Bullboard - Stock Discussion Forum WSP Global Inc T.WSP

Alternate Symbol(s): WSPOF

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WSP Global Inc. is a Canada-based professional services firm. The Company provides strategic advisory, engineering and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water and mining sectors. It also offers highly specialized services in project and program delivery and advisory services. Its segments include Canada... see more

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TSX:WSP - Post Discussion

WSP Global Inc > TD

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Post by retiredcf on Aug 09, 2023 8:29am

TD

Some potential here for them to increase their target. GLTA

WSP Global Inc.

(WSP-T) C$178.44

Q2/23 First Look Event

August 9, 2023

Recommendation: BUY

Risk: MEDIUM

12-Month Target Price: C$205.00

12-Month Dividend (Est.): C$1.50

12-Month Total Return: 15.7%

WSP reported Q2/23 adj. EBITDA that was ~5% above consensus. The outperformance was driven by better-than-expected net revenues (organic net revenue growth was strong at +9.3% y/y).
Meanwhile, WSP increased its full-year 2023 guidance for net revenue, organic growth, and adjusted EBITDA (new $1.915bln adj. EBITDA guidance midpoint is ~3.4% above pre-quarter consensus). Further, organic order intake in Q2/23 of $4.0bln was a quarterly record.
Conference call at 8:00 a.m. ET (link to webcast).

Impact: SLIGHTLY POSITIVE

We view Q2/23 as an all-around solid quarter. We are encouraged by Q2/23's strong organic net revenue growth and better-than-expected adj. EBITDA, along with the increase in full-year 2023 guidance, which suggests continued strong performance in H2/23.
Q2/23 adj. EBITDA was $461.6mm vs. consensus of $439.8mm (per S&P Capital IQ) and our $447.6mm estimate. Adj. EPS was $1.56 vs. consensus/TD at $1.50/$1.48.
Adjusted EBITDA margin was 16.9% (+20bps y/y) vs. consensus/TD at 17.0%/17.2%.
Net revenue was $2.74bln (+29.8% y/y) vs. consensus of $2.59bln and TD at $2.60bln. Q2/23 organic net revenue growth was +9.3% y/y. This compares favourably to our estimate of +6.7% y/y and represents a slight acceleration from the +8.6% y/y organic growth reported in Q1/23.

Organic growth was broad-based, with all geographic segments generating positive y/y organic growth in Q2/23. Organic growth was: APAC +14.9%, Americas +11.3%, Canada +6.2%, and EMEIA +5.8%.

Acquisitions contributed net revenue growth of +16.9% y/y; f/x was a tailwind of 3.6% y/y.

Backlog totaled a record $14.3bln, +3.5% q/q and +25.0% y/y. Backlog organic growth was +1.7% y/y.
Net debt to adj. EBITDA was 2.0x at Q2/23 (vs. 1.8x at Q1/23); up q/q due to higher net debt used to finance recent acquisitions.
Increased 2023 Financial Guidance:
WSP increased its net revenue outlook to a range of $10.7bln–$11.0bln from $10.0bln–$10.6bln, previously. Similarly, management increased its adj. EBITDA guidance to $1,900mm–$1,930mm from $1,760mm–$1,840mm, previously. The new implied midpoint adj. EBITDA margin is 17.65% (implies y/ y margin expansion of ~55bps) vs. management's prior implied midpoint margin guidance of 17.5%. WSP now expects full-year 2023 organic net revenue growth to be 6%–9%, up from 3%–6%, previously.