WSP Reports Solid Q3 2024 Results and Announces Appointment of Global Chief Operating Officer

Press Release

MONTREAL, Nov. 06, 2024 — WSP Global Inc. (TSX: WSP) (“WSP” or the “Corporation”), one of the world’s leading and largest professional services firms, today announced financial and operating results for the third quarter ended September 28, 2024.

	Third quarters ended		Nine-month periods ended
(in millions of dollars, except percentages, per share data, DSO and ratios)	September 28, 2024	September 30, 2023	September 28, 2024	September 30, 2023
Revenues	$3,983.9	$3,597.4	$11,501.9	$10,712.9
Net revenues(1)	$2,996.9	$2,734.8	$8,778.2	$8,141.0
Earnings before net financing expense and income taxes	$351.7	$292.7	$923.2	$736.5
Adjusted EBITDA(2)	$585.4	$521.5	$1,551.4	$1,396.4
Adjusted EBITDA margin(2)	19.5%	19.1%	17.7%	17.2%
Net earnings attributable to shareholders of WSP Global Inc.	$203.6	$156.2	$514.5	$419.4
Basic net earnings per share attributable to shareholders	$1.63	$1.25	$4.13	$3.37
Adjusted net earnings(2)	$279.8	$246.4	$709.6	$612.2
Adjusted net earnings per share(2)	$2.24	$1.98	$5.69	$4.91
Cash inflows from operating activities	$415.5	$149.5	$608.6	$209.7
Free cash flow(2)	$291.8	$21.1	$242.0	$(177.2)
As at			September 28, 2024	September 30, 2023
Backlog			$14,838.7	$14,276.4
Approximate number of employees			69,900	67,000
DSO(3)			80 days	77 days
As at			September 28, 2024	December 31, 2023
Net debt to adjusted EBITDA ratio(3)			1.5	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 third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at www.sedarplus.ca, which includes explanations of the composition and usefulness of these non-IFRS financial measures and non-IFRS ratios.}

^{(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 third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at www.sedarplus.ca, which explains the composition of the supplemental financial measures, as well as the usefulness of the net debt to adjusted EBITDA ratio, which is a capital management measure composed of the ratio of net debt to adjusted EBITDA for the trailing twelve-month period. Net debt is defined as long-term debt, including current portions but excluding lease liabilities, and net of cash. Adjusted EBITDA and earnings before net financing expense and income taxes for the trailing twelve months ended September 28, 2024 amounted to $2,076.3 million and $1,134.2 million, respectively. Days sales outstanding (“DSO”) represents the average number of days to convert the Corporation’s trade receivables (net of sales taxes) and costs and anticipated profits in excess of billings, net of billings in excess of costs and anticipated profits, into cash.}

THIRD QUARTER OF 2024 FINANCIAL HIGHLIGHTS

In the third quarter of 2024, WSP delivered solid growth in net revenues, improved profitability, strong cash flows from operations and a record-high backlog.

• Revenues and net revenues for the quarter reached $3.98 billion and $3.00 billion, up 10.7% and 9.6%, respectively, compared to the third quarter of 2023. Net revenue organic growth of 7.2%⁽¹⁾ in the quarter is attributable to all reportable segments, led by the US, Canada, the Middle East and the UK.
• Backlog as at September 28, 2024 reached a new record level of $14.8 billion, representing 11.6 months of revenues⁽²⁾.
• Adjusted EBITDA in the quarter grew to $585.4 million, compared to $521.5 million in the third quarter of 2023, an increase of 12.3%.
• Adjusted EBITDA margin for the quarter increased by 40 basis points (“bps”) to 19.5%, compared to 19.1% in the third quarter of 2023. The improvement is mainly attributable to increased productivity, partially offset by lower performance in the APAC reportable segment.
• Earnings before net financing expense and income taxes in the quarter stood at $351.7 million, up $59.0 million or 20.2%, compared to the third quarter of 2023.
• Adjusted net earnings for the quarter reached $279.8 million, or $2.24 per share, up 13.6% and 13.1%, respectively, compared to the third quarter of 2023. The increase is mainly attributable to higher adjusted EBITDA.
• Net earnings attributable to shareholders for the quarter reached $203.6 million, or $1.63 per share, up 30.3% and 30.4%, respectively, compared to $156.2 million, or $1.25 per share, in the third quarter of 2023. The increase is mainly due to higher adjusted EBITDA, partially offset by higher net financing expenses.
• DSO as at September 28, 2024 stood at 80 days, and is expected to return within Management’s outlook range by year end.⁽³⁾
• Cash inflows from operating activities were $608.6 million in the nine-month period ended September 28, 2024, increased compared to $209.7 million in the corresponding period in 2023. Free cash inflow was $242.0 million for the nine-month period ended September 28, 2024, representing an improvement of $419.2 million compared to free cash outflow of $177.2 million in the corresponding period in 2023. The trailing twelve months of free cash flow amounted to $852.3 million, representing 1.3 times the net earnings attributable to shareholders (the trailing twelve months of cash inflows from operating activities was $1,385.2 million).⁽⁴⁾ The improvement in free cash flow is mainly due to lower usage of working capital, higher adjusted EBITDA, and lower income taxes paid.
• Net debt to adjusted EBITDA ratio stood at 1.5x, within Management’s target range of 1.0x to 2.0x.
• Quarterly dividend declared of $0.375 per share, or $46.8 million, which was paid subsequent to the end of the third quarter on October 15, 2024.
• Mr. Mark Naysmith was appointed to the role of Global Chief Operating Officer effective January 2025.

^{(1)Supplemental financial measure. Net revenue organic growth represents the period-over-period change in net revenues, excluding net revenues of businesses acquired or divested in the twelve months following the acquisition or prior to the divestiture, expressed as a percentage of the comparable period net revenues, adjusted to exclude net revenues of divested businesses, all calculated to exclude the impact of foreign exchange.}

^{(2)Based on revenues for the trailing twelve-month period, incorporating a full twelve months of revenues for all acquisitions.}

^{(3)This information constitutes forward-looking information, based on multiple estimates and assumptions about future events. The reader is cautioned that using this information for other purposes may be inappropriate. Actual results may differ and such differences may be material. Refer to section 16, “Forward-Looking Statements” of WSP’s MD&A for the third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at www.sedarplus.ca, for additional information.}

^{(4)Non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar ratios used by other issuers. The ratio is defined as the trailing twelve months of free cash flow to trailing twelve months of net earnings attributable to shareholders. The ratio of free cash flow to net earnings attributable to shareholders for the twelve months ended September 30, 2023 was 0.5. Refer to section 19, “Glossary of segment reporting, non-IFRS and other financial measures” of WSP’s MD&A for the third quarter and nine-month period ended September 28, 2024, filed on SEDAR+ at www.sedarplus.ca, for references to the non-IFRS financial measure which is a components of this non-IFRS ratio, and the usefulness of this non-IFRS ratio.}

“Building on our strong first half of the year, our teams have delivered robust organic growth and profitability,” said Alexandre L’Heureux, President and CEO, WSP Global. “This is a testament to the strength of our platform and the sustained demand for the high quality services offered by our scientists and engineers. We are excited to be onboarding our new colleagues from POWER Engineers while executing on our strategy with discipline. I am also pleased to announce the appointment of Mark Naysmith to the role of Global Chief Operating Officer and am confident he will help drive growth and operational excellence to further leverage the scale of our business.”

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