SNC-Lavalin Reports First Quarter 2020 Results

SNCL Engineering Services delivers solid results in first quarter; Company continuing to take action in response to COVID-19 impacts  

MONTREAL, May 7, 2020 /CNW Telbec/ - SNC-Lavalin Group Inc. (TSX: SNC) today announced its results for the first quarter ended March 31, 2020.

2020 First Quarter Highlights

• Continued progress on new strategic direction in Q1:
• SNCL Engineering Services revenue and EBIT improved, generating good cash flows.
• Lump-sum turnkey ("LSTK") construction projects backlog continued to reduce.
• Restructuring actions in underperforming Resources segment ongoing.
• Liquidity and cash flow remain strong: 
• Total cash flow from operations was $23 million compared to $(249) million in Q1 2019.
• SNCL Engineering Services generated operating cash flow of $142 million.
• Cash and cash equivalents of $2.1 billion; net recourse debt to EBITDA ratio was 2.3x. 
• SNCL Engineering Services, excluding Capital, delivers a solid first quarter:
• Segment EBIT⁽⁷⁾ increased by 10.7% to $111.5 million.
• Revenue increased by 6.4% to $1,535 million; Backlog at $11.0 billion.
• Capital results in line with expectation:
• Segment EBIT⁽⁷⁾ decreased by 35.7% to $42 million, due to lower dividends received from reduced interest in Highway 407 ETR.
• SNCL Projects LSTK runoff continued; Weak Resources results being addressed:
• LSTK construction contracts backlog reduced to $2.9 billion, with Infrastructure EPC Projects at $2.6 billion and Resources at $0.3 billion.
• Infrastructure EPC Projects Segment EBIT⁽⁷⁾ at $3.8 million; Resources Segment EBIT⁽⁷⁾ at $(58.0) million.
• IFRS net loss attributable to SNC-Lavalin shareholders:
• Net loss attributable to SNC‑Lavalin shareholders was $66.0 million, or $0.38 per diluted share, including a fair value revaluation of Highway 407 ETR contingent consideration receivable of $49.6 million (after taxes).

CEO Commentary

"Our number one priority in this challenging time for our customers and communities, is to ensure our employees are safe and that we continue to service our clients. I can't thank our employees enough for their resilience and support," said Ian L. Edwards, President and CEO, SNC-Lavalin Group Inc. "The business performed well in the first quarter against a challenging external environment. The early actions we took at the end of the first quarter to reduce costs and create operational and financial flexibility are allowing us to manage effectively the initial impacts of COVID-19, and the company stands ready to take additional action if needed."

First Quarter Financial Highlights

Note that there has been a change in terminology for the reporting of financial information for Engineering & Construction ("E&C"), which has been renamed Professional Services & Project Management ("PS&PM") to better reflect the Company's strategic direction and activities.

(in thousands of dollars, unless otherwise indicated)	First Quarter
	2020	2019
Total revenue	2,229,484	2,363,193
Net loss attributable to SNC-Lavalin shareholders	(65,964)	(17,305)
Diluted EPS ($)	($0.38)	($0.10)
SNCL Engineering Services
Excluding Capital
Revenue	1,534,769	1,442,011
Segment EBIT^(7)	111,532	100,780
Segment EBIT ratio (%)	7.3%	7.0%
Backlog	10,965,300	10,702,400
Capital
Revenue	46,242	72,177
Segment EBIT^(7)	42,028	65,399
Backlog	171,900	194,100
SNCL Projects
Revenue	648,473	849,005
Segment EBIT^(7)	(54,246)	(67,486)
Segment EBIT ratio (%)	(8.4%)	(7.9%)
Backlog	3,885,400	4,944,200
Cash flow from operations	23,354	(248,855)
Adjusted EBITDA from PS&PM^(8)	84,993	79,206
Adjusted EBITDA from PS&PM margin	3.9%	3.5%
Adjusted diluted EPS from PS&PM^(2)($)	($0.02)	($0.08)

First Quarter Results

The Company reported an IFRS net loss attributable to SNC-Lavalin shareholders of $66.0 million, or $0.38 per diluted share in Q1 2020, compared with a loss of $17.3 million, or $0.10 per diluted share, for the corresponding period in 2019. The increase in the net loss attributable to SNC-Lavalin shareholders was mainly due to a fair value revaluation of Highway 407 ETR contingent consideration receivable of $57.2 million ($49.6 million after taxes).

Adjusted net loss from PS&PM⁽¹⁾ in Q1 2020 was $3.9 million, or $0.02 per diluted share, compared with an adjusted net loss from PS&PM⁽¹⁾ of $14.9 million, or $0.08 per diluted share, for the corresponding period in 2019.

SNCL Engineering Services

SNCL Engineering Services revenue and EBIT improved compared to the prior year period, and the diversified nature of our services portfolio is proving the resiliency of our strategy in the face of the COVID-19 pandemic. SNCL Engineering Services also generated $143 million of cash from operations in Q1 2020.

Revenue from SNCL Engineering Services, excluding Capital, totaled $1,535 million in Q1 2020, a 6.4% increase compared to Q1 2019 and Segment EBIT totaled $111.5 million, representing a 10.7% increase. Decreases in revenue and Segment EBIT⁽⁷⁾ in the EDPM segment, mainly due to a reduction in business in the Middle East and COVID-19 impacts in Asia Pacific, were more than offset by Nuclear, which had a strong performance across its core markets, and Infrastructure Services, with Linxon continuing to expand its activities into further geographies.  

Since the onset of the COVID-19 pandemic, most of SNCL Engineering Services personnel have been able to continue servicing clients and win work from home-based locations, including the recently announced joint venture contract to provide design expertise to help deliver up to ten, 100-bed Mobile Health Units in Canada. The Company continues to actively offer its services and capabilities to customers, as well as supporting governments. While the Company has begun to see a slowdown in new work and backlog replenishment in the last few weeks, which will impact gross margins in Q2 2020, the actions that management took to create flexibility in the Company's cost base are proving effective. The scale and impact of the slowdown on the business remains uncertain and difficult to quantify.

EDPM Segment EBIT⁽⁷⁾  fell to $57.5 million in Q1 2020, compared to $80.2 million in Q1 2019, primarily due to the impact of lower revenues. The EDPM business has slowed in Q2 2020 as the impact of COVID-19 has spread to the business's core markets of Canada, the UK, and the US.

Our Nuclear and Infrastructure Services segments are proving to be resilient in the current COVID-19 environment, due to a combination of their services to industry being considered essential services, and the nature of their long-term contracts. As a result, the Company expects smaller revenue reductions and project delays than other engineering services in Q2.  

The Nuclear and Infrastructure Services Segments EBIT⁽⁷⁾ increased to $54.0 million in Q1 2020, compared to $20.6 million in Q1 2019, driven by underlying growth in services and non-repeat of a one-off charge in Nuclear taken in the prior year.

The Capital Segment EBIT⁽⁷⁾ decreased by 35.7% to $42 million, due to lower dividends received from reduced interest in Highway 407 ETR. Excluding the Highway 407 ETR, the Capital segment businesses are primarily availability-based contracts and have not been significantly impacted by the COVID-19 pandemic. Highway 407 ETR has seen significant reductions in traffic volumes since March which are not expected to materially recover until current governmental restrictions are eased. Future quarterly dividend payments may also be negatively impacted depending on traffic volume levels.

SNCL Engineering Services backlog, excluding Capital, totaled $11.0 billion as at March 31, 2020, compared to $11.1 billion at the end of 2019. Total bookings for Q1 2020 amounted to $1.3 billion, representing a 0.9 book-to-bill ratio, with $0.9 billion of bookings in the EDPM segment.

"I am also very proud of how our company is stepping up to use our unique skills and capabilities to provide support to governments in the geographies we operate in, including the recently announced project to design and deliver up to ten, 100-bed mobile health units for the Canadian government's health preparedness efforts," added Ian L. Edwards, President and CEO, SNC-Lavalin Group Inc. "At the same time, we are focused on maintaining financial flexibility and operational capacity to be ready to take advantage of additional opportunities when governments deem it appropriate to ease restrictions and business improves."

SNCL Projects

In SNCL Projects, the LSTK construction projects backlog continued to reduce, and while Resources continued to underperform in the quarter, restructuring actions are ongoing.

Revenue from the SNCL Projects line of business, which includes LSTK construction contracting, totaled $648.5 million for Q1 2020, a decrease of 23.6% compared to Q1 2019. This was mainly due to the continuing backlog run-off of certain major LSTK construction projects, coupled with no new LSTK construction contract bidding by the Company.

SNCL Projects backlog continues to decrease and totaled $3.9 billion as at March 31, 2020, compared to $4.0 billion as at December 31, 2019. SNCL Projects backlog at the end of March 31, 2020 included $1.0 billion of reimbursable & engineering services contracts and $2.9 billion of LSTK construction contracts, split between Infrastructure EPC Projects with $2.6 billion, and Resources with $0.3 billion.

The Infrastructure EPC Projects segment delivered a Segment EBIT⁽⁷⁾ of $3.8 million in Q1 2020, compared to a negative Segment EBIT⁽⁷⁾ of $6.1 million in Q1 2019. Despite experiencing lower productivity since mid-March on some sites due to COVID-19, progress on reducing the LSTK backlog in Q1 was largely in line with our expectations. Q1 also saw revised contract amendments on certain projects that reduces completion risk while increasing backlog to recover, which resulted in a LSTK backlog outstanding of $2.6 billion, similar to the backlog outstanding at the end of 2019.

Of the Infrastructure LSTK construction projects, the REM and Husky projects are currently suspended, with REM scheduled to restart on May 11. With its joint venture partners, the Company moved quickly to suspend operations while maintaining the care and custody of the various project sites of both projects towards the end of Q1, as well as continuing with engineering design work where possible. The Eglinton and Trillium projects remain open but are being affected by revised working conditions due to COVID-19, which is impacting productivity.

The Resources segment recorded a negative Segment EBIT⁽⁷⁾ of $58.0 million in Q1 2020, mainly due to unfavorable LSTK project reforecasts and a cost base mis-aligned to the reduction in services revenue and backlog. The LSTK construction projects are still largely expected to be completed by the end of 2020, although restrictions on the ability to rotate personnel on and off project sites are having some impact on productivity, and therefore it is possible some project completion dates may be delayed into the first half of 2021. The LSTK backlog was reduced in Q1 from $0.4 billion to $0.3 billion, as progress on projects has generally seen only minor impacts related to COVID-19. In the Services business, actions to accelerate cost removal in the business in Q2 are underway, and non-core operations will be closed or sold. The Company completed the shutdown of Valerus in Q1 2020, non-core mid-stream oil and gas production and processing facilities based in Houston.

Financial Position and Liquidity

Reflecting the new strategic direction that places a priority on cash generating activities, the Company generated $23 million of cash flow from operations in Q1 2020, compared to a cash used from operations of $249 million in Q1 2019. The improvement over the prior year is primarily due to working capital efficiencies and timing, particularly in SNCL Engineering Services, which generated $142 million of cash flow from operations in Q1 2020.

The Company has a strong financial position and continues to focus on maximizing its financial flexibility for the second quarter and beyond. Management took early action in March to reduce costs and manage cashflow, including eliminating discretionary expenditures not required to support client delivery, freezing capital expenditures, and aligning the employee cost base in the second quarter for a potential reduction in revenues through salary reductions, reduced working hours and furloughs.

As a result of these measures, and other working capital initiatives, as at March 31, 2020, the Company had $2.1 billion of cash and cash equivalents, including the proceeds of $1.0 billion drawn on its revolving credit facility. The Company has an additional $1.0 billion available on its revolving credit facility should it so need and has been reviewing the availability of various announced government support programs. The Company has $2.2 billion of recourse debt, of which $0.3 billion is due for repayment in Q4 2020, with the remainder not due until 2021 and beyond, and $0.4 billion of limited recourse debt.

As at March 31, 2020, the net recourse debt to EBITDA ratio calculated in accordance with the terms of the Company's Credit Agreement was 2.3x, well below the required covenant level of 3.75x.

Quarterly Dividend

The Board of Directors today declared a cash dividend of $0.02 per share, unchanged from the previous quarter. The dividend is payable on June 4, 2020, to shareholders of record on May 21, 2020. This dividend is an "eligible dividend" for Canadian federal and provincial income tax purposes.

2020 Outlook

As indicated in the Company's press release dated March 27, 2020, the 2020 financial outlook that was provided by the Company on February 28, 2020 is no longer valid due to the consequences of the unprecedented and rapidly changing nature of the COVID-19 situation, and its impact on the Company's worldwide operations. The Company does not intend to provide any further outlook for 2020 at this time.

First Quarter 2020 Earnings Conference Call / Webcast

SNC-Lavalin will hold a conference call today at 9:30 a.m. EST to review results for its first quarter of 2020. 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 1 855 327 6838 in North America or dial 1 604 235 2082 outside North America. You can also use the following numbers: 416 915 3239 in Toronto, 514 375 0364 in Montreal, or 080 8101 2791 in the United Kingdom. A recording of the conference call and its transcript will be available on the Company's website within 24 hours following the call.

Annual Shareholders' Meeting / Webcast

SNC-Lavalin will also hold its Annual Shareholders' Meeting today at 11:00 a.m. EST on the Broadridge Virtual Shareholder Meeting platform via live audio webcast. The meeting will be held via live audio webcast online at www.virtualshareholdermeeting.com/SNCAF2020. For more information regarding this virtual event, please visit SNC-Lavalin's 2020 Annual Shareholders' Meeting dedicated web page at www.snclavalin.com/en/investors/agm-2020. 

About SNC-Lavalin

Founded in 1911, SNC-Lavalin is a fully integrated professional services and project management company with offices around the world. SNC-Lavalin connects people, technology and data to help shape and deliver world-leading concepts and projects, while offering comprehensive innovative solutions across the asset lifecycle. Our expertise is wide-ranging — consulting & advisory, intelligent networks & cybersecurity, design & engineering, procurement, project & construction management, operations & maintenance, decommissioning and sustaining capital – and delivered to clients in four strategic sectors: EDPM (engineering, design and project management), Infrastructure, Nuclear and Resources, supported by Capital. People. Drive. Results. 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 in this press release: Adjusted net income from PS&PM, Adjusted diluted EPS from PS&PM, Adjusted net income from Capital, Adjusted diluted EPS from Capital, Adjusted consolidated diluted EPS, EBITDA, Adjusted EBITDA from PS&PM and Segment EBIT. Additional details for these non-IFRS measures can be found below and in SNC-Lavalin's MD&A for the first quarter of 2020, filed with the securities regulatory authorities in Canada, available on SEDAR at www.sedar.com and on the  Company's website at www.snclavalin.com under the "Investors" section. 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 PS&PM is defined as net income (loss) attributable to SNC-Lavalin shareholders from PS&PM, excluding charges related to restructuring costs, 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 loss from adjustment on disposals of PS&PM businesses, the financing costs related to the agreement to sell shares of Highway 407 ETR, the federal charges settlement (PPSC), and the adjustment to provision for the Pyrrhotite Case litigation. PS&PM is defined in the Company's first quarter 2020 financial statements and Management's Discussion and Analysis.

⁽²⁾ Adjusted diluted EPS from PS&PM is defined as adjusted net income (loss) from PS&PM 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 costs, the gains on disposals of Capital Investments and the fair value revaluation of Highway 407 ETR contingent consideration receivable.

⁽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 PS&PM plus the adjusted net income from Capital.

⁽⁶⁾ Adjusted consolidated diluted EPS is defined as the adjusted net income (loss) from PS&PM 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 loss from adjustment on disposals of PS&PM businesses and gain on disposal of a Capital investment.

⁽⁸⁾ Adjusted EBITDA from PS&PM is defined herein as earnings from PS&PM before net financial expenses (income), income taxes, depreciation and amortization, and excludes charges related to restructuring costs, acquisition-related costs and integration costs, the loss from adjustment on disposals of PS&PM businesses, the federal charges settlement (PPSC) and the adjustment to provision for the Pyrrhotite Case litigation.

SNC-Lavalin Financial Summary
(in thousands of dollars, unless otherwise indicated)		First Quarter
		2020	2019
Revenues
SNCL Engineering Services, excluding Capital		1,534,769	1,442,011
Capital		46,242	72,177
SNCL Projects		648,473	849,005
		2,229,484	2,363,193
Net income (loss) attributable to SNC-Lavalin shareholders
From PS&PM		(45,926)	(67,355)
From Capital		(20,039)	50,050
		(65,964)	(17,305)
Diluted EPS ($)
From PS&PM		(0.26)	(0.38)
From Capital		(0.11)	0.28
		(0.38)	(0.10)
Adjusted net income (loss) attributable to SNC-Lavalin shareholders
From PS&PM^(1)		(3,918)	(14,913)
From Capital^(3)		29,589	51,782
		25,671	36,869
Adjusted diluted EPS ($)
From PS&PM^(2)		(0.02)	(0.08)
From Capital^(4)		0.17	0.29
		0.15	0.21
Adjusted EBITDA from PS&PM^(8)		84,993	79,206
Adjusted EBITDA from PS&PM margin		3.9%	3.5%
Backlog
SNCL Engineering Services, excluding Capital		10,965,300	10,702,400
Capital		171,900	194,100
SNCL Projects		3,885,400	4,944,200
		15,022,600	15,840,700
Cash and cash equivalents		2,102,324	614,850
Recourse and limited recourse debt		2,568,159	3,595,437
Note that certain totals and subtotals may not reconcile due to rounding

Reconciliation of IFRS Net Income (loss) as Reported to Adjusted Net Income (loss)
	First Quarter 2020			First Quarter 2019
	PS&PM	Capital	Total	PS&PM	Capital	Total
(in M$)
Net income (loss) attributable to SNC-Lavalin shareholders (IFRS)	(45.9)	(20.0)	(66.0)	(67.4)	50.1	(17.3)
Amortization of intangible assets related to business combinations	33.0	-	33.0	42.8	-	42.8
Restructuring costs	2.1	-	2.1	6.2	1.7	7.9
Fair value revaluation of Highway 407 ETR contingent consideration receivable^1	-	49.6	49.6	-	-	-
Acquisition-related costs and integration costs	-	-	-	3.4	-	3.4
Adjustment to provision for the Pyrrhotite Case litigation^2	7.0	-	7.0	-	-	-
Loss from adjustment on disposals of PS&PM businesses	-	-	-	0.1	-	0.1
Adjusted net income (loss) attributable to SNC-Lavalin shareholders (non-IFRS)	(3.9)	29.6	25.7	(14.9)	51.8	36.9
(in $)
Diluted EPS (IFRS)	(0.26)	(0.11)	(0.38)	(0.38)	0.28	(0.10)
Amortization of intangible assets related to business combinations	0.19	-	0.19	0.24	-	0.24
Restructuring costs	0.01	-	0.01	0.04	0.01	0.05
Fair value revaluation of Highway 407 ETR contingent consideration receivable	-	0.28	0.28	-	-	-
Acquisition-related costs and integration costs	-	-	-	0.02	-	0.02
Adjustment to provision for the Pyrrhotite Case litigation	0.04	-	0.04	-	-	-
Loss from adjustment on disposals of PS&PM businesses	-	-	-	0.00	-	0.00
Adjusted Diluted EPS (non-IFRS)	(0.02)	0.17	0.15	(0.08)	0.29	0.21
Note that certain totals and subtotals may not reconcile due to rounding
^1 included in "Gain (loss) arising on financial assets (liabilities) at fair value through profit or loss"
^2included in "Corporate selling, general and administrative expenses"

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; ii) business and management strategies and the expansion and growth of the Company's operations; and iii) the expected impacts of the COVID-19 pandemic on the business and its operating and reportable segments. 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 2019 annual MD&A (particularly in the sections entitled "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" and "How We Analyze and Report our Results") and as updated in the first quarter 2020 MD&A. 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) impacts of the COVID-19 pandemic (b) results of the new 2019 strategic direction coupled with a corporate reorganization; (c) fixed-price contracts or the Company's failure to meet contractual schedule, performance requirements or to execute projects efficiently; (d) contract awards and timing; (e) remaining performance obligations; (f) being a provider of services to government agencies; (g) international operations; (h) Nuclear liability; (i) ownership interests in Capital investments; (j) dependence on third parties; (k) joint ventures and partnerships; (l) information systems and data; (m) competition; (n) professional liability or liability for faulty services; (o) monetary damages and penalties in connection with professional and engineering reports and opinions; (p) insurance coverage; (q) health and safety; (r) qualified personnel; (s) work stoppages, union negotiations and other labour matters; (t) extreme weather conditions and the impact of natural or other disasters and global health crises; (u) intellectual property; (v) divestitures and the sale of significant assets; (w) impact of operating results and level of indebtedness on financial situation; * 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) outcome of pending and future claims and litigations; (hh) ongoing and potential investigations; (ii) settlements; (jj) further regulatory developments as well as employee, agent or partner misconduct or failure to comply with anti-bribery and other government laws and regulations; (kk) reputation of the Company; (ll) inherent limitations to the Company's control framework; (mm) environmental laws and regulations; (nn) Brexit; (oo) global economic conditions; and (pp) fluctuations in commodity prices.

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 2019 MD&A and as updated in the first quarter 2020 MD&A, filed with the securities regulatory authorities in Canada, available on SEDAR at http://www.sedar.com/ and on the Company's website at www.snclavalin.com under the "Investors" section.

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 three-month period ended March 31, 2020, together with its MD&A for the corresponding period, can be accessed on the Company's website at www.snclavalin.com and on www.sedar.com.

SOURCE SNC-Lavalin

Media, Daniela Pizzuto, Director, External Communications, 514-393-8000 ext. 54772, [email protected]; Investors, Denis Jasmin, Vice President, Investor Relations, 514-393-8000 ext. 57553, [email protected]

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