- SNCL Engineering Services revenue of $1.5 billion, an increase of 2.4%, or 6.8% based
on constant currency(9), compared to Q2
2020
- SNCL Engineering Services backlog reached $11.1 billion, an increase of 1.1% compared to
June 30, 2020; LSTK construction
backlog reduced by $202.4 million
from the prior quarter
- SNCL-Engineering Services Segment Adjusted
EBIT(1) of $145.1 million,
representing a 9.6% margin, improved 63 basis points
- Segment Adjusted EBIT to segment revenue ratio(2)
of 9.1%, 14.2% and 7.9% for EDPM, Nuclear and Infrastructure
Services, respectively
- Net income from continuing operations attributable to
SNC-Lavalin shareholders of $29.2
million, or $0.17 per diluted
share, compared to a net loss of $25.3
million, or $(0.14) in Q2
2020
- Closed the sale of a substantial portion of the Resources
Oil & Gas business
- Reaffirming outlook of SNCL Engineering Services revenue for
full year 2021 to increase by a low single digit percentage,
reflecting current currency rates, compared to 2020, and for its
Segment Adjusted EBIT to segment revenue ratio(2) to be
between 8% and 10%
MONTREAL, July 30, 2021 /CNW Telbec/ - SNC-Lavalin Group
Inc. (TSX: SNC), a fully integrated professional services and
project management company with offices around the world, today
announced its results for the second quarter ended June 30, 2021.
IFRS Financial Highlights
|
Q2
2021
|
Q2
2020A
|
YTD
2021B
|
YTD 2020A,
B
|
|
Revenue
|
1,797,789
|
1,659,953
|
3,617,528
|
3,528,472
|
|
Attributable to
SNC-Lavalin Shareholders
|
|
|
|
|
|
Net income (loss)
from continuing operations:
|
|
|
|
|
|
From
PS&PM
|
26,124
|
(31,894)
|
87,155
|
(10,905)
|
|
From
Capital
|
3,068
|
6,595
|
9,780
|
(13,444)
|
|
Total
|
29,192
|
(25,299)
|
96,935
|
(24,349)
|
|
Diluted EPS from
continuing operations:
|
|
|
|
|
|
From
PS&PM ($)
|
0.15
|
(0.18)
|
0.50
|
(0.06)
|
|
From
Capital ($)
|
0.02
|
0.04
|
0.06
|
(0.08)
|
|
Total ($)
|
0.17
|
(0.14)
|
0.55
|
(0.14)
|
|
|
|
|
|
|
Net income (loss)
from discontinued operations
|
16,523
|
(86,348)
|
21,825
|
(153,262)
|
|
Net income
(loss)
|
45,715
|
(111,647)
|
118,760
|
(177,611)
|
|
Net cash generated
from operating activities
|
78,124
|
129,818
|
83,736
|
153,172
|
|
Backlog from
continuing operations as of June 30
|
|
|
13,012,100
|
13,771,000
|
Non-IFRS Financial Highlights
|
Q2
2021
|
Q2
2020A
|
YTD
2021B
|
YTD 2020A,
B
|
|
Attributable to
SNC-Lavalin Shareholders
|
|
|
|
|
|
Adjusted net income
from PS&PM(4)
|
53,765
|
21,680
|
137,189
|
82,754
|
|
Adjusted diluted EPS
from PS&PM(5) ($)
|
0.31
|
0.12
|
0.78
|
0.47
|
|
Adjusted EBITDA from
PS&PM(3)
|
148,913
|
82,169
|
313,035
|
218,684
|
|
Adjusted EBITDA from
PS&PM to revenue from PS&PM ratio(8)
|
8.4%
|
5.0%
|
8.8%
|
6.3%
|
|
|
All figures in
thousands of dollars except per share data
|
|
AComparative figures have been
re-presented as a result of an operation discontinued in
2020
|
|
BYTD includes the six months
ended June 30
|
CEO Commentary
"We are pleased with the solid financial results for the first
half of the year. SNCL Engineering Services delivered robust second
quarter performance led by strong profitability within our three
segments. Our LSTK projects progressed well, the related backlog
continued to decrease, and discussions with our clients on
compensation for the additional costs related to COVID-19 impacts
have been constructive," said Ian L.
Edwards, President and CEO of SNC-Lavalin Group Inc. "We are
also pleased to have recently closed the sale of a substantial
portion of our Resources Oil & Gas business, which represents
an important strategic milestone for the Company. With these second
quarter results and the current trends across our businesses, we
remain on track to meet our 2021 outlook expectations."
Second Quarter Results
Professional Services & Project Management are collectively
referred to as "PS&PM" to distinguish them from "Capital"
activities. PS&PM groups together five of the Company's
segments, namely Engineering, Design and Project Management
("EDPM"), Nuclear, Infrastructure Services, Resources and
Infrastructure EPC projects, while Capital is its own reportable
segment and separate from PS&PM.
The Company's net income from continuing operations attributable
to SNC-Lavalin shareholders was $29.2 million, or $0.17 per diluted share in Q2 2021, compared to a
net loss from continuing operations attributable to SNC-Lavalin
shareholders of $25.3 million,
or $(0.14) per diluted share, for the
corresponding period in 2020. This was comprised of net income from
continuing operations from PS&PM of $26.1 million, or $0.15 per diluted share and net income from
continuing operations from Capital of $3.1
million, or $0.02 per diluted
share in Q2 2021. For the corresponding period in 2020, net loss
from continuing operations was comprised of a net loss from
continuing operations from PS&PM of $31.9 million, or $(0.18) per diluted share and net income from
continuing operations from Capital of $6.6
million, or $0.04 per diluted
share.
Q2 2021 net income included amortization of intangible assets
related to business combinations of $20.5
million ($17.2 million after
income taxes or $0.10 per diluted
share) and restructuring and transformation costs of $15.2 million ($11.3
million after income taxes or $0.06 per diluted share), while Q2 2020 included
amortization of intangible assets related to business combinations
of $40.0 million ($32.7 million after income taxes or $0.19 per diluted share) and restructuring and
transformation costs of $23.9 million
($20.9 million after income taxes or
$0.12 per diluted share).
Adjusted net income from PS&PM(4) in Q2 2021 more
than doubled and totaled $53.8
million, or $0.31 per diluted
share, compared with $21.7 million,
or $0.12 per diluted share, for Q2
2020. The increase was mainly due to an increase of 9.5% in Segment
Adjusted EBIT(1) from SNCL Engineering Services and a
decrease in the negative Segment Adjusted EBIT(1) in
SNCL Projects, partially offset by a higher income taxes
expense.
Lines of Business
SNCL Engineering Services
|
Q2
2021
|
Q2
2020
|
YTD
2021A
|
YTD
2020A
|
|
Revenue
|
1,504,302
|
1,469,505
|
3,019,427
|
3,004,274
|
|
Segment Adjusted
EBIT(1)
|
145,126
|
132,526
|
277,916
|
244,058
|
|
Segment Adjusted EBIT
to segment revenue ratio(2)
|
9.6%
|
9.0%
|
9.2%
|
8.1%
|
|
Backlog as
of June 30
|
|
|
11,102,400
|
10,982,500
|
|
|
All figures in
thousands of dollars
|
|
AYTD includes the six months
ended June 30
|
The SNCL Engineering Services line of business (comprised of the
EDPM, Nuclear and Infrastructure Services segments) continued to
deliver solid results, benefitting from a diversified business
model, long-term client relationships and a strong public sector
focus.
Revenue from SNCL Engineering Services increased by 2.4% to
$1,504.3 million in Q2 2021, compared
to the corresponding period in 2020. Based on constant
currency(9), revenue increased 6.8%. Segment
Adjusted EBIT(1) totaled $145.1
million in Q2 2021, representing a margin of 9.6%, a 63
basis points improvement, compared with Q2 2020. SNCL Engineering
Services total backlog amounted to $11.1
billion as at June 30, 2021,
compared to $11.0 billion as at
June 30, 2020. Total bookings for the
first six months of the year amounted to $3.3 billion, representing a 1.08
booking-to-revenue ratio(6).
EDPM revenue increased by 0.2% to $935.3 million in Q2 2021, compared to Q2 2020.
Based on constant currency(9), revenue increased by
5.3% driven primarily by strong volumes in the United Kingdom. EDPM Segment Adjusted
EBIT(1) totaled $85.4
million, representing a margin of 9.1% in Q2 2021, a 70
basis points improvement compared to Q2 2020. The Segment Adjusted
EBIT(1) improvement in Q2 2021 mainly reflected the
continued solid performance seen across the United Kingdom and the United States with steady productivity and
the impact of settling a number of project final accounts. Backlog
was strong at June 30, 2021, at
$3.0 billion, an increase of 11.7%
compared to June 30, 2020. Bookings
in Q2 2021 totaled $1.1 billion,
representing a 1.13 booking-to-revenue ratio(6).
Nuclear revenue increased by 6.1% to $234.7 million in Q2 2021, compared to Q2 2020.
Based on constant currency(9), revenue increased 9.6%
driven by an increased level of activity in North America and Europe, partially offset by a decrease in
Asia. Nuclear Segment Adjusted
EBIT(1) totaled $33.2
million in Q2 2021, representing a margin of 14.2%, a 19
basis points improvement compared to Q2 2020. Backlog totaled
$0.8 billion at June 30, 2021, a decrease of 16.7% compared to
June 30, 2020. The backlog decrease
over the last twelve months was mainly due to the progress on the
Company's major refurbishment long-term contracts in Canada.
Infrastructure Services revenue increased by 6.3% to
$334.3 million in Q2 2021, compared
to Q2 2020. Based on constant currency(9), revenue
increased 9.2% driven mainly by a higher volume of activities in
Linxon. Infrastructure Services Segment Adjusted EBIT(1)
totaled $26.4 million in Q2 2021,
representing a margin of 7.9%, a 65 basis point improvement
compared to Q2 2020. Backlog totaled $7.2
billion at June 30, 2021, in
line with June 30, 2020. Bookings in
Q2 2021 totaled $0.3 billion,
representing a 0.86 booking-to-revenue ratio(6).
Infrastructure Services backlog includes long-term Operations &
Maintenance contracts, which can cover periods of up to 40
years.
SNCL Projects
|
Q2
2021
|
Q2
2020A
|
YTD
2021B
|
YTD 2020A,
B
|
|
Revenue
|
273,702
|
168,860
|
556,583
|
456,368
|
|
Segment Adjusted
EBIT(1)
|
(21,276)
|
(91,411)
|
(29,469)
|
(89,564)
|
|
LSTK construction
contracts backlog decrease
|
202,400
|
163,400
|
443,900
|
195,500
|
|
LSTK construction
contracts backlog as of June 30
|
|
|
1,394,200
|
2,561,600
|
|
|
All figures in
thousands of dollars
|
|
AComparative figures have been
re-presented as a result of an operation discontinued in
2020
|
|
BYTD includes the six months
ended June 30
|
Backlog for the SNCL Projects line of business (comprised of the
Resources and Infrastructure EPC Projects segments) as at
June 30, 2021, totaled $1.8 billion and included $1.4 billion of LSTK construction contracts and
$0.4 billion of reimbursable and
engineering services contracts. SNCL Projects backlog for LSTK
construction contracts decreased by $202.4
million in Q2 2021, as the Company continued to execute on
its LSTK projects.
SNCL Projects revenues amounted to $273.7
million in Q2 2021, compared to $168.9 million in Q2 2020. SNCL Projects Segment
Adjusted EBIT(1) was negative $21.3 million in Q2 2021, compared to a negative
Segment Adjusted EBIT(1) of $91.4
million in Q2 2020. The variance was mainly due to the
Resources segment, which recorded a positive Segment Adjusted
EBIT(1) of $1.0 million in
Q2 2021, compared to a negative Segment Adjusted EBIT(1)
of $72.4 million in Q2 2020, which
included a $70 million charge related
to client disputes on a Resources LSTK project. The Infrastructure
EPC Projects segment had a negative Segment Adjusted
EBIT(1) of $22.2 million
in Q2 2021, compared to a negative Segment Adjusted
EBIT(1) of $19.0 million
in Q2 2020. The loss in Q2 2021 was mainly due to a reduction in
gross margin, including costs in closing out certain projects
nearing completion and the impacts of COVID-19.
As announced earlier today, the Company has closed the sale of a
substantial portion of its Resources Oil & Gas business
pursuant to the previously announced binding agreement with Kentech
Corporate Holding Limited dated February 9,
2021. The balance of closing, which constitutes the Saudi
Arabian portion of the business, is expected to be completed by the
end of Q3 2021, following the anticipated receipt of standard Saudi
Arabian regulatory approval. This portion of the business
represented approximately a quarter of the Resources Oil & Gas
business total annual revenues.
Capital
|
Q2
2021
|
Q2
2020
|
YTD
2021A
|
YTD
2020A
|
|
Revenue
|
19,785
|
21,588
|
41,518
|
67,830
|
|
Segment Adjusted
EBIT(1)
|
16,405
|
18,375
|
35,127
|
60,403
|
|
Backlog as
of June 30
|
|
|
148,700
|
166,900
|
|
|
All figures in
thousands of dollars
|
|
AYTD includes the six months
ended June 30
|
Capital revenue and Segment Adjusted EBIT(1) totaled
$19.8 million and $16.4 million, respectively, in Q2 2021, compared
to $21.6 million and $18.4 million, respectively, in Q2 2020. The
variance was mainly due to lower contributions from certain
investments.
Financial Position and Operating Cash Flow
As at June 30, 2021, the Company
had $662.9 million of cash and cash
equivalents. The Company also has an additional $2.0 billion of available drawing capacity under
its revolving credit facility. As at June
30, 2021, the Company had $1.0 billion of recourse debt and
$0.4 billion of limited recourse debt
and its net recourse debt to EBITDA ratio(7) calculated
in accordance with the terms of the Company's Credit Agreement was
1.8, below the required covenant level of 3.75.
The Company's net cash generated from operating activities was
$78.1 million in Q2 2021, compared to
$129.8 million in Q2 2020. Net cash
generated from operating activities in SNCL Engineering Services
totaled $157 million in Q2 2021. The
Company continues to anticipate that its net cash generated from
operating activities in 2021 will be broadly breakeven, as positive
operating cash flow from SNCL Engineering Services is expected to
be largely offset by an operating cash flow usage in SNCL
Projects.
Virtual Investor Day
SNC-Lavalin will host a virtual Investor Day on Tuesday, September 28, 2021, at 8:30 a.m. Eastern Time. Ian Edwards, President and Chief Executive
Officer, Jeff Bell, Executive
Vice-President and Chief Financial Officer, and other members of
the leadership team will provide an in-depth review of the business
strategy, financial outlook, and initiatives to drive long-term
stakeholder value. A live webcast of the presentation, including
question and answer sessions, will be available the day of the
event on the Company's Investor Day 2021 webpage.
Registration is required and can be completed in advance on the
Company's Investor Day 2021 webpage. A replay of the webcast will
be available on the Investor Relations webpage following the
event.
SNCL Engineering Services 2021 Outlook
maintained
The following statements are based on current
expectations. These statements are forward-looking and the
actual results could differ materially. The 2021 Outlook section
should be read in conjunction with the information on
forward-looking statements at the end of this release.
The Company continues to expect SNCL Engineering Services
revenue for full year 2021 to increase by a low single digit
percentage, reflecting current currency rates, compared to 2020,
and for its Segment Adjusted EBIT to segment revenue
ratio(2) to be between 8% and 10% for the full year
2021.
This outlook is based on the assumptions and methodology
described in the Company's Annual 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 2020 Annual Management's Discussion and Analysis.
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 27, 2021, to shareholders of record on
August 13, 2021. This dividend is an
"eligible dividend" for Canadian federal and provincial income tax
purposes.
Second Quarter 2021 Conference Call / Webcast
SNC-Lavalin will hold a conference call today at 8:30 a.m. Eastern Time to review results for its
second quarter of 2021. 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. News and information are available at
www.snclavalin.com or follow us on Twitter @ SNCLavalin.
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: Revenues
presented on a constant currency basis, Segment Adjusted EBIT,
Segment Adjusted EBIT to revenue ratio, Adjusted EBITDA, Adjusted
net income (loss) attributable to SNC-Lavalin shareholders,
Adjusted diluted EPS, Booking-to-revenue ratio, and Adjusted EBITDA
from PS&PM to revenue from PS&PM ratio. Additional details
for these non-IFRS measures can be found below or in Section 9 of
SNC-Lavalin's Management's Discussion and Analysis ("MD&A") for
the second quarter of 2021, 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. Certain
revenue figures and changes thereto from prior periods are analyzed
and presented on a constant currency basis and are obtained by
translating financial results from the comparable periods of the
prior year denominated in foreign currencies at the foreign
exchange rates of the current periods. 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 PS&PM, by excluding
components related to Capital, as the Company believes that such
measures are useful as these PS&PM activities are usually
analyzed separately by the Company. Reconciliations of non-IFRS
measures to the most comparable IFRS measures are set forth in
Section 9.4 of the second quarter 2021 MD&A and certain of
those reconciliations are set out at the end of this press
release.
|
(1) 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 and transformation costs,
amortization of intangible assets related to business combinations,
gains (losses) on disposals of PS&PM businesses and Capital
investments (or adjustments to gains or losses on such disposals),
gain on remeasurement of assets of disposal group classified as
held for sale to fair value less cost to sell, net financial
expenses and income taxes. 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: acquisition-related costs
and integration costs and the Federal charges settlement (PPSC)
expense. See a reconciliation of total Segment Adjusted EBIT to net
income (loss) in the Q2 2021 MD&A, Section 4.
|
|
|
(2) Segment Adjusted EBIT
to segment 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 by the amount of segment
revenue for the same period. See a reconciliation of
Segment Adjusted EBIT to segment revenue ratio in the Q2 2021
MD&A, Section 4.
|
|
|
(3) 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 is
based on EBITDA from continuing operations and excludes charges
related to restructuring and transformation 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 (described in Note
33 to the 2020 Annual Financial Statements, 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,
2021), the fair value revaluation of the Highway 407 ETR contingent
consideration receivable, the Guaranteed Minimum Pension ("GMP")
equalization expenses and the gain on remeasurement of assets of
disposal group classified as held for sale to fair value less cost
to sell. 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: acquisition-related costs and integration costs
and the Federal charges settlement (PPSC) expense. The Company
believes that Adjusted EBITDA is useful for providing securities
analysts, investors and others 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 the Q2 2021 MD&A, Section 9.4
for a reconciliation of Adjusted EBITDA to net income (loss) from
continuing operations as determined under IFRS. Such reconciliation
is provided on a consolidated basis and also separately for
PS&PM activities, as the Company believes that such measures
are useful since these PS&PM activities are analyzed separately
by the Company.
|
|
|
(4) Adjusted net income
(loss) attributable to SNC-Lavalin shareholders is defined as net
income (loss) attributable to SNC-Lavalin shareholders from
continuing operations, 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 and transformation costs,
amortization of intangible assets related to business combinations,
gains (losses) on disposals of PS&PM businesses and Capital
investments (or adjustments to gains or losses on such disposals),
the fair value revaluation of the Highway 407 ETR contingent
consideration receivable, the adjustment to provision for the
Pyrrhotite Case litigation, gain on remeasurement of assets of
disposal group classified as held for sale to fair value less cost
to sell, the GMP equalization expense, as well as income taxes and
non-controlling interests on these adjustments. 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 and comparative periods:
acquisition-related costs and integration costs, financing costs
related to the agreement to sell shares of Highway 407 ETR and the
federal charges settlement (PPSC) expense. The Company believes
that Adjusted net income (loss) attributable to SNC-Lavalin
shareholders is useful for providing securities analysts, investors
and others 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
the Q2 2021 MD&A, Section 9.4 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 PS&PM
activities, as the Company believes that such measures are useful
since these PS&PM activities are analyzed separately by the
Company.
|
|
|
(5) Adjusted diluted
earnings per share ("Adjusted diluted EPS") is defined as adjusted
net income (loss) attributable to SNC-Lavalin shareholders from
continuing operations, 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 the
Company to present the adjusted net income (loss) attributable to
SNC-Lavalin shareholders on a diluted share basis. Refer to the Q2
2021 MD&A, Section 9.4 for a 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 PS&PM activities, as
the Company believes that such measures are useful since these
PS&PM activities are usually analyzed separately by the
Company.
|
|
|
(6) Booking-to-revenue
ratio corresponds to contract bookings divided by 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.
|
|
|
(7) While net
recourse debt and EBITDA are non-IFRS measures, the reference to
the ratio of "net recourse debt to EBITDA" is a defined term under
and calculated in accordance with the Company's Credit Agreement
and is not a specific reference to the actual non-IFRS measures in
question.
|
|
|
(8) Adjusted EBITDA from
PS&PM to revenue from PS&PM ratio is a measure used to
analyze the profitability of the Company's PS&PM line of
business and facilitate period-to-period comparisons, as well as
comparison with peers. This financial measure is calculated by
dividing the amount of Segment Adjusted EBITDA from PS&PM of a
given period to the amount of revenue from PS&PM for the same
period.
|
|
|
(9) Revenue figures and
changes from prior period are analyzed and presented on a constant
currency basis and are obtained by translating revenues from the
comparable period of the prior year denominated in foreign
currencies at the foreign exchange rates of the current period. The
Company believes that this non-IFRS financial measure is useful to
compare its performance that excludes certain elements prone to
volatility.
|
Reconciliation of IFRS net income (loss) from continuing
operations to Adjusted net income from PS&PM
|
Second
Quarter
2021
|
Second
Quarter
20201
|
|
In M$
|
Per diluted
EPS
In $
|
In M$
|
Per diluted
EPS
In $
|
|
Net income (loss)
attributable to SNC-Lavalin shareholders from continuing
operations
(IFRS)
|
29.2
|
0.17
|
(25.3)
|
(0.14)
|
|
Restructuring and
transformation costs
|
15.2
|
|
23.9
|
|
|
Amortization of
intangible assets related to business combinations
|
20.5
|
|
40.0
|
|
|
Gain on remeasurement
of assets of disposal group classified as held for sale to fair
value less cost to sell
|
(0.9)
|
|
-
|
|
|
Income taxes and
non-controlling interest on adjustments above
|
(7.1)
|
|
(10.3)
|
|
|
Total
adjustments
|
27.6
|
0.16
|
53.6
|
0.31
|
|
Adjusted net
income attributable to SNC-Lavalin shareholders
(non-IFRS)
|
56.8
|
0.32
|
28.3
|
0.16
|
|
Segment adjusted EBIT
from Capital
|
(16.4)
|
|
(18.4)
|
|
|
Corporate selling,
general and administrative expenses not allocated to the segments -
Capital
|
7.0
|
|
7.0
|
|
|
Net financial
expenses from Capital
|
4.3
|
|
4.2
|
|
|
Income taxes from
Capital on adjustments above
|
2.0
|
|
0.5
|
|
|
Total adjustments to
exclude Capital
|
(3.1)
|
(0.02)
|
(6.6)
|
(0.04)
|
|
Adjusted net
income attributable to SNC-Lavalin shareholders from
PS&PM
(non-IFRS)
|
53.8
|
0.31
|
21.7
|
0.12
|
Note that certain totals and subtotals may not
reconcile due to rounding
1 Comparative figures have been
re-presented as a result of an operation discontinued in
2020
|
Six months
ended
June 30,
2021
|
Six months
ended
June 30,
20201
|
|
In M$
|
Per diluted
EPS
In $
|
In M$
|
Per diluted
EPS
In $
|
|
Net income (loss)
attributable to SNC-Lavalin shareholders from continuing
operations
(IFRS)
|
96.9
|
0.55
|
(24.3)
|
(0.14)
|
|
Restructuring and
transformation costs
|
20.1
|
|
24.4
|
|
|
Amortization of
intangible assets related to business combination
|
43.8
|
|
80.4
|
|
|
Fair value
revaluation of Highway 407 ETR contingent consideration
receivable2
|
-
|
|
57.2
|
|
|
Adjustment to
provision for the Pyrrhotite Case litigation3
|
-
|
|
10.0
|
|
|
Gain on remeasurement
of assets of disposal group classified as held for sale to fair
value less cost to sell
|
(1.3)
|
|
-
|
|
|
Income taxes and
non-controlling interest on adjustments above
|
(12.5)
|
|
(28.8)
|
|
|
Total
adjustments
|
50.0
|
0.28
|
143.3
|
0.82
|
|
Adjusted net
income attributable to SNC-Lavalin shareholders
(non-IFRS)
|
147.0
|
0.84
|
118.9
|
0.68
|
|
Segment adjusted EBIT
from Capital
|
(35.1)
|
|
(60.4)
|
|
|
Corporate selling,
general and administrative expenses not allocated to the segments -
Capital
|
14.1
|
|
14.1
|
|
|
Net financial
expenses from Capital
|
8.5
|
|
8.5
|
|
|
Income taxes from
Capital on adjustments above
|
2.8
|
|
1.6
|
|
|
Total adjustments to
exclude Capital
|
(9.8)
|
(0.06)
|
(36.2)
|
(0.21)
|
|
Adjusted net
income attributable to SNC-Lavalin shareholders from PS&PM
(non-IFRS)
|
137.2
|
0.78
|
82.7
|
0.47
|
Note that certain totals and subtotals may not
reconcile due to rounding
1 Comparative figures have been
re-presented as a result of an operation discontinued in
2020
2 included in "Gain (loss)
arising on financial assets (liabilities) at fair value through
profit or loss"
3 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 associates, or SNC-Lavalin Group Inc. or one or
more of its subsidiaries or joint arrangements or
associates.
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", "outlooks", "estimates", "expects", "goal",
"intends", "may", "plans", "projects", "forecasts", "should",
"synergies", "target", "vision", "will", "likely", 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 additional 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 2020 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 2021
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) additional impacts
of the COVID-19 pandemic; (b) execution of the strategic direction
announced in 2019; (c) fixed-price contracts or the Company's
failure to meet contractual schedule, performance requirements or
to execute projects efficiently; (d) remaining performance
obligations; (e) contract awards and timing; (f) being a provider
of services to government agencies; (g) international operations;
(h) Nuclear liability; (i) ownership interests in investments; (j)
dependence on third parties; (k) joint ventures and partnerships;
(l) information systems and data and compliance with privacy
legislation; (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)
divestitures and the sale of significant assets; (v) intellectual
property; (w) liquidity and financial position; * indebtedness; (y)
impact of operating results and level of indebtedness on financial
situation; (z) security under the CDPQ Loan Agreement; (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) the impact on the Company of legal and
regulatory proceedings, investigations and litigation settlements;
(hh) further regulatory developments as well as employee, agent or
partner misconduct or failure to comply with anti-bribery and other
government laws and regulations; (ii) reputation of the Company;
(jj) inherent limitations to the Company's control framework; (kk)
environmental laws and regulations; (ll) Brexit; (mm) global
economic conditions; (nn) fluctuations in commodity prices; and
(oo) income taxes.
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 2020 Annual MD&A and as updated
in the first and second quarter 2021 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, 2021, 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