Overview. September 2018

Transcription

1 Overview September 2018

2 Our Guiding Principles 2 We value our people and our reputation. We are locally dedicated with international scale. We are future-focused and challenge the status quo. We foster collaboration in everything we do. We have an empowering culture and hold ourselves accountable.

3 3 We are Our Brand

4 4 WSP is A global professional service firm headquartered in Canada, specializing in providing technical expertise and strategic advice to clients in the Transport & Infrastructure, Property & Buildings, Environment, Industry & Energy sectors Approximately 43,600 employees, active in 40 countries Generating TTM $CAD$5.8 billion in net revenues and TTM$CAD$603.4 million in adjusted EBITDA for the last 12 months ended June 30, 2018 A pure play consulting and design firm, no construction risk Led by an experienced board & management team and supported by long term shareholders

5 A global player of approx. 43,600 professionals 8,200 Canada 5,530 Nordics 5 7,370 US 2,930 Central & South America 8,000 UK Ireland 580 South Africa 730 Continental Europe 2,160 Middle East India 3,210 Asia 4,890 Australia New Zealand As at June 30, 2018

6 A global player with attractive geographic and business mix 18% 14% APAC 10% INDUSTRY & ENERGY* 11% ENVIRONMENT CANADA 6 By operating segment By market segment 31% AMERICAS 37% EMEIA 29% PROPERTY & BUILDINGS 50% TRANSPORT & INFRASTRUCTURE Percentage of net revenues Based on Fiscal 2017 results *Includes Industry, Resources and Power & Energy

7 Our positioning in the infrastructure and construction value chain EQUIPMENT SUPPLIERS MATERIALS AND ENGINEERED PRODUCTS WE HAVE A HORIZONTAL FEE-FOR-SERVICE MODEL 7 PLANNING DESIGN CONSTRUCTION SERVICES (Construction/Project Management) ARCHITECTS CONTRACTORS AND DEVELOPERS OPERATION AND MAINTENANCE

8 A young and experienced leadership team ALEXANDRE L HEUREUX President and CEO PAUL DOLLIN Chief Operating Officer BRUNO ROY Chief Financial Officer ROBERT OUELLETTE Chief Corporate Services Officer Steeve Robitaille Chief Legal Officer and Executive Vice President, Mergers and Acquisitions ISABELLE ADJAHI Senior VP, IR & Communications 8 HUGO BLASUTTA Canada GREGORY KELLY Americas MAGNUS MAYER Nordics GREG KANE Middle East MARK NAYSMITH UK GUY TEMPLETON ANZ DAVE MCALISTER Transport and Infrastructure TOM SMITH Property and Buildings

9 A proven and sustained performance 5, , , , , , , % 10.8% WSP Acquisition % % PB Acquisition % 10.4% 11.0% TTM Q2 18 * In millions CAD Non-IFRS measures NET REVENUES* TTM Q2 18 ADUSTED EBITDA* AND ADJUSTED EBITDA MARGIN*

10 Margin Growth Opportunity 11.0% % Profitable revenue growth Operational efficiency Cost control 2015 TTM Q2 18 * In millions CAD Non-IFRS measures

11 Q Highlights

12 Q Highlights 11 Solid Q2 18 financial results, with organic growth in net revenues spanning across all reportable segments and strong trailing twelvemonth free cash flow Once we close Louis Berger transaction, all of our Strategic Plan objectives will have been met Reiterating our 2018 outlook

13 Net revenues were $1.5 billion, up 17.1% Organic growth in net revenues was strong at 8.7% 13 Adjusted EBITDA at $169.5 million Adjusted EBITDA at 11% Backlog, stood at $6.7 billion, representing approximately 10.3 months of revenues Backlog organic growth amounted to 7.8%

14 Louis Berger 13 RATIONALE Strengthen our presence in the US Adds depth to our transportation team Strengthens our expertise in sectors and services that WSP had targeted for growth (critical mass in water and environment) Provides a gateway to the Federal Services Business Increases our presence in Continental Europe, specifically in countries we had previously intended for growth, notably, France and Spain. US$480M revenues and US$45M normalized EBITDA TRANSACTION $US400M purchase price Mid-single digit to accretive adjusted net earnings per share before amortization of intangibles, without considering any synergies Approximately US$15 million recurring cost synergies

15 Strategic Plan Update Once Louis Berger is closed 2018 Objective Employees 48,000 45, Net Revenues (CAD) > 6.0B 6.0B Adjusted EBITDA Margin (%) ±

16 Our strategy

17 Our strategy Where we compete How we compete 17 Pure play consulting & design firm without construction exposure Leading presence in Transport & Infrastructure and Property & Buildings Focus on mature geographies with niche growth in emerging markets Four pillars: Growth (M&A, organic) People & Expertise Operational Excellence Clients

18 Where we compete: Advantages of diversification 18 Exposure to various economies and risk mitigation Opportunity to better service local and international clients Access to pool of talent Knowledge sharing Leverage best business practices Communities of practice Cross-selling opportunities Opportunity to develop professionally and international careers Lower-cost design centres

19 Growth: we have a well-defined road map TODAY FROM LOCAL TO NATIONAL, TO INTERNATIONAL More than 100 acquisitions Major acquisitions A TRULY MULTI-DISCIPLINARY FIRM 43,600 employees (Approx. 48,000 with Louis Berger) A STRATEGY OF CONTINUITY TO EXPAND OUR STRATEGIC SERVICES OFFERING TO CLIENTS WSP 9,000 people (2012) Focus 1,800 people (2014) Parsons Brinckerhoff 13,500 people (2014) MMM 2,000 people (2015) Mouchel 2,000 people (2016) Opus 3,000 people (2017) TTM net revenues: $5.8 B (Louis Berger 2017 revenue: US$480M) TTM adjusted EBITDA: $603.4 M (Louis Berger 2017 normalized EBITDA: US$45M) Our objectives 45,000 employees $6.0B in net revenues ($1.3B through acquisitions) 5% annual organic growth 11% adjusted EBITDA margin Louis Berger* 5,000 people (2018) Continue to consolidate the industry to create the best professional services firm in each of our geography and sector *Pending

20 How we compete: our Strategic Plan CLIETS GROWTH EMPLOYEES OPERATIONAL EXCELLENCE CLIENTS 20 $6.0B NET REVENUES $ 1.3B THROUGH ACQUISITIONS 5% ANNUAL ORGANIC GROWTH CONSOLIDATE AND EXPAND OUR EXPERTISE IN OUR CORE SECTORS (T&I, P&B, ENV.) OPPORTUNISTIC DEVELOPMENT IN SELECTED GEOGRAPHIES IN OTHER SECTORS 45,000 EMPLOYEES 11% EBITDA MARGIN > 100% CASH FLOW/NET INCOME < 85 DAYS DAYS SALES OUTSTANDING (DSO) 1 st CHOICE FOR ALL CLIENTS, LARGE OR SMALL 10% OF OUR REVENUES FROM GLOBAL CLIENTS

21 Growth: the benefits of consolidation SCALE CLIETS EXPERTISE INTEGRATED SERVICES 21 Size of project is increasing Financial strength is an asset Geographic and market diversification provide resilience Ability to mobilize depth of workforce Acquire best in class expertise Benefit of knowledge sharing, collaboration and cross-selling Access low cost production centers and improve competitiveness Cover the project lifecycle with full suite of services Offer a one-stop shop Develop a multidisciplinary offering

22 Growth: our recipe for successful combinations 22 Performing and accretive companies Complementary activities and services Successful and respected in their fields Strong portfolio of projects and client base Share our vision and corporate culture

23 Growth: Acquisitions will be key to our continued success 23 SUBSCALE IN CERTAIN SECTORS EXPANDING GEOGRAPHICALLY ADDING SPECIFIC EXPERTISE EXPANDING GEOGRAPHICALLY SUBSCALE IN CERTAIN SECTORS TRANSPORTATION BUILDINGS INFRASTRUCTURE ENVIRONMENT

24 We have the resources to grow (in $M, CAD) Q Financial liabilities $1,280.1 Less: Cash ($153.4) 24 Net debt $1,126.7 TTM adjusted EBITDA* $603.4 Net debt / TTM adjustedebitda* (adjusted for 12-month net revenues for all acquisitions) 1.8x * In millions CAD Non-IFRS measures

25 Capital Allocation Strategy 25 SOURCE OF FUNDS Cash flows Credit facilities USE OF FUNDS Working capital Capex Dividend payment M&A activities Drive M&A strategy and organic growth Invest in employees Return capital to shareholders

26 2018 Outlook

27 2018 Outlook Reiterated Net revenues* Adjusted EBITDA* Between $5,700 million and $5,900 million Between $610 million and $660 million 27 Seasonality and adjusted EBITDA* fluctuations Q1: 18% to 21% Q2: 25% to 28% Q3: 26% to 29% Q4: 24% to 27% Tax rate 23% to 25% DSO* Amortization of intangibleassets related to acquisitions Capital expenditures 80 to 85 days Net debt to adjusted EBITDA* 1.5x to 2.0x 1) Acquisition and reorganization costs* Between $60 and $70 million Between $115 and $125 million Between $40 million and $50 million 2) * Non-IFRS measure. 1) Target excluding any debt required to finance acquisitions 2) Due mainly to personnel and real estate integration costs related to the acquisition of Opus completed in Q4 2017, to real estate integration costs pertaining to the Mouchel acquisition completed in Q and IT outsourcing program costs.

28 H Regional operational outlook CANADA Solid backlog and good prospects NORDICS Higher utilization rates Mid to high single digits Low to mid single digit 28 AMERICAS Strong US Transportation and Infrastructure spending Integration of POCH and ConCol to deliver synergies and improvement in operating margins Negative organic growth in net revenues in Q due to the substantial FEMA net revenues recognized in Q UK Large public sector work Low single digits SOUTH AFRICA Difficult economic conditions Negative organic growth MIDDLE EAST Difficult economic conditions Negative organic growth ASIA Continued slowdown in buildings market Negative organic growth AUSTRALIA/NEW ZEALAND Solid transportation market Mid to high single digits

29 In Conclusion Why Invest in WSP? CLIETS GROWTH EMPLOYEES OPERATIONAL EXCELLENCE CLIENTS 29 Diversified and sustainable profitable growth Strong balance sheet Well-positioned to capitalize on mega trends Experienced and disciplined management team Engaged and motivated workforce Strong people empowerment and accountability Voluntary turnover below industry average Strong expertise and industry recognition Customer first approach Robust pipeline of projects in 2018 and beyond

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