MONTREAL, July 31, 2020 /CNW Telbec/ - SNC-Lavalin
Group Inc. (TSX: SNC) today announced its results for the second
quarter ended June 30, 2020.
2020 Second Quarter Highlights
- Net loss attributable to SNC-Lavalin shareholders of
$111.6 million, or $(0.64) per diluted share, compared with a net
loss of $2,118.3 million, or
$(12.07) per diluted share for Q2
2019
-
- Q2 2020 net loss includes $47.3
million of restructuring costs mainly related to the
Resources Services transformation (see press release issued earlier
today) and EDPM.
- SNCL Engineering Services; resilient through COVID-19,
outlook provided
-
- Total Segment Adjusted EBIT(3) of $132.5 million, representing a 9.0% margin. EDPM
Segment Adjusted EBIT(3) of $78.8
million, representing an 8.4% margin.
- SNCL Engineering Services revenue for the second half of 2020
forecast to decrease by a low to mid single digit percentage,
compared to the second half of 2019, and Segment Adjusted
EBIT(3) as a percentage of revenue expected to be
between 8% and 10%.
- SNCL Projects; backlog continued to reduce, results impacted
by COVID-19
-
- LSTK projects backlog reduced by $0.2
billion in the quarter to $2.7
billion, with $2.4 billion
being Infrastructure EPC Projects.
- Resources LSTK Backlog reduced to $0.2
billion and remains on track to be largely completed by end
of 2020, considerably improving management's visibility on
completion risks.
- Total negative Segment Adjusted EBIT(3) of
$141.3 million, which included a loss
of $122.3 million in Resources and a
loss of $19.0 million in
Infrastructure EPC Projects.
- Lower productivity from COVID-19 impacted LSTK projects in both
Resources and Infrastructure EPC Projects resulting in project
reforecasts, with Resources taking a $70
million charge related to client disputes on a project.
- Strong financial position and operating cash flows
-
- Cash and cash equivalents at $1.6
billion and net recourse debt to EBITDA ratio at 1.0x
(calculated in accordance with Credit Agreement).
- $129.8 million of net cash
generated from operating activities during Q2, with SNCL
Engineering Services generating $222
million.
CEO Commentary
Ian L. Edwards, President and
CEO of SNC-Lavalin Group Inc., made the following comments:
"During the last quarter, our business has demonstrated
resilience through the challenges posed by COVID-19. This would not
have been possible without the commitment and efforts of our
employees, to whom I offer my thanks and appreciation. The
unprecedented economic situation precipitated by COVID-19 and the
downturn in oil prices has demonstrated that we made the right
decision in changing our business model and exiting LSTK
contracting to focus on our core engineering services strengths.
Our Engineering Services business in Q2 delivered solid financial
results."
"COVID-19 did have an impact on our LSTK projects
productivity, contributing to project reforecasts; however, we do
not consider these losses to be representative of future quarterly
performance. The LSTK backlog continued to reduce and we are now in
the final phases of closing out the Resources LSTK projects,
improving management's visibility on completion risks. We are
confident about transforming and resizing our Resources Services
business, and its potential to add real value to our Professional
Services and Project Management capabilities and to complement our
existing Engineering Services focused strategy."
Second Quarter Financial Highlights
Note that effective from the second quarter of 2020, the Company
presents financial results of Capital outside of SNCL Engineering
Services.
|
(in thousands of
dollars, unless otherwise indicated)
|
Second
Quarter
|
2020
|
2019
|
Total
revenue
|
1,952,739
|
2,284,177
|
Net loss attributable
to SNC-Lavalin shareholders
|
(111,647)
|
(2,118,320)
|
Diluted EPS
($)
|
(0.64)
|
(12.07)
|
SNCL Engineering
Services
|
|
|
Revenue
|
1,469,505
|
1,499,752
|
Segment Adjusted
EBIT(3)
|
132,526
|
123,358
|
Segment Adjusted EBIT
to revenue ratio(6) (%)
|
9.0%
|
8.2%
|
Backlog
|
10,982,500
|
10,934,900
|
SNCL
Projects
|
|
|
Revenue
|
461,646
|
709,679
|
Segment Adjusted
EBIT(3)
|
(141,307)
|
(307,704)
|
Segment Adjusted EBIT
to revenue ratio(6) (%)
|
(30.6%)
|
(43.4%)
|
Backlog
|
3,442,800
|
4,562,100
|
Capital
|
|
|
Revenue
|
21,588
|
74,746
|
Segment Adjusted
EBIT(3)
|
18,375
|
69,189
|
Backlog
|
166,900
|
187,200
|
Net cash generated
from (used for) operating activities
|
129,818
|
(367,603)
|
Adjusted EBITDA from
PS&PM(4)
|
39,578
|
(151,783)
|
Adjusted diluted
EPS(2) from PS&PM ($)
|
(0.22)
|
(1.71)
|
Second Quarter Results
The Company reported a net loss attributable to SNC-Lavalin
shareholders of $111.6 million,
or $(0.64) per diluted share in Q2
2020, compared with a net loss of $2,118.3 million, or $(12.07) per diluted share, for the corresponding
period in 2019, as the latter included a non-cash goodwill
impairment charge and an impairment of intangible assets relating
to the Company's Resources segment totaling $1.8 billion (after taxes) and unfavorable
reforecasts on certain LSTK construction projects of approximately
$280 million. Q2 2020 net loss
included restructuring costs of $47.3
million (after taxes), mainly related to restructuring
activity in EDPM and Resources Services.
Adjusted net loss(1) from PS&PM in Q2 2020
amounted to $38.2 million, or
$(0.22) per diluted share, compared
with an adjusted net loss(1) from PS&PM of
$299.8 million, or $(1.71) per diluted share, for the corresponding
period in 2019.
SNCL Engineering Services
The SNCL Engineering Services business (comprised of the EDPM,
Nuclear and Infrastructure Services segments) has been resilient
through COVID-19, as the decisive and early actions that management
took to align costs have proven to be effective. Revenue from SNCL
Engineering Services totaled $1,469.5
million in Q2 2020, a 2.0% decrease from the corresponding
period in 2019, while Segment Adjusted EBIT(3) totaled
$132.5 million, representing a 7.4%
increase, compared to Q2 2019. The EDPM segment has performed
strongly over the last quarter, underpinned by its long-term client
relationships and strong public sector focus. The Nuclear and
Infrastructure Services segments continue to be resilient in the
current COVID-19 environment, due to a combination of their
services being considered essential and the long-term nature of
their contracts.
SNCL Engineering Services also generated $222 million of cash from operations in Q2 2020,
although approximately $100 million
of this benefit will reverse over time related to COVID-19
government payment terms and sales tax deferrals.
EDPM Segment Adjusted EBIT(3) was $78.8 million, representing a margin of 8.4%, in
Q2 2020, compared to $81.5 million,
representing a margin of 8.4%, in Q2 2019, as the decrease in
revenue as a consequence of COVID-19 was largely offset by cost
mitigation measures.
The Nuclear and Infrastructure Services Segments Adjusted
EBIT(3) increased to $53.8
million in Q2 2020, compared to $41.8
million in Q2 2019, mainly driven by increased scopes of
work on certain Operations & Maintenance ("O&M") contracts
and improved performance on other existing and new contracts.
SNCL Engineering Services backlog totaled $11.0 billion as at June
30, 2020, compared to $11.1
billion at the end of 2019. Total bookings for Q2 2020
amounted to $1.5 billion,
representing a 1.1 booking-to-revenue ratio(5), a strong
result despite the current COVID-19 environment.
SNCL Projects
In line with the Company's previous decision to exit LSTK
projects, revenue from the SNCL Projects line of business
(comprised of Resources and Infrastructure EPC Projects segments),
which includes LSTK construction contracting, continued to decrease
and totaled $461.6 million in Q2
2020, a decrease of 35.0% compared to Q2 2019. This was mainly due
to the continuing backlog run-off of Resources and Canadian light
rail transit LSTK construction projects.
SNCL Projects backlog continues to decrease and totaled
$3.4 billion as at June 30, 2020, compared to $3.9 billion as at March
31, 2020. SNCL Projects backlog at the end of June 30, 2020 included $0.8 billion of reimbursable & engineering
services contracts and $2.7 billion
of LSTK construction contracts, split between Infrastructure EPC
Projects with $2.4 billion, and
Resources with $0.2 billion. The
Resources LSTK construction contracts backlog remains on track to
be largely completed by end of 2020. Since announcing the exit of
LSTK projects in Q2 2019, the Resources LSTK project backlog has
reduced from $581 million to
$234 million, which has considerably
improved management visibility of the remaining completion risks in
Resources LSTK.
The Resources segment recorded a negative Segment Adjusted
EBIT(3) of $122.3 million
in Q2 2020, compared to a negative Segment Adjusted
EBIT(3) of $181.6 million
in Q2 2019. The loss in Q2 2020 was driven by the underperforming
Services business, as cost reduction and restructuring activity
from the new strategic direction (see press release issued earlier
today) was at an early stage, and by a $70
million charge related to client disputes on a Middle East
LSTK project, as well as lower productivity on LSTK projects, all
of which has been impacted by COVID-19. The Company does not
consider the charge in Q2 representative of current
performance.
All Infrastructure LSTK construction projects, except the Husky
project, which was suspended in March by the client, continue to
progress well, despite COVID-19 having had some impact on pace of
delivery. The Infrastructure EPC Projects segment delivered a
negative Segment Adjusted EBIT(3) of $19.0 million in Q2 2020, compared to a negative
Segment Adjusted EBIT(3) of $126.1 million in Q2 2019, as project reforecasts
and lower productivity since mid-March due to revised working
conditions caused by COVID-19 impacted margin and profitability.
The Company remains confident that the Infrastructure LSTK projects
should be cash positive over their project life and that the Q2
loss does not represent a new trend.
Capital
Capital Segment Adjusted EBIT(3) decreased to
$18.4 million, compared to
$69.2 million in Q2 2019, as no
dividends were received in the quarter from the Company's reduced
interest in Highway 407 ETR. Highway 407 ETR has seen significant
reductions in traffic volumes since mid-March, and while the full
duration and scope of the impact on Highway 407 ETR from the
pandemic remain unknown, management continue to strongly believe in
the long-term concession value. Excluding the Highway 407 ETR, the
Capital segment businesses are primarily availability-based
contracts and have not been significantly impacted by the COVID-19
pandemic.
Second Quarter Financial Position and Cash
Flows
The Company generated $129.8
million of net cash from operating activities in Q2 2020,
compared to a net cash used for operating activities of
$367.6 million in Q2 2019, which
benefited from temporary positive working capital from certain
projects and included approximately $100
million of benefit from COVID-19 government payment terms
and sales tax deferrals, which will reverse in the coming quarters.
The remaining improvement is mainly due to improved profitability,
particularly in SNCL Engineering Services, which generated
$222 million of net cash from
operating activities in Q2 2020, compared to $45 million in Q2 2019.
As a result of these actions, and other working capital
initiatives, as at June 30, 2020, the
Company had $1.6 billion of cash and
cash equivalents. The Company has an additional $1.5 billion available on its revolving credit
facility should it so need. The Company has $1.7 billion of recourse debt, of which
$0.3 billion is due for repayment in
Q4 2020, with the remainder not due until 2021 and beyond, and
$0.4 billion of limited recourse
debt.
As at June 30, 2020, the net
recourse debt to EBITDA ratio calculated in accordance with the
terms of the Company's Credit Agreement was 1.0x, well below the
required covenant level of 3.75x.
Quarterly Dividend
The Board of Directors today declared a cash dividend of
$0.02 per share, unchanged from the
previous quarter. The dividend is payable on August 28, 2020 to shareholders of record on
August 14, 2020. This dividend is an
"eligible dividend" for Canadian federal and provincial income tax
purposes.
2020 Outlook
As the scale and economic impact on the business from COVID-19
becomes clearer, and the resiliency of the Company's businesses are
supplemented by management actions, it provides improved
visibility on the forecasted financial outcome for the remainder of
the year. The Company now expects, assuming no significant
deviation from the current COVID-19 worldwide situation, that SNCL
Engineering Services revenue for the second half of 2020 should
decrease by a low to mid single digit percentage, compared to the
second half of 2019, and that its Segment Adjusted
EBIT(3) as a percentage of revenue should be between 8%
and 10% for the same period.
This outlook is based on the assumptions and methodology
described in the Company's second quarter 2020 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 and in the Company's 2019 Annual Management's Discussion
and Analysis, which are more fully described in the Company's
public disclosure documents.
Second Quarter 2020 Earnings Conference Call /
Webcast
SNC-Lavalin will hold a conference call today at 8:30 a.m. EDT to review results for its second
quarter of 2020. 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 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 080 8101
2791 in the United Kingdom. A
recording of the conference call and its transcript 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 in this press release: Adjusted
net income (loss) attributable to SNC-Lavalin shareholders,
Adjusted diluted EPS, Segment Adjusted EBIT, Segment Adjusted EBIT
to revenue ratio, Adjusted EBITDA and booking-to-revenue ratio.
Additional details for these non-IFRS measures can be found below
and in section 9 of SNC-Lavalin's Management's Discussion and
Analysis ("MD&A") for the second quarter of 2020, filed with
the securities regulatory authorities in Canada, available on SEDAR at
www.sedar.com and on the Company's website at
www.snclavalin.com under the "Investors" section. 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
operating performance and financial position 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. Furthermore, certain non-IFRS financial measures and
additional IFRS measures are presented separately for each
PS&PM and Capital, as the Company believes that such measures
are useful as these activities are usually analyzed separately by
the Company.
(1) Adjusted net income (loss)
attributable to SNC-Lavalin shareholders is defined as net income
(loss) attributable to SNC-Lavalin shareholders, adjusted for
certain specific items that are significant but are not, based on
management's judgement, reflective of the Company's underlying
operations. These adjustments are restructuring costs,
acquisition-related costs and integration costs, amortization of
intangible assets related to business combinations, impairment of
intangible assets related to business combinations and impairment
of goodwill, gains (losses) on disposals of PS&PM businesses
and Capital investments (or adjustments to gains or losses on such
disposals), financing costs related to the agreement to sell shares
of Highway 407 ETR, the fair value revaluation of the Highway 407
ETR contingent consideration receivable, the federal charges
settlement (PPSC) expense and the adjustment to provision for the
Pyrrhotite Case litigation (described in the 2019 Annual MD&A,
as updated in Note 12 to the Company's unaudited interim condensed
consolidated financial statements for the three-month and six-month
periods ended June 30, 2020). It
should be noted that, in 2020, management has added as components
of Adjusted net income (loss) attributable to SNC-Lavalin
shareholders the amounts of the fair value revaluation of Highway
407 ETR contingent consideration receivable and the adjustment to
provision for the Pyrrhotite Case litigation as it believes that
such items are not reflective of the Company's underlying
operations. Such additions did not result in any change to
comparative figures as there was no adjustment of this nature in
the comparative periods being presented. Also, it should be noted
that the following adjustments were removed from the list of
adjustments disclosed in prior periods as there was no adjustment
of this nature in the current periods and the previous year: the
net expense for the 2012 class action lawsuit settlement and
related legal costs, the GMP equalization expense and the impact of
U.S. corporate tax reform. The Company believes that Adjusted net
income (loss) attributable to SNC-Lavalin shareholders is useful
for providing securities analysts, investors and other parties with
additional information to assist them in understanding components
of its financial results, including a more complete understanding
of factors and trends affecting the Company's operating
performance. Adjusted net income (loss) attributable to SNC-Lavalin
shareholders is believed to supplement information provided, as it
highlights trends that may not otherwise be apparent when relying
solely on IFRS financial measures. It is also used by management to
evaluate the performance of the activities of the Company from
period to period. Refer to Q2 MD&A, Section 9.3 for a
reconciliation of Adjusted net income (loss) attributable to
SNC-Lavalin shareholders to net income (loss) as determined under
IFRS. Such reconciliation is provided on a consolidated basis and
also separately for each of PS&PM and Capital, as the Company
believes that such measures are useful since these activities are
analyzed separately by the Company.
(2) Adjusted diluted earnings per
share ("Adjusted diluted EPS") is defined as adjusted net income
(loss) attributable to SNC-Lavalin shareholders, divided by the
diluted weighted average number of outstanding shares for the
period. Adjusted diluted EPS is a non-IFRS financial measure that
is an indicator of the financial performance of the Company's
activities and allows to present the adjusted net income (loss)
attributable to SNC-Lavalin shareholders on a diluted share basis.
Refer to Q2, 2020 MD&A, Section 9.3, for the reconciliation of
Adjusted diluted EPS to diluted EPS (namely, net income (loss) per
diluted share) as determined under IFRS. Such reconciliation is
provided on a consolidated basis and also separately for each of
PS&PM and Capital, as the Company believes that such measures
are useful since these activities are also analyzed
separately by the Company.
(3) Segment Adjusted EBIT consists of
revenues allocated to the applicable segment less i) direct costs
of activities, ii) directly related selling, general and
administrative expenses, and iii) corporate selling, general and
administrative expenses that are allocated to segments. Segment
Adjusted EBIT is the measure used by management to evaluate the
performance of the Company's segments, and gives investors an
indication of the profitability of each segment, as it excludes
certain items that the Company believes are not reflective of the
segment's underlying operations. Such financial measure also
facilitates period-to-period comparisons of the underlying
segment's performance. Expenses that are not allocated to the
Company's segments are: certain corporate selling, general and
administrative expenses that are not directly related to projects
or segments, impairment loss 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 federal charges settlement (PPSC) expense and gains (losses) on
disposals of PS&PM businesses and Capital investments (or
adjustments to gains or losses on such disposals), net financial
expenses and income taxes. Also, it should be noted that the
following adjustment was removed from the list of adjustments
disclosed in prior periods as there was no adjustment of this
nature in the current periods and the previous year: the net
expense for the 2012 class action lawsuit settlement and related
legal costs. See reconciliation of Segment Adjusted EBIT to net
income (loss) in Q2, 2020 MD&A, Section 4. A reconciliation of
Segment Adjusted EBIT from PS&PM and from Capital to net income
(loss) as determined under IFRS is presented in Note 3 of the
Company's unaudited interim condensed consolidated financial
statements for the three-month and six-month periods ended
June 30, 2020.
(4) Adjusted EBITDA is a non-IFRS
financial measure used by management to facilitate operating
performance comparison from period to period and to prepare annual
operating budgets and forecasts. Adjusted EBITDA excludes charges
related to restructuring costs, acquisition-related costs and
integration costs, gains (losses) on disposals of PS&PM
businesses and Capital investments (or adjustments to gains or
losses on such disposals), the adjustment to provision for the
Pyrrhotite Case litigation, the Federal charges settlement (PPSC)
expense and the fair value revaluation of the Highway 407 ETR
contingent consideration receivable. It should be noted that, in
2020, management has added as components to Adjusted EBITDA the
amounts of the fair value revaluation of the Highway 407 ETR
contingent consideration receivable and the adjustment to provision
for the Pyrrhotite Case litigation as it believes that such items
are not reflective of the Company's underlying operations. Such
additions did not result in any change to comparative figures as
there was no adjustment of this nature in the comparative periods
being presented. Also, it should be noted that the following
adjustments were removed from the list of adjustments disclosed in
prior periods as there was no adjustment of this nature in the
current periods and the previous year: the net expense for the 2012
class action lawsuit settlement and related legal costs and the GMP
equalization expense. The Company believes that Adjusted EBITDA is
useful for providing securities analysts, investors and other
parties with additional information to assist them in understanding
components of its financial results, including a more complete
understanding of factors and trends affecting the Company's
operating performance. Adjusted EBITDA is believed to supplement
information provided, as it highlights trends that may not
otherwise be apparent when relying solely on IFRS financial
measures. Refer to Q2 MD&A, Section 9.3 for a reconciliation of
Adjusted EBITDA to net income (loss) as determined under IFRS. Such
reconciliation is provided on a consolidated basis and also
separately for each of PS&PM and Capital, as the Company
believes that such measures are useful since these activities are
analyzed separately by the Company.
(5) Booking-to-revenue ratio
corresponds to contract bookings divided by the revenues, for a
given period. This measure provides a useful basis for assessing
the renewal of business, as it compares the value of performance
obligations added in a given period to the amount of revenue
recognized upon satisfying performance obligations in the same
given period.
(6) Segment Adjusted EBIT to revenue
ratio is a measure used to analyze the profitability of the
Company's segments and facilitate period-to-period comparisons, as
well as comparison with peers. This financial measure is calculated
by dividing the amount of Segment Adjusted EBIT of a given period
to the amount of revenue for the same period.
SNC-Lavalin
Financial Summary
|
|
(in thousands of
dollars, unless otherwise indicated)
|
Second
Quarter
|
Six months ended
June 30
|
2020
|
2019
|
2020
|
2019
|
Revenues
|
|
|
|
|
SNCL Engineering
Services
|
1,469,505
|
1,499,752
|
3,004,274
|
2,941,763
|
SNCL
Projects
|
461,646
|
709,679
|
1,110,119
|
1,558,684
|
Capital
|
21,588
|
74,746
|
67,830
|
146,923
|
|
1,952,739
|
2,284,177
|
4,182,223
|
4,647,370
|
|
|
|
|
|
Net income (loss)
attributable to SNC-Lavalin shareholders
|
|
|
|
|
From
PS&PM
|
(118,242)
|
(2,183,772)
|
(164,167)
|
(2,251,127)
|
From
Capital
|
6,595
|
65,452
|
(13,444)
|
115,502
|
|
(111,647)
|
(2,118,320)
|
(177,611)
|
(2,135,625)
|
|
|
|
|
|
Diluted EPS
($)
|
|
|
|
|
From
PS&PM
|
(0.67)
|
(12.44)
|
(0.94)
|
(12.82)
|
From
Capital
|
0.04
|
0.37
|
(0.08)
|
0.65
|
|
(0.64)
|
(12.07)
|
(1.01)
|
(12.17)
|
|
|
|
|
|
Adjusted net
income (loss) attributable to SNC-Lavalin
shareholders(1)
|
|
|
|
|
From
PS&PM
|
(38,194)
|
(299,822)
|
(42,112)
|
(314,735)
|
From
Capital
|
6,593
|
65,608
|
36,182
|
117,390
|
|
(31,601)
|
(234,214)
|
(5,930)
|
(197,345)
|
|
|
|
|
|
Adjusted diluted
EPS(2) ($)
|
|
|
|
|
From
PS&PM
|
(0.22)
|
(1.71)
|
(0.24)
|
(1.79)
|
From
Capital
|
0.04
|
0.37
|
0.21
|
0.67
|
|
(0.18)
|
(1.34)
|
(0.03)
|
(1.12)
|
|
|
|
|
|
Adjusted EBITDA
from PS&PM(4)
|
39,578
|
(151,783)
|
124,571
|
(72,577)
|
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
SNCL Engineering
Services
|
|
|
10,982,500
|
10,934,900
|
SNCL
Projects
|
|
|
3,442,800
|
4,562,100
|
Capital
|
|
|
166,900
|
187,200
|
|
|
|
14,592,200
|
15,684,200
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
1,591,221
|
580,625
|
|
|
|
|
|
Recourse and
limited recourse debt
|
|
|
2,069,034
|
3,991,428
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
Reconciliation
of IFRS Net Income (loss) as Reported to Adjusted Net Income
(loss)
|
|
|
Second
Quarter
2020
|
Six months
ended
June 30,
2020
|
|
PS&PM
|
Capital
|
Total
|
PS&PM
|
Capital
|
Total
|
(in
M$)
|
|
|
|
|
|
|
Net income (loss)
attributable to SNC-
Lavalin shareholders (IFRS)
|
(118.2)
|
6.6
|
(111.6)
|
(164.2)
|
(13.4)
|
(177.6)
|
Amortization of
intangible assets related
to business combinations
|
32.7
|
-
|
32.7
|
65.7
|
-
|
65.7
|
Restructuring
costs
|
47.3
|
-
|
47.3
|
49.4
|
-
|
49.4
|
Fair value
revaluation of Highway 407
ETR contingent
consideration receivable1
|
-
|
-
|
-
|
-
|
49.6
|
49.6
|
Adjustment to
provision for the Pyrrhotite
Case
litigation2
|
-
|
-
|
-
|
7.0
|
-
|
7.0
|
|
|
|
|
|
|
|
Adjusted net income
(loss) attributable to
SNC-Lavalin shareholders (non-IFRS)
|
(38.2)
|
6.6
|
(31.6)
|
(42.1)
|
36.2
|
(5.9)
|
|
|
|
|
|
|
|
(in
$)
|
|
|
|
|
|
|
Diluted EPS
(IFRS)
|
(0.67)
|
0.04
|
(0.64)
|
(0.94)
|
(0.08)
|
(1.01)
|
Amortization of
intangible assets related
to business combinations
|
0.19
|
-
|
0.19
|
0.37
|
-
|
0.37
|
Restructuring
costs
|
0.27
|
-
|
0.27
|
0.28
|
-
|
0.28
|
Fair value
revaluation of Highway 407
ETR contingent
consideration receivable
|
-
|
-
|
-
|
-
|
0.28
|
0.28
|
Adjustment to
provision for the Pyrrhotite
Case
litigation
|
-
|
-
|
-
|
0.04
|
-
|
0.04
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
(non-IFRS)
|
(0.22)
|
0.04
|
(0.18)
|
(0.24)
|
0.21
|
(0.03)
|
|
|
|
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
1 included in "Gain (loss) arising
on financial assets (liabilities) at fair value through profit or
loss"
|
2
included in "Corporate selling, general and administrative
expenses"
|
|
|
Second
Quarter
2019
|
Six months
ended
June 30,
2019
|
|
|
|
|
|
|
|
|
PS&PM
|
Capital
|
Total
|
PS&PM
|
Capital
|
Total
|
|
|
|
|
|
|
|
(in
M$)
|
|
|
|
|
|
|
Net income (loss)
attributable to SNC-
Lavalin shareholders (IFRS)
|
(2,183.8)
|
65.5
|
(2,118.3)
|
(2,251.1)
|
115.5
|
(2,135.6)
|
Impairment of
goodwill
|
1,720.9
|
-
|
1,720.9
|
1,720.9
|
-
|
1,720.9
|
Impairment of
intangible assets related to
business combinations
|
60.1
|
-
|
60.1
|
60.1
|
-
|
60.1
|
Amortization of
intangible assets related
to business combinations
|
40.5
|
-
|
40.5
|
83.2
|
-
|
83.2
|
Restructuring
costs
|
32.9
|
0.1
|
33.0
|
39.1
|
1.8
|
40.9
|
Financing costs
related to the agreement
to sell shares of Highway 407 ETR
|
27.4
|
-
|
27.4
|
27.4
|
-
|
27.4
|
Acquisition-related
costs and integration
costs
|
2.0
|
-
|
2.0
|
5.4
|
-
|
5.4
|
Loss from adjustment
on disposals of
PS&PM businesses
|
0.1
|
-
|
0.1
|
0.2
|
-
|
0.2
|
|
|
|
|
|
|
|
Adjusted net income
(loss) attributable to
SNC-Lavalin shareholders (non-IFRS)
|
(299.8)
|
65.6
|
(234.2)
|
(314.7)
|
117.4
|
197.3
|
|
|
|
|
|
|
|
(in
$)
|
|
|
|
|
|
|
Diluted EPS
(IFRS)
|
(12.44)
|
0.37
|
(12.07)
|
(12.82)
|
0.66
|
(12.17)
|
Impairment of
goodwill
|
9.80
|
-
|
9.80
|
9.80
|
-
|
9.80
|
Impairment of
intangible assets related to
business combinations
|
0.34
|
-
|
0.34
|
0.34
|
-
|
0.34
|
Amortization of
intangible assets related
to business combinations
|
0.23
|
-
|
0.23
|
0.47
|
-
|
0.47
|
Restructuring
costs
|
0.19
|
0.00
|
0.19
|
0.22
|
0.01
|
0.23
|
Financing costs
related to the agreement
to sell shares of Highway 407 ETR
|
0.16
|
-
|
0.16
|
0.16
|
-
|
0.16
|
Acquisition-related
costs and integration
costs
|
0.01
|
-
|
0.01
|
0.03
|
-
|
0.03
|
Loss from adjustment
on disposals of
PS&PM businesses
|
0.00
|
-
|
0.00
|
0.00
|
-
|
0.00
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
(non-IFRS)
|
(1.71)
|
0.37
|
(1.34)
|
(1.79)
|
0.67
|
(1.12)
|
|
|
|
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
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; ii)
business and management strategies and the expansion and growth of
the Company's operations; and iii) the expected impacts of the
ongoing COVID-19 pandemic on the business and its operating and
reportable segments as well as elements of uncertainty related
thereto. 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 annual MD&A (particularly in the
sections entitled "Critical Accounting Judgments and Key Sources of
Estimation Uncertainty" and "How We Analyze and Report our
Results") and as updated in the first and second quarter 2020
MD&A. 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) impacts of the
COVID-19 pandemic and the elements of uncertainty related thereto;
(b) results of the new 2019 strategic direction coupled with a
corporate reorganization; (c) fixed-price contracts or the
Company's failure to meet contractual schedule, performance
requirements or to execute projects efficiently; (d) contract
awards and timing; (e) remaining performance obligations; (f) being
a provider of services to government agencies; (g) international
operations; (h) Nuclear liability; (i) ownership interests in
Capital investments; (j) dependence on third parties; (k) joint
ventures and partnerships; (l) information systems and data; (m)
competition; (n) professional liability or liability for faulty
services; (o) monetary damages and penalties in connection
with professional and engineering reports and opinions; (p)
insurance coverage; (q) health and safety; (r) qualified personnel;
(s) work stoppages, union negotiations and other labour matters;
(t) extreme weather conditions and the impact of natural or other
disasters and global health crises; (u) intellectual property;
(v) divestitures and the sale of significant assets; (w)
impact of operating results and level of indebtedness on financial
situation; * liquidity and financial position; (y) indebtedness;
(z) security under the SNC–Lavalin Highway Holdings Loan; (aa)
dependence on subsidiaries to help repay indebtedness; (bb)
dividends; (cc) post-employment benefit obligations, including
pension-related obligations; (dd) working capital requirements;
(ee) collection from customers; (ff) impairment of goodwill
and other assets; (gg) outcome of pending and future claims and
litigations; (hh) ongoing and potential investigations; (ii)
settlements; (jj) further regulatory developments as well as
employee, agent or partner misconduct or failure to comply with
anti-bribery and other government laws and regulations; (kk)
reputation of the Company; (ll) inherent limitations to the
Company's control framework; (mm) environmental laws and
regulations; (nn) Brexit; (oo) global economic conditions; and (pp)
fluctuations and volatility 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 annual MD&A and as updated
in the first and second quarter 2020 MD&A, each filed with the
securities regulatory authorities in Canada, available on SEDAR at
www.sedar.com and on the Company's website at
www.snclavalin.com under the "Investors"
section.
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 unaudited condensed consolidated interim financial
statements for the three-month and six-month periods ended
June 30, 2020, together with its
MD&A for the corresponding period, can be accessed on the
Company's website at www.snclavalin.com and on
www.sedar.com.
SOURCE SNC-Lavalin