SNC-Lavalin Reports Fourth Quarter and 2019 Year-End Results

Strong Q4 operating cash flow, reduced debt ratio and growing Engineering Services backlog, in line with the new strategic direction

To watch Ian L. Edwards provide an overview of the fourth quarter results for 2019 and explains how SNC-Lavalin continues to deliver on its new strategic direction, view here.

MONTREAL, Feb. 28, 2020 /CNW Telbec/ - SNC-Lavalin Group Inc. (TSX: SNC) today announced its results for the fourth quarter and year ended December 31, 2019. All currency references in this press release are in Canadian dollars except as otherwise indicated.

2019 Fourth Quarter Financial Highlights

• New strategic direction continuing to deliver results: In July 2019, SNC-Lavalin announced a new strategic direction focused on de-risking the business through exiting bidding on lump-sum turnkey (LSTK) contracts and prioritizing the Company's high-value SNCL Engineering Services business line. The SNCL Engineering Services continued its solid performance during the quarter with strong revenue, EBIT and EBIT margins; LSTK construction contracts backlog for SNCL Projects reduced to $3.0 billion as at December 31, 2019 from $3.2 billion as at September 30, 2019.
• Strong operating cash flow: SNC-Lavalin generated operating cash flow of $312 million, the highest quarterly amount since the fourth quarter of 2017, increasing total cash on the balance sheet to $1.2 billion as at December 31, 2019; net recourse debt to EBITDA ratio under the Company's Credit Agreement reduced to 2.1x from 3.4x in the third quarter of 2019 and down from 2.9x in the fourth quarter of 2018.     
• Resources restructuring: The Company made the decision to close Valerus, non-core, underperforming, mid-stream oil and gas production and processing facilities based in Houston, and took a restructuring charge in the fourth quarter of 2019 of approximately $72 million, of which approximately $53 million was non-cash. The Company continues to actively explore all options for the remaining Resources business as it winds down the remaining LSTK projects and is right-sizing overhead as the business evolves.
• Federal charges settled: SNC-Lavalin Construction Inc., a subsidiary of SNC-Lavalin Group Inc., pled guilty to one charge of fraud; all charges against SNC-Lavalin Group Inc. were withdrawn and the Company agreed to a fine of $280 million, payable in equal instalments over five years. As a result, the Company recognized a non-cash accounting charge of $257.3 million, reflecting the net present value of the full settlement amount.
• Cost reduction program: In the fourth quarter of 2019, the Company successfully completed its $250 million annual run-rate cost reduction program. 
• IFRS net loss attributable to SNC-Lavalin shareholders: Net loss attributable to SNC‑Lavalin shareholders was $293 million, mainly due to the non-cash, net present value of the Federal charge settlement being recognized in full in the quarter, and restructuring charges.   

2019 Fourth Quarter and Year-End Financial Highlights
(in thousands of dollars, unless otherwise indicated)	Fourth Quarter		Year Ended
	2019	2018	2019	2018
Total revenue	2,436,077	2,562,503	9,515,610	10,084,006
Net income (loss) attributable to SNC-Lavalin shareholders	(292,870)	(1,598,724)	328,219	(1,316,898)
Diluted EPS	($1.67)	($9.11)	$1.87	($7.50)
SNCL Engineering Services (incl. Capital)    Revenue    Segment EBIT^(7)    Segment EBIT ratio    Backlog	1,609,784 190,513 11.8% 11,297,900	1,580,001 219,099 13.9% 10,376,800	6,280,011 802,118 12.8% 11,297,900	5,786,374 776,432 13.4% 10,376,800
SNCL Projects    Revenue      Segment EBIT^(7)    Segment EBIT ratio    Backlog	826,293 (27,839) (3.4%) 3,964,600	982,502 (364,601) (37.1%) 4,508,200	3,235,599 (448,000) (13.8%) 3,964,600	4,297,632 (237,297) (5.5%) 4,508,200
Adjusted EBITDA from E&C^(8) Adjusted EBITDA from E&C margin Adjusted diluted EPS from E&C^(2)	166,808 7.0% $0.45	(204,868) (8.2%) ($1.62)	279,123 3.0% ($0.40)	385,588 3.9% $0.25

CEO Commentary

Ian L. Edwards, President and CEO of SNC-Lavalin Group Inc., made the following comments in relation to the Company's 2019 fourth quarter and year-end results:

"2019 was a challenging year for us in many ways. We were tested as a Company, and went through some very difficult times, but I am very proud to say that we took decisive action and are stronger for it. In July, we took the decision, with the support of the Board, to set a different course, and point the Company in a new strategic direction: we exited bidding on LSTK contracts and focused on growing our high-value SNCL Engineering Services business, therefore de-risking the business and positioning it to generate consistent earnings and cash flow. Six months into our new strategic direction, it is clear to me after two quarters of solid results in the second half of 2019, that the strategy is delivering, and that we made the right decision. 

"In the fourth quarter of 2019, we generated strong operating cash flow, the highest since Q4 2017, and delivered solid earnings on an adjusted basis. Our SNCL Engineering Services business line continued to perform well, and we continued to reduce the SNCL Projects LSTK backlog. We also took the necessary decision to close Valerus, non-core, unprofitable, mid-stream oil and gas production and processing facilities, as part of our commitment to restructure the Resources business. Additionally, we appointed a President of Infrastructure Projects, a role dedicated solely to executing and managing the wind-down of the remaining LSTK infrastructure projects.

"We settled the federal charges resulting from the Company's legacy activities in Libya. With this issue behind us, our new strategy firmly in place, and a refocused senior leadership team, which includes the appointment of a new Chief Transformation Officer, a new Executive Vice President and General Counsel, and an incoming Chief Financial Officer, we are well-positioned for the next chapter in the Company's growth and transformation into a professional engineering services and project management solutions provider."

Fourth Quarter Results

The Company reported an IFRS net loss attributable to SNC-Lavalin shareholders of $292.9 million, or $1.67 per diluted share for the fourth quarter of 2019, compared with a loss of $1.6 billion, or $9.11 per diluted share, for the corresponding period in 2018. The Company's fourth quarter 2019 net loss attributable to SNC-Lavalin shareholders was due to the Federal charges settlement (PPSC) of $257.3 million and after-tax restructuring costs of $99.6 million mainly related to the decision made to close the Company's Valerus facilities in Houston.

Adjusted net income from E&C⁽¹⁾ in the fourth quarter of 2019 increased to $79.1 million, or $0.45 per diluted share, compared with an adjusted net loss from E&C⁽¹⁾ of $284.1 million, or $1.62 per diluted share, for the corresponding period in 2018. The higher adjusted net income from E&C⁽¹⁾ in the fourth quarter of 2019 was mainly due to improved results in the Resources segment, and lower financial expenses.

SNCL Engineering Services

Revenue from the SNCL Engineering Services line of business, which includes the EDPM, Nuclear, Infrastructure Services, and Capital segments, totaled $1.6 billion for the fourth quarter of 2019, an increase of 1.9%, compared to the fourth quarter of 2018, mainly due to a revenue increase of 20.8% in Infrastructure Services, which offsets a decrease in the Capital segment of 53.1%.

SNCL Engineering Services, excluding Capital, recorded a strong Segment EBIT⁽⁷⁾ and Segment EBIT ratio of $159.0 million and 10.1%, respectively, in line with the fourth quarter of 2018. The Capital Segment EBIT⁽⁷⁾ was lower due to a decrease in Highway 407 ETR dividends following the sale of a portion of the Company's interest in Highway 407 ETR during the third quarter of 2019.

SNCL Projects

Revenue from the SNCL Projects line of business, which includes LSTK construction contracting in the Infrastructure EPC Projects and Resources segments, totaled $826.3 million for the fourth quarter of 2019, a decrease of 15.9% compared to the fourth quarter of 2018. This was mainly due to the continuing backlog run-off of certain major LSTK construction projects, coupled with no new bidding by the Company in this market.

SNCL Projects recorded a negative Segment EBIT⁽⁷⁾ totaling $27.8 million in the fourth quarter of 2019. The negative Segment EBIT⁽⁷⁾ was due to the Resources segment which recorded a loss of $51.2 million mainly due to three factors: unfavourable reforecasts on certain Resources LSTK construction projects, continuing underperformance of the midstream oil and gas production and processing facilities, and overhead costs that are in the process of being right-sized to align with a lower level of activity. These were partially offset by a strong quarter from the Infrastructure EPC Projects segment, as the Company continues to progress on its major light rail transit (LRT) projects.

Backlog and Bookings

The Company's backlog totaled $15.3 billion as at December 31, 2019, 2.5% higher than at the end of December 2018. The backlog for SNCL Engineering Services increased by 8.9% to $11.3 billion, while SNCL Projects backlog continues to decrease and totaled $4.0 billion. SNCL Engineering Services total bookings for the fourth quarter of 2019 amounted to $1.4 billion. Contracts bookings for SNCL Engineering Services amounted to $6.9 billion for 2019, representing a 1.2 book-to-bill ratio, with $3.7 billion of bookings in the EDPM segment, $2.3 billion in the Infrastructure Services segment and $0.9 billion in the Nuclear segment.

LSTK Projects Update

The Company continued to run off the LSTK projects component of its SNCL Projects backlog which totaled $3.0 billion at the end of the fourth quarter of 2019, down from $3.2 billion as at September 30, 2019. The Company expects to complete most of its remaining Resources LSTK construction projects by the end of 2020. The majority of the Company's LSTK project backlog represents light rail transit systems projects for which the Company has a long track record of executing successfully. The Company reduced its Infrastructure EPC Projects and Resources LSTK backlog by 3.5% and 19.6%, respectively, compared to the end of the third quarter of 2019.

Financial Position and Cash Flows

As of December 31, 2019, the Company had $1.2 billion of cash and cash equivalents, $1.2 billion of recourse debt and $0.4 billion of limited recourse debt, as well as $2.4 billion in unused capacity under its $2.6 billion committed revolving credit facility.

As at December 31, 2019, the net recourse debt to EBITDA ratio calculated in accordance with the terms of the Company's Credit Agreement improved substantially year-over-year and quarter-over-quarter to 2.1x.

Quarterly Dividend

The Board of Directors today declared a cash dividend of $0.02 per share, payable on March 27, 2020, to shareholders of record on March 13, 2020. This dividend is an "eligible dividend" for income tax purposes.

2020 Outlook

The Company expects that in 2020 the gross revenue from SNCL Engineering Services, excluding Capital, will grow by a low single digit percentage, and that Segment EBITDA⁽⁹⁾ as a percentage of gross revenue, from SNCL Engineering Services, excluding Capital, will be between 10% and 12%.

This outlook is based on the assumptions and methodology described in the Company's 2019 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.

Special Committee

The special committee established by the Board in December 2018 explored a range of alternatives to protect and enhance value for SNC-Lavalin. The Company has charted a new strategic direction and succeeded in resolving legacy legal matters. Having now fulfilled its mandate, the committee has been disbanded.

Fourth Quarter and Year-End 2019 Earnings Conference Call / Webcast

SNC-Lavalin will hold a conference call today at 8:30 a.m. EST to review results for its fourth quarter and year-end 2019. 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 1 800 319 4610 in North America, 416 915 3239 in Toronto, 514 375 0364 in Montreal, or 080 8101 2791 in the United Kingdom. A recording of the conference call will be available on the Company's website within 24 hours following the call.

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: 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 EBITDA from E&C Segment EBIT and Segment EBITDA. 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.

⁽¹⁾ Adjusted net income (loss) from E&C is defined as net income (loss) attributable to SNC-Lavalin shareholders from E&C, excluding charges related to restructuring, right-sizing and other, 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 net expense for the 2012 class action lawsuits settlement and related legal costs, the GMP equalization expense, the gains (losses) on disposals of E&C businesses, the impact of U.S. corporate tax reform and the incremental financing costs related to the amendments to the CDPQ loan, other E&C financing arrangements in connection with the sale of 10.01% of the shares of Highway 407 ETR and the federal charges settlement (PPSC). E&C is defined in the Company's 2019 financial statements and Management's Discussion and Analysis. The term "Adjusted net income (loss) from E&C" does not have any standardized meaning as prescribed by 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 (loss) 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 charges related to restructuring, right sizing and other, and 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 net income is defined as the adjusted net income (loss) from E&C plus the adjusted net income from Capital.

⁽⁶⁾ Adjusted consolidated diluted EPS is defined as the adjusted net income (loss) from E&C 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 (reversal of impairment losses) 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 net expense for the 2012 class action lawsuits settlement and related legal costs, the GMP equalization expense, gains (losses) on disposals of E&C businesses and Capital investments, as well as the federal charges settlement (PPSC). 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.

⁽⁸⁾ Adjusted EBITDA from E&C 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, the net expense for the 2012 class action lawsuits settlement and related legal costs, the GMP equalization expense, the gains (losses) on disposals of E&C businesses as well as the federal charges settlement (PPSC). The term "Adjusted EBITDA 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.

⁽⁹⁾ Segment EBITDA is defined herein as the Segment EBIT plus the segment depreciation of property and equipment and segment amortization of intangible assets. The term "Segment 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.

SNC-Lavalin Financial Summary
(in thousands of dollars, unless otherwise indicated)	Fourth Quarter		Year ended December 31
	2019	2018	2019	2018
Revenues
From E&C-SNCL Engineering Services	1,573,591	1,502,911	6,017,291	5,521,717
From E&C-SNCL Projects	826,293	982,502	3,235,599	4,297,632
From Capital	36,193	77,090	262,720	264,657
	2,436,077	2,562,503	9,515,610	10,084,006
Net income (loss) attributable to SNC-Lavalin shareholders
From E&C	(310,366)	(1,654,303)	(2,444,583)	(1,562,986)
From Capital	17,496	55,579	2,772,802	246,088
	(292,870)	(1,598,724)	328,219	(1,316,898)
Diluted EPS ($)
From E&C	(1.77)	(9.42)	(13.92)	(8.90)
From Capital	0.10	0.32	15.79	1.40
	(1.67)	(9.11)	1.87	(7.50)
Adjusted net income (loss) attributable to SNC-Lavalin shareholders
From E&C^(1)	79,061	(284,146)	(70,331)	43,119
From Capital^(3)	19,333	54,444	189,446	186,549
	98,394	(229,703)	119,115	229,668
Adjusted diluted EPS ($)
From E&C^(2)	0.45	(1.62)	(0.40)	0.25
From Capital^(4)	0.11	0.31	1.08	1.06
	0.56	(1.31)	0.68	1.31
Adjusted EBITDA from E&C* ^(8)	166,808	(204,868)	279,123	385,588
Adjusted EBITDA from E&C margin	7.0%	(8.2%)	3.0%	3.9%
Backlog
From SNCL Engineering Services			11,297,900	10,376,800
From SNCL Projects			3,964,600	4,508,200
Cash and cash equivalents			1,188,636	634,084
Recourse and limited recourse debt			1,572,663	3,268,323

Note that certain totals and subtotals may not reconcile due to rounding

* The Company's 2019 financial results incorporate the non-cash impact of IFRS 16, Leases ("IFRS 16"). Financial results for 2018 were not restated for the new accounting standard. If the Company excluded the adoption of IFRS 16, adjusted EBITDA from E&C⁽⁸⁾ for the year ended December 31, 2019 would have been approximately $136 million lower ($39 million for the fourth quarter of 2019), and the net financial expenses would have been $24 million lower for the year ended December 31, 2019 ($7 million for the fourth quarter of 2019), mainly offset by a lower EBIT for a similar amount.

Reconciliation of IFRS Net Income (loss) as Reported to Adjusted Net Income (loss)
	Fourth Quarter 2019			Year ended December 31, 2019
	E&C	Capital	Total	E&C	Capital	Total
(In M$)
Net Income (Loss) (IFRS)	(310.4)	17.5	(292.9)	(2,444.6)	2,772.8	328.2
Impairment of goodwill	-	-	-	1,720.9	-	1,720.9
Impairment of intangible assets related to business combinations	-	-	-	60.1	-	60.1
Amortization of intangible assets related to business combinations	32.4	-	32.4	148.3	-	148.3
Restructuring costs	99.6	-	99.6	154.0	2.5	156.5
Financing costs related to the agreement to sell shares of Highway 407 ETR	-	-	-	27.4	-	27.4
Acquisition-related costs and integration costs	0.1	-	0.1	5.9	-	5.9
Federal charges settlement (PPSC)	257.3	-	257.3	257.3	-	257.3
Loss from adjustment on disposals of E&C businesses	-	-	-	0.3	-	0.3
Loss (gain) on disposal of a Capital investment	-	1.8	1.8	-	(2,586.0)	(2,586.0)
Adjusted Net Income (Loss) (non-IFRS)	79.1	19.3	98.4	(70.3)	189.4	119.1
(in $)
Diluted EPS (IFRS)	(1.77)	0.10	(1.67)	(13.92)	15.79	1.87
Impairment of goodwill	-	-	-	9.80	-	9.80
Impairment of intangible assets related to business combinations	-	-	-	0.34	-	0.34
Amortization of intangible assets related to business combinations	0.18	-	0.18	0.85	-	0.85
Restructuring costs	0.57	-	0.57	0.88	0.01	0.89
Financing costs related to the agreement to sell shares of Highway 407 ETR	-	-	-	0.16	-	0.16
Acquisition-related costs and integration costs	0.00	-	0.00	0.03	-	0.03
Federal charges settlement (PPSC)	1.47	-	1.47	1.47	-	1.47
Loss from adjustment on disposals of E&C businesses	-	-	-	0.00	-	0.00
Loss (gain) on disposal of a Capital investment	-	0.01	0.01	-	(14.73)	(14.73)
Adjusted Diluted EPS (non-IFRS)	0.45	0.11	0.56	(0.40)	1.08	0.68
Note that certain totals and subtotals may not reconcile due to rounding

	Fourth Quarter 2018			Year ended December 31, 2018
	E&C	Capital	Total	E&C	Capital	Total
(In M$)
Net Income (Loss) (IFRS)	(1,654.3)	55.6	(1,598.7)	(1,563.0)	246.1	(1,316.9)
Net charges related to restructuring & right-sizing plan and other	48.5	0.3	48.8	58.7*	0.3	59.0
Acquisition-related costs and integration costs	16.1	-	16.1	42.8	-	42.8
Amortization of intangible assets related to business combinations	42.9	-	42.9	171.1	-	171.1
Net loss (gain) on disposals of E&C business and Capital investments	0.2	(1.4)	(1.2)	0.5	(59.8)	(59.3)
Net expense for the 2012 class action lawsuits settlement & related legal costs	1.2	-	1.2	65.7	-	65.7
Impact of U.S. corporate tax reform	-	-	-	6.0	-	6.0
Non-cash goodwill impairment charge	1,240.4	-	1,240.4	1,240.4	-	1,240.4
Non-cash Guaranteed Minimum Pension (GMP) equalization expense**	20.8	-	20.8	20.8	-	20.8
Adjusted Net Income (Loss) (non-IFRS)	(284.1)	54.4	(229.7)	43.1	186.5	229.7
(in $)
Diluted EPS (IFRS)	(9.42)	0.32	(9.11)	(8.90)	1.40	(7.50)
Net charges related to restructuring & right-sizing plan and other	0.28	0.00	0.28	0.33	0.00	0.34
Acquisition-related costs and integration costs	0.09	-	0.09	0.24	-	0.24
Amortization of intangible assets related to business combinations	0.24	-	0.24	0.97	-	0.97
Net loss (gain) on disposals of E&C business and Capital investments	0.00	(0.01)	(0.01)	0.00	(0.34)	(0.34)
Net expense for the 2012 class action lawsuits settlement & related legal costs	0.01	-	0.01	0.37	-	0.37
Impact of U.S. corporate tax reform	-	-	-	0.03	-	0.03
Non-cash goodwill impairment charge	7.07	-	7.07	7.07	-	7.07
Non-cash Guaranteed Minimum Pension (GMP) equalization expense	0.12	-	0.12	0.12	-	0.12
Adjusted Diluted EPS (non-IFRS)	(1.62)	0.31	(1.31)	0.25	1.06	1.31
Note that certain totals and subtotals may not reconcile due to rounding
*This amount included $6.9 million ($5.6 million after taxes) of net charges which did not meet the restructuring costs definition in accordance with IFRS.
**Included 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; 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.

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 MD&A (particularly in the sections entitled "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" and "How We Analyze and Report our Results"). 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) results of the new 2019 strategic direction coupled with a corporate reorganization; (b) fixed-price contracts or the Company's failure to meet contractual schedule, performance requirements or to execute projects efficiently; (c) contract awards and timing; (d) remaining performance obligations; (e) being a provider of services to government agencies; (f)  international operations; (g) Nuclear energy services;  (h) ownership interests in Capital investments; (i) dependence on third parties; (j) joint ventures and partnerships; (k) information systems and data; (l) competition; (m) professional liability or liability for faulty services; (n) monetary damages and penalties in connection with professional and engineering reports and opinions; (o) insurance coverage; (p) health and safety; (q) qualified personnel; (r) work stoppages, union negotiations and other labour matters; (s) extreme weather conditions and the impact of natural or other disasters and global health crises; (t) intellectual property; (u) divestitures and the sale of significant assets; (v) impact of operating results and level of indebtedness on financial situation; (w) liquidity and financial position; * indebtedness; (y) security under the SNC‑Lavalin Highway Holdings Loan; (z) dependence on subsidiaries to help repay indebtedness; (aa) dividends; (bb) post-employment benefit obligations, including pension-related obligations; (cc) working capital requirements; (dd) collection from customers; (ee) impairment of goodwill and other assets; (ff) outcome of pending and future claims and litigations; (gg) ongoing and potential investigations; (hh) settlements; (ii) further regulatory developments as well as employee, agent or partner misconduct or failure to comply with anti-bribery and other government laws and regulations; (jj) reputation of the Company; (kk) inherent limitations to the Company's control framework; (ll) environmental laws and regulations; (mm) Brexit; (nn) global economic conditions; and (oo) 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.

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 consolidated financial statements for the year ended December 31, 2019, together with its Management's Discussion and Analysis ("MD&A") for the corresponding period, can be accessed under the Company's profile on www.sedar.com and on the Company's website at www.snclavalin.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]

Related Links

www.snclavalin.com