SNC-Lavalin Reports Third Quarter 2022 Results

MONTREAL, Nov. 4, 2022

Q3 2022 Financial Highlights 
(All results reflect comparisons to prior-year period of Q3 2021, except otherwise indicated)

• SNCL Services revenue increased 8.2% to $1.6 billion, or 12.6% on an organic revenue growth⁽¹⁾⁽⁵⁾basis
• Strong organic revenue growth⁽¹⁾⁽⁵⁾ in the Engineering Services and O&M segments
• SNCL Services Segment Adjusted EBIT of $152.6 million, representing a 9.3% margin
• SNCL Services backlog as at September 30, 2022, totaled $11.7 billion
• Engineering Services segment backlog stood at a new record high of $4.6 billion, up 20.3%, with a further strong increase in the United States
• LSTK Projects Segment Adjusted EBIT of negative $43.9 million
• Management remains confident that the cumulative potential financial risks to complete the LSTK projects should be contained within the previously disclosed $300 million envelope
• LSTK Projects backlog reduced by $494.5 million year over year and $164.5 million sequentially from Q2 2022 to $663.9 million as at September 30, 2022
• The two LSTK Ontario projects remain on track to be largely physically complete by end of the year
• Net income from continuing operations attributable to SNC-Lavalin shareholders totaled $44.7 million, or $0.25 per diluted share, compared to net income of $18.6 million, or $0.11 per diluted share in Q3 2021
• Net cash used for operating activities of $158.7 million, mainly due to operating cash outflows needed to complete the remaining LSTK Projects

2022 Outlook

• Given robust backlog and strong performance year-to-date in Engineering Services, management is raising its SNCL Services organic revenue growth⁽¹⁾⁽⁵⁾ outlook for full year 2022 vs 2021 to between 5% and 7% (previously between 4% and 6%)
• Q4 2021 included a $93 million favorable outcome from an arbitration decision that is not expected to repeat in Q4 2022
• Tightening the range on SNCL Services Segment Adjusted EBIT to segment revenue ratio outlook for full year 2022 to between 8.5% and 9.0% (previously between 8% and 10%)
• Updating 2022 net cash from operating activities outlook to approximately negative $300 million (previously between negative $50 million and negative $150 million), primarily driven by the need to fund higher costs to complete the LSTK projects prior to receiving potential claim recoveries
• Reaffirming all other Company's financial outlook metrics for full year 2022

MONTREAL, Nov. 4, 2022 /CNW Telbec/ - SNC-Lavalin Group Inc. (TSX: SNC), a fully integrated professional services and project management company with offices around the world, today announced its financial results for the third quarter ended September 30, 2022.

"I am pleased with our third quarter results which demonstrate our ability to execute on our stated strategy. Our SNCL Services business produced its sixth-consecutive quarter of positive year-over-year revenue growth, while our Engineering Services segment achieved a second consecutive quarter of record high backlog, driven by continued growth in the United States. Recent performance highlights our ability to capture market share in our core geographies, which continue to demonstrate resilient growth, a key pillar of our Pivoting to Growth strategy," said Ian L. Edwards, President and CEO of SNC-Lavalin Group Inc. "We were also successful in further decreasing our LSTK backlog in the quarter, and as we push towards completion, we remain confident with our previously disclosed financial risks estimates. Our third quarter results highlight the long-term runway for SNC-Lavalin, mainly driven by our unique end-to-end capabilities to support the public sector's focus on sustainable infrastructure and long-term energy solutions across the globe, as we strive to engineer a better future for our planet and its people."

Third Quarter Financial Results

Professional Services & Project Management are collectively referred to as "PS&PM" to distinguish them from "Capital" activities. PS&PM groups together five of the Company's segments, namely Engineering Services, Nuclear, Linxon, Operation & Maintenance ("O&M"), and Lump-Sum Turnkey ("LSTK") Projects, while Capital is its own reportable segment and separate from PS&PM.