- Reported 2017 IFRS net income attributable to SNC-Lavalin
shareholders of $382.0 million, or
$2.34 per diluted share, compared to
$255.5 million, or $1.70 per diluted share, in 2016.
- 2017 adjusted net income from E&C(1) of
$351.3 million, or $2.15 per diluted share, an increase of 55.2%
compared to 2016.
- Q4 2017 adjusted net income from E&C(1) of
$137.8 million, or $0.78 per diluted share, an increase of 87.6%
compared to Q4 2016.
- Strong operating cash flow of $376.2
million in Q4 2017.
- Delivered an adjusted E&C EBITDA(7) margin of
8.6% in Q4 2017 and 6.9% for the full year, compared to our
Operational Excellence target of 7%.
- 2018 Outlook: adjusted diluted EPS from E&C(2)
in the range of $2.60 to $2.85 and adjusted consolidated diluted
EPS(5) in the range of $3.60 to $3.85,
revised in consideration with IFRS 15 revenue recognition
criteria.
To watch Neil Bruce comment on
SNC-Lavalin's fourth quarter and year-end 2017 financial results,
click here.
To watch Neil Bruce talk about
the vision and 2018 priorities for SNC-Lavalin, click here.
MONTREAL, Feb. 22, 2018 /CNW Telbec/ - SNC-Lavalin
Group Inc. (TSX: SNC) today announces its results for the fourth
quarter and year ended December 31,
2017.
"We are very pleased with our 2017 performance.
Through the acquisition of Atkins, the largest and most
transformative in our history, we continued to deliver on our
strategic growth objectives while positioning the Company for
future opportunities. We divested certain non-core and low growth
businesses, further de-risked our business model and applied
tighter governance mechanisms to proactively manage our project
portfolio," said Neil Bruce,
President and Chief Executive Officer, SNC-Lavalin Group Inc. "The
integration of the Atkins business continues to progress well and
will be fully completed in 2018. We have a positive outlook
on growth and confidence in delivering on our 2020 vision. Our
backlog is supported by a healthy pipeline of prospects across our
sectors and geographies, as well as revenue synergies from our
business development efforts in our enlarged group. Our recent
selection as a preferred proponent for the Montreal light rapid transit system
underscores the quality of our organic prospects and bolsters our
reputation as the leader in infrastructure in Canada."
- Q4 2017 reported IFRS net income attributable to SNC-Lavalin
shareholders was $52.4 million, or
$0.30 per diluted share, compared
with $1.6 million, or $0.01 per diluted share, for the corresponding
period in 2016. Q4 2017 reported IFRS net income attributable to
SNC-Lavalin shareholders included a non-cash charge of $42.5 million for the estimated net impact of
revaluation of the Company's U.S. deferred tax assets and
liabilities, as a result of the U.S. corporate tax reform. It also
included acquisition-related and integration costs of $21.6 million (after taxes), a net restructuring
cost recovery and other of $1.9
million (after taxes), an amortization of intangible assets
related to business combinations of $61.3
million (after taxes) and tax adjustments of $3.1 million on previously recorded gain on
disposals.
- Adjusted net income from E&C(1) for Q4 2017 was
$137.8 million, or $0.78 per diluted share, compared with
$73.4 million, or $0.49 per diluted share for Q4 2016, mainly due
to a higher Segment EBIT(6), partially offset by an
increase in income taxes and financial expenses, largely
attributable to the financing of the Atkins acquisition. On a
segmented basis, Infrastructure continued to perform well,
delivering a higher Segment EBIT(6) in Q4 2017, compared
with Q4 2016, while the Power segment recorded a negative Segment
EBIT(6) in Q4 2017, mainly due to an unfavorable cost
reforecast on the Company's remaining fixed price engineering,
procurement and construction (EPC) thermal power plant project. The
Atkins business had another strong quarter and delivered a
$131.5 million Segment
EBIT(6) in Q4 2017 with a 13.2% Segment
EBIT(6) margin, mainly due to excellent core business
performance and earlier than scheduled cost synergies.
- The Company delivered cost synergies of approximately
$40 million related to the
acquisition of Atkins in 2017 and remains on track to deliver cost
synergies of $120 million by the end
of 2018.
- Adjusted net income from Capital(3) for Q4 2017 was
$34.9 million, or $0.20 per diluted share, compared with
$42.6 million, or $0.28 per diluted share for the corresponding
period in 2016, mainly due to a contribution from certain Capital
investments and from certain Canadian Capital investments
transferred to SNC-Lavalin Infrastructure Partners LP, which was
partly sold in September 2017,
partially offset by an increase in dividends received from Highway
407 ETR.
- E&C revenue for the fourth quarter ended December 31, 2017 increased to $2.9 billion, compared with $2.1 billion in the fourth quarter of 2016. The
increase was mainly due to the $1.0
billion incremental revenues from the acquisition of Atkins,
partially offset by decreases in the Oil & Gas and Power
segments. The decrease in Oil & Gas was mainly due to lower
revenues in the LNG sector, partially offset by higher revenues
from sustaining capital projects in the Middle East and modularized gas solutions in
the United States. The decrease in
Power was mainly due to lower revenues from the Thermal
sub-segment, as the Company decided to exit the EPC part of this
business, partially offset by an increase in the nuclear business.
Note that the Infrastructure segment revenue was mainly in line
with Q4 2016, despite a significant decrease in revenue due to the
disposal, in December 2016, of
SNC-Lavalin's non-core E&C business in France and the Real Estate Facilities
Management business in Canada.
- The revenue backlog(8) totaled $10.4 billion at the end of December 2017. Total backlog bookings for the
fourth quarter amounted to $1.9
billion, while bookings for 2017 represented $6.7 billion, including $2.0 billion in Infrastructure, $1.7 billion in Oil & Gas, $0.8 billion in Mining & Metallurgy and
$0.5 billion in Power. The Company
also added Atkins' revenue backlog(8) in 2017. Atkins'
2017 bookings, since its acquisition in July
2017, totaled $1.7 billion. It
is important to note that the Réseau Express Métropolitain (REM)
project for the EPC work on Montreal's new light rail transit system, and
the provision of rolling stock, systems and operation and
maintenance (RSSOM) contracts, for which SNC-Lavalin was recently
selected as the preferred proponent, as well as the Stockyard Hill
Wind Farm contract in Australia
have not been included in the December 31,
2017 backlog. These would add over $2
billion to the backlog. In 2018, the Company's revenue
backlog will be replaced by the measure of "Remaining performance
obligation", which is based on IFRS 15 "Revenue from contracts with
customers", effective January 1, 2018
for the Company. Based on this new standard, the Company estimates
that the opening "Remaining performance obligation" for 2018 would
be approximatively $3 billion higher
than the revenue backlog based on the Company's current definition
as at December 31, 2017. Combined
together, these two increases could take the Company's total
backlog to over $15 billion in
2018.
- Net cash generated from operating activities totaled
$376.2 million and the recourse debt
was reduced by $179.1 million in Q4
2017. As of December 31, 2017, the
Company continues to maintain adequate liquidity with $0.7 billion of cash and cash equivalents,
$1.3 billion of net recourse debt and
$2.3 billion in unused capacity under
its $2.75 billion committed revolving
credit facility, while the net recourse debt to adjusted EBITDA
ratio(9) was 0.6.
2018 Outlook
The Company is targeting a significant increase with an adjusted
diluted EPS from E&C(2) for 2018 in the range of
$2.60 to $2.85, as well as an adjusted consolidated
diluted EPS(5) in the range of $3.60 to $3.85.
While we anticipate some seasonality in the E&C business and
lower adjusted diluted EPS in Q1, we expect a gradual increase
throughout the remainder of the year.
The 2018 outlook is based on IFRS 15, which is applicable for
the Company beginning January 1, 2018
and will be applied using the modified retrospective method. We
expect that IFRS 15 will bring more volatility to the Company's
results from period to period, as some more stringent conditions on
contract modifications could delay and slow down revenue
recognition on the Company's multi-year projects, but expect the
same overall results through time.
While we expect continuing market challenges in 2018 in certain
of the Company's sectors, we anticipate benefiting from Atkins
synergies and restructuring savings. As such, we expect growth in
the Company's total Segment EBIT(6) in 2018, compared
with 2017. Segment EBIT(6) for the Atkins, Mining &
Metallurgy and Power segments are expected to increase, while the
Oil & Gas and Infrastructure segments are expected to be mainly
in line with 2017. Note that the 2018 outlook will include twelve
months of Atkins' operations and related financing, compared to
approximately six months in 2017. It also assumes a weighted
average number of outstanding shares of approximately 175 million.
Tax rate for the adjusted E&C business is expected to be
between 20% and 25%.
This outlook is based on the assumptions and methodology
described in the Company's 2017 Management's Discussion and
Analysis under the heading, "How We Budget and Forecast Our
Results" and the "Forward-Looking Statements" section below and is
subject to the risks and uncertainties summarized therein, which
are more fully described in the Company's public disclosure
documents.
Quarterly Dividend
Given the Company's long-term outlook, liquidity profile and
revenue backlog(8) level, the Board of Directors has
increased the quarterly cash dividend by 5% to $0.287 per share, payable on March 22, 2018, to shareholders of record on
March 8, 2018. This represents the
17th consecutive year that the Company's dividend per
share has been increased. This dividend is an "eligible dividend"
for income tax purposes.
Q4 2017 Results Conference Call / Webcast
SNC-Lavalin will hold a conference call today at 3:00 p.m. EST (Eastern Standard Time) to review
results for its fourth quarter. To join the conference call, please
dial toll free at 1 800 281 7973 in North
America, 647 794 1827 in Toronto, 438 968 3557 in Montreal, or 080 0358 6377 in the United Kingdom. A live audio webcast of the
conference call and an accompanying slide presentation will be
available at investors.snclavalin.com. A recording of the
conference call will be available on our website within 24 hours
following the call.
Non-IFRS Financial Measures and Additional IFRS
Measures
The Company reports its financial results in accordance with
IFRS. However, the following non-IFRS measures and additional IFRS
measures are used by the Company: Adjusted net income from E&C,
Adjusted diluted EPS from E&C, Adjusted net income from
Capital, Adjusted diluted EPS from Capital, Adjusted consolidated
diluted EPS, EBITDA, Adjusted E&C EBITDA, Segment EBIT and
Revenue backlog. Additional details for these non-IFRS measures and
additional IFRS measures can be found below and in SNC-Lavalin's
MD&A, which is available in the Investors section of the
Company's website at www.snclavalin.com. Non-IFRS financial
measures do not have any standardized meaning 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
financial results and certain investors may use this information to
evaluate the Company's performance from period to period. However,
these non-IFRS financial measures have limitations and should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
About SNC-Lavalin
Founded in 1911, SNC-Lavalin is a global fully integrated
professional services and project management company and a major
player in the ownership of infrastructure. From offices around the
world, SNC-Lavalin's employees are proud to build what matters. Our
teams provide comprehensive end-to-end project solutions –
including capital investment, consulting, design, engineering,
construction, sustaining capital and operations and maintenance –
to clients in Oil and Gas, Mining and Metallurgy, Infrastructure
and Power. On July 3, 2017,
SNC-Lavalin acquired Atkins, one of the world's most respected
design, engineering and project management
consultancies. www.snclavalin.com
(1) Adjusted net income from E&C is
defined as net income attributable to SNC-Lavalin shareholders from
E&C, excluding charges related to restructuring, right-sizing
and other, acquisition-related costs and integration costs, impact
of U.S. corporate tax reform as well as amortization of intangible
assets related to business combinations, and the gains (losses) on
disposals of E&C businesses and the head office building.
E&C is defined in the Company's 2017 financial statements and
Management's Discussion and Analysis. The term "Adjusted net income
from E&C" does not have any standardized meaning under IFRS.
Therefore, it may not be comparable to similar measures presented
by other issuers. Management uses this measure as a more meaningful
way to compare the Company's financial performance from period to
period. Management believes that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use
this information to evaluate the Company's performance. See
reconciliation below.
(2) Adjusted diluted EPS from E&C is
defined as the adjusted net income from E&C divided by the
diluted weighted average number of outstanding shares for the
period.
(3) Adjusted net income from Capital is
defined as net income attributable to SNC-Lavalin shareholders from
Capital, excluding the gains on disposals of Capital
Investments.
(4) Adjusted diluted EPS from Capital is
defined as the adjusted net income from Capital divided by the
diluted weighted average number of outstanding shares for the
period.
(5) Adjusted consolidated diluted EPS is
defined as the adjusted net income from E&C plus the adjusted
net income from Capital divided by the diluted weighted average
number of outstanding shares for the period.
(6) Segment EBIT consists of gross margin
less i) directly related selling, general and administrative
expenses; ii) corporate selling, general and administrative
expenses that are directly related to projects or segments; and
iii) non-controlling interests before taxes. Expenses that are not
allocated to the Company's segment include: Corporate selling,
general and administrative expenses that are not directly related
to projects or segments, restructuring costs, goodwill impairment,
acquisition-related costs and integration costs and amortization of
intangible assets related to business combinations, as well as
gains (losses) on disposals of E&C businesses, Capital
investments and head office building. The term "Segment EBIT" does
not have any standardized meaning under IFRS. Therefore, it may not
be comparable to similar measures presented by other issuers.
Management uses this measure as a more meaningful way to compare
the Company's financial performance from period to period.
Management believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this
information to evaluate the Company's performance.
(7) Adjusted E&C EBITDA is defined
herein as earnings from E&C before net financial expenses
(income), income taxes, depreciation and amortization, and excludes
charges related to restructuring, right-sizing and other,
acquisition-related costs and integration costs, as well as the
gains (losses) on disposals of E&C businesses, Capital
investments and head office building. The term "Adjusted E&C
EBITDA" does not have any standardized meaning under IFRS.
Therefore, it may not be comparable to similar measures presented
by other issuers. Management uses this measure as a more meaningful
way to compare the Company's financial performance from period to
period. Management believes that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use
this information to evaluate the Company's performance.
(8) Revenue Backlog is defined herein as a
forward-looking indicator of anticipated revenues to be recognized
by the Company, determined based on contract awards that are
considered firm. Management could be required to make estimates
regarding the revenue to be generated for long-term firm
reimbursable contracts. In order to provide information that is
comparable to the revenue backlog of other categories of activity,
the Company limits the O&M activities revenue backlog, which
can cover a period of up to 40 years, to the earlier of: i) the
contract term awarded; and ii) the next five years. The term
"Revenue backlog" does not have any standardized meaning under
IFRS. Therefore, it may not be comparable to similar measures
presented by other issuers. Management believes that, in addition
to conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate the Company's future
performance.
(9) Net recourse debt to adjusted EBITDA
ratio is defined herein as the net recourse debt divided by the
trailing 12-months adjusted EBITDA on a pro forma basis, including
the EBITDA of Atkins and DTS before its acquisition by SNC-Lavalin,
less interest on limited recourse debt. The term "Net
recourse to adjusted EBITDA ratio" does not have any standardized
meaning under IFRS. Therefore, it may not be comparable to similar
measures presented by other issuers. Management uses this measure
as a more meaningful way to compare the Company's financial
performance from period to period. Management believes that, in
addition to conventional measures prepared in accordance with IFRS,
certain investors use this information to evaluate the Company's
performance.
SNC-Lavalin
Financial Summary
|
|
|
|
(in thousands of
Canadian dollars, unless otherwise indicated)
|
Fourth
Quarter
|
Year
ended
December
31
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Revenues
|
|
|
|
|
From
E&C
|
2,867,747
|
2,146,484
|
9,096,715
|
8,223,085
|
From
Capital
|
50,089
|
64,653
|
238,003
|
247,748
|
|
2,917,836
|
2,211,137
|
9,334,718
|
8,470,833
|
|
|
|
|
|
Net income
attributable to SNC-Lavalin's shareholders
|
|
|
|
|
From
E&C
|
14,277
|
(38,435)
|
175,995
|
46,346
|
From
Capital
|
38,079
|
40,011
|
206,040
|
209,187
|
|
52,356
|
1,576
|
382,035
|
255,533
|
|
|
|
|
|
Diluted EPS
($)
|
|
|
|
|
From
E&C
|
0.08
|
(0.26)
|
1.08
|
0.31
|
From
Capital
|
0.22
|
0.27
|
1.26
|
1.39
|
|
0.30
|
0.01
|
2.34
|
1.70
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income attributable to SNC-Lavalin's shareholders
|
|
|
|
|
From
E&C(1)
|
137,775
|
73,449
|
351,284
|
226,397
|
From
Capital(3)
|
34,942
|
42,620
|
171,032
|
160,750
|
|
172,717
|
116,069
|
522,316
|
387,147
|
|
|
|
|
|
Adjusted diluted
EPS ($)
|
|
|
|
|
From
E&C(2)
|
0.78
|
0.49
|
2.15
|
1.51
|
From
Capital(4)
|
0.20
|
0.28
|
1.05
|
1.07
|
|
0.98
|
0.77
|
3.20
|
2.58
|
|
|
|
|
|
Adjusted E&C
EBITDA(7)
|
245,863
|
107,971
|
629,021
|
371,880
|
Adjusted E&C
EBITDA margin
|
8.6%
|
5.0%
|
6.9%
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
Revenue
backlog(8)
|
|
|
10,406,400
|
10,677,400
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
706,531
|
1,055,484
|
|
|
|
|
|
Recourse long-term
debt
|
|
|
1,345,539
|
349,369
|
Reconciliation
of IFRS Net Income as Reported to Adjusted Net
Income
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
Net charges
(reversal) related to the restructuring & right-sizing plan and
other
|
Acquisition
|
Net gain on
disposals of E&C business, head office building, and Capital
investments
|
Impact of U.S.
corporate tax reform
|
Net income,
adjusted (Non-IFRS)
|
|
|
|
Acquisition-related
costs and integration costs
|
Amortization of
intangible assets related to business combinations
|
|
|
|
|
Fourth Quarter
2017
|
In
M$
|
E&C
|
14.3
|
(1.9)1
|
21.6
|
61.3
|
-
|
42.54
|
137.8
|
Capital
|
38.1
|
-
|
-
|
-
|
(3.1)3
|
-
|
34.9
|
|
52.4
|
(1.9)
|
21.6
|
61.3
|
(3.1)
|
42.5
|
172.7
|
Per Diluted share
($)
|
E&C
|
0.08
|
(0.01)
|
0.12
|
0.35
|
-
|
0.24
|
0.78
|
Capital
|
0.22
|
-
|
-
|
-
|
(0.02)
|
-
|
0.20
|
|
0.30
|
(0.01)
|
0.12
|
0.35
|
(0.02)
|
0.24
|
0.98
|
|
Year Ended
December 31, 2017
|
In
M$
|
E&C
|
176.0
|
25.42
|
97.2
|
112.6
|
(102.4)
|
42.54
|
351.3
|
Capital
|
206.0
|
-
|
-
|
-
|
(35.0)
|
-
|
171.0
|
|
382.0
|
25.4
|
97.2
|
112.6
|
(137.4)
|
42.5
|
522.3
|
|
Per Diluted share
($)
|
E&C
|
1.08
|
0.15
|
0.60
|
0.69
|
(0.63)
|
0.26
|
2.15
|
Capital
|
1.26
|
-
|
-
|
-
|
(0.21)
|
-
|
1.05
|
|
2.34
|
0.15
|
0.60
|
0.69
|
(0.84)
|
0.26
|
3.20
|
1
This amount includes a reversal of $1.1 million ($0.7 million
after taxes) of charges which did not meet the restructuring costs
definition in accordance with IFRS.
|
|
2This amount includes $5.1
million ($5.3 million after taxes) of net charges which did not
meet the restructuring costs definition in accordance with
IFRS.
|
|
3Tax adjustments on previously
recorded gains.
|
|
4As a result of the U.S.
corporate tax reform, the Company recorded a non-cash charge
reflecting the estimated net impact of revaluation of its U.S.
deferred tax assets and deferred tax liabilities.
|
|
|
|
|
|
|
|
Net income (loss),
as reported
|
Net charges related
to the restructuring & right-sizing plan and other
|
Acquisition
|
Net loss (gain)
on disposals of E&C business and Capital
investments
|
Net income,
adjusted (Non-IFRS)
|
|
|
|
Acquisition-related
costs and integration costs
|
Amortization of
intangible assets related to business combinations
|
|
|
|
Fourth Quarter
2016
|
In
M$
|
E&C
|
(38.4)
|
53.91
|
0.2
|
13.2
|
44.6
|
73.5
|
Capital
|
40.0
|
-
|
-
|
-
|
2.6
|
42.6
|
|
1.6
|
53.9
|
0.2
|
13.2
|
47.2
|
116.1
|
|
Per Diluted share
($)
|
E&C
|
(0.26)
|
0.36
|
0.00
|
0.09
|
0.30
|
0.49
|
Capital
|
0.27
|
-
|
-
|
-
|
0.01
|
0.28
|
|
0.01
|
0.36
|
0.00
|
0.09
|
0.31
|
0.77
|
|
Year Ended
December 31, 2016
|
In
M$
|
E&C
|
46.3
|
77.62
|
3.4
|
54.5
|
44.6
|
226.4
|
Capital
|
209.2
|
-
|
-
|
-
|
(48.5)
|
160.7
|
|
255.5
|
77.6
|
3.4
|
54.5
|
(3.9)
|
387.1
|
|
Per Diluted share
($)
|
E&C
|
0.31
|
0.52
|
0.02
|
0.36
|
0.30
|
1.51
|
Capital
|
1.39
|
-
|
-
|
-
|
(0.32)
|
1.07
|
|
1.70
|
0.52
|
0.02
|
0.36
|
(0.02)
|
2.58
|
1This amount includes a reversal
of $8.5 million ($8.0 million after taxes) of charges, which did
not meet the restructuring costs definition in accordance with
IFRS.
|
|
2This amount includes a net
reversal of $4.2 million ($6.0 million after taxes) of charges,
which did not meet the restructuring costs definition in accordance
with IFRS.
|
Forward-looking Statements:
Reference in this press release, and hereafter, to the
"Company" or to "SNC-Lavalin" means, as the context may require,
SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint
arrangements, or SNC-Lavalin Group Inc. or one or more of its
subsidiaries or joint arrangements.
Statements made in this press release that describe the
Company's or management's budgets, estimates, expectations,
forecasts, objectives, predictions, projections of the future or
strategies may be "forward-looking statements", which can be
identified by the use of the conditional or forward-looking
terminology such as "aims", "anticipates", "assumes", "believes",
"cost savings", "estimates", "expects", "goal", "intends", "may",
"plans", "projects", "should", "synergies", "target", "vision",
"will", or the negative thereof or other variations thereon.
Forward-looking statements also include any other statements that
do not refer to historical facts. Forward-looking statements also
include statements relating to the following: i) future capital
expenditures, revenues, expenses, earnings, economic performance,
indebtedness, financial condition, losses and future prospects; and
ii) business and management strategies and the expansion and growth
of the Company's operations. All such forward-looking statements
are made pursuant to the "safe-harbour" provisions of applicable
Canadian securities laws. The Company cautions that, by their
nature, forward-looking statements involve risks and uncertainties,
and that its actual actions and/or results could differ materially
from those expressed or implied in such forward-looking statements,
or could affect the extent to which a particular projection
materializes. Forward-looking statements are presented for the
purpose of assisting investors and others in understanding certain
key elements of the Company's current objectives, strategic
priorities, expectations and plans, and in obtaining a better
understanding of the Company's business and anticipated operating
environment. Readers are cautioned that such information may not be
appropriate for other purposes.
The 2018 outlook referred to in this press release is
forward-looking information and is based on the methodology
described in the Company's 2017 Management's Discussion and
Analysis ("MD&A") under the heading "How We Budget and Forecast
Our Results" and is subject to the risks and uncertainties
described in the Company's public disclosure documents. The purpose
of the 2018 outlook is to provide the reader with an indication of
management's expectations, at the date of this press release,
regarding the Company's future financial performance and readers
are cautioned that this information may not be appropriate for
other purposes.
Forward-looking statements made in this press release are
based on a number of assumptions believed by the Company to be
reasonable as at the date hereof. The assumptions are set out
throughout the Company's 2017 MD&A, particularly in the
sections entitled "Critical Accounting Judgments and Key Sources of
Estimation Uncertainty" and "How We Analyze and Report our
Results". The 2018 outlook also assumes that the federal charges
laid against the Company and its indirect subsidiaries SNC-Lavalin
International Inc. and SNC-Lavalin Construction Inc. on
February 19, 2015, will not have a
significant adverse impact on the Company's business in 2018. If
these assumptions are inaccurate, the Company's actual results
could differ materially from those expressed or implied in such
forward-looking statements. In addition, important risk factors
could cause the Company's assumptions and estimates to be
inaccurate and actual results or events to differ materially from
those expressed in or implied by these forward-looking statements.
These risks include, but are not limited to: (a) the outcome of
pending and future claims and litigation could have a material
adverse impact on the Company's business, financial condition and
results of operation; (b) on February 19,
2015, the Company was charged with one count of corruption
under the Corruption of Foreign Public Officials Act (Canada) (the "CFPOA") and one count of fraud
under the Criminal Code (Canada),
and is also subject to other ongoing investigations which could
subject the Company to criminal and administrative enforcement
actions, civil actions and sanctions, fines and other penalties,
some of which may be significant. These charges and investigations,
and potential results thereof, could harm the Company's reputation,
result in suspension, prohibition or debarment of the Company from
participating in certain projects, reduce its revenues and net
income and adversely affect its business; (c) further
regulatory developments could have a significant adverse impact on
the Company's results, and employee, agent or partner misconduct or
failure to comply with anti-bribery and other government laws and
regulations could harm the Company's reputation, reduce its
revenues and net income, and subject the Company to criminal and
administrative enforcement actions and civil actions; (d) a
negative impact on the Company's public image could influence its
ability to obtain future projects; (e) fixed-price contracts or the
Company's failure to meet contractual schedule or performance
requirements or to execute projects efficiently may increase the
volatility and unpredictability of its revenue and profitability;
(f) the Company's revenue and profitability are largely dependent
on the awarding of new contracts, which it does not directly
control, and the uncertainty of contract award timing could have an
adverse effect on the Company's ability to match its workforce size
with its contract needs; (g) the Company's backlog is subject to
unexpected adjustments and cancellations, including under
"termination for convenience" provisions, and does not represent a
guarantee of the Company's future revenues or profitability; (h)
SNC-Lavalin is a provider of services to government agencies and is
exposed to risks associated with government contracting; (i) the
Company's international operations are exposed to various risks and
uncertainties, including unfavourable political environments, weak
foreign economies and the exposure to foreign currency risk; (j)
there are risks associated with the Company's ownership interests
in Capital investments that could adversely affect it; (k) the
Company is dependent on third parties to complete many of its
contracts; (l) the Company's use of joint ventures and partnerships
exposes it to risks and uncertainties, many of which are outside of
the Company's control; (m) the competitive nature of the markets in
which the Company does business could adversely affect it; (n) the
Company's project execution activities may result in professional
liability or liability for faulty services; (o) the Company could
be subject to monetary damages and penalties in connection with
professional and engineering reports and opinions that it provides;
(p) the Company may not have in place sufficient insurance coverage
to satisfy its needs; (q) the Company's employees work on projects
that are inherently dangerous and a failure to maintain a safe work
site could result in significant losses and/or an inability to
obtain future projects; (r) the Company's failure to attract and
retain qualified personnel could have an adverse effect on its
activities; (s) work stoppages, union negotiations and other labour
matters could adversely affect the Company; (t) the Company relies
on information systems and data in its operations. Failure in the
availability or security of the Company's information systems or in
data security could adversely affect its business and results of
operations; (u) any acquisition or other investment may present
risks or uncertainties; (v) divestitures and the sale of
significant assets may present risks or uncertainties; (w) possible
failure to realize anticipated benefits of the acquisition and
difficulties in the integration of Atkins; * increased indebtedness
as a result of the Atkins Acquisition; (y) dependence on
subsidiaries to help repay indebtedness as a result of the Atkins
Acquisition; (z) security under the SNC-Lavalin Highway
Holdings Loan being called at an inopportune time; (aa)
ability to pay dividends; (bb) additional significant integration
costs may be incurred following Atkins Acquisition; (cc) Atkins'
pension-related obligations; (dd) a deterioration or weakening of
the Company's financial position could have a material adverse
effect on its business and results of operations; (ee) the Company
may have significant working capital requirements, which if
unfunded could negatively impact its business, financial condition
and cash flows; (ff) an inability of SNC-Lavalin's clients to
fulfill their obligations on a timely basis could adversely affect
the Company; (gg) the Company may be required to impair certain of
its goodwill, and it may also be required to write down or write
off the value of certain of its assets and investments, either of
which could have a material adverse impact on the Company's results
of operations and financial condition; (hh) global economic
conditions could affect the Company's client base, partners,
subcontractors and suppliers and could materially affect its
backlog, revenues, net income and ability to secure and maintain
financing; (ii) fluctuations in commodity prices may affect
clients' investment decisions and therefore subject the Company to
risks of cancellation, delays in existing work, or changes in the
timing and funding of new awards, and may affect the costs of the
Company's projects; (jj) inherent limitations to the Company's
control framework could result in a material misstatement of
financial information; and; (kk) environmental laws and regulations
expose the Company to certain risks, could increase costs and
liabilities and impact demand for the Company's services. The
Company cautions that the foregoing list of factors is not
exhaustive. For more information on risks and uncertainties, and
assumptions that could cause the Company's actual results to differ
from current expectations, please refer to the sections "Risks and
Uncertainties", "How We Analyze and Report Our Results" and
"Critical Accounting Judgments and Key Sources of Estimation
Uncertainty" in the Company's 2017 MD&A.
The forward-looking statements herein reflect the Company's
expectations as at the date of this press release and are subject
to change after this date. The Company does not undertake to update
publicly or to revise any such forward-looking statements, whether
as a result of new information, future events or otherwise, unless
required by applicable legislation or regulation.
SNC-Lavalin's Consolidated Financial Statements and
Management's Discussion and Analysis and other relevant financial
materials are available in the Investors section of the Company's
website at www.snclavalin.com. These and other
Company reports are also available on the website maintained by the
Canadian Securities regulators at
www.sedar.com.
SOURCE SNC-Lavalin