Strong Q4 operating cash flow, reduced debt
ratio and growing Engineering Services backlog, in line with the
new strategic direction
To watch Ian L.
Edwards provide an overview of the fourth quarter results
for 2019 and explains how SNC-Lavalin continues to deliver on its
new strategic direction, view here.
MONTREAL, Feb. 28, 2020 /CNW Telbec/ - SNC-Lavalin
Group Inc. (TSX: SNC) today announced its results for the fourth
quarter and year ended December 31,
2019. All currency references in this press release are in
Canadian dollars except as otherwise indicated.
2019 Fourth Quarter Financial Highlights
- New strategic direction continuing to deliver results:
In July 2019, SNC-Lavalin announced a
new strategic direction focused on de-risking the business through
exiting bidding on lump-sum turnkey (LSTK) contracts and
prioritizing the Company's high-value SNCL Engineering Services
business line. The SNCL Engineering Services continued its
solid performance during the quarter with strong revenue, EBIT and
EBIT margins; LSTK construction contracts backlog for SNCL Projects
reduced to $3.0 billion as at
December 31, 2019 from $3.2 billion as at September 30, 2019.
- Strong operating cash flow: SNC-Lavalin generated
operating cash flow of $312 million,
the highest quarterly amount since the fourth quarter of 2017,
increasing total cash on the balance sheet to $1.2 billion as at December 31, 2019; net recourse debt to EBITDA
ratio under the Company's Credit Agreement reduced to 2.1x from
3.4x in the third quarter of 2019 and down from 2.9x in the fourth
quarter of 2018.
- Resources restructuring: The Company made the
decision to close Valerus, non-core, underperforming, mid-stream
oil and gas production and processing facilities based in
Houston, and took a restructuring
charge in the fourth quarter of 2019 of approximately $72 million, of which approximately $53 million was non-cash. The Company continues
to actively explore all options for the remaining Resources
business as it winds down the remaining LSTK projects and is
right-sizing overhead as the business evolves.
- Federal charges settled: SNC-Lavalin Construction Inc.,
a subsidiary of SNC-Lavalin Group Inc., pled guilty to one charge
of fraud; all charges against SNC-Lavalin Group Inc. were withdrawn
and the Company agreed to a fine of $280
million, payable in equal instalments over five years. As a
result, the Company recognized a non-cash accounting charge of
$257.3 million, reflecting the net
present value of the full settlement amount.
- Cost reduction program: In the fourth quarter of 2019,
the Company successfully completed its $250
million annual run-rate cost reduction
program.
- IFRS net loss attributable to SNC-Lavalin shareholders:
Net loss attributable to SNC‑Lavalin shareholders was
$293 million, mainly due to the
non-cash, net present value of the Federal charge settlement being
recognized in full in the quarter, and restructuring charges.
2019 Fourth
Quarter and Year-End Financial Highlights
|
|
(in thousands of
dollars, unless otherwise indicated)
|
Fourth
Quarter
|
Year
Ended
|
2019
|
2018
|
2019
|
2018
|
Total
revenue
|
2,436,077
|
2,562,503
|
9,515,610
|
10,084,006
|
Net income (loss)
attributable to SNC-Lavalin shareholders
|
(292,870)
|
(1,598,724)
|
328,219
|
(1,316,898)
|
Diluted
EPS
|
($1.67)
|
($9.11)
|
$1.87
|
($7.50)
|
SNCL Engineering
Services (incl. Capital)
Revenue
Segment
EBIT(7)
Segment
EBIT ratio
Backlog
|
1,609,784
190,513
11.8%
11,297,900
|
1,580,001
219,099
13.9%
10,376,800
|
6,280,011
802,118
12.8%
11,297,900
|
5,786,374
776,432
13.4%
10,376,800
|
SNCL
Projects
Revenue
Segment
EBIT(7)
Segment
EBIT ratio
Backlog
|
826,293
(27,839)
(3.4%)
3,964,600
|
982,502
(364,601)
(37.1%)
4,508,200
|
3,235,599
(448,000)
(13.8%)
3,964,600
|
4,297,632
(237,297)
(5.5%)
4,508,200
|
Adjusted EBITDA from
E&C(8)
Adjusted EBITDA from
E&C margin
Adjusted diluted EPS
from E&C(2)
|
166,808
7.0%
$0.45
|
(204,868)
(8.2%)
($1.62)
|
279,123
3.0%
($0.40)
|
385,588
3.9%
$0.25
|
CEO Commentary
Ian L. Edwards, President and
CEO of SNC-Lavalin Group Inc., made the following comments in
relation to the Company's 2019 fourth quarter and year-end
results:
"2019 was a challenging year for us in many ways. We were tested
as a Company, and went through some very difficult times, but I am
very proud to say that we took decisive action and are stronger for
it. In July, we took the decision, with the support of the Board,
to set a different course, and point the Company in a new strategic
direction: we exited bidding on LSTK contracts and focused on
growing our high-value SNCL Engineering Services business,
therefore de-risking the business and positioning it to generate
consistent earnings and cash flow. Six months into our new
strategic direction, it is clear to me after two quarters of solid
results in the second half of 2019, that the strategy is
delivering, and that we made the right decision.
"In the fourth quarter of 2019, we generated strong operating
cash flow, the highest since Q4 2017, and delivered solid earnings
on an adjusted basis. Our SNCL Engineering Services business line
continued to perform well, and we continued to reduce the SNCL
Projects LSTK backlog. We also took the necessary decision to close
Valerus, non-core, unprofitable, mid-stream oil and gas production
and processing facilities, as part of our commitment to restructure
the Resources business. Additionally, we appointed a President of
Infrastructure Projects, a role dedicated solely to executing and
managing the wind-down of the remaining LSTK infrastructure
projects.
"We settled the federal charges resulting from the Company's
legacy activities in Libya. With
this issue behind us, our new strategy firmly in place, and a
refocused senior leadership team, which includes the appointment of
a new Chief Transformation Officer, a new Executive Vice President
and General Counsel, and an incoming Chief Financial Officer, we
are well-positioned for the next chapter in the Company's growth
and transformation into a professional engineering services and
project management solutions provider."
Fourth Quarter Results
The Company reported an IFRS net loss attributable to
SNC-Lavalin shareholders of $292.9 million, or $1.67 per diluted share for the fourth quarter of
2019, compared with a loss of $1.6
billion, or $9.11 per diluted
share, for the corresponding period in 2018. The Company's fourth
quarter 2019 net loss attributable to SNC-Lavalin shareholders was
due to the Federal charges settlement (PPSC) of $257.3 million and after-tax restructuring costs
of $99.6 million mainly related to
the decision made to close the Company's Valerus facilities in
Houston.
Adjusted net income from E&C(1) in the fourth
quarter of 2019 increased to $79.1
million, or $0.45 per diluted
share, compared with an adjusted net loss from
E&C(1) of $284.1
million, or $1.62 per diluted
share, for the corresponding period in 2018. The higher adjusted
net income from E&C(1) in the fourth quarter of 2019
was mainly due to improved results in the Resources segment, and
lower financial expenses.
SNCL Engineering Services
Revenue from the SNCL Engineering Services line of business,
which includes the EDPM, Nuclear, Infrastructure Services, and
Capital segments, totaled $1.6
billion for the fourth quarter of 2019, an increase of 1.9%,
compared to the fourth quarter of 2018, mainly due to a revenue
increase of 20.8% in Infrastructure Services, which offsets a
decrease in the Capital segment of 53.1%.
SNCL Engineering Services, excluding Capital, recorded a strong
Segment EBIT(7) and Segment EBIT ratio of $159.0 million and 10.1%, respectively, in line
with the fourth quarter of 2018. The Capital Segment
EBIT(7) was lower due to a decrease in Highway 407 ETR
dividends following the sale of a portion of the Company's interest
in Highway 407 ETR during the third quarter of 2019.
SNCL Projects
Revenue from the SNCL Projects line of business, which includes
LSTK construction contracting in the Infrastructure EPC Projects
and Resources segments, totaled $826.3
million for the fourth quarter of 2019, a decrease of 15.9%
compared to the fourth quarter of 2018. This was mainly due to the
continuing backlog run-off of certain major LSTK construction
projects, coupled with no new bidding by the Company in this
market.
SNCL Projects recorded a negative Segment EBIT(7)
totaling $27.8 million in the fourth
quarter of 2019. The negative Segment EBIT(7) was due to
the Resources segment which recorded a loss of $51.2 million mainly due to three factors:
unfavourable reforecasts on certain Resources LSTK construction
projects, continuing underperformance of the midstream oil and gas
production and processing facilities, and overhead costs that are
in the process of being right-sized to align with a lower level of
activity. These were partially offset by a strong quarter from the
Infrastructure EPC Projects segment, as the Company continues to
progress on its major light rail transit (LRT) projects.
Backlog and Bookings
The Company's backlog totaled $15.3
billion as at December 31,
2019, 2.5% higher than at the end of December 2018. The backlog for SNCL Engineering
Services increased by 8.9% to $11.3
billion, while SNCL Projects backlog continues to decrease
and totaled $4.0 billion. SNCL
Engineering Services total bookings for the fourth quarter of 2019
amounted to $1.4 billion. Contracts
bookings for SNCL Engineering Services amounted to $6.9 billion for 2019, representing a 1.2
book-to-bill ratio, with $3.7 billion
of bookings in the EDPM segment, $2.3 billion in the Infrastructure Services
segment and $0.9 billion in the
Nuclear segment.
LSTK Projects Update
The Company continued to run off the LSTK projects component of
its SNCL Projects backlog which totaled $3.0
billion at the end of the fourth quarter of 2019, down from
$3.2 billion as at September 30, 2019. The Company expects to
complete most of its remaining Resources LSTK construction projects
by the end of 2020. The majority of the Company's LSTK project
backlog represents light rail transit systems projects for which
the Company has a long track record of executing successfully. The
Company reduced its Infrastructure EPC Projects and Resources LSTK
backlog by 3.5% and 19.6%, respectively, compared to the end of the
third quarter of 2019.
Financial Position and Cash Flows
As of December 31, 2019, the
Company had $1.2 billion of cash and
cash equivalents, $1.2 billion
of recourse debt and $0.4 billion of
limited recourse debt, as well as $2.4
billion in unused capacity under its $2.6 billion committed revolving credit
facility.
As at December 31, 2019, the net
recourse debt to EBITDA ratio calculated in accordance with the
terms of the Company's Credit Agreement improved substantially
year-over-year and quarter-over-quarter to 2.1x.
Quarterly Dividend
The Board of Directors today declared a cash dividend of
$0.02 per share, payable on
March 27, 2020, to shareholders of record on March 13, 2020. This dividend is an "eligible
dividend" for income tax purposes.
2020 Outlook
The Company expects that in 2020 the gross revenue from SNCL
Engineering Services, excluding Capital, will grow by a low single
digit percentage, and that Segment EBITDA(9) as a
percentage of gross revenue, from SNCL Engineering Services,
excluding Capital, will be between 10% and 12%.
This outlook is based on the assumptions and methodology
described in the Company's 2019 Management's Discussion and
Analysis under the heading, "How We Budget and Forecast Our
Results" and the "Forward-Looking Statements" section below and is
subject to the risks and uncertainties summarized therein, which
are more fully described in the Company's public disclosure
documents.
Special Committee
The special committee established by the Board in December 2018 explored a range of alternatives to
protect and enhance value for SNC-Lavalin. The Company has charted
a new strategic direction and succeeded in resolving legacy legal
matters. Having now fulfilled its mandate, the committee has been
disbanded.
Fourth Quarter and Year-End 2019 Earnings Conference Call
/ Webcast
SNC-Lavalin will hold a conference call today at 8:30 a.m. EST to review results for its fourth
quarter and year-end 2019. A live audio webcast of the conference
call and an accompanying slide presentation will be available at
www.investors.snclavalin.com. The call will also be
accessible by telephone, please dial toll free at 1 800 319
4610 in North America, 416
915 3239 in Toronto, 514 375
0364 in Montreal, or 080 8101
2791 in the United Kingdom. A
recording of the conference call will be available on the Company's
website within 24 hours following the call.
About SNC-Lavalin
Founded in 1911, SNC-Lavalin is a fully integrated professional
services and project management company with offices around the
world. SNC-Lavalin connects people, technology and data to help
shape and deliver world-leading concepts and projects, while
offering comprehensive innovative solutions across the asset
lifecycle. Our expertise is wide-ranging — consulting &
advisory, intelligent networks & cybersecurity, design &
engineering, procurement, project & construction management,
operations & maintenance, decommissioning and sustaining
capital – and delivered to clients in four strategic sectors: EDPM
(engineering, design and project management), Infrastructure,
Nuclear and Resources, supported by Capital. People. Drive.
Results. www.snclavalin.com
Non-IFRS Financial Measures and Additional IFRS
Measures
The Company reports its financial results in accordance with
IFRS. However, the following non‑IFRS measures and additional IFRS
measures are used by the Company: Adjusted net income from E&C,
Adjusted diluted EPS from E&C, Adjusted net income from
Capital, Adjusted diluted EPS from Capital, Adjusted consolidated
diluted EPS, EBITDA, Adjusted EBITDA from E&C Segment EBIT and
Segment EBITDA. Additional details for these non-IFRS measures and
additional IFRS measures can be found below and in SNC-Lavalin's
MD&A, which is available in the Investors section of the
Company's website at www.snclavalin.com. Non-IFRS financial
measures do not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. Management believes that, in addition to
conventional measures prepared in accordance with IFRS, these
non-IFRS measures provide additional insight into the Company's
financial results and certain investors may use this information to
evaluate the Company's performance from period to period. However,
these non-IFRS financial measures have limitations and should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
(1) Adjusted net income (loss) from
E&C is defined as net income (loss) attributable to SNC-Lavalin
shareholders from E&C, excluding charges related to
restructuring, right-sizing and other, acquisition-related costs
and integration costs, as well as amortization of intangible assets
related to business combinations, impairment of goodwill,
impairment of intangible assets related to business combinations,
the net expense for the 2012 class action lawsuits settlement and
related legal costs, the GMP equalization expense, the gains
(losses) on disposals of E&C businesses, the impact of U.S.
corporate tax reform and the incremental financing costs
related to the amendments to the CDPQ loan, other E&C financing
arrangements in connection with the sale of 10.01% of the shares of
Highway 407 ETR and the federal charges settlement (PPSC).
E&C is defined in the Company's 2019 financial statements and
Management's Discussion and Analysis. The term "Adjusted net income
(loss) from E&C" does not have any standardized meaning as
prescribed by IFRS. Therefore, it may not be comparable to similar
measures presented by other issuers. Management uses this measure
as a more meaningful way to compare the Company's financial
performance from period to period. Management believes that, in
addition to conventional measures prepared in accordance with IFRS,
certain investors use this information to evaluate the Company's
performance. See reconciliation below.
(2) Adjusted diluted EPS from E&C
is defined as the adjusted net income (loss) from E&C divided
by the diluted weighted average number of outstanding shares for
the period.
(3) Adjusted net income from Capital
is defined as net income attributable to SNC-Lavalin shareholders
from Capital, excluding charges related to restructuring, right
sizing and other, and the gains on disposals of Capital
Investments.
(4) Adjusted diluted EPS from Capital
is defined as the adjusted net income from Capital divided by the
diluted weighted average number of outstanding shares for the
period.
(5) Adjusted consolidated net income
is defined as the adjusted net income (loss) from E&C plus the
adjusted net income from Capital.
(6) Adjusted consolidated diluted EPS
is defined as the adjusted net income (loss) from E&C plus the
adjusted net income from Capital divided by the diluted weighted
average number of outstanding shares for the period.
(7) Segment EBIT consists of revenues
less i) direct cost of activities, ii) directly related selling,
general and administrative expenses, and iii) corporate selling,
general and administrative expenses that are allocated to segments.
Expenses that are not allocated to the Company's segments include:
certain corporate selling, general and administrative expenses that
are not directly related to projects or segments, impairment loss
(reversal of impairment losses) arising from expected credit
losses, gain (loss) arising on financial assets (liabilities) at
fair value through profit or loss, restructuring costs, impairment
of goodwill, impairment of intangible assets related to business
combinations, acquisition-related costs and integration costs,
amortization of intangible assets related to business combinations,
the net expense for the 2012 class action lawsuits settlement and
related legal costs, the GMP equalization expense, gains (losses)
on disposals of E&C businesses and Capital investments, as well
as the federal charges settlement (PPSC). The term "Segment EBIT"
does not have any standardized meaning under IFRS. Therefore, it
may not be comparable to similar measures presented by other
issuers. Management uses this measure as a more meaningful way to
compare the Company's financial performance from period to period.
Management believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this
information to evaluate the Company's performance.
(8) Adjusted EBITDA from E&C is
defined herein as earnings from E&C before net financial
expenses (income), income taxes, depreciation and amortization, and
excludes charges related to restructuring, right-sizing and other,
acquisition-related costs and integration costs, the net expense
for the 2012 class action lawsuits settlement and related legal
costs, the GMP equalization expense, the gains (losses) on
disposals of E&C businesses as well as the federal charges
settlement (PPSC). The term "Adjusted EBITDA from E&C" does not
have any standardized meaning under IFRS. Therefore, it may not be
comparable to similar measures presented by other issuers.
Management uses this measure as a more meaningful way to compare
the Company's financial performance from period to period.
Management believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this
information to evaluate the Company's performance.
(9) Segment EBITDA is defined herein
as the Segment EBIT plus the segment depreciation of property and
equipment and segment amortization of intangible assets. The term
"Segment EBITDA" does not have any standardized meaning under IFRS.
Therefore, it may not be comparable to similar measures presented
by other issuers. Management uses this measure as a more meaningful
way to compare the Company's financial performance from period to
period. Management believes that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use
this information to evaluate the Company's
performance.
SNC-Lavalin
Financial Summary
|
|
|
|
(in thousands of
dollars, unless otherwise indicated)
|
Fourth
Quarter
|
Year ended
December 31
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Revenues
|
|
|
|
|
From E&C-SNCL
Engineering Services
|
1,573,591
|
1,502,911
|
6,017,291
|
5,521,717
|
From E&C-SNCL
Projects
|
826,293
|
982,502
|
3,235,599
|
4,297,632
|
From
Capital
|
36,193
|
77,090
|
262,720
|
264,657
|
|
2,436,077
|
2,562,503
|
9,515,610
|
10,084,006
|
|
|
|
|
|
Net income (loss)
attributable to SNC-Lavalin shareholders
|
|
|
|
|
From
E&C
|
(310,366)
|
(1,654,303)
|
(2,444,583)
|
(1,562,986)
|
From
Capital
|
17,496
|
55,579
|
2,772,802
|
246,088
|
|
(292,870)
|
(1,598,724)
|
328,219
|
(1,316,898)
|
|
|
|
|
|
Diluted EPS
($)
|
|
|
|
|
From
E&C
|
(1.77)
|
(9.42)
|
(13.92)
|
(8.90)
|
From
Capital
|
0.10
|
0.32
|
15.79
|
1.40
|
|
(1.67)
|
(9.11)
|
1.87
|
(7.50)
|
|
|
|
|
|
Adjusted net
income (loss) attributable to SNC-Lavalin
shareholders
|
|
|
|
|
From
E&C(1)
|
79,061
|
(284,146)
|
(70,331)
|
43,119
|
From
Capital(3)
|
19,333
|
54,444
|
189,446
|
186,549
|
|
98,394
|
(229,703)
|
119,115
|
229,668
|
|
|
|
|
|
Adjusted diluted
EPS ($)
|
|
|
|
|
From
E&C(2)
|
0.45
|
(1.62)
|
(0.40)
|
0.25
|
From
Capital(4)
|
0.11
|
0.31
|
1.08
|
1.06
|
|
0.56
|
(1.31)
|
0.68
|
1.31
|
Adjusted EBITDA
from E&C* (8)
|
166,808
|
(204,868)
|
279,123
|
385,588
|
Adjusted EBITDA
from E&C margin
|
7.0%
|
(8.2%)
|
3.0%
|
3.9%
|
|
|
|
|
|
Backlog
|
|
|
|
|
From SNCL Engineering
Services
|
|
|
11,297,900
|
10,376,800
|
From SNCL
Projects
|
|
|
3,964,600
|
4,508,200
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
1,188,636
|
634,084
|
|
|
|
|
|
Recourse and
limited recourse debt
|
|
|
1,572,663
|
3,268,323
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
* The Company's
2019 financial results incorporate the non-cash impact of IFRS 16,
Leases ("IFRS 16"). Financial results for 2018 were not restated
for the new accounting standard. If the Company excluded the
adoption of IFRS 16, adjusted EBITDA from
E&C(8) for the year ended December 31, 2019
would have been approximately $136 million lower ($39 million for
the fourth quarter of 2019), and the net financial expenses would
have been $24 million lower for the year ended December 31, 2019
($7 million for the fourth quarter of 2019), mainly offset by a
lower EBIT for a similar amount.
|
Reconciliation
of IFRS Net Income (loss) as Reported to Adjusted Net Income
(loss)
|
|
|
Fourth
Quarter
2019
|
Year
ended
December 31,
2019
|
|
E&C
|
Capital
|
Total
|
E&C
|
Capital
|
Total
|
(In
M$)
|
|
|
|
|
|
|
Net Income (Loss)
(IFRS)
|
(310.4)
|
17.5
|
(292.9)
|
(2,444.6)
|
2,772.8
|
328.2
|
Impairment of
goodwill
|
-
|
-
|
-
|
1,720.9
|
-
|
1,720.9
|
Impairment of
intangible assets related to business combinations
|
-
|
-
|
-
|
60.1
|
-
|
60.1
|
Amortization of
intangible assets related to business combinations
|
32.4
|
-
|
32.4
|
148.3
|
-
|
148.3
|
Restructuring
costs
|
99.6
|
-
|
99.6
|
154.0
|
2.5
|
156.5
|
Financing costs
related to the agreement to sell shares of Highway 407
ETR
|
-
|
-
|
-
|
27.4
|
-
|
27.4
|
Acquisition-related
costs and integration costs
|
0.1
|
-
|
0.1
|
5.9
|
-
|
5.9
|
Federal charges
settlement (PPSC)
|
257.3
|
-
|
257.3
|
257.3
|
-
|
257.3
|
Loss from adjustment
on disposals of E&C businesses
|
-
|
-
|
-
|
0.3
|
-
|
0.3
|
Loss (gain) on
disposal of a Capital investment
|
-
|
1.8
|
1.8
|
-
|
(2,586.0)
|
(2,586.0)
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) (non-IFRS)
|
79.1
|
19.3
|
98.4
|
(70.3)
|
189.4
|
119.1
|
|
|
|
|
|
|
|
(in
$)
|
|
|
|
|
|
|
Diluted EPS
(IFRS)
|
(1.77)
|
0.10
|
(1.67)
|
(13.92)
|
15.79
|
1.87
|
Impairment of
goodwill
|
-
|
-
|
-
|
9.80
|
-
|
9.80
|
Impairment of
intangible assets related to business combinations
|
-
|
-
|
-
|
0.34
|
-
|
0.34
|
Amortization of
intangible assets related to business combinations
|
0.18
|
-
|
0.18
|
0.85
|
-
|
0.85
|
Restructuring
costs
|
0.57
|
-
|
0.57
|
0.88
|
0.01
|
0.89
|
Financing costs
related to the agreement to sell shares of Highway 407
ETR
|
-
|
-
|
-
|
0.16
|
-
|
0.16
|
Acquisition-related
costs and integration costs
|
0.00
|
-
|
0.00
|
0.03
|
-
|
0.03
|
Federal charges
settlement (PPSC)
|
1.47
|
-
|
1.47
|
1.47
|
-
|
1.47
|
Loss from adjustment
on disposals of E&C businesses
|
-
|
-
|
-
|
0.00
|
-
|
0.00
|
Loss (gain) on
disposal of a Capital investment
|
-
|
0.01
|
0.01
|
-
|
(14.73)
|
(14.73)
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
(non-IFRS)
|
0.45
|
0.11
|
0.56
|
(0.40)
|
1.08
|
0.68
|
|
|
|
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
|
Fourth
Quarter
2018
|
Year
ended
December 31,
2018
|
|
E&C
|
Capital
|
Total
|
E&C
|
Capital
|
Total
|
(In
M$)
|
|
|
|
|
|
|
Net Income (Loss)
(IFRS)
|
(1,654.3)
|
55.6
|
(1,598.7)
|
(1,563.0)
|
246.1
|
(1,316.9)
|
Net charges related
to restructuring & right-sizing plan and other
|
48.5
|
0.3
|
48.8
|
58.7*
|
0.3
|
59.0
|
Acquisition-related
costs and integration costs
|
16.1
|
-
|
16.1
|
42.8
|
-
|
42.8
|
Amortization of
intangible assets related to business combinations
|
42.9
|
-
|
42.9
|
171.1
|
-
|
171.1
|
Net loss (gain) on
disposals of E&C business and Capital investments
|
0.2
|
(1.4)
|
(1.2)
|
0.5
|
(59.8)
|
(59.3)
|
Net expense for the
2012 class action lawsuits settlement & related legal
costs
|
1.2
|
-
|
1.2
|
65.7
|
-
|
65.7
|
Impact of U.S.
corporate tax reform
|
-
|
-
|
-
|
6.0
|
-
|
6.0
|
Non-cash goodwill
impairment charge
|
1,240.4
|
-
|
1,240.4
|
1,240.4
|
-
|
1,240.4
|
Non-cash Guaranteed
Minimum Pension (GMP) equalization expense**
|
20.8
|
-
|
20.8
|
20.8
|
-
|
20.8
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) (non-IFRS)
|
(284.1)
|
54.4
|
(229.7)
|
43.1
|
186.5
|
229.7
|
|
|
|
|
|
|
|
(in
$)
|
|
|
|
|
|
|
Diluted EPS
(IFRS)
|
(9.42)
|
0.32
|
(9.11)
|
(8.90)
|
1.40
|
(7.50)
|
Net charges related
to restructuring & right-sizing plan and other
|
0.28
|
0.00
|
0.28
|
0.33
|
0.00
|
0.34
|
Acquisition-related
costs and integration costs
|
0.09
|
-
|
0.09
|
0.24
|
-
|
0.24
|
Amortization of
intangible assets related to business combinations
|
0.24
|
-
|
0.24
|
0.97
|
-
|
0.97
|
Net loss (gain) on
disposals of E&C business and Capital investments
|
0.00
|
(0.01)
|
(0.01)
|
0.00
|
(0.34)
|
(0.34)
|
Net expense for the
2012 class action lawsuits settlement & related legal
costs
|
0.01
|
-
|
0.01
|
0.37
|
-
|
0.37
|
Impact of U.S.
corporate tax reform
|
-
|
-
|
-
|
0.03
|
-
|
0.03
|
Non-cash goodwill
impairment charge
|
7.07
|
-
|
7.07
|
7.07
|
-
|
7.07
|
Non-cash Guaranteed
Minimum Pension (GMP) equalization expense
|
0.12
|
-
|
0.12
|
0.12
|
-
|
0.12
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
(non-IFRS)
|
(1.62)
|
0.31
|
(1.31)
|
0.25
|
1.06
|
1.31
|
|
|
|
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
*This amount
included $6.9 million ($5.6 million after taxes) of net charges
which did not meet the restructuring costs definition in accordance
with IFRS.
|
|
**Included in
Corporate selling, general and administrative
expenses
|
Forward-looking Statements
Reference in this press release, and hereafter, to the
"Company" or to "SNC-Lavalin" means, as the context may require,
SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint
arrangements, or SNC-Lavalin Group Inc. or one or more of its
subsidiaries or joint arrangements.
Statements made in this press release that describe the
Company's or management's budgets, estimates, expectations,
forecasts, objectives, predictions, projections of the future or
strategies may be "forward-looking statements", which can be
identified by the use of the conditional or forward-looking
terminology such as "aims", "anticipates", "assumes", "believes",
"cost savings", "estimates", "expects", "goal", "intends", "may",
"plans", "projects", "should", "synergies", "target", "vision",
"will", or the negative thereof or other variations thereon.
Forward-looking statements also include any other statements that
do not refer to historical facts. Forward-looking statements also
include statements relating to the following: i) future capital
expenditures, revenues, expenses, earnings, economic performance,
indebtedness, financial condition, losses and future prospects; and
ii) business and management strategies and the expansion and growth
of the Company's operations. All such forward-looking statements
are made pursuant to the "safe-harbour" provisions of applicable
Canadian securities laws. The Company cautions that, by their
nature, forward-looking statements involve risks and uncertainties,
and that its actual actions and/or results could differ materially
from those expressed or implied in such forward-looking statements,
or could affect the extent to which a particular projection
materializes. Forward-looking statements are presented for the
purpose of assisting investors and others in understanding certain
key elements of the Company's current objectives, strategic
priorities, expectations and plans, and in obtaining a better
understanding of the Company's business and anticipated operating
environment. Readers are cautioned that such information may not be
appropriate for other purposes.
Forward-looking statements made in this press release are
based on a number of assumptions believed by the Company to be
reasonable as at the date hereof. The assumptions are set out
throughout the Company's 2019 MD&A (particularly in the
sections entitled "Critical Accounting Judgments and Key Sources of
Estimation Uncertainty" and "How We Analyze and Report our
Results"). If these assumptions are inaccurate, the Company's
actual results could differ materially from those expressed or
implied in such forward-looking statements. In addition, important
risk factors could cause the Company's assumptions and estimates to
be inaccurate and actual results or events to differ materially
from those expressed in or implied by these forward-looking
statements. These risks include, but are not limited to: (a)
results of the new 2019 strategic direction coupled with a
corporate reorganization; (b) fixed-price contracts or the
Company's failure to meet contractual schedule, performance
requirements or to execute projects efficiently; (c) contract
awards and timing; (d) remaining performance obligations;
(e) being a provider of services to government agencies;
(f) international operations; (g) Nuclear energy
services; (h) ownership interests in Capital investments; (i)
dependence on third parties; (j) joint ventures and partnerships;
(k) information systems and data; (l) competition; (m)
professional liability or liability for faulty services; (n)
monetary damages and penalties in connection with professional and
engineering reports and opinions; (o) insurance coverage; (p)
health and safety; (q) qualified personnel; (r) work stoppages,
union negotiations and other labour matters; (s) extreme weather
conditions and the impact of natural or other disasters and global
health crises; (t) intellectual property; (u) divestitures and the
sale of significant assets; (v) impact of operating results and
level of indebtedness on financial situation; (w) liquidity and
financial position; * indebtedness; (y) security under the
SNC‑Lavalin Highway Holdings Loan; (z) dependence on subsidiaries
to help repay indebtedness; (aa) dividends; (bb) post-employment
benefit obligations, including pension-related obligations; (cc)
working capital requirements; (dd) collection from customers;
(ee) impairment of goodwill and other assets; (ff) outcome of
pending and future claims and litigations; (gg) ongoing and
potential investigations; (hh) settlements; (ii) further regulatory
developments as well as employee, agent or partner misconduct or
failure to comply with anti-bribery and other government laws and
regulations; (jj) reputation of the Company; (kk) inherent
limitations to the Company's control framework; (ll) environmental
laws and regulations; (mm) Brexit; (nn) global economic
conditions; and (oo) fluctuations in commodity prices.
The Company cautions that the foregoing list of factors is
not exhaustive. For more information on risks and uncertainties,
and assumptions that could cause the Company's actual results to
differ from current expectations, please refer to the sections
"Risks and Uncertainties", "How We Analyze and Report Our Results"
and "Critical Accounting Judgments and Key Sources of Estimation
Uncertainty" in the Company's 2019 MD&A.
The forward-looking statements herein reflect the Company's
expectations as at the date of this press release and are subject
to change after this date. The Company does not undertake to update
publicly or to revise any such forward-looking statements whether
as a result of new information, future events or otherwise, unless
required by applicable legislation or regulation.
The Company's consolidated financial statements for the year
ended December 31, 2019, together
with its Management's Discussion and Analysis ("MD&A") for the
corresponding period, can be accessed under the Company's profile
on www.sedar.com and on the Company's website at
www.snclavalin.com.
SOURCE SNC-Lavalin