Mr. Alexandre L'Heureux reports

WSP REPORTS STRONG ORGANIC NET REVENUES AND EBITDA GROWTH IN Q1 2023

WSP Global Inc. has released financial and operating results for the first quarter ended on April 1, 2023.

WSP Global reports a strong start to 2023, with higher-than-expected organic growth in net revenues and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the first quarter. Overall net revenues, adjusted EBITDA and adjusted net earnings each increased by more than 25 per cent relative to the first quarter of 2022.

First quarter of 2023 financial highlights:

• Revenues and net revenues reached $3.49-billion and $2.67-billion, up 28.7 per cent and 27.0 per cent, respectively, compared with the first quarter of 2022. The increase in net revenue was principally due to acquisition growth of 15.8 per cent and organic growth of 8.6 per cent. Organic growth was achieved across all reportable segments.
• Backlog as at April 1, 2023, stood at $13.8-billion, representing 12.1 months of revenues.
• Adjusted EBITDA was $413.3-million, up 27.3 per cent, compared with $324.6-million in the first quarter of 2022.
• Adjusted EBITDA margin was 15.5 per cent, the same level as the comparable period in 2022.
• Earnings before net financing expense and income taxes were $199.9-million, up 27.2 per cent compared with the first quarter of 2022, mainly due to higher adjusted EBITDA, partially offset by higher amortization of intangible assets, due to recent acquisitions, as well as ERP implementation costs.
• Adjusted net earnings were $171.1-million, or $1.37 per share, up $34.7-million or 21 cents per share, compared with the first quarter of 2022. The respective increases of 25.4 per cent and 18.1 per cent in these metrics are mainly attributable to higher adjusted EBITDA.
• Net earnings attributable to shareholders were $112.5-million, or 90 cents per share, up $17.5-million, or nine cents per share, compared with the first quarter of 2022. The increase was mainly due to higher adjusted EBITDA, partially offset by higher net financing expenses, amortization of intangible assets, due to recent acquisitions, and ERP implementation costs.
• DSO as at April 1, 2023, stood at 74 days, compared with 70 days as at April 2, 2022, in line with management's outlook target range for the year ending Dec. 31, 2023.
• Free cash outflow was $141.1-million for the three-month period ended April 1, 2023. Trailing 12 months of free cash inflow amounted to $353.2-million, representing 0.8 times the net earnings attributable to shareholders. Improvement in free cash flow compared with the first quarter of 2022 was mainly attributable to the increase in adjusted EBITDA.
• Cash outflows from operating activities were $24.6-million, compared with $83.0-million in the first quarter of 2022. The improvement is mainly attributable to the increase in adjusted EBITDA.
• Net debt to adjusted EBITDA ratio stood at 1.8 times, compared with 1.6 times as at Dec. 31, 2022. The increase is in part due to higher net debt balance to finance recent acquisitions. Incorporating a full 12 months of adjusted EBITDA of all acquired businesses, the net debt to adjusted EBITDA ratio would be 1.7 times.
• A quarterly dividend was declared of 37.5 cents per share, or $46.7-million, with a 21.6-per-cent dividend reinvestment plan (DRIP) participation. DRIP termination was approved by the board of directors, effective May 10, 2023.
• The 2023 financial outlook issued on March 8, 2023, in the fourth quarter 2022 press release, is reiterated, as well as key related assumptions.

"WSP continued to leverage its momentum and achieved higher-than-expected organic growth across all our geographies in the first quarter of 2023," said Alexandre L'Heureux, president and chief executive officer of WSP Global. "These first quarter results highlight the diligent execution of our robust 2022-2024 global strategic action plan, driven by the positive industry dynamics, our enhanced presence in key regions and the high demand for our services."

Dividend

The board of WSP Global declared a dividend of 37.5 cents per share. This dividend will be payable on or about July 15, 2023, to shareholders of record at the close of business on June 30, 2023.

DRIP termination

The corporation also announces that its board of directors has approved the termination of its dividend reinvestment plan in accordance with its terms, effective May 10, 2023. Upon the termination of the DRIP, all cash dividends or distributions on the corporation's common shares with a record date for payment of such dividend or distribution after the effective date, including the dividend declared today and payable on or about July 15, 2023, to shareholders of record as at the close of business on June 30, 2023, will be paid in cash rather than in shares of the corporation. TSX Trust Company, as administrator of the DRIP, will forward a notice and related documentation to all current DRIP participants in the coming days.

Financial report

This release includes, by reference, the financial reports for the first quarter of 2023, including the unaudited interim condensed consolidated financial statements and the management's discussion and analysis of the corporation for the first quarter ended on April 1, 2023, which are available on its website. These documents are also available on SEDAR.

Conference call and webcast

WSP Global will hold a conference call and webcast from 8 a.m. to 9 a.m. Eastern Time on May 11, 2023, to discuss these results. To participate in the conference call, please preregister. Registrants will receive a confirmation with dial-in details. A live webcast of the conference call will be available.

A presentation of the first quarter of 2023 highlights and results will be available on May 10, 2023, after market close under the investors section of the WSP Global website. For those unable to attend, a replay will be available within 24 hours following the call.

About WSP Global Inc.

As one of the largest professional service firms in the world, WSP Global exists to future-proof cities and the environment. It provides strategic advisory, engineering and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water and mining sectors. Its 67,000 trusted professionals are united by the common purpose of creating positive, long-lasting impacts on the communities it serves through a culture of innovation, integrity and inclusion. In 2022, WSP Global reported $11.9-billion in revenue. The corporation's shares are listed on the Toronto Stock Exchange (WSP).

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