SNC-Lavalin announces $382 million in net income attributable to shareholders for 2017, a 50% increase compared to 2016
-- 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 17(th) 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 ($)
From
E&C(2) 0.78 0.49 2.15 1.51
From
Capital(4) 0.20 0.28 1.05 1.07
----------- ---- ---- ---- ----
0.98 0.77 3.20 2.58
---- ---- ---- ----
Adjusted
E&C
EBITDA(7) 245,863 107,971 629,021 371,880
Adjusted
E&C
EBITDA
margin 8.6% 5.0% 6.9% 4.5%
-------- --- --- --- ---
Revenue
backlog(8) 10,406,400 10,677,400
----------- ---------- ----------
Cash and
cash
equivalents 706,531 1,055,484
------------ ------- ---------
Recourse
long-
term debt 1,345,539 349,369
---------- --------- -------
Reconciliation of IFRS Net Income as Reported to Adjusted Net Income
Net income, as reported Net charges (reversal) related Acquisition Net gain on disposals of E&C Impact of U.S. corporate Net income, adjusted (Non-
to the restructuring & right- business, head office tax reform IFRS)
sizing plan and other building, and Capital
investments
----------------------- ------------------------------- ----------- ------------------------------ ------------------------- ---------------------------
Acquisition-related costs and Amortization of intangible
integration costs assets related to business
combinations
------------------------------ --------------------------
Fourth Quarter 2017
In M$
-----
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 25.4(2) 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.
(2)This amount includes $5.1
million ($5.3 million after
taxes) of net charges which did
not meet the restructuring costs
definition in accordance with
IFRS.
(3)Tax adjustments on previously
recorded gains.
4As a result of the U.S. corporate
tax reform, the Company recorded a
non-cash charge reflecting the
estimated net impact of
revaluation of its U.S. deferred
tax assets and deferred tax
liabilities.
Net income (loss), as Net charges related to the Acquisition Net loss (gain) on disposals Net income, adjusted (Non-
reported restructuring & right-sizing of E&C business and Capital IFRS)
plan and other investments
---------------------- ----------------------------- ----------- ------------------------------ --------------------------
Acquisition-related costs and Amortization of intangible
integration costs assets related to business
combinations
----------------------------- --------------------------
Fourth Quarter 2016
In M$
-----
E&C (38.4) 53.9(1) 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 77.6(2) 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
---- ---- ---- ---- ----- ----
(1)This 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.
(2)This 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; (x) 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
