Mr. Alexandre L'Heureux reports

WSP REPORTS STRONG Q3 2023 RESULTS WITH ENHANCED MARGINS AND ROBUST BACKLOG

WSP Global Inc. has released its financial and operating results for the third quarter ended on Sept. 30, 2023.

In the third quarter of 2023, WSP generated solid organic growth in net revenues across all reportable segments and delivered a 50-basis-point (bps) increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin. Backlog and order intake remained strong with backlog organic growth of 7.2 per cent in the first nine months of 2023.

Financial highlights for the third quarter of 2023:

• Revenues and net revenues for the quarter reached $3.60-billion and $2.73-billion, up 24.2 per cent and 24.7 per cent, respectively, compared with the third quarter of 2022. Net revenue organic growth of 6.7 per cent in the quarter, attributable to all reportable segments. The acquisition of the environment and infrastructure business (E&I) of John Wood Group PLC was the main driver of acquisition growth of 15.3 per cent.
• Backlog as at Sept. 30, 2023, stood at $14.3-billion, representing 12.1 months of revenues(1). Organic order intake in the third quarter was $4.0-billion, while organic growth in the first nine months of 2023 was 7.2 per cent.
• Adjusted EBITDA in the quarter grew to $521.5-million, compared with $407.0-million in the third quarter of 2022, an increase of 28.1 per cent.
• Adjusted EBITDA margin for the quarter increased by 50 bps to 19.1 per cent, compared with 18.6 per cent in the third quarter of 2022. In the nine-month period ended Sept. 30, 2023, adjusted EBITDA margin increased by 30 bps to 17.2 per cent.
• Earnings before net financing expense and income taxes in the quarter stood at $292.7-million, up $56.3-million compared with the third quarter of 2022, mainly due to higher adjusted EBITDA.
• Adjusted net earnings for the quarter were $246.4-million, or $1.98 per share, up $53.0-million and 39 cents, respectively, compared with the third quarter of 2022. The respective increases in these metrics are mainly attributable to a higher adjusted EBITDA, partially offset by higher interest on long-term debt.
• Net earnings attributable to shareholders for the quarter stood at $156.2-million, or $1.25 per share, compared with $127.5-million and $1.05 per share in Q3 2022. The increases are mainly attributable to higher adjusted EBITDA, partially offset by higher interest on long-term debt and income taxes, as well as increased amortization of intangible assets due to recent acquisitions.
• Cash inflows from operating activities were $209.7-million in the nine-month period ended Sept. 30, 2023, compared with $207.4-million in the first nine months of 2022. Free cash outflow was $177.2-million for the nine-month period ended Sept. 30, 2023, affected by the continued impact of higher income taxes due to changes in tax regulation in the United States, which delays the deductibility of certain expenses.
• Net debt to adjusted EBITDA ratio stood at 1.9 times, compared with 1.6 times as at Dec. 31, 2022. The increase is mainly due to a higher net debt balance used to finance recent acquisitions. Incorporating a full 12 months of adjusted EBITDA of all acquired businesses, the net debt to adjusted EBITDA ratio would be 1.8 times.
• The quarterly dividend declared was 37.5 cents per share or $46.7-million.
• The financial outlook for 2023 updated in the Q2 2023 news release has been reaffirmed.

"Our performance in the third quarter is aligned with our expectations and demonstrates the continued momentum and high demand for our services. We continue to achieve significant organic growth and our backlog remains at record levels," said Alexandre L'Heureux, president and chief executive officer of WSP. "During the quarter, we celebrated an important milestone as it marked the one-year anniversary of welcoming our colleagues from the environment and infrastructure business of John Wood Group, a key addition to our global platform. We are reaffirming our financial outlook with confidence and will remain agile navigating fluid macroeconomic and geopolitical environments while executing our strategy with discipline and rigour."

Leadership announcement

WSP announces that Lewis (Lou) Cornell, president and chief executive officer, WSP, in the United States, will retire in 2024 after a successful career spanning nearly three and a half decades. Mr. Cornell has been a member of the global leadership team and an integral part in expanding the business and driving significant growth. He will continue to oversee the U.S. business until his retirement and is committed to facilitating a smooth transition. The company has initiated a search process for his replacement.

Dividend

The board of WSP declared a dividend of 37.5 cents per share. This dividend will be payable on or about Jan. 15, 2024, to shareholders of record at the close of business on Dec. 29, 2023.

Financial report

This news release includes, by reference, the financial reports for the third quarter of 2023, including the unaudited interim condensed consolidated financial statements and the management's discussion and analysis (MD&A) of the corporation for the third quarter ended on Sept. 30, 2023, which are available on WSP's website. These documents are also available on SEDAR+.

Conference call and webcast

WSP will hold a conference call and webcast from 8 a.m. Eastern Time to 9 a.m. Eastern Time on Nov. 9, 2023, to discuss these results. To participate in the conference call, please preregister on-line. Registrants will receive a confirmation with dial-in details. A live webcast of the conference call will be available. For those unable to attend, a replay will be available within 24 hours following the call under the investors section of WSP's website.

A presentation of the third quarter 2023 highlights and results will be accessible on Nov. 8, 2023, after the market close under the investors section of the WSP website.

(1) Based on revenues for the trailing-12-month period, incorporating a full 12 months of revenues for all acquisitions.

All amounts shown in this news release are expressed in Canadian dollars, unless otherwise indicated. All quarterly information disclosed in this news release is based on unaudited figures.

About WSP Global Inc.

As one of the largest professional services firms in the world, WSP exists to future-proof cities and the 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 67,000 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 2022, WSP reported $11.9-billion in revenue. The corporation's shares are listed on the Toronto Stock Exchange (symbol WSP).

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