WSP Reports Solid Q4 and Fiscal 2015 Results

MONTREAL, QUEBEC--(Marketwired - March 15, 2016) - WSP Global Inc. (TSX:WSP) ("WSP" or the "Corporation") today announced its financial and operating results for the fourth quarter and fiscal year ended December 31, 2015. The fourth quarter results cover the period from September 27, 2015 to December 31, 2015.

FOURTH QUARTER AND FISCAL 2015 FINANCIAL HIGHLIGHTS

Solid financial performance validating our geographically diversified revenue stream business model.

• For the quarter, revenues and net revenues of $1,660.1 million and $1,248.2 million, up 43.3% and 45.3%, respectively, mainly as a result of acquisitions. Global organic growth of 0.8% on a constant currency basis; excluding the anticipated contraction experienced by the western Canadian oil & gas sector, global organic growth stands at 5.3%.
• For the year, revenues and net revenues of $6,064.0 million and $4,486.8 million, up 108.9% and 90.9%, respectively, mainly as a result of acquisitions. Global organic growth of 3.2% on a constant currency basis; excluding the anticipated contraction experienced by the western Canadian oil & gas sector, global organic growth stands at 7.8%.
• Adjusted EBITDA of $124.0 million for the quarter and $441.5 million for the year, up $33.9 million or 37.6% and $188.0 million or 74.2%, respectively. Adjusted EBITDA margins are 9.9% for the quarter and 9.8% for the year.
• Adjusted net earnings, at $32.4 million, or $0.33 per share for the quarter, down 21.0% and 36.5%, respectively. The decrease in absolute dollars and on a per share basis due mainly to tax adjustments pertaining to prior years and unrecognized tax benefits. For the year, adjusted net earnings were $172.8 million, or $1.87 per share, up 46.4% and 1.6%, respectively.
• Net earnings attributable to shareholders at $14.7 million, or $0.15 per share for the quarter, compared to loss of ($7.9) million, or ($0.10) per share for Q4 2014. For the year, net earnings attributable to shareholders at $188.8 million, or $2.05 per share, up 200.6% and 109.2%, respectively.
• Backlog at $5,199.7 million representing approximately 9.6 months of revenues, up $308.1 million or 6.3% compared to Q3 2015, and up $1,264.6 million or 32.1% compared to Q4 2014. On a constant currency basis, backlog organic growth was 9.4% year over year.
• For fiscal 2015, funds from operations and free cash flow were $321.1 million and $197.0 million, up 139.3% and 9.1%, respectively. Cash flows from operating activities were $218.0 million for the quarter and $203.8 million for the year.
• DSO stood at 76 days, an 11 day improvement compared to the prior quarter and a 1 day improvement compared to Q4 2014.
• Quarterly dividend declared of $0.375 per share, with a 50.7% Dividend Reinvestment Plan ("DRIP") participation.
• Net debt to adjusted EBITDA ratio at 1.8x; incorporating full 12 month adjusted EBITDA for all acquisitions, the ratio was at 1.7x.

"We are pleased about our financial results for the fourth quarter and the full year and thankful to our 34,000 employees around the world for their commitment to our success. In 2015, we continued to reap the benefits of our combination with Parsons Brinckerhoff and, excluding oil and gas activities, posted a strong organic growth. We also added over 3,000 new colleagues to our workforce through 7 acquisitions which enhanced our technical capabilities in Canada, the United States and the Nordics. Finally, we have made strategic investments in people, technology and other organizational resources, which have set the foundation for us to be the best global technical consultancy," said Pierre Shoiry, WSP's President and Chief Executive Officer. "In 2016, we will continue to make strategic investments, as they position us to grow organically and also to take advantage of acquisition opportunities. Staying focused on our core strategy will deliver long-term revenue growth and enhanced value for our shareholders, as we believe in the strong underlying fundamentals and drivers of our industry, as well as in our unique business model and culture".

OUTLOOK FOR 2016

Management of the Corporation ("Management") provided guidance on 2016 operating results in the Management's Discussion & Analysis ("MD&A") for the year ended December 31, 2015. The outlook is provided to assist analysts and shareholders in formalizing their respective views on 2016. These measures are subject to change.

DIVIDEND

The Board of WSP declared a dividend of $0.375 per share. This dividend will be payable on or about April 15, 2016, to shareholders of record at the close of business on March 31, 2016.

FINANCIAL REPORT

This release includes, by reference, our 2015 financial reports, including the audited consolidated financial statements and Management's Discussion and Analysis ("MD&A") of the Corporation.

For a copy of our 2015 financial results, including the MD&A and the audited consolidated financial statements, please visit our website at www.wsp-pb.com.

CONFERENCE CALL

WSP will hold a conference call at 4 p.m. (Eastern Time) on March 15, 2016, to discuss these results. The telephone numbers to access the conference call are 1-647-788-4922 or 1-877-223-4471 (toll-free).

A presentation of the fourth quarter and fiscal 2015 highlights and results will be available on the same day at www.wsp-pb.com in the Investors section, under Presentations & Events.

A replay of the call will be available until March 25, 2016. The telephone numbers to access the replay of the call are 1-416-621-4642 or 1-800-585-8367 (toll-free), access code 91978083. The replay of the conference call will also be available in the Investor section of the WSP website under Presentations & Events, in the days following the call.

RESULTS OF OPERATIONS

	Q4				YTD
	2015		2014		2015		2014
(in millions of dollars, except number of shares and per share data)	For the period from September 27 to December 31		For the period from September 28 to December 31		For the period from January 1 to December 31		For the period from January 1 to December 31
Revenues	$1,660.1		$1,158.1		$6,064.0		$2,902.4
Less: Subconsultants and direct costs	$411.9		$299.3		$1,577.2		$552.5
Net revenues*	$1,248.2		$858.8		$4,486.8		$2,349.9
Personnel costs	$935.6		$644.7		$3,420.0		$1,762.8
Occupancy costs	$56.9		$42.0		$215.0		$124.4
Other operational costs(1)	$132.2		$84.7		$415.6		$219.8
Share of earnings of associates	($0.5	)	($2.7	)	($5.3	)	($10.6	)
Adjusted EBITDA*	$124.0		$90.1		$441.5		$253.5
Acquisition and reorganization costs*	$30.3		$61.8		$3.9		$69.8
Amortization of intangible assets	$21.4		$15.8		$75.8		$43.7
Depreciation of property, plant and equipment	$19.6		$12.1		$64.2		$33.8
Financial expenses	$2.2		$5.1		$35.0		$13.8
Share of depreciation of associates	$0.1		$0.6		$1.1		$2.4
Earnings before income taxes	$50.4		($5.3	)	$261.5		$90.0
Income tax expenses	$36.0		$1.7		$71.8		$25.3
Share of tax of associates	-		$0.6		$1.1		$2.5
Net earnings	$14.4		($7.6	)	$188.6		$62.2
Attributable to:
- Shareholders	$14.7		($7.9	)	$188.8		$62.8
- Non-controlling interests	($0.3	)	$0.3		($0.2	)	($0.6	)
Basic net earnings per share	$0.15		($0.10	)	$2.05		$0.98
Diluted net earnings per share	$0.15		($0.10	)	$2.05		$0.98
Basic weighted average number of shares	99,109,839		79,109,987		92,280,269		64,023,625
Diluted weighted average number of shares	99,192,114		79,110,481		92,324,972		64,023,625

*Non-IFRS measures are described in the 'Glossary' section

(1) Other operational costs include operation exchange loss or gain and interest income

NON-IFRS MEASURES

The Corporation reports its financial results in accordance with IFRS. However, in this press release, the following non-IFRS measures are used by the Corporation: net revenues; adjusted EBITDA; adjusted EBITDA margin; adjusted EBITDA before Global Corporate costs; adjusted EBITDA margin before Global Corporate costs; adjusted net earnings (loss); adjusted net earnings (loss) per share; adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions; adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions per share; acquisition and reorganization costs; backlog; funds from operations; funds from operations per share; free cash flow; free cash flow per share; days sales outstanding ("DSO") and net debt to adjusted EBITDA. These measures are defined below.

Management believes that these non-IFRS measures provide useful information to investors regarding the Corporation's financial condition and results of operations as they provide key metrics of its performance. These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS and may differ from similar computations as reported by other issuers, and accordingly may not be comparable. These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS.

Net revenues

Net revenues are defined as revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients. Net revenues are not an IFRS measure and do not have a standardized definition within IFRS. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are advised that net revenues should not be construed as an alternative to revenues for the period (as determined in accordance with IFRS) as an indicator of the Corporation's performance.

Adjusted EBITDA

Adjusted EBITDA is defined as earnings before financial expenses, income tax expenses, depreciation and amortization and acquisition and reorganization costs. Adjusted EBITDA is not an IFRS measure and does not have a standardized definition within IFRS. Investors are cautioned that adjusted EBITDA should not be considered an alternative to net earnings for the period (as determined in accordance with IFRS) as an indicator of the Corporation's performance, or an alternative to cash flows from operating, financing and investing activities as a measure of the liquidity and cash flows. The Corporation's method of calculating adjusted EBITDA may differ from the methods used by other issuers and, accordingly, the Corporation's adjusted EBITDA may not be comparable to similar measures used by other issuers.

Adjusted EBITDA margin

Adjusted EBITDA margin is defined as adjusted EBITDA expressed as a percentage of net revenues. Adjusted EBITDA margin is not an IFRS measure.

Adjusted EBITDA before Global Corporate costs

Adjusted EBITDA before Global Corporate costs is defined as adjusted EBITDA excluding Global Corporate costs. Global Corporate costs are expenses and salaries related to centralized functions, such as global finance, human resources and technology teams, which are not allocated to operating segments. This measure is not an IFRS measure. It provides Management with comparability from one region to the other.

Adjusted EBITDA margin before Global Corporate costs

Adjusted EBITDA margin before Global Corporate costs is defined as adjusted EBITDA before Global Corporate costs expressed as a percentage of net revenues. Adjusted EBITDA margin before Global Corporate costs is not an IFRS measure. It provides Management with comparability from one region to the other.

Adjusted net earnings (loss) and adjusted net earnings (loss) per share

Adjusted net earnings (loss) is defined as net earnings (loss) attributable to shareholders excluding acquisition and reorganization costs and the income tax effects related to these costs. Adjusted net earnings (loss) is not an IFRS measure. It provides a comparative measure of the Corporation`s performance in a context of significant business combinations in which the Corporation may incur significant acquisition and reorganization costs which the Corporation believes should be excluded in understanding the underlying operational financial performance achieved by the Corporation.

Adjusted net earnings (loss) per share is calculated using the basic weighted average number of shares.

Adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions and adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions per share

Adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) is defined as adjusted net earnings (loss) attributable to shareholders excluding the amortization of backlogs, customer relationships, non-competition agreements and trade names accounted for in business combinations and the income tax effects related to this amortization. Adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) is not an IFRS measure. It provides a comparative measure of Corporation performance in a context of significant business combinations.

Adjusted net earnings (loss) excluding amortization of intangible assets related to acquisitions (net of income taxes) per share is calculated using the basic weighted average number of shares.

Acquisition and reorganization costs

Acquisition and reorganization costs include transaction and integration costs related to business acquisitions as well as costs of restructuring and reorganizing existing operations. In 2015, acquisition and reorganization costs included gains made on the disposal of equity investments in associates. Acquisition and reorganization costs is not an IFRS measure. Acquisition and reorganization costs are items of financial performance which the Corporation believes should be excluded in understanding the underlying operational financial performance achieved by the Corporation.

Backlog

Backlog is not an IFRS measure. It represents future revenues stemming from existing signed contracts to be completed. The Corporation's method of calculating backlog may differ from the methods used by other issuers and, accordingly, may not be comparable to similar measures used by other issuers.

Funds from operations and funds from operations per share

Funds from operations is not an IFRS measure. It provides Management and investors with a proxy for the amount of cash generated from (used in) operating activities before changes in non-cash working capital items.

Funds from operations per share is calculated using the basic weighted average number of shares.

Free cash flow and free cash flow per share

Free cash flow is not an IFRS measure. It provides a consistent and comparable measurement of discretionary cash generated by and available to the Corporation. Free cash flow is defined as cash flows from operating activities as reported in accordance with IFRS, plus discretionary cash generated by the Corporation from other activities, less net capital expenditures.

Free cash flow per share is calculated using the basic weighted average number of shares.

Days Sales Outstanding ("DSO")

DSO is not an IFRS measure. It represents the average number of days to convert our trade receivables and costs and anticipated profits in excess of billings into cash, net of sales taxes. The Corporation's method of calculating DSO may differ from the methods used by other issuers and, accordingly, may not be comparable to similar measures used by other issuers.

Net Debt to adjusted EBITDA

Net Debt to adjusted EBITDA is not an IFRS measure. It is a measure of our level of financial leverage net of our cash and is calculated on our trailing twelve month adjusted EBITDA.

ABOUT WSP

As one of the world's leading professional services firms, we provide technical expertise and strategic advice to clients in the Property & Buildings, Transportation & Infrastructure, Environment, Industry, Resources (including Mining and Oil & Gas) and Power & Energy sectors. We also offer highly specialized services in project delivery and strategic consulting. Our experts include engineers, advisors, technicians, scientists, architects, planners, surveyors and environmental specialists, as well as other design, program and construction management professionals. With approximately 34,000 talented people in 500 offices across 40 countries, we are uniquely positioned to deliver successful and sustainable projects under our WSP and WSP / Parsons Brinckerhoff brands, wherever our clients need us. www.wsp-pb.com.

Forward-looking statements

Certain information regarding WSP contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although WSP believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. WSP's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The complete version of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect WSP's actual or projected results are included in the Management Discussion and Analysis for the fourth quarter and year ended December 31, 2015, which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and WSP does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.