WSP Global Inc T.WSP

Alternate Symbol(s): WSPOF

Industrials Conglomerates

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, Americas (United States and Latin America), Europe, Middle East, India and Africa (EMEIA), and Asia Pacific, comprising Asia, Australia and New Zealand (APAC). It provides comprehensive technical support to the renewable energy industry. Its wind energy specialists help clients in both the onshore and offshore wind energy sectors develop systems. Its services include identification of prospective wind farm sites; resource assessment of wind power stations in high-wind-speed environments; wind power assessment studies and grid impact studies, and electrical interconnection studies.

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Post by retiredcfon Nov 08, 2024 9:19am

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Post# 36302892

TD 2

Q3/24: OVERALL SOLID QUARTER MARKED BY STRONG ORGANIC GROWTH & MARGIN GAINS

THE TD COWEN INSIGHT

We view Q3/24 as another all-round solid quarter for WSP. Organic net revenue growth was strong at +7.2% y/y, adjusted EBITDA margin was up 40bps y/y, and backlog reached a new record level. On the whole, we see Q3/24's release as aligned with and supportive of our constructive stance on the name.

Event

WSP reported Q3/24 adj. EBITDA that was essentially in line with consensus.

Meanwhile, WSP modestly raised its full-year 2024 guidance for net revenue and adjusted EBITDA to reflect the recently completed acquisition of Power Engineers (closed October 1).

Q3/24 adjusted EBITDA was $585.4mm vs. consensus of $582.1mm and our $588.2mm estimate. Adjusted EPS was $2.24 vs. consensus/TD at $2.23/$2.31. Adjusted EBITDA margin was 19.5% (+40bps y/y) vs. consensus/TD at 19.5%/19.7%.

Net revenue was $2.997bln (+9.6% y/y) vs. consensus of $2.980bln and TD at $2.990bln. Q3/24 organic net revenue growth was +7.2% y/y vs. our +7.0% y/y estimate. Organic y/y growth by geographic segment was: Americas +11.0%, Canada +7.8%, EMEIA +6.0%, and APAC +1.0%. Acquisitions contributed net revenue growth of +1.1% y/y, the impact of divestitures was -1.0% y/y, and the impact of f/x was +2.3% y/y.

Backlog totalled a record $14.8bln, +0.8% q/q and +3.9% y/y. Backlog organic growth was +2.0% y/y. Pro forma the Power Engineers acquisition, net debt to adj. EBITDA was ~2.0x.

2024 Guidance Increased (reflects Power Engineers acquisition): WSP increased its net revenue outlook to a range of $11.8bln–$12.1bln (pre-quarter consensus at $12.0bln) from $11.4bln–$11.8bln, previously. Similarly, management increased its adjusted EBITDA guidance range to $2.155bln–$2.175bln (pre-quarter consensus at $2.175bln) from $2.10bln–$2.14bln, previously. The new implied midpoint adjusted EBITDA margin guidance of 18.1% (vs. 18.3%, previously) is in line with pre-quarter consensus and implies y/y margin expansion of ~50bps.

We have made various adjustments to our forecast; however, our 2024 and 2025 adj. EBITDA estimates are little changed (down 2% and 1%, respectively). Our $300.00 target price is unchanged (continues to be based on 17.0x our 2025E adj. EBITDA).