Strong first quarter results were in line with management's expectations as the Corporation achieved healthy organic growth in net revenues, combined with an increase in adjusted EBITDA margin of 50 basis points (“bps”) over the comparable quarter in 2023.
FIRST QUARTER OF 2024 FINANCIAL HIGHLIGHTS
- Revenues and net revenues for the quarter reached
$3.59 billion and$2.79 billion , up 2.7% and 4.7%, respectively, compared to the first quarter of 2023. Net revenue organic growth of 4.6% in the quarter is attributable to all reportable segments. Net revenue organic growth would be approximately 6.5% if normalized for the same number of billable days compared to Q1 2023.
- Backlog as at
March 30, 2024 stood at$14.2 billion , representing 11.8 months of revenues(1), with theAmericas reportable segment achieving organic backlog growth of 10.3% over the last twelve months.
- Adjusted EBITDA margin for the quarter increased by 50 bps to 16.0%, compared to 15.5% in the first quarter of 2023. The increase is mainly attributable to increased productivity.
- Adjusted EBITDA in the quarter grew to
$446.1 million , compared to$413.3 million in the first quarter of 2023, an increase of 7.9%.
- Earnings before net financing expense and income taxes in the quarter stood at
$244.3 million , up$44 .4 million or 22.2%, compared to the first quarter of 2023, mainly due to increased adjusted EBITDA.
- Adjusted net earnings for the quarter reached
$193.8 million , or$1.55 per share, up 13.3% and 13.1%, respectively, compared to the first quarter of 2023. The increase is mainly attributable to higher adjusted EBITDA.
- Net earnings attributable to shareholders for the quarter reached
$126.8 million , or$1.02 per share, compared to$112 .5 million, or$0.90 per share, in the first quarter of 2023.
- DSO as at
March 30, 2024 stood at 76 days, compared to 74 days as atApril 1, 2023 , and unchanged from 76 days as atDecember 31, 2023 .
- Cash outflows from operating activities of
$10.4 million are comparable to outflows of$24 .6 million in the first quarter of 2023. Free cash outflow for the three-month period endedMarch 30, 2024 was$125.2 million , compared to$141 .1 million in the first quarter of 2023.
- Net debt to adjusted EBITDA ratio stood at 1.6x, within Management's target range of 1.0x to 2.0x.
- Quarterly dividend declared of
$0.375 per share, or$46.8 million .
- The 2024 financial outlook issued on
February 28, 2024 , in the Q4 2023 press release is reiterated as well as key related assumptions.
(1) | Based on revenues for the trailing twelve-month period, incorporating a full twelve months of revenues for all acquisitions. |
"With the final year of our strategic cycle underway, our first quarter performance has set a solid foundation for the remainder of 2024. We continue to build upon the significant momentum we generated in 2023, supported by our exceptional teams," said Alexandre L’Heureux, President and CEO of WSP. "We are moving forward with confidence as our focus remains on delivering our ambitions, bolstered by healthy market conditions and growth opportunities. Our shared vision and collective efforts are the cornerstones of our success, and I am confident they will continue to guide us on our journey to be recognized as the undisputed leader in our industry."
DIVIDEND
FINANCIAL REPORT
This release includes, by reference, the financial reports for the first quarter of 2024, including the unaudited interim condensed consolidated financial statements and the Management's Discussion and Analysis ("MD&A") of the Corporation for the first quarter ended on
CONFERENCE CALL & WEBCAST
WSP will hold a conference call and webcast from
For those unable to attend, a replay will be available within 24 hours following the call under the "Investors" section of the website.
A presentation of the first quarter of 2024 highlights and results will be accessible on
FINANCIAL HIGHLIGHTS
First quarters ended | ||
(in millions of dollars, except percentages, per share data, DSO and ratios) | ||
Revenues | ||
Net revenues(1) | ||
Earnings before net financing expense and income taxes | ||
Adjusted EBITDA(2) | ||
Adjusted EBITDA margin(2) | 16.0% | 15.5% |
Net earnings attributable to shareholders of | ||
Basic net earnings per share attributable to shareholders | ||
Adjusted net earnings(2) | ||
Adjusted net earnings per share(2) | ||
Cash outflows used in operating activities | ||
Free cash outflow(2) | ||
As at | ||
Backlog(3) | ||
Approximate number of employees | 67,200 | 67,300 |
DSO(3) | 76 days | 74 days |
As at | ||
Net debt to adjusted EBITDA ratio(3) | 1.6 | 1.5 |
(1) | Quantitative reconciliations of net revenues to revenues are presented below under the caption "Non-IFRS and other financial measures". |
(2) | Non-IFRS financial measure or non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar measures or ratios used by other issuers. Quantitative reconciliations of non-IFRS financial measures to the most directly comparable IFRS measures are presented below under the caption "Non-IFRS and other financial measures". Adjusted EBITDA margin is defined as adjusted EBITDA expressed as a percentage of net revenues. Adjusted net earnings per share is the ratio of adjusted net earnings divided by the basic weighted average number of shares outstanding for the period. This press release incorporates by reference section 19, “Glossary of segment reporting, non-IFRS and other financial measures”, of WSP’s MD&A for the first quarter ended |
(3) | This press release incorporates by reference section 19, “Glossary of segment reporting, non-IFRS and other financial measures”, of WSP’s MD&A for the first quarter ended |
RESULTS OF OPERATIONS
First quarters ended | ||
(in millions of dollars, except number of shares and per share data) | ||
Revenues | ||
Less: Subconsultants and direct costs | ||
Net revenues | $2,793.3 | $2,667.1 |
Earnings before net financing expense and income taxes | $244.3 | $199.9 |
Net financing expense | ||
Earnings before income taxes | $173.2 | $154.3 |
Income tax expense | ||
Net earnings | $126.8 | $113.4 |
Net earnings attributable to: | ||
Shareholders of | ||
Non-controlling interests | — | |
Basic net earnings per share attributable to shareholders | $1.02 | $0.90 |
Diluted net earnings per share attributable to shareholders | $1.01 | $0.90 |
Basic weighted average number of shares | 124,670,918 | 124,531,822 |
Diluted weighted average number of shares | 125,046,024 | 124,853,450 |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in millions of Canadian dollars)
References to notes refer to notes in the unaudited interim condensed consolidated financial statements of the relevant period.
As at | ||
$ | $ | |
Assets | ||
Current assets | ||
Cash and cash equivalents (note 15) | 341.6 | 378.0 |
Trade receivables and other receivables | 2,592.6 | 2,726.4 |
Cost and anticipated profits in excess of billings | 2,272.0 | 1,911.6 |
Prepaid expenses | 262.7 | 239.4 |
Other financial assets | 124.7 | 123.3 |
Income taxes receivable | 31.6 | 38.4 |
5,625.2 | 5,417.1 | |
Non-current assets | ||
Right-of-use assets (note 9) | 835.7 | 824.2 |
Intangible assets | 1,061.4 | 1,104.1 |
Property and equipment | 427.1 | 435.3 |
7,248.1 | 7,155.8 | |
Deferred income tax assets | 472.5 | 429.3 |
Other assets | 217.7 | 217.3 |
10,262.5 | 10,166.0 | |
Total assets | 15,887.7 | 15,583.1 |
Liabilities | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 2,458.5 | 2,738.2 |
Billings in excess of costs and anticipated profits | 1,330.2 | 1,158.0 |
Income taxes payable | 190.2 | 171.0 |
Provisions | 133.8 | 134.9 |
Dividends payable to shareholders (note 14) | 46.8 | 46.8 |
Current portion of lease liabilities (note 9) | 262.6 | 257.5 |
Current portion of long-term debt (note 11) | 259.7 | 204.2 |
4,681.8 | 4,710.6 | |
Non-current liabilities | ||
Long-term debt (note 11) | 3,297.4 | 3,058.3 |
Lease liabilities (note 9) | 740.4 | 744.6 |
Provisions | 395.7 | 399.3 |
Retirement benefit obligations | 188.3 | 187.5 |
Deferred income tax liabilities | 152.3 | 149.4 |
4,774.1 | 4,539.1 | |
Total liabilities | 9,455.9 | 9,249.7 |
Equity | ||
Equity attributable to shareholders of | 6,431.8 | 6,328.9 |
Non-controlling interests | — | 4.5 |
Total equity | 6,431.8 | 6,333.4 |
Total liabilities and equity | 15,887.7 | 15,583.1 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
References to notes refer to notes in the unaudited interim condensed consolidated financial statements of the relevant period.
For the three-month periods ended | ||
$ | $ | |
Operating activities | ||
Net earnings | 126.8 | 113.4 |
Adjustments (note 15) | 149.4 | 141.4 |
Net financing expense (note 7) | 71.1 | 45.6 |
Income tax expense | 46.4 | 40.9 |
Income taxes paid | (50.7) | (74.9) |
Change in non-cash working capital items (note 15) | (353.4) | (291.0) |
Cash outflows used in operating activities | (10.4) | (24.6) |
Financing activities | ||
Net proceeds of long-term debt | 194.2 | 146.5 |
Lease payments (note 9) | (90.8) | (94.7) |
Net financing expenses paid, excluding interest on lease liabilities | (49.7) | (46.2) |
Dividends paid to shareholders of | (46.8) | (32.2) |
Issuance of common shares, net of issuance costs (note 12) | 2.3 | 0.8 |
Cash inflows from (outflows used in) financing activities | 9.2 | (25.8) |
Investing activities | ||
Net disbursements related to business acquisitions | (35.8) | (104.2) |
Additions to property and equipment, excluding business acquisitions | (24.2) | (17.4) |
Additions to identifiable intangible assets, excluding business acquisitions | (4.0) | (4.9) |
Proceeds from disposal of property and equipment | 4.2 | 0.5 |
Other | (2.8) | 1.1 |
Cash outflows used in investing activities | (62.6) | (124.9) |
Effect of exchange rate change on cash and cash equivalents | (1.9) | (1.0) |
Change in net cash and cash equivalents | (65.7) | (176.3) |
Cash and cash equivalents, net of bank overdraft - beginning of the period | 361.9 | 491.0 |
Cash and cash equivalents, net of bank overdraft - end of period (note 15) | 296.2 | 314.7 |
All amounts shown in this press release are expressed in Canadian dollars, unless otherwise indicated. All quarterly information disclosed in this press release is based on unaudited figures.
NON-IFRS AND OTHER FINANCIAL MEASURES
The Corporation reports its financial results in accordance with International Financial Reporting Standards as issued by the
In this press release, the following non-IFRS and other financial 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 and other financial measures can be found in section 19, “Glossary of segment reporting, non-IFRS and other financial measures” of WSP’s MD&A for the first quarter ended
Management believes that these non-IFRS and other financial 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 and other financial 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.
Reconciliation of net revenues | ||||||
The following table reconciles net revenues to the most comparable IFRS measure: | ||||||
First quarters ended | ||||||
(in millions of dollars) | ||||||
Revenues | $3,585.1 | $3,489.5 | ||||
Less: Subconsultants and direct costs | ||||||
Net revenues* | $2,793.3 | $2,667.1 | ||||
* Total of segments measure. | ||||||
Reconciliation of adjusted EBITDA | ||||||
The following table reconciles this metric to the most comparable IFRS measure: | ||||||
First quarters ended | ||||||
(in millions of dollars) | ||||||
Earnings before net financing expense and income taxes | $244.3 | $199.9 | ||||
Acquisition, integration and reorganization costs | ||||||
ERP implementation costs | ||||||
Depreciation of right-of-use assets | ||||||
Amortization of intangible assets | ||||||
Depreciation of property and equipment | ||||||
Share of depreciation and taxes of associates and joint ventures | ||||||
Interest income | ||||||
Adjusted EBITDA* | $446.1 | $413.3 | ||||
* Non-IFRS financial measure. | ||||||
Reconciliation of adjusted net earnings | ||||||
The following table reconciles this metric to the most comparable IFRS measure: | ||||||
First quarters ended | ||||||
(in millions of dollars, except per share data) | ||||||
Net earnings attributable to shareholders | $126.8 | $112.5 | ||||
Amortization of intangible assets related to acquisitions | ||||||
Acquisition, integration and reorganization costs | ||||||
ERP implementation costs | ||||||
Gains on investments in securities related to deferred compensation obligations | ||||||
Unrealized losses (gains) on derivative financial instruments | ||||||
Income taxes related to above items | ||||||
Adjusted net earnings* | $193.8 | $171.1 | ||||
Adjusted net earnings per share* | $1.55 | $1.37 | ||||
* Non-IFRS financial measure or non-IFRS ratio. | ||||||
Reconciliation of free cash flow | ||||||
The following table reconciles this metric to the most comparable IFRS measure: | ||||||
First quarters ended | ||||||
(in millions of dollars) | ||||||
Cash outflows used in operating activities | $(10.4) | $(24.6) | ||||
Lease payments in financing activities | ||||||
Net capital expenditures* | ||||||
Free cash outflow** | $(125.2) | $(141.1) | ||||
* Capital expenditures pertaining to property and equipment and intangible assets, net of proceeds from disposal and lease incentives received. | ||||||
** Non-IFRS financial measure. | ||||||
FORWARD-LOOKING STATEMENTS
Certain information regarding WSP contained herein are not based on historical facts and may constitute forward-looking statements or forward-looking information under Canadian securities laws (collectively, “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 include statements about our 2024 strategic financial ambitions, backlog and the strength of the markets across our regions, the payment of dividends, our proposed strategy, and our operating performance, financial outlook for 2024 (including net revenues, adjusted EBITDA, seasonality and adjusted EBITDA fluctuations, DSO, net capital expenditures, acquisition, integration and reorganization costs, ERP implementation costs), organic growth, effective tax rates, depreciation of right-of-use assets, property & equipment and amortization of software, head office corporate costs, a net debt to adjusted EBITDA ratios, and statements about the 2022-2024 Global Strategic Action Plan. These forward-looking statements are based on a number of assumptions believed by the Corporation to be reasonable as at
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, and such risks include, but are not limited to, the deterioration of our financial position or net cash position; our working capital requirements; our accounts receivable; our increased indebtedness and raising capital; the impairment of long-lived assets; our foreign currency exposure; our income taxes; underfunded defined benefits obligations, and any other risk factors described under section 20 “Risk Factors” of WSP's MD&A for the fourth quarter and year ended
ABOUT WSP
As one of the largest professional services firms in the world, WSP exists to future-proof our cities and our environment. It provides strategic advisory, engineering, and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water, and mining sectors. Its 67,200 trusted professionals are united by the common purpose of creating positive, long-lasting impacts on the communities it serves through a culture of innovation, integrity, and inclusion. In 2023, WSP reported
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Chief Financial Officer
alain.michaud@wsp.com
Phone: 438-843-7317
Source:
2024 GlobeNewswire, Inc., source