- Reported Q2 2018 IFRS net income attributable to SNC-Lavalin
shareholders of $83.0 million, or
$0.47 per diluted share, which
included a net expense of $88 million
($64.5 million after taxes) to settle
the 2012 class action lawsuits. It also included a net gain on
disposal of a Capital investment of $62.7
million ($58.4 million after
taxes).
- Q2 2018 adjusted net income from
E&C(1) of $113.5
million, up 77.0%, (or $0.65
per diluted share, up 51.2%), compared to Q2 2017.
- Reported Q2 2018 EBITDA of $187.8
million, compared to $174.0
million in Q2 2017.
- Adjusted E&C EBITDA(7) more than doubled
to $189.7 million, compared to
$86.8 million in Q2 2017.
-
- Continued strong adjusted E&C
EBITDA(7) margin performance of 7.7% in Q2 2018, up
from 4.6% in Q2 2017.
- Strong backlog(8) of $15.2 billion at the end of June 2018, compared to $10.4 billion at year end, up 45.8%.
- 2018 Outlook maintained: adjusted diluted EPS from
E&C(2) in the range of $2.60 to $2.85 and
adjusted consolidated diluted EPS(5) in the range of
$3.60 to $3.85.
To view Neil Bruce comment
on SNC-Lavalin's second quarter 2018 financial results, click
here.
MONTREAL, Aug. 2, 2018 /CNW Telbec/ - SNC-Lavalin Group
Inc. (TSX: SNC) today announces its results for the second quarter
ended June 30, 2018.
"We are very pleased with our first six months performance,
which is in line with our expectations and reached a milestone of
over $15 billion of backlog," said
Neil Bruce, President and Chief
Executive Officer, SNC-Lavalin Group Inc. "We are entering the
third quarter of 2018 with a strong backlog, a number of recently
signed master service agreements and a high quality prospects list
across our key sectors and geographies; poised for a strong second
half of 2018. The integration of Atkins business continues to
progress well and we have been able to share technologies, data and
knowledge that is improving and broadening our services to
clients."
- Q2 2018 reported IFRS net income attributable to SNC-Lavalin
shareholders was $83.0 million, or
$0.47 per diluted share, compared
with $136.4 million, or $0.91 per diluted share, for the corresponding
period in 2017. Q2 2018 included the settlement of class action
lawsuits, brought in 2012, to which the Company will contribute
$88 million ($64.5 million after taxes), a net gain on the
successful disposal of a Capital investment of $58.4 million (after taxes), acquisition-related
and integration costs of $10.3
million (after taxes) and amortization of intangible assets
related to business combinations of $43.7
million (after taxes).
- Adjusted net income from E&C(1) increased to
$113.5 million in Q2 2018, or
$0.65 per diluted share, compared
with $64.2 million, or $0.43 per diluted share for Q2 2017, mainly due
to a higher total Segment EBIT(6), partially offset by
an increase in financial expenses, largely attributable to the
financing of the Atkins acquisition, and an increase in income
taxes expense. On a segmented basis, the Thermal Power segment
recorded a negative Segment EBIT(6) totaling
$11.1 million in Q2 2018, compared to
a positive Segment EBIT(6) in Q2 2017. As previously
stated, the Company made the strategic decision to exit the thermal
power market, and this loss mainly relates to the Company's last
ongoing fixed price engineering, procurement and construction (EPC)
thermal power plant project. The Nuclear, EDPM and Infrastructure
segments had a strong quarter, with a 17%, 12% and 5% Segment
EBIT(6) margin, respectively, mainly due to strong
project execution and demand.
- Atkins operational integration is complete and we continue to
deliver the cost synergies through the year. The Company remains on
track to deliver cost synergies of $120
million from this acquisition by the end of 2018. We are
seeing good opportunities with clients for longer term revenue
synergies, and recently announced a framework agreement award that
included services from both legacy Atkins and SNC-Lavalin.
- Adjusted net income from Capital(3) totaled
$41.4 million in Q2 2018, or
$0.24 per diluted share, compared
with $43.6 million, or $0.29 per diluted share for the corresponding
period in 2017, mainly due to a lower contribution from certain
capital investments, partially offset by an increase in dividends
received from Highway 407 ETR.
- E&C revenue for the second quarter ended June 30, 2018 increased to $2.5 billion, compared with $1.9 billion in the second quarter of 2017. The
increase was mainly due to the EDPM and Nuclear segments, largely
attributable to the incremental revenues from Atkins which was
acquired in Q3 2017, partially offset by a decrease in the Oil
& Gas and Thermal segments.
- The Company's backlog(8) totaled $15.2 billion as at June
30, 2018. Total bookings for the second quarter amounted to
$4.1 billion, totaling $6.2 billion for the six-month period ended
June 30, 2018. Q2 2018 bookings
included $2.3 billion in
Infrastructure and $1.0 billion in
EDPM.
- As of June 30, 2018, the Company
continues to maintain appropriate liquidity with $0.7 billion of cash and cash equivalents,
$2.2 billion of recourse debt and
$2.1 billion in unused capacity under
its $2.6 billion committed revolving
credit facility, while the net recourse debt to adjusted EBITDA
ratio(9) was 1.6. During the second quarter, the Company
amended and restated its credit agreement, making available
$500 million under a new 5-year
non-revolving Term Loan, which was used to repay tranche B of its
limited recourse CDPQ Loan in full. The Company also issued
$150 million of unsecured debentures
for which the net proceeds were used to repay certain outstanding
indebtedness.
2018 Outlook
The Company maintains its 2018 outlook for the adjusted diluted
EPS from E&C(2), which is expected to be in the
range of $2.60 to $2.85, as well as for the adjusted consolidated
diluted EPS(5) in the range of $3.60 to $3.85. As
a result of project activity level and awards timing, we expect a
stronger adjusted diluted EPS from E&C(2) in the
second half of 2018 than in the first half. We also expect that the
adjusted diluted EPS E&C(2) in Q4 will be stronger
than Q3, which should be similar to Q2.
While we expect continuing market challenges in 2018 in certain
of the Company's sectors, we anticipate benefiting from Atkins
synergies and restructuring savings. As such, we expect growth in
the Company's total Segment EBIT(6) in 2018, compared
with 2017. Segment EBIT(6) for the EDPM, Mining &
Metallurgy, Nuclear and Thermal Power segments are expected to
increase, while the Oil & Gas and Infrastructure segments are
expected to be mainly in line compared to 2017 with Clean Power to
be slightly lower. Note that the 2018 outlook will include twelve
months of Atkins' operations and related financing, compared to
approximately six months in 2017. It also assumes a weighted
average number of outstanding shares of approximately 175 million.
The tax rate for the adjusted E&C business is expected to be
between 20% and 25%.
This outlook is based on the assumptions and methodology
described in the Company's 2017 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.
Quarterly Dividend
The Board of Directors today declared a cash dividend of
$0.287 per share, payable on
August 30, 2018, to shareholders of
record on August 16, 2018. This
dividend is an "eligible dividend" for income tax purposes.
Potential sale of a portion of Highway 407
ETR
- SNC-Lavalin has engaged CIBC Capital Markets and RBC
Capital Markets as its financial advisors to assist the Company
with a potential sale of a portion (6.76%) of its investment in
Highway 407 ETR to further create shareholder value. The potential
divestiture could be in the form of a direct sale or another type
of transaction.
- As we continue to make progress on delivering on our
strategic objectives and continue to review our capital allocation
strategy, we have determined that now is a good time to consider
this transaction. We believe that the value realized through this
potential transaction will demonstrate and augment the valuation of
our Capital investments and will, concurrently, help the market to
value SNC-Lavalin's E&C business more accurately.
- There can be no assurance that the process being
undertaken will result in a transaction. Determination as to how
the proceeds of any transaction will be used will be made at the
time of a transaction based on the Company's cash requirements and
capital allocation strategy.
Q2 2018 Results Conference Call / Webcast
SNC-Lavalin will hold a conference call today at 3:00 p.m. EDT to review results for its second
quarter. To join the conference call, please dial toll free at 1
800 281 7973 in North America, 647
794 1827 in Toronto, 438 968 3557
in Montreal, or 080 0358 6377 in
the United Kingdom. A live audio
webcast of the conference call and an accompanying slide
presentation will be available at investors.snclavalin.com. A
recording of the conference call will be available on our website
within 24 hours following the call.
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 E&C EBITDA, Segment EBIT and 2017
backlog. 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 as prescribed by 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.
About SNC-Lavalin
Founded in 1911, SNC-Lavalin is a global fully integrated
professional services and project management company and a major
player in the ownership of infrastructure. From offices around the
world, SNC-Lavalin's employees are proud to build what matters. Our
teams provide comprehensive end-to-end project solutions –
including capital investment, consulting, design, engineering,
construction, sustaining capital and operations and maintenance –
to clients across oil and gas, mining and metallurgy,
infrastructure, clean power, nuclear and EDPM (engineering, design
and project management). On July 3,
2017, SNC-Lavalin acquired Atkins, one of the world's most
respected design, engineering and project management consultancies,
which has been integrated into our
sectors. www.snclavalin.com
(1) Adjusted net income from E&C is
defined as net income attributable to SNC-Lavalin shareholders from
E&C, excluding charges related to restructuring, right-sizing
and other, acquisition-related costs and integration costs, impact
of U.S. corporate tax reform as well as amortization of intangible
assets related to business combinations, net expense for the 2012
class action lawsuits settlement and the gains (losses) on
disposals of E&C businesses and the head office building.
E&C is defined in the Company's 2017 financial statements and
Management's Discussion and Analysis. The term "Adjusted net income
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 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 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 diluted EPS is
defined as the adjusted net income from E&C plus the adjusted
net income from Capital divided by the diluted weighted average
number of outstanding shares for the period.
(6) Segment EBIT consists of revenues less
i) direct costs of activities, ii) directly related selling,
general and administrative expenses, iii) corporate selling,
general and administrative expenses that are allocated to segments;
and iv) non-controlling interests before taxes. 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 arising from
expected credit losses, gain (loss) arising on financial assets at
fair value through profit or loss, restructuring costs, goodwill
impairment, acquisition-related costs and integration costs, and
amortization of intangible assets related to business combinations,
the net class action lawsuits settlement expense, as well as gains
(losses) on disposals of E&C businesses, Capital investments
and the head office building. The term "Segment EBIT" 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.
(7) Adjusted E&C EBITDA 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, net expense for
the 2012 class action lawsuits settlement, as well as the gains
(losses) on disposals of E&C businesses and head office
building. The term "Adjusted E&C EBITDA" 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.
(8) In 2018, backlog represents the
Remaining Performance Obligations, an IFRS measure, and is defined
as a forward-looking indicator of anticipated revenues to be
recognized by the Company, determined based on contract awards that
are firm and amounting to the transaction price allocated to
remaining performance obligations. Management could be required to
make estimates regarding the revenue to be generated for long-term
firm reimbursable contracts. In 2017, backlog did not
have any standardized meaning as prescribed by IFRS and
represented a forward-looking indicator of anticipated revenues to
be recognized by the Company, determined based on contract awards
that are considered firm. Management could be required to make
estimates regarding the revenue to be generated for long-term firm
reimbursable contracts. In order to provide information that is
comparable to the backlog of other categories of activity, the
Company limited the O&M activities backlog, which can cover a
period of up to 40 years, to the earlier of: i) the contract term
awarded; and ii) the next five years.
(9) Net recourse debt to adjusted EBITDA
ratio is defined herein as the net recourse debt divided by the
trailing 12-months adjusted EBITDA, less interest on limited
recourse debt. The term "Net recourse to adjusted EBITDA
ratio" 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.
SNC-Lavalin
Financial Summary
|
|
|
|
(in thousands of
Canadian dollars, unless otherwise indicated)
|
Second
Quarter
|
Six months ended
June 30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
Revenues
|
|
|
|
|
From
E&C
|
2,469,920
|
1,868,161
|
4,837,117
|
3,656,485
|
From
Capital
|
57,199
|
66,712
|
121,396
|
127,658
|
|
2,527,119
|
1,934,873
|
4,958,513
|
3,784,143
|
|
|
|
|
|
Net income (loss)
attributable to SNC-Lavalin's shareholders
|
|
|
|
|
From
E&C
|
(16,809)
|
87,356
|
14,732
|
132,693
|
From
Capital
|
99,820
|
49,034
|
146,351
|
93,410
|
|
83,011
|
136,390
|
161,083
|
226,103
|
|
|
|
|
|
Diluted EPS
($)
|
|
|
|
|
From
E&C
|
(0.10)
|
0.58
|
0.08
|
0.88
|
From
Capital
|
0.57
|
0.33
|
0.83
|
0.62
|
|
0.47
|
0.91
|
0.92
|
1.50
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income attributable to SNC-Lavalin's shareholders
|
|
|
|
|
From
E&C(1)
|
113,537
|
64,160
|
203,014
|
124,884
|
From
Capital(3)
|
41,415
|
43,632
|
87,946
|
88,007
|
|
154,952
|
107,792
|
290,960
|
212,891
|
|
|
|
|
|
Adjusted diluted
EPS ($)
|
|
|
|
|
From
E&C(2)
|
0.65
|
0.43
|
1.16
|
0.83
|
From
Capital(4)
|
0.23
|
0.29
|
0.50
|
0.59
|
|
0.88
|
0.72
|
1.66
|
1.42
|
|
|
|
|
|
Adjusted E&C
EBITDA(7)
|
189,724
|
86,849
|
367,040
|
186,840
|
Adjusted E&C
EBITDA margin
|
7.7%
|
4.6%
|
7.6%
|
5.1%
|
|
|
|
|
|
|
|
|
|
|
Backlog(8)
|
|
|
15,174,800
|
9,576,600
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
721,408
|
737,361
|
|
|
|
|
|
Recourse
debt
|
|
|
2,177,921
|
349,487
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
Reconciliation
of IFRS Net Income as Reported to Adjusted Net
Income
|
|
|
|
|
|
|
|
|
|
Net income
(loss), as
reported
(IFRS)
|
Net charges
related
to restructuring &
right-sizing plan and
other
|
Acquisition
|
Net loss (gain)
on disposals
of E&C
business and
Capital
investment
|
Net expense
for the 2012
class action
lawsuits
settlement
|
Impact of
U.S.
corporate
tax reform
|
Net income,
adjusted
(Non-IFRS)
|
|
|
|
Acquisition-related
costs and integration
costs
|
Amortization of
intangible assets
related to
business
combinations
|
|
|
|
|
|
Second Quarter
2018
|
In
M$
|
E&C
|
(16.8)
|
6.7*
|
10.3
|
43.7
|
0.2
|
64.5
|
4.8
|
113.5
|
Capital
|
99.8
|
-
|
-
|
-
|
(58.4)
|
-
|
-
|
41.4
|
|
83.0
|
6.7
|
10.3
|
43.7
|
(58.1)
|
64.5
|
4.8
|
154.9
|
|
Per Diluted share
($)
|
E&C
|
(0.10)
|
0.04
|
0.06
|
0.25
|
0.00
|
0.37
|
0.03
|
0.65
|
Capital
|
0.57
|
-
|
-
|
-
|
(0.33)
|
-
|
-
|
0.24
|
|
0.47
|
0.04
|
0.06
|
0.25
|
(0.33)
|
0.37
|
0.03
|
0.89
|
|
Six Months Ended
June 30, 2018
|
In
M$
|
E&C
|
14.7
|
8.0
|
18.7
|
90.6
|
0.3
|
64.5
|
6.2
|
203.0
|
Capital
|
146.4
|
-
|
-
|
-
|
(58.4)
|
-
|
-
|
87.9
|
|
161.1
|
8.0
|
18.7
|
90.6
|
(58.1)
|
64.5
|
6.2
|
290.9
|
|
Per Diluted share
($)
|
E&C
|
0.08
|
0.05
|
0.11
|
0.52
|
0.00
|
0.37
|
0.04
|
1.16
|
Capital
|
0.83
|
-
|
-
|
-
|
(0.33)
|
-
|
-
|
0.50
|
|
0.92
|
0.05
|
0.11
|
0.52
|
(0.33)
|
0.37
|
0.04
|
1.66
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
*This amount
included $6.9 million ($5.6 million after taxes) of net charges
which did not meet the restructuring costs definition in accordance
with IFRS.
|
|
|
|
|
|
|
|
Net income,
as reported
(IFRS)
|
Net charges
related
to the restructuring
& right-sizing plan
and other
|
Acquisition
|
Net gain on
disposals of
E&C business,
head office
building, and
Capital
investment
|
Net income,
adjusted
(Non-IFRS)
|
|
|
|
Acquisition-related
costs and integration
costs
|
Amortization of
intangible assets
related to Kentz
|
|
|
|
Second Quarter
2017
|
In
M$
|
E&C
|
87.4
|
22.6*
|
44.5
|
11.5
|
(101.8)
|
64.2
|
Capital
|
49.0
|
-
|
-
|
-
|
(5.4)
|
43.6
|
|
136.4
|
22.6
|
44.5
|
11.5
|
(107.2)
|
107.8
|
|
Per Diluted share
($)
|
E&C
|
0.58
|
0.15
|
0.30
|
0.08
|
(0.68)
|
0.43
|
Capital
|
0.33
|
-
|
-
|
-
|
(0.04)
|
0.29
|
|
0.91
|
0.15
|
0.30
|
0.08
|
(0.72)
|
0.72
|
|
Six Months Ended
June 30, 2017
|
In
M$
|
E&C
|
132.7
|
25.2
|
45.6
|
23.8
|
(102.4)
|
124.9
|
Capital
|
93.4
|
-
|
-
|
-
|
(5.4)
|
88.0
|
|
226.1
|
25.2
|
45.6
|
23.8
|
(107.8)
|
212.9
|
|
Per Diluted share
($)
|
E&C
|
0.88
|
0.17
|
0.31
|
0.16
|
(0.68)
|
0.83
|
Capital
|
0.62
|
-
|
-
|
-
|
(0.04)
|
0.59
|
|
1.50
|
0.17
|
0.31
|
0.16
|
(0.72)
|
1.42
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
*This amount
included $4.0 million ($5.0 million after taxes) of net charges
which did not meet the restructuring costs definition in accordance
with IFRS.
|
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.
The 2018 outlook referred to in this press release is
forward-looking information and is based on the methodology
described in the Company's 2017 Management's Discussion and
Analysis ("MD&A") under the heading "How We Budget and Forecast
Our Results" and is subject to the risks and uncertainties
described in the Company's public disclosure documents. The purpose
of the 2018 outlook is to provide the reader with an indication of
management's expectations, at the date of this press release,
regarding the Company's future financial performance and readers
are cautioned that this 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 2017 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 2018
MD&A. The 2018 outlook also assumes that the federal charges
laid against the Company and its indirect subsidiaries SNC-Lavalin
International Inc. and SNC-Lavalin Construction Inc. on
February 19, 2015, will not have a
significant adverse impact on the Company's business in 2018. 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) the outcome of
pending and future claims and litigation could have a material
adverse impact on the Company's business, financial condition and
results of operations; (b) on February 19,
2015, the Company was charged with one count of corruption
under the Corruption of Foreign Public Officials Act (Canada) (the "CFPOA") and one count of fraud
under the Criminal Code (Canada),
and is also subject to other ongoing investigations which could
subject the Company to criminal and administrative enforcement
actions, civil actions and sanctions, fines and other penalties,
some of which may be significant. These charges and investigations,
and potential results thereof, could harm the Company's reputation,
result in suspension, prohibition or debarment of the Company from
participating in certain projects, reduce its revenues and net
income and adversely affect its business; (c) further
regulatory developments could have a significant adverse impact on
the Company's results, and employee, agent or partner misconduct or
failure to comply with anti-bribery and other government laws and
regulations could harm the Company's reputation, reduce its
revenues and net income, and subject the Company to criminal and
administrative enforcement actions and civil actions; (d) a
negative impact on the Company's public image could influence its
ability to obtain future projects; (e) fixed-price contracts or the
Company's failure to meet contractual schedule or performance
requirements or to execute projects efficiently may increase the
volatility and unpredictability of its revenue and profitability;
(f) the Company's revenue and profitability are largely dependent
on the awarding of new contracts, which it does not directly
control, and the uncertainty of contract award timing could have an
adverse effect on the Company's ability to match its workforce size
with its contract needs; (g) the Company's remaining performance
obligations are subject to unexpected adjustments and
cancellations, including under "termination for convenience"
provisions, and does not represent a guarantee of the Company's
future revenues or profitability; (h) SNC-Lavalin is a provider of
services to government agencies and is exposed to risks associated
with government contracting; (i) the Company's international
operations are exposed to various risks and uncertainties,
including unfavourable political environments, weak foreign
economies and the exposure to foreign currency risk; (j) there are
risks associated with the Company's ownership interests in Capital
investments that could adversely affect it; (k) the Company is
dependent on third parties to complete many of its contracts; (l)
the Company's use of joint ventures and partnerships exposes it to
risks and uncertainties, many of which are outside of the Company's
control; (m) the competitive nature of the markets in which the
Company does business could adversely affect it; (n) the Company's
project execution activities may result in professional liability
or liability for faulty services; (o) the Company could be subject
to monetary damages and penalties in connection with professional
and engineering reports and opinions that it provides; (p) the
Company may not have in place sufficient insurance coverage to
satisfy its needs; (q) the Company's employees work on projects
that are inherently dangerous and a failure to maintain a safe work
site could result in significant losses and/or an inability to
obtain future projects; (r) the Company's failure to attract and
retain qualified personnel could have an adverse effect on its
activities; (s) work stoppages, union negotiations and other labour
matters could adversely affect the Company; (t) the Company relies
on information systems and data in its operations. Failure in the
availability or security of the Company's information systems or in
data security could adversely affect its business, financial
condition and results of operations; (u) any acquisition or other
investment may present risks or uncertainties; (v) divestitures and
the sale of significant assets may present risks or uncertainties;
(w) increased indebtedness as a result of the Atkins Acquisition; *
dependence on subsidiaries to help repay indebtedness as a result
of the Atkins Acquisition; (y) security under the SNC-Lavalin
Highway Holdings Loan being called at an inopportune time; (z)
ability to pay dividends; (aa) Atkins' pension-related obligations;
(bb) a deterioration or weakening of the Company's financial
position could have a material adverse effect on its business and
results of operations; (cc) the Company may have significant
working capital requirements, which if unfunded could negatively
impact its business, financial condition and cash flows; (dd) an
inability of SNC-Lavalin's clients to fulfill their obligations on
a timely basis could adversely affect the Company; (ee) the Company
may be required to impair certain of its goodwill, and it may also
be required to write down or write off the value of certain of its
assets and investments, either of which could have a material
adverse impact on the Company's results of operations and financial
condition; (ff) global economic conditions could affect the
Company's client base, partners, subcontractors and suppliers and
could materially affect its remaining performance obligations,
revenues, net income and ability to secure and maintain financing;
(gg) fluctuations in commodity prices may affect clients'
investment decisions and therefore subject the Company to risks of
cancellation, delays in existing work, or changes in the timing and
funding of new awards, and may affect the costs of the Company's
projects; (hh) inherent limitations to the Company's control
framework could result in a material misstatement of financial
information; and; (ii) environmental laws and regulations expose
the Company to certain risks, could increase costs and liabilities
and impact demand for the Company's services. 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 2017 MD&A and as updated in the
first and second quarter 2018 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.
SNC-Lavalin's Consolidated Financial Statements and
Management's Discussion and Analysis and other relevant financial
materials are available in the Investors section of the Company's
website at www.snclavalin.com. These and other
Company reports are also available on the website maintained by the
Canadian Securities regulators at
www.sedar.com.
SOURCE SNC-Lavalin