MONTREAL, May 07, 2025 (GLOBE NEWSWIRE) -- WSP Global Inc. (TSX: WSP) ("WSP" or the "Corporation"), one of the world's leading professional services firms, today announced financial results for the first quarter ended March 29, 2025.
WSP delivered results in line with expectations for the first quarter of 2025. Cash inflows from operating activities, free cash flow(2) and days sales outstanding ("DSO")(3) improved compared to the corresponding period in the prior year. Overall backlog remains strong.
| First quarters ended | ||||
| (in millions of dollars, except percentages, per share data, DSO and ratios) | March 29, 2025 | March 30, 2024 | ||
| Revenues | $4,388.9 | $3,585.1 | ||
| Net revenues(1) | $3,347.3 | $2,793.3 | ||
| Earnings before net financing expense and income taxes (EBIT) | $288.1 | $244.3 | ||
| Adjusted EBITDA(2) | $533.9 | $446.1 | ||
| Adjusted EBITDA margin(2) | 16.0% | 16.0% | ||
| Net earnings attributable to shareholders of WSP Global Inc. | $144.1 | $126.8 | ||
| Basic net earnings per share attributable to shareholders | $1.10 | $1.02 | ||
| Adjusted net earnings(2) | $229.1 | $193.8 | ||
| Adjusted net earnings per share(2) | $1.76 | $1.55 | ||
| Cash inflows from (outflows used in) operating activities | $237.8 | $(10.4 | ) | |
| Free cash inflow (outflow)(2) | $115.9 | $(125.2 | ) | |
| As at | March 29, 2025 | March 30, 2024 | ||
| Backlog | $16,599.7 | $14,233.7 | ||
| Approximate number of employees | 72,600 | 67,200 | ||
| DSO(3) | 70 days | 76 days | ||
| As at | March 29, 2025 | December 31, 2024 | ||
| Net debt to adjusted EBITDA ratio(3) | 1.8 | 1.8 | ||
| (1) | Total of segments measure. 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". This press release incorporates by reference section 19, "Glossary of segment reporting, non-IFRS and other financial measures", of WSP's Management's Discussion and Analysis for the first quarter ended March 29, 2025, filed on SEDAR+ at www.sedarplus.ca ("MD&A"), 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, 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, and was $3.99 billion as at March 29, 2025. Adjusted EBITDA for the trailing twelve-month period ended March 29, 2025 was $2.27 billion. |
Financial highlights for the first quarter of 2025
- Revenues and net revenues for the quarter reached $4.39 billion and $3.35 billion, up 22.4% and 19.8%, respectively, compared to the first quarter of 2024. Net revenue organic growth(1) was 3.7%, or approximately 5.5% when normalized for fewer billable days in the US operations than the comparable period in 2024.
- Backlog as at March 29, 2025 reached another new record level of $16.6 billion, representing 11.3 months of revenues,(2) up 16.6% in the twelve-month period.
- Adjusted EBITDA in the quarter grew to $533.9 million, compared to $446.1 million in the first quarter of 2024, an increase of 19.7%. Adjusted EBITDA margin for the quarter stood at 16.0%.
- EBIT in the quarter stood at $288.1 million, up $43.8 million or 17.9%, compared to the first quarter of 2024. The increase was mainly attributable to an increase in adjusted EBITDA, partially offset by higher acquisition and integration costs in the first quarter of 2025, mainly due to the acquisition of POWER Engineers, Incorporated in 2024.
- Adjusted net earnings for the quarter reached $229.1 million, or $1.76 per share, up 18.2% and 13.5%, respectively, compared to the first quarter of 2024. The increase was mainly attributable to higher adjusted EBITDA, partially offset by higher interest on long-term debt.
- Net earnings attributable to shareholders for the quarter reached $144.1 million, or $1.10 per share, up 13.6% and 7.8%, respectively, compared to $126.8 million, or $1.02 per share, in the first quarter of 2024. The increase was mainly due to higher adjusted EBITDA, partially offset by higher net financing expenses.
- DSO as at March 29, 2025 stood at 70 days, compared to 76 days as at March 30, 2024.
- Cash inflows from operating activities were $237.8 million in the three-month period ended March 29, 2025, an increase compared to cash outflows of $10.4 million in the corresponding period in 2024. Free cash inflow was $115.9 million for the three-month period ended March 29, 2025, representing an improvement of $241.1 million compared to free cash outflow of $125.2 million in the corresponding period in 2024. The trailing twelve months of free cash flow amounted to $1,125.6 million, representing 1.6 times the net earnings attributable to shareholders(3) (the trailing twelve months of cash inflows from operating activities was $1,630.1 million).
- Net debt to adjusted EBITDA ratio stood at 1.8x, within Management's target range of 1.0x to 2.0x. Incorporating a full twelve months of adjusted EBITDA of all acquired businesses, the net debt to adjusted EBITDA ratio would have been 1.7x.
- Quarterly dividend declared of $0.375 per share, or $48.9 million, which was paid subsequent to the end of the first quarter on April 15, 2025.
- The 2025 financial outlook issued on February 12, 2025 is reiterated as well as key related assumptions.
"I am pleased to report on our first-quarter performance, kicking off our new strategic cycle. We have a good backlog and are maintaining our focus on enhancing operational efficiency-in line with our commitment to deliver sustainable financial performance. WSP continues to be driven by solid fundamentals, a clear strategy, a diversified and resilient platform, and some of the brightest professionals worldwide. I am confident in our ability to drive shareholder value as we navigate the current macro environment," said Alexandre L'Heureux, President and CEO of WSP.
Dividend
The Board of Directors of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about July 15, 2025, to shareholders of record at the close of business on June 30, 2025.
Financial Report
This release incorporates the financial reports for the first quarter of 2025, including the unaudited interim condensed consolidated financial statements for the three-month period ended on March 29, 2025 and the MD&A of the Corporation for the first quarter ended on March 29, 2025, which are available on our website at www.wsp.com. These documents are also available on SEDAR+ at www.sedarplus.ca.
Webcast
WSP will hold a conference call and webcast from 8:00 a.m. to 9:00 a.m. (Eastern Time) on May 8, 2025, to discuss these results.
To participate in the conference call, please pre-register using this link. Registrants will receive a confirmation with dial-in details. A live webcast of the conference call can be accessed using this link. 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 on the first quarter of 2025 results will be accessible on May 7, 2025, after market close under the "Investors" section of www.wsp.com.
| (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) | Non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar ratios used by other issuers.. The ratio of free cash flow to net earnings attributable to shareholders for the trailing twelve months ended March 30, 2024 was 0.8. This press release incorporates by reference section 19, "Glossary of segment reporting, non-IFRS and other financial measures", of WSP's MD&A, for explanations of the composition and usefulness of this non-IFRS ratio. |
Result of operations
| First quarters ended | ||
| (in millions of dollars, except number of shares and per share data) | March 29, 2025 | March 30, 2024 |
| Revenues | $4,388.9 | $3,585.1 |
| Less: Subconsultants and direct costs | $1,041.6 | $791.8 |
| Net revenues | $3,347.3 | $2,793.3 |
| EBIT | $288.1 | $244.3 |
| Net financing expense | $91.7 | $71.1 |
| Earnings before income taxes | $196.4 | $173.2 |
| Income tax expense | $52.3 | $46.4 |
| Net earnings | $144.1 | $126.8 |
| Net earnings attributable to: | ||
| Shareholders of WSP Global Inc. | $144.1 | $126.8 |
| Basic net earnings per share attributable to shareholders | $1.10 | $1.02 |
| Diluted net earnings per share attributable to shareholders | $1.10 | $1.01 |
| Basic weighted average number of shares | 130,497,383 | 124,670,918 |
| Diluted weighted average number of shares | 130,832,588 | 125,046,024 |
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 | March 29, 2025 | December 31, 2024 |
| $ | $ | |
| Assets | ||
| Current assets | ||
| Cash and cash equivalents (note 15) | 412.7 | 623.5 |
| Trade receivables and other receivables | 3,226.3 | 3,390.7 |
| Cost and anticipated profits in excess of billings | 2,429.6 | 2,390.8 |
| Prepaid expenses | 368.9 | 396.7 |
| Other financial assets | 149.3 | 168.0 |
| Income taxes receivable | 33.5 | 39.2 |
| 6,620.3 | 7,008.9 | |
| Non-current assets | ||
| Right-of-use assets (note 9) | 1,075.6 | 1,066.6 |
| Intangible assets | 1,481.1 | 1,539.3 |
| Property and equipment | 485.0 | 493.4 |
| Goodwill (note 10) | 9,501.5 | 9,451.5 |
| Deferred income tax assets | 422.3 | 404.1 |
| Other assets | 223.7 | 235.4 |
| 13,189.2 | 13,190.3 | |
| Total assets | 19,809.5 | 20,199.2 |
| Liabilities | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities | 3,103.3 | 3,261.2 |
| Billings in excess of costs and anticipated profits | 1,517.7 | 1,652.7 |
| Income taxes payable | 155.7 | 206.3 |
| Provisions | 153.8 | 121.4 |
| Dividends payable to shareholders (note 14) | 48.9 | 48.9 |
| Current portion of lease liabilities (note 9) | 285.9 | 285.0 |
| Current portion of long-term debt (note 11) | 248.5 | 704.9 |
| 5,513.8 | 6,280.4 | |
| Non-current liabilities | ||
| Long-term debt (note 11) | 4,155.7 | 3,894.5 |
| Lease liabilities (note 9) | 912.4 | 907.2 |
| Provisions | 426.8 | 466.3 |
| Retirement benefit obligations | 207.1 | 202.1 |
| Deferred income tax liabilities | 186.1 | 176.2 |
| 5,888.1 | 5,646.3 | |
| Total liabilities | 11,401.9 | 11,926.7 |
| Equity | ||
| Equity attributable to shareholders of WSP Global Inc. | 8,407.6 | 8,272.5 |
| Total equity | 8,407.6 | 8,272.5 |
| Total liabilities and equity | 19,809.5 | 20,199.2 |
Consolidated statements of cash flow
(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 | March 29, 2025 | March 30, 2024 | ||
| $ | $ | |||
| Operating activities | ||||
| Net earnings | 144.1 | 126.8 | ||
| Adjustments (note 15) | 188.4 | 149.4 | ||
| Net financing expense (note 7) | 91.7 | 71.1 | ||
| Income tax expense | 52.3 | 46.4 | ||
| Income taxes paid | (107.8 | ) | (50.7 | ) |
| Change in non-cash working capital items (note 15) | (130.9 | ) | (353.4 | ) |
| Cash inflows from (outflows used in) operating activities | 237.8 | (10.4 | ) | |
| Financing activities | ||||
| Net change in borrowings under credit facilities and other financial liabilities | (243.4 | ) | 194.2 | |
| Lease payments (note 9) | (95.4 | ) | (90.8 | ) |
| Net financing expenses paid, excluding interest on lease liabilities | (71.1 | ) | (49.7 | ) |
| Dividends paid to shareholders of WSP Global Inc. | (48.9 | ) | (46.8 | ) |
| Issuance of common shares, net of issuance costs (note 12) | 4.3 | 2.3 | ||
| Cash inflows from (outflows used in) financing activities | (454.5 | ) | 9.2 | |
| Investing activities | ||||
| Net disbursements related to business acquisitions and disposals of businesses | (5.6 | ) | (35.8 | ) |
| Additions to property and equipment, excluding business acquisitions | (23.4 | ) | (24.2 | ) |
| Additions to identifiable intangible assets, excluding business acquisitions | (4.3 | ) | (4.0 | ) |
| Proceeds from disposal of property and equipment | 1.2 | 4.2 | ||
| Other | 2.2 | (2.8 | ) | |
| Cash outflows used in investing activities | (29.9 | ) | (62.6 | ) |
| Effect of exchange rate change on cash and cash equivalents | 6.5 | (1.9 | ) | |
| Change in net cash and cash equivalents | (240.1 | ) | (65.7 | ) |
| Cash and cash equivalents, net of bank overdraft - beginning of the period | 619.3 | 361.9 | ||
| Cash and cash equivalents, net of bank overdraft - end of period (note 15) | 379.2 | 296.2 | ||
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's unaudited interim condensed financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting. WSP uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures are not calculated in accordance with International Financial Reporting Standards Accounting Standards ("IFRS"). Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure prescribes disclosure requirements that apply to the following types of measures used by the Corporation: (i) non-IFRS financial measures; (ii) non-IFRS ratios; (iii) total of segments measures; (iv) capital management measures; and (v) supplementary financial measures.
In this press release, the following non-IFRS and other financial measures may be used by the Corporation: net revenues; adjusted EBITDA; adjusted EBITDA margin; adjusted net earnings; adjusted net earnings per share; free cash flow; trailing twelve months of free cash flow to trailing twelve months of net earnings attributable to shareholders; organic net revenue growth (contraction), acquisition net revenue growth; divestiture net revenue impact; organic backlog growth (contraction); 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 March 29, 2025, which is posted on WSP's website at www.wsp.com, and filed on SEDAR+ at www.sedarplus.ca. Reconciliations of non-IFRS financial measures and total of segments measures to the most directly comparable IFRS measures are provided below.
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) | March 29, 2025 | March 30, 2024 | ||||
| Revenues | $4,388.9 | $3,585.1 | ||||
| Less: Subconsultants and direct costs | $1,041.6 | $791.8 | ||||
| Net revenues* | $3,347.3 | $2,793.3 | ||||
| * 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) | March 29, 2025 | March 30, 2024 | ||||
| EBIT | $288.1 | $244.3 | ||||
| Acquisition, integration and reorganization costs | $35.7 | $21.2 | ||||
| ERP implementation costs | $17.1 | $15.6 | ||||
| Depreciation of right-of-use assets | $79.8 | $73.6 | ||||
| Amortization of intangible assets | $70.5 | $56.0 | ||||
| Depreciation of property and equipment | $35.6 | $31.0 | ||||
| Share of depreciation and taxes of associates and joint ventures | $3.7 | $3.5 | ||||
| Interest income | $3.4 | $0.9 | ||||
| Adjusted EBITDA* | $533.9 | $446.1 | ||||
| * 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) | March 29, 2025 | March 30, 2024 | ||||||
| Net earnings attributable to shareholders | $144.1 | $126.8 | ||||||
| Amortization of intangible assets related to acquisitions | $58.2 | $45.7 | ||||||
| Acquisition, integration and reorganization costs | $35.7 | $21.2 | ||||||
| ERP implementation costs | $17.1 | $15.6 | ||||||
| Losses (gains) on investments in securities related to deferred compensation obligations | $2.7 | $(0.7 | ) | |||||
| Unrealized losses on derivative financial instruments | $0.9 | $9.1 | ||||||
| Income taxes related to above items | $(29.6 | ) | $(23.9 | ) | ||||
| Adjusted net earnings* | $229.1 | $193.8 | ||||||
| Adjusted net earnings per share* | $1.76 | $1.55 | ||||||
| * 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) | March 29, 2025 | March 30, 2024 | ||||||
| Cash inflows from (outflows used in) operating activities | $237.8 | $(10.4 | ) | |||||
| Lease payments in financing activities | $(95.4 | ) | $(90.8 | ) | ||||
| Net capital expenditures* | $(26.5 | ) | $(24.0 | ) | ||||
| Free cash inflows (outflows)** | $115.9 | $(125.2 | ) | |||||
| * 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 contained in this press release are not based on historical or current facts and may constitute forward-looking statements or forward-looking information (collectively, "forward-looking statements") under Canadian securities laws. 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, without limitation, statements about the 2025 financial outlook; our ambitions; our future growth and potential; our profitability; the payment of dividends; our proposed strategy, and our operating performance.
Forward-looking statements made by the Corporation are based on a number of operational and other assumptions believed by the Corporation to be reasonable as at the date such statements were made, including assumptions set out through this press release and including, without limitation, the following principal assumptions about: general economic and political conditions; organic growth expectations; economic and market assumptions regarding the competition; 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; interest rates; working capital requirements; the collection of accounts receivable; the Corporation obtaining new contract awards; the type of contracts entered into by the Corporation; the anticipated margins under new contract awards; the utilization of the Corporation's workforce; the ability of the Corporation to attract new clients; the ability of the Corporation to retain current clients; changes in contract performance; project delivery; the Corporation's competitors; the ability of the Corporation to successfully integrate businesses; the acquisition and integration of businesses in the future; the Corporation's ability to manage growth; external factors affecting the global operations of the Corporation; the state of the Corporation's backlog and pipeline of opportunities in various reportable segments; the joint arrangements into which the Corporation has entered or will enter; the capital investments made by the public and private sectors; relationships with suppliers and subconsultants; relationships with management, key professionals and other employees of the Corporation; the maintenance of sufficient insurance; the management of environmental, social and health and safety risks; the sufficiency of the Corporation's current and planned information systems, communications technology and other technology; compliance with laws and regulations; future legal proceedings; the sufficiency of internal and disclosure controls; the regulatory environment; impairment of goodwill; foreign currency fluctuation; the expected benefits of acquisitions and the expected synergies to be realized as a result thereof; the tax legislation and regulations to which the Corporation is subject and the state of the Corporation's benefit plans; as well as the assumptions underlying the 2025 financial outlook set out in the Corporation's press release dated February 12, 2025.
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. In evaluating these forward-looking statements, investors should specifically consider various risk factors, which, if realized, could cause the Corporation's actual results or events to differ materially from those expressed or implied in forward-looking statements. Such risk factors include, but are not limited to, the rising complexity of the geopolitical landscape and macroeconomic developments; the failure to maintain our competitive positioning in rapidly changing competitive market; the failure to effectively adopt, integrate, and leverage existing and emerging technologies in our operations; failure to implement sufficient corporate and business initiatives; increases in real estate costs; 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; as well as other risks detailed from time to time in reports filed by the Corporation with securities regulators or securities commissions or other documents that the Corporation makes public, which may cause actual results or events to differ materially from the results expressed or implied in any forward-looking statement.
These and other risk factors that could cause actual results or events to differ materially from our expectations expressed in, or implied by, our forward-looking statements are discussed in greater detail in section 20, "Risk Factors" of the Corporation's Management's Discussion and Analysis for the fourth quarter and year ended December 31, 2024 which is available on SEDAR+ at www.sedarplus.ca. Actual results and events may be significantly different from what we currently expect because of the risks associated with our business, industry and global economy and of the assumptions made in relation to these risks. As such, there can be no assurance that actual results will be consistent with forward-looking statements.
The forward-looking statements contained in this press release describe the Corporation's expectations as of the date hereof and, accordingly, are subject to change after such date. Except as required under Canadian securities legislation, the Corporation does not assume any obligation to publicly update or to revise any forward-looking statements made in this press release or otherwise, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. The Corporation may also make oral forward-looking statements from time to time. The Corporation advises that the above paragraphs and the risk factors set forth in section 20, "Risk factors" should be read for a description of certain factors that could cause the actual results of the Corporation to differ materially from the results expressed or implied in any oral forward-looking statements. Readers should not place undue reliance on forward-looking statements.
About WSP
WSP is one of the world's leading professional services firms, uniting its engineering, advisory and science-based expertise to shape communities to advance humanity. From local beginnings to a globe-spanning presence today, WSP operates in over 50 countries and employs approximately 73,000 professionals, known as Visioneers. Together they pioneer solutions and deliver innovative projects in the transportation, infrastructure, environment, building, energy, water, and mining and metals sectors. WSP is publicly listed on the Toronto Stock Exchange (TSX:WSP).
For more information, please contact:
Alain Michaud
Chief Financial Officer
WSP Global Inc.
alain.michaud@wsp.com
Phone: 438-843-7317
