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.
DIVIDENDThe 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.
FINANCIAL REPORTThis 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.
CONFERENCE CALL 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
POSITIONReferences 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 FLOWSReferences
to notes refer to notes in the financial statements
|
First quarters ended |
|
|
March 27,2021 |
|
March 28,2020 |
|
|
$ |
$ |
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 |
|
Lease payments |
(61.9 |
) |
(70.4 |
) |
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 |
|
NON-IFRS MEASURESThe
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.
ABOUT WSPAs 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.
FORWARD-LOOKING
STATEMENTSCertain 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:
Alain MichaudChief Financial
OfficerWSP Global Inc.alain.michaud@wsp.com Phone: 438-843-7317
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