Mr. Ian Edwards reports

SNC-LAVALIN REPORTS STRONG FIRST QUARTER 2023 RESULTS

SNC-Lavalin Group Inc. has released its financial results for the first quarter ended March 31, 2023.

The SNCL Services line of business continued to deliver on its pivoting to growth strategy with another quarter of strong revenue growth, particularly in the engineering services segment, and a significant increase in segment adjusted EBIT (earnings before interest, taxes and taxes). SNCL Services achieved record-high backlog, with another record high level in the engineering services segment and a strong increase in the nuclear segment. The LSTK Projects exit strategy continues to progress well.

Q1 2023 financial highlights (all results reflect comparisons to prior-year period of Q1 2022, except otherwise indicated):

• SNCL Services revenue increased 10.8 per cent to $1.8-billion, or 10.1 per cent on an organic revenue growth basis, outperforming the company's 5-per-cent to 7-per-cent full year outlook range:
  • Engineering services organic revenue growth of 17.5 per cent.
• SNCL Services segment adjusted EBIT increased by 23.4 per cent to $156.3-million, representing an 8.5-per-cent margin, in line with company's full year outlook range:
  • Engineering services segment adjusted EBIT margin and engineering services segment adjusted EBITDA to segment net revenue ratio of 8.4 per cent and 14.0 per cent, respectively;
  • Nuclear segment adjusted EBIT margin of 13.4 per cent.
• SNCL Services backlog reached a record-high and totalled $12.1-billion as at March 31, 2023, an increase of 8.0 per cent. Bookings in Q1 2023 totalled $2.1-billion, representing a 1.13 booking-to-revenue ratio:
  • Engineering services backlog reached a record-high and totaled $4.8-billion as at March 31, 2023, an increase of 25.3 per cent, which includes another new record-high for the United States. Bookings in Q1 2023 totalled $1.5-billion, representing a 1.13 booking-to-revenue ratio;
  • Nuclear backlog increased by 22.9 per cent to $985.8-million as at March 31, 2023.
• LSTK Projects segment adjusted EBIT of negative $9.2-million, in line with expectations. LSTK Projects backlog reduced by $167.6-million sequentially from Dec. 31, 2022, to $517.9-million as at March 31, 2023.
• Adjusted net income attributable to SNC-Lavalin shareholders from PS&PM totalled $55.4-million, or 32 cents per diluted share, compared with $39.4-million, or 22 cents per diluted share, in Q1 2022.
• Net income from continuing operations attributable to SNC-Lavalin shareholders totalled $28.4-million, or 16 cents per diluted share, compared with $24.8-million, or 14 cents per diluted share, in Q1 2022.
• Net cash used for operating activities of $57.3-million:
  • Net cash generated from operating activities in SNCL Services of $94.1-million.
• Net limited recourse and recourse debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of 2.9 as at March 31, 2023.

"With our strong first quarter results, we believe that we are well on track to deliver the company's 2023 outlook," said Ian L. Edwards, president and chief executive officer of SNC-Lavalin Group. "First quarter performance further emphasizes that our pivoting to growth strategy is succeeding, as we become a professional services and project management company. Our continued backlog growth in SNCL Services demonstrates the resiliency of our business amid economic pressures and our list of prospects is strong as government and commercial clients continue to invest in infrastructure and as the world transitions to a low carbon environment."

First quarter financial results

Professional services and 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 and maintenance (O&M), and lump-sum turnkey (LSTK) projects, while capital is its own reportable segment and separate from PS&PM.

• The increase in net income from continuing operations attributable to SNC-Lavalin shareholders was mainly due to higher segment adjusted EBIT, partially offset by higher net financial expenses.

Quarterly dividend

The board of directors today declared a cash dividend of two cents per share, unchanged from the previous quarter. The dividend is payable on June 6, 2023, to shareholders of record on May 23, 2023. This dividend is an eligible dividend for Canadian federal and provincial income tax purposes.

First quarter 2023 conference call/webcast

SNC-Lavalin will hold a conference call and audio webcast today at 8:30 a.m. ET to discuss and present its first 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. 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.

Annual meeting of shareholders

SNC-Lavalin's annual meeting of shareholders will be held on Thursday, May 18, 2023, at 11 a.m. ET. Registered shareholders as of the close of business on March 20, 2023, and duly appointed proxyholders of record are entitled to participate in the meeting virtually, regardless of geographic location, and will have the opportunity to ask questions and vote, all in real time, provided they are connected to the Internet and comply with all of the requirements set out in the proxy materials. Whether or not a shareholder plans to attend the meeting, the company urges all shareholders to vote and submit their proxy in advance of the meeting by one of the methods described in the proxy materials provided to shareholders.

Additional information related to the meeting can also be found in SNC-Lavalin's 2023 management proxy circular which is available on SEDAR and on the company's website under investors/investor's briefcase.

About SNC-Lavalin Group Inc.

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 the planet and its people.

We seek Safe Harbor.