


Q4 2022

2022

Revenue – Linxon

133.9

561.2

Less: Costs of equipment provided by the minority shareholder of Linxon

47.1

118.0

Segment net revenue – Linxon

86.9

443.2

Segment Adjusted EBITDA – Linxon

(13.2)

(5.7)

Segment Adjusted EBITDA to segment net revenue ratio – Linxon

(15.2) %

(1.3) %

All figures in millions of dollars, except otherwise indicated


Calculation of organic revenue growth (contraction)


Q4 2022
Revenue

Q4 2021A
Revenue

Variance

Foreign
exchange
impact

Acquisition /
Divestiture
impact

Organic
revenue
growth (contraction)

Engineering Services

1,242.9

1,216.3

26.5

(1.8)

-

28.3

Nuclear

223.6

220.4

3.2

-

0.5

2.7

O&M

131.6

114.6

17.0

2.5

-

14.5

Linxon

133.9

164.3

(30.4)

(2.9)

-

(27.5)

Total – SNCL Services

1,732.1

1,715.6

16.4

(2.2)

0.5

18.0

 


Q4 2022
Revenue

Q4 2021A
Revenue

Variance

Foreign
exchange
impact

Acquisition /
Divestiture
impact

Organic
revenue
growth
(contraction)

Engineering Services

1,242.9

1,216.3

2.2 %

(0.2) %

-

2.3 %

Nuclear

223.6

220.4

1.5 %

-

0.2 %

1.2 %

O&M

131.6

114.6

14.9 %

2.4 %

-

12.4 %

Linxon

133.9

164.3

(18.5) %

(1.4) %

-

(17.0) %

Total – SNCL Services

1,732.1

1,715.6

1.0 %

(0.1) %

-

1.1 %

 


2022

 Revenue

2021A
Revenue

Variance

Foreign
exchange
impact

Acquisition /
Divestiture
impact

Organic
revenue
growth
(contraction)

Engineering Services

4,686.2

4,366.4

319.7

(80.1)

-

399.8

Nuclear

896.0

904.7

(8.7)

(7.4)

0.5

(1.9)

O&M

497.2

470.4

26.9

4.9

-

22.0

Linxon

561.2

588.4

(27.2)

(29.2)

-

2.0

Total – SNCL Services

6,640.6

6,330.0

310.7

(111.8)

0.5

421.9

 


2022

 Revenue

2021A
Revenue

Variance

Foreign
exchange
impact

Acquisition /
Divestiture
impact

Organic
revenue
growth
(contraction)

Engineering Services

4,686.2

4,366.4

7.3 %

(2.0) %

-

9.3 %

Nuclear

896.0

904.7

(1.0) %

(0.8) %

0.1 %

(0.2) %

O&M

497.2

470.4

5.7 %

1.1 %

-

4.6 %

Linxon

561.2

588.4

(4.6) %

(5.0) %

-

0.4 %

Total – SNCL Services

6,640.6

6,330.0

4.9 %

(1.9) %

-

6.8 %

All figures in millions of dollars, except otherwise indicated

A Comparative figures have been restated to reflect the new reportable segments effective as of January 1, 2022


Calculation of booking-to-revenue ratio


Q4 2022


Engineering

Services

Nuclear

O&M

Linxon

Total

SNCL

Services

Opening backlog

4,622.9

859.0

5,418.0

763.8

11,663.7

Plus:

Contract bookings during the period

1,304.9

264.6

67.6

252.0

1,889.0

Less:

Revenues from contracts with customers recognized during the period

1,265.7

187.0

131.6

133.9

1,718.3

Ending backlog

4,622.1

936.6

5,353.9

881.8

11,834.4

Booking-to-revenue ratio

1.03

1.41

0.51

1.88

1.10

 


2022


Engineering

Services

Nuclear

O&M

Linxon

Total

SNCL

Services

Opening backlogA

3,769.0

834.9

5,705.4

974.2

11,283.5

Plus:

Contract bookings during the year

5,564.8

960.5

145.8

468.9

7,139.9

Backlog from a business combination during the year

-

0.3

-

-

0.3

Less:

Revenues from contracts with customers recognized during the year

4,671.7

859.1

497.2

561.2

6,589.2

Ending backlog

4,622.1

936.6

5,353.9

881.8

11,834.4

Booking-to-revenue ratio

1.19

1.12

0.29

0.84

1.08

All figures in millions of dollars, except otherwise indicated

A Comparative figures have been restated to reflect the new reportable segments effective as of January 1, 2022


Calculation of net limited recourse and recourse debt to Adjusted EBITDA ratio





December 31,

2022

Limited recourse debt




400.0

Recourse debt




1,470.6

Less: Cash and cash equivalents




570.3

Net limited recourse and recourse debt




1,300.3

Adjusted EBITDA (trailing 12 months)




453.0

Net limited recourse and recourse debt to Adjusted EBITDA ratio




2.9

All figures in millions of dollars, except otherwise indicated


Forward-Looking Statements

Reference in this press release, and hereafter, to the "Company" or to "SNC-Lavalin" means, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint arrangements or associates, or SNC-Lavalin Group Inc. or one or more of its subsidiaries or joint arrangements or associates.

Statements made in this press release that describe the Company's or management's budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "aims", "anticipates", "assumes", "believes", "cost savings", "estimates", "expects", "forecasts", "goal", "intends", "likely", "may", "objective", "outlook", "plans", "projects", "should", "synergies", "target", "vision", "will", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. Forward-looking statements also include statements relating to the following: i) future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses, project- or contract-specific cost reforecasts and claims provisions, and future prospects; ii) business and management strategies and the expansion and growth of the Company's operations; and iii) the expected additional impacts of the ongoing COVID-19 pandemic on the business and its operating and reportable segments as well as elements of uncertainty related thereto. All such forward-looking statements are made pursuant to the "safe-harbour" provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Forward-looking statements made in this press release are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company's 2022 Annual MD&A (particularly in the sections entitled "Critical Accounting Judgements and Key Sources of Estimation Uncertainty" and "How We Analyze and Report Our Results"). If these assumptions are inaccurate, the Company's actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company's assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risks include, but are not limited to, matters relating to: (a) epidemics, pandemics, including COVID-19, and other global health crises; (b) execution of the Company's "Pivoting to Growth Strategy" unveiled in September 2021; (c) fixed-price contracts or the Company's failure to meet contractual schedule, performance requirements or to execute projects efficiently; (d) backlog and contracts with termination for convenience provisions; (e) contract awards and timing; (f) being a provider of services to government agencies; (g) international operations; (h) nuclear liability; (i) ownership interests in investments; (j) dependence on third parties; (k) supply chain disruptions; (l) joint ventures and partnerships; (m) information systems and data and compliance with privacy legislation; (n) qualified personnel; (o) competition; (p) professional liability or liability for faulty services; (q) monetary damages and penalties in connection with professional and engineering reports and opinions; (r) gaps in insurance coverage; (s) health and safety; (t) work stoppages, union negotiations and other labour matters; (u) global climate change, extreme weather conditions and the impact of natural or other disasters; (v) divestitures and the sale of significant assets; (w) intellectual property; * liquidity and financial position; (y) indebtedness; (z) impact of operating results and level of indebtedness on financial situation; (aa) security under the CDPQ Loan Agreement (as defined in the Company's 2022 Annual MD&A); (bb) dependence on subsidiaries to help repay indebtedness; (cc) dividends; (dd) post-employment benefit obligations, including pension-related obligations; (ee) working capital requirements; (ff) collection from customers; (gg) impairment of goodwill and other assets; (hh) the impact on the Company of legal and regulatory proceedings, investigations and dispute settlements; (ii) further regulatory developments as well as employee, agent or partner misconduct or failure to comply with anti-corruption and other government laws and regulations; (jj) reputation of the Company; (kk) inherent limitations to the Company's control framework; (ll) environmental laws and regulations; (mm) global economic conditions; (nn) inflation; (oo) fluctuations in commodity prices; and (pp) income taxes.

The Company cautions that the foregoing list of factors is not exhaustive. For more information on risks and uncertainties, and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the sections "Risks and Uncertainties", "How We Analyze and Report Our Results" and "Critical Accounting Judgements and Key Sources of Estimation Uncertainty" in the Company's 2022 Annual MD&A filed with the securities regulatory authorities in Canada, available on SEDAR at www.sedar.com and on the Company's website at www.snclavalin.com under the "Investors" section.

The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake to update publicly or to revise any written or oral forward-looking information or statements whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement.

The Company's audited consolidated financial statements for the year ended December 31, 2022, together with its 2022 Annual MD&A for the corresponding year, can be accessed on the Company's website at www.snclavalin.com and on www.sedar.com.

SOURCE SNC-Lavalin

Copyright 2023 Canada NewsWire

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