New strategic direction demonstrating results;
SNCL Engineering Services delivers strong EBIT
To watch Ian L.
Edwards provide an overview of the third quarter results for
2019 and explain how SNC-Lavalin is delivering on its new strategic
direction, view here.
MONTREAL, Oct. 31, 2019 /CNW Telbec/ - SNC-Lavalin Group
Inc. (TSX: SNC) today announces its results for the third quarter
ended September 30, 2019. All
currency references in this press release are in Canadian dollars
except as otherwise indicated.
2019 Third
Quarter Financial Highlights
|
|
(in thousands of
dollars, unless otherwise indicated)
|
Third
Quarter
|
2019
|
2018
|
Total
revenue
|
2,432,163
|
2,562,990
|
Net income
attributable to SNC-Lavalin shareholders
|
2,756,714
|
120,743
|
Diluted
EPS
|
$15.70
|
$0.69
|
SNCL Engineering
Services (incl. Capital)
|
|
|
Revenue
|
1,581,541
|
1,418,853
|
Segment
EBIT(7)
|
252,879
|
184,787
|
Segment EBIT
ratio
|
16.0%
|
13.0%
|
Backlog
|
11,416,000
|
10,401,600
|
SNCL
Projects
|
|
|
Revenue
|
850,622
|
1,144,137
|
Segment
EBIT(7)
|
(44,971)
|
55,495
|
Segment EBIT
ratio
|
(5.3%)
|
4.9%
|
Backlog
|
4,216,700
|
4,754,500
|
Adjusted EBITDA from
E&C(8)
|
184,892
|
223,416
|
Adjusted EBITDA from
E&C margin
|
7.9%
|
8.9%
|
Adjusted diluted EPS
from E&C(2)
|
$0.94
|
$0.71
|
2019 Third Quarter Highlights
- Balance sheet strengthened: Debt reduced by $2.4 billion, compared to June 2019. Net proceeds of $2.9 billion from Highway 407 ETR sale used to
deleverage, cash and cash equivalents increased to $938.9 million.
- New strategic direction delivering results: SNCL
Engineering Services Segment revenue, EBIT and EBIT ratio improved
compared to the third quarter of 2018; lump-sum turnkey (LSTK)
construction contracts backlog for SNCL Projects reduced to
$3.2 billion from $3.4 billion as at June
30, 2019.
- Highway 407 ETR: Sale of 10.01% stake completed for net
gain after tax of $2.6 billion.
- Q3 contract wins in engineering services: Seven new
contracts signed with an estimated value of ~$500 million, including providing Programme
Management Office (PMO) services to the largest freight rail
infrastructure project in Australia. For the first nine months of the
year, SNCL Engineering Services had a book-to-bill ratio of
1.2.
- Resources restructuring: As per the July 22 announcement, the Company is advancing a
number of options, including a combination of potential Oil &
Gas-related divestitures, closures and the possible transition of
Resources engineering services activities to SNCL Engineering
Services, and will provide an update as decisions are made. The
Company also continues to run off the LSTK construction projects
included in its backlog.
- Cost reduction program: The Company will realize over
$100 million in cost savings by
year-end 2019 and remains on target to achieving an annual run-rate
of $250 million in cost savings in
2020.
President and CEO Commentary
Ian L. Edwards, President and CEO of SNC-Lavalin Group
Inc., made the following comments in relation to the Company's 2019
third quarter results:
"We are committed to delivering on what we say we will do, and
producing consistent results, as we execute on our new strategic
direction. It is still early days, but the decisions we made
in July – to exit lump-sum turnkey construction contracting and
reorganize the Company to focus on our high-performing Engineering
Services business – are demonstrating results, and I am encouraged
by our progress.
"Revenue, backlog, and Segment EBIT for SNCL Engineering
Services have all increased year-over-year, with growth in EDPM and
Infrastructure Services. Between July and mid-October, we announced
seven new contract wins. We continue to reduce our LSTK
construction backlog and are laser-focused on managing the
risks.
"We also significantly strengthened our balance sheet in Q3
2019. We used the $2.9 billion in net
proceeds from the sale of 10.01% of Highway 407 ETR, to mainly
reduce our leverage. As a result, our balance sheet is strong, with
$939 million in cash and cash
equivalents, and considerably reduced debt. As we improve on EBITDA
and free cash flow generation, our goal is to reduce our leverage
ratio. Our solid financial position and new strategic direction
provides us with a clear path forward, focused on generating
consistent earnings and cash flow and surfacing value for our
shareholders."
Third Quarter Results
The Company reported an IFRS net income attributable to
SNC-Lavalin shareholders of $2.8
billion, or $15.70 per diluted
share for the third quarter of 2019, compared with $120.7 million, or $0.69 per diluted share, for the corresponding
period in 2018. The Company's third quarter 2019 net income
attributable to SNC-Lavalin shareholders included a net gain on the
disposal of a 10.01% stake of Highway 407 ETR of $2.6 billion, or $14.74 per diluted share. The third quarter of
2019 also included an amortization of intangible assets related to
business combinations of $32.8
million (after taxes) and restructuring costs of
$15.2 million (after taxes).
Adjusted net income from E&C(1) in the third
quarter of 2019 increased to $165.3
million, or $0.94 per diluted
share, compared with $124.3 million,
or $0.71 per diluted share, for the
corresponding period in 2018. The higher adjusted net income from
E&C(1) in the third quarter of 2019 was mainly due
to the 35.5% higher Segment EBIT(7) contribution from
SNCL Engineering Services from E&C and the recognition of
$82.7 million ($0.47 per diluted share) in income tax recoveries
on capital losses, following the capital gain on disposal of a
10.01% stake in Highway 407 ETR, partially offset by a loss from
Resources projects in SNCL Projects.
SNCL Engineering Services
Revenue from SNCL Engineering Services, which includes EDPM,
Nuclear, Infrastructure Services, and Capital, totaled $1.6 billion for the third quarter of 2019, an
increase of 11.5%, compared to the third quarter of 2018, mainly
due to revenue increases of 43.4% and 6.2% in Infrastructure
Services and EDPM, respectively.
The SNCL Engineering Services business recorded strong Segment
EBIT(7) of $252.9 million,
an increase of 36.8%, compared to the third quarter of 2018, and
representing a 16.0% Segment EBIT ratio (11.7% excluding Capital),
due to increased profitability in all segments.
SNCL Projects
Revenue from SNCL Projects, which includes LSTK construction
contracting in Infrastructure and Resources segments, totaled
$850.6 million for the third quarter
of 2019, a decrease of 25.7% compared to the third quarter of 2018.
This was mainly due to the continuing backlog run off of certain
major LSTK construction projects, coupled with no new bidding by
the Company in this market segment.
SNCL Projects recorded a negative Segment EBIT(7)
totaling $45.0 million in the third
quarter of 2019. This was mainly due to three factors; unfavorable
reforecasts on certain Resources LSTK construction projects,
continuing underperformance of the Oil & Gas production and
processing facilities, and overhead costs that are in the midst of
being right-sized to align with a lower level of activity.
Backlog and Bookings
The Company's backlog totaled $15.6
billion as at September 30,
2019, 3.1% higher than at the end of September 2018. The backlog for SNCL Engineering
Services increased by 9.8% to $11.4
billion, while SNCL Projects backlog continues to decrease,
as a result of the Company's decision to cease bidding on LSTK
construction contracts. SNC Engineering Services total bookings for
the third quarter of 2019 amounted to $1.8
billion. Contracts bookings for SNCL Engineering Services
amounted to $5.5 billion for the
first nine months of 2019, representing a 1.2 book-to-bill ratio,
with $2.8 billion of bookings in the
EDPM segment and $2.1 billion in the
Infrastructure Services segment.
LSTK Construction Projects Update
The Company continued to run off the LSTK construction projects
in its SNCL Projects backlog, which totaled $3.2 billion at the end of the third quarter of
2019, down from $3.4 billion as at
June 30, 2019. Most of this backlog
represents light rail transit systems projects for which the
Company has a long track record of executing successfully. The
Company expects to complete most of its remaining LSTK construction
projects by the end of 2021.
Financial Position and Cash Flows
The Company continues to strengthen its balance sheet, using the
$2.9 billion in net proceeds from the
sale of 10.01% of the shares of Highway 407 ETR to repay debt and
deleverage. The Company's revolving facility was repaid, along with
$600 million of its CDPQ Loan and its
$300 million unsecured bridge
facility. As of September 30, 2019,
the Company had $938.9 million of
cash and cash equivalents, $1.2
billion of recourse debt and $0.4
billion of limited recourse debt, as well as $2.5 billion in unused capacity under its
$2.6 billion committed revolving
credit facility.
As at September 30, 2019, the net
recourse debt to EBITDA ratio in accordance with the terms of the
Company's Credit Agreement, as amended, was 3.4x.
Quarterly Dividend
The Board of Directors today declared a cash dividend of
$0.02 per share, payable on
November 28, 2019, to shareholders of
record on November 14, 2019. This
dividend is an "eligible dividend" for income tax purposes.
Third Quarter 2019 Earnings Conference Call /
Webcast
SNC-Lavalin will hold a conference call today at 8:30 a.m. (Eastern Daylight Time) to review
results for its third quarter. A live audio webcast of the
conference call and an accompanying slide presentation will be
available at www.investors.snclavalin.com. The call will
also be accessible by telephone, please dial toll free at 1 888 204
4368 in North America, 647 484
0478 in Toronto, 514 669 6113 in
Montreal, or 080 0358 6377 in the
United Kingdom. A recording 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 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 think beyond engineering. Our teams
provide comprehensive end-to-end project solutions – including
capital investment, consulting, design, engineering, construction
management, sustaining capital and operations and maintenance – to
clients across the EDPM (engineering, design and project
management), Infrastructure, Nuclear, and Resources
businesses. www.snclavalin.com
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 EBITDA from E&C and Segment EBIT.
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.
(1) Adjusted net income (loss) from
E&C is defined as net income (loss) attributable to SNC-Lavalin
shareholders from E&C, excluding charges related to
restructuring, right-sizing and other, acquisition-related costs
and integration costs, as well as amortization of intangible assets
related to business combinations, impairment of goodwill,
impairment of intangible assets related to business combinations,
the net expense for the 2012 class action lawsuits settlement and
related legal costs, the GMP equalization expense, the gains
(losses) on disposals of E&C businesses, the impact of U.S.
corporate tax reform and the incremental financing costs
related to the amendments to the CDPQ loan and other E&C
financing arrangements in connection with the sale of 10.01% of the
shares of Highway 407 ETR. E&C is defined in the
Company's 2018 financial statements and Management's Discussion and
Analysis. The term "Adjusted net income (loss) from E&C" does
not have any standardized meaning as prescribed by 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 (loss) 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 charges related to restructuring, right
sizing and other, and 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 net income
is defined as the adjusted net income (loss) from E&C plus the
adjusted net income from Capital.
(6) Adjusted consolidated diluted EPS
is defined as the adjusted net income (loss) from E&C plus the
adjusted net income from Capital divided by the diluted weighted
average number of outstanding shares for the period.
(7) Segment EBIT consists of revenues
less i) direct cost of activities, ii) directly related selling,
general and administrative expenses, and iii) corporate selling,
general and administrative expenses that are allocated to segments.
Expenses that are not allocated to the Company's segments include:
certain corporate selling, general and administrative expenses that
are not directly related to projects or segments, impairment loss
arising from expected credit losses, gain (loss) arising on
financial assets (liabilities) at fair value through profit or
loss, restructuring costs, impairment of goodwill, impairment of
intangible assets related to business combinations,
acquisition-related costs and integration costs, amortization of
intangible assets related to business combinations, the net expense
for the 2012 class action lawsuits settlement and related legal
costs, and the GMP equalization expense, as well as gains (losses)
on disposals of E&C businesses and Capital investments. 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.
(8) Adjusted EBITDA from E&C 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, the net expense
for the 2012 class action lawsuits settlement and related legal
costs, the GMP equalization expense, as well as the gains (losses)
on disposals of E&C businesses. The term "Adjusted EBITDA 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.
SNC-Lavalin
Financial Summary
|
|
|
|
(in thousands of
dollars, unless otherwise indicated)
|
Third
Quarter
|
Nine months
ended
September 30
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Revenues
|
|
|
|
|
From E&C-SNCL
Engineering Services
|
1,501,937
|
1,352,682
|
4,443,700
|
4,018,806
|
From E&C-SNCL
Projects
|
850,622
|
1,144,137
|
2,409,306
|
3,315,130
|
From
Capital
|
79,604
|
66,171
|
226,527
|
187,567
|
|
2,432,163
|
2,562,990
|
7,079,533
|
7,521,503
|
|
|
|
|
|
Net income (loss)
attributable to SNC-Lavalin shareholders
|
|
|
|
|
From
E&C
|
116,910
|
76,585
|
(2,134,217)
|
91,317
|
From
Capital
|
2,639,804
|
44,158
|
2,755,306
|
190,509
|
|
2,756,714
|
120,743
|
621,089
|
281,826
|
|
|
|
|
|
Diluted EPS
($)
|
|
|
|
|
From
E&C
|
0.67
|
0.44
|
(12.16)
|
0.52
|
From
Capital
|
15.04
|
0.25
|
15.69
|
1.08
|
|
15.70
|
0.69
|
3.54
|
1.60
|
|
|
|
|
|
Adjusted net
income (loss) attributable to SNC-Lavalin
shareholders
|
|
|
|
|
From
E&C(1)
|
165,322
|
124,251
|
(149,392)
|
327,265
|
From
Capital(3)
|
52,723
|
44,159
|
170,113
|
132,105
|
|
218,045
|
168,410
|
20,721
|
459,370
|
|
|
|
|
|
Adjusted diluted
EPS ($)
|
|
|
|
|
From
E&C(2)
|
0.94
|
0.71
|
(0.85)
|
1.86
|
From
Capital(4)
|
0.30
|
0.25
|
0.97
|
0.75
|
|
1.24
|
0.96
|
0.12
|
2.62
|
|
|
|
|
|
Adjusted EBITDA
from E&C* (8)
|
184,892
|
223,416
|
112,315
|
590,456
|
Adjusted EBITDA
from E&C margin
|
7.9%
|
8.9%
|
1.6%
|
8.1%
|
|
|
|
|
|
Backlog
|
|
|
|
|
From SNCL Engineering
Services
|
|
|
11,416,000
|
10,401,600
|
From SNCL
Projects
|
|
|
4,216,700
|
4,754,500
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
938,911
|
735,915
|
|
|
|
|
|
Recourse and
limited recourse debt
|
|
|
1,572,352
|
3,202,295
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
* The Company's
2019 financial results incorporate the non-cash impact of IFRS 16,
Leases ("IFRS 16"). Financial results for 2018 were not restated
for the new accounting standard. If the Company excluded the
adoption of IFRS 16, adjusted E&C EBITDA for the nine month
period ended September 30, 2019 would have been approximately $97
million more negative ($33 million for the third quarter of 2019),
and the net financial expenses would have been $17 million lower
for the nine month period ended September 30, 2019 ($6 million for
the third quarter of 2019), mainly offset by a lower EBIT for a
similar amount.
|
Reconciliation
of IFRS Net Income (loss) as Reported to Adjusted Net Income
(loss)
|
|
|
|
|
Third
Quarter
2019
|
Nine months
ended
September 30,
2019
|
|
E&C
|
Capital
|
Total
|
E&C
|
Capital
|
Total
|
(In
M$)
|
|
|
|
|
|
|
Net Income (Loss)
(IFRS)
|
116.9
|
2,639.8
|
2,756.7
|
(2,134.2)
|
2,755.3
|
621.1
|
Impairment of
goodwill
|
-
|
-
|
-
|
1,720.9
|
-
|
1,720.9
|
Impairment of
intangible assets related to business combinations
|
-
|
-
|
-
|
60.1
|
-
|
60.1
|
Amortization of
intangible assets related to business combinations
|
32.8
|
-
|
32.8
|
116.0
|
-
|
116.0
|
Restructuring
costs
|
15.2
|
0.7
|
15.9
|
54.4
|
2.5
|
56.8
|
Financing costs
related to the agreement to sell shares of Highway 407
ETR
|
-
|
-
|
-
|
27.4
|
-
|
27.4
|
Acquisition-related
costs and integration costs
|
0.4
|
-
|
0.4
|
5.9
|
-
|
5.9
|
Loss from adjustment
on disposals of E&C businesses
|
-
|
-
|
-
|
0.2
|
-
|
0.2
|
Gain on disposal of a
Capital investment
|
-
|
(2,587.8)
|
(2,587.8)
|
-
|
(2,587.8)
|
(2,587.8)
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) (non-IFRS)
|
165.3
|
52.7
|
218.0
|
(149.4)
|
170.1
|
20.7
|
|
|
|
|
|
|
|
(in
$)
|
|
|
|
|
|
|
Diluted EPS
(IFRS)
|
0.67
|
15.04
|
15.70
|
(12.16)
|
15.69
|
3.54
|
Impairment of
goodwill
|
-
|
-
|
-
|
9.80
|
-
|
9.80
|
Impairment of
intangible assets related to business combinations
|
-
|
-
|
-
|
0.34
|
-
|
0.34
|
Amortization of
intangible assets related to business combinations
|
0.19
|
-
|
0.19
|
0.66
|
-
|
0.66
|
Restructuring
costs
|
0.09
|
0.00
|
0.09
|
0.31
|
0.01
|
0.32
|
Financing costs
related to the agreement to sell shares of Highway 407
ETR
|
-
|
-
|
-
|
0.16
|
-
|
0.16
|
Acquisition-related
costs and integration costs
|
0.00
|
-
|
0.00
|
0.03
|
-
|
0.03
|
Loss from adjustment
on disposals of E&C businesses
|
-
|
-
|
-
|
0.00
|
-
|
0.00
|
Gain on disposal of a
Capital investment
|
-
|
(14.74)
|
(14.74)
|
-
|
(14.74)
|
(14.74)
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
(non-IFRS)
|
0.94
|
0.30
|
1.24
|
(0.85)
|
0.97
|
0.12
|
|
|
|
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
|
|
|
Third
Quarter
2018
|
Nine months
ended
September 30,
2018
|
|
E&C
|
Capital
|
Total
|
E&C
|
Capital
|
Total
|
(In
M$)
|
|
|
|
|
|
|
Net Income
(IFRS)
|
76.6
|
44.2
|
120.7
|
91.3
|
190.5
|
281.8
|
Net charges related
to restructuring & right-sizing plan and other
|
2.2
|
-
|
2.2
|
10.2*
|
-
|
10.2
|
Acquisition-related
costs and integration costs
|
8.1
|
-
|
8.1
|
26.8
|
-
|
26.8
|
Amortization of
intangible assets related to business combinations
|
37.6
|
-
|
37.6
|
128.2
|
-
|
128.2
|
Net loss (gain) on
disposals of E&C business and Capital investments
|
(0.1)
|
-
|
(0.1)
|
0.2
|
(58.4)
|
(58.2)
|
Net expense for the
2012 class action lawsuits settlement & related legal
costs
|
-
|
-
|
-
|
64.5
|
-
|
64.5
|
Impact of U.S.
corporate tax reform
|
(0.2)
|
-
|
(0.2)
|
6.0
|
-
|
6.0
|
|
|
|
|
|
|
|
Adjusted Net Income
(non-IFRS)
|
124.3
|
44.2
|
168.4
|
327.3
|
132.1
|
459.4
|
|
|
|
|
|
|
|
(in
$)
|
|
|
|
|
|
|
Diluted EPS
(IFRS)
|
0.44
|
0.25
|
0.69
|
0.52
|
1.08
|
1.60
|
Net charges related
to restructuring & right-sizing plan and other
|
0.01
|
-
|
0.01
|
0.06
|
-
|
0.06
|
Acquisition-related
costs and integration costs
|
0.05
|
-
|
0.05
|
0.15
|
-
|
0.15
|
Amortization of
intangible assets related to business combinations
|
0.21
|
-
|
0.21
|
0.73
|
-
|
0.73
|
Net loss (gain) on
disposals of E&C business and Capital investments
|
(0.00)
|
-
|
(0.00)
|
0.00
|
(0.33)
|
(0.33)
|
Net expense for the
2012 class action lawsuits settlement & related legal
costs
|
-
|
-
|
-
|
0.37
|
-
|
0.37
|
Impact of U.S.
corporate tax reform
|
(0.00)
|
-
|
(0.00)
|
0.03
|
-
|
0.03
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
(non-IFRS)
|
0.71
|
0.25
|
0.96
|
1.86
|
0.75
|
2.62
|
|
|
|
|
|
|
|
Note that certain
totals and subtotals may not reconcile due to
rounding
|
|
*This amount
included $6.9 million ($5.6 million after taxes) of net 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.
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 2018 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: (a)
outcome of pending and future claims and litigation; (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 as well as employee, agent or partner
misconduct or failure to comply with anti-bribery and other
government laws and regulations; (d) reputation of the Company; (e)
fixed-price contracts or the Company's failure to meet contractual
schedule or performance requirements or to execute projects
efficiently; (f) contract awards and timing; (g) remaining
performance obligations; (h) being a provider of services to
government agencies; (i) international operations; (j) Brexit; (k)
ownership interests in Capital investments; (l) dependence on third
parties; (m) joint ventures and partnerships; (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) insurance coverage; (r)
health and safety; (s) qualified personnel; (t) work stoppages,
union negotiations and other labour matters; (u) information
systems and data; (v) acquisitions or other investment; (w)
divestitures and the sale of significant assets; * liquidity and
financial position; (y) indebtedness; (z) security under the
SNC-Lavalin Highway Holdings Loan; (aa) dependence on subsidiaries
to help repay indebtedness; (bb) dividends; (cc) post-employment
benefit obligations, including pension-related obligations; (dd)
working capital requirements; (ee) collection from customers; (ff)
impairment of goodwill and other assets; (gg) global economic
conditions; (hh) fluctuations in commodity prices; (ii) inherent
limitations to the Company's control framework; (jj) environmental
laws and regulations; (kk) results of the new 2019 strategic
direction coupled with a corporate reorganization; and (ll) impact
of operating results and level of indebtedness on financial
situation.
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 2018 MD&A, and as updated in the
first, second and third quarter 2019 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.
The Company's unaudited condensed consolidated interim financial
statements for the nine-month period ended September 30, 2019, together with its
Management's Discussion and Analysis ("MD&A") for the
corresponding period, can be accessed under the Company's profile
on www.sedar.com and on the Company's website at
www.snclavalin.com.
SOURCE SNC-Lavalin