Q2 2022 Financial
Highlights
(All results reflect comparisons to prior-year period of Q2
2021, except otherwise indicated)
- SNCL Services revenue reached $1.6
billion, up 4.2%, or 6.0% based on organic revenue
growth(1)(5)
-
- Engineering Services segment revenue up 6.4%, or 8.3% based
on organic revenue growth(1)(5)
- SNCL Services Segment Adjusted EBIT of $145.9 million, representing a 9.1%
margin
- SNCL Services backlog as at June 30,
2022, totaled $11.3
billion
-
- Engineering Services segment backlog stood at a record high
of $4.2 billion, up 11.0%, with a
strong increase in the United
States
- LSTK Projects Segment Adjusted EBIT of negative $36.6 million
-
- Management remains confident that the cumulative potential
financial risks to complete the LSTK projects should be contained
in the previously disclosed $300
million
- LSTK Projects backlog reduced by $128.2 million or 13.4% from Q1 2022 to
$828.4 million
-
- The two LSTK Ontario projects remain on track to be largely
complete by the end of the year
- Net income from continuing operations attributable to
SNC-Lavalin shareholders totaled $1.6
million, or $0.01 per diluted
share, compared to net income of $29.2
million, or $0.17 per diluted
share in Q2 2021, mainly driven by the expense related to the
remediation agreement with the Quebec Crown Prosecutor's Office
("DPCP") regarding the Jacques Cartier Bridge charges
- Net cash used for operating activities of $128.7 million
2022
Outlook
- Reaffirming financial outlook metrics for full year 2022,
including full year SNCL Services organic revenue growth, Segment
Adjusted EBIT margins and Engineering Services Segment Adjusted
EBITDA margin targets, other than full year 2022 net cash from
operating activities
-
- 2022 net cash from operating activities updated to between
negative $50 million and negative
$150 million (previously between
$0 million and $100 million), primarily driven by the need to
fund higher costs to complete the LSTK projects in advance of the
timing of potential claim recoveries
MONTREAL, Aug. 4, 2022
/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 financial
results for the second quarter ended June
30, 2022.
"We experienced another period of strong execution during the
second quarter in our SNCL Services line of business, with revenue
organically increasing approximately 6% year-over-year," said
Ian L. Edwards, President and CEO of
SNC-Lavalin Group Inc. "Additionally, we continued to take strides
in winding down our last LSTK projects, decreasing their backlog by
13% during the second quarter, which represents a 29% backlog
reduction during the first half of 2022. Our experience in the
first half of the year supports our continued confidence that our
forecasted additional potential financial loss related to winding
down our LSTK projects remains valid."
"Our Pivoting to Growth strategy was developed to drive
deliberate value creation for SNC-Lavalin through a focus on a few
core markets with high growth potential where we have long-standing
customer relationships and a focus on public sector entities that
can withstand macroeconomic volatility. Our second quarter results
demonstrated the success of this strategy as we achieved record
high backlog in the United States
and for Engineering Services overall, and successfully added
additional personnel to support our growth. Performance in the SNCL
Services line of business has remained resilient in the face of the
current inflationary environment, and is well positioned to realize
the potential of our unique end-to-end capabilities to deliver
best-in-class services and products globally and locally," added
Mr. Edwards.
Second Quarter Financial
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 Services, Nuclear, Linxon, Operation
& Maintenance ("O&M"), and Lump-Sum Turnkey ("LSTK")
Projects, while Capital is its own reportable segment and separate
from PS&PM.
IFRS Financial
Highlights
|
Q2
2022
|
Q2
2021
|
2022A
|
2021A
|
Revenue
|
|
|
|
|
From
PS&PM
|
1,857.6
|
1,778.0
|
3,729.3
|
3,576.0
|
From
Capital
|
13.9
|
19.8
|
30.3
|
41.5
|
Total
|
1,871.5
|
1,797.8
|
3,759.6
|
3,617.5
|
Attributable to
SNC-Lavalin shareholders
|
|
|
|
|
Net income (loss) from
continuing operations:
|
|
|
|
|
From
PS&PM
|
(0.4)
|
26.1
|
16.1
|
87.2
|
From
Capital
|
2.0
|
3.1
|
10.2
|
9.8
|
Total
|
1.6
|
29.2
|
26.3
|
96.9
|
Diluted EPS from
continuing operations:
|
|
|
|
|
From
PS&PM ($)
|
(0.00)
|
0.15
|
0.09
|
0.50
|
From
Capital ($)
|
0.01
|
0.02
|
0.06
|
0.06
|
Total ($)
|
0.01
|
0.17
|
0.15
|
0.55
|
|
|
|
|
|
Net income from
discontinued operations
|
-
|
16.5
|
-
|
21.8
|
Net income
|
1.6
|
45.7
|
26.3
|
118.8
|
Net cash generated from
(used for) operating activities
|
(128.7)
|
78.1
|
(262.7)
|
83.7
|
Backlog from continuing
operations as at June 30B
|
|
|
|
|
SNCL
Services
|
|
|
11,306.2
|
11,469.2
|
Capital
|
|
|
31.4
|
148.7
|
LSTK
Projects
|
|
|
828.4
|
1,394.2
|
Total
|
|
|
12,166.1
|
13,012.2
|
Non-IFRS Financial
Highlights
|
Q2
2022
|
Q2
2021
|
2022A
|
2021A
|
Attributable to
SNC-Lavalin shareholders
|
|
|
|
|
Adjusted net income
from PS&PM(1)
|
53.8
|
53.8
|
93.2
|
137.2
|
Adjusted diluted EPS
from PS&PM(1)(2) ($)
|
0.31
|
0.31
|
0.53
|
0.78
|
Adjusted EBITDA from
PS&PM(1)
|
127.9
|
148.9
|
240.5
|
313.0
|
|
All figures in
millions of dollars, except otherwise indicated
|
Certain totals and
subtotals may not reconcile due to rounding
|
A
For the six-month period ended June 30
|
B
Comparative figures have been restated to reflect the new
reportable segments effective as of January 1, 2022
|
Lines of Business
Performance
SNCL Services
|
Q2
2022
|
Q2
2021B
|
2022A
|
2021A,B
|
Segment
revenue
|
|
|
|
|
Engineering Services
|
1,128.7
|
1,061.2
|
2,266.9
|
2,110.8
|
Nuclear
|
221.0
|
234.7
|
453.1
|
463.8
|
O&M
|
104.8
|
104.4
|
241.3
|
246.0
|
Linxon
|
153.7
|
143.4
|
304.2
|
275.3
|
Total
|
1,608.2
|
1,543.7
|
3,265.5
|
3,095.8
|
Segment Adjusted
EBIT
|
|
|
|
|
Engineering Services
|
95.4
|
95.2
|
180.6
|
181.5
|
Nuclear
|
32.5
|
33.2
|
66.8
|
65.1
|
O&M
|
11.4
|
13.4
|
23.1
|
25.8
|
Linxon
|
6.5
|
7.3
|
2.0
|
13.4
|
Total
|
145.9
|
149.1
|
272.6
|
285.7
|
Segment Adjusted EBIT
to segment revenue ratio
|
9.1 %
|
9.7 %
|
8.3 %
|
9.2 %
|
Backlog as at June
30
|
|
|
|
|
Engineering Services
|
|
|
4,158.4
|
3,745.8
|
Nuclear
|
|
|
808.3
|
830.8
|
O&M
|
|
|
5,516.3
|
5,849.8
|
Linxon
|
|
|
823.3
|
1,042.7
|
Total
|
|
|
11,306.2
|
11,469.2
|
|
All figures in
millions of dollars, except otherwise indicated
|
A
For the six-month period ended June 30
|
B
Comparative figures have been restated to reflect the new
reportable segments effective as of January 1, 2022
|
The SNCL Services line of business (comprised of the Engineering
Services, Nuclear, O&M and Linxon segments) continues to
experience strong demand, benefitting from its global capabilities,
unique end-to-end services, decarbonization and sustainable
solutions, long-term client relationships and a strong public
sector focus. During the second quarter, management continued to
see demand growth across each of the core markets in which the
Company operates — Canada,
United Kingdom, United States.
- Q2 2022 revenue reached $1.6
billion, up 4.2% compared to Q2 2021. SNCL Services had an
organic revenue growth(1)(5) of 6.0% in Q2 2022 compared
to Q2 2021.
-
- Primarily driven by an organic revenue growth(1)(5)
of 8.3% in Engineering Services, and 13.7% in Linxon.
- Q2 2022 Segment Adjusted EBIT was $145.9
million, representing a margin of 9.1%.
-
- Engineering Services Segment Adjusted EBIT of $95.4 million represents a margin of 8.5%,
slightly below the corresponding quarter last year, as Q2 2021
Segment Adjusted EBIT included the positive impact of settling a
number of project final accounts.
-
- Engineering Services Segment Adjusted EBITDA to segment net
revenue ratio(1)(6) of 15.0%.
- Nuclear Segment Adjusted EBIT of $32.5
million represents a margin of 14.7%.
- O&M Segment Adjusted EBIT of $11.4
million represents a margin of 10.9%.
- Linxon Segment Adjusted EBIT of $6.5
million represents a margin of 4.2%.
-
- Linxon Segment Adjusted EBITDA to segment net revenue
ratio(1)(7) of 5.9%.
- Backlog amounted to $11.3 billion
as at June 30, 2022, which included
$1.7 billion of bookings in Q2 2022,
representing a 1.08 booking-to-revenue ratio(1)(3).
-
- Engineering Services backlog reached a record-high and totaled
$4.2 billion as at June 30, 2022, an increase of 11.0%, compared to
June 30, 2021, which includes a new
record-high for the United States.
Bookings in Q2 2022 totaled $1.4
billion, representing a 1.27 booking-to-revenue
ratio(1)(3).
LSTK Projects
|
Q2
2022
|
Q2
2021B
|
2022A
|
2021A,B
|
Revenue
|
249.4
|
234.4
|
463.8
|
480.2
|
Segment Adjusted
EBIT
|
(36.6)
|
(25.3)
|
(67.2)
|
(37.2)
|
Backlog
decrease
|
128.2
|
202.4
|
338.5
|
443.9
|
Backlog as at June
30
|
|
|
828.4
|
1,394.2
|
|
All figures in
millions of dollars
|
A
For the six-month period ended June 30
|
B
Comparative figures have been restated to reflect the new
reportable segments effective as of January 1, 2022
|
The Company continues to execute its LSTK projects exit
strategy.
- The LSTK Projects segment backlog decreased by 13.4% during the
quarter, as the progress on the Company's last remaining LSTK
projects was partially offset by additional work from approved
project scope changes. Backlog totaled $828.4 million as at June
30, 2022, representing a 29.0% decrease compared to
December 31, 2021 and a 40.6%
decrease compared to June 30,
2021.
-
- Despite the supply chain challenges and various labour and
construction strikes in Ontario
during the quarter, the two remaining Ontario LSTK projects have
progressed well and remain on track to be largely completed by the
end of the year.
- Q2 2022 Segment Adjusted EBIT was negative $36.6 million, totaling negative $67.2 million for the six-month period ended
June 30, 2022.
-
- Year-to-date, the Company recognized $46
million in losses related to the completion of the LSTK
projects ($20 million in Q1 2022 and
$26 million in Q2 2022). Management
remains confident that the cumulative potential financial risks to
complete the LSTK projects should be contained in the previously
disclosed $300 million*.
- The balance of year-to-date negative Segment Adjusted EBIT
mainly includes segment overhead costs needed to support these
projects.
- The Company continues to vigorously pursue COVID-19 and other
related claims associated with the increased costs experienced on
the projects. While discussions with the clients remain ongoing,
and may take some time to settle, once the claims are resolved the
related cash received will be incrementally positive to the
Company's net cash from operating activities.
* Announced on March 3,
2022. See also the assumptions and methodology set out in Section
2.2 of the Company's 2021 Annual Management's Discussion and
Analysis ("2021 Annual MD&A") under the heading "How We Budget
and Forecast Our Results", particularly but not limited to the
Source of Variation titled "Unforeseen impacts related to ongoing
and continued duration of COVID-19 pandemic" and the
"Forward-Looking Statements" section in this press
release.
|
Capital
|
Q2
2022
|
Q2
2021
|
2022A
|
2021A
|
Revenue
|
13.9
|
19.8
|
30.3
|
41.5
|
Segment Adjusted
EBIT
|
10.9
|
16.4
|
23.3
|
35.1
|
Backlog as at June
30
|
|
|
31.4
|
148.7
|
|
All figures in
millions of dollars
|
A
For the six-month period ended June 30
|
The Q2 2022 Capital Segment Adjusted EBIT decrease was mainly
due to the disposal of InPower BC G.P. (the John Hart Generating
Station) to SNC-Lavalin Infrastructure Partners LP in February 2022 and a lower contribution from
certain other Capital investments. No dividend was received from
Highway 407 ETR in Q2 2022 and Q2 2021.
Operating Cash Flow and
Financial Position
- Net cash used for operating activities amounted to $128.7 million in Q2 2022, compared to a net cash
generated from operating activities of $78.1
million in Q2 2021. The negative operating cash flows in Q2
2022 were mainly due to operating cash outflows related to the LSTK
Projects, partially offset by operating cash inflows from SNCL
Services.
- Net cash generated from operating activities in SNCL Services
of $94.1 million in Q2 2022.
- Cash and cash equivalents of $567.4
million as at June 30,
2022.
- Recourse debt of $1.4 billion and
limited recourse debt of $0.4 billion
as at June 30, 2022.
- Net limited recourse and recourse debt to Adjusted EBITDA
ratio(1)(4) of 2.8 as at June 30,
2022.
- Extended the Company's primary corporate credit facilities,
which now introduces a sustainability-linked framework to align
with the Company's leading ESG initiatives.
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 September 1, 2022, to shareholders of record on
August 18, 2022. This dividend is an
"eligible dividend" for Canadian federal and provincial income tax
purposes.
Second Quarter 2022 Conference
Call / Webcast
SNC-Lavalin will hold a conference call and audio webcast today
at 8:30 a.m. (Eastern Time) to
discuss and present its second quarter financial results. The live
audio webcast of the conference call can be accessed through a link
posted on the Company's website, as well as an accompanying slide
presentation, 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 and a transcript of the conference call will be available
on the Company's website within 24 hours following the call.
About SNC-Lavalin
Founded in 1911, SNC-Lavalin is a fully integrated professional
services and project management company with offices around the
world dedicated to engineering a better future for our planet and
its people. We create sustainable solutions that connect people,
technology and data to design, deliver and operate the most complex
projects. We deploy global capabilities locally to our clients and
deliver unique end-to-end services across the whole life cycle of
an asset including consulting, advisory & environmental
services, intelligent networks & cybersecurity, design &
engineering, procurement, project & construction management,
operations & maintenance, decommissioning and capital. – and
delivered to clients in key strategic sectors such as Engineering
Services, Nuclear, Operations & Maintenance and Capital. News
and information are available at snclavalin.com or follow us
on LinkedIn and Twitter.
(1)
Non-IFRS financial measures and ratios, supplementary financial
measures and non-financial information do not have a standardized
definition within International Financial Reporting Standards
(IFRS), and other issuers may define these measures differently
and, accordingly, these may not be comparable to similar measures
used by other issuers. Refer to the sections "Non-IFRS
Financial Measures and Ratios, Supplementary Financial Measures and
Non-Financial Information" and "Reconciliations and Calculations"
of this press release.
|
(2) Adjusted diluted EPS is
a non-IFRS ratio based on adjusted net income (loss) attributable
to SNC-Lavalin shareholders from continuing operations, itself a
non-IFRS financial measure.
|
(3)
Booking-to-revenue ratio is a non-IFRS ratio based on contract
bookings.
|
(4) Net limited recourse
and recourse debt to Adjusted EBITDA ratio is a non-IFRS ratio
based on net limited recourse and recourse debt at the end of a
given period and Adjusted EBITDA of the corresponding trailing
twelve-month period, both of which are non-IFRS financial
measures.
|
(5)
Organic revenue growth (contraction) is a non-IFRS ratio
comparing organic revenue (which excludes foreign exchange and
acquisition and divestiture impacts), itself a non-IFRS financial
measure, between two periods.
|
(6) Segment Adjusted EBITDA
to segment net revenue for the Engineering Services segment is a
non-IFRS ratio based on Segment Adjusted EBITDA and net revenue,
both of which are non-IFRS financial measures.
|
(7) Segment Adjusted EBITDA
to segment net revenue for the Linxon segment is a non-IFRS ratio
based on Segment Adjusted EBITDA and net revenue, both of which are
non-IFRS financial measures.
|
Non-IFRS Financial Measures and
Ratios, Supplementary Financial Measures and Non-Financial
Information
The Company reports its financial results in accordance with
IFRS. However, the following non–IFRS financial measures and
ratios, supplementary financial measures and non-financial
information are used by the Company in this press release: Organic
revenue growth (contraction), EBITDA, Adjusted EBITDA, Adjusted net
income (loss) attributable to SNC-Lavalin shareholders, Adjusted
diluted EPS, Booking-to-revenue ratio, Segment Adjusted EBITDA to
segment net revenue ratio, Segment net revenue, Net limited
recourse and recourse debt to adjusted EBITDA ratio and Net limited
recourse and recourse debt. Additional details for these non-IFRS
financial measures and ratios, supplementary financial measures and
non-financial information can be found below and in Sections 6.4
and 9 of SNC-Lavalin's Management's Discussion & Analysis
("MD&A") for the second quarter of 2022 (which sections are
incorporated by reference into this press release), 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 and ratios, supplementary financial measures and
non-financial information 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 financial measures and ratios, and supplementary financial
measures and non-financial information 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 and ratios, and supplementary financial
measures and non-financial information 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 certain additional IFRS measures
and ratios, and certain supplementary financial measures and other
non-financial information 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 and
calculations of non-IFRS measures to the most comparable IFRS
measures are set forth below in the section "Reconciliations and
Calculations" of this press release.
Reconciliations and Calculations
Reconciliation of Adjusted net income attributable to
SNC-Lavalin shareholders from PS&PM to IFRS net income
attributable to SNC-Lavalin shareholders from continuing
operations
|
Q2
2022
|
Q2
2021
|
|
Before
Taxes
|
Taxes
|
After Taxes
|
Diluted EPS
(In $)
|
Before
Taxes
|
Taxes
|
After Taxes
|
Diluted EPS
(In $)
|
Net income
attributable to SNC-Lavalin shareholders from continuing
operations
(IFRS)
|
|
|
1.6
|
0.01
|
|
|
29.2
|
0.17
|
Restructuring and
transformation costs
|
13.4
|
(2.9)
|
10.4
|
|
15.2
|
(3.8)
|
11.3
|
|
Amortization of
intangible assets related to business combinations
|
20.6
|
(4.2)
|
16.4
|
|
20.5
|
(3.3)
|
17.2
|
|
Gain on remeasurement
of assets of disposal group classified as held for sale to fair
value less cost to sell
|
-
|
-
|
-
|
|
(0.9)
|
-
|
(0.9)
|
|
DPCP Remediation
Agreement expense
|
27.4
|
-
|
27.4
|
|
-
|
-
|
-
|
|
Total
adjustments
|
61.4
|
(7.1)
|
54.3
|
0.31
|
34.7
|
(7.1)
|
27.6
|
0.16
|
Adjusted net income
attributable to SNC-Lavalin shareholders
(non-IFRS)
|
|
|
55.8
|
0.32
|
|
|
56.8
|
0.32
|
|
|
|
|
|
|
|
|
|
Net income
attributable to SNC-Lavalin shareholders from
Capital
|
|
|
2.0
|
0.01
|
|
|
3.1
|
0.02
|
Gain on disposal of a
Capital investment
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
Total
adjustments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Adjusted net income
attributable to SNC-Lavalin shareholders from
Capital
(non-IFRS)
|
|
|
2.0
|
0.01
|
|
|
3.1
|
0.02
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to SNC-Lavalin shareholders from
PS&PM
(non-IFRS)
|
|
|
53.8
|
0.31
|
|
|
53.8
|
0.31
|
|
Six months
ended
June 30,
2022
|
Six months
ended
June 30,
2021
|
|
Before
Taxes
|
Taxes
|
After Taxes
|
Diluted EPS
(In $)
|
Before
Taxes
|
Taxes
|
After Taxes
|
Diluted EPS
(In $)
|
Net income
attributable to SNC-Lavalin shareholders from continuing
operations
(IFRS)
|
|
|
26.3
|
0.15
|
|
|
96.9
|
0.55
|
Restructuring and
transformation costs
|
20.1
|
(4.5)
|
15.6
|
|
20.1
|
(4.9)
|
15.1
|
|
Amortization of
intangible assets related to business combinations
|
42.9
|
(8.8)
|
34.1
|
|
43.8
|
(7.5)
|
36.3
|
|
Gain on disposal of a
Capital investment
|
(4.3)
|
(0.1)
|
(4.4)
|
|
-
|
-
|
-
|
|
Gain on remeasurement
of assets of disposal group classified as held for sale to fair
value less cost to sell
|
-
|
-
|
-
|
|
(1.3)
|
-
|
(1.3)
|
|
DPCP Remediation
Agreement expense
|
27.4
|
-
|
27.4
|
|
-
|
-
|
-
|
|
Total
adjustments
|
86.1
|
(13.5)
|
72.6
|
0.41
|
62.5
|
(12.5)
|
50.0
|
0.29
|
Adjusted net income
attributable to SNC-Lavalin shareholders
(non-IFRS)
|
|
|
99.0
|
0.56
|
|
|
147.0
|
0.84
|
|
|
|
|
|
|
|
|
|
Net income
attributable to SNC-Lavalin shareholders from
Capital
|
|
|
10.2
|
0.06
|
|
|
9.8
|
0.06
|
Gain on disposal of a
Capital investment
|
(4.3)
|
(0.1)
|
(4.4)
|
|
-
|
-
|
-
|
|
Total
adjustments
|
(4.3)
|
(0.1)
|
(4.4)
|
(0.03)
|
-
|
-
|
-
|
-
|
Adjusted net income
attributable to SNC-Lavalin shareholders from
Capital
(non-IFRS)
|
|
|
5.8
|
0.03
|
|
|
9.8
|
0.06
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to SNC-Lavalin shareholders from
PS&PM
(non-IFRS)
|
|
|
93.2
|
0.53
|
|
|
137.2
|
0.78
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
All figures in
millions of dollars, except otherwise indicated
|
Reconciliation of EBITDA and Adjusted EBITDA to IFRS net
income from continuing operations
|
Q2
2022
|
Q2
2021
|
|
From
PS&PM
|
From Capital
|
Total
|
From
PS&PM
|
From Capital
|
Total
|
Net income from
continuing operations
|
1.5
|
2.0
|
3.5
|
29.3
|
3.1
|
32.3
|
Net financial expenses
|
19.3
|
0.8
|
20.2
|
21.7
|
4.3
|
25.9
|
Income taxes
|
2.4
|
1.1
|
3.5
|
20.1
|
2.0
|
22.2
|
EBIT
|
23.2
|
3.9
|
27.1
|
71.1
|
9.4
|
80.4
|
Depreciation and
amortization
|
43.3
|
-
|
43.3
|
43.1
|
-
|
43.1
|
Amortization of
intangible assets related to business combinations
|
20.6
|
-
|
20.6
|
20.5
|
-
|
20.5
|
EBITDA
|
87.1
|
3.9
|
91.0
|
134.6
|
9.4
|
144.0
|
Restructuring and
transformation costs
|
13.4
|
-
|
13.4
|
15.2
|
-
|
15.2
|
Gain on remeasurement
of assets of disposal group classified as held for sale to fair
value less cost to sell
|
-
|
-
|
-
|
(0.9)
|
-
|
(0.9)
|
DPCP Remediation
Agreement expense
|
27.4
|
-
|
27.4
|
-
|
-
|
-
|
Adjusted
EBITDA
|
127.9
|
3.9
|
131.8
|
148.9
|
9.4
|
158.3
|
|
Six months
ended
June 30,
2022
|
Six months
ended
June 30,
2021
|
|
From
PS&PM
|
From Capital
|
Total
|
From
PS&PM
|
From Capital
|
Total
|
Net income from
continuing operations
|
15.2
|
10.2
|
25.4
|
91.2
|
9.8
|
101.0
|
Net financial expenses
|
44.0
|
1.8
|
45.8
|
48.7
|
8.5
|
57.1
|
Income taxes
|
5.9
|
1.6
|
7.4
|
23.0
|
2.8
|
25.8
|
EBIT
|
65.0
|
13.5
|
78.6
|
162.9
|
21.0
|
183.9
|
Depreciation and
amortization
|
85.1
|
-
|
85.1
|
87.7
|
-
|
87.7
|
Amortization of
intangible assets related to business combinations
|
42.9
|
-
|
42.9
|
43.8
|
-
|
43.8
|
EBITDA
|
193.0
|
13.6
|
206.5
|
294.3
|
21.1
|
315.4
|
Restructuring and
transformation costs
|
20.1
|
-
|
20.1
|
20.1
|
-
|
20.1
|
Gain on disposal of a
Capital investment
|
-
|
(4.3)
|
(4.3)
|
-
|
-
|
-
|
Gain on remeasurement
of assets of disposal group classified as held for sale to fair
value less cost to sell
|
-
|
-
|
-
|
(1.3)
|
-
|
(1.3)
|
DPCP Remediation
Agreement expense
|
27.4
|
-
|
27.4
|
-
|
-
|
-
|
Adjusted
EBITDA
|
240.5
|
9.2
|
249.8
|
313.0
|
21.1
|
334.1
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
All figures in millions of
dollars
|
Calculation of segment net revenue and Segment Adjusted
EBITDA to segment net revenue ratio for Engineering Services and
Linxon segments
|
Q2
2022
|
Six months
ended June
30, 2022
|
Revenue – Engineering
Services
|
1,128.7
|
2,266.9
|
Less: Direct costs for
sub-contractors and other direct expenses that are recoverable
directly from clients – Engineering Services
|
289.1
|
544.5
|
Segment net revenue
– Engineering Services
|
839.6
|
1,722.4
|
Segment Adjusted EBITDA
– Engineering Services
|
125.7
|
240.6
|
Segment Adjusted
EBITDA to segment net revenue ratio – Engineering
Services
|
15.0 %
|
14.0 %
|
|
Q2
2022
|
Six months
ended June
30, 2022
|
Revenue –
Linxon
|
153.7
|
304.2
|
Less: Costs of
equipment provided by the minority shareholder of Linxon
|
31.2
|
58.1
|
Segment net revenue
– Linxon
|
122.5
|
246.1
|
Segment Adjusted EBITDA
– Linxon
|
7.3
|
4.2
|
Segment Adjusted
EBITDA to segment net revenue ratio – Linxon
|
5.9 %
|
1.7 %
|
|
|
|
All figures in
millions of dollars, except otherwise indicated
|
Calculation of organic revenue growth (contraction)
|
Q2 2022
Revenue
|
Q2
2021A Revenue
|
Variance
|
Foreign
exchange
impact
|
Acquisition /
Divestiture
impact
|
Organic
revenue
growth
(contraction)
|
Engineering
Services
|
1,128.7
|
1,061.2
|
67.5
|
(18.8)
|
-
|
86.3
|
Nuclear
|
221.0
|
234.7
|
(13.6)
|
(1.3)
|
-
|
(12.3)
|
O&M
|
104.8
|
104.4
|
0.4
|
1.3
|
-
|
(0.9)
|
Linxon
|
153.7
|
143.4
|
10.3
|
(8.2)
|
-
|
18.5
|
Total – SNCL
Services
|
1,608.2
|
1,543.7
|
64.6
|
(27.0)
|
-
|
91.6
|
|
Q2 2022
Revenue
|
Q2
2021A
Revenue
|
Variance
|
Foreign
exchange
impact
|
Acquisition /
Divestiture
impact
|
Organic
revenue
growth
(contraction)
|
Engineering
Services
|
1,128.7
|
1,061.2
|
6.4 %
|
(1.9) %
|
-
|
8.3 %
|
Nuclear
|
221.0
|
234.7
|
(5.8) %
|
(0.5) %
|
-
|
(5.3) %
|
O&M
|
104.8
|
104.4
|
0.4 %
|
1.2 %
|
-
|
(0.8) %
|
Linxon
|
153.7
|
143.4
|
7.2 %
|
(6.5) %
|
-
|
13.7 %
|
Total – SNCL
Services
|
1,608.2
|
1,543.7
|
4.2 %
|
(1.9) %
|
-
|
6.0 %
|
|
Six months
ended June
30, 2022
Revenue
|
Six months
ended June
30, 2021A Revenue
|
Variance
|
Foreign
exchange
impact
|
Acquisition /
Divestiture
impact
|
Organic
revenue
growth
(contraction)
|
Engineering
Services
|
2,266.9
|
2,110.8
|
156.1
|
(33.3)
|
-
|
189.4
|
Nuclear
|
453.1
|
463.8
|
(10.7)
|
(2.9)
|
-
|
(7.8)
|
O&M
|
241.3
|
246.0
|
(4.7)
|
1.4
|
-
|
(6.1)
|
Linxon
|
304.2
|
275.3
|
28.9
|
(16.0)
|
-
|
44.9
|
Total – SNCL
Services
|
3,265.5
|
3,095.8
|
169.6
|
(50.8)
|
-
|
220.5
|
|
Six months
ended June
30, 2022
Revenue
|
Six months
ended June
30, 2021A Revenue
|
Variance
|
Foreign
exchange
impact
|
Acquisition /
Divestiture impact
|
Organic
revenue
growth
(contraction)
|
Engineering
Services
|
2,266.9
|
2,110.8
|
7.4 %
|
(1.7) %
|
-
|
9.1 %
|
Nuclear
|
453.1
|
463.8
|
(2.3) %
|
(0.6) %
|
-
|
(1.7) %
|
O&M
|
241.3
|
246.0
|
(1.9) %
|
0.5 %
|
-
|
(2.5) %
|
Linxon
|
304.2
|
275.3
|
10.5 %
|
(6.8) %
|
-
|
17.3 %
|
Total – SNCL
Services
|
3,265.5
|
3,095.8
|
5.5 %
|
(1.8) %
|
-
|
7.2 %
|
|
|
|
All figures in
millions of dollars, except otherwise indicated
|
|
A Comparative
figures have been restated to reflect the new reportable segments
effective as of January 1, 2022
|
Calculation of booking-to-revenue ratio
|
Q2
2022
|
|
Engineering
Services
|
Nuclear
|
O&M
|
Linxon
|
Total
SNCL
Services
|
Opening
backlog
|
3,861.1
|
802.2
|
5,598.4
|
920.4
|
11,182.1
|
Plus: Contract
bookings during the period
|
1,414.4
|
226.6
|
22.7
|
56.6
|
1,720.2
|
Less: Revenues
from contracts with
customers
recognized during the period
|
1,117.1
|
220.5
|
104.8
|
153.7
|
1,596.1
|
Ending
backlog
|
4,158.4
|
808.3
|
5,516.3
|
823.3
|
11,306.2
|
Booking-to-revenue
ratio
|
1.27
|
1.03
|
0.22
|
0.37
|
1.08
|
|
Six months ended
June 30, 2022
|
|
Engineering
Services
|
Nuclear
|
O&M
|
Linxon
|
Total
SNCL
Services
|
Opening
backlog
|
3,769.0
|
834.9
|
5,705.4
|
974.2
|
11,283.5
|
Plus: Contract
bookings during the period
|
2,633.6
|
425.8
|
52.2
|
153.3
|
3,264.9
|
Less: Revenues
from contracts with
customers
recognized during the period
|
2,244.2
|
452.4
|
241.3
|
304.2
|
3,242.1
|
Ending
backlog
|
4,158.4
|
808.3
|
5,516.3
|
823.3
|
11,306.2
|
Booking-to-revenue
ratio
|
1.17
|
0.94
|
0.22
|
0.50
|
1.01
|
|
|
|
All figures in
millions of dollars, except otherwise indicated
|
Calculation of net limited recourse and recourse debt to
Adjusted EBITDA ratio
|
June
30,
2022
|
Limited recourse
debt
|
400.0
|
Recourse
debt
|
1,414.9
|
Less: Cash and cash
equivalents
|
567.4
|
Net limited recourse
and recourse debt
|
1,247.5
|
Adjusted EBITDA
(trailing 12 months)
|
440.6
|
Net limited recourse
and recourse debt to Adjusted EBITDA ratio
|
2.8
|
|
|
|
All figures in
millions of dollars, except otherwise indicated
|
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", "estimates", "expects", "forecasts", "goal",
"intends", "likely", "may", "objective", "outlook", "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, project- or
contract-specific cost reforecasts and claims provisions, 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 2021 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"). 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, matters
relating to: (a) ongoing and additional impacts of the COVID-19
pandemic; (b) execution of the Company's "Pivoting to Growth
Strategy" unveiled in September 2021;
(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) supply chain disruptions; (l) joint ventures
and partnerships; (m) information systems and data and compliance
with privacy legislation; (n) competition; (o) professional
liability or liability for faulty services; (p) monetary
damages and penalties in connection with professional and
engineering reports and opinions; (q) gaps in insurance coverage;
(r) health and safety; (s) qualified personnel; (t) work stoppages,
union negotiations and other labour matters; (u) extreme weather
conditions and the impact of natural or other disasters and global
health crises; (v) divestitures and the sale of significant assets;
(w) intellectual property; * liquidity and financial position; (y)
indebtedness; (z) impact of operating results and level of
indebtedness on financial situation; (aa) security under the
CDPQ Loan Agreement (as defined in the Company's 2021 Annual
MD&A); (bb) dependence on subsidiaries to help repay
indebtedness; (cc) dividends; (dd) post-employment benefit
obligations, including pension-related obligations; (ee) working
capital requirements; (ff) collection from customers;
(gg) impairment of goodwill and other assets; (hh) the impact
on the Company of legal and regulatory proceedings, investigations
and litigation settlements; (ii) further regulatory developments as
well as employee, agent or partner misconduct or failure to comply
with anti-corruption and other government laws and regulations;
(jj) reputation of the Company; (kk) inherent limitations to the
Company's control framework; (ll) environmental laws and
regulations; (mm) global economic conditions; (nn) inflation; (oo)
fluctuations in commodity prices; and (pp) 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 2021 Annual MD&A and as updated
in the first and second quarter 2022 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 written or oral forward-looking
information or statements whether as a result of new information,
future events or otherwise, unless required by applicable
legislation or regulation. The forward-looking information
and statements contained herein are expressly qualified in their
entirety by this cautionary statement.
The Company's unaudited condensed consolidated interim financial
statements for the three-month and six-month periods ended
June 30, 2022, together with its
MD&A for the corresponding periods, can be accessed on the
Company's website at www.snclavalin.com and on
www.sedar.com.
SOURCE SNC-Lavalin