UNLOCKING
2023 ANNUAL REPORT
Possibilities
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On the Cover
The Spiral, also known as 66 Hudson Boulevard
in Manhattan, New York, USA. See page 15.
Image courtesy of Tishman Speyer.
This annual report is an interactive PDF and is designed to be viewed with Adobe Reader and an Internet connection.
The report can also be viewed offline, but any external links will not be accessible.
What
We Stand For
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Our teams bring global
expertise to their local
communities, dare to
challenge the status
quo, collaborate with
and learn from others,
and are empowered to
turn challenges into
opportunities.
OUR PURPOSE
We exist to future-proof
our cities and environments
OUR BELIEF
For societies to thrive,
we believe that we
must all hold ourselves
accountable for tomorrow
OUR GUIDING
PRINCIPLES
We value our people and
our reputation
We are locally dedicated
with international scale
We are future-focused
and challenge the
status quo
We foster collaboration
in everything we do
We have an empowering
culture and hold ourselves
accountable
2023 ANNUAL REPORT
Chairman’s
Message
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I am very pleased to share that
2023 was a strong year for WSP.
Our company continued to
demonstrate the agilit it needs
to succeed and grow in a fast-
changing environment.
Now that we have completed
the second year of our 2022-
2024 Global Strategic Action
Plan, our performance remains
on track and has even exceeded
expectations on several levels.
We continue to make excellent
progress toward our ambitions,
allowing us to enter the last
year of our strategic cycle
with confdence.
Once again, consistent and solid
leadership in conscientiously
serving our clients was the key
to our success, supported by our
experienced global management
team and the wider workforce.
On behalf of the Board, I wish
to thank and congratulate
WSP’s leaders and our 66,500
employees worldwide for the
integral role they play.
Our success is also derived from
strengthening and expanding
our diversifed platform through
acquisitions. Following the
addition of John Wood plc’s
Environment and Infrastructure
business and other companies
in 2022, we have been focused
on their integration into WSP.
In 2023, we also maintained our
growth momentum through
four strategic acquisitions
including Calibre in Australia,
which strengthened our mining
resources, and BG Consulting
Engineers in Switzerland,
which supported our European
ambitions, expanded our market
leadership and broadened our
expertise.
As we continue to grow,
vigilance regarding external
forces is top of mind for the
Board. In the current dynamic
geopolitical context, the Board
continues to take a proactive
approach to risk management
by demonstrating agilit,
foresight, and a comprehensive
understanding of the potential
implications for the business.
2023 ANNUAL REPORT
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As the world is dealing with
climate change and the energy
transition, WSP is poised to
provide the sustainable solutions
required and keep building a
powerful and lasting legacy.
I would like to thank our
Board members for their work
and highlight the addition of
Mack Tall and Claude Tessier,
whose backgrounds and
experience are sure to bring
signifcant value.
I am incredibly proud and
honoured to be WSP’s
Chairman. With the full backing
of our leadership team, we
have pledged to consistently
deliver best-in-class professional
services while playing a pivotal
role in some of the world's most
signifcant projects.
As we prepare for our next
three-year strategic cycle,
I feel confdent that we have
the leadership and experience
we need to achieve our goals.
I am grateful to our employees,
clients, shareholders, investors,
and other stakeholders for
placing their trust in us as
we work to build a more
sustainable world for all.
CHRIS COLE
CHAIRMAN OF THE BOARD
We continue to make excellent
progress toward our ambitions,
allowing us to enter the last
year of our strategic cycle
with confidence.
Similarly, trends such as
artifcial intelligence and
digitization present both risks
and opportunities. Tanks to our
technological expertise, we are
in a good position to leverage
these innovations in a way that
best serves our clients.
Of equal importance is our
sustainabilit strategy. Our
commitment to achieving our
ambitious goals remains strong.
In the past year, we garnered
awards and recognition,
including being named to
the Dow Jones Sustainabilit
North American Index.
Te bold actions we are taking
to build a sustainable future
are a testament to our global
leadership. For example, we
are commited to providing
sustainable future-focused
services to our clients, and to
achieving net zero emissions
across our value chain by 2040.
Additionally, we continue to
improve our programs for our
people and increase our positive
impact on the communities we
serve. We have also enhanced
our oversight of internal
controls and processes for
our Environmental, Social and
Governance (ESG) program
through the Audit Commitee.
Our Board continues to
enjoy the support of our
stakeholders as it oversees a
culture that places a strong
emphasis on health and safet,
inclusion, equit, diversit, and
ethics, among other critical
maters which underpin our
performance culture.
2023 ANNUAL REPORT
President
and CEO’s
Message
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2023 was an exciting and
inspiring year for us at WSP.
Our dedication and hard
work have enabled us to build
one of the most innovative
engineering and professional
services frms in the world.
Tis year, thanks to the
leadership, passion, and rigour
of our teams worldwide, and our
strong operational execution,
we met our fnancial ambitions,
including solid organic growth
and improved proftabilit.
We focused on diligently
integrating the businesses
acquired in previous years,
the majorit having been in
our Earth & Environment
sector, which welcomed
13,000 new employees in the
past two years. We also completed
four strategic acquisitions in
2023, including BG Consulting
Engineers in Switzerland and
Calibre in Australia. Tey have
respectively strengthened our
foothold in Europe and boosted
our mining capabilities in a
key Australian market. Tis
abilit to diversif our ofering
and seize market opportunities
has fuelled our work intake,
atesting to the growing demand
for our services.
Our dedication and hard work
have enabled us to build one of the
most innovative engineering and
professional services firms in the world.
2023 ANNUAL REPORT
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People Are our
Superpower
We recognize our people are
our superpower and continue
to support them to do the best
work of their lives. In 2023, we
introduced a signifcant level
of transformation activities
including the roll-out of a new
ERP in Canada, and several
initiatives to enhance our
employee experience and be an
even more agile WSP.
We remain commited to
fostering a workplace culture
that inspires collaboration,
empowers individuals, and
cultivates the importance of
diversit, equit and inclusion.
We are pleased to report that we
achieved our goal of increasing
internal progression and
improving the representation
of underrepresented groups.
Our engagement scores remain
healthy, and we have reached our
internal promotion objective
with 75% of our leadership roles
having been flled internally. Tis
is a testament to our commitment
to career development and
succession planning.
Creating Enduring
Legacies for our Clients
and Communities
WSP is dedicated to creating
lasting legacies for local
communities across the globe.
We are privileged to work
with like-minded clients and
partners who share our objective
of building a more inclusive,
equitable, and sustainable world. In
2023, approximately 63% of our
annualized revenues were derived
from activities that support the UN
Sustainable Development Goals,1
an increase relative to last year.
Our key initiatives and
leadership in creating a more
sustainable and resilient world
continued to gain widespread
industry recognition in the
form of awards, rankings,
and ratings. In the current
context of energy transition,
decarbonization, and aging
infrastructure, there is a clear
and growing need for our
strategic expertise. WSP is
well positioned to ofer best-
in-class services to our public
and private-sector clients while
reaping the benefts of stimulus
programs deployed across our
key geographies.
In the current context of energy transition,
decarbonization, and aging infrastructure,
there is a clear and growing need for
our strategic expertise.
1 Our SDG-Linked Revenues are unaudited and are based on mapping
WSP’s project taxonomy to services that align with the UN SDGs.
2023 ANNUAL REPORT
Reporting Strong
Financial Performance
Unlocking
Possibilities
I am proud of our well-balanced
business and exceptional team
and am convinced that 2024 will
bring a wealth of possibilities
for us to keep transforming
the world. While the
macroeconomic and geopolitical
environments are fuid, our
business is well-diversifed
and resilient, and I trust in our
abilit to navigate with agilit,
vigilance, and discipline.
We remain steadfast in our
eforts to create a more
sustainable future for our teams,
our clients, our communities,
as well as for the industry as a
whole. We have entered 2024
with renewed optimism and
determination, and trust in our
abilit to develop solutions and
deliver on our purpose.
I wish to extend my sincere
thanks to our employees, clients,
Board members, and shareholders
for their trust and ongoing
confdence in our company.
ALEXANDRE L’HEUREUX
GLOBAL PRESIDENT AND
CHIEF EXECUTIVE OFFICER
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In fscal 2023, we achieved
strong fnancial performance,
with net revenues reaching
$11 billion, up 22% compared
to 2022. We delivered
$1.9 billion adjusted EBITDA
and our adjusted EBITDA
margin rose to 17.6%, up from
17.1% the previous year. We
are making signifcant strides
towards ataining our goal of
1 million hours saved globally
through improvements
and simplifcation. Market
conditions remain healthy
and we are on track to
exceed our 2024 strategic
fnancial ambitions.
Late last year, we enhanced
our sustainabilit-linked
fnancing structure to refect
the signifcant progress we have
made over the past few years to
advance our ESG strategy, set
ambitious targets and broaden
our scope of impact. We are
grateful to all our investors for
their support and commitment
to our long-term strategic vision.
As we enter the last year of
our three-year strategic plan,
we will continue to focus on
achieving our goals and leading
our business with discipline.
We will seek to unlock further
opportunities, face challenges
head-on, and we are already
planning and preparing our next
strategic cycle. We maintain our
unwavering dedication to being
distinguished as the undisputed
leader in our industry.
I am proud of our well-balanced
business and exceptional team and
am convinced that 2024 will bring
a wealth of possibilities for us to
keep transforming the world.
2023 ANNUAL REPORT
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23 Year
in Review
In the second year of our 2022-2024
strategic cycle, we maintained our
momentum and strengthened the
foundations of our resilient business.
We consistently garnered recognition
for our market leadership and
sustainability impacts.
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JANUARY 31
WSP Completes Acquisitions
of BG Consulting Engineers
and enstruct
WSP acquired BG Bonnard & Gardel
Holding SA, one of Switzerland’s
leading engineering consulting
frms. Te transaction added
700 professionals, strengthening
WSP’s foothold in Europe.
WSP also completed the acquisition
of Enstruct Group Pt Ltd., a
75-employee structural and civil
engineering frm in Australia.
MAY 3
WSP Acquires lgt
Te acquisition of LGT Inc., a Quebec
Cit-based building engineering
frm, added 150 professionals and
bolstered WSP’s building services
in the region.
MAY 5
WSP is Recognized by
Environment Analyst
for its Climate and ESG
Impact Leadership
WSP is among the four out
of 50 leading environmental
frms that received a fve-star
rating for their climate and
ESG impact leadership.
JUNE 8
WSP Completes the
Acquisition of Calibre
Te acquisition of Australian-based
Calibre added 800 professionals
to WSP’s workforce, reinforcing
its position as a leading provider
of services across the full mining
asset life cycle.
JUNE 15
WSP’s Robust Ethics
& Compliance Program
Earns Recognition
WSP’s commitment to
maintaining a best-in-class ethics
and compliance program garnered
Ethisphere’s coveted Compliance
Leader Verifcation designation
for the second time.
JUNE 28
WSP Ranks among Canada’s
Best 50 Corporate Citizens
WSP was recognized as one of
Canada’s Best 50 Corporate Citizens
by Corporate Knights for the third
year in a row. WSP’s strong showing
was accompanied by top scores in
environmental metrics, sustainable
investment and diversit.
2023 ANNUAL REPORT
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JULY 10
WSP Earns Three Sustainability
Consulting Awards
WSP received three Sustainabilit
Consulting Awards from
Environment Analyst in recognition
of its commitment to making a
positive and sustainable impact
on people, communities and the
environment.
JULY 17
WSP Recognized as a Leader
in Climate Change Consulting
WSP was named among the most
prominent climate change consultants
worldwide by Verdantix. WSP
appeared in the Leaders’ Quadrant
as one of six frms demonstrating
comprehensive climate change
consulting capabilities.
AUGUST 7
WSP Sells Louis Berger
Services
Louis Berger Services (LBS) was
sold to Versar Inc. LBS specializes
in operations and maintenance
services for complex infrastructure
assets at mission-essential defence
and civilian facilities around
the world.
AUGUST 24
WSP Maintains its Position as
the World’s No. 1 Design Firm
For the third consecutive year,
WSP scored the No. 1 position in
Engineering News-Record’s annual
list of the Top 225 International
Design Firms.
SEPTEMBER 14
WSP Named to TIME’s 2023
List of World’s Best Companies
WSP was included in TIME's list of
the world's best companies for 2023
as one of only four Canadian-based
frms in the prestigious Top 100.
SEPTEMBER 27
WSP Included in Fortune’s
Annual Change the World List
WSP earned a spot in Fortune’s
2023 Change the World list, which
recognizes companies making a
positive social impact through
activities in line with their core
business strategy.
DECEMBER 11
WSP Retains its Position
as the Top Environmental &
Sustainability Consulting Firm
WSP was recognized as the
world's leading environmental and
sustainabilit consulting frm in
Environment Analyst’s annual
state of the industry report.
DECEMBER 19
WSP Included in the
Dow Jones Sustainability
North America Index
WSP earned a place in the Dow
Jones Sustainabilit North America
Index for the very frst time. Tis
industry standard recognizes the
Top 20% sustainabilit performers
among the 600 largest companies
in the US and Canada based on
long-term economic, environmental
and social criteria.
2023 ANNUAL REPORT
WSP
Today
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41%
Transportation
& Infrastructure
33%
Earth &
Environment
19%
Property &
Buildings
7%
Power & Energy,
Industry
For the year ended December 31, 2023.
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66,500
Employees Worldwide
12,200
CANADA
24,200
EMEIA
EUROPE, MIDDLE EAST, INDIA AND AFRICA
18,100
AMERICAS
UNITED STATES AND LATIN AMERICA
12,000
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ASIA PACIFIC
18%
37%
29%
16%
CANADA
AMERICAS1
EMEIA2
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As of December 31, 2023.
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Asia, Australia, and New Zealand.
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United States and Latin America.
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Europe (including United Kingdom & Ireland, Central Europe, and Nordics), Middle East, India, and Africa.
2023 ANNUAL REPORT
Financial
Highlights
We are pleased to report solid 2023 financial
results. With strong organic growth in net
revenues, improved margins, and record-
high order intake, our performance is on
track to meet our 2024 ambitions.
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1 Total of segments measure. Refer to section 8.1, “Net revenues” of WSP’s Management's Discussion and
Analysis for the quarter and year ended December 31, 2023 (“MD&A”) for a reconciliation to revenues.
2 Non-IFRS financial measure or non-IFRS ratio without a standardized definition under IFRS, which may not
be comparable to similar measures or ratios used by other issuers. Refer to section 22, “Glossary of segment
reporting, non-IFRS and other financial measures”, of WSP’s MD&A for the quarter and year ended
December 31, 2023 for explanations of the composition and usefulness of this non-IFRS financial measure
and non-IFRS ratio. Quantitative reconciliations of the non-IFRS financial measure to the most directly
comparable IFRS measure are incorporated by reference to sections 8.3, “Adjusted EBITDA” of WSP’s
MD&A. Adjusted EBITDA margin is defined as adjusted EBITDA expressed as a percentage of net revenues.
3 Supplemental financial measure. Backlog represents future revenues stemming from existing signed
contracts to be completed. Days Sales Outstanding (DSO) represents the average number of days to
convert the Corporation's trade receivables (net of sales taxes) and costs and anticipated profits
in excess of billings into cash, net of billings in excess of costs and anticipated profits.
$14.44B
Revenues (CAD)
$10.90B
Net revenues1 (CAD)
7.3%
Organic growth in
net revenues
$550.0M
Net earnings attributable
to shareholders (CAD)
$4.41
Basic net earnings
per share attributable
to shareholders (CAD)
$1.92B
Adjusted EBITDA2 (CAD)
$947.5M
Earnings before net
financing expense and
income taxes (CAD)
17.6%
Adjusted EBITDA margin2
76
Days sales outstanding3
$14.1B
Backlog3 (CAD)
2023 ANNUAL REPORT
Our
Projects
Our innovative projects are shaping tomorrow's
communities and providing opportunities
to contribute to a low-carbon world.
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HERE IS A SELECTION OF OUR
TRANSFORMATIVE PROJECTS
FROM AROUND THE WORLD.
2023 ANNUAL REPORT
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Te Spiral ofers a vision of the workplace of the future with a
human-focused design that prioritizes health and well-being.
In terms of stand-out features, every foor of this 1,041-foot-tall
skscraper is structurally designed with the fexibilit to
remove slabs and introduce double-height atrium spaces that
open onto “cascading” landscaped green terraces. Its open
foorplates provide fexibilit for tenants to help maximize
leasing potential and provide uninterrupted views.
Tanks to wind tunnel testing commissioned by WSP, it was
determined that wind loads were signifcantly lower than standard
assumptions, enabling a more efcient structural design and
signifcantly reducing the embedded carbon (since the steel frame and
trusses are so strong, less material is needed in the building core).
Efcient project delivery was made possible through
early-stage collaboration with constructors. WSP’s
engineers produced detailed computer models as part of
an integrated, collaborative and time-saving process. Tis
helped to meet a challenging completion deadline.
THE WORKPLACE
OF THE FUTURE
THE SPIRAL
NEW YORK CITY, USA
WSP engineers designed
The Spiral building to be
future-ready, anticipating
multiple-use changes over time.
FACT
2023 ANNUAL REPORT
WSP is deeply involved in the implementation of
the fundamental data acquisition system (DAS) for
Hong Kong’s Free-Flow Tolling System, known as
HKeToll. Tis comprehensive system covers six
major toll tunnels owned by the government.
Te project aims to enhance driving experiences and improve
overall transportation efciency, aligning with Hong Kong's smart
mobilit ambitions. Te Free-Flow Tolling System will be rolled
out in three phases, with full completion anticipated by 2025.
Tolls ofen create signifcant botlenecks in densely populated
areas like Hong Kong, where trafc congestion is a daily
challenge. With the Free-Flow Tolling System, drivers no longer
need to stop at toll booths, resulting in smoother trafc fow
near tunnels. Tis advancement will also enhance fuel efciency,
maximize road capacit, and enhance user satisfaction.
To ensure the success of the project, WSP's experts
have leveraged cuting-edge technologies such as radio
frequency identifcation (RFID), automatic number plate
recognition (ANPR), and light detection and ranging
(LiDAR) technology. Tese technologies work in unison
to facilitate accurate and efcient toll collection.
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Vatenfall and Zephyr, two Nordic leaders in renewable
energy, are planning an ofshore wind farm of the west
coast of Sweden, about 40 km northwest of Gothenburg
- the Poseidon Ofshore Wind Farm. WSP’s mandate
includes providing strategic support to both companies.
Te wind farm will have a maximum of 94 turbines
with foating foundations, among the frst in Sweden.
Te project will generate approximately 5.5 TWh of
electricit per year, or nearly 4% of Sweden's electricit
consumption, supplying about 1 million households.
As part of the permiting, which is currently in
progress, WSP has prepared the Environmental
Impact Assessment and several supporting
studies for establishment of the wind farm
and has been supporting the client in all
stages of the permiting process. In addition,
WSP has been chosen to support the client
in the next phases of the project.
DRIVING TRANSFORMATION
WITH DIGITAL INTELLIGENCE
FREE-FLOW TOLLING SYSTEM
HONG KONG
This smart project introduces
a fully automated solution
enabling electronic toll collection,
eliminating the need for physical
toll booths.
FACT
CLEAN ENERGY FOR A
MILLION HOUSEHOLDS
POSEIDON OFFSHORE WIND FARM
SKAGERRAK, SWEDEN
This renewable energy project
contributes to Sweden's
objectives to have 100%
renewable energy by 2040.
FACT
2023 ANNUAL REPORT
WSP is partnering with Atelier d’Urbanité Roland
Castro (urban designers) and Snøheta (architects)
to revitalize Boulevard de la Croisete, Cannes’
renowned waterfront thoroughfare.
Te 19th century promenade has long been associated
with the Cannes Film Festival and other international
events. When the legendary boulevard – largely
untouched since the 1960s – needed restoring, the Cit
of Cannes embraced the opportunit to transform it
into a more open, accessible and sustainable place.
Working closely with its client, WSP is using its
Future Ready® approach to devise a broad range of solutions.
To provide more shade in hot weather, umbrella pine trees
will be planted throughout the boulevard, along with a
specially designed shaded terrace at the new pavilion in
Reynaldo Hahn Square. In addition, new bicycle paths
will encourage social interaction and physical activit.
REVITALIZING A FAMOUS
PROMENADE
BOULEVARD DE LA CROISETTE
CANNES, FRANCE
The design of the promenade
aims to encourage social
interaction and physical activity
for health and well-being.
FACT
Future Ready® is registered in Canada, United States and
New Zealand. WSP Future Ready (Logo)® Is registered in
Europe, Australia and in the United Kingdom.
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WSP is advising on a project initiated by DSV,
the global transport and logistics company. Te
goal is to create a future-proof logistics centre
leading to green savings and greater efciency.
Te project will be built on a 761,000 m2
site in the village of Lund near Horsens.
Te new logistics centre—one of Europe’s
largest—will also be the continent’s bigest
single-tenant facilit. WSP’s team is ensuring
that the project is designed and executed
correctly in accordance with applicable
regulations, standards and specifcations.
Given the across-the-board sustainabilit of this
project, an ambitious, state-of-the-art energy
solution is also being developed, with roofop
photovoltaic panels, power systems well-suited
to batery-powered buildings, and charging
capacit for the electric trucks of the future.
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Mapocho River Park (Parque Mapocho Río) aims to revitalize the
southern bank of the Mapocho River in the Chilean capital of
Santiago, positively impacting the lives of over 250,000 people
and the cit’s image when arriving from the international
airport. Te communit will beneft from a park featuring over
1,000 new trees of native species, including willows, quillayes
and peumos, known for their low water consumption. For this
project, WSP is providing technical and specialized support
to ensure the safet and qualit of the work carried out.
New amenities will include children's playgrounds, lagoons (one for
water sports and another for wildlife conservation), two riverside
access points, facilities for various sports, artifcial soccer felds,
multipurpose felds, a fgure skating rink, skateparks, a free climb/
bouldering area, water game plazas, an athletic track and numerous
outdoor recreation opportunities throughout the landscaped grounds.
Te project, comprising six stages, initiated
construction in December 2020 and is in
progress. To date, two stages have already been
inaugurated. WSP’s team has been supporting and
advising the Metropolitan Housing and Urban
Planning Department (Serviu Metropolitano)
on technical evaluations, project management
monitoring, layout planning/delivery,
strategic discussions and decision-making.
© DS Flexhal
EUROPE'S LARGEST
LOGISTICS CENTRE
DSV HORSENS SUSTAINABLE
–
LOGISTICS, HORSENS, DENMARK
The new sustainable logistics
centre will create green savings
and boost efficiency.
FACT
REVITALIZING THE
MAPOCHO RIVER
MAPOCHO RIVER PARK
SANTIAGO, CHILE
Combined with existing parks,
Mapocho River Park forms a
continuous 34-km-long stretch
of green space, measuring
230 hectares.
FACT
© Ministerio Vivienda y Urbanismo de Chile (Minvu)
2023 ANNUAL REPORT
By creating a safer roadway, WSP is helping the
Province of British Columbia to make it easier
to navigate a difcult section of the Trans-
Canada Highway in the Rock Mountains.
Spanning a total of 26 kilometres, the Kicking
Horse Canyon project has seen the highway’s
capacit doubled from two lanes to four, making
it safer to navigate the difcult roadway.
Phase 4 of this multi-phase project, a 4.8-km section
representing the grueling fnal stretch of the upgrade,
was substantially completed in late 2023.
TAMING THE ROCKY
MOUNTAINS
KICKING HORSE CANYON
BRITISH COLUMBIA, CANADA
WSP has been working closely with Kicking Horse Canyon
Constructors, the consortium responsible for the Phase 4 work,
to navigate the project’s many challenges. Tese include
signifcant upgrades to hazard mitigation (designed to prevent
avalanches), new wildlife protections (including exclusion fencing)
and curve re-alignment on the short stretch of highway.
The re-designed Kicking Horse
Canyon segment of the Trans-
Canada Highway prioritizes
vehicle and pedestrian safety,
and works to minimize the
impact on wildlife in the region.
As the owner’s engineer on the project since 2017, WSP has
worked with its government partners to plan, procure, and
implement these upgrades to the Trans-Canada Highway.
FACT
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WSP helped to develop Los Angeles Metro’s new Regional
Connector, a 1.9-mile rail line linking three existing lines
and providing seamless, one-seat journeys for Metro’s
customers. Te new link opened in June 2023.
Tree new stations were created: Litle Toko/Arts District
Station; Historic Broadway Station; and Grand Avenue Arts/
Bunker Hill Station. Te project also marks Metro’s frst use
of high-speed elevators in a station instead of escalators.
SEAMLESS COMMUTING
IN LOS ANGELES
REGIONAL CONNECTOR
LOS ANGELES, USA
WSP provided environmental and engineering services to
the project owner from the early planning stages through to
design and construction. In a joint venture with AECOM as
the Connector Partnership, WSP also provided transportation
planning, rail design and rail planning. We were also involved with
architecture, mechanical/electrical engineering and transit systems,
including traction power, communications and train control.
The Regional Connector
facilitates the commute for
88,000 daily riders, thanks to
improved connections and an
enhanced transit experience.
FACT
2023 ANNUAL REPORT
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WSP led the design and project management components
of the scheme to revitalize Hanover Square and Gardens in
Westminster, near Oxford Circus. Te main goals were to “bring
nature back” while adopting sustainabilit and circular principles,
enhancing climate resilience and contributing to heritage
restoration. Tis major transformation was completed in 2023.
Te extensive consultation process reinforced the importance of
preserving and showcasing key cultural and historical assets, including
prominent statues and retaining London’s famous plane trees.
Te creation of a “paradise” for visitors and businesses in
and around the 300-year-old public square is designed to
increase footfall, thus enhancing commercial and business
performance in the area. Accessibilit has been improved by
embracing inclusive design principles, including pavement
fnishes, cycling infrastructure and all level changes.
WSP’s multidisciplinary team included landscape
architects and specialists in the felds of transport,
ecology, drainage and civil engineering.
© Thomas Graham
A SUSTAINABLE
HERITAGE PARADISE
HANOVER SQUARE AND GARDENS
LONDON, UK
Key materials for the project
were sourced locally within
the UK and prized heritage
assets were retained.
FACT
2023 ANNUAL REPORT
Glenroy Communit Hub is the frst public building in
Australia to achieve the Passivhaus energy efciency standard,
under which the internal environment is isolated from the
outside world. Te hub houses a library, kindergarten and
health clinic, which were all in need of refurbishment.
Te new facilit consolidates these services in a single building,
ofering new opportunities for recreation and lifelong learning.
It also incorporates a heritage structure: one of the former
classrooms has been transformed into a space for local youth, with
a jam room, recording studio, makerspace and games centre.
Te Hub has Living Building Challenge certifcation (regenerative
design/Zero Energy certifcation), emphasizing its connection
to nature. Te challenge facing WSP’s designers was how to
reconcile these conficting approaches. Te solution was
to design the Hub as separate but connected structures,
devising ways to prevent conditioned air from escaping.
LOCAL TRANSFORMATION,
WORLD-CLASS
SUSTAINABILITY
GLENROY COMMUNITY HUB,
MELBOURNE, AUSTRALIA
The heating, ventilation and
air conditioning of Glenroy
Community Hub can ramp up
and down to meet stringent
minimal energy standards
and the demands of future
climate extremes.
FACT
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© Dianna Snape
Corporate
Governance
BOARD OF DIRECTORS
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03
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06
07
08
09
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CHRISTOPHER COLE
CHAIRMAN AND MEMBER OF
THE GOVERNANCE, ETHICS AND
COMPENSATION COMMITTEE
Director since 2012
Independent
Professional Non-Executive Director
02
PIERRE SHOIRY
VICE CHAIRMAN
Director since 2006
Independent
Professional Non-Executive Director
03
ALEXANDRE L’HEUREUX
PRESIDENT AND CHIEF EXECUTIVE
OFFICER, WSP GLOBAL INC.
Director since 2016
Non-independent
04
LOUIS-PHILIPPE CARRIÈRE
CHAIR OF THE AUDIT COMMITTEE
Director since 2017
Independent
Professional Non-Executive Director
05
BIRGIT NØRGAARD
MEMBER OF THE GOVERNANCE, ETHICS
AND COMPENSATION COMMITTEE
Director since 2013
Independent
Professional Non-Executive Director
06
SUZANNE RANCOURT
MEMBER OF THE AUDIT COMMITTEE
Director since 2016
Independent
Professional Non-Executive Director
07
PAUL RAYMOND
MEMBER OF THE AUDIT COMMITTEE
Director since 2019
Independent
President and Chief Executive Ofcer, Alithya
08
LINDA SMITH-GALIPEAU
CHAIR OF THE GOVERNANCE, ETHICS AND
COMPENSATION COMMITTEE
Director since 2019
Independent
Professional Non-Executive Director
09
MACKY TALL
DIRECTOR
Director since 2023
Independent
Partner and Chair of Carlyle’s Global
Infrastructure Group
10
CLAUDE TESSIER
MEMBER OF THE AUDIT COMMITTEE
Director since 2023
Independent
Professional Non-Executive Director
2023 ANNUAL REPORT
GLOBAL LEADERSHIP TEAM
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03
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07
08
09
10
11
12
13
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01
ALEXANDRE L’HEUREUX
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
02
MARC CHABOT
CHIEF GLOBAL CLIENTS OFFICER
03
PHILIPPE FORTIER
CHIEF LEGAL OFFICER AND
CORPORATE SECRETARY
04
JULIANNA FOX
CHIEF ETHICS AND COMPLIANCE OFFICER
05
CHADI HABIB
CHIEF TECHNOLOGY OFFICER AND
HEAD OF BUSINESS SOLUTIONS
06
ALAIN MICHAUD
CHIEF FINANCIAL OFFICER
07
GINO POULIN
CHIEF INFORMATION OFFICER
08
MARC RIVARD
GLOBAL SENIOR VICE PRESIDENT,
OPERATIONAL PERFORMANCE
09
MEGAN VAN PELT
CHIEF HUMAN RESOURCES OFFICER
10
SANDY VASSIADIS
CHIEF COMMUNICATIONS OFFICER
11
KEVIN BEAUCHAMP
GLOBAL DIRECTOR, MINING
12
ANDRÉ-MARTIN BOUCHARD
GLOBAL DIRECTOR, EARTH
AND ENVIRONMENT
13
ERIC PEISSEL
GLOBAL DIRECTOR, TRANSPORT
AND INFRASTRUCTURE
14
TOM SMITH
GLOBAL DIRECTOR, PROPERTY
AND BUILDINGS
2023 ANNUAL REPORT
15
16
17
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IAN BLAIR
MANAGING DIRECTOR,
NEW ZEALAND
16
LEWIS P. CORNELL
PRESIDENT AND CHIEF EXECUTIVE
OFFICER, USA
17
MARIE-CLAUDE DUMAS
PRESIDENT AND CHIEF EXECUTIVE
OFFICER, CANADA
18
GREG KANE
CHIEF EXECUTIVE OFFICER,
AUSTRALIA
19
IVY KONG
CHIEF EXECUTIVE OFFICER, ASIA
20
DEAN MCGRAIL
CHIEF EXECUTIVE OFFICER,
MIDDLE EAST
21
PETER MYERS
CHIEF EXECUTIVE OFFICER, LATIN
AMERICA AND THE CARIBBEAN
22
MARK NAYSMITH
PRESIDENT AND CHIEF EXECUTIVE
OFFICER, EUROPE, MIDDLE EAST
AND AFRICA
23
ANNA-LENA ÖBERG-HÖGSTA
CHIEF EXECUTIVE OFFICER,
NORDICS
2023 ANNUAL REPORT
20
23
Management’s
Discussion
&
Analysis
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M-1
WSP Global Inc.
For the fourth quarter
and year ended
December 31, 2023
2023 ANNUAL REPORT
TABLE OF CONTENTS
M-2
1 MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................ M-3
2 NON-IFRS AND OTHER FINANCIAL MEASURES........................................................... M-3
3 CORPORATE OVERVIEW ........................................................................................................ M-4
4
FINANCIAL HIGHLIGHTS......................................................................................................... M-6
5 EXECUTIVE SUMMARY............................................................................................................ M-6
6 KEY EVENTS................................................................................................................................. M-8
7
8
9
SEGMENT OPERATIONAL REVIEW..................................................................................... M-9
FINANCIAL REVIEW.................................................................................................................. M-14
LIQUIDITY ..................................................................................................................................... M-21
10 SUMMARY OF QUARTERLY RESULTS................................................................................ M-24
11 SELECTED ANNUAL INFORMATION .................................................................................. M-25
12 GOVERNANCE............................................................................................................................ M-25
13 CRITICAL ACCOUNTING ESTIMATES................................................................................. M-26
14 MATERIAL ACCOUNTING POLICIES................................................................................... M-27
15 FINANCIAL INSTRUMENTS.................................................................................................... M-27
16 RELATED PARTY TRANSACTIONS ...................................................................................... M-28
17 OFF-BALANCE SHEET AGREEMENTS ............................................................................... M-28
18 CONTRACTUAL OBLIGATIONS............................................................................................. M-28
19 FORWARD-LOOKING STATEMENTS.................................................................................. M-28
20 RISK FACTORS............................................................................................................................ M-30
21 ADDITIONAL INFORMATION ................................................................................................ M-50
22 GLOSSARY OF SEGMENT REPORTING, NON-IFRS AND OTHER FINANCIAL
MEASURES................................................................................................................................... M-50
WSP Global Inc.
Management's Discussion and Analysis
2023
M-3
1 MANAGEMENT’S DISCUSSION AND
ANALYSIS
The following management’s discussion and analysis (“MD&A”) of the consolidated financial position and consolidated
results of operations, dated February 28, 2024, is intended to assist readers in understanding WSP Global Inc. (together
with its subsidiaries, the “Corporation” or “WSP”) and its business environment, strategies, performance and risk factors.
This MD&A should be read together with the Corporation's audited consolidated financial statements and accompanying
notes for the year ended December 31, 2023. The Corporation’s audited consolidated financial statements for the year
ended December 31, 2023 have been prepared in compliance with International Financial Reporting Standards as issued by
the International Accounting Standards Board (“IASB” and “IFRS”). All amounts shown in this MD&A are expressed in
Canadian dollars, unless otherwise indicated. All quarterly information disclosed in this MD&A is based on unaudited
figures.
This MD&A focuses on the Corporation’s annual and quarterly results for the year and fourth quarter ended December 31,
2023. The Corporation’s second and third quarters are always comprised of 13 weeks of operations. However, the number
of weeks of operations in the first and fourth quarters will vary as the Corporation has a statutory December 31 year end.
The fourth quarter results include the period from October 1, 2023 to December 31, 2023 and the comparative fourth
quarter results include the period from October 2, 2022 to December 31, 2022.
In this MD&A, references to the “Corporation”, “we”, “us”, “our” and “WSP” or “WSP Global” refer to WSP Global Inc.
Depending on the context, this term may also include subsidiaries and associated companies.
2 NON-IFRS AND OTHER FINANCIAL
MEASURES
The Corporation reports its financial results in accordance with IFRS as issued by the IASB. WSP uses a number of financial
measures when assessing its results and measuring overall performance. Some of these financial measures are not
calculated in accordance with IFRS. Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure
(“Regulation 52-112”) prescribes disclosure requirements that apply to the following types of measures used by the
Corporation:
i. non-IFRS financial measures;
ii. non-IFRS ratios;
iii. total of segments measures;
iv. capital management measures; and
v.
supplemental financial measures.
In this MD&A, the following non-IFRS and other financial measures are used by the Corporation: net revenues; total
adjusted EBITDA by segment; total adjusted EBITDA margin by segment; adjusted EBITDA; adjusted EBITDA margin;
adjusted net earnings; adjusted net earnings per share; backlog; free cash flow; days sales outstanding (“DSO”); and net
debt to adjusted EBITDA ratio. These measures are defined in section 22, “Glossary of segment reporting, non-IFRS and
other financial measures” and reconciliations to IFRS measures can be found in section 8, “Financial Review” and section 9,
“Liquidity”.
Management of the Corporation (“Management”) believes that these non-IFRS and other financial measures provide useful
information to investors regarding the Corporation’s financial condition and results of operations as they provide
additional key metrics of its performance. These non-IFRS and other financial measures are not recognized under IFRS, do
not have any standardized meaning prescribed under IFRS and may differ from similarly-named measures as reported by
other issuers, and accordingly may not be comparable. These measures should not be viewed as a substitute for the related
financial information prepared in accordance with IFRS.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-4
3 CORPORATE OVERVIEW
As one of the world’s leading professional services firms, WSP provides strategic advisory, engineering and design services
to clients in the Transportation & Infrastructure, Earth & Environment, Property & Buildings, Power & Energy and
Industry sectors. WSP's experts include advisors, engineers, environmental specialists, scientists, technicians, architects
and planners, in addition to other design and program management professionals. With approximately 66,500 talented
people globally, WSP is well positioned to deliver successful and sustainable projects, to meet clients' needs.
The Corporation’s business model is centered on maintaining a leadership position in each of its end-markets and the
regions in which it operates by establishing a strong commitment to, and recognizing the needs of, surrounding
communities, as well as local and national clients. WSP offers a variety of professional services throughout all project
execution phases, from the initial development and planning studies through to the project and program management,
design, construction management, commissioning and maintenance phases.
Under this business model, the Corporation benefits from regional offices with a full-service offering. Functionally, sector
and regional leaders work together to develop and coordinate markets served, combining local knowledge and
relationships with nationally recognized expertise. The Corporation has developed a multidisciplinary team approach
whereby employees work closely with clients to develop optimized solutions.
The Corporation believes it has the capability and the depth of expertise to transform clients’ visions into realities that are
sustainable in every sense - commercially, technically, socially and environmentally.
The market sectors in which the Corporation operates are described below.
•
•
•
Transportation & Infrastructure: The Corporation’s experts advise, plan, design and manage projects for rail,
transit, aviation, highways, bridges, tunnels, water, maritime and urban infrastructure. Public and private sector
clients, together with construction contractors and other partners, seek WSP’s global expertise to undertake
design services as well as create medium and long-term transportation and infrastructure strategies, and to
provide guidance and support throughout the lifecycle of a wide range of projects and assets. WSP offers
comprehensive, innovative and value-oriented solutions to assist clients in achieving their desired outcomes and
takes great pride in solving clients’ toughest problems. WSP offers a full range of services locally with extensive
global experience and support to successfully deliver projects, helping clients overcome challenges and respond
to emerging areas in new mobility, resiliency, decarbonization, social equity, digital project delivery, asset
management and design.
Earth & Environment: The Corporation has specialists working with and advising governments and private-
sector clients on key aspects of earth sciences and environmental sustainability. WSP’s experts advise on matters
ranging from clean air, water and land, to biodiversity, green energy solutions, climate change and
Environmental, Social and Governance (“ESG”) issues. They provide specialized services to mining, oil and gas,
power, industrial and transportation clients, all of whom operate in highly-regulated industries. The Corporation
delivers a broad range of advisory and operational services, including due diligence, permit approvals, regulatory
compliance, waste/hazardous materials management, geotechnical and mining engineering, environmental/
social impact assessments, feasibility and land remediation studies. WSP's reputation is built on helping clients
worldwide mitigate risk, manage and reduce impacts and maximize opportunities related to sustainability,
climate change, energy use, resource extraction and the environment. The Corporation is able to support its
clients through the project life-cycle, from design, permitting, planning and operations, to decommissioning and
asset remediation.
Property & Buildings: WSP is a world-leading provider of technical and advisory services with a track record of
delivering buildings of the highest quality. The Corporation is involved at every stage of the project life-cycle,
from the business case, through design and construction, to asset management and refurbishment. The
Corporation has teams of technical experts across the globe delivering engineering and consultancy services
ranging from decarbonization strategies and digital building design to building engineering design and project
WSP Global Inc.
Management's Discussion and Analysis
2023
M-5
•
•
management. The Corporation enables its clients to maximize the outcome of their projects across all sectors
including commercial and residential, government and mobility, healthcare, science, technology and
manufacturing, hospitality and entertainment.
Power & Energy: The Corporation offers energy clients support on all kinds of projects, including large-scale
power plants, clean energy investments like renewables, smaller on-site power generation and efficiency
programs, energy transmission, storage and distribution. WSP's experts can advise and collaborate during every
project stage, delivering full life-cycle solutions. From pre-feasibility studies and community engagement through
operation and decommissioning, the Corporation aims to support clients’ transition to cleaner, more efficient and
sustainable energy.
Industry: The Corporation operates in almost every industrial and manufacturing sector including food and
beverage, pharmaceutical and biotechnology, aerospace, automotive, technology and chemicals. WSP's experts
support industrial clients throughout the facility life-cycle, from siting and licensing, to procurement,
construction management, engineering, process design, and productivity analysis. In addition, WSP provides
operational and maintenance support during the facility’s active life, as well as decommissioning services. The
Corporation has a deep understanding of industrial and energy processes and incorporates automation
capabilities, climate change resilience and ESG-driven metrics into its projects.
In addition to these sectors, the Corporation offers the highly specialized strategic advisory services listed below:
•
Planning and Advisory Services: The Corporation helps clients throughout their journey from strategic
planning to final project delivery. Combining technical talent and business acumen, WSP's team has a
comprehensive understanding of market dynamics and expertise in areas such as finance, digital technology,
economics, policy development, sustainability and risk. To stay competitive and effectively manage and develop
their infrastructure and property assets, public and private sector clients are seeking access to more refined data
and “lessons learned” from the Corporation. The Corporation provides local expertise and offers international
benchmarks and best practice solutions based on its experience. WSP's team blends the technical skills of its
global network with a results-oriented approach to provide effective and sustainable strategies that help to
advance the communities where it is present.
• Management Services: The Corporation’s professionals help clients to assess and define their goals, as well as to
address the technical, environmental and commercial realities and challenges they face. WSP’s integrated service
offering also helps to forge strategic relationships with clients, who are supported throughout the project
planning, implementation and commissioning stages, including during emergencies. Focusing on cost, on-time
delivery, quality and safety, and applying best-in-class management processes and techniques, WSP can put
together the right team from around the world to execute projects of varying sizes and complexity.
•
Technology and Sustainability Services: The Corporation’s professionals work throughout the project life cycle
to design innovative solutions with a strong focus on change management and executive engagement. Major
technological advancements are likely to improve the way we live, commute and travel, but they also shed new
light on how property and infrastructure owners need to adapt to and embrace change. WSP’s Technology
Services experts use digital solutions and software to enhance engineering, infrastructure, building and
environmental projects. In the face of challenges associated with population growth, resource demands and
constraints, not to mention extreme weather events that impact community resiliency, the Corporation remains
committed to integrating sustainability principles during the planning, design and management stages of all its
projects.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-6
4 FINANCIAL HIGHLIGHTS
(in millions of dollars, except percentages, per share data, DSO and ratios) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Fourth quarters ended
Years ended
Revenues
Net revenues(1)
Earnings before net financing expense and income taxes
Adjusted EBITDA(2)
Adjusted EBITDA margin(3)
Net earnings attributable to shareholders of WSP Global Inc.
Basic net earnings per share attributable to shareholders
Adjusted net earnings(2)
Adjusted net earnings per share(3)
Cash inflows from operating activities
Free cash flow(2)
As at
Backlog(4)
Approximate number of employees
DSO(4)
Net debt to adjusted EBITDA ratio(5)
$3,724.3
$2,756.0
$211.0
$524.9
19.0 %
$130.6
$1.05
$247.8
$1.99
$776.6
$610.3
$3,560.8
$2,553.7
$185.3
$446.4
17.5 %
$120.0
$0.96
$209.3
$1.68
$607.4
$442.7
$14,437.2
$10,897.0
$947.5
$1,921.3
17.6 %
$550.0
$4.41
$860.0
$6.90
$986.3
$433.1
$11,932.9
$8,957.2
$749.1
$1,530.2
17.1 %
$431.8
$3.59
$692.6
$5.75
$814.8
$309.0
December 31, 2023 December 31, 2022
$14,076.5
$13,006.5
66,500
76 days
1.5
66,200
73 days
1.6
(1)
(2)
(3)
(4)
(5)
Total of segments measure. Refer to section 8.1, “Net revenues” for a reconciliation to revenues.
Non-IFRS financial measure without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers.
Refer to sections 8.3, “Adjusted EBITDA”, 8.8, “Adjusted net earnings”, 9.1, “Operating activities and free cash flow”, as well as section 22, “Glossary
of segment reporting, non-IFRS and other financial measures”, for quantitative reconciliations to the most directly comparable IFRS measures, as
well as explanations of the composition and usefulness of these non-IFRS financial measures.
Non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar ratios used by other issuers. Adjusted EBITDA
margin is defined as adjusted EBITDA expressed as a percentage of net revenues. Adjusted net earnings per share is the ratio of adjusted net
earnings divided by the basic weighted average number of shares outstanding for the period. Refer to section 22, “Glossary of segment reporting,
non-IFRS and other financial measures” for references to the non-IFRS financial measures which are components of these non-IFRS ratios, and the
use of these non-IFRS ratios.
Supplemental financial measure. Backlog represents future revenues stemming from existing signed contracts to be completed. DSO represents the
average number of days to convert the Corporation's trade receivables (net of sales taxes) and costs and anticipated profits in excess of billings, net
of billings in excess of costs and anticipated profits, into cash.
This capital management measure is the ratio of net debt to adjusted EBITDA for the trailing twelve-month period. Net debt is defined as long-term
debt, including current portions but excluding lease liabilities, and net of cash.
5 EXECUTIVE SUMMARY
Strong 2023 performance with net revenues up 22% from healthy organic growth and recent strategic acquisitions.
Adjusted EBITDA up 26% over 2022 resulting from strong growth and significantly improved adjusted EBITDA margin
reaching 17.6%, up by 55 basis points (“bps”) compared to 2022. Concluding positively a year of growth and consolidation,
with continued robust market conditions evidenced by a record-high order intake of $15.1 billion in 2023.
Fourth quarter 2023 financial highlights
•
Revenues and net revenues for the quarter reached $3.72 billion and $2.76 billion, up 4.6% and 7.9%, respectively,
compared to the fourth quarter of 2022. Net revenue organic growth of 5.1% in the quarter is attributable to all
reportable segments. Globally, net revenue organic growth would be approximately 6.5% when excluding the
significantly lower level of activity in our emergency response services in the US.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-7
•
•
•
•
Adjusted EBITDA margin for the quarter increased by 150 bps to 19.0%, compared to 17.5% in the fourth quarter of
2022. The increase is mainly attributable to strong project performance and increased productivity.
Adjusted EBITDA in the quarter grew to $524.9 million, compared to $446.4 million in the fourth quarter of 2022, an
increase of 17.6%.
Earnings before net financing expense and income taxes in the quarter stood at $211.0 million, up $25.7 million
compared to the fourth quarter of 2022, mainly due to higher adjusted EBITDA.
Adjusted net earnings for the quarter reached $247.8 million, up $38.5 million or 18.4%, compared to the fourth
quarter of 2022. The increase is mainly attributable to a higher adjusted EBITDA, partially offset by higher interest on
long-term debt.
• Net earnings attributable to shareholders for the quarter stood at $130.6 million, compared to $120.0 million in
Q4 2022.
•
•
Cash flows from operating activities increased 28% in the quarter, and free cash flow reached $610.3 million.
Quarterly dividend declared of $0.375 per share, or $46.8 million.
Fiscal year 2023 financial highlights
•
•
•
•
•
•
Revenues and net revenues increased by 21.0% and 21.7%, respectively, compared to 2022, growing to $14.44 billion
and $10.90 billion, respectively, with net revenue reaching the high end of Management's revised outlook range for
the year of $10.7 billion to $11.0 billion. The increase was due to healthy organic growth of 7.3%, which was achieved
across all reportable segments, and to sizeable acquisition growth of 12.3%.
Organic order intake reached a record high level of $15.1 billion for the year, resulting in backlog as at December 31,
2023 of $14.1 billion, representing 11.8 months of revenues,(1) up 8.2% in the year.
Adjusted EBITDA margin increased to 17.6%, compared to 17.1% in 2022, mainly attributable to strong project
performance and increased productivity.
Adjusted EBITDA grew to $1.92 billion, up 25.6%, compared to $1.53 billion in 2022, reaching the high end of
Management's revised outlook range of $1.90 billion to $1.93 billion.
Earnings before net financing expense and income taxes stood at $947.5 million, up 26.5% compared to 2022, mainly
due to increased adjusted EBITDA.
Adjusted net earnings of $860.0 million, or $6.90 per share, increased by $167.4 million or $1.15 per share, compared
to 2022. The respective increases of 24.2% and 20.0% in these metrics are mainly attributable to higher adjusted
EBITDA, partially offset by higher interest on long-term debt.
• Net earnings attributable to shareholders reached $550.0 million, or $4.41 per share, up $118.2 million, or $0.82 per
share, compared to 2022. The increase was mainly due to higher adjusted EBITDA, partially offset by impairment of
long-lived assets resulting from ongoing optimizations as part of the Corporation's real estate strategy to review its
footprint, realize synergies and reduce costs.
•
DSO as at December 31, 2023 stood at 76 days, compared to 73 days as at December 31, 2022.
(1)
Based on revenues for the trailing twelve-month period, incorporating a full twelve months of revenues for all acquisitions.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-8
•
Cash inflows from operating activities were $986.3 million compared to $814.8 million in 2022. Free cash flow was
$433.1 million for the year, up 40.2% compared to $309.0 million in 2022. The improvement in free cash flow
compared to 2022 was mainly attributable to the increase in adjusted EBITDA, partially offset by higher income taxes
paid due to tax regulations in the US which delay the deductibility of certain expenses. Excluding the effect of the
latter, free cash flow represents 1.1 times net earnings attributable to shareholders.
• Net debt to adjusted EBITDA ratio stood at 1.5x, within Management's target range of 1.0x to 2.0x.
•
Full year dividend declared of $1.50 per share, or $186.9 million.
6 KEY EVENTS
The following are highlights from January 1, 2023 to February 28, 2024, the date of this MD&A for the fourth quarter and
year ended December 31, 2023.
Acquisitions and divestiture
In January 2023, WSP acquired BG Bonnard & Gardel Holding SA (“BG”), one of Switzerland’s leading engineering
consulting firms, with a strong presence in France, as well as a minor presence in Portugal and Italy. With approximately
700 professionals, BG offers consulting, engineering, and project management services in the infrastructure, building,
water, environment, and energy sectors.
In January 2023, WSP acquired Enstruct Group Pty Ltd (“enstruct”), a 75-employee structural engineering firm with offices
in Sydney, Melbourne, and Brisbane, noted for designing and delivering building projects throughout Australia.
In May 2023, WSP acquired LGT Inc. (“LGT”), a Quebec-based building engineering firm with over 150 employees. LGT
provides advisory services in the areas of mechanical engineering, electricity, sustainable development, structural, and
civil engineering.
In June 2023, WSP acquired Calibre Professional Services One Pty Ltd (“Calibre”) for an aggregate consideration of
AUD 275.7 million ($245.1 million). Calibre is a leading engineering services provider in Australia, focused on rail,
infrastructure, rehabilitation, and renewable projects supporting blue-chip mining clients, with a workforce of
approximately 800 professionals.
These acquisitions were financed using WSP's available cash and credit facilities.
In August 2023, WSP sold Louis Berger Services, Inc. (“LBS”) to Versar Inc., a global engineering, environmental, and
security services company. LBS specializes in operations and maintenance services for complex infrastructure assets at
mission-essential defense and civilian facilities worldwide and employed approximately 1,400 people at the time of the
divestiture.
Financing arrangement
On November 22, 2023, WSP completed a private placement of senior unsecured notes at par for aggregate gross proceeds
of $500 million, due November 22, 2030 (the “Notes”). The Notes bear interest at a fixed rate of 5.548% per annum, payable
semi annually until maturity on the 22nd day of May and November in each year beginning on May 22, 2024. The Notes
were assigned rating of BBB (high), with a stable trend, by DBRS Morningstar. Proceeds from the Notes offering were used
to repay existing indebtedness and for other general corporate purposes.
Leadership and Board announcements
In February 2023, Sandy Vassiadis joined WSP as Global Chief Communications Officer. Ms. Vassiadis is a seasoned
communications executive specializing in public affairs, brand recognition and corporate social responsibility.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-9
In May 2023, Mr. Macky Tall joined WSP’s Board of Directors of the Corporation (the “Board”). Mr. Tall is a Partner and
Chair of Carlyle's Global Infrastructure Group. He brings to the Board extensive senior management, financial and industry
experience.
In December 2023, Mr. Claude Tessier joined WSP’s Board and was appointed as a member of its Audit Committee. He
brings to the Board extensive senior management, financial, and operational experience.
In November 2023, WSP announced that Lewis (Lou) Cornell, President and Chief Executive Officer, WSP in the USA, will
retire in 2024. The process is underway to recruit Mr. Cornell's replacement.
DRIP termination
On May 10, 2023, the Board approved the termination of the Dividend Reinvestment Plan (“DRIP”) of the Corporation in
accordance with its terms. All cash dividends or distributions on the Corporation's common shares with a record date for
payment after May 10, 2023, have been or will be paid in cash rather than in shares of the Corporation.
7 SEGMENT OPERATIONAL REVIEW
The Corporation’s reportable segments are: Canada, Americas (USA and Latin America), EMEIA (Europe, Middle East, India
and Africa) and APAC (Asia Pacific, comprising Australia, New Zealand and Asia). Segment performance is measured using
net revenues and adjusted EBITDA by segment.
CANADA
(in millions of dollars, except percentages and number of
employees)
Fourth quarters ended
Years ended
December 31,
2023
December 31,
2022
Variance
December 31,
2023
December 31,
2022
Variance
Net revenues
Organic growth
Acquisition growth
$487.5
$438.4
Adjusted EBITDA by segment
Adjusted EBITDA margin by segment
$118.3
24.3 %
$91.9
21.0 %
As at
Backlog
Organic backlog growth in the year
Approximate number of employees
bps: basis points
Net revenues
11.2 %
9.5 %
1.7 %
28.7 %
330 bps
$1,912.0
$1,585.2
$433.5
22.7 %
$347.9
21.9 %
20.6 %
6.8 %
13.8 %
24.6 %
80 bps
December 31,
2023
December 31,
2022
Variance
$2,444.2
$2,304.8
12,200
11,800
6.0 %
5.1 %
3.4 %
In the quarter ended December 31, 2023, net revenues in Canada were $487.5 million, an increase of $49.1 million, or 11.2%,
compared to the corresponding quarter in 2022. Organic growth and acquisition growth for the fourth quarter of 2023
were 9.5 % and 1.7 %, respectively.
In the year ended December 31, 2023, net revenues in Canada were $1.91 billion, an increase of $326.8 million, or 20.6%,
compared to 2022. Organic growth and acquisition growth in the year were 6.8% and 13.8%, respectively. The year ended
December 31, 2022 benefitted from the favourable impact of a significant change order on a project. Excluding the impact
of the change order, organic growth in net revenues for 2023 stood at 7.3%.
Acquisition growth is due to the acquisition of the Environment & Infrastructure business (“E&I”) of John Wood Group plc
(“Wood”) (the “E&I Acquisition”) completed in September 2022 as well as the acquisition of LGT completed in May 2023.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-10
In the year ended December 31, 2023, the Transportation & Infrastructure, Earth & Environment and Property & Buildings
market sectors accounted for 90% of net revenues and public sector clients accounted for 38% of net revenues.
Backlog
In 2023, backlog in Canada grew organically by 5.1%. The acquisition of LGT also contributed to the higher level of backlog.
Adjusted EBITDA margin
For both the quarter and the year ended December 31, 2023, adjusted EBITDA margin in Canada increased significantly
mainly due to strong project performance and increased productivity. Notably, the first quarter of 2022 benefitted from
the favourable impact of a significant change order on a project which accounted for approximately a 40 bps increase in
the adjusted EBITDA margin in 2022. Excluding the impact of this change order in 2022, adjusted EBITDA margin in Canada
in 2023 increased by 120 bps.
AMERICAS
(in millions of dollars, except percentages and number of
employees)
Net revenues
Organic growth*
Acquisition growth*
Divestiture impact*
Foreign currency exchange impact**
Adjusted EBITDA by segment
Adjusted EBITDA margin by segment
As at
Backlog
Organic backlog growth in the year
Approximate number of employees
Fourth quarters ended
Years ended
December 31,
2023
December 31,
2022
Variance
December 31,
2023
December 31,
2022
Variance
$1,006.0
$986.1
$220.1
21.9 %
$211.1
21.4 %
2.0 %
5.0 %
—
(4.4) %
1.4 %
4.3 %
50 bps
$4,087.8
$3,256.4
$808.1
19.8 %
$644.7
19.8 %
December 31,
2023
December 31,
2022
$6,473.3
$6,315.3
25.5 %
7.4 %
15.5 %
(2.1) %
4.7 %
25.3 %
—
Variance
2.5 %
6.3 %
18,100
20,500
(11.7) %
*
**
Organic growth, acquisition growth and divestiture impact are calculated based on local currencies.
Foreign currency exchange impact represents the foreign currency exchange component to convert net revenues in local currencies into the
Canadian equivalent amount, net of organic growth, acquisition growth and divestiture impact.
bps: basis points
Net revenues
In the quarter ended December 31, 2023, net revenues in the Americas reportable segment were $1,006.0 million, largely
stable compared to the corresponding quarter in 2022. Organic growth for the fourth quarter of 2023 was 5.0%, on a
constant currency basis. Strong organic growth in the Transportation & Infrastructure market sector was partially offset
by significantly lower demand for emergency response services due to less inspection activity. Excluding the impact of the
latter, organic growth in the Americas would be 8.6% for the quarter.
In the year ended December 31, 2023, net revenues in the Americas reportable segment stood at $4.09 billion, an increase
of $831.4 million, or 25.5%, compared to 2022. Organic growth and acquisition growth were 7.4% and 15.5%, respectively,
both on a constant currency basis. Organic growth is predominantly driven by the Transportation & Infrastructure market
sector. Acquisition growth mainly stems from the E&I Acquisition completed in September 2022.
The sale of LBS in August 2023 resulted in a divestiture impact of 4.4 % and 2.1 % in the quarter and year ended
December 31, 2023, respectively.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-11
In addition, in both the quarter and year ended December 31, 2023, the Americas segment benefitted from positive impacts
of foreign exchange, principally due to the depreciation of the Canadian dollar against the US dollar.
In the year ended December 31, 2023, the Transportation & Infrastructure, Earth & Environment and Property & Buildings
market sectors accounted for 96% of net revenues and public sector clients accounted for 57% of net revenues.
Backlog
In 2023, backlog in the Americas reportable segment grew organically by 6.3%. Backlog also increased due to the
depreciation of the Canadian dollar against the US dollar. Backlog growth was partially offset by divestiture impact
following the sale of LBS in August 2023.
Adjusted EBITDA margin
In the quarter ended December 31, 2023, adjusted EBITDA margin for the Americas segment increased 50 bps, mainly due
to improved productivity.
In the year ended December 31, 2023, adjusted EBITDA margin for the Americas segment remained stable as compared to
2022, as improvements in the US were offset by lower margins in Latin America largely due to ramp down of some projects.
EMEIA
(in millions of dollars, except percentages and number of
employees)
Net revenues
Organic growth*
Acquisition growth*
Foreign currency exchange impact**
Adjusted EBITDA by segment
Adjusted EBITDA margin by segment
As at
Backlog
Organic backlog growth in the year
Approximate number of employees
Fourth quarters ended
Years ended
December 31,
2023
December 31,
2022
Variance
December 31,
2023
December 31,
2022
Variance
$830.6
$738.5
12.5 %
$3,193.0
$2,651.1
4.3 %
4.6 %
3.6 %
31.0 %
230 bps
$138.2
16.6 %
$105.5
14.3 %
$489.9
15.3 %
$390.0
14.7 %
20.4 %
6.5 %
10.7 %
3.2 %
25.6 %
60 bps
December 31,
2023
December 31,
2022
Variance
$3,542.3
$2,852.8
24,200
22,500
24.2 %
9.7 %
7.6 %
*
**
Organic growth and acquisition growth are calculated based on local currencies.
Foreign currency exchange impact represents the foreign currency exchange component to convert net revenues in local currencies into the
Canadian equivalent amount, net of organic growth, acquisition growth and divestiture impact.
bps: basis points
Net revenues
In the quarter ended December 31, 2023, net revenues in the EMEIA reportable segment were $830.6 million, an increase of
$92.1 million, or 12.5%, compared to Q4 2022. Organic growth and acquisition growth for the fourth quarter of 2023 were
4.3% and 4.6 %, respectively, both on a constant currency basis.
In the year ended December 31, 2023, net revenues in the EMEIA operating segment stood at $3.19 billion, an increase of
$541.9 million, or 20.4%, compared to 2022. Organic growth and acquisition growth were 6.5% and 10.7%, respectively, both
on a constant currency basis.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-12
Acquisition growth in the quarter and year includes the acquisition of BG Bonnard & Gardel Holding SA (“BG”) completed
in January 2023. For the year, acquisition growth also includes the E&I Acquisition and the acquisition of Capita REI and
GLH, both completed in September 2022, as well as the aquisition of BOD Arquitectura e Ingeniería (“BOD”) completed in
June 2022.
In addition, in both the quarter and year ended December 31, 2023, the EMEIA segment benefitted from positive impacts of
foreign exchange, principally due to the depreciation of the Canadian dollar against the pound sterling and the euro.
In the year ended December 31, 2023, the Transportation & Infrastructure, Earth & Environment and Property & Buildings
market sectors accounted for 91% of net revenues and public sector clients accounted for 58% of net revenues.
Backlog
In 2023, backlog in the EMEIA reportable segment grew organically by 9.7 %, mainly in the UK. Backlog also increased due
to the acquisition of BG in January 2023, as well as the depreciation of the Canadian dollar, mainly against the pound
sterling and the euro.
Adjusted EBITDA margin
In the quarter and year ended December 31, 2023, adjusted EBITDA margin for the EMEIA segment increased by 230 bps
and 60 bps, respectively, as compared to the corresponding periods in 2022. The increases are mainly due to improved
performance in the UK and Central Europe. Foreign exchange negatively impacted adjusted EBITDA margin variances by
40 bps and 50 bps in the quarter and the year, respectively.
APAC
(in millions of dollars, except percentages and number of
employees)
Net revenues
Organic growth*
Acquisition growth*
Foreign currency exchange impact**
Adjusted EBITDA by segment
Adjusted EBITDA margin by segment
As at
Backlog
Organic backlog contraction in the year
Approximate number of employees
Fourth quarters ended
Years ended
December 31,
2023
December 31,
2022
Variance
December 31,
2023
December 31,
2022
Variance
$431.9
$390.7
$78.6
18.2 %
$69.7
17.8 %
10.5 %
1.9 %
8.9 %
(0.3) %
12.8 %
40 bps
$1,704.2
$1,464.5
16.4 %
9.3 %
6.9 %
0.2 %
15.5 %
(10) bps
$308.6
18.1 %
$267.1
18.2 %
December 31,
2023
December 31,
2022
Variance
$1,616.7
$1,533.6
12,000
11,400
5.4 %
(4.1) %
5.3 %
*
**
Organic growth and acquisition growth are calculated based on local currencies.
Foreign currency exchange impact represents the foreign currency exchange component to convert net revenues in local currencies into the
Canadian equivalent amount, net of organic growth, acquisition growth and divestiture impact.
bps: basis points
Net revenues
In the quarter ended December 31, 2023, net revenues in the APAC reportable segment were $431.9 million, an increase of
$41.2 million, or 10.5%, when compared to the corresponding quarter in 2022. Organic growth and acquisition growth for
the fourth quarter of 2023 were 1.9% and 8.9%, respectively, both on a constant currency basis.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-13
In the year ended December 31, 2023, net revenues in the APAC reportable segment stood at $1.70 billion, an increase of
$239.7 million, or 16.4%, when compared to 2022. Organic growth and acquisition growth were 9.3% and 6.9%, respectively,
both on a constant currency basis.
The organic growth in the APAC reportable segment was driven by strong market conditions in Australia and New Zealand,
partially offset by contraction in Asia mainly due to market slowdown in mainland China. Excluding the impact of Asia, the
organic growth for the segment would be 6.3% and 14.3%, for the quarter and year respectively.
Acquisition growth in the quarter and year stems from the acquisitions of Enstruct Group Pty Ltd (“enstruct”) in January
2023 and Calibre Professional Services One Pty Ltd (“Calibre”) in June 2023. For the year, acquisition growth also includes
the acquisition of Greencap Holdings Ltd (“Greencap”) in August 2022.
In the year ended December 31, 2023, the Transportation & Infrastructure, Earth & Environment and Property & Buildings
market sectors accounted for 97% of net revenues and public sector clients accounted for 54% of net revenues.
Backlog
In 2023, backlog for the APAC segment increased 5.4 % mainly due to the acquisitions of enstruct and Calibre. Organic
backlog contraction is mainly driven by difficult market conditions in China.
Adjusted EBITDA margin
In the quarter ended December 31, 2023, adjusted EBITDA margin for the APAC reportable segment increased by 40 bps
mainly due to improved performance in most market sectors in Australia, partially offset by market slowdowns in China.
In the year ended December 31, 2023, adjusted EBITDA margin for the APAC reportable segment decreased by 10 bps,
mainly due to non-recurring expenses, as well as lower performance resulting from difficult market conditions in China.
Excluding Asia, the increases in adjusted EBITDA margin for Australia and New Zealand combined, compared to the
corresponding periods in 2022, would be 140 bps for the fourth quarter and 40 bps for the year.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-14
8 FINANCIAL REVIEW
(in millions of dollars, except number of shares and per share data)
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Fourth quarters ended
Years ended
Revenues
Personnel costs
Subconsultants and direct costs
Other operational costs
Depreciation of right-of-use assets
Amortization of intangible assets
Depreciation of property and equipment
Impairment of long-lived assets
Acquisition, integration and reorganization costs
ERP implementation costs
Exchange loss (gain)
Share of income of associates and joint ventures, net of tax
Earnings before net financing expense and income taxes
Net financing expense
Earnings before income taxes
Income tax expense
Net earnings
Net earnings attributable to:
Shareholders of WSP Global Inc.
Non-controlling interests
Basic net earnings per share attributable to shareholders
Diluted net earnings per share attributable to shareholders
$3,724.3
$2,010.6
$968.3
$239.9
$77.2
$58.7
$39.7
$81.7
$26.3
$21.1
($1.2)
($9.0)
$211.0
$47.4
$163.6
$32.3
$131.3
$130.6
$0.7
$1.05
$1.05
$3,560.8
$1,889.3
$1,007.1
$229.0
$77.6
$73.1
$30.6
$5.1
$49.7
$19.4
$1.0
($6.4)
$185.3
$27.3
$158.0
$37.6
$120.4
$120.0
$0.4
$0.96
$0.96
$14,437.2
$11,932.9
$8,047.1
$3,540.2
$6,679.9
$2,975.7
$980.4
$316.4
$221.7
$135.1
$87.1
$105.0
$81.0
$5.4
($29.7)
$947.5
$202.6
$744.9
$191.9
$553.0
$550.0
$3.0
$4.41
$4.40
$794.0
$288.5
$173.4
$114.6
$21.6
$115.5
$49.9
($5.3)
($24.0)
$749.1
$161.6
$587.5
$152.8
$434.7
$431.8
$2.9
$3.59
$3.58
Basic weighted average number of shares
Diluted weighted average number of shares
124,647,422
124,989,583
124,426,229
124,730,705
124,603,768
124,951,544
120,400,365
120,709,390
8.1 NET REVENUES
(in millions of dollars, except percentages)
Canada
Americas
EMEIA
APAC
Total
Fourth quarters of 2023 vs 2022
Net revenues - 2023
Net revenues - 2022
Net change %
Organic growth*
Acquisition growth*
Divestiture impact*
Foreign currency exchange impact**
Net change %
$487.5
$438.4
11.2 %
9.5 %
1.7 %
—
—
11.2 %
$1,006.0
$986.1
2.0 %
5.0 %
—
(4.4)%
1.4 %
2.0 %
$830.6
$738.5
12.5 %
4.3 %
4.6 %
—
3.6 %
12.5 %
$431.9
$390.7
10.5 %
1.9 %
8.9 %
—
(0.3)%
10.5 %
$2,756.0
$2,553.7
7.9 %
5.1 %
3.1 %
(1.6)%
1.3 %
7.9 %
*
**
Organic growth, acquisition growth and divestiture impact are calculated based on local currencies.
Foreign currency exchange impact represents the foreign currency exchange component to convert net revenues in local currencies into the
Canadian equivalent amount, net of organic growth, acquisition growth and divestiture impact.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-15
(in millions of dollars, except percentages and number of employees)
Canada
Americas
EMEIA
APAC
Total
Fiscal years 2023 vs 2022
Net revenues - 2023
Net revenues - 2022
Net change %
Organic growth*
Acquisition growth*
Divestiture impact*
Foreign currency exchange impact**
Net change %
Approximate number of employees - December 31, 2023
Approximate number of employees - December 31, 2022
Net change %
$1,912.0
$1,585.2
$4,087.8
$3,256.4
$3,193.0
$2,651.1
$1,704.2
$1,464.5
$10,897.0
$8,957.2
20.6 %
25.5 %
20.4 %
16.4 %
21.7 %
6.8 %
13.8 %
—
—
20.6 %
12,200
11,800
3.4 %
7.4 %
15.5 %
(2.1)%
4.7 %
25.5 %
18,100
20,500
(11.7)%
6.5 %
10.7 %
—
3.2 %
20.4 %
As at
24,200
22,500
7.6 %
9.3 %
6.9 %
—
0.2 %
16.4 %
12,000
11,400
5.3 %
7.3 %
12.3 %
(0.6)%
2.7 %
21.7 %
66,500
66,200
0.5 %
*
**
Organic growth, acquisition growth and divestiture impact are calculated based on local currencies.
Foreign currency exchange impact represents the foreign currency exchange component to convert net revenues in local currencies into the
Canadian equivalent amount, net of organic growth, acquisition growth and divestiture impact.
During the fourth quarter of 2023, the Corporation achieved net revenues of $2.76 billion, up 7.9% compared to the fourth
quarter of 2022. The increase was principally driven by organic growth of 5.1%, as well as acquisition growth of 3.1%. Net
revenues grew organically across all reportable segments. Globally, net revenue organic growth would be approximately
6.5% when excluding the significantly lower level of activity in our emergency response services in the US. The sale of LBS
in August 2023 resulted in a divestiture impact in the US. The overall positive impacts of foreign exchange are principally
due to the depreciation of the Canadian dollar against the pound sterling, the US dollar and the euro.
In the year ended December 31, 2023, net revenues grew to $10.90 billion, an increase of 21.7% compared to 2022, reaching
the high end of Management's revised outlook range for the year of $10.7 billion to $11.0 billion. The increase was
principally due to healthy organic growth of 7.3% and sizeable acquisition growth of 12.3%. Net revenue grew organically
across all reportable segments. The E&I Acquisition was the main driver of acquisition growth, while the sale of LBS in
August 2023 resulted in a divestiture impact in the US. The overall positive impacts of foreign exchange are principally due
to the depreciation of the Canadian dollar against the US dollar, the pound sterling and the euro.
In 2023, the increases in the number of employees in EMEIA, APAC and Canada were partially offset in the Americas by a
reduction of approximately 1,400 employees due to the sale of LBS, as well as some project ramp downs in South America.
Refer to section 7, “Segment operational review” for further analysis of net revenues by segment.
Reconciliation of net revenues
The Corporation’s financial performance and results should be measured and analyzed in relation to fee-based
revenues, or net revenues, since direct recoverable costs can vary significantly from contract to contract and are not
indicative of the performance of the professional consulting services business.
(in millions of dollars)
Revenues
Less: Subconsultants and direct costs
Net revenues(1)
Fourth quarters ended
Years ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
$3,724.3
$968.3
$2,756.0
$3,560.8
$1,007.1
$2,553.7
$14,437.2
$3,540.2
$10,897.0
$11,932.9
$2,975.7
$8,957.2
(1) Total of segments measure. Refer to section 22, “Glossary of segment reporting, non-IFRS and other financial measures”.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-16
8.2 BACKLOG
(in millions of dollars)
Backlog, as at December 31, 2022
Revenues
Organic order intake
Net order intake (reduction) through business
acquisition or divestiture
Foreign exchange movement
Backlog, as at December 31, 2023
Organic backlog growth in the year
Canada
$2,304.8
Americas
$6,315.3
EMEIA
$2,852.8
APAC
$1,533.6
Total
$13,006.5
$(2,498.5)
$(6,024.8)
$(3,900.4)
$(2,013.5)
$(14,437.2)
$2,615.2
$6,382.8
$4,175.6
$1,950.2
$15,123.8
$26.3
$(3.6)
$2,444.2
5.1 %
$(426.5)
$226.4
$6,473.3
6.3 %
$317.2
$97.1
$135.0
$11.4
$52.0
$331.3
$3,542.3
$1,616.7
$14,076.5
9.7 %
(4.1)%
5.6 %
Solid markets growth lead to a record-high organic order intake for the year of $15.1 billion and a healthy level of backlog.
Backlog as at December 31, 2023 totalled $14.1 billion, representing 11.8 months of revenues(1), up 8.2% over 2022. Organic
growth in the year since December 31, 2022 was 5.6%, as order intake was strong in all key markets. Backlog contraction in
the APAC reportable segment is mainly driven by difficult market conditions in China.
(1)
Based on revenues for the trailing twelve-month period, incorporating a full twelve months of revenues for all acquisitions.
8.3 ADJUSTED EBITDA
Fourth quarter ended December 31, 2023
(in millions of dollars, except percentages)
Canada
Americas
Net revenues
Adjusted EBITDA by segment(1)
Adjusted EBITDA margin by segment(1)
Head office corporate costs
Adjusted EBITDA(2)
$487.5
$118.3
24.3%
$1,006.0
$220.1
21.9%
EMEIA
$830.6
$138.2
16.6%
APAC
$431.9
$78.6
18.2%
Fourth quarter ended December 31, 2022
(in millions of dollars, except percentages)
Canada
Americas
$438.4
$91.9
21.0%
$986.1
$211.1
21.4%
EMEIA
$738.5
$105.5
14.3%
APAC
$390.7
$69.7
17.8%
Net revenues
Adjusted EBITDA by segment(1)
Adjusted EBITDA margin by segment(1)
Head office corporate costs
Adjusted EBITDA(2)
(in millions of dollars, except percentages)
Net revenues
Adjusted EBITDA by segment(1)
Adjusted EBITDA margin by segment(1)
Head office corporate costs
Adjusted EBITDA(2)
Year ended December 31, 2023
Canada
$1,912.0
$433.5
22.7%
Americas
$4,087.8
$808.1
19.8%
EMEIA
$3,193.0
$489.9
15.3%
APAC
$1,704.2
$308.6
18.1%
(1)
(2)
Total adjusted EBITDA by segment and total adjusted EBITDA margin by segment, presented in the “total” column of the table, are total of segments
measures.
Non-IFRS financial measure.
WSP Global Inc.
Management's Discussion and Analysis
2023
Total
$2,756.0
$555.2
20.1%
$30.3
$524.9
Total
$2,553.7
$478.2
18.7%
$31.8
$446.4
Total
$10,897.0
$2,040.1
18.7%
$118.8
$1,921.3
(in millions of dollars, except percentages)
Net revenues
Adjusted EBITDA by segment(1)
Adjusted EBITDA margin by segment(1)
Head office corporate costs
Adjusted EBITDA(2)
Year ended December 31, 2022
Canada
$1,585.2
$347.9
21.9%
Americas
$3,256.4
$644.7
19.8%
EMEIA
$2,651.1
$390.0
14.7%
APAC
$1,464.5
$267.1
18.2%
M-17
Total
$8,957.2
$1,649.7
18.4%
$119.5
$1,530.2
(1)
(2)
Total adjusted EBITDA by segment and total adjusted EBITDA margin by segment, presented in the “total” column of the table, are total of segments
measures.
Non-IFRS financial measure.
Total adjusted EBITDA by segment and total adjusted EBITDA margin by segment stood at $555.2 million and 20.1%,
respectively, for the fourth quarter ended December 31, 2023, compared to $478.2 million and 18.7%, respectively, for the
corresponding quarter in 2022.
For the year ended December 31, 2023, total adjusted EBITDA by segment and total adjusted EBITDA margin by segment
stood at $2.04 billion and 18.7%, respectively, compared to $1.65 billion and 18.4%, respectively, in 2022.
The variance explanations by segment are described in section 7, “Segment operational review”.
Head office corporate costs for the fourth quarter ended December 31, 2023 stood at $30.3 million, lower than the
comparable quarter in 2022 mainly due to lower expenses related to long-term incentive plans. Head office corporate costs
for the year ended December 31, 2023 stood at $118.8 million, lower than in 2022 and within the range of Management's
outlook for the year of $110.0 million to $125.0 million.
Reconciliation of adjusted EBITDA
Management analyzes the Corporation’s financial performance in relation to adjusted EBITDA as it believes this metric
allows comparability of operating results from one period to another. These measures exclude the effects of items that
primarily reflect the impact of long-term investment and financing decisions, rather than the results of day-to-day
operations. The following table reconciles this metric to the most comparable IFRS measure:
Fourth quarters ended
Years ended
(in millions of dollars)
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Earnings before net financing expense and income taxes
$211.0
$185.3
$947.5
$105.0
$81.0
$316.4
$221.7
$135.1
$87.1
$14.9
$12.6
$749.1
$115.5
$49.9
$288.5
$173.4
$114.6
$21.6
$11.8
$5.8
$446.4
$1,921.3
$1,530.2
$49.7
$19.4
$77.6
$73.1
$30.6
$5.1
$3.2
$2.4
Acquisition, integration and reorganization costs
ERP implementation costs
Depreciation of right-of-use assets
Amortization of intangible assets
Depreciation of property and equipment
Impairment of long-lived assets
Share of depreciation and taxes of associates and joint
ventures
Interest income
Adjusted EBITDA*
* Non-IFRS financial measure.
$26.3
$21.1
$77.2
$58.7
$39.7
$81.7
$4.5
$4.7
$524.9
WSP Global Inc.
Management's Discussion and Analysis
2023
M-18
8.4 EARNINGS BEFORE NET FINANCING EXPENSE AND
INCOME TAXES
The following table summarizes selected operating results expressed as a percentage of net revenues.
(percentage of net revenues)
Net revenues
Personnel costs
Other operational costs
Exchange losses (gains) and interest income
Share of earnings of associates and joint ventures before
depreciation and income taxes
Adjusted EBITDA margin
Depreciation of right-of-use assets
Depreciation of property and equipment
Amortization of intangible assets
Impairment of long-lived assets
Acquisition, integration and reorganization costs and ERP
implementation costs
Share of depreciation and taxes of associates
Deduct: Interest income
Earnings before net financing expense and income taxes
Net financing expense
Income tax expense
Net earnings
Fourth quarters ended
Years ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
100.0 %
73.0 %
8.7 %
(0.2)%
(0.5)%
19.0 %
2.8 %
1.4 %
2.1 %
3.0 %
1.7 %
0.1 %
0.2 %
7.7 %
1.7 %
1.2 %
4.8 %
100.0 %
74.0 %
9.0 %
(0.1)%
(0.4)%
17.5 %
3.0 %
1.2 %
2.9 %
0.2 %
2.7 %
0.1 %
0.1 %
7.3 %
1.1 %
1.5 %
4.7 %
100.0 %
73.9 %
9.0 %
(0.1)%
(0.4)%
17.6 %
2.9 %
1.3 %
2.0 %
0.8 %
1.7 %
0.1 %
0.1 %
8.7 %
1.9 %
1.7 %
5.1 %
100.0 %
74.5 %
8.9 %
(0.1)%
(0.4)%
17.1 %
3.2 %
1.3 %
1.9 %
0.2 %
1.9 %
0.1 %
0.1 %
8.4 %
1.8 %
1.7 %
4.9 %
In the fourth quarter of 2023, adjusted EBITDA reached $524.9 million, up 17.6% compared to $446.4 million in Q4 2022. As a
percentage of net revenues, adjusted EBITDA margin for the quarter increased to 19.0%, compared to 17.5% in Q4 2022, an
increase of 150 bps.
In the year ended December 31, 2023, adjusted EBITDA grew to $1.92 billion, up 25.6%, compared to $1.53 billion in 2022,
reaching the high end of Management's revised outlook range of $1.90 billion to $1.93 billion. As a percentage of net
revenues, adjusted EBITDA margin increased to 17.6%, compared to 17.1% in 2022.
The improvements in adjusted EBITDA margin in the quarter and the year ended December 31, 2023 are mainly
attributable to strong project performance and increased productivity.
In the fourth quarter ended December 31, 2023, earnings before net financing expense and income taxes as a percentage of
net revenues increased to 7.7%, compared to 7.3% in Q4 2022. The improvements in adjusted EBITDA were partially offset
by impairment of right-of-use assets and leasehold improvements.
In the year ended December 31, 2023, earnings before net financing expense and income taxes increased as a percentage of
net revenues to 8.7%, compared to 8.4% in 2022, mainly due to the increased adjusted EBITDA.
These variances are explained in further detail below.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-19
Personnel costs
Personnel costs include payroll costs for all employees related to the delivery of consulting services and projects, as well as
administrative and corporate staff.
For the quarter and year ended December 31, 2023, personnel costs decreased as a percentage of net revenues, as
compared to the corresponding periods in 2022, mainly due to continuous improvement initiatives to optimize
productivity.
Other operational costs
Other operational costs include fixed costs such as, but not limited to, non-recoverable client service costs, technology
costs, professional indemnity insurance costs and office space related costs (mainly utilities and maintenance costs).
Other operational costs for the quarter ended December 31, 2023, as a percentage of net revenues, were lower as compared
to the corresponding quarter in 2022, mainly due to lower discretionary spending and better cost absorption.
Other operational costs for the year ended December 31, 2023, as a percentage of net revenues, were largely stable as
compared to 2022.
Exchange gains and losses and interest income
In the fourth quarter ended December 31, 2023, operational foreign exchange gains of $1.2 million had a positive impact, as
compared to losses of $1.0 million in the corresponding period in 2022.
In 2023, operational foreign exchange losses of $5.4 million had a negative impact, as compared to gains of $5.3 million in
2022.
In addition, in the fourth quarter and year ended December 31, 2023, interest income increased to $4.7 million and
$12.6 million, respectively, compared to $2.4 million and $5.8 million, in the corresponding periods in 2022.
Depreciation, amortization and impairment of long-lived assets
Depreciation of right-of-use assets, as a percentage of net revenues, decreased slightly in the quarter and year ended
December 31, 2023 when compared to the corresponding periods in 2022, mainly due to lease terminations and lease
modifications in connection with office closures and downsizing, as the Corporation achieves synergies with newly
acquired businesses and leverages a hybrid workplace model.
Depreciation of intangible assets and property and equipment, as a percentage of net revenues, was largely stable for the
year ended December 31, 2023, when compared to 2022.
In 2023 and 2022, the Corporation recorded charges against certain leased assets and leasehold improvements resulting
from ongoing optimizations as part of its real estate strategy to review its footprint, realize synergies and reduce costs.
Acquisition, integration and reorganization costs and ERP implementation costs
Acquisition, integration and reorganization costs include, if and when incurred, transaction and integration costs related
to business acquisitions, gains or losses on disposals of non-core assets, outsourcing program costs pertaining mainly to
redundancy and transition costs resulting from the outsourcing of the Corporation’s infrastructure or other functions,
restructuring costs, and severance costs stemming from adjustments to cost structures. In the table above, these costs are
combined with ERP implementation costs.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-20
Acquisition, integration and reorganization costs and ERP implementation costs are components of financial performance
which the Corporation believes should be excluded in understanding its underlying operational financial performance,
and are therefore presented separately in the consolidated statement of earnings.
In the quarter and year ended December 31, 2023, the Corporation incurred acquisition, integration and reorganization
costs of $26.3 million and $105.0 million, respectively, compared to $49.7 million and $115.5 million, respectively, in the
corresponding periods in 2022. The level of expenditures is lower than the corresponding periods mainly due to lower
business acquisition costs.
In the quarter and year ended December 31, 2023, the Corporation incurred ERP implementation costs of $21.1 million and
$81.0 million, respectively, higher than $19.4 million and $49.9 million, in the corresponding periods in 2022, due to the
migration of the Canadian business into the Corporation's global cloud-based ERP solution, as well as continued design and
implementation costs related to future rollouts to other countries.
8.5 FINANCING EXPENSES
Net financing expenses for the fourth quarter ended December 31, 2023 were higher than the comparable quarter in 2022,
mainly attributable to higher interest on long-term debt due to recent increases in interest rates, as well as exchange
losses on assets and liabilities denominated in foreign currencies compared to gains in the comparable period, partially
offset by higher gains from derivative financial instruments and higher non-cash gains in value of investments related to a
US employee deferred compensation plan.
Net financing expenses for the year ended December 31, 2023 were higher than in 2022, mainly due to higher interest on
long-term debt following the E&I Acquisition, as well as recent increases in interest rates, partially offset by gains from
derivative financial instruments and non-cash gains in value of investments related to a US employee deferred
compensation plan compared to losses in the comparable period of 2022.
8.6 INCOME TAXES
In the fourth quarter of 2023, income tax expense of $32.3 million was recorded on earnings before income taxes of
$163.6 million, representing an effective income tax rate of 19.7%. The lower effective tax rate is mainly related to
adjustments in respect of prior years and foreign income tax rate differences.
For the year ended December 31, 2023, income tax expense of $191.9 million was recorded on earnings before income taxes
of $744.9 million representing an effective income tax rate of 25.8%, in line with Management's outlook range of 25% to
29%.
8.7 NET EARNINGS
In the fourth quarter of 2023, the Corporation’s net earnings attributable to shareholders were $130.6 million, or $1.05 per
share, compared to $120.0 million, or $0.96 per share in the comparable quarter in 2022. Higher adjusted EBITDA and lower
acquisition costs were partially offset by higher impairment of long-lived assets and higher interest on long-term debt.
For the year ended December 31, 2023, the Corporation’s net earnings attributable to shareholders increased to
$550.0 million, or $4.41 per share, compared to $431.8 million, or $3.59 per share in 2022. The increase is mainly due to
higher adjusted EBITDA, partially offset by impairment of long-lived assets resulting from ongoing optimizations as part of
the Corporation's real estate strategy to review its footprint, realize synergies and reduce costs as well as higher interest
on long-term debt and income taxes, increased amortization of intangible assets due to recent acquisitions, and higher ERP
implementation costs.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-21
8.8 ADJUSTED NET EARNINGS
Management believes that adjusted net earnings and adjusted net earnings per share should be taken into consideration in
assessing the Corporation's performance against its peers. In the context of highly acquisitive companies or consolidating
industries such as engineering and construction, this non-IFRS measure isolates amortization of intangible assets related
to acquisitions (created from the allocation of purchase price between goodwill and intangible assets) as well as other
charges directly or indirectly related to acquisitions. In addition, this non-IFRS financial measure is adjusted for certain
non-cash items related to market volatility, which are inherently unpredictable.
Adjusted net earnings stood at $247.8 million, or $1.99 per share, in the fourth quarter of 2023, compared to $209.3 million,
or $1.68 per share, in Q4 2022. Adjusted net earnings stood at $860.0 million, or $6.90 per share, for the year ended
December 31, 2023, compared to $692.6 million, or $5.75 per share, in 2022. The increases in these metrics in both the
quarter and year are mainly attributable to higher adjusted EBITDA, partially offset by higher interest on long-term debt.
Reconciliation of adjusted net earnings
The following table reconciles this metric to the most comparable IFRS measure:
Fourth quarters ended
Years ended
(in millions of dollars, except per share data)
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Net earnings attributable to shareholders
$130.6
$120.0
Amortization of intangible assets related to acquisitions
Impairment of long-lived assets
Acquisition, integration and reorganization costs
ERP implementation costs
(Gains) losses on investments in securities related to deferred
compensation obligations
Unrealized (gains) losses on derivative financial instruments
Income taxes related to above items
Adjusted net earnings*
Adjusted net earnings per share*
* Non-IFRS financial measure or non-IFRS ratio.
$47.2
$81.7
$26.3
$21.1
$(10.4)
$(8.9)
$(39.8)
$247.8
$1.99
$49.3
$5.1
$49.7
$19.4
$(5.0)
$(3.5)
$(25.7)
$209.3
$1.68
$550.0
$181.7
$87.1
$105.0
$81.0
$(18.1)
$(27.4)
$(99.3)
$860.0
$6.90
$431.8
$112.6
$21.6
$115.5
$49.9
$22.1
$20.1
$(81.0)
$692.6
$5.75
9 LIQUIDITY
(in millions of dollars)
Cash inflows from operating activities
Cash inflows from (outflows used in) financing activities
Cash outflows used in investing activities
Effect of exchange rate change on cash
Change in net cash and cash equivalents
Dividends paid to shareholders of WSP Global Inc.
Net capital expenditures*
Fourth quarters ended
Years ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
$776.6
$(604.1)
$(57.8)
$1.8
$116.5
$(46.6)
$(70.0)
$607.4
$(450.0)
$(87.0)
$4.7
$75.1
$(23.7)
$(72.8)
$986.3
$(597.4)
$(510.4)
$(7.6)
$(129.1)
$(162.2)
$(178.1)
$814.8
$1,420.7
$(2,682.7)
$11.9
$(435.3)
$(90.1)
$(164.5)
* Capital expenditures pertaining to property and equipment and intangible assets, net of proceeds from disposal and lease incentives received.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-22
9.1 OPERATING ACTIVITIES AND FREE CASH FLOW
Cash flows from operating activities
The cash inflows from operating activities in the year ended December 31, 2023 increased compared to 2022. The increase
in adjusted EBITDA was partially offset by higher income taxes paid mainly due to tax regulations in the US which delay
the deductibility of certain expenses and higher ERP implementation costs. The investment in working capital remained
stable, despite a 21.0% increase in revenues.
Free cash flow
In the fourth quarter ended December 31, 2023, the Corporation achieve its highest quarterly free cash flow, reaching
$610.3 million.
Free cash flow for the year ended December 31, 2023 was $433.1 million, compared to $309.0 million in 2022. The
improvement in free cash flow compared to 2022 was mainly attributable to the increase in adjusted EBITDA, partially
offset by higher income taxes paid due to tax regulations in the US which delay the deductibility of certain expenses, as
well as higher lease payments, ERP implementation costs and net capital expenditures. Excluding the effect of tax
regulations in the US related to deductibility of certain expenses, free cash flow represents 1.1 times net earnings
attributable to shareholders (otherwise the ratio is 0.8 times).
Reconciliation of free cash flow
Free cash flow is an indication of the Corporation’s continuing capacity to generate discretionary cash from operations.
It represents cash flows for the period available to the suppliers of capital, which are the Corporation’s creditors and
shareholders. The free cash flow metric should be reviewed year-over-year as opposed to quarter-to-quarter as the
timing of investments in capital expenditure initiatives and management of working capital can have an impact in the
shorter term.
Fourth quarters ended
Years ended
(in millions of dollars)
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Cash inflows from operating activities
Lease payments in financing activities
Net capital expenditures*
Free cash flow**
$776.6
$(96.3)
$(70.0)
$610.3
$607.4
$(91.9)
$(72.8)
$442.7
$986.3
$(375.1)
$(178.1)
$433.1
$814.8
$(341.3)
$(164.5)
$309.0
* Capital expenditures pertaining to property and equipment and intangible assets, net of proceeds from disposal and lease incentives received.
** Non-IFRS financial measure.
9.2 FINANCING ACTIVITIES
In the fourth quarter ended December 31, 2023, cash outflows used in financing activities of $604.1 million were mainly
due to net repayment of borrowings under credit facilities, lease payments, net financing expenses paid and dividends paid
to shareholders of the Corporation, partially offset by issuance of senior unsecured notes.
In the year ended December 31, 2023, cash outflows used in financing activities of $597.4 million were mainly attributable
to lease payments, net financing expenses paid and dividends paid to shareholders of the Corporation, partially offset by
issuance of senior unsecured notes, net of repayment of borrowings under credit facilities.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-23
9.3 INVESTING ACTIVITIES
In the fourth quarter ended December 31, 2023, cash outflows used in investing activities of $57.8 million related mainly to
net capital expenditures.
In the year ended December 31, 2023, cash outflows used in investing activities related mainly to business acquisitions and
net capital expenditures, and were partially offset by proceeds from the disposal of LBS.
9.4 NET DEBT TO ADJUSTED EBITDA RATIO
As at December 31, 2023, the Corporation’s statement of financial position remained strong, with a net debt position of
$2.88 billion and a net debt to adjusted EBITDA ratio of 1.5x, within the Corporation's target ratio range of 1.0x to 2.0x.
9.5 CAPITAL RESOURCES
(in millions of dollars)
Cash and cash equivalents
Available syndicated credit facility
Other operating credit facilities
Available short-term capital resources
As at
December 31, 2023 December 31, 2022
$378.0
$1,467.8
$193.0
$2,038.8
$495.6
$1,857.4
$168.1
$2,521.1
The Corporation believes that its cash flows from operating activities, combined with its available short-term capital
resources, will enable it to support its continued growth strategy, its working capital requirements and planned capital
expenditures.
9.6 CREDIT FACILITIES
The Corporation has in place, as at December 31, 2023, unsecured credit facilities and term loans:
•
•
unsecured revolving credit facilities with a syndicate of financial institutions providing for a maximum amount of
US$1.5 billion with maturities up to April 2028, comprised of two tranches; and
unsecured term loans totalling US$1,325 million with maturities up to September 2027.
The US$1.5-billion revolving credit facilities are available for general corporate purposes and for financing business
acquisitions.
As at December 31, 2023, the US$1,325-million unsecured term loans were fully drawn, whereas the US$1.5-billion
revolving credit facility had an available balance of US$1.11 billion.
Under these credit facilities, the Corporation is required, among other conditions, to respect certain covenants calculated
on a consolidated basis. The financial covenants are in regard to its consolidated net debt to consolidated adjusted EBITDA
and the fixed charge coverage ratios. These terms and ratios are defined in the credit facility agreements and do not
correspond to the Corporation’s metrics described in section 22, “Glossary of segment reporting, non-IFRS and other
financial measures”, or to other terms used in this MD&A. Management reviews compliance with these covenants on a
quarterly basis in conjunction with filing requirements under its credit facilities. All covenants were met as at
December 31, 2023.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-24
9.7 DIVIDENDS
On November 8, 2023, the Corporation declared a quarterly dividend of $0.375 per common share to holders of common
shares on record as of December 31, 2023, which was paid subsequent to the end of the year on January 15, 2024. The total
amount of the dividend for the fourth quarter of 2023 was $46.8 million.
Following the payment of the dividends declared on November 9, 2022 and March 8, 2023, $24.6 million was reinvested in
147,859 common shares under the DRIP during the year ended December 31, 2023.
On May 10, 2023, the Board of Directors of the Corporation (the “Board”) approved the termination of the DRIP in
accordance with its terms. All cash dividends or distributions on the Corporation's common shares with a record date for
payment after May 10, 2023, have been or will be paid in cash rather than in shares of the Corporation.
The Board has determined that the current level of quarterly dividend is appropriate based on the Corporation’s current
earnings and operational financial requirements. The dividend is currently expected to remain at this level subject to the
Board’s ongoing assessment of the Corporation’s future cash requirements, financial performance, liquidity, and other
factors that the Board may deem relevant. The actual amount of any dividend, as well as each declaration date, record date
and payment date, is subject to the discretion of the Board. Some of the information in this section constitutes forward-
looking information. Please refer to section 19, “Forward-Looking Statements”, of this MD&A.
10 SUMMARY OF QUARTERLY RESULTS
(in millions of dollars, except per share data)
Results of operations
Revenues
Net revenues
Adjusted EBITDA*
2023
2022
Fiscal
year
2023
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Fourth quarter
ended
December 31
Third quarter
ended
September 30
Second quarter
ended July 01
First quarter
ended April 01
Fourth quarter
ended
December 31
Third quarter
ended October 1
Second quarter
ended July 2
First quarter
ended April 2
$14,437.2
$3,724.3
$3,597.4
$3,626.0
$3,489.5
$3,560.8
$2,896.1
$2,764.2
$2,711.8
$10,897.0
$2,756.0
$2,734.8
$2,739.1
$2,667.1
$2,553.7
$2,193.9
$2,109.6
$2,100.0
$1,921.3
$524.9
$521.5
$461.6
$413.3
$446.4
$407.0
$352.2
$324.6
Net earnings attributable to shareholders
$550.0
$130.6
$156.2
$150.7
$112.5
$120.0
$127.5
Basic net earnings per share**
Diluted net earnings per share**
$4.41
$4.40
$1.05
$1.05
$1.25
$1.25
$1.21
$1.21
$0.90
$0.90
$0.96
$0.96
$1.05
$1.05
$89.3
$0.76
$0.75
$95.0
$0.81
$0.80
Backlog
Dividends
$14,076.5 $14,276.4 $14,311.6 $13,833.7
$13,006.5 $13,253.8 $11,448.8 $11,021.4
Dividends declared
$186.9
$46.8
$46.7
$46.7
$46.7
$46.7
$46.6
$44.3
$44.2
Dividends declared, per share
$1.50
$0.375
$0.375
$0.375
$0.375
$0.375
$0.375
$0.375
$0.375
Non-IFRS financial measure.
*
** Quarterly net earnings per share are not additive and may not equal the annual net earnings per share reported. This may be a result of the effect of
shares issued on the weighted average number of shares, as well as the impact of dilutive options.
The Corporation's quarterly earnings and revenue measures are, to a certain degree, affected by seasonality. The third and
fourth quarters historically generate the largest contribution to net revenues and adjusted EBITDA, and the first quarter
the least. The Corporation's cash flows from operations are also, to a certain degree, subject to seasonal fluctuations, with
the fourth quarter historically generating a higher amount of cash flows from operations.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-25
11 SELECTED ANNUAL INFORMATION
For the years ended December 31
(in millions of dollars, except per share data)
Revenues
Net revenues
Net earnings attributable to shareholders of WSP Global Inc.
Net earnings per share attributable to shareholders of WSP Global Inc.
Basic
Diluted
As at December 31
Total assets
Non-current financial liabilities (1)
Dividends declared per share to holders of common shares of WSP Global Inc.
(1)
Financial liabilities consist of long-term debt and lease liabilities, excluding current portions.
2023
2022
2021
$14,437.2
$10,897.0
$550.0
$4.41
$4.40
2023
$15,583.1
$3,802.9
$1.50
$11,932.9
$8,957.2
$431.8
$3.59
$3.58
2022
$14,841.7
$3,637.9
$1.50
$10,279.1
$7,869.6
$473.6
$4.07
$4.05
2021
$11,250.4
$2,245.4
$1.50
In 2022, revenues and net revenues increased 16.1% and 13.8%, respectively, compared to 2021. The increase in net
revenue was principally due to acquisition growth of 8.2% and organic growth of 7.3%. Organic growth was achieved across
all reportable segments, and most pronounced in the US, the UK, Canada and Australia. In 2023, revenues and net revenues
grew by 21.0% and 21.7%, respectively, compared to 2022, with net revenues reaching the high end of Management's
revised outlook range for the year of $10.7 billion to $11.0 billion. The increase in net revenue was principally due to
healthy organic growth of 7.3% which was achieved across all reportable segments, and to sizeable acquisition growth of
12.3%.
Net earnings attributable to shareholders and net earnings per share attributable to shareholders decreased from 2021 to
2022 mainly due to higher net financing expenses, amortization and depreciation, business acquisition and integration
costs and ERP implementation costs, partially offset by higher adjusted EBITDA. Net earnings attributable to shareholders
and net earnings per share attributable to shareholders increased from 2022 to 2023 mainly due to higher adjusted EBITDA,
partially offset by impairment of long-lived assets resulting from ongoing optimizations as part of the Corporation's real
estate strategy to review its footprint, realize synergies and reduce costs.
From December 31, 2021 to December 31, 2022, total assets and non-current financial liabilities increased mainly due to
business acquisitions. From December 31, 2022 to December 31, 2023, total assets increased mainly due to business
acquisitions and increased contract balances, while non-current financial liabilities remained largely stable.
12 GOVERNANCE
Internal controls over financial reporting
The Corporation’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are responsible for establishing and
maintaining disclosure controls and procedures (“DC&P”) and have caused them to be designed under their supervision to
provide reasonable assurance that:
• Material information related to the Corporation is made known to them by others, particularly during the period
•
in which the annual filings are being prepared; and
Information required to be disclosed by the Corporation in its annual filings, interim filings or other reports filed
or submitted by it under securities legislation is recorded, processed, summarized and reported within the time
periods specified in securities legislation.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-26
The CEO and CFO have evaluated or caused to be evaluated under their supervision, the effectiveness of the Corporation’s
DC&P and based on the evaluation, the CEO and CFO have concluded that the design and operation of the Corporation’s
DC&P were effective as at December 31, 2023.
The CEO and CFO are also responsible for establishing and maintaining internal controls over financial reporting (“ICFR”)
and have designed ICFR or have caused ICFR to be designed under their supervision using the Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO Framework), to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with IFRS.
The CEO and CFO have evaluated or caused to be evaluated under their supervision, the effectiveness of the Corporation’s
ICFR and based on their evaluation, the CEO and CFO have concluded that ICFR were designed and operated effectively as
at December 31, 2023.
Due to the inherent limitations of DC&P and ICFR, Management does not expect that DC&P and ICFR can prevent or detect
all errors or intentional misstatements resulting from fraudulent activities.
There were no changes in the Corporation’s ICFR that occurred during the period beginning on October 1, 2023 and ended
on December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Corporation’s ICFR.
During the first half of 2023, most of the Corporation's Canadian operations completed the initial phase of implementation
of a new enterprise resource planning (ERP) system. This ERP implementation has not resulted in any significant changes
in internal controls. Management employed appropriate procedures to ensure internal controls over financial reporting
were in place during and after the conversion. The Corporation regularly monitors and assesses its DC&P and ICFR, while
reiterating the importance of internal controls and maintaining frequent communication across the organization at all
levels, in order to maintain a strong control environment.
Responsibilities of the Board of Directors
The Board has oversight responsibilities for reported financial information. Accordingly, the Board of WSP has reviewed
and approved, upon recommendation of the Audit Committee of the Corporation, this MD&A and the audited consolidated
financial statements for the year ended December 31, 2023, before their publication.
13 CRITICAL ACCOUNTING ESTIMATES
The preparation of the financial statements requires Management to make judgments, assumptions and estimates in
applying the Corporation's accounting policies. Critical accounting estimates are those which are highly uncertain at the
time they are made and where different reasonably likely estimates, or reasonably likely changes in estimates from period
to period, would have a material impact on the Corporation's financial condition or results of operations.
Estimates and assumptions are continually evaluated and are based on historical trends and other factors, including
expectations of future events that are likely to materialize under reasonable circumstances. Actual results will differ from
estimates used, and such differences could be material.
The Corporation's most critical accounting estimates are discussed in note 4, "Critical accounting estimates and
judgments", to the Corporation's audited consolidated financial statements for the year ended December 31, 2023.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-27
14 MATERIAL ACCOUNTING POLICIES
CHANGES IN ACCOUNTING POLICY EFFECTIVE IN 2023
ACCOUNTING POLICIES AND ESTIMATES
In February 2021, the IASB issued narrow-scope amendments to IAS 1 - Presentation of Financial Statements, IFRS Practice
Statement 2 - Making Materiality Judgements and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. The
amendments require the disclosure of material, rather than significant, accounting policy information, define accounting
estimates and clarify the distinction between changes in accounting policies from changes in accounting estimates. The
Corporation adopted these amendments effective January 1, 2023.
INCOME TAXES
In May 2021, the IASB issued targeted amendments to IAS 12 - Income Taxes, which narrows the scope exemption when
recognizing deferred taxes. In specified circumstances, entities are exempt from recognizing deferred income taxes when
they recognize assets or liabilities for the first time. The amendments clarify that the exemption does not apply to
transactions where both assets and liabilities are recognized (and give rise to equal and offsetting temporary differences)
such as leases and decommissioning obligations and that entities are required to recognize deferred income taxes on such
transactions. The Corporation adopted these amendments effective January 1, 2023, resulting in no impact on its
consolidated financial statements as a result.
In May 2023, the IASB issued International Tax Reform – Pillar Two Model Rules - Amendments to IAS 12 – Income Taxes, addressing
income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by
the Organisation for Economic Co-operation and Development (OECD). The amendments introduce a mandatory
temporary exception to the accounting for deferred taxes arising from the implementation of the Pillar Two model rules
and disclosure requirements about the Pillar Two exposure. The Corporation applied the mandatory temporary exception
effective January 1, 2023 and has presented the disclosure requirements in its audited consolidated financial statement.
RECENT STANDARDS, AMENDMENTS AND INTERPRETATIONS
NOT YET EFFECTIVE AND NOT APPLIED
Refer to note 3, “Accounting policy developments”, to the Corporation's audited consolidated financial statements for the
year ended December 31, 2023, for further details.
15 FINANCIAL INSTRUMENTS
The Corporation’s financial assets include cash, trade receivables and other receivables. The Corporation's financial
liabilities include accounts payable and accrued liabilities, dividends payable to shareholders, lease liabilities, and long-
term debt.
The Corporation uses derivative financial instruments to manage its exposure to fluctuations of foreign currency exchange
rates. It does not hold or use any derivative instruments for trading or speculative purposes. Refer to note 13, “Financial
instruments”, to the Corporation's audited consolidated financial statements for the year ended December 31, 2023 for a
description of the Corporation's hedging activities.
The Corporation's financial instruments expose the Corporation primarily to foreign exchange, credit, liquidity and
interest rate risks. Refer to section 20, “Risk factors” , as well as note 13 “Financial instruments”, to the Corporation's
audited consolidated financial statements for the year ended December 31, 2023, for a description of these risks and how
they are managed, as well as for a description of how fair values are determined.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-28
16 RELATED PARTY TRANSACTIONS
The Corporation's related parties, as defined by IFRS, are its joint operations, joint ventures, associates and key
management personnel. A description of any material transactions with these related parties is included in note 29,
“Related party transactions", to the Corporation's audited consolidated financial statements for the year ended
December 31, 2023.
17 OFF-BALANCE SHEET AGREEMENTS
The Corporation does not engage in the practice of off-balance sheet financing, except for the use of letters of credit.
18 CONTRACTUAL OBLIGATIONS
The Corporation is committed under the terms of contractual obligations with various expiration dates, primarily for long-
term debt and the rental of office space and computer equipment. The following table provide a summary of the timing of
Corporation’s undiscounted long-term contractual obligations as at December 31, 2023:
(in millions of dollars)
Long-term debt
Lease liabilities
2024
$743.7
$319.5
2025
$734.8
$244.1
2026 and
thereafter
$2,380.2
$598.9
Total
$3,858.7
$1,162.5
Management expects the Corporation's cash flows from its operations and amounts available under credit facilities will be
sufficient to meet its contractual obligations in the future.
19 FORWARD-LOOKING STATEMENTS
In addition to disclosure of historical information, the Corporation may make or provide statements or information in this
MD&A that are not based on historical facts and which are considered to be forward-looking information or forward-
looking statements under Canadian securities laws (collectively, “forward-looking statements”). Such statements relate to
future events or future performance and reflect the expectations of Management regarding, without limitation, the
growth, results of operations, performance and business prospects and opportunities of the Corporation, the achievement
of its 2022-2024 Global Strategic Action Plan, or the trends affecting its industry.
This MD&A may contain forward-looking statements. Forward-looking statements can typically be identified by
terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “forecast”,
“project”, “intend”, “target”, “potential”, “continue” or the negative of these terms or terminology of a similar nature.
More specifically, this MD&A contains the following forward-looking statements: the impact of order intake on our
backlog and the state of our backlog in various reportable segments; our belief that our cash flows from operating
activities, combined with our available short-term capital resources, will enable us to support our continued growth
strategy, working capital requirements and planned capital expenditures; our expected level of dividend declaration and
payment on the Corporation’s common shares. Such forward-looking statements reflect current beliefs of Management
and are based on certain factors and assumptions as set forth in this MD&A, which by their nature are subject to inherent
risks and uncertainties. While the Corporation considers these factors and assumptions to be reasonable, actual events or
results could differ materially from the results, predictions, forecasts, conclusions or projections expressed or implied in
the forward-looking statements.
Forward-looking statements made by the Corporation are based on a number of assumptions believed by the Corporation
to be reasonable as at the date such statements were made, including assumptions set out through this MD&A and
WSP Global Inc.
Management's Discussion and Analysis
2023
M-29
assumptions about general economic and political conditions; the state of the global economy and the economies of the
regions in which the Corporation operates; the state of and access to global and local capital and credit markets; interest
rates; working capital requirements; the collection of accounts receivable; the Corporation obtaining new contract awards;
the type of contracts entered into by the Corporation; the anticipated margins under new contract awards; the utilization
of the Corporation’s workforce; the ability of the Corporation to attract new clients; the ability of the Corporation to retain
current clients; changes in contract performance; project delivery; the Corporation’s competitors; the ability of the
Corporation to successfully integrate acquired businesses; the acquisition and integration of businesses in the future; the
Corporation’s ability to manage growth; external factors affecting the global operations of the Corporation; the current or
expected state of the Corporation’s backlog; the joint arrangements into which the Corporation has or will enter; capital
investments made by the public and private sectors; relationships with suppliers and subconsultants; relationships with
management, key professionals and other employees of the Corporation; the maintenance of sufficient insurance; the
management of environmental, social and health and safety risks; the sufficiency of the Corporation’s current and planned
information systems, communications technology and other technology; compliance with laws and regulations; future
legal proceedings; the sufficiency of internal and disclosure controls; the regulatory environment; impairment of goodwill;
foreign currency fluctuation; the tax legislation and regulations to which the Corporation is subject and the state of the
Corporation’s benefit plans. If these assumptions prove to be inaccurate, the Corporation’s actual results could differ
materially from those expressed or implied in forward-looking statements.
In evaluating these forward-looking statements, investors should specifically consider various risk factors, which, if
realized, could cause the Corporation's actual results to differ materially from those expressed or implied in forward-
looking statements. Such risk factors include, but are not limited to, the following risk factors discussed in greater detail in
section 20, “Risk factors” : “Health, Safety, Environment and Security Hazards and Risks”; “Non-Compliance with Laws or
Regulations”; “Information Technology and Information Security”; “Geopolitical Risks”; “Availability, Retention and Well-
being of Qualified Professional Staff”; “Adequate Utilization of Workforce”; “Global Operations”; “Competition in the
Industry”; “Professional Services Contracts”; “Economic Environment”; “Working with Government Agencies”;
“Challenges Associated with Size”; “Growth by Acquisitions”; “Acquisition Integration and Management”; “Current or
Future Legal Proceedings”; “Reputation”; “Insurance Limits”; “Challenges associated with infectious disease outbreaks”;
“Controls and Disclosure”; “Increasing Requirements and Stakeholder Expectations Regarding ESG matters”; “Risks related
to Generative AI”; “Climate Change and related Physical and Transition Risks”; “Ecological and Social Impacts of Projects”;
“Joint Arrangements”; “Reliance on Suppliers and Subconsultants”; “Work Stoppage and Labour Disputes”; “Changes to
Backlog”; “Protection of Intellectual Property Rights”; “Deterioration of Financial Position or Net Cash Position”; “Working
Capital Requirements”; “Accounts Receivable”; “Increased Indebtedness and Raising Capital”; “Impairment of Long-Lived
Assets”; “Foreign Currency Exposure”; “Income Taxes”; “Underfunded Defined Benefits Obligations”; as well as other risks
detailed from time to time in reports filed by the Corporation with securities regulators or securities commissions or other
documents that the Corporation makes public, which may cause events or results to differ materially from the results
expressed or implied in any forward-looking statement.
The Corporation cautions that the foregoing list of risk factors is not exhaustive. Actual results and events may be
significantly different from what we currently expect because of the risks associated with our business, industry and global
economy and of the assumptions made in relation to these risks. As such, there can be no assurance that actual results will
be consistent with forward-looking statements. Except to the extent required by applicable law, the Corporation assumes
no obligation to publicly update or revise forward-looking statements made in this MD&A or otherwise, whether as a
result of new information, future events or otherwise. The forward-looking statements contained in this MD&A describe
the Corporation’s expectations as of the date of this MD&A and, accordingly, are subject to change after such date. The
forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. The Corporation
may also make oral forward-looking statements from time to time. The Corporation advises that the above paragraphs and
the risk factors set forth in section 20, “Risk factors” should be read for a description of certain factors that could cause the
actual results of the Corporation to differ materially from the results expressed or implied in any oral forward-looking
statements. Readers should not place undue reliance on forward-looking statements.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-30
20 RISK FACTORS
The Corporation is subject to a number of risks and uncertainties and is affected by a number of factors which could have a
material adverse effect on the Corporation’s business, financial condition, operating results, future prospects or
achievement of its 2022-2024 Global Strategic Action Plan. These risks should be considered when evaluating an
investment in the Corporation and may, among other things, cause a decline in the price of the Corporation's shares or
adversely affect the Corporation’s ability to declare and/or pay dividends on the shares.
This section describes the risks Management considers as the most material to the Corporation's business. This is not,
however, a comprehensive list of the potential risks the Corporation currently faces, or could eventually face. Risks and
uncertainties not presently known to the Corporation or that the Corporation currently considers as not material could
become material in the future or impair its business operations, cause a decline in the price of shares or adversely affect
the Corporation’s ability to declare and/or pay dividends on the shares.
RISKS RELATED TO THE BUSINESS
Health, Safety, Environment and Security Hazards and Risks
The Corporation’s Health, Safety, Environment & Quality (“HSEQ”) systems, processes and policies are aimed at reducing
risks to employees, subconsultants and others; however, services and activities to be performed on work sites can put
employees, subconsultants and others in challenging or remote locations which may increase the risk to health and safety
from hazards related to heavy mobile equipment, working at height, energy sources, working near water and ground
stability. On some project sites, the Corporation may be responsible for safety and, accordingly, it has an obligation to
implement effective safety procedures. Through recent acquisitions in the Earth and Environment sector, the Corporation
has increased its exposure to health and safety risks on project sites primarily due to the nature of services rendered in
this sector which often include activities to be performed directly on project sites. Failure to implement or follow
appropriate safety procedures by the Corporation or others could result in personal injury, illness or loss of life to people,
environmental damage or other damage to the Corporation’s property or the property of others.
In the ordinary course of the Corporation’s business, the Corporation's employees frequently make professional judgments
and recommendations about environmental and engineering conditions of project sites for the Corporation's clients. The
Corporation may be deemed to be responsible for these professional judgments and recommendations if they are later
determined to be inadequate or result in injury or damage. Unsafe work conditions also have the potential of increasing
employee turnover, increasing project and operating costs and could negatively impact the awarding of new contracts.
The Corporation could also be exposed to substantial security costs in order to maintain the safety of its personnel, to civil
and/or statutory liability to employees and to reputational harm arising from injuries or deaths because of inadequate
health and safety policies and practices. The Corporation cannot fully protect against all these risks, nor are all these risks
insurable. The Corporation may become liable for damages arising from events against which it cannot insure or against
which it may elect not to insure for various reasons.
The Corporation operates in regions across the world in a global capacity, working in some very high risk and challenging
environments and geographies, which present numerous risks including security issues, political unrest, country stability
and varying degrees of medical risk to personnel, all combined with differing cultures, regional legislative requirements
and regional operating standards. Acts of terrorism, including domestic terrorism, and threats of armed conflicts in or
around various regions in which the Corporation operates could limit or disrupt markets and its operations, including
disruptions resulting from the evacuation of personnel, cancellation of contracts, or the loss of key employees, contractors
or assets. Furthermore, the Corporation risks incurring additional costs on projects that have sustained environmental,
health, and safety hazards because they may require additional time to complete or because employee time may be lost
due to injury.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-31
Non-Compliance with Laws or Regulations
The Corporation faces risks relating to non-compliance with laws, regulations, rules and other current, new or changing
legal requirements enforced by governments or other authorities, including with respect to trade restrictions, sanctions,
export control, false claims, protection of classified information, lobbying or similar activities, securities, antitrust, data
privacy, tax, environmental, social and governance (“ESG”) matters, labour relations, artificial intelligence (“AI”) as well as
laws related to corruption, anti-competitive acts, illegal political contributions, human rights, including modern slavery
and ethics-related issues, which could have a significant adverse impact on the Corporation. In particular, the regulatory
landscape surrounding ESG matters is evolving at a rapid pace in multiple jurisdictions and there is a significant degree of
uncertainty regarding the scope of future requirements. As a result, we may be required to rapidly adapt data collection
and assurance processes, with the risk that information will not be available to the Corporation to respond to the relevant
requirements in a timely manner.
Although the Corporation has control measures and policies to mitigate these risks, including an anti-corruption
compliance program, these control measures and policies have inherent limitations, including human error, and could be
intentionally circumvented or become inadequate as conditions change. Moreover, the coordination of the Corporation’s
activities to address the broad range of complex legal and regulatory environments in which it operates presents
significant challenges. The Corporation's control measures may not be sufficiently effective to protect it from the
consequences of acts committed by its current and former directors, officers, employees, consultants, agents and/or
partners, corruption in connection with its operations and ethics-related issues. Accordingly, fraud, corruption and other
reckless or criminal acts may occur and remain undetected, resulting in a loss of assets and/or misstatement in the
Corporation’s financial statements and related public disclosure. Moreover, fraud, corruption, illegal political
contributions, non-compliance with previously enacted or proposed laws or regulations, anti-competitive or other
reckless acts or criminal acts or misconduct by the Corporation’s current or former directors, officers, employees,
consultants, agents and/or partners, including those of businesses acquired by the Corporation, could subject the
Corporation to fines and penalties, criminal, civil and administrative legal sanctions and suspension from its ability to bid,
enter into or perform public or private contracts, resulting in reduced revenues and profits, and could materially damage
the Corporation's business, operating results, financial condition, reputation, brand, expansion effort, and ability to attract
and retain employees and clients, and may have a negative impact on the market price of the Corporation’s shares. The
institution of formal charges with respect to any such circumstances by appropriate governmental authorities may have to
be immediately accounted for in the results of the Corporation and may have a material adverse impact on the assets,
liabilities, revenues and goodwill of the Corporation.
As part of its global business dealings with different governmental bodies, entities and agencies in each of the countries in
which the Corporation operates, WSP must also comply with complex public procurement laws and regulations aimed at
ensuring that public sector bodies award and manage contracts in a transparent, competitive, efficient and non-
discriminatory manner in these jurisdictions. In certain jurisdictions in which the Corporation operates, the Corporation is
also subject to legislation that grants governmental authorities exceptional measures for the reimbursement and recovery
of amounts improperly obtained as a result of fraud or fraudulent tactics in the course of the tendering, awarding or
management of public contracts. In connection with a reimbursement or settlement under such legislation, a number of
conditions may be imposed on the Corporation and the Corporation may be required to undergo certain changes to its
business practices which could impose additional costs on the Corporation and adversely affect its ability to pursue
business opportunities.
The services provided by the Corporation are also subject to numerous environmental protection laws and regulations that
are complex and stringent. Significant fines, penalties and other sanctions may be imposed for non-compliance with
environmental laws and regulations, and some environmental laws provide for joint and several strict liabilities for
remediation of releases of hazardous substances, rendering a person liable for environmental damage, without regard to
negligence or fault on the part of such person. These laws and regulations may expose the Corporation to liability arising
out of the conduct of operations or conditions caused by others, and in certain cases for acts of the Corporation that were
in compliance with all applicable laws at the time these acts were performed. Failure to comply with environmental laws
and regulations could have a material adverse impact on our business, financial condition and result of operations.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-32
Furthermore, a portion of the Corporation’s professional services business is generated directly or indirectly as a result of
laws and regulations. Changes in such laws or regulations could affect the Corporation’s business more significantly than
they would affect other professional services firms. Accordingly, changes to the number or scope of these laws and
regulations could significantly reduce the size of its market sector in such market and materially adversely impact the
Corporation’s business, financial condition and results of operations.
Across its global operations and in connection with its M&A activities, the Corporation must comply with numerous
privacy and data protection laws and regulations applicable in multiple jurisdictions designed to protect privacy rights and
personal information. The global data protection landscape continues to evolve, and the Corporation is required to
navigate distinct obligations and compliance risks in various countries and regions it operates in. The impact and cost of
ensuring compliance and protecting the data and privacy rights of individuals in line with the specifics of each applicable
legislation continues to grow each year. Failing to protect privacy rights and personal information in compliance with
those laws, including the EU and UK General Data Protection Regulation, the Canadian federal Personal Information
Protection and Electronic Documents Act (and other substantially similar provincial laws), the California Consumer
Privacy Act as amended by the California Privacy Rights Act, Brazil’s General Personal Data Protection law and other
emerging global privacy laws, could result in the Corporation being subject to significant regulatory penalties, legal
liability and remediation costs and negatively impact its reputation.
Information Technology and Information Security
In order to operate properly, ensure adequate service delivery to its clients and meet its business objectives, the
Corporation relies heavily on information technologies. Within these technologies, the Corporation processes proprietary
information relating to its business, client information and information in relation to other third parties including in
connection with its M&A activities. This may include proprietary, sensitive, confidential, and personal information limited
to the nature of professional services it or third parties provide and personal information relating to employees.
The Corporation faces numerous threats that are constantly evolving, increasingly sophisticated and difficult to detect and
successfully defend against. These include cyber threats from criminal hackers, ransomware, denial of service and other
forms of malicious attacks, hacktivists, state sponsored organizations and industrial espionage, phishing and other social
engineering techniques, physical or electronic security breaches, computer viruses, unauthorized access, employee
misconduct, human or technological errors, or similar events or disruptions. In addition, AI is increasingly being
incorporated into cyber attacks, for example through system reconnaissance and social engineering. Any of these threats
may lead to system interruptions, delays, and loss of critical data and expose the Corporation, clients, or other third
parties to potential liability, litigation and regulatory action, as well as the loss of client confidence, loss of existing or
potential clients, loss of sensitive government contracts, damage to brand and reputation, financial reporting capabilities
and other financial loss. The current geopolitical instability has exacerbated these threats, which could lead to increased
risk and frequency of cybersecurity incidents.
The Corporation relies on industry-accepted security measures and technical and organizational controls to protect its
information and information technology systems, and there can be no assurance that our efforts will prevent all threats to
our systems. The Corporation may be required to allocate increasingly significant resources, and additional security
measures, to protect against the cyber threats referenced above.
Compliance with information security standards such as NIST, DFAR and ISO27001, among others, are increasing the
requirements to bid for projects. Inability to meet such requirements would limit our ability to pursue certain business
opportunities. Further, the Corporation provides services that may be highly sensitive or that may relate to critical
national security matters; if a security breach were to occur, our ability to procure future government contracts could be
severely limited. The precautions the Corporation takes to prevent and detect these activities may not be effective and the
Corporation could face unknown material risks or losses.
The Corporation’s operations could be interrupted or delayed if the Corporation is unable to continually and adequately
maintain its information technologies, to scale and add software and hardware, to effectively upgrade its systems and
network infrastructure, to maintain key information technology personnel, and take other steps to improve the efficiency
WSP Global Inc.
Management's Discussion and Analysis
2023
M-33
and protection of its systems. Existing business continuity plans may not be sufficient to enable the Corporation to recover
from material information technology disruptions.
The Corporation’s ability to meet its objectives and deliver on its strategic plan depend on its capacity to transform the
organization as it develops its new enterprise resource planning platform, while maintaining an adequate level of service
to clients and protecting profitability. Failure to properly review critical changes within the business before and during
the implementation and deployment of key technological systems or failure to align client expectations with the
Corporation’s client commitments and operating capabilities could adversely affect the Corporation’s operating results or
financial position
The Corporation relies on third-party software and services to support its delivery of professional services to clients such
as design, collaboration and project management, and to support the Corporation’s accounting and financial information
systems. While the Corporation selects third-party vendors carefully, it does not control their actions. Any technology
services provided by a third party, including contractors, business partners, vendors and other third parties, may be
subject to breakdowns, disruption in information and communication services, inability to handle current or higher
volumes, cyber-attacks, security and data breaches. These risks could have a material adverse effect on the Corporation’s
operations and its ability to deliver services to clients. Furthermore, the Corporation may incur additional costs to
remediate errors or failures by third parties.
The Corporation’s employees are provided with systems and infrastructure that facilitate secure remote working,
including from their place of residence, public spaces and sites owned or managed by third parties and clients. However,
these locations may not have the same level of physical security controls as the Corporation’s offices which could increase
the risk of a physical security event, such as device theft, which may disrupt operations.
The Corporation’s digital services are permanently in an evolving state and increasingly utilize emerging technologies
such as cloud computing, machine learning and AI, including generative AI. These technologies come with additional risks,
such as the risk of data loss, hallucination (AI services unknowingly providing false information) or unintentional
intellectual property infringement. In addition, our client deliveries increasingly use innovative technologies such as
smart buildings and automated robotics that require investment to protect their use. Any cybersecurity incident of these
technologies or systems may expose the Corporation and its clients to remediation and litigation costs.
The Corporation processes personal information in relation to its employees and for the clients and other third parties it
works with. If a data breach were to compromise this information, the Corporation could be exposed to regulatory fines,
reputational damage and financial costs associated with remediation. If, in connection with any such breach, deficiencies
are identified in the Corporation’s privacy and information governance program, the financial and reputational impacts on
the Corporation may be exacerbated.
Furthermore, cybersecurity and privacy insurance is becoming more challenging to procure and is unlikely to cover all
cybersecurity or privacy related losses. The insurance available may not fully indemnify and compensate the Corporation
for all damages it may suffer, including reputational losses. These risks, if materialized, could have a material adverse
effect on the Corporation’s business, financial condition and results of operations.
Geopolitical Risks
The Corporation is exposed to various geopolitical risks as it operates across the world in an increasingly interconnected
global economy. In addition, the geopolitical landscape is becoming more complex as the world continues to face more and
more crises and tensions between competing nations and alliances. The Corporation has a geographically dispersed client
base which it serves with local presence and through a network of operations located around the globe. Escalating
conflicts and unrest can affect particular regions and may also have severe repercussions in other parts of the world. As
such, the Corporation may be adversely affected by deteriorating uncertainties arising from political, economic, military
or social conditions emerging from domestic or international political tensions, conflicts and crises.
The potential impacts on the Corporation depend on the extent and depth of geopolitical issues and conflicts as they
materialize and may include consequences such as delays or cancellation of contracts, changes in regulatory practices,
impact to tariffs and taxes, restrictions to global mobility, restrictions to contracting capabilities, productivity slowdowns,
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Management's Discussion and Analysis
2023
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inability to deliver projects in the affected region, deterioration of local and global economies as well as consequences on
the health, safety and well-being of employees.
In particular, the on-going armed conflict between Ukraine and Russia continues to significantly affect the global economy
and has deepened its negative effects on certain regions. Although shortages of specific materials in the construction
industry have resulted in certain of our projects being postponed or cancelled, the Corporation has suffered limited
impacts and continues to monitor this conflict closely and adjust its operations and practices to minimize potential
impacts.
The Israel-Hamas conflict that abruptly escalated in early October 2023 has impacted our operations and employees in the
affected region. The conflict is expected to continue in 2024, and although our operations continue, and our offices
located in low-risk areas remain open, there can be no certainty as to the continuity of our operations in the region if it
continues to escalate. This conflict also exacerbates the overall geopolitical risk landscape in the Middle East and
diplomatic tensions between global powers are increasing.
The Corporation deployed a crisis management team to closely monitor the conflict and mitigate any impact on our
employees and operations. However, should the Israel-Hamas conflict or the Ukraine-Russia conflict persist for a
significant period of time or escalate further with the active participation of other interested countries, the Corporation
may be materially adversely affected by deteriorating impacts on its employees, operations and business.
The Corporation is also exposed to the risks related to the rise of domestic political tensions in certain countries where key
elections are underway. The volatile, uncertain and unpredictable nature of external factors related to geopolitical risks
cannot be easily managed. The Corporation has established a process and business continuity plans to assess and monitor
regional conditions and has defined appropriate policies and controls to engage in work that aligns with its risk tolerance
levels, however these conditions may change through time and potentially render these controls ineffective. If the
Corporation does not successfully and timely adjust to these factors or implement appropriate mitigations, its workforce,
business and results of operations may be materially adversely impacted.
Availability, and Retention and Well-being of Qualified Professional Staff
There is strong competition for qualified technical and management personnel in the sectors in which the Corporation
operates. The Corporation’s success depends in part on its continued ability to attract and retain qualified and skilled
engineers, scientists, planners, technical experts and other professional staff and to establish and execute an effective
succession plan. Over the years, a significant shortage of engineers and other professionals serving our industry has
developed in some markets which has resulted in continued upward pressure on professional compensation packages and
has resulted in high turnover rates, adding pressure on employee retention. Competition in the industry today largely
involves the competition for talent. Considering longer term trends in the industry including demographics, scarcity of
talent relative to demand and the pace of technological advances, the Corporation expects this risk to remain significant to
its business. There can be no assurance that the Corporation will be able to attract, hire and retain sufficient qualified
management personnel, engineers and other professional staff necessary to continue to maintain and grow its business.
Furthermore, some of the Corporation’s personnel hold government granted clearance in certain regions that may be
required in order to work on specific government projects. If the Corporation were to lose some or all of these personnel,
such staff may be difficult to replace. Loss of the services of, or failure to recruit, qualified technical and leadership
personnel with governmental clearances could limit the Corporation’s ability to successfully complete existing projects
and/or compete for new projects requiring such clearances.
When the Corporation fails to retain key personnel or when such personnel retire or otherwise depart the Corporation, the
roles and responsibilities of such employees need to be filled, which requires that the Corporation devote time and
resources to identify, hire and integrate new employees. If the Corporation's succession plan fails to identify those
individuals with high potential or to develop these key individuals, it may be unable to replace key members who retire or
leave the Corporation and may be required to expend significant time and resources to recruit and/or train new
employees. The inability to attract, hire and retain enough qualified management personnel, engineers and other
professional staff as well as to establish and execute an effective succession plan could limit the Corporation’s ability to
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Management's Discussion and Analysis
2023
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successfully complete existing projects and compete for new projects, which could adversely affect the Corporation’s
ability to sustain and increase revenues and its future results.
In addition, the Corporation strives to protect, support and promote the well-being of its people through workplace
practices and well-being programs. Failure to meet those goals may lead to deteriorating work-life balance, reduction in
productivity, decline in workforce mental and physical health, increase in absenteeism, voluntary turnover, work
incidents and accidents. This may impact the delivery of our professional services and consequently adversely impact the
Corporation’s business objectives and financial position.
Over the past several years, as attention to issues of societal inequity and racial injustice have increased globally, the
Corporation has continued to emphasize its commitment to inclusion, equity and diversity. The Corporation is committed
to promoting a culture that empowers its people through a work environment where inclusion, equity and diversity are
expected and valued. Among other things, the Corporation has set in its 2022-2024 Global Strategic Action Plan a target of
5% year-over-year increase in the representation of women and under-represented groups. Failure to meet our goals of
fostering an inclusive, equitable, diverse and non-discriminatory culture, including our targets of increasing
representation of women and under-represented groups, could impact our workforce development goals, our retention
efforts, our ability to achieve our business objectives, our reputation and adversely affect our business and future success.
Although the Corporation has set inclusion, equity and diversity standards that are to be observed by its employees when
conducting business, the Corporation remains subject to the risk of misconduct, non-compliance or other improper
behaviour by its employees, agents or partners.
Adequate Utilization of Workforce
The cost of providing its services, including the extent to which the Corporation utilizes its workforce, affects its
profitability. The rate at which the Corporation utilizes its workforce is affected by a number of factors, including:
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its ability to transition employees from completed projects to new assignments and to hire and integrate timely
new employees, including those coming from newly acquired entities;
its ability to forecast demand for its services and thereby maintain an appropriate headcount in each of its
geographies;
its ability to adequately plan succession to ensure leadership roles, critical positions and technical capabilities are
properly maintained, developed and timely prepared to carry on the Corporation’s business objectives and its
future growth;
its ability to manage attrition; its need to devote time and resources to training, business development,
professional development, and other non-chargeable activities;
its ability to match the skill sets of its employees to the needs of the marketplace; and
its ability to adapt its organizational structure to support and meet the needs of its clients while optimizing its
resources to meet its margin objectives.
If the Corporation does not utilize its workforce effectively, this could impact employee attrition, safety and project
execution, which could result in a decline in future profitability.
Global Operations
The Corporation's operations are global, which subjects the Corporation to a variety of risks, including:
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general social, economic and political conditions or instability in one or more specific markets and/or globally,
including recessions, political changes or disruptions and other economic crises in one or more markets in which
the Corporation operates;
risks related to complying with a wide variety of local, national, and international laws, regulations and policies,
together with potential adverse or significant changes in laws and regulatory framework and practices;
changes in local government trade laws, regulations and policies affecting the markets for the Corporation’s
services, including applicable international sanctions;
international hostilities, civil unrest, force majeure, war, terrorism, including domestic terrorism, and other
armed conflict;
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Management's Discussion and Analysis
2023
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difficulty or expense in enforcing contractual rights due to a lack of a developed legal system or other factors in
certain jurisdictions;
difficulties and costs of staffing and managing global operations and changes in labour conditions;
difficulties, delays and expenses that may be experienced or incurred in connection with the movement of
personnel through the customs and immigration authorities of various jurisdictions;
a greater risk of uncollectible accounts and longer collection cycles;
fluctuations in exchange rates;
changes in regulatory practices, tariffs and taxes;
foreign ownership restrictions with respect to operations in certain countries or the risk that such restrictions
will be adopted or increase in the future;
• multiple and possibly overlapping tax structures;
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exchange controls and other funding restrictions and limitations on the Corporation’s ability to repatriate cash,
funds or capital invested or held in certain jurisdictions where the Corporation operates; and
cultural, logistical and communications challenges.
•
Competition in the Industry
In a people-based industry, the Corporation operates in highly competitive markets and has numerous competitors for all
of the services it offers. Size and characteristics of competitors vary widely with the type of service they provide, the
geographic area and the industry. Some of the Corporation’s competitors have longer operating histories, greater brand
recognition, larger customer bases and have achieved substantially more market penetration in certain of the areas or
locations in which the Corporation competes.
In addition, some of the Corporation’s competitors may allocate substantially more financial or marketing resources to
particular competitive bidding processes and/or benefit from greater financial flexibility than the Corporation in certain
markets or they may be willing to take greater risks or accept terms and conditions that the Corporation may not deem to
be acceptable. Other competitors are smaller and may be more specialized and concentrate their resources in particular
areas of expertise.
Moreover, the technical and professional aspects of some of the Corporation’s services generally do not require large
upfront capital expenditures and provide limited barriers against new competitors. The Corporation’s competitors may
also consolidate or establish teaming or other relationships among themselves or with third parties to increase their
ability to address customers’ needs.
In the midst of rapid technological development, the Corporation must continue to anticipate changes in its clients’ needs
and to do so, must adapt its services so that it maintains and improves its competitive advantage. If the Corporation does
not continue to innovate and leverage technology advancements, fails to adequately develop or implement its business
and sales strategies or inadequately manages its projects, its ability to retain existing clients and attract new clients may
be adversely affected.
In addition, competitive pressures may result in the Corporation being successful in a lesser number of competitive bids
than budgeted for, which if material, could result in a negative impact on its profitability. Moreover, we may not be
awarded contracts because of existing government policies designed to promote locally based businesses and under-
represented minority contractors.
All of these competitive forces may result in our inability to win bids for future projects, increased margin pressure and
loss of revenue, profitability and market share, which if significant, could have a material adverse effect on the
Corporation’s business, reputation, financial condition and results of operations.
Professional Services Contracts
Most of the Corporation’s revenues come from fixed-price contracts, cost-plus contracts with ceilings and time and
material contracts with fixed rates. Under fixed-price contracts, the Corporation agrees to perform either all or a specified
portion of work under the contract for a fixed fee which could expose the Corporation to a greater risk of cost overruns.
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Management's Discussion and Analysis
2023
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Fixed-price contracts, cost-plus contracts with ceilings and time and material contracts with fixed rates are established in
part on partial or incomplete designs, cost and scheduling estimates that are based on a number of assumptions, including
those about future economic conditions (including inflation and interest rates), commodity and other materials pricing
(including construction costs) and availability of labour, equipment and materials and other requirements. If these
assumptions prove inaccurate or if unexpected changes arise, then cost overruns may occur and the Corporation could
experience reduced profits or, in some cases, a loss for that project.
Increasing the volume of fixed-price contracts, cost-plus contracts with ceilings or time and material contracts with fixed
rates and/or increasing the size of such contracts would increase the Corporation’s exposure to these risks and if the
project is significant, or there are one or more issues that impact multiple projects, costs overruns could have a material
adverse impact on the Corporation’s business, financial condition and results of operations.
In addition, the Corporation sometimes partners with construction delivery professionals on engineering, procurement
and construction (“EPC”) projects. In such cases, the Corporation may be required to assume not only design risks, but also
certain procurement and construction risks, except for any risks that are contractually assumed by the client. Losses
under EPC projects could adversely affect the Corporation’s business, operating results and financial condition.
The Corporation may have pending claims made to clients under some of its contracts for payment of work performed
beyond the initial contractual requirements. In general, the Corporation cannot guarantee that such claims will be
approved by its clients in whole, in part, or at all. If these claims are not approved, the Corporation’s revenues may be
reduced in future periods or a dispute (including legal proceedings) could arise which could be detrimental to the
Corporation.
Moreover, in certain instances, the Corporation may provide a guarantee to a client that it will complete a project by a
certain date. As such, the Corporation may incur additional costs should the project be managed ineffectively or should it
subsequently fail to meet the scheduled completion date for any other reason. Projects that are not completed on schedule
further reduce profitability. Staff must continue to work on such projects for longer than anticipated; this may prevent
them from pursuing and working on new or other projects. Projects that are over budget or not on schedule may also lead
to client dissatisfaction and legal proceedings, which can be costly and detrimental to and adversely impact the
Corporation’s reputation. A project’s revenues could also be reduced should the Corporation be required to pay liquidated
damages in connection with contractual penalty provisions. Such damages can be substantial and can accrue on a daily
basis.
In addition, certain contract bidding frameworks are inherently stringent and inflexible, which limits the ability of a
bidder or tenderer to negotiate certain contractual terms and conditions. These types of contracts could potentially
expose the Corporation to significant additional risks or costs, including making any pricing adjustment difficult in a
highly inflationary environment, that could lead to lower margins and adversely affect the profitability of the
Corporation’s projects.
Economic Environment
Demand for the Corporation’s services can be impacted by economic factors and events. Global and local capital and credit
markets and global and local economies may experience significant uncertainty, characterized by the bankruptcy, failure,
collapse or transactions in one or more market sectors, including financial institutions, and a considerable level of
intervention from governments and international organizations around the world. Economic conditions in any of the
markets in which the Corporation operates may be weak and may remain weak or become weaker in the future. In
addition, many governments used, or continue to use, significant levels of fiscal stimulus in an attempt to avoid recessions
and now have significant and growing debts and deficits that may require actions such as spending cuts and higher taxes.
Any of these conditions may impact demand for the Corporation’s services by public and private entities or impact our
cost of doing business. Demand for the Corporation’s services may also be vulnerable to reductions in private industry
spending resulting from sudden economic downturns or changes in commodity prices such as oil, natural gas or metals,
which may result in clients delaying, curtailing or cancelling proposed and existing projects, in some cases with little or no
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Management's Discussion and Analysis
2023
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prior notice. Any of these conditions may adversely affect the demand for the Corporation’s services, which may
negatively affect its business, financial condition and results of operations.
In addition, currency and interest rate fluctuations, financial market volatility or credit market disruptions may limit the
Corporation’s access to capital and may also negatively affect the ability of the Corporation’s customers to obtain credit to
finance their businesses on acceptable terms. If the operating and financial performance of the Corporation’s customers
deteriorates or if they are unable to make scheduled payments or obtain credit, the Corporation’s customers may not be
able to pay the Corporation. Any inability of customers to pay the Corporation for its services may adversely affect its
backlog, earnings and cash flows.
Lastly, rising inflation, interest rates and construction costs could reduce the demand for the Corporation’s services in the
markets in which it operates or may operate in the future. The Corporation also generally bears the risk of rising inflation
in connection with fixed-price contracts and may also bear inflation risk in relation to cost-plus contracts with ceilings or
contracts on a time and material basis where hourly rates are fixed. In addition, if the Corporation expands its business
into markets or geographic areas in which fixed-price work is more prevalent, inflation may have a larger impact on the
Corporation’s results of operations. The impact of inflation could also subject the Corporation to significant cost pressure,
including increasing costs of borrowing, or lead to a decrease in the liquidity of capital markets.
Working with Government Agencies
The demand for the Corporation’s services is affected by the level of government funding that is allocated for rebuilding,
improving, and expanding infrastructure systems. The Corporation derives a significant portion of its revenues from
governments or government-funded projects and expects to continue to do so in the future. Significant changes in the
level of government funding, the short-term and long-term impacts of the COVID-19 pandemic (including future
budgetary constraints, concerns regarding deficits, inflation and a recession), economic crisis, changing political priorities,
changes in governments or delays in projects caused by political deadlock, may adversely affect the Corporation’s
business, prospects, financial condition and results of operations.
The success and further development of the Corporation’s business depend, in part, on the continued funding of these
government programs and on the Corporation’s ability to participate in these programs. However, governments may not
have available resources to fund these programs or may decide not to fund these programs for diverse political reasons.
Most government contracts are awarded through a rigorous competitive process which may result in the Corporation
facing significant additional pricing pressure, uncertainties, and additional costs. As such:
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Government contracts in most regions are based on strict regulatory and statutory foundations of public
procurement. Non-compliance with these regulatory requirements by the Corporation may result in termination
of contracts, suspension or debarment from future governmental projects and/or other sanctions including the
imposition of penalties or fines.
Government contracts are typically subject to renewal or extensions over a defined period, and thus the
Corporation cannot be assured of its continued work under these contracts in the future. Government budgetary
approval procedures take place annually, which may result in partial contract funding where contract
performance is expected to take more than one year. Moreover, those budgetary processes may also result in
defunding where multi-year contracts were partially funded in the early stages of implementation.
Government agencies can typically terminate these contracts at their convenience or render the Corporation
ineligible to contract with such government agencies in the future. The Corporation may incur costs in
connection with the termination of these contracts and suffer a loss of business.
In certain markets, contracts with government agencies are subject to substantial regulation and audit of the
actual costs incurred. These audits can result in a determination that a rule or regulation has been violated or that
adjustments are necessary to the amount of contract costs the Corporation believes are reimbursable by the
agencies and the amount of overhead costs allocated to the agencies. Consequently, there may be a downward
adjustment to the Corporation’s revenues if costs already recognized exceed the contractual entitlements, as
audited by the relevant government agency.
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Management's Discussion and Analysis
2023
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Our inability to win new contracts or be awarded additional work under existing contracts could have a material adverse
impact on the Corporation's business, financial condition and results of operations.
In addition, as part of its global business dealings with different governmental bodies, entities and agencies in each of the
countries in which the Corporation operates, WSP must comply with complex public procurement laws and regulations
aimed at ensuring that public sector bodies award and manage contracts in a transparent, competitive, efficient and non-
discriminatory manner in these jurisdictions. These rules can also provide for verification processes and disclosure
requirements, as well as address national security concerns, among other matters. WSP can be subject to audits and
investigations by government departments and agencies with respect to compliance with these rules. Non-compliance
with these requirements may result in the Corporation incurring penalties and sanctions, including contract termination,
suspension of payments, suspension or debarment from doing business with the government, and fines. In addition, WSP
may be required to obtain authorizations or certifications in order to enter into contracts with governmental bodies,
entities and agencies in certain jurisdictions, which authorizations or certifications may be revoked in a variety of
circumstances, including at the discretion of a governmental authority or if the Corporation or its affiliates or directors or
officers are convicted of an offense. If the Corporation fails to comply with these laws and regulations or the terms of these
authorizations or certifications or if the Corporation, its directors, officers, employees or agents commit legal violations or
misconduct specified in any of these rules, the Corporation could be subject to mandatory or discretionary exclusion or
suspension, on a permanent or temporary basis, from contracting with these governmental bodies, entities and agencies
or within certain jurisdictions, in addition to termination of certain government contracts, fines, penalties and other
sanctions that could be imposed on the Corporation. Upon conviction of an offense, the Corporation could be debarred
from participating in procurements with governmental bodies, entities and agencies for extended periods of time and
suffer significant damage to its reputation. The disqualification of the Corporation from public contracts, the conviction of
the Corporation with respect to certain offenses or the institution of formal charges with respect to such offenses in any
jurisdiction in which it has operations or carries out business activities could impact its ability to bid, enter into or
perform public contracts or subcontracts in that and other jurisdictions, any of which may adversely affect the
Corporation’s business, financial condition and results of operations.
Challenges Associated with Size
In recent years, the Corporation has significantly increased in size and, as at December 31, 2023, had approximately 66,500
employees globally. The Corporation must effectively communicate, monitor and manage its culture, values, standards,
internal controls and policies throughout the larger organization. The Corporation may not be able to achieve its strategic
objectives if it does not overcome the challenges associated with managing cultural diversity and the particularities of
local markets. Cultural differences in various countries may also present barriers to introducing new ideas or aligning
WSP’s vision and strategy throughout the organization.
In addition, the size and scope of the Corporation’s operations heighten the possibility that it will have employees who
engage in unlawful or fraudulent activity, or otherwise expose it to business or reputational risks, despite the
Corporation's efforts to provide training and maintain controls to prevent such instances. If the Corporation cannot
overcome these obstacles, it may not be able to achieve its growth and profitability objectives and/or it may suffer
reputationally. In addition, from time to time, the Corporation has made, and may continue to make, changes to its
operating model, including how it is organized, to adapt to the needs and size of its business evolution. If the Corporation
does not successfully and timely implement any such changes, its business and results of operation may be negatively
impacted.
Growth by Acquisitions
A key part of our growth strategy is through M&A activities; that is, acquiring firms that align with our strategic objectives
and/or that operate in geographies and/or specialties that are complementary to our existing operations. Management
believes that growth through acquisitions can enhance the Corporation’s value proposition and can accelerate our ability
to achieve our strategic goals. However, a variety of factors may adversely affect the anticipated benefits of a given
acquisition or prevent these from materializing to the extent envisaged or at all, or from occurring within the time periods
forecasted by the Corporation. In addition, entities the Corporation acquires may have liabilities, contingencies,
incompatibilities or other obstacles to successful integration that the Corporation failed to discover or was unable to
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Management's Discussion and Analysis
2023
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accurately quantify in the due diligence conducted prior to completion of an acquisition and which could have a material
adverse effect on the Corporation’s business, financial condition or future prospects.
Although we seek to complete a thorough due diligence process in connection with any acquisition or related transaction
we pursue, there remains a level of risk regarding the accuracy and completeness of the information provided to the
Corporation or our ability to discover or accurately quantify certain liabilities, deficiencies, contingencies or other
obstacles to a successful integration, particularly in competitive processes, such as auction-style processes, where we may
not have access to all material information prior to submitting a binding offer, which could have a material adverse effect
on the Corporation’s business, financial condition or future prospects. While we strive to obtain adequate indemnification
rights from the sellers of acquired businesses and/or insurance that could mitigate certain of these risks, such rights may
be difficult to enforce, the losses may exceed any dedicated escrow funds or holdbacks and the indemnitors may not have
the ability to financially support the indemnity, or the insurance coverage may be unavailable or insufficient to cover all
losses.
In addition, as there is strong competition among acquirers in our industry, it may prove increasingly challenging to
identify attractive targets for acquisitions, and such firms may not be available on terms and conditions, including pricing,
that are acceptable to us, which may negatively impact our ability to successfully pursue our growth strategy. Existing
cash balances and cash flow from operations, together with borrowing capacity under our credit facilities, may be
insufficient to make acquisitions. Future acquisitions may require us to obtain additional equity or debt financing, which
may not be available on attractive terms, or at all.
Further, the Corporation may enter into new markets or take on new activities as a result of its acquisitions. This carries
the risk that the Corporation may struggle to efficiently or effectively exploit such new markets or services, and/or to
comply with laws and regulations applicable thereto, or it may misjudge or inefficiently mitigate the risks associated with
these new markets or activities.
Consummation of acquisitions may be subject to the satisfaction of customary closing conditions. One or more of these
conditions may not be fulfilled and, accordingly, the transaction may not be consummated or may be significantly delayed.
If the transaction is not consummated, we will have incurred costs, often substantial, without realizing the expected
benefits of the acquisition. In addition, there may be challenges associated with obtaining adequate insurance coverage for
the target’s operations prior to closing. To the extent the market price of our shares reflects a market assumption that the
transaction will be consummated or will be consummated within a particular timeframe, the market price of our shares
may decline. The announcement of the transaction or its pendency can cause uncertainty among clients and employees
about the effect of the transaction which could have an adverse effect on the Corporation’s ability to maintain existing
business relationships or retain key employees. The pursuit of the transaction will also require management attention and
use of internal resources that would otherwise be focused on general business operations. Any of the foregoing, or other
risks arising in connection with a failure or delay in consummating a transaction, including the diversion of management
attention or loss of other opportunities during the pendency of the transaction, could have a material adverse effect on
our business, financial condition and results of operations.
Furthermore, as we regularly review our global business and operations, we may wish to divest certain of the
Corporation’s businesses that do not align with its current and future strategy. Divestitures involve risks and uncertainties
and may take longer or be costlier than expected, are subject to market conditions and may not be completed at all. We
may also retain liabilities related to divested businesses post-disposal. If we are unable to complete divestitures or to
successfully transition divested businesses, or if closing of a divestiture is significantly delayed, our business and financial
results could be negatively impacted.
Acquisition Integration and Management
Achievement of the benefits of acquisitions depends in part on successfully consolidating functions, integrating and
leveraging operations, procedures, systems, and personnel in a timely and efficient manner, as well as the Corporation’s
ability to share knowledge and realize revenues, synergies and other growth opportunities from combining acquired
businesses and operations with those of WSP. There is no assurance that the Corporation will be able to successfully
integrate its acquisitions. Failure by the Corporation to effectively and timely integrate acquired businesses, including the
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Management's Discussion and Analysis
2023
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integration of personnel, culture, values, operations, standards, controls, procedures, policies and systems, including IT
systems, could lead to, among other matters: a failure to realize anticipated benefits of one or more acquisitions, including
cost savings, synergies, business opportunities and growth opportunities; unanticipated operational problems resulting in
inefficiencies, expenses, including higher than anticipated integration costs, liabilities and claims; the loss or
disengagement of certain key personnel; and an increase in the risks to which the Corporation is subject.
The successful integration of an acquired business is subject to the risk that personnel and professionals from the acquired
business and the Corporation may not be able to work together successfully, which could affect morale and the
Corporation’s operations. Cultural differences, including but not limited to differences in corporate cultures, may also
present barriers to the successful integration of businesses acquired by the Corporation. Among other things, the
Corporation may seek to require as a condition of completion of one or more acquisitions that key personnel and
professionals from the acquired business enter into employment agreements for specified post-acquisition periods and/or
non-competition undertakings; however, there are risks that such commitments will not be respected or that the
personnel and professionals subject to same or other personnel and professionals will not be successfully integrated as
productive contributors to the Corporation’s business. In addition, all acquisitions carry the risk of the potential loss of key
personnel or that key personnel may compete with the Corporation’s business post-closing which would hinder our ability
to protect the goodwill acquired in connection with the transaction.
While in transition, the integration of information technology systems and financial management systems of acquired
firms may expose us to information security risks, cyber security risks, and gaps in internal controls, in particular where
there may be gaps in the security protections implemented in target firms relative to the standards implemented in the
Corporation.
There may also be gaps in the standard contracts terms implemented in target firms relative to those implemented in the
Corporation, resulting in less favourable terms and conditions post-acquisition. The implementation of WSP contracting
standards and guidelines following completion may require significant time and resources and correspondingly, result in
increased risk during the transition period.
Integration requires the dedication of substantial management effort, time and resources, which may divert
Management’s focus and resources from other strategic opportunities (including other potential acquisitions) and from
operational matters during the integration process. The acquisition integration process may also result in the disruption of
ongoing business, client, employee and other relationships that may adversely affect the Corporation’s ability to achieve
the anticipated benefits of a given acquisition. In particular, major clients of the acquired businesses may not be retained
following the acquisition of such businesses. The Corporation may not ever realize the full benefits of an acquisition,
including the synergies, cost savings, or sales or growth opportunities, any of these difficulties could adversely impact our
business performance and results of operations.
Current or Future Legal Proceedings
In the ordinary course of conducting its business, the Corporation is threatened from time to time with, or named as a
defendant in, or may become subject to, various legal proceedings. These legal proceedings (which may include civil suits,
demands for arbitration or class actions) often allege professional errors and omissions or other incidents that may occur
during project delivery, or commercial or regulatory disputes involving with clients, service providers, partners, project
owners, contractors, and the Corporation’s employees.
As part of its service offerings, the Corporation also issues reports and opinions to clients based on its professional
engineering expertise, as well as its other professional credentials, in compliance with applicable laws, regulations and
professional standards. The Corporation could be liable to third parties who use or rely upon such reports or opinions even
if the Corporation is not contractually bound to those third parties. In particular, such third-party liability could include
expert liability under applicable laws. The Corporation may not always have the ability to control the manner in which its
reports and work produced for clients may be released, quoted from, or summarized in the public domain. As a result, the
Corporation could attract liability if its clients reproduce such work products to solicit funds from investors without
appropriate disclaimers or context, or the information proves to be incorrect, misleading, or incomplete.
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In addition, legal proceedings may result from the business historically carried on by the Corporation’s predecessors as
well as employees’ or former employees’ failure to comply with applicable laws and regulations.
On December 27, 2019, over 100 plaintiffs filed suit in the US District Court for Washington, DC against a number of US
government contractors, including The Louis Berger Group, Inc. and Louis Berger International, Inc. (collectively, “LB”)
which the Corporation acquired in December 2018, alleging that between 2009 and 2017, LB had violated the Anti-
Terrorism Act. The Corporation is of the view that LB has a strong defense on both the legal aspects of the litigation and
the factual underpinnings in this complex and rarely litigated statute. Preliminary motions to dismiss the proceedings
have been filed by the Defendants. However, the Corporation cannot, at this preliminary stage, predict the outcome of this
suit, potential losses or the impact on its reputation.
Defending lawsuits of this nature or arising out of any of the services provided by the Corporation could require
substantial attention from Management, necessitate financial resources to defend such claims and/or result in significant
attorney fees, damage awards and the imposition of significant fines, penalties or injunctive relief for which the
Corporation may not be fully insured and which could harm its reputation, thereby affecting its ability to bid on and/or
obtain future projects and retain qualified employees. Even if the Corporation is successful or if it is fully indemnified or
insured, such lawsuits could damage the Corporation’s reputation and make it more difficult to compete effectively or
obtain adequate insurance in the future. In addition, the institution of proceedings against the Corporation may have to be
immediately accounted for in the results of the Corporation and may have a material adverse impact on the assets,
liabilities, revenues and/or goodwill of the Corporation, the magnitude of which the Corporation may not predict.
Reputation
To remain competitive, the Corporation depends to a large extent on its relationships with its clients and its reputation for
high-quality professional services and as a professional services firm that complies with the highest ethical standards. This
positive reputation plays an important role in the Corporation’s long-term success and is crucial for it to continue to
compete effectively and maintain its goodwill. The failure of the Corporation to meet its clients’ expectations in the course
of a project, or the occurrence of events outside of the control of the Corporation including the possibility of a catastrophic
failure or incident affecting such a project, could have a negative impact on how it is perceived in the market. Further, the
Corporation’s failure to comply with applicable laws, regulations or generally recognized and accepted guidelines on
corporate, environmental, social (including health and safety), and governance responsibilities, failure to adequately
report on or meet its environmental, social and governance objectives, human rights standards or commitment of any acts
of misconduct or corruption, illegal political contributions, alleged or proven non-compliance with laws or regulations,
anti-competitive or criminal acts or other ethics-related acts or omissions by its officers, directors, employees,
subconsultants, contractors, agents, third party suppliers and/or partners could negatively impact the Corporation’s
reputation. Harm to the Corporation’s reputation could also arise from a number of other factors, including questions
surrounding competence, data breaches, actual or alleged quality, timing or performance issues on its projects, a poor
health and safety record or the accuracy and quality of financial reporting and public disclosure. Any negative publicity
about, or significant damage to, the Corporation’s reputation and image could have an adverse impact on client, employee
and investor perception and confidence and may result in the cancellation of current projects and adversely impact its
ability to obtain future projects, affect the Corporation’s ability to attract or retain qualified personnel, or negatively
impact the Corporation’s relationship with its investors and potential investors, all of which could materially and
adversely affect its revenues and profitability. Also, the pervasiveness and viral nature of social media could exacerbate
any negative publicity with respect to the Corporation's business.
Insurance Limits
The Corporation maintains comprehensive insurance coverage for various aspects of its business and operations, to
provide indemnity for its losses and liabilities. The Corporation’s insurance programs are subject to varying coverage
limits, retentions as well as exclusions that are customary or reasonable given the cost of procuring insurance, and current
operating conditions, and other relevant considerations. As a result, the Corporation may be subject to future liability for
which it is only partially insured, or completely uninsured. The Corporation is of the view that its insurance programs
address all material insurable risks and provides coverage that is in accordance with what would be maintained by a
prudent operator of a similar business. However, there can be no guarantee that such insurance will continue to be offered
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Management's Discussion and Analysis
2023
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on economically feasible terms, that all events that could give rise to a loss or liability are or will be insurable, or that the
amounts of insurance will always be sufficient to cover every loss or claim that may occur involving the Corporation’s
assets or operations.
Challenges associated with infectious disease outbreaks
Infectious disease outbreaks, including epidemics, pandemics such as COVID-19 or similar widespread public health
concerns, can cause serious demand, supply and operational challenges that may negatively impact the Corporation's
employees, business, financial performance and financial position.
These public health concerns pose the risk that our employees, clients, subconsultants and other business partners may be
prevented from, or restricted in, conducting business activities for an indefinite period, including due to the transmission
of the disease or to emergency measures or restrictions that may be requested or mandated by governmental authorities.
Pathogens are constantly and rapidly evolving and they are impacted by climate change which also increases the spread of
infectious diseases.
The likelihood and magnitude of such impacts or the occurrence of any such infectious disease outbreaks are inherently
difficult to predict and will depend on many factors beyond the Corporation’s control and knowledge. If infectious disease
outbreaks continue to materialize, and if the Corporation’s business continuity plans are insufficient to adequately
mitigate any impacts, there could be a material adverse impact on the Corporation’s business, financial results and/or
operations.
Controls and Disclosure
Inherent limitations to the Corporation’s internal or disclosure controls could result in a material misstatement of
financial information or other metrics disclosed by the Corporation, which could cause the Corporation to incur
incremental compliance costs, fail to meet its public reporting requirements or require a restatement of its financial
statements. The Corporation maintains accounting systems and internal controls over its financial reporting and
disclosure controls and procedures. There are inherent limitations to any control framework, as controls can be
circumvented by acts of individuals, intentional or not, by collusion of two or more individuals, by management override
of controls, by lapses in judgment and breakdowns resulting from human error. There are no systems or controls that can
provide absolute assurance that all fraud, errors, circumvention of controls or omission of disclosure are prevented or
detected. Such fraud, errors, circumvention of controls or omission of disclosure could result in a material misstatement of
financial information. Also, projections of any evaluation of the effectiveness of controls to future periods are subject to
the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the
policies or procedures may deteriorate. Inadequate controls could also result in fraud and inappropriate decision-making
based on non-current internal information. Inadequate internal or disclosure controls may also have a material adverse
impact on the assets, liabilities, revenues, expenses, and reputation of the Corporation.
Increasing Requirements and Stakeholder Expectations Regarding ESG Matters
The Corporation and its clients are facing increasing ESG risk management and reporting expectations driven by
stakeholders including clients, investors, employees and communities as well as by an increasing number of regulatory
requirements globally. These expectations and obligations are expected to continue to evolve in the near future.
Through its designs and advisory services, as well as through its own actions, WSP is committed to helping address and
solve some of the most pressing environmental and social issues. The Corporation has pledged to reduce its greenhouse
gas (“GHG”) emissions, create a more inclusive and diverse workplace, protect the health, safety and well-being of its
workforce, and assess its impacts on biodiversity, among other ESG commitments. The achievement of these goals and
objectives is subject to risks and uncertainties, notably for targets that are not under the Corporation’s direct control, such
as the GHG emissions reductions of its business partners and suppliers (scope 3 emissions). The Corporation offers advisory
services in relation to setting ESG targets and reporting on frameworks and as such, is subject to increased scrutiny of its
corporate ESG disclosures. More acute generalized scrutiny also adds pressure to secure reliable and precise ESG data with
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Management's Discussion and Analysis
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clear accountability across the organization and to deploy robust data collection processes with effective controls that will
allow external verification in the near future. As a result, if the Corporation misses its stated ESG targets, or fails to
accurately manage, measure or report on its progress in relation to such ESG targets, this could have financial,
reputational, legal and regulatory repercussions. For example, the Corporation’s activities are rated by ESG rating
agencies, and the resulting scores and rankings are used as an investment tool, notably among institutional investors.
Failure by the Corporation to reach its ESG targets could potentially lead to downgrades in its ratings and loss of clients,
partners or internal talent.
In addition, the emergence of ‘’greenwashing’’ litigation by various groups creates a new and evolving set of compliance
risks. Gaps in perception and acceptability of how ESG factors in shareholder value also call for increased vigilance when it
comes to ESG reporting and communication.
If the Corporation’s ESG risk management and reporting practices fail to achieve the expectations of its stakeholders, this
could influence investor behaviour and negatively affect our reputation, all of which would have an adverse effect on our
business, results of operations and financial condition.
Risks related to Generative AI
The digital transformation and the adoption of emerging technologies, such as generative AI, are requiring us to identify
and manage new risks. Although the integration of generative AI into the Corporation’s operations may perform a broad
range of knowledge-intensive tasks and provide a business advantage, it also carries risks related to:
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Accuracy and bias: Generative AI tools may generate inaccurate or unreliable output which may be biased or
discriminatory, include unethical or inappropriate content, or be repetitive. If generative AI output is relied upon
with insufficient human validation, there may be an increased risk of errors and omissions in the Corporation’s
services and work products, and consequently, increased risk of litigation and claims and erosion of trust with
clients.
Data privacy and confidentiality of client, personal and corporate data: questions and prompts that may interact
with public generative AI services may be stored and re-used in the tool. In such instances, the data entered is not
protected against disclosure and may be permanently available to third parties, increasing compliance risks with
data protection laws.
Regulation: emerging regulations, data protection laws or contractual obligations relating to generative AI may
lead to additional compliance risks for the Corporation.
Intellectual property: generative AI service providers may pose aggressive terms and conditions on the ownership
of information provided by or to the tool, raising the risk of copyright or intellectual property violations.
Although the Corporation has established internal controls and processes regarding generative AI, these may not be
sufficient to adequately protect against all risks. This may result in fines, penalties, litigation and impact our reputation,
which may adversely impact the Corporation’s business, financial condition and results of operations.
Climate Change and related Physical and Transition Risks
As an organization providing consultancy services with no significant real estate assets, the Corporation believes its
financial exposure to acute physical impacts from climate change is limited. However, there is the potential that changes
in climate such as increasing heatwaves, sea level rise, extreme weather events, storm-related flooding or extended
drought, or other acute or chronic changes to the climate could disrupt its clients’ projects, its project delivery, or the
health and safety of its employees. The effects of climate change and extreme weather events on the Corporation’s clients
have the potential to cause negative impacts on the Corporation, including work stoppages, project delays, financial losses
and additional costs to resume operations, including increased insurance costs or loss of coverage, legal liability and
reputational losses. Existing business continuity plans may not be sufficient to enable the Corporation to recover from
these negative impacts.
Generally, the Corporation occupies modern offices in well-connected locations. It also has significant regional, national
and global presence to ensure that all offices would not be disrupted by adverse climate impacts at the same time.
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Management's Discussion and Analysis
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However, the health and well-being of our employees may be impacted if there are significant, region-wide events such as
heatwaves or extreme weather, regardless of where employees are working, which may impact project delivery. The
Corporation conducts outdoor field activities in the course of its projects, including but not limited to professional
surveying, resident engineering services, field data surveys and collection, archeology, geotechnical investigations and
exploratory geological or geo-environmental drilling, construction oversight and inspection, and plant start-up, testing
and operations. Therefore, extreme weather events could also hinder the ability of its field employees to perform their
work, which may result in delays or loss of revenues, while certain costs continue to be incurred.
In addition to physical risks, climate change poses transitional risks to the Corporation such as market and technology
shifts, which could result in decreased demand for some of the Corporation's services. Furthermore, policy changes made
by governments in response to climate concerns could increase the costs or impact the viability of projects for some
clients, or alternatively increase demand for some of our services. It is currently difficult to predict the outcome of
climate-related proposals and their impact on the Corporation and its clients.
Ecological and Social Impacts of Projects
WSP works in industries including energy, mining, water, transportation and infrastructure, where related projects may
impact the environment or local or Indigenous communities or take place in regions subject to geopolitical tensions or
with elevated human rights concerns. The impacts of our clients’ projects may include a reduction in biodiversity,
deforestation, water pollution, displacement of local populations, otherwise disrupt communities or lead to the loss of
territories claimed by certain groups. Beyond abiding by all applicable laws and regulations, the Corporation’s clients must
gain social acceptance for their projects from a wide number of stakeholders. Failure to involve concerned citizens and
impacted communities in decision-making could lead to negative publicity, protests, litigation, policy changes, or even
cancellation of projects, which could adversely impact the Corporation’s business, financial condition, or its reputation.
Joint Arrangements
As part of its business strategy, the Corporation may enter into certain contracts through joint arrangements with
unaffiliated third parties such as joint ventures, partnerships or other strategic alliances. The success of the Corporation’s
joint arrangements depends, in part, on the satisfactory performance by its partners of their respective obligations. The
failure or unwillingness of any partner in a joint arrangement to perform its obligations or to provide the required levels
of financial support could impose financial and performance obligations on the Corporation that could result in increased
costs and adversely affect the Corporation’s reputation, business and financial condition. If these circumstances occur, the
Corporation may be required to pay financial penalties or liquidated damages, provide additional services outside of its
responsibilities, or make additional investments to ensure adequate performance and delivery of the contracted services.
Under agreements with joint and several (or solidary) liabilities or whereby the work to be delivered to our client is
integrated with our contract partners, the Corporation could be liable for both its own obligations and those of its partners
which could have an adverse impact on its financial condition and results of operations. These circumstances could also
lead to disputes and litigation with the Corporation’s partners or clients.
Reliance on Suppliers and Subconsultants
The Corporation engages with a large number of third-party suppliers and subconsultants to fulfill its obligations towards
its clients. The proper and profitable completion of some contracts depends to a large extent on the satisfactory
performance of the subconsultants that complete different elements of the work delivered by the Corporation to its
clients. If these subconsultants do not perform to acceptable standards or fail to deliver as per the agreed schedule, the
Corporation may have to replace its subconsultant to complete the subcontracted deliverables and the Corporation’s
ability to fulfill its obligations may be jeopardized. This may result in additional costs to the Corporation which could
impact profitability on a specific job and in certain circumstances may lead to margin erosion, significant losses,
dissatisfied clients and claims.
The failure of the Corporation to flow down its contractual liability adequately and proportionately to its suppliers and
subconsultants and the failure of any such third party, supplier or subconsultant to deliver on their contractual
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Management's Discussion and Analysis
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commitments or to meet the Corporation’s expectations set out in its Business Partners Code of Conduct could have an
adverse effect on the Corporation’s business, reputation, prospects, financial condition and results of operations.
Work Stoppage and Labour Disputes
As at December 31, 2023, employees predominantly in the Nordics, Brazil, Canada and Central Europe, representing
approximately 11% of the Corporation's total employee population were unionized. Although the Corporation believes
that it has good relations with its employees, the Corporation has in the past experienced labour disputes with its
employees and could experience such conflicts in the future which could lead to strikes, loss of productivity, project
interruptions, financial losses or damages to the Corporation’s reputation as an employer of choice. A lengthy strike or
other work stoppages, caused by or involving unionized or non-unionized employees, in connection with any of the
Corporation’s projects could have a material adverse effect on the Corporation. There is an inherent risk that on-going
or future negotiations relating to collective bargaining agreements or union representation may not be favourable to
the Corporation. From time to time, the Corporation has also experienced attempts to unionize the Corporation’s non-
unionized employees. Such efforts can often disrupt or delay work and present risk of labour unrest.
Changes to Backlog
The Corporation cannot guarantee that the revenues projected in its backlog will be realized or, if realized, will result in
profits. Projects may remain in the backlog for an extended period of time. In addition, project delays, suspensions,
terminations, cancellations, reductions in scope or other adjustments do occur from time to time in the Corporation’s
industry due to considerations beyond its control and may have a material impact on the value of reported backlog with a
corresponding adverse impact on future revenues and profitability. Future project cancellations and scope adjustments
could further reduce the dollar amount of the backlog and the revenues that the Corporation actually receives.
In addition, most of the Corporation’s contracts contain “termination for convenience” or termination upon short notice
provisions, which permit the client to terminate or cancel the contract at its convenience upon providing the Corporation
with notice of a specified period of time before the termination date or paying the Corporation equitable compensation or
both, depending on the specific contract terms. In the event a significant number of the Corporation’s clients were to avail
themselves of such “termination for convenience” provisions, or if one or more significant contracts were terminated for
convenience, the Corporation’s reported backlog would be adversely affected with a corresponding adverse impact on
expected future revenues and profitability. Although the Corporation’s revenues do not materially depend on any specific
client, there can be no assurance that the Corporation will be able to retain its relationships with its largest clients.
If a significant backlog adjustment occurs, the Corporation could incur costs resulting from reductions in staff that would
have the effect of reducing its net earnings.
Protection of Intellectual Property Rights
The Corporation’s technology and intellectual property provide, in certain instances, a competitive advantage. Where
appropriate, the Corporation seeks to protect its technology and intellectual property, including trademarks, patents,
copyright, know-how and industrial designs, by relying on registration, licensing, security controls and other available
mechanisms, as well as by implementing the proper legal contractual arrangement and non-disclosure agreements.
However, there is no assurance that such measures will be enforceable or adequate. Trade secrets are generally difficult to
protect. Our employees and contractors are subject to confidentiality obligations, but this protection may be inadequate to
deter or prevent misappropriation of our confidential information and/or infringement of our intellectual property. If the
Corporation is not able to fully protect its intellectual property rights or detect unauthorized use of same or otherwise
take appropriate steps to enforce its rights, they could be invalidated, circumvented, challenged or become obsolete which
could adversely impact the Corporation’s capacity to differentiate itself from its competitors. Litigation to determine the
scope of intellectual property rights, even if ultimately successful, could be costly and could divert management’s
attention away from other aspects of our business.
Clients and third parties occasionally provide the Corporation with access to their technology and intellectual property,
and although the Corporation takes reasonable steps to protect such information from improper use or distribution, there
is a risk that it may not be adequately protected which could lead to claims and litigation and resulting liabilities, loss of
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Management's Discussion and Analysis
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contracts or other consequences that could have a material adverse impact on our business, financial condition and results
of operations. In addition, the Corporation publishes numerous articles and reports, in a variety of websites, journals or
magazines and may, even unintentionally, entail copyright infringement. The Corporation may face allegations or claims
by clients and third parties of infringement, misappropriation or other violations of their intellectual property rights. Any
infringement, misappropriation or related claims, whether or not meritorious, could be time consuming, divert technical
and management personnel, and costly to resolve and could substantially harm our business, financial results and overall
reputation.
RISKS RELATED TO THE CORPORATION'S LIQUIDITY, CAPITAL
RESOURCES AND FINANCIAL POSITION
Deterioration of Financial Position or Net Cash Position
The Corporation relies both on its cash position as well as on the bank, credit and capital markets to provide a portion of
its capital requirements and it is, in certain instances, required to obtain bank guarantees, letters of credit and/or
performance and payment bonds as a means to secure its various contractual obligations. Significant instability or
disruptions of the capital markets, including the credit markets, or a deterioration in or weakening of its financial position,
including its net cash position, due to internal or external factors, could restrict or prohibit the Corporation’s access to, or
significantly increase the cost of, one or more of these financing sources, including credit facilities, the issuance of long-
term debt (such as the issuance of debentures, bonds or notes), or the availability of bank guarantees, letters of credit and/
or bonding to guarantee its contractual and project obligations.
There can be no assurance that the Corporation will maintain an adequate net cash position and generate sufficient cash
flow from operations to fund its operations and liquidity needs, service its debt and/or maintain its ability to obtain and
secure bank guarantees.
A draw on letters of credit or bank guarantees by one or more third parties could, among other things, significantly reduce
the Corporation’s cash position and have a material adverse effect on its business and results of operations.
Working Capital Requirements
The Corporation may have significant working capital requirements, which if unfunded could negatively impact its
business, financial condition and cash flows. In some cases, the Corporation may require significant working capital to
finance the performance of engineering and other work on certain projects before it receives payment from clients. In
other cases, the Corporation is contractually obligated to its clients to fund working capital on projects. Increases in
working capital requirements could negatively impact the Corporation’s business, financial condition and cash flows.
Further, significant deterioration of the current global economic and credit market environment could challenge the
Corporation’s efforts to maintain a diversified asset allocation with credit worthy financial institutions.
In addition, the Corporation may invest some of its cash in longer-term investment opportunities, including the
acquisition of other entities or operations, capital expenditures, the reduction of certain liabilities such as unfunded
pension liabilities and/or repurchases of the Corporation’s outstanding shares. To the extent the Corporation uses cash for
such other purposes, the amount of cash available for the working capital needs described above would be reduced.
Accounts Receivable
As is common in the professional services industry, the Corporation carries a high level of accounts receivable on its
balance sheet. This value is spread among numerous contracts and clients. While the Corporation performs regular
reviews of accounts receivable to identify clients with overdue payments and resolve issues causing any delays, including
issues relating to the financial capacity of such clients, there can be no assurance that outstanding accounts receivable will
be paid on a timely basis or at all. The non-payment of accounts receivable may have an adverse impact on the
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Corporation’s financial condition and profitability. While the Corporation maintains provisions to account for projected
collection issues, such provisions are based on estimates and projections which may differ significantly from actual results.
The Corporation’s credit risk is principally attributable to its trade receivables. The amounts presented in the balance
sheet are net of expected credit losses, estimated by Management and based, in part, on the age of the specific receivable
balance and the current and expected collection trends. Generally, although credit is extended following an evaluation of
creditworthiness, the Corporation does not require collateral or other security from customers for trade accounts
receivable. Large uncollectible accounts receivable balances could have a material adverse effect on the Corporation’s
financial condition.
Increased Indebtedness and Raising Capital
The Corporation may draw on its credit facilities or may issue other debt instruments, such as bonds, to fund its activities,
including acquisitions it may complete from time to time. Depending on its level of indebtedness, the Corporation could be
required to dedicate an important part of its cash flow to making interest and capital payments on its indebtedness, which
could have other important consequences for investors, including the following:
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it may limit the Corporation’s ability to make investments that are important to its growth and strategies while
meeting its other cash needs or obtain additional financing for working capital, capital expenditures, debt service
requirements, acquisitions and general corporate or other purposes;
certain of the Corporation’s borrowings are at variable interest rates and expose the Corporation to the risk of
increased interest rates;
it may limit the Corporation’s ability to adjust to changing market conditions and place the Corporation at a
competitive disadvantage compared to its competitors that have less debt;
it may negatively impact the Corporation’s credit ratings;
the Corporation may not be able to declare and pay dividends on its shares or may have to lower the dividends it
declares and pays on its shares; and
the Corporation may be vulnerable in a downturn in general economic conditions.
Under the terms of the contracts governing its indebtedness, the Corporation is permitted to incur additional debt in
certain circumstances. However, doing so could increase the risks described above. Under its credit facility and trust
indenture, the Corporation is required, among other conditions, to respect certain covenants on a consolidated basis. The
main covenants are in regard to its consolidated funded debt to consolidated adjusted EBITDA and the interest coverage
ratios, which are non-IFRS measures. Management reviews compliance with these covenants on a quarterly basis in
conjunction with filing and reporting requirements under its credit facility and trust indenture. A breach of any covenant
or our inability to comply with the required financial ratios could result in a default under our credit facilities and limit
our ability to do further borrowing.
If the Corporation is unable to obtain capital on acceptable terms in order to fund its growth strategy, the Corporation may
be required to reduce the scope of its anticipated expansion, which may negatively affect its business strategy, future
competitiveness and results of operations. Using internally generated cash or taking on high levels of debt to complete
acquisitions could substantially limit the Corporation’s operational and financial flexibility. The extent to which the
Corporation will be able or willing to issue equity as a means of financing acquisitions will depend on the market value of
its shares from time to time and the willingness of potential sellers to accept its shares as full or partial consideration. The
Corporation may also be required to incur additional debt if it acquires another business, which could increase its debt
repayment obligations and have a negative impact on future liquidity and profitability.
In addition, the Corporation may also be required to raise additional capital in the public or private markets to support its
strategy and operational needs in the future. The availability of future financing will depend on prevailing market
conditions, and the acceptability of financing terms offered. There can be no assurance that future financing will be
available, or available on acceptable terms, in an amount sufficient to fund its needs, especially during periods of economic
downturn.
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Impairment of Long-Lived Assets
Because the Corporation has grown in part through acquisitions, goodwill and intangible assets represent a substantial
portion of the Corporation’s assets. As at December 31, 2023, the Corporation had $7.16 billion of goodwill, representing
46% of its total assets of $15.58 billion. Under IFRS, the Corporation is required to test goodwill and indefinite-lived
intangible assets carried in its consolidated statement of financial position for possible impairment on an annual basis; the
Corporation uses a fair value approach. The Corporation has chosen to perform its annual impairment review of goodwill
on the first day of the Corporation’s fourth quarter of its fiscal year. The Corporation is also required to test long-lived
assets for impairment between annual tests if events occur or circumstances indicate that an asset or Cash Generating Unit
("CGU") may be impaired. These events or circumstances could include a significant change in the business climate,
including a significant sustained decline in a CGU’s market value, legal factors, operating performance indicators,
competition, sale or disposition of a significant portion of its business, potential government actions toward its facilities,
and other factors. If the recoverable amount of a CGU is less than its carrying value, the Corporation would be required to
record an impairment charge. The amount of any impairment could be significant and could have a material adverse
impact on the Corporation’s financial condition and results of operations for the period in which the charge is taken.
Foreign Currency Exposure
Foreign currency risk is the risk that fair value of an asset or liability or future cash flows will fluctuate because of changes
in foreign exchange rates, and where a change in exchange rates would have a direct impact on net earnings of the
Corporation. The Corporation operates internationally which significantly increases its exposure to the foreign currency
risk arising from its operating activities denominated in various currencies, including US dollars, pounds sterling, Swedish
kronas and Australian dollars and to its net assets in foreign operations. A significant portion of the Corporation’s earnings
and net assets is denominated in multiple foreign currencies, including US dollar, pound sterling, Swedish krona and
Australian dollars. Accordingly, fluctuations in exchange rates between the Canadian dollar and such currencies may have
an adverse effect on the Corporation’s results and financial condition. Future events that may significantly increase or
decrease the risk of future movement in the exchange rates for these currencies cannot be predicted.
In situations where revenues and costs are transacted in different currencies, the Corporation sometimes enters into
foreign exchange contracts in order to limit its exposure to fluctuating foreign currencies. Nonetheless, future cash flows
in a foreign currency carry the risk that the foreign currency will fluctuate in value before the transaction in question is
completed and the currency is exchanged into the Corporation’s functional currency.
Income Taxes
The Corporation is subject to income taxes in various foreign jurisdictions. The tax legislation, regulation and
interpretation that apply to its operations are continually changing. In addition, deferred income tax benefits and
liabilities are dependent on factors that are inherently uncertain and subject to change, including future earnings, future
tax rates, and anticipated business mix in the various jurisdictions in which the Corporation operates. Significant
judgment is required in determining required provision for income taxes and Management uses accounting and fiscal
principles to determine income tax positions that it believes are likely to be sustained by applicable tax authorities.
However, there is no assurance that the Corporation's tax benefits or tax liability will not materially differ from its
estimates or expectations. In the ordinary course of business, there are many transactions and calculations where the
ultimate tax determination is uncertain. The Corporation is regularly under audit by tax authorities. It is these tax
authorities that will make the final determination of the actual amounts of taxes payable or receivable, of any deferred
income tax benefits or liabilities and of income tax expense that the Corporation may ultimately recognize. Although
Management believes that its income tax estimates and tax positions are reasonable, they could be materially affected by
many factors including the final outcome of tax audits and related litigation, the introduction of new income tax
accounting standards, legislation, regulations, and related interpretations, the Corporation’s global mix of earnings, the
realizability of deferred income tax assets and changes in uncertain tax positions. Any of the above factors could have a
material adverse effect on the Corporation's net income or cash flows by affecting its operations and profitability, the
availability of tax credits, the cost of the services it provides, and the availability of deductions for operating losses as the
Corporation grows its business. An increase or decrease in the Corporation’s effective income tax rate could have a
material adverse impact on its financial condition and results of operations.
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Underfunded Defined Benefits Obligations
The Corporation may be required to contribute additional cash to meet any underfunded benefit obligations associated
with retirement and post-retirement employee benefit plans managed by the Corporation. Such contributions are
generally determined by calculating the projected benefit obligations of a plan, minus the fair value of such plan assets. In
the future, the Corporation’s benefit plan obligations may increase or decrease depending on, among other things, changes
in life expectancy, interest rates and asset performance. If the Corporation is required to contribute a significant amount
to cover deficit under underfunded benefit plans, the Corporation’s cash flows may be materially and adversely affected.
Changing economic conditions and demographics may result in significant increases in the Corporation’s funding
obligations thereby reducing the availability of such funds for other corporate purposes, which could have a material
adverse effect on the Corporation’s business, financial condition and results of operations.
21 ADDITIONAL INFORMATION
Additional information regarding the Corporation is available on our website at www.wsp.com and on SEDAR+ at
www.sedarplus.ca. The Corporation's Annual Information Form for the year ended December 31, 2023 is available on these
websites.
The common shares of the Corporation are traded on the Toronto Stock Exchange under the symbol “WSP”. As at
December 31, 2023, the Corporation had 124,663,950 common shares outstanding. As at February 27, 2024, the Corporation
had 124,668,249 common shares outstanding.
The Corporation has no other shares outstanding.
As at February 27, 2024, 909,883 stock options were outstanding at exercise prices ranging from $41.69 to $183.27.
Under the Corporation's share unit plan, which forms part of its long-term incentive plans, vested redeemable share units
may be redeemed for common shares of the Corporation or cash, at the choice of the participant. Subject to the
achievement of specified performance measures and objectives, the Corporation's redeemable share units outstanding as
at February 27, 2024, could be redeemed for a maximum of 231,598 common shares of the Corporation, when vested.
22 GLOSSARY OF SEGMENT REPORTING,
NON-IFRS AND OTHER FINANCIAL
MEASURES
Net revenues
Net revenues is defined as revenues less direct costs for subconsultants and other direct expenses that are recoverable
directly from clients.
Net revenues is a segment reporting measure and a total of segments measure, without a standardized definition within
IFRS, which may not be comparable to similar measures presented by other issuers.
Management analyzes the Corporation's financial performance in relation to fee-based revenues, or net revenues, since
direct recoverable costs can vary significantly from contract to contract and are not indicative of the performance of the
professional consulting services business. Refer to section 8.1, “Net revenues”, for reconciliations of revenues to net
revenues.
WSP Global Inc.
Management's Discussion and Analysis
2023
M-51
Adjusted EBITDA and adjusted EBITDA margin
Adjusted EBITDA is defined as earnings before net financing expense (except interest income), income tax expense,
depreciation, amortization, impairment charges on long-lived assets and reversals thereof, share of income tax expense
and depreciation of associates and joint ventures, acquisition, integration and reorganization costs and ERP
implementation costs. Adjusted EBITDA margin is defined as adjusted EBITDA expressed as a percentage of net revenues.
Adjusted EBITDA is a non-IFRS financial measures. Adjusted EBITDA margin is a non-IFRS ratio. These measures have no
standardized definitions under IFRS, and, accordingly, these measures may not be comparable to similar measures used by
other issuers.
Management analyzes the Corporation’s financial performance in relation to adjusted EBITDA as it believes this metric
allows comparability of operating results from one period to another. These measures exclude the effects of items that
primarily reflect the impact of long-term investment and financing decisions, rather than the results of day-to-day
operations. Refer to section 8.3, “Adjusted EBITDA”, for reconciliations of earnings before net financing expense and
income taxes to adjusted EBITDA.
Adjusted EBITDA by segment and adjusted EBITDA margin by segment
Adjusted EBITDA by segment is defined as adjusted EBITDA excluding head office corporate costs. Head office corporate
costs are expenses and salaries related to centralized functions, such as head office finance, human resources and
technology teams, which are not allocated to reportable segments. Adjusted EBITDA margin by segment is defined as
adjusted EBITDA before head office corporate costs expressed as a percentage of net revenues.
These are segment reporting and total of segments measures without standardized definitions within IFRS. Other issuers
may define adjusted EBITDA by segment differently and, accordingly, this measure may not be comparable to similar
measures used by other issuers.
These metrics provide Management with comparability from one reportable segment to another. Refer to section 8.3,
“Adjusted EBITDA”, for reconciliations of adjusted EBITDA to adjusted EBITDA by segment and of earnings before net
financing expense and income taxes to adjusted EBITDA.
Adjusted net earnings and adjusted net earnings per share
Adjusted net earnings is defined as net earnings attributable to shareholders excluding:
•
•
•
•
•
•
•
amortization of intangible assets related to acquisitions;
impairment charges on long-lived assets and reversals thereof;
acquisition, integration and reorganization costs;
ERP implementation costs;
gains or losses on investments in securities related to deferred compensation obligations, included in other
financial assets;
unrealized gains or losses on derivative financial instruments; and
the income tax effects related to the above-mentioned items.
Adjusted net earnings per share is calculated using the basic weighted average number of shares.
Adjusted net earnings is a non-IFRS financial measure and adjusted net earnings per share is a non-IFRS ratio. These
measures have no standardized definitions under IFRS, and, accordingly, these measures may not be comparable to similar
measures used by other issuers.
The exclusion of acquisition, integration and reorganization costs, amortization of intangible assets related to acquisitions
and impairment charges on long-lived assets and reversals thereof provides a comparative measure of the Corporation’s
performance in a context of material business combinations, in which the Corporation may incur material acquisition,
integration and reorganization costs and as a result of which the Corporation's amortization expense may increase due to
recognition of intangible assets which would not normally be recognized outside of a business combination. In addition,
reorganization of the business in line with our real estate strategy and realization of synergies following acquisitions may
WSP Global Inc.
Management's Discussion and Analysis
2023
M-52
lead to impairment or abandonment of certain assets in order to improve the Corporation's overall cost structure.
Management also excludes ERP implementation costs as such costs are not representative of the operating activities of the
business. In addition, this non-IFRS financial measure is adjusted for certain non-cash items related to market volatility,
which are inherently unpredictable. In the US, the Corporation maintains a deferred compensation plan under which a
portion of employees’ compensation is deferred and invested in financial assets held in a trust, included in other financial
assets in the Corporation's statement of financial position. These financial assets held in a trust are for the ultimate benefit
of the employees but are available to the Corporation’s creditors in the event of insolvency and are therefore not
considered actuarial gains and losses recorded through other comprehensive income, and instead are recorded in
financing expense. Finally, unrealized gains or losses on derivative financial instruments relate to future transactions and
therefore are not comparable when included in the current period results.
Management believes these items should be excluded in understanding the underlying operational financial performance
achieved by the Corporation. Refer to section 8.8, “Adjusted net earnings”, for reconciliations of net earnings attributable
to shareholders to adjusted net earnings.
Backlog
Backlog represents future revenues stemming from existing signed contracts with customers. For public-sector clients
funded by a governmental body, such funding has been confirmed.
Backlog is a supplementary financial measure without a standardized definition within IFRS. Backlog is different from the
IFRS definition of unfulfilled performance obligations, as backlog also includes cost-plus contracts without stated ceilings,
and cost-plus contracts with ceilings and fixed-price contracts on which work has not yet commenced. Other issuers may
define a similar measure differently and, accordingly, this measure may not be comparable to similar measures used by
other issuers.
Free cash flow
Free cash flow (or outflow) is defined as cash flows from operating activities, plus discretionary cash generated by the
Corporation from other activities (if any), less lease payments and net capital expenditures.
Free cash flow is a non-IFRS financial measure without a standardized definition within IFRS. Other issuers may define a
similar measure differently and, accordingly, this measure may not be comparable to similar measures used by other
issuers.
Free cash flow provides a consistent and comparable measure of discretionary cash generated by, and available to, the
Corporation to service debt, meet other payment obligations and make strategic investments. Refer to section 9.1,
“Operating activities and free cash flow”, for reconciliations of free cash flow to cash flows from operating activities.
Days sales outstanding (“DSO”)
DSO represents the average number of days to convert the Corporation's trade receivables (net of sales taxes) and costs
and anticipated profits in excess of billings, net of billings in excess of costs and anticipated profits, into cash. DSO is a
supplementary financial measure without a standardized definition within IFRS. Other issuers may define a similar
measure differently and, accordingly, this measure may not be comparable to similar measures used by other issuers.
Net debt to adjusted EBITDA ratio
Net debt to adjusted EBITDA ratio is a capital management measure. Net debt is defined as long-term debt, including
current portions but excluding lease liabilities, and net of cash. The Corporation uses this ratio as a measure of financial
leverage and it is calculated using the trailing twelve-month adjusted EBITDA.
WSP Global Inc.
Management's Discussion and Analysis
2023
20
23
Consolidated
Financial
Statements
I
I
C
O
N
S
O
L
D
A
T
E
D
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
I
F-1
2
0
2
3
A
N
N
U
A
L
R
E
P
O
R
T
WSP Global Inc.
For the year ended
December 31, 2023
2023 ANNUAL REPORT
Independent auditor’s report
To the Shareholders of WSP Global Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the financial position of WSP Global Inc. and its subsidiaries (together, the Corporation) as at
December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended
in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS).
What we have audited
The Corporation’s consolidated financial statements comprise:
the consolidated statements of earnings for the years ended December 31, 2023 and 2022;
the consolidated statements of comprehensive income for the years ended December 31, 2023
and 2022;
the consolidated statements of financial position as at December 31, 2023 and 2022;
the consolidated statements of changes in equity for the years ended December 31, 2023 and 2022;
the consolidated statements of cash flows for the years ended December 31, 2023 and 2022; and
the notes to the consolidated financial statements, comprising material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Corporation in accordance with the ethical requirements that are relevant
to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
PricewaterhouseCoopers LLP
1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1
T: +1 514 205 5000, F: +1 514 876 1502, ca_montreal_main_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2023. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Revenue recognition – Estimated costs on
cost-plus contracts with ceilings and fixed-price
contracts
Refer to note 2 – Material accounting policies,
note 4 – Critical accounting estimates and
judgments and note 7 – Revenues to the
consolidated financial statements.
The Corporation typically recognizes revenues
over time, using an input measure, as it fulfills
its performance obligations in line with contracted
terms. For the year ended December 31, 2023,
a portion of the Corporation’s total revenues of
$14,437.2 million were generated from cost-plus
contracts with ceilings and fixed-price contracts.
For these contracts, revenues are recognized
progressively based on a percentage-of-completion
method, whereby the percentage of revenues
earned to date is estimated using an input
measure, usually as the ratio of contract costs
incurred to date to total estimated costs.
Recognition of revenues and costs and anticipated
profits in excess of billings involves estimates
of costs required to complete the project.
On a periodic basis, management reviews the costs
incurred to date and the estimated costs to
complete for each project to determine whether the
amount recognized as costs and anticipated profits
in excess of billings is an accurate estimate of the
amount that the Corporation has earned on
its projects.
Our approach to addressing the matter included
the following procedures, among others:
Tested how management determined the total
estimated costs for a sample of contracts,
as follows:
Obtained and read contract agreements,
and change orders, when applicable, to
understand contract scope and key terms;
Evaluated the timely identification of
circumstances that may warrant a
modification to the total estimated costs
including, but not limited to, contracts
subject to claims and contract
modifications;
Interviewed operational personnel of the
Corporation to evaluate progress to date,
the estimate of costs to be incurred, and
factors impacting the amount of time and
cost to complete the project;
Compared the original margin expected
on the contracts to the actual margin; and
Determined an expected total estimated
costs derived from the margin achieved for
contracts executed in the same region and
compared this expectation to the estimated
total estimated costs.
Tested, on a sample basis, the costs incurred
to supporting evidence.
Key audit matter
How our audit addressed the key audit matter
We considered this a key audit matter due to the
judgments made by management when developing
the estimated costs required to complete the
projects, which led to auditor judgments and audit
effort in performing procedures to evaluate the total
estimated costs, including the assessment of
management’s judgments about its ability to
determine the estimated costs required to complete
the project.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis and the information, other than the consolidated financial statements and our
auditor’s report thereon, included in the annual report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Corporation or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Corporation’s financial
reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Corporation’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Corporation’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Corporation to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Corporation to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is
Jean-François Lecours.
/s/PricewaterhouseCoopers LLP1
Montréal, Quebec
February 28, 2024
1 CPA auditor, public accountancy permit No. A126402
WSP GLOBAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions of Canadian dollars, except number of shares and per share data)
F-7
Years ended December 31
Revenues (note 7)
Personnel costs
Subconsultants and direct costs
Other operational costs
Depreciation of right-of-use assets (note 17)
Amortization of intangible assets (note 18)
Depreciation of property and equipment (note 19)
Impairment of long-lived assets (notes 17 and 19)
Acquisition, integration and reorganization costs (note 10)
ERP implementation costs (note 10)
Exchange losses (gains)
Share of income of associates and joint ventures, net of tax
Earnings before net financing expense and income taxes
Net financing expense (note 11)
Earnings before income taxes
Income tax expense (note 12)
Net earnings
Net earnings attributable to:
Shareholders of WSP Global Inc.
Non-controlling interests
Basic net earnings per share attributable to shareholders
Diluted net earnings per share attributable to shareholders
2023
$
2022
$
14,437.2
11,932.9
8,047.1
3,540.2
980.4
316.4
221.7
135.1
87.1
105.0
81.0
5.4
(29.7)
947.5
202.6
744.9
191.9
553.0
550.0
3.0
553.0
4.41
4.40
6,679.9
2,975.7
794.0
288.5
173.4
114.6
21.6
115.5
49.9
(5.3)
(24.0)
749.1
161.6
587.5
152.8
434.7
431.8
2.9
434.7
3.59
3.58
Basic weighted average number of shares
Diluted weighted average number of shares
124,603,768
124,951,544
120,400,365
120,709,390
The accompanying notes are an integral part of these consolidated financial statements.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
F-8
Years ended December 31
Net earnings
Other comprehensive income (loss)
Items that may be reclassified subsequently to net earnings
Currency translation adjustments
Translation adjustments on financial instruments designated as a net
investment hedge
(Loss) gain on financial instruments designated as a cash flow hedge
Income tax recovery (expense) on items that may be reclassified subsequently
to net earnings
Items that will not be reclassified to net earnings
Actuarial (loss) gain on pension schemes
Exchange differences on pension schemes
Income tax recovery (expense) on pension schemes
Total comprehensive income for the year
Comprehensive income attributable to:
Shareholders of WSP Global Inc.
Non-controlling interests
The accompanying notes are an integral part of these consolidated financial statements.
2023
$
2022
$
553.0
434.7
(51.1)
4.2
(28.7)
9.0
(11.0)
0.1
2.5
478.0
475.0
3.0
478.0
179.8
(130.5)
37.0
(9.8)
36.1
(0.1)
(8.3)
538.9
536.0
2.9
538.9
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in millions of Canadian dollars)
As at December 31
Assets
Current assets
Cash and cash equivalents (note 28)
Trade receivables and other receivables (note 14)
Cost and anticipated profits in excess of billings (note 15)
Prepaid expenses
Other financial assets (note 16)
Income taxes receivable
Non-current assets
Right-of-use assets (note 17)
Intangible assets (note 18)
Property and equipment (note 19)
Goodwill (note 20)
Deferred income tax assets (note 12)
Other assets (note 21)
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 22)
Billings in excess of costs and anticipated profits (note 15)
Income taxes payable
Provisions (note 23)
Dividends payable to shareholders (note 27)
Current portion of lease liabilities (note 17)
Current portion of long-term debt (note 24)
Non-current liabilities
Long-term debt (note 24)
Lease liabilities (note 17)
Provisions (note 23)
Retirement benefit obligations (note 9)
Deferred income tax liabilities (note 12)
Total liabilities
Equity
Equity attributable to shareholders of WSP Global Inc.
Non-controlling interests
Total equity
Total liabilities and equity
Approved by the Board of Directors
F-9
2022
$
495.6
2,625.8
1,626.2
138.9
108.2
39.5
5,034.2
978.9
1,102.6
398.9
6,792.2
351.3
183.6
9,807.5
14,841.7
2,736.4
973.1
260.4
152.2
46.7
273.0
173.4
4,615.2
2,781.1
856.8
288.9
162.3
128.3
4,217.4
8,832.6
6,006.0
3.1
6,009.1
14,841.7
2023
$
378.0
2,726.4
1,911.6
239.4
123.3
38.4
5,417.1
824.2
1,104.1
435.3
7,155.8
429.3
217.3
10,166.0
15,583.1
2,738.2
1,158.0
171.0
134.9
46.8
257.5
204.2
4,710.6
3,058.3
744.6
399.3
187.5
149.4
4,539.1
9,249.7
6,328.9
4.5
6,333.4
15,583.1
(signed) Alexandre L'Heureux
Director
(signed) Louis-Philippe Carrière
Director
The accompanying notes are an integral part of these consolidated financial statements.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in millions of Canadian dollars)
F-10
Attributable to Shareholders of WSP Global Inc.
Share
capital
$
Contributed
surplus
$
Retained
earnings
$
Accumulated
other
comprehensive
income (loss)
$
Non-
controlling
interests
$
Total
$
Total
equity
$
4,784.4
212.4
959.5
49.7
6,006.0
3.1
6,009.1
—
—
—
24.6
6.3
—
—
—
—
—
—
—
(1.1)
5.0
550.0
—
550.0
—
—
—
—
—
(186.9)
—
—
(75.0)
(75.0)
550.0
(75.0)
475.0
24.6
5.2
5.0
(186.9)
—
—
—
—
—
3.0
—
3.0
—
—
—
—
553.0
(75.0)
478.0
24.6
5.2
5.0
(186.9)
—
(0.4)
(0.4)
—
30.9
4,815.3
—
3.9
216.3
—
(186.9)
1,322.6
—
—
—
(152.1)
(25.3) 6,328.9
(1.2)
(1.6)
4.5
(1.2)
(153.7)
6,333.4
Balance - January 1, 2023
Comprehensive income
Net earnings
Other comprehensive loss
Total comprehensive income
Common shares issued under the
DRIP (note 25)
Exercise of stock options (note 25)
Stock-based compensation expense
Declared dividends to shareholders
of WSP Global Inc.
Dividends paid to non-controlling
interests
Purchase of non-controlling
interests
Balance - December 31, 2023
The accompanying notes are an integral part of these consolidated financial statements.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in millions of Canadian dollars)
F-11
Attributable to Shareholders of WSP Global Inc.
Share
capital
$
Contributed
surplus
$
Retained
earnings
$
Accumulated
other
comprehensive
income (loss)
$
Non-
controlling
interests
$
Total
$
Total
equity
$
3,801.2
208.3
709.5
(54.5) 4,664.5
0.7
4,665.2
431.8
—
431.8
—
104.2
104.2
—
—
—
445.9
446.1
89.2
2.0
—
—
—
—
—
—
—
—
(0.4)
4.5
—
—
—
—
—
—
(181.8)
431.8
104.2
536.0
445.9
446.1
89.2
1.6
4.5
(181.8)
2.9
—
2.9
—
—
—
—
—
—
434.7
104.2
538.9
445.9
446.1
89.2
1.6
4.5
(181.8)
—
—
—
—
—
—
—
983.2
4,784.4
—
4.1
212.4
—
(181.8)
959.5
—
—
49.7
—
805.5
6,006.0
(0.5)
(0.5)
3.1
(0.5)
805.0
6,009.1
Balance - January 1, 2022
Comprehensive income
Net earnings
Other comprehensive income
Total comprehensive income
Common shares issued via bought
deal public offering (note 25)
Common shares issued via private
placements (note 25)
Common shares issued under the
DRIP (note 25)
Exercise of stock options (note 25)
Stock-based compensation expense
Declared dividends to shareholders
of WSP Global Inc.
Dividends to non-controlling
interests
Balance - December 31, 2022
The accompanying notes are an integral part of these consolidated financial statements.
WSP Global Inc.
Consolidated Financial Statements
2023
F-12
2022
$
434.7
535.6
161.6
152.8
(185.2)
(284.7)
814.8
—
(235.2)
2,309.3
(1,025.8)
(341.3)
(79.2)
(90.1)
883.5
(0.5)
1,420.7
(2,554.1)
(130.9)
(35.6)
2.0
22.0
13.9
(2,682.7)
11.9
(435.3)
926.3
491.0
2023
$
553.0
658.9
202.6
191.9
(334.4)
(285.7)
986.3
496.2
(364.5)
—
—
(375.1)
(196.6)
(162.2)
5.2
(0.4)
(597.4)
(354.3)
(159.9)
(20.1)
1.9
22.6
(0.6)
(510.4)
(7.6)
(129.1)
491.0
361.9
WSP GLOBAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
Years ended December 31
Operating activities
Net earnings
Adjustments (note 28)
Net financing expense (note 11)
Income tax expense (note 12)
Income taxes paid
Change in non-cash working capital items (note 28)
Cash inflows from operating activities
Financing activities
Issuance of senior unsecured notes (note 24)
Net repayment of long-term debt
Issuance of long-term debt related to business acquisitions
Repayment of long-term debt following business acquisitions
Lease payments (note 17)
Net financing expenses paid, excluding interest on lease liabilities
Dividends paid to shareholders of WSP Global Inc.
Issuance of common shares, net of issuance costs (note 25)
Dividends paid to non-controlling interests
Cash inflows from (outflows used in) financing activities
Investing activities
Net disbursements related to business acquisitions and disposals of businesses
(notes 5 and 20)
Additions to property and equipment, excluding business acquisitions
Additions to identifiable intangible assets, excluding business acquisitions
Proceeds from disposal of property and equipment
Dividends received from associates
Other
Cash outflows used in investing activities
Effect of exchange rate change on cash and cash equivalents
Change in net cash and cash equivalents
Cash and cash equivalents, net of bank overdraft - beginning of the year
Cash and cash equivalents, net of bank overdraft - end of the year (note 28)
The accompanying notes are an integral part of these consolidated financial statements.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures are in millions of Canadian dollars, unless otherwise stated)
NOTES
1
BASIS OF PRESENTATION ........................................................................................................
2 MATERIAL ACCOUNTING POLICIES ........................................................................................
3
4
5
ACCOUNTING POLICY DEVELOPMENTS ................................................................................
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS ....................................................
BUSINESS ACQUISITIONS .........................................................................................................
6 OPERATING SEGMENTS ............................................................................................................
7
8
9
REVENUES ...................................................................................................................................
LONG-TERM INCENTIVE PLANS ("LTIPS") ..............................................................................
PENSIONS SCHEMES .................................................................................................................
10
ACQUISITION, INTEGRATION AND REORGANIZATION COSTS AND ERP
IMPLEMENTATION COSTS.........................................................................................................
11 NET FINANCING EXPENSE ........................................................................................................
12
INCOME TAXES ...........................................................................................................................
13 FINANCIAL INSTRUMENTS ........................................................................................................
14 TRADE AND OTHER RECEIVABLES .........................................................................................
15 CONTRACT BALANCES .............................................................................................................
16 OTHER FINANCIAL ASSETS ......................................................................................................
17 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES ..................................................................
18
INTANGIBLE ASSETS ..................................................................................................................
19 PROPERTY AND EQUIPMENT ..................................................................................................
20 GOODWILL ...................................................................................................................................
21 OTHER ASSETS ............................................................................................................................
22 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES ...............................................................
23 PROVISIONS ................................................................................................................................
24 LONG-TERM DEBT ......................................................................................................................
25 SHARE CAPITAL ..........................................................................................................................
26 CAPITAL MANAGEMENT ...........................................................................................................
27 DIVIDENDS ...................................................................................................................................
28 STATEMENTS OF CASH FLOWS ...............................................................................................
29 RELATED PARTY TRANSACTIONS ...........................................................................................
30 CONTINGENT LIABILITIES ..........................................................................................................
WSP Global Inc.
Consolidated Financial Statements
2023
F-13
F-14
F-14
F-24
F-25
F-27
F-32
F-35
F-35
F-37
F-41
F-41
F-42
F-45
F-49
F-50
F-51
F-51
F-53
F-54
F-55
F-57
F-57
F-58
F-58
F-60
F-61
F-62
F-63
F-64
F-65
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-14
1 BASIS OF PRESENTATION
WSP Global Inc. (together with its subsidiaries, the “Corporation” or “WSP”) is a professional services consulting firm which
provides technical expertise and strategic advice to clients in the Transportation & Infrastructure, Earth & Environment,
Property & Buildings, Power & Energy and Industry market sectors. The Corporation also offers highly specialized services in
project and program delivery and advisory services. The address of its main registered office is 1600 René-Lévesque Blvd.
West, Montréal, Quebec, Canada.
The common shares of the Corporation are listed under the trading symbol “WSP” on the Toronto Stock Exchange (“TSX”).
STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in compliance with International Financial Reporting Standards
as issued by the International Accounting Standards Board (“IASB” and “IFRS”). These financial statements were prepared on
a going concern basis, on a historical cost basis, except for certain financial assets and liabilities (including investments in
securities and derivative instruments), liabilities for share unit plans, and contingent consideration, which are measured at
fair value, and defined benefit liabilities, which are measured as the net total of the present value of the defined benefit
obligations minus the fair value of plan assets.
These financial statements were approved by the Corporation’s Board of Directors on February 28, 2024.
2 MATERIAL ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, unless otherwise stated in note 3, Accounting policy developments.
CONSOLIDATION, JOINT ARRANGEMENTS AND ASSOCIATES
These consolidated financial statements include the accounts of the Corporation and its subsidiaries.
Non-controlling interests represent equity interests in subsidiaries owned by outside parties. The share of net assets of
subsidiaries attributable to non-controlling interests is disclosed as a component of equity. Their share of net earnings and
comprehensive income is recognized directly in equity. Changes in the parent Corporation’s ownership interest in
subsidiaries that do not result in a loss of control are accounted for as equity transactions.
SUBSIDIARIES
Subsidiaries are all entities over which the Corporation has control. The Corporation controls an entity when the
Corporation is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is
obtained by the Corporation. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealized gains and losses on transactions between the Corporation's companies
are eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Corporation’s
accounting policies.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-15
The table below lists the Corporation's most significant subsidiaries for each fiscal year ended December 31, based on
revenues. The Corporation held 100% of the interest in all the subsidiaries listed below.
2023
2022
Entity
WSP USA Inc.
WSP Canada Inc.
WSP UK Ltd
WSP USA Environment & Infrastructure Inc
WSP Australia Pty Ltd
WSP Sverige AB
WSP New Zealand Ltd
WSP E&I Canada Limited
JOINT ARRANGEMENTS
Entity
WSP USA Inc.
WSP Canada Inc.
Country of
incorporation
United States
Canada
United Kingdom WSP UK Ltd
United States
Australia
Sweden
New Zealand
Canada
WSP Australia Pty Ltd
WSP Sverige AB
Golder Associates Ltd
WSP New Zealand Ltd
WSP USA Solutions Inc.
Country of
incorporation
United States
Canada
United Kingdom
Australia
Sweden
Canada
New Zealand
United States
Joint arrangements are classified as either joint operations or joint ventures. The determination of whether an arrangement
is a joint operation or joint venture is based on the rights and obligations arising from the contractual obligations between
the parties to the arrangement. Joint arrangements that provide the Corporation with the rights to the individual assets and
obligations arising from the arrangement are classified as joint operations; and joint arrangements that provide the
Corporation with rights to the net assets of the arrangement are classified as joint ventures.
The interests in joint operations are recognized by the Corporation by recording its share of the assets, liabilities, revenues,
costs and cash flows using the most recent financial statements of these joint operations.
The interests in joint ventures are accounted for using the equity method and included in other assets in the statements of
financial position. The carrying amount of investments in joint ventures is tested for impairment as described below under
the caption “Impairment of long-lived assets”.
ASSOCIATES
Associates are all entities over which the Corporation has significant influence but not control or joint control. Investments
in associates are accounted for using the equity method and included in other assets in the statements of financial position.
The carrying amount of investments in associates is tested for impairment as described below under the caption
“Impairment of long-lived assets”.
FOREIGN CURRENCY
The consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional currency.
Items included in the financial statements of each of the Corporation’s subsidiaries are measured using the currency of the
primary economic environment in which the entity operates (i.e. the functional currency). Foreign currency transactions are
translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets
and liabilities not denominated in the functional currency of an entity are recognized in net earnings, except when deferred
in other comprehensive income as qualifying for net investment hedges. Foreign exchange gains and losses that relate to
borrowings and cash are disclosed within finance expenses.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-16
Assets and liabilities of entities with functional currencies other than the Canadian dollar are translated at the period-end
exchange rates, and the results of their operations are translated at average exchange rates for the period. The resulting
changes are recognized in accumulated other comprehensive income in equity as currency translation adjustments.
SEGMENT REPORTING
Segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker is responsible for allocating resources and assessing the performance of the reportable
segments and has been identified as the global leadership team (“GLT”). The Corporation is managed through four reportable
segments: Canada, Americas (United States of America (“US”) and Latin America), EMEIA (Europe, Middle East, India and
Africa) and APAC (Asia Pacific – comprising Asia, Australia and New Zealand).
REVENUE RECOGNITION
The Corporation derives revenues from the delivery of engineering services. If the Corporation has recognized revenues, but
not issued an invoice, then the entitlement to consideration is recognized as a contract asset presented as costs and
anticipated profits in excess of billings on the Corporation’s consolidated statement of financial position. The contract asset
is transferred to trade receivables when the invoice is issued indicating that the entitlement to payment has become
unconditional. If payments are received, or invoices are issued to a customer, prior to the rendering of services, the
Corporation recognizes a contract liability under the caption billings in excess of costs and anticipated profits on the
Corporation’s consolidated statement of financial position. The contract liability is transferred to revenues once related
services have been rendered.
Revenues are measured based on the consideration specified in a contract with a customer. The Corporation typically
recognizes revenues over time, using an input measure, as it fulfills its performance obligations in line with contracted
terms.
A performance obligation is a promise in the contract to transfer a distinct good or service to the customer. A contract’s
transaction price is allocated to each distinct performance obligation and recognized as revenues when, or as, the
performance obligations are satisfied. Most of the Corporation’s contracts have a single performance obligation as the
promise to transfer individual goods or services is not separately identifiable from other promises in the contracts and,
therefore, not distinct. Any modifications or variations to contracts in progress are assessed to determine if they fall under
the scope of the existing contract performance obligation or form part of a new performance obligation.
The Corporation's revenues are derived mainly from three types of contracts, which are described below, and the
Corporation disaggregates its revenues by market sector and client category, as described below.
Revenues (and profits) from cost-plus contracts with ceilings and from fixed-price contracts are recognized progressively
based on a percentage-of-completion method, whereby the percentage of revenues earned to date is estimated using an
input measure, usually as the ratio of contract costs incurred to date to total estimated costs.
Revenues (and profits) from cost-plus contracts without stated ceilings are recognized when costs are incurred and are
calculated based on billing rates for the services performed.
Certain costs incurred by the Corporation for subconsultants and other expenses are recoverable directly from customers
and are billed to them. These charges are included in revenues and costs (under the caption subconsultants and direct costs)
when the Corporation controls the goods or services before they are transferred to the customer. The value of goods and
services purchased by the Corporation when acting as a purchasing agent for a customer are not recorded as revenues and
costs.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-17
The effects of revisions to estimated revenues and costs, including the impact from any modifications or variations to
contracts in progress, are recorded when they represent enforceable rights of the Corporation and amounts can be
reasonably estimated. These revisions can occur at any time and could be material. Where total estimated contract costs
exceed total estimated contract revenues, the expected loss is recognized as an expense immediately via a provision for
losses to completion, irrespective of the stage of completion and based on a best estimate of forecast results including, where
appropriate, rights to additional income or compensation (e.g. award or incentive fees).
The Corporation's main market sectors, as disclosed in note 7, Revenues, are: Transportation & Infrastructure, Earth &
Environment, Property & Buildings, Power & Energy and Industry.
The Corporation's main client categories are public and private sector clients. Revenues generated from contracts where the
end user of services provided is identified to be a public sector entity are classified as public sector revenues. Entities
controlled by any branch of government are considered public sector entities. Revenues generated from contracts where the
end user of services provided is not identified as a public sector entity are classified as private sector revenues.
Revenues are shown net of value-added tax and after eliminating sales within the Corporation.
ACQUISITION, INTEGRATION AND REORGANIZATION COSTS
Acquisition, integration and reorganization costs include, among others, the following costs, if and when incurred:
•
•
•
•
•
•
Transaction costs related to business acquisitions, successful or not;
Costs of integrating newly acquired businesses following the date of acquisition;
Gains or losses on disposals of non-core assets;
Outsourcing program costs pertaining mainly to redundancy and transition costs resulting from the outsourcing of
the Corporation's infrastructure or other functions;
Restructuring costs; and
Severance costs stemming from adjustments to cost structures.
The above list may be adjusted, from time to time, when it is deemed appropriate to highlight other items under this caption
to assist users in understanding the financial performance of the Corporation.
ERP IMPLEMENTATION COSTS
The Corporation is in the process of designing and implementing a global cloud-based ERP solution with broad capabilities.
Customization and configuration costs in a cloud computing arrangement that do not meet the definition of an asset or a
lease, along with implementation costs, are expensed as incurred and reported as ERP implementation costs.
LEASE ACCOUNTING
The Corporation leases various office premises and equipment under lease agreements. Lease terms are negotiated on an
individual basis, contain a wide range of terms and conditions and usually can be renewed at market rates.
The majority of leases are recognized as right-of-use assets, with a corresponding liability, at the date at which the leased
asset is available for use by the Corporation. Lease payments are allocated between the liability and finance cost. The finance
cost is charged to the statement of earnings over the lease period using the effective interest rate method. The right-of-use
asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. Lease extension and
termination options are included in the lease term only when it is reasonably certain that the Corporation will exercise the
option.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-18
Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of
the following lease payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments and fixed payments for any extension options included in
the lease term), less any lease incentives receivable;
variable lease payments that are based on an index or a rate;
amounts expected to be payable by the Corporation under residual value guarantees;
the exercise price of a purchase option if the Corporation is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the Corporation exercising that option.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of the lease liability;
any lease payments made at or before the commencement date, less any lease incentives received;
any initial direct costs; and
any obligations to incur restoration costs.
The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined,
the relevant incremental borrowing rate.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an
expense in the Corporation’s statement of earnings. Short-term leases have a lease term of twelve months or less. Low-value
asset leases comprise mostly computer equipment and small items of office furniture.
FINANCIAL INSTRUMENTS
CLASSIFICATION AND MEASUREMENT
Financial assets and financial liabilities are initially recognized at fair value, and their subsequent measurements are
dependent on their classification. Financial assets are classified and measured at amortized cost or fair value through profit
or loss (“FVTPL”) based on how the Corporation manages the financial instruments and the contractual cash flow
characteristics of the financial asset.
The table below summarizes the classification and measurement of the Corporation’s financial instruments:
Financial assets
Cash, cash equivalents and restricted cash
Trade receivables, other receivables, amounts due from joint ventures and associates
Investments in securities
Derivative financial instruments
Amortized cost
Amortized cost
FVTPL
FVTPL
Financial liabilities
Accounts payables and accrued liabilities
Dividends payable to shareholders
Borrowings under credit facility and bank overdrafts
Consideration payable related to business acquisitions
Derivative financial instruments
Amortized cost
Amortized cost
Amortized cost
Amortized cost or FVTPL
FVTPL
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-19
Financial assets and liabilities classified as amortized cost are subsequently measured using the effective interest rate
method less any impairment loss.
Changes in fair value are recorded in net financing expenses in the statement of earnings.
Financial liabilities are derecognized when the obligation specified in the contract is discharged, canceled or expired.
EXPECTED CREDIT LOSSES
The Corporation applies the simplified approach to measuring expected credit losses for all trade receivables and contract
assets (costs and anticipated profits in excess of billings). Therefore, the Corporation does not track changes in credit risk,
but instead recognizes a loss allowance at an amount equal to the lifetime expected credit losses at each reporting date. The
factors that the Corporation considers to classify trade receivables as credit-impaired are as follows: the customer is in
bankruptcy or under administration, payments are in dispute, or payments are past due.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk
characteristics. The contract assets, which are costs and anticipated profits in excess of billings, have substantially all the
same risk characteristics as the trade receivables for the same types of contracts. The Corporation has therefore concluded
that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
The Corporation considers a financial asset in default when contractual payments are between 0-60 days past due, depending
on the various economic and asset-specific factors, or if it becomes probable that a customer will enter bankruptcy. A
financial or contract asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
DETERMINATION OF FAIR VALUE
The fair value of a financial instrument is the amount of consideration that would be agreed to be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. Subsequent to
initial recognition, the fair values of financial instruments that are quoted in active markets are based on closing prices for
financial assets and financial liabilities. When independent prices are not available, fair values are determined by using
valuation techniques that refer to observable market inputs and minimizing the use of unobservable inputs.
OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the asset and settle the liability simultaneously.
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently
re‑measured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. The Corporation designates certain
derivatives as either:
(a) hedges of the fair value of recognized assets and liabilities or a firm commitment (fair value hedge);
(b) hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction
(cash flow hedge); or
(c) hedges of a net investment in a foreign operation (net investment hedge).
The Corporation documents at the inception of the transaction the relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Corporation
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-20
also documents its assessment, both at hedge inception and on an on-going basis, of whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in net earnings
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
Cash flow hedge
The effective portion of the change in the fair value of the derivatives that are designated and qualify as cash flow hedges is
recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in
net earnings.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss.
However, when a forecasted transaction that is hedged results in the recognition of a non-financial asset, the gains and
losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the
asset.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecasted transaction is
ultimately recognized in net earnings. When a forecasted transaction is no longer expected to occur, the cumulative gain or
loss that was reported in equity is immediately transferred to net earnings.
Net investment hedge
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other
comprehensive income. The gain or loss relating to the ineffective portion is recognized in net earnings.
Gains and losses accumulated in equity are transferred to net earnings if a foreign operation is disposed of, partially or in its
entirety.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and with banks and short-term deposits with a maturity of three months
or less at the date of acquisition, which are subject to an insignificant risk of changes in value. For the purposes of the cash
flow statement, cash and cash equivalents are net of bank overdraft.
TRADE RECEIVABLES
Trade receivables are amounts due from customers for the rendering of services in the ordinary course of business. Trade
receivables are classified as current assets if payment is due within one year or less. Trade receivables are recognized initially
at fair value and subsequently measured at amortized cost, less allowance for expected credit losses.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at historical cost less accumulated depreciation and accumulated impairment losses.
Historical cost includes expenditures that are directly attributable to the acquisition of the items.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-21
Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits associated
with the item will flow to the Corporation and the cost of the item can be measured reliably. Repairs and maintenance costs
are charged to net earnings during the period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the methods described below to allocate their cost to
their residual values over their estimated useful lives. The estimated useful lives, residual values and depreciation methods
are reviewed at each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.
The following table summarizes the depreciation methods, rates and periods used:
Category
Method
Rate or period
Buildings
Leasehold improvements
Furniture and equipment
Computer equipment
Straight-line or declining balance
Straight-line
Straight-line or declining balance
Straight-line or declining balance
25 to 50 years or 2% to 4%
Shorter of lease term or useful life
3 to 10 years
3 to 8 years
The gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognized in net earnings within other operational
costs.
INTANGIBLE ASSETS
Intangible assets consist of software, customer relationships, contract backlogs and trade names. Intangible assets acquired
in business acquisitions are recognized separately from goodwill and are initially recognized at their fair value as at the
acquisition date. Intangible assets are carried at cost less accumulated amortization and accumulated impairment losses.
Software, contract backlogs, customer relationships and certain trade names are considered intangible assets with finite
useful lives. Based on the strength, long history and expected future use, certain trade names are indefinite-lived intangible
assets. The useful life of intangible assets that are not being amortized is reviewed each reporting period to determine
whether events and circumstances continue to support an indefinite useful life assessment. If not, the change in the
assessment from indefinite to finite will be accounted for as a change in accounting estimate.
Intangible assets are amortized on a straight-line basis over the following periods:
Category
Software
Contract backlogs
Customer relationships
Finite-lived trade names
Period
3 to 7 years
2 to 9 years
3 to 15 years
3 to 8 years
IMPAIRMENT OF LONG-LIVED ASSETS
Long-lived assets with finite useful lives are reviewed for impairment when events or circumstances indicate that the
carrying amount may not be recoverable. Indefinite-lived assets are not subject to amortization but are tested for
impairment on an annual basis as at the first day of the Corporation's fourth quarter, or more frequently if events or
circumstances indicate that the carrying value may not be recoverable. Impairment exists when the recoverable amount of
an asset is less than its carrying value. The recoverable amount is the higher of the asset’s fair value less costs to sell
("FVLCS") and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash inflows (a cash-generating unit or “CGU”). The amount of impairment loss, if any, is the
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-22
excess of the carrying value over its recoverable amount. Assets other than goodwill that have suffered impairment are
reviewed for indicators of possible reversal of the impairment at each reporting date.
GOODWILL
Goodwill represents the excess of the consideration transferred for the acquired businesses over the estimated fair value at
the acquisition date of net identifiable assets acquired. Goodwill is not subject to amortization and is carried at cost less
accumulated impairment loss and is tested for impairment on an annual basis or more frequently if events or circumstances
indicate that it may be impaired.
For the purpose of impairment testing, goodwill is allocated to each CGU or group of CGUs expected to benefit from the
synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually as at the first
day of the Corporation's fourth quarter, or more frequently if events or circumstances indicate that the carrying value may
not be recoverable. If the higher of the CGU's FVLCS or value in use is less than its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU
pro rata on the basis of the carrying amount of each asset. An impairment loss recognized for goodwill cannot be reversed in
a subsequent period.
TRADE PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Trade
payables are classified as current liabilities if payment is due within one year or less. Trade payables are recognized initially
at fair value and subsequently measured at amortized cost.
PROVISIONS
Provisions represent liabilities of the Corporation for which the amount or timing is uncertain. Provisions are recognized
when the Corporation has a present legal or constructive obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized
for future operating losses. When the Corporation expects some or all of a provision to be reimbursed, for example, under an
insurance contract, and when the reimbursement is virtually certain, the expected reimbursement is recognized as a
separate asset. The expense relating to any provision is presented in the consolidated statements of earnings, net of any
reimbursement receivable recognized. Provisions are measured at the present value of the expected expenditures to settle
the obligation, including legal fees, using a discount rate that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.
LONG-TERM INCENTIVE PLANS (“LTIPs”)
The Corporation has in place LTIPs for directors and key employees under which stock options and the following types of
share units can be issued: cash-settled performance share units (“PSUs”), cash-settled deferred share units (“DSUs”) cash-
settled restricted share units (“RSUs”), performance share units redeemable for common shares of the Corporation or cash at
the choice of the participant (“redeemable PSUs”), and restricted share units redeemable for common shares of the
Corporation or cash at the choice of the participant (“redeemable RSUs”). Stock options, PSUs, RSUs, redeemable PSUs, and
redeemable RSUs vest over time in accordance with the terms of the grant. DSUs vest when granted. The cash-settled LTIP
instruments (PSUs, DSUs and RSUs) and redeemable PSUs and redeemable RSUs are measured at fair value based on the
Corporation's share price at the end of each reporting period and recorded in current and non-current liabilities, over the
vesting period. Stock options are valued at fair value using a Black-Scholes pricing model at grant date and recorded in
contributed surplus over the vesting period.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-23
INCOME TAXES
Income taxes are recognized in net earnings except to the extent related to a business combination, or items recognized in
other comprehensive income or directly in equity.
Current tax expense is the expected tax payable or receivable on taxable income or loss for the period, calculated using tax
rates and laws that were enacted or substantively enacted for the reporting period. It may also include adjustments for prior
periods.
The Corporation follows the liability method when accounting for income taxes. Under this method, deferred income tax
assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between
the financial statement carrying values of existing assets and liabilities and their respective tax bases. This approach also
requires the recording of deferred income tax assets related to operating losses and tax credit carry forwards. Deferred
income tax assets and liabilities are measured using enacted or substantively enacted income tax rates applicable when
temporary differences and carry forwards are expected to be recovered or settled. Deferred income taxes are not recognized
for the initial recognition of goodwill, the initial recognition of assets or liabilities that affects neither accounting nor taxable
profit or loss, and temporary differences related to investments in subsidiaries and joint ventures where the Corporation
controls the reversal of the temporary difference and reversal is not expected in the foreseeable future. The Corporation has
applied a temporary mandatory relief from deferred tax accounting for the impacts of the new Pillar Two top-up tax and will
account for it as a current tax when it is incurred.
Deferred income tax assets for unused tax loss carry forwards and deductible temporary differences are only recognized
when it is probable that there will be future taxable profits against which the assets can be utilized. Deferred income tax
assets are reviewed at each reporting period and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized.
Deferred income tax assets and liabilities are classified as non-current. They are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and they relate to income taxes levied by the same taxation
authority on either the same taxable entity or different entities where there is an intention to settle the balance on a net
basis.
As tax legislation is complex and subject to interpretation, in determining current and deferred income taxes, the
Corporation takes into account the impact of uncertain tax positions and whether additional taxes and penalties may be due.
The Corporation values uncertain income tax positions based on the probability of whether tax authorities with full
knowledge of all relevant information will accept the Corporation's tax treatments. This assessment, based on judgment,
requires estimates and assumptions considering facts and circumstances existing as at the reporting period. Estimates are
reviewed each reporting period and updated, based on new information available.
INVESTMENT TAX CREDITS (ITCs)
ITCs are recognized where there is reasonable assurance that the ITCs will be received and all attached conditions will be
complied with. ITCs are subject to examination and approval by regulating authorities, and, therefore, the amounts granted
may differ from those recorded. ITCs determined to be earned by the Corporation are recorded as a reduction of the
operating expenses incurred.
PENSION SCHEMES
The Corporation maintains a number of defined contribution schemes and contributions are charged to net earnings in the
period in which they are due.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-24
In addition, the Corporation operates defined benefit schemes which require contributions to be made to separately
administered funds. The cost of providing benefits under defined benefit schemes is determined separately for each scheme
using the projected unit credit actuarial valuation method. Current service costs, past service costs, curtailment costs and
settlement costs along with interest costs which are based on a notional charge based on scheme liabilities during the year,
less expected returns on scheme assets, are charged to net earnings. Actuarial gains and losses are fully recognized in equity
through other comprehensive income as they arise. The consolidated statement of financial position reflects the schemes’
surplus or deficit as at the end of the reporting period.
SHARE CAPITAL
Issuance costs directly attributable to the issuance of shares are recognized as a deduction from equity, net of income tax
effects.
DIVIDENDS
Dividends on common shares of WSP Global Inc. are recognized in the Corporation’s consolidated financial statements in the
period in which the dividends are declared.
EARNINGS PER SHARE
Basic earnings per share are determined using the weighted average number of shares outstanding during the period.
Diluted earnings per share are determined using the weighted average number of shares outstanding during the period, plus
the effects of dilutive potential shares outstanding during the period. The calculation of diluted earnings per share follows
the treasury stock method.
3 ACCOUNTING POLICY DEVELOPMENTS
NEW ACCOUNTING STANDARDS EFFECTIVE IN 2023
ACCOUNTING POLICIES AND ESTIMATES
In February 2021, the IASB issued narrow-scope amendments to IAS 1 - Presentation of Financial Statements, IFRS Practice
Statement 2 - Making Materiality Judgements and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. The
amendments require the disclosure of material, rather than significant, accounting policy information, define accounting
estimates and clarify the distinction between changes in accounting policies from changes in accounting estimates. The
Corporation adopted these amendments effective January 1, 2023.
INCOME TAXES
In May 2021, the IASB issued targeted amendments to IAS 12 - Income Taxes, which narrows the scope exemption when
recognizing deferred taxes. In specified circumstances, entities are exempt from recognizing deferred income taxes when
they recognize assets or liabilities for the first time. The amendments clarify that the exemption does not apply to
transactions where both assets and liabilities are recognized (and give rise to equal and offsetting temporary differences)
such as leases and decommissioning obligations and that entities are required to recognize deferred income taxes on such
transactions. The Corporation adopted these amendments effective January 1, 2023, resulting in no impact on its
consolidated financial statements as a result.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-25
In May 2023, the IASB issued International Tax Reform – Pillar Two Model Rules - Amendments to IAS 12 – Income Taxes, addressing
income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by
the Organisation for Economic Co-operation and Development (OECD). The amendments introduce a mandatory temporary
exception to the accounting for deferred taxes arising from the implementation of the Pillar Two model rules and disclosure
requirements about the Pillar Two exposure. The Corporation applied the mandatory temporary exception effective
January 1, 2023 and has presented the disclosure requirements in its audited consolidated financial statement.
RECENT STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET
EFFECTIVE AND NOT APPLIED
CLASSIFICATION OF LIABILITIES AS CURRENT OR NON-CURRENT
In January 2020, IASB issued a narrow-scope amendment to IAS 1 - Presentation of Financial Statements, which clarifies that the
classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting
period. Classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a
liability or events after the reporting date. The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’
of a liability. The amendment is effective for the Corporation's annual reporting period beginning on January 1, 2024, with
earlier application permitted. The Corporation has concluded its current accounting policies are in line with the amended
standard and therefore this amendment will have no impact on its consolidated financial statements.
LONG-TERM DEBT COVENANTS
In October 2022, the IASB issued amendments to IAS 1 - Presentation of Financial Statements, which specify that for long-term
debt with covenants to be complied with after the reporting date, such covenants do not affect the classification of debt as
current or non-current at the reporting date, but do require disclosures in the notes to the financial statements. The
amendments are effective for the Corporation's annual reporting period beginning on January 1, 2024, with earlier
application permitted. The Corporation has concluded its current accounting policies are in line with the amended standard
and therefore this amendment will have no impact on its consolidated financial statements.
4 CRITICAL ACCOUNTING ESTIMATES
AND JUDGMENTS
The preparation of the financial statements requires Management to make judgments, assumptions and estimates in
applying the Corporation's accounting policies. The estimates and judgments that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Estimates and assumptions are continually evaluated and are based on historical trends and other factors, including
expectations of future events that are likely to materialize under reasonable circumstances. Actual results will differ from
estimates used, and such differences could be material.
REVENUE RECOGNITION
The Corporation values its costs and anticipated profits in excess of billings based on the time and materials charged into
each project and estimated future costs and total revenues. Recognition of revenues and contract assets involves estimates of
costs required to complete the project. On a periodic basis, Management reviews the costs incurred to date and the estimated
costs to complete for each project to determine whether the amount recognized as contract assets is an accurate estimate of
the amount that the Corporation has earned on its projects. Where the review determines that the value of costs and
anticipated profits in excess of billings exceed the amount that has been earned, adjustments are made to the contract assets.
Changes in the estimate of costs required to complete projects could lead to reversals of revenues.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-26
IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL
Identifiable intangible assets and goodwill, excluding software, amounted to $8,127.4 million as at December 31, 2023
($7,848.1 million as at December 31, 2022). These assets arise out of business combinations and the Corporation applies the
acquisition method of accounting to these transactions. Management uses material estimates and assumptions in measuring
the fair value of the assets acquired and the liabilities assumed and estimating the useful lives of identifiable intangible
assets. Material estimates include expected cash flows, discount rates and terminal growth rates.
Intangible assets related to business combinations and recognized separately from goodwill are initially recognized at their
fair value at the acquisition date and are mostly amortized with determined finite lives. Management uses judgment to
identify indefinite-lived intangible assets. If actual useful lives are shorter than estimated, the Corporation may be required
to accelerate amortization.
For the purposes of assessing impairment, Management exercises judgment to identify independent cash inflows to
determine CGUs. The fair value of CGUs are determined using material estimates including the applicable discount rate and
the expected future cash flows. The inputs used in the discounted cash flows model are Level 3 inputs (inputs not based on
observable market data). Management applies judgment to identify indicators of possible impairment or reversal of
impairment at each reporting date.
LEGAL CLAIMS PROVISIONS
In the normal course of business the Corporation faces legal proceedings for work carried out on projects. The Corporation
has professional liability insurance (subject to certain self retention thresholds) in order to manage risks related to such
proceedings. Management uses judgment to assess the potential outcomes of claims and estimates the claims provisions,
based on advice and information provided by its legal advisors and on its own past experience in the settlement of similar
proceedings. Claims provisions include litigation costs and also take into account indemnities. Final settlements could have a
material effect on the financial position or operating results of the Corporation.
RETIREMENT BENEFIT OBLIGATIONS
The present value of obligations is calculated on an actuarial basis which depends on a number of assumptions relating to the
future. These assumptions include discount rates, inflation rates and life expectancy. The key assumptions are assessed
regularly according to market conditions and data available to Management. Additional details and sensitivity analyses are
given in note 9, Pension schemes.
INCOME TAX PROVISION
The Corporation is subject to income tax laws and regulations in multiple jurisdictions. There are many transactions and
calculations for which the ultimate tax determination is uncertain. The Corporation recognizes liabilities for anticipated tax
audit issues on the basis of amounts expected to be paid to the tax authorities. Where the final tax outcome of these matters
is different from the amounts that were initially provisioned, such differences will impact the current and deferred income
tax assets and liabilities in the period in which such determination is made. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
DEFERRED INCOME TAX ASSETS
Management exercises judgment in the assessment of the probability of future taxable income, to estimate the extent to
which deferred income tax assets can be realized. Estimates are based on the Corporation’s most recent approved budget
forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax
loss or credit. The tax rules and tax planning strategies in the numerous jurisdictions in which the Corporation operates are
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-27
carefully taken into consideration. Management uses judgment to assess specific facts and circumstances to evaluate legal,
economic or other uncertainties.
INVESTMENT TAX CREDITS (ITCs)
The Corporation benefits from certain government assistance programs in the different jurisdictions where it operates,
including scientific research and experimental development tax credit programs. In preparing claims, judgment is required
in interpreting the regulations related to these programs, determining if the operations of the Corporation qualify and
identifying quantifying eligible expenses. These claims are subject to examination and audit by local tax authorities, who
may disagree with interpretations made by the Corporation. Management estimates the amounts receivable under these
programs. Final settlements following examinations and audits could be different from amounts recorded and could have a
material effect on the financial position or operating results of the Corporation.
LEASES
The Corporation uses judgment to establish the lease term based on the conditions of the lease and whether it is reasonably
certain that it will exercise any extension or termination options. When the implicit interest rate of a lease is not readily
available, the Corporation is required to use its incremental borrowing rate (“IBR”), which is generally the case. The
determination of the IBR requires the use of various assumptions. The Corporation uses judgment to determine if a lease
modification which increases the scope of a lease should be accounted as a separate lease. Such determination requires the
use of judgment to determine if the increase in lease payments is commensurate to the change in scope.
The Corporation applies estimates to assesses whether a right-of-use asset is impaired, particularly when it expects to vacate
an office space, including the ability to sublease the assets or surrender the lease and recover its costs. The Corporation
examines its lease conditions as well as local market conditions and estimates its recoverability potential for each vacated
premise.
5 BUSINESS ACQUISITIONS
Acquisitions are accounted for using the acquisition method, and the operating results are included in the consolidated
financial statements from the date of acquisition. If the initial accounting for a business combination is incomplete by the
end of the reporting period, the Corporation will report provisional amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted during the measurement period, and additional assets or liabilities are
recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if
known, would have affected the amounts recognized at that date.
The measurement period is the period from the date of acquisition to the date the Corporation obtains complete information
about facts and circumstances that existed as of the acquisition date, up to a maximum of one year.
2023 TRANSACTIONS
In January 2023, WSP acquired BG Bonnard & Gardel Holding SA (“BG”), a Swiss engineering consulting firm, with offices also
in France, Portugal and Italy. With approximately 700 professionals, BG offers consulting, engineering, and project
management services in the infrastructure, building, water, environment, and energy sectors.
In January 2023, WSP acquired Enstruct Group Pty Ltd (“enstruct”), a 75-employee structural engineering firm with offices in
Sydney, Melbourne, and Brisbane, experienced in designing and delivering building projects throughout Australia.
In May 2023, WSP acquired LGT Inc. (“LGT”), a Quebec-based building engineering firm with over 150 employees. LGT
provides advisory services in the areas of mechanical engineering, electricity, sustainable development, structural, and civil
engineering.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-28
In June 2023, WSP acquired Calibre Professional Services One Pty Ltd (“Calibre”) for an aggregate consideration of
AUD 275.7 million ($245.1 million). Calibre is an engineering services provider in Australia, focused on rail, infrastructure,
rehabilitation, and renewable projects supporting blue-chip mining clients, with a workforce of approximately 800
professionals.
These acquisitions were financed using WSP's available cash and credit facilities.
These acquisitions were not individually material, therefore the Corporation has chosen to disclose the required information
in aggregate. The table below presents the fair values of the assets acquired and the liabilities assumed as at December 31,
2023. For LGT and Calibre, the fair values represent Management's preliminary assessments, with the most significant
aspects remaining to be finalized relating to the valuation of trade receivables, contract assets and liabilities, and intangible
assets. For BG and enstruct, the Corporation has completed its measurement of fair values.
Recognized amounts of identifiable assets acquired and liabilities assumed
Assets
Cash and cash equivalents
Trade receivables and other receivables
Cost and anticipated profits in excess of billings (note 15)
Prepaid expenses
Income taxes receivable
Right-of-use assets (note 17)
Intangible assets (note 18)
Property and equipment (note 19)
Deferred income tax assets (note 12)
Other assets
Liabilities
Accounts payable and accrued liabilities
Billings in excess of costs and anticipated profits (note 15)
Income taxes payable
Provisions (note 23)
Lease liabilities (note 17)
Long-term debt
Deferred income tax liabilities (note 12)
Other current and non-current liabilities
Fair value of identifiable assets and liabilities assumed
Goodwill (note 20)
Total purchase consideration
Cash acquired
Consideration payable
Net cash disbursements
$
18.8
73.9
28.1
3.3
2.9
24.1
109.3
34.3
3.5
1.4
(92.7)
(19.2)
(4.4)
(31.1)
(23.9)
(4.8)
(26.2)
(8.5)
88.8
296.4
385.2
(18.8)
(2.1)
364.3
Goodwill is attributable to the workforce of the acquired businesses and the synergies expected to arise with the Corporation
after the acquisitions. None of the goodwill recognized as at December 31, 2023 is expected to be deductible for income tax
purposes.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-29
The trade receivables acquired had a fair value of $68.5 million and gross contractual amount of $74.1 million.
The acquired businesses contributed revenues of $290.0 million and net earnings of $18.3 million from their respective
acquisition dates to December 31, 2023.
2022 TRANSACTIONS
ENVIRONMENT & INFRASTRUCTURE BUSINESS OF JOHN WOOD GROUP plc
On September 21, 2022, the Corporation closed the acquisition of the Environment & Infrastructure business (“E&I”) of John
Wood Group plc (“Wood”) (the “E&I Acquisition”). E&I provides engineering, remediation consulting, environmental
permitting, inspection & monitoring, and environmental management services to clients in the government, industrial,
infrastructure, oil & gas, power, water and mining industries. E&I operates in approximately 100 offices with approximately
6,000 environmental consulting staff across more than 10 countries. Following final adjustments, the aggregate cash
consideration for the E&I Acquisition was US$1.8 billion ($2.4 billion).
In 2022, the Corporation entered into a fully-committed term credit facility with various tenors of up to 5 years in length, to
fund the E&I Acquisition and other related transaction costs.
In the year ended December 31, 2023, the Corporation completed its final determination of the fair values of all assets and
acquired liabilities assumed in connection with the E&I Acquisition, which required some adjustments to the preliminary
assessment. The initial preliminary determination of the fair values was adjusted in the year ended December 31, 2023, as
shown below. The Corporation did not restate the consolidated statement of financial position as at December 31, 2022 as the
adjustments were deemed not material. The Corporation also determined that the net impact on the net earnings as a result
of these adjustments was not material for the year ended December 31, 2022, and as such, they were accounted for in the
consolidated statement of earnings for the year ended December 31, 2023.
The table below presents Management's initial preliminary assessment of the fair values of the assets acquired and the
liabilities assumed, as well as the final determination of the fair values made within 12 months of the acquisition date.
Recognized amounts of identifiable assets acquired and liabilities assumed
Assets
Preliminary Adjustments
$
$
Final
$
Cash and cash equivalents
Trade receivables and other receivables
Cost and anticipated profits in excess of billings (note 15)
Prepaid expenses
Income taxes receivable
Right-of-use assets (note 17)
Intangible assets other than software (note 18)
Software (note 18)
Property and equipment (note 19)
Deferred income tax assets (note 12)
WSP Global Inc.
Consolidated Financial Statements
2023
22.2
255.4
125.7
1.3
0.3
72.8
652.2
1.1
16.1
18.8
—
(12.8)
25.1
2.7
—
20.0
(13.3)
—
(0.7)
3.9
22.2
242.6
150.8
4.0
0.3
92.8
638.9
1.1
15.4
22.7
(Table continued on next page...)
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-30
(...Table continued from previous page)
Liabilities
Accounts payable and accrued liabilities
Billings in excess of costs and anticipated profits (note 15)
Income taxes payable
Provisions (note 23)
Lease liabilities (note 17)
Retirement benefit obligations (note 9)
Deferred income tax liabilities (note 12)
Fair value of identifiable assets and liabilities assumed
Goodwill (note 20)
Total purchase consideration
Cash acquired
Consideration payable
Net cash disbursements
Preliminary Adjustments
Final
(173.6)
(70.7)
(10.5)
(169.6)
(82.9)
(3.5)
(20.0)
635.1
1,789.9
2,425.0
(22.2)
(5.4)
2,397.4
(76.6)
—
4.4
(67.7)
(12.7)
(5.3)
9.5
(123.5)
154.5
31.0
—
5.4
36.4
(250.2)
(70.7)
(6.1)
(237.3)
(95.6)
(8.8)
(10.5)
511.6
1,944.4
2,456.0
(22.2)
—
2,433.8
Goodwill is attributable to the workforce of the acquired business and the synergies expected to arise with the Corporation
after the acquisition. The majority of the goodwill recognized as at December 31, 2023 is expected to be deductible for
income tax purposes. Intangible assets are mainly attributable to customer relationships and contract backlogs. Management
applied the excess earnings method using discounted cash flow models to value customer relationships and backlogs
acquired. Management's significant estimates and assumptions in applying this methodology included forecast revenues and
margins attributable to the customer relationships (in excess of backlog), rates of attrition and discount rates.
The trade receivables acquired had a final fair value of $190.7 million and gross contractual amount of $223.4 million.
The acquired E&I business contributed revenues of $443.9 million and net earnings of $34.1 million from September 21, 2022
to December 31, 2022. Considering the nature of the acquisition, the available financial information does not allow for the
accurate disclosure of pro forma revenues and net earnings, had the Corporation concluded these acquisitions at the
beginning of its fiscal year.
OTHER ACQUISITIONS IN 2022
In 2022, the Corporation concluded several other individually immaterial acquisitions. In February, 2022, WSP acquired
Climate Finance Advisors (“CFA”), a US-based climate and finance consultancy. In June 2022, WSP acquired BOD Arquitectura
e Ingeniería (“BOD”), a 45-employee architecture and engineering firm based in Madrid, Spain. In August 2022, WSP acquired
Australian-based Greencap Holdings Ltd. (“Greencap”), a 250-employee subsidiary of Wesfarmers Industrial and Safety. In
September 2022, WSP acquired two UK-based businesses, Capita (Real Estate & Infrastructure) Ltd. (“Capita REI”) and GL
Hearn Ltd. (“GLH”), both part of the Capita plc group, for an aggregate cash consideration of £69.7 million, ($112.4 million),
adding around 1,000 UK-based employees. In October 2022, WSP acquired Odeh Engineers, a US-based 40-person structural
engineering firm. These acquisitions were financed using WSP's available cash and credit facilities.
These acquisitions were not individually material, therefore the Corporation has chosen to disclose the required information
in aggregate.
The table below presents Management's preliminary assessment of the fair values of the assets acquired and the liabilities
assumed as at December 31, 2022, any adjustments recognized during the subsequent measurement periods and the final
determinations of the fair values as at December 31, 2023.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-31
The final determination of the fair values required some adjustments to the preliminary assessments as shown below. The
Corporation has not restated the consolidated statement of financial position as at December 31, 2022 as the adjustments
were deemed not material. The Corporation also determined that the net impact on the net earnings as a result of these
adjustments was not material for the year ended December 31, 2022, and as such, they were accounted for in the
consolidated statement of earnings for the year ended December 31, 2023.
Recognized amounts of identifiable assets acquired and liabilities assumed
Assets
Preliminary Adjustments
$
$
Final
$
Cash and cash equivalents
Trade receivables and other receivables
Cost and anticipated profits in excess of billings (note 15)
Prepaid expenses
Right-of-use assets (note 17)
Intangible assets (note 18)
Software (note 18)
Property and equipment (note 19)
Deferred income tax assets (note 12)
Liabilities
Accounts payable and accrued liabilities
Billings in excess of costs and anticipated profits (note 15)
Income taxes payable
Provisions (note 23)
Lease liabilities (note 17)
Long-term debt (note 28)
Deferred income tax liabilities (note 12)
Fair value of identifiable assets and liabilities assumed
Goodwill (note 20)
Total purchase consideration
Cash acquired
Consideration payable
Net cash disbursements
18.0
29.1
4.9
15.2
4.3
21.3
0.7
3.6
0.8
(26.1)
(1.1)
(1.3)
(0.6)
(4.3)
(1.1)
(4.9)
58.5
95.5
154.0
(18.0)
(11.5)
124.5
4.5
(2.6)
(5.2)
—
1.0
12.0
2.5
—
2.9
(4.2)
(6.4)
—
(11.9)
(1.0)
—
(0.7)
(9.1)
9.1
(9.1)
(4.5)
1.3
(12.3)
22.5
26.5
(0.3)
15.2
5.3
33.3
3.2
3.6
3.7
(30.3)
(7.5)
(1.3)
(12.5)
(5.3)
(1.1)
(5.6)
49.4
104.6
154.0
(22.5)
(10.2)
121.3
Goodwill is attributable to the workforce of the acquired businesses and the synergies expected to arise with the Corporation
after the acquisitions. Approximately $27 million of the goodwill recognized as at December 31, 2023 is expected to be
deductible for income tax purposes.
The trade receivables acquired had a fair value of $26.5 million and gross contractual amount of $29.7 million.
The acquired businesses contributed revenues of $72.8 million and net earnings of $4.8 million from their respective
acquisition dates to December 31, 2022.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-32
6 OPERATING SEGMENTS
SEGMENTED INFORMATION
The Corporation manages its business by geographic region. The Corporation's operating segments represent countries, or
groups of countries, in which it operates. The Corporation has four reportable segments: Canada, Americas (US and Latin
America), EMEIA (Europe, Middle East, India and Africa) and APAC (Asia Pacific, comprising Asia, Australia and New Zealand).
Management has applied the following judgments to aggregate certain operating segments:
•
•
•
Americas - The operating segments of US and Latin America are in the same geographic region of the Americas and
have been aggregated as the Latin America operating segment does not meet any of the quantitative thresholds to
be reported separately.
EMEIA - The operating segments of the United Kingdom "UK" and Ireland, Nordic European countries and Central
European countries have been aggregated as these segments have similar products and services, the same types of
customers and operate in similar economies. The Middle East, India and Africa operating segments have also been
aggregated in EMEIA as they do not meet any of the quantitative thresholds to be reported separately.
APAC - The operating segments of Australia and New Zealand have been aggregated as these segments have similar
products and services, the same types of customers and operate in similar economies. The Asia operating segment
has also been aggregated in APAC as it does not meet any of the quantitative thresholds to be reported separately
and it is part of the same geographic region.
The Corporation's global leadership team ("GLT") assesses the performance of the reportable segments based on net
revenues and adjusted EBITDA by segment. Adjusted EBITDA by segment excludes items such as business acquisition,
integration and reorganization costs, ERP implementation costs and head office corporate costs, which are not considered
when assessing the underlying financial performance of the reportable segments. Head office corporate costs are expenses
and salaries related to centralized functions, such as global finance, legal, human resources and technology teams, which are
not allocated to segments. This measure also excludes the effects of financing expenses, depreciation, amortization,
impairment and income taxes.
Sales between segments are carried out on terms equivalent to arm's length transactions and are eliminated upon
consolidation.
The net revenues reported to the GLT are derived from revenues net of subconsultant and direct costs, which are measured
in a similar manner as in the consolidated statements of earnings, and exclude intersegmental net revenues.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-33
The tables below present the Corporation’s operations based on reportable segments, for the years ended December 31:
Revenues
Less: Subconsultants and direct costs
Net revenues
Adjusted EBITDA by segment
Head office corporate costs
Depreciation and amortization
Impairment of long-lived assets
Acquisition, integration and reorganization costs
ERP implementation costs
Net financing expenses, excluding interest income
Share of depreciation, financing expenses and
taxes of associates and joint ventures
Earnings before income taxes
Revenues
Less: Subconsultants and direct costs
Net revenues
Adjusted EBITDA by segment
Head office corporate costs
Depreciation and amortization
Impairment of long-lived assets
Acquisition, integration and reorganization costs
ERP implementation costs
Net financing expenses, excluding interest income
Share of depreciation, financing expenses and
taxes of associates and joint ventures
Earnings before income taxes
Canada
$
2,498.5
(586.5)
1,912.0
Americas
$
6,024.8
(1,937.0)
4,087.8
EMEIA
$
3,900.4
(707.4)
3,193.0
APAC
$
2,013.5
(309.3)
1,704.2
433.5
808.1
489.9
308.6
Canada
$
2,151.2
(566.0)
1,585.2
Americas
$
4,826.4
(1,570.0)
3,256.4
EMEIA
$
3,207.8
(556.7)
2,651.1
APAC
$
1,747.5
(283.0)
1,464.5
347.9
644.7
390.0
267.1
2023
Total
$
14,437.2
(3,540.2)
10,897.0
2,040.1
(118.8)
(673.2)
(87.1)
(105.0)
(81.0)
(215.2)
(14.9)
744.9
2022
Total
$
11,932.9
(2,975.7)
8,957.2
1,649.7
(119.5)
(576.5)
(21.6)
(115.5)
(49.9)
(167.4)
(11.8)
587.5
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-34
GEOGRAPHIC INFORMATION
The Corporation's revenues are allocated to geographic regions based on the country of operation, as follows, for the years
ended December 31:
US
Canada
UK
Australia
Sweden
Other
2023
$
5,655.2
2,498.5
1,583.2
1,155.2
664.2
2,880.9
14,437.2
2022
$
4,503.1
2,151.2
1,299.6
970.1
660.8
2,348.1
11,932.9
Right-of-use assets, property and equipment, goodwill and intangible assets are allocated in the following countries, as at
December 31:
US
Canada
Australia
UK
Other
2023
$
4,415.9
2,268.6
705.0
703.6
1,426.3
9,519.4
2022
$
4,610.7
2,306.1
422.2
653.8
1,279.8
9,272.6
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-35
7 REVENUES
The tables below present the Corporation’s disaggregated revenues by market sector and client category, for the years ended
December 31:
Market sector
Transportation & Infrastructure
Earth & Environment
Property & Buildings
Power & Energy
Industry
Client category
Public sector
Private sector
Market sector
Transportation & Infrastructure
Earth & Environment
Property & Buildings
Power & Energy
Industry
Client category
Public sector
Private sector
Canada
$
Americas
$
593.2
1,302.5
394.4
108.3
100.1
2,498.5
1,091.2
1,407.3
2,498.5
2,679.9
2,311.7
650.6
375.2
7.4
6,024.8
3,379.9
2,644.9
6,024.8
Canada
$
Americas
$
585.1
1,016.1
335.7
118.8
95.5
2,151.2
607.5
1,543.7
2,151.2
2,470.1
1,466.2
520.9
360.7
8.5
4,826.4
2,847.6
1,978.8
4,826.4
EMEIA
$
1,675.8
709.3
1,192.6
252.4
70.3
3,900.4
2,049.0
1,851.4
3,900.4
EMEIA
$
1,449.6
479.2
996.3
205.6
77.1
3,207.8
1,677.3
1,530.5
3,207.8
APAC
$
993.6
484.0
469.0
50.9
16.0
2,013.5
1,059.8
953.7
2,013.5
APAC
$
885.0
353.9
441.9
51.8
14.9
1,747.5
961.7
785.8
1,747.5
2023
Total
$
5,942.5
4,807.5
2,706.6
786.8
193.8
14,437.2
7,579.9
6,857.3
14,437.2
2022
Total
$
5,389.8
3,315.4
2,294.8
736.9
196.0
11,932.9
6,094.1
5,838.8
11,932.9
8 LONG-TERM INCENTIVE PLANS ("LTIPs")
STOCK OPTIONS
Options granted under the stock option plan, to officers and employees, may be exercised during a period not exceeding ten
years from the grant date. Options vest, at latest, three years after the grant date. Any unexercised options expire at the
earlier of one month after the date a beneficiary ceases to be an employee or the expiration date of the stock option.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-36
Number of stock options exercised during the year ended December 31
Exercise price range of stock options exercised during the year ended December 31
Stock options outstanding as at December 31
Vested stock options outstanding as at December 31
Exercise price range of stock options outstanding as at December 31
62,374
$57.98 to $180.65
782,722
651,150
$41.69 to $180.65
22,295
$41.69 to $121.18
706,602
572,511
$41.69 to $180.65
2023
2022
The fair value of stock options at grant date was measured using the Black-Scholes option pricing model. The historical share
price of the Corporation’s common shares is used to estimate expected volatility, and government bond rates are used to
estimate the risk-free interest rate. For options granted during the years ended December 31, 2023 and 2022, the following
table illustrates the inputs used in the measurement of the grant date fair values of the stock options:
Expected stock price volatility
Dividend
Risk-free interest rate
Expected option life
Fair value – weighted average of options issued
2023
24%
0.88%-0.96%
3.33%-3.70%
5.8
$39.93
2022
22%
0.80%
1.85%
5.7
$41.43
During the year ended December 31, 2023, the Corporation recorded stock-based compensation expense of $5.0 million
($4.5 million in 2022) in personnel costs.
PSUs, RSUs, DSUs, redeemable PSUs and redeemable RSUs
The PSUs are settled in cash and vest after three years if the Corporation meets certain performance targets. The RSUs are
settled in cash and vest after three years. The DSUs are settled in cash and vest immediately when granted but their
settlement is deferred until employment with the Corporation is terminated for any reason other than for cause. Redeemable
PSUs vest after three years, subject to performance-based vesting conditions. Redeemable RSUs vest after three years.
Redeemable PSUs and redeemable RSUs may be redeemed by the participant at any time after vesting but prior to the tenth
anniversary of the grant date for common shares of the Corporation or cash, or any combination of them, at the choice of the
participant.
The compensation expense and corresponding liability for the share unit plan awards are measured using the market value
of the Corporation's share price, the Corporation's expected performance vis-a-vis targets, and other factors, as applicable,
and the expense is recorded over the vesting period for PSUs, RSUs, redeemable PSUs and redeemable RSUs and as granted
for DSUs.
At the end of each financial reporting period, changes in the Corporation’s payment obligation due to changes in the market
value of the Corporation's common shares on the TSX, or changes in the number of units based on the Corporation’s
expected performance and other factors, as applicable, are recorded as an expense or recovery.
The Corporation recorded personnel costs of $60.2 million during 2023 ($39.1 million in 2022) related to the share unit plans.
As at December 31, 2023, there were 742,377 PSUs, RSUs, DSUs, redeemable PSUs and redeemable RSUs outstanding and the
cumulative obligation liability stood at $120.9 million (748,344 units and $119.9 million, respectively, as at December 31,
2022). The intrinsic value of the liability for all share unit plans for which the participants' right to cash had vested as at
December 31, 2023 was $87.3 million ($83.9 million as at December 31, 2022).
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-37
The Corporation enters into derivative financial instruments with Canadian financial institutions to limit the Corporation's
exposure to the variability of LTIP-based units caused by fluctuations in its common share price. The value of the derivative
financial instruments fluctuates in accordance with the movement of the Corporation's common share price and these
instruments are classified as FVTPL. As such, they are measured at fair value on the consolidated statement of financial
position and the mark-to-market gain or loss pertaining to derivative financial instruments is recorded in personnel costs
and financing expense. In 2023, the mark-to-market gain recorded in net earnings amounted to $17.2 million ($20.6 million
loss in 2022). As at December 31, 2023, the Corporation had derivatives outstanding for 660,000 of its common shares (780,000
as at December 31, 2022).
9 PENSIONS SCHEMES
Pension costs included in personnel costs consist of the following for the years ended December 31:
Current service cost of defined benefit pension schemes
Past service cost of defined benefit pension schemes
Employer contributions to defined benefit pension schemes
Employer contributions to defined contribution pension schemes
2023
$
10.0
(0.6)
9.8
208.7
227.9
2022
$
2.1
(1.0)
13.6
161.2
175.9
The Corporation operates both defined contribution and defined benefit pension schemes. Defined contributions are charged
to net earnings as incurred.
In the UK, there are several defined benefit schemes, all of which are closed to new members. The assets of the schemes are
held separately from those of the Corporation in independently administered funds.
In Sweden, a portion of a multi-employer and collectively-bargained defined benefit plan is recognized on the Corporation’s
consolidated statement of financial position as a defined benefit plan. Accrual of service costs under this arrangement ceased
in 2008 when the Corporation began insuring new accruals with an insurance company. This portion of the plan accounted
for as a defined benefit plan relates to the historical accruals prior to 2008, which are unfunded.
The benefits within the collectively-bargained plan in Sweden which are insured with an insurance company are considered
a multi-employer plan. Since the insurance company is not able to specify the portion of their insurance assets which are set
aside to meet each and every individual employers’ share of pension obligation, it is treated as a defined contribution scheme
in the Corporation's consolidated financial statements.
In the US, the Corporation maintains a deferred compensation plan under which a portion of employees’ compensation is
deferred and invested in financial assets held in a trust (included in financial assets as disclosed in note 16, Other financial
assets). The financial assets held in a trust are for the ultimate benefit of the employees but are available to the Corporation’s
creditors in the event of insolvency. Therefore this plan is reported as an unfunded plan.
In the US, the Corporation also maintains a funded defined benefit schemes, which is closed to new members. The assets of
the scheme are held separately from those of the Corporation in independently administered funds.
For funded and unfunded defined benefit plans, any deficit of the fair value of plan assets over the present value of the
defined benefit obligation is recognized as a liability in the consolidated statement of financial position. Actuarial gains and
losses are recognized in full as they arise in other comprehensive income. These gains and losses reflect changes in actuarial
assumptions, and differences between actuarial assumptions and what has actually occurred.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-38
The actuarial costs charged to the consolidated statements of earnings in respect of defined benefit plans may consist of
current service cost, net interest on defined benefit liability (asset), past service costs and costs of curtailments.
The liabilities of the Corporation arising from defined benefit obligations and their related current service cost are
determined using the projected unit credit method. Valuations are performed annually. Actuarial advice is provided by both
external consultants and actuaries. The actuarial assumptions used to calculate the benefit obligations vary according to the
economic conditions of the country in which the plan is located and are set out below.
The main assumptions used to calculate the liabilities related to defined benefit obligations and their related current service
cost were as follows as at and for the years ended December 31:
UK
Rate of increase in pension payments
Discount rate
Inflation assumption
Life expectancy at age 65 (for member currently aged 65)
– Men
– Women
Sweden
Discount rate
Inflation assumption
Life expectancy at age 65 (for member currently aged 65)
– Men
– Women
US
Discount rate (unfunded plans)
Discount rate (funded plans)
2023
2022
2.05% to 2.95%
4.75 %
2.75% to 3.10%
1.90% to 3.50%
5.00 %
2.80% to 3.15%
87.2
89.6
3.25 %
1.60 %
86.9
88.9
87.9
90.2
4.00 %
1.90 %
87.0
89.0
4.75% to 4.80%
4.91 %
4.95% to 5.10%
5.19 %
The fair values by major categories of plan assets pertaining to the funded US and UK defined benefits pension schemes were
as follows, as at December 31:
Equities
Bonds
Liability-driven investments
Cash and cash equivalents
Other
$
13.1
85.4
62.0
13.4
48.5
222.4
2023
%
6
38
28
6
22
100
$
46.1
63.9
48.8
0.1
93.9
252.8
2022
%
18
25
20
—
37
100
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
Amounts recognized in the statements of financial position are as follows, as at December 31:
Fair value of plan assets (UK)
Present value of funded obligations (UK)
Net asset of funded plans (UK)
Fair value of plan assets (US)
Present value of funded obligations (US)
Deficit of funded plans (US)
Present value of unfunded obligations (US)
Present value of unfunded obligations (Sweden)
Net pension liability
2023
$
156.0
(140.8)
15.2
66.4
(78.6)
(12.2)
(137.7)
(37.6)
(172.3)
Amounts recognized in the consolidated net earnings were as follows, for the years ended December 31:
Current service cost
Past service cost
Administration cost
Defined benefit pension scheme expense
Interest expense
Expected return on plan assets
Net financing expense on pension liabilities
2023
$
10.0
(0.6)
1.3
10.7
19.2
(12.9)
6.3
Changes in the present value of the defined benefit obligation are as follows for the years ended December 31:
Present value of obligation – beginning balance
Present value of obligation – acquisitions
Current service cost
Past service cost
Contributions from scheme members
Benefits paid
Payments in respect of settlements
Interest expenses
Actuarial losses - changes in assumptions
Actuarial losses - changes in experience adjustments
Exchange differences
Present value of obligation – ending balance
WSP Global Inc.
Consolidated Financial Statements
2023
2023
$
415.1
4.2
10.0
(0.6)
—
(28.1)
(44.7)
19.2
14.8
2.8
2.0
394.7
F-39
2022
$
184.7
(183.0)
1.7
68.1
(77.5)
(9.4)
(122.6)
(32.0)
(162.3)
2022
$
2.1
(1.0)
0.3
1.4
9.3
(5.8)
3.5
2022
$
478.1
78.5
2.1
(1.0)
0.1
(26.9)
—
9.3
(136.1)
4.2
6.8
415.1
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
Changes in the fair value of plan assets are as follows, as at December 31:
Fair value of plan assets – beginning balance
Expected return on plan assets
Contributions from scheme members
Contributions from employer
Benefits paid
Payments in respect of settlements
Administration costs
Actuarial gain (experience)
Exchange differences
Fair value of plan assets – ending balance
Net retirement obligations deficit summary, as at December 31:
Fair value of scheme assets
Present value of scheme liabilities
Deficit
2023
$
252.8
12.9
—
9.8
(16.9)
(44.7)
(1.3)
6.6
3.2
222.4
2023
$
222.4
(394.7)
(172.3)
F-40
2022
$
265.2
5.8
0.1
13.6
(12.7)
—
(0.3)
(95.8)
1.9
252.8
2022
$
252.8
(415.1)
(162.3)
The Corporation’s defined benefit plans expose it to interest risk, inflation risk, longevity risk, currency risk and market
investment risk. Sensitivity analysis of the overall pension deficit as at December 31, 2023 to changes in principal
assumptions is shown below:
Assumption
Change in basis points / years
Discount rate
Inflation rate(1)
Mortality(1)
(1) Impact on pension deficit of defined benefit plans in UK and Sweden only.
- 10 bps
+ 10 bps
+ 1 year
Increase in pension deficit
$
2.4
1.4
5.3
The combined employee and employer contributions to be paid in the year ending December 31, 2024, pertaining to the
Corporation’s defined benefit pension schemes in the UK, are expected to be approximately $1.6 million.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-41
10 ACQUISITION, INTEGRATION AND
REORGANIZATION COSTS AND ERP
IMPLEMENTATION COSTS
Business acquisition costs
Integration costs of acquired businesses
Other
2023
$
12.5
92.5
—
105.0
2022
$
39.8
70.9
4.8
115.5
Included in acquisition, integration and reorganization costs in 2023 are employee benefit costs of $41.2 million
($16.2 million in 2022). Other than employee benefit costs, costs relate mainly to legal and professional fees and early
contract termination costs.
Included in ERP implementation costs in 2023 are employee benefit costs of $22.5 million ($13.8 million in 2022). Other than
employee benefit costs, costs relate mainly to professional fees.
11 NET FINANCING EXPENSE
Interest expense related to credit facilities and senior unsecured notes
Interest expense on lease liabilities
Net financing expense on pension obligations
Exchange losses on assets and liabilities denominated in foreign currencies
Unrealized (gains) losses on derivative financial instruments
Other interest and bank charges
(Gains) losses on investments in securities
Interest income
2023
$
185.1
40.9
6.3
4.7
(27.4)
23.7
(18.1)
(12.6)
202.6
2022
$
68.4
37.4
3.5
2.3
20.1
13.6
22.1
(5.8)
161.6
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
12 INCOME TAXES
INCOME TAX EXPENSE AND TAX RATE RECONCILIATION
The components of the income tax expense for the years ended December 31, 2023 and 2022 were as follows:
Current income tax expense
Current income tax expense on earnings for the year
Adjustments in respect of prior years
Deferred income tax recovery
Origination and reversal of temporary differences
Impact of changes in substantively enacted income tax rates
Adjustments in respect of prior years
Income tax expense
2023
$
304.1
(50.6)
253.5
(100.1)
0.1
38.4
(61.6)
191.9
F-42
2022
$
313.8
(2.5)
311.3
(161.1)
(2.0)
4.6
(158.5)
152.8
The reconciliation of the difference between the income tax expense using the combined Canadian federal and provincial
statutory income tax rate of 26.5% in 2023 and in 2022 and the actual effective income tax rate is as follows for the years
ended December 31:
Earnings before income taxes
Income tax expense at the combined Canadian federal
and provincial statutory income tax rate
Changes resulting from:
Foreign income tax rate differences
Non-deductible expenses, net of non-taxable income
Net unrecognized income tax benefits
Adjustments in respect of prior years
Effect of change in income tax rates
Other items
$
744.9
197.4
(12.1)
5.3
13.3
(12.2)
0.1
0.1
191.9
2023
%
26.5 %
(1.6)%
0.7 %
1.8 %
(1.6)%
— %
— %
25.8 %
$
587.5
155.7
(17.2)
6.3
7.7
2.1
(2.0)
0.2
152.8
2022
%
26.5 %
(2.9)%
1.1 %
1.3 %
0.4 %
(0.4)%
— %
26.0 %
In 2023 and 2022, net unrecognized income tax benefits represented the impact of unrecognized current and prior years
income tax benefits related mostly to foreign subsidiaries where recovery is not considered probable, partly offset by the
recognition of previously unrecognized deferred income tax assets related to certain subsidiaries that generated profits in
the current year.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
TEMPORARY DIFFERENCES
The significant components of deferred income tax assets and liabilities were as follows, as at December 31:
F-43
2023
Credited
(charged) to
Credited to
Business
other acquisitions
and
As at
January 1 of earnings
$
statement comprehensive
income
$
$
As at
Exchange
disposals differences December 31
$
$
$
Deferred income tax assets
Deductible provisions upon
settlement
Tax loss carry forwards
Pension schemes
Deferred issuance-related costs
Property and equipment
Leases
Research and development
expenses
Other temporary differences
Deferred income tax liabilities
Costs and anticipated profits in
excess of billings
Holdbacks
Property and equipment
Intangible assets
Goodwill
Other temporary differences
213.7
22.9
42.8
14.1
19.7
27.8
165.1
55.6
561.7
(103.2)
(18.9)
(24.4)
(128.3)
(16.6)
(47.3)
(338.7)
223.0
(4.1)
22.9
(2.1)
(4.9)
0.4
13.9
76.3
(18.9)
83.5
(21.9)
2.0
6.3
43.1
(30.3)
(21.1)
(21.9)
61.6
—
—
2.5
—
—
—
—
—
2.5
—
—
—
—
9.0
9.0
11.5
25.6
1.7
1.4
—
—
(1.8)
5.0
(2.2)
29.7
(0.2)
—
(3.6)
(33.3)
1.3
(0.5)
(36.3)
(6.6)
(4.0)
—
(0.8)
—
0.3
(0.6)
(5.0)
(0.8)
(10.9)
(0.2)
—
1.0
(0.2)
0.8
(0.1)
1.3
(9.6)
231.2
47.5
43.8
9.2
20.4
39.3
241.4
33.7
666.5
(125.5)
(16.9)
(20.7)
(118.7)
(44.8)
(60.0)
(386.6)
279.9
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-44
2022
Credited
(charged)
to
As at statement
January 1 of earnings
$
$
Charged
to other
compre-
hensive
income
$
Credited
As at
directly
to equity acquisitions differences December 31
$
Exchange
Business
$
$
$
Deferred income tax assets
Deductible provisions upon
settlement
Tax loss carry forwards
Pension schemes
Deferred issuance-related costs
Property and equipment
Leases
Research and development
expenses
Other temporary differences
Deferred income tax liabilities
Costs and anticipated profits in
excess of billings
Holdbacks
Property and equipment
Intangible assets
Goodwill
Other temporary differences
219.3
24.2
45.3
7.4
19.9
22.3
4.5
25.8
368.7
(93.5)
(19.0)
(15.2)
(118.9)
(7.4)
(48.8)
(302.8)
65.9
(24.3)
(1.8)
3.2
(1.3)
(0.1)
(10.6)
154.6
13.1
132.8
(9.9)
0.5
(7.6)
38.5
(8.4)
12.6
25.7
158.5
—
—
(8.3)
—
—
—
—
—
(8.3)
—
—
—
—
—
(9.8)
(9.8)
(18.1)
—
—
—
8.1
—
—
—
—
8.1
—
—
—
—
—
—
—
8.1
11.8
0.6
0.9
—
0.5
15.4
—
14.7
43.9
(4.0)
—
(0.5)
(44.7)
—
(0.2)
(49.4)
(5.5)
6.9
(0.1)
1.7
(0.1)
(0.6)
0.7
6.0
2.0
16.5
4.2
(0.4)
(1.1)
(3.2)
(0.8)
(1.1)
(2.4)
14.1
213.7
22.9
42.8
14.1
19.7
27.8
165.1
55.6
561.7
(103.2)
(18.9)
(24.4)
(128.3)
(16.6)
(47.3)
(338.7)
223.0
The deferred income taxes are presented as follows on the consolidated statements of financial position, as at December 31:
Deferred income tax assets
Deferred income tax liabilities
2023
$
429.3
(149.4)
279.9
2022
$
351.3
(128.3)
223.0
As at December 31, 2023, the Corporation had recognized deferred income tax assets of $47.5 million ($22.9 million as at
December 31, 2022) related to tax losses of the current and prior years. The deferred income tax assets are recognized, as the
Corporation believes it is probable that taxable profits will be available in the future against which the tax loss carry
forwards can be utilized.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-45
As at December 31, 2023, the Corporation had $165.4 million ($159.3 million as at December 31, 2022) of unrecognized
deferred income tax assets. Of these, a portion relates to tax loss carry forwards of $436.3 million, of which $75.8 million
expire between 2024 and 2033 and the remainder of which having no expiry ($367.2 million and $49.5 million, respectively,
as at December 31, 2022) and a portion relates to gross temporary differences with no expiry of $31.1 million ($60.7 million as
at December 31, 2022). Additionally, $42.9 million of unrecognized deferred income tax assets relate to tax credits that expire
between 2024 and 2033 ($45.3 million as at December 31, 2022). The Corporation considers the recovery of those
unrecognized deferred income tax assets as not probable.
As at December 31, 2023, a deferred income tax liability relating to $1,070.1 million of taxable temporary differences
associated with the undistributed earnings of subsidiaries, has not been recognized as the Corporation controls the timing of
the reversal of these temporary differences and does not expect they will reverse in the foreseeable future ($851.0 million as
at December 31, 2022). Upon distribution of these earnings in the form of dividends or otherwise, the Corporation may be
subject to corporate or withholding income taxes.
OECD PILLAR TWO RULES
The Corporation operates in various countries which have enacted or substantively enacted new Pillar Two legislation to
implement a global minimum top-up tax. The legislation will be effective for the Corporation's annual reporting period
beginning on January 1, 2024. The Corporation has performed an assessment of its potential exposure to Pillar Two income
taxes based on the most recent tax filings, country-by-country reporting and financial statements for its constituent entities.
Based on the assessment, the Corporation does not expect a material exposure to Pillar Two income taxes.
The Corporation has applied a temporary mandatory relief from deferred tax accounting for the impacts of the new Pillar
Two top-up tax and will account for it as a current tax when it is incurred.
13 FINANCIAL INSTRUMENTS
FAIR VALUE
Cash, trade and other receivables, accounts payable, dividends payable to shareholders, bank overdrafts, long-term debt
related to credit facilities and other financial liabilities are financial instruments whose fair values approximate their
carrying values due to their short-term maturity, variable interest rates or current market rates for instruments with fixed
rates.
•
•
The fair value hierarchy under which the Corporation’s financial instruments are valued is as follows:
Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 includes inputs other than quoted prices included in Level 1 that are observable for the assets or liability,
either directly or indirectly;
Level 3 includes inputs for the assets or liability that are not based on observable market data.
•
The Corporation's senior unsecured notes are financial liabilities carried at amortized costs. As at December 31, 2023, the fair
value of the $1.0 billion of senior unsecured notes, which is based on unadjusted quote prices (Level 1), was $987.9 million
($439.5 million for the $500 million of senior unsecured notes as at December 31, 2022).
As at December 31, 2023 and 2022, fair values of other financial assets and hedges of the Corporation's common shares are
determined under Level 1. Fair values of foreign currency risk based financial instruments, notably foreign currency forward
contracts and cross currency swap agreements, are determined under Level 2.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-46
FINANCIAL RISK MANAGEMENT
The Corporation is exposed to credit risk, foreign currency risk, interest rate risk and liquidity risk. The following analyses
provide a portrait of those risks as at December 31, 2023 and 2022.
CREDIT RISK
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss.
Financial instruments which potentially subject the Corporation to significant credit risk consist principally of cash, trade
receivables, other receivables, derivative financial instruments, investments in securities and amounts due from joint
ventures and associates. Costs and anticipated profits in excess of billings are also evaluated for credit risk using the same
model. The Corporation’s maximum amount of credit risk exposure is limited to the carrying amount of these financial
instruments and contract assets, which is $5,139.1 million as at December 31, 2023 ($4,855.0 million as at December 31, 2022).
The Corporation’s cash is held with investment-grade financial institutions. Therefore, the Corporation considers the risk of
non-performance on these instruments to be minimal.
The Corporation’s credit risk is principally attributable to its trade receivables and costs and anticipated profits in excess of
billings. The amounts disclosed in the consolidated statements of financial position are net of an allowance for expected
credit losses, estimated by Management and based, in part, on the age of the specific receivable balance and the current and
expected collection trends. Generally, the Corporation does not require collateral or other security from customers for trade
accounts receivable; however, credit is extended following an evaluation of creditworthiness. In addition, the Corporation
performs ongoing credit reviews of all its customers and establishes an allowance for expected credit losses when the
likelihood of collecting the account has significantly diminished. The Corporation believes that the credit risk of trade
accounts receivable is limited. During the year ended December 31, 2023, the Corporation recognized net credit losses of
$18.8 million (net recovery of previously recognized allowance for expected credit losses of $9.3 million in 2022).
The Corporation mitigates its credit risk by providing services to diverse clients in various market sectors, countries and
sectors of the economy.
FOREIGN CURRENCY RISK
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
The Corporation operates internationally and is exposed to currency risks arising from its operating activities denominated
in US dollars, pounds sterling, Australian dollars, Swedish krona, New Zealand dollars, euros, and other currencies as well as
from its net assets in foreign operations. These risks are partially offset by purchases and operating expenses incurred in
these currencies.
The Corporation has investments in foreign operations, whose net assets are exposed to foreign currency risk. This risk is
partly offset through borrowings denominated in the relevant foreign currency. The exchange gains or losses on the net
equity investment of these operations are reflected in the accumulated other comprehensive income account in
shareholders’ equity, as part of the currency translation adjustment.
The Corporation enters into foreign currency forward contracts and options to hedge the variability in the foreign currency
exchange rates of certain currencies against the Canadian dollar. As at December 31, 2023, the net fair market value gain of
these forward contracts and options amounted to $10.0 million, and a gain of $22.0 million was recorded in net earnings in
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-47
2023. The largest hedged currency outstanding as at December 31, 2023 represents a nominal amount of $734.6 million US
dollars.
The Corporation holds interest rate swap agreements for a nominal amount of $325.0 million US dollars to hedge the
variability in interest rates of its US-dollar denominated debt. The fair market value gain of these interest rate swap
agreements as at December 31, 2023 amounted to $6.7 million and the change in fair value was recorded in other
comprehensive loss.
The Corporation holds cross-currency interest rate swap agreements for a nominal amount of $1.0 billion Canadian dollars to
hedge the variability in the USD/CAD currency risk of the Corporation’s net investment in foreign entities having the USD as
their functional currency. The fair market value loss of these cross-currency interest rate swaps agreements as at
December 31, 2023 amounted to $2.5 million and the change in fair value was recorded in other comprehensive loss.
In 2023, the Corporation entered into cross-currency interest rate swap agreements to hedge the variability in multiple
currencies to the Canadian dollar, as well as the variability in interest rates of multiple foreign currency-denominated debts.
The cross-currency component and interest rate component of each of these financial instruments are bifurcated and each
component designated as either a net investment hedge or cash flow hedge, respectively. The fair market value net loss of
these cross-currency interest rate swaps agreements as at December 31, 2023 amounted to $19.5 million and the changes in
fair value were recorded in other comprehensive loss.
In 2023, the Corporation entered into interest rate collar agreements for a nominal amount of $300.0 million US dollars to
hedge the variability in interest rates of its US-dollar denominated debt. The fair market value gain of these interest rate
collar agreements as at December 31, 2023 amounted to $0.3 million and the change in fair value was recorded in other
comprehensive loss.
In 2023, the Corporation entered into cross-currency interest rate swap agreements for a nominal amount of $275 million
Australian dollars to hedge the variability in the Australian dollar to the US dollar, as well as variability in interest rates.
These financial instruments are not designated in a hedging relationship. The fair market value loss of these cross-currency
interest rate swaps agreements as at December 31, 2023 amounted to $12.9 million and the change in fair value was recorded
in net earnings.
The Corporation enters into derivative financial instruments with Canadian financial institutions to limit the Corporation's
exposure to the variability of cash-settled long-term incentive plan (“LTIP”) share unit compensation plans caused by
fluctuations in its common share price. The value of the derivative financial instruments fluctuates in accordance with the
movement of the Corporation's common share price and are classified as fair value through profit or loss. As such, they are
measured at fair value on the consolidated statement of financial position and the mark-to-market gain or loss pertaining to
derivative financial instruments is recorded in personnel costs and financing expense as an offset of the revalutation of the
LTIP liability. As at December 31, 2023, the Corporation had hedges outstanding for 660,000 of its common shares, with total
fair value gain of $8.9 million (for 780,000 shares, with a loss of $6.9 million as at December 31, 2022). In 2023, mark-to-market
variations on LTIP hedging instruments recorded in net earnings were a gain of $17.2 million (a loss of $20.6 million in 2022).
Taking into account the amounts denominated in foreign currencies and presuming that all of the other variables remain
unchanged, a fluctuation in exchange rates would have an impact on the Corporation’s net earnings and equity.
Management believes that a 10% change in exchange rates could be reasonably possible. The table below summarizes the
impacts on net earnings and other comprehensive income of a 10% weakening or strengthening in exchange rates against
the Canadian dollar, for the years ended December 31:
Net earnings
Other comprehensive income
US dollar
$
25.3
342.7
Pound
sterling
$
6.7
63.2
Australian
dollar
$
5.2
62.7
2023
Swedish
krona
$
3.2
20.9
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
Net earnings
Other comprehensive income
INTEREST RISK
US Dollar
$
18.2
453.3
Pound
sterling
$
7.5
54.5
Australian
Dollar
$
3.7
39.8
F-48
2022
Swedish
krona
$
1.9
16.5
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Corporation’s exposure to the risk of changes in market interest rates relates primarily to its
long-term debt and other non-current financial liabilities with floating interest rates. This risk is partially offset by cash held
at variable rates.
Management believes a 100-basis point change in interest rates is reasonably possible. An 100-basis point increase in interest
rates, all other variables held constant, would decrease the Corporation’s net earnings by of $13.8 million. An 100-basis point
decrease in interest rates, all other variables held constant, would increase the Corporation’s net earnings by of $15.7 million.
LIQUIDITY RISK
Liquidity risk is the risk that the Corporation will encounter difficulties in meeting its obligations as they fall due.
A centralized treasury function ensures that the Corporation maintains funding flexibility by assessing future cash flow
expectations and by maintaining sufficient headroom on its committed borrowing facilities. Borrowing limits, cash
restrictions and compliance with debt covenants are also taken into account.
The Corporation watches for liquidity risks arising from financial instruments on an ongoing basis. Management monitors
the liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom
on its undrawn committed borrowing facilities at all times. WSP has access to committed lines of credit with banks, as
described in note 24, Long-term debt.
The tables below presents the contractual maturities of financial liabilities as at December 31, 2023 and 2022. The amounts
disclosed are contractual undiscounted cash flows.
Less than
a year 1 an
$
2,738.3
46.8
319.5
743.7
3,848.3
Between
d 2 years
$
—
—
244.1
734.8
978.9
2023
More than
2 years
$
—
—
598.9
2,380.2
2,979.1
Accounts payable and accrued liabilities
Dividends payable to shareholders
Lease liabilities
Long-term debt
Carrying C
amount
$
2,738.3
46.8
1,002.1
3,262.5
7,049.7
ontractual
cash flows
$
2,738.3
46.8
1,162.5
3,858.7
7,806.3
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
Accounts payable and accrued liabilities
Dividends payable to shareholders
Lease liabilities
Long-term debt
Carrying C
amount
$
2,736.4
46.7
1,129.8
2,954.5
6,867.4
ontractual
cash flows
$
2,736.4
46.7
1,298.6
3,411.9
7,493.6
Less than
a year 1 an
$
2,736.4
46.7
325.4
345.6
3,454.1
Between
d 2 years
$
—
—
265.5
707.0
972.5
F-49
2022
More than
2 years
$
—
—
707.7
2,359.3
3,067.0
As at December 31, 2023, the Corporation had amounts available under the credit facility of $1,467.8 million ($1,857.4 million
in 2022), net of outstanding letters of credit of $148.9 million ($141.8 million in 2022). The Corporation's cash and cash
equivalents, net of bank overdraft, as at December 31, 2023 was $361.9 million ($491.0 million in 2022).
14 TRADE AND OTHER RECEIVABLES
As at December 31
Net trade receivables
Other receivables
Derivative financial instruments
Amounts due from joint ventures and associates
2023
$
2,364.2
328.5
25.9
7.8
2,726.4
2022
$
2,232.6
351.7
33.3
8.2
2,625.8
In applying the simplified approach to measuring expected credit losses, the Corporation does not track changes in credit
risk and therefore does not assign credit risk rating grades to trade receivables. The Corporation does track the aging of
gross trade receivables past due, which was as follows:
As at December 31
Current
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days
Past due over 180 days
Trade receivables
Allowance for expected credit loss
Net trade receivables
2023
$
907.7
714.0
306.0
182.3
182.4
241.8
2,534.2
(170.0)
2,364.2
2022
$
847.7
732.0
286.4
122.0
168.9
233.2
2,390.2
(157.6)
2,232.6
The Corporation is exposed to credit risk with respect to its trade receivables and maintains provisions for potential credit
losses. Potential for such losses is mitigated because customer creditworthiness is evaluated before credit is extended and no
single customer represented more than 10% of revenues. During the year ended December 31, 2023, the Corporation
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-50
recognized net credit losses of $18.8 million (net recovery of previously recognized allowance for expected credit losses of
$9.3 million in 2022).
15 CONTRACT BALANCES
Changes in costs and anticipated profits in excess of billings (contract assets) and in billings in excess of costs and anticipated
profits (contract liabilities) are as follows:
Costs and
anticipated
profits in excess
of billings
$
1,626.2
2023
Billings in
excess of costs
and anticipated
profits
$
(973.1)
Costs and
anticipated
profits in excess
of billings
$
1,156.4
2022
Billings in
excess of costs
and anticipated
profits
$
(751.1)
—
—
(3,339.6)
3,167.5
11,269.7
(10,978.0)
15.8
(22.1)
1,911.6
—
—
(25.6)
12.8
(1,158.0)
—
—
9,523.9
(9,224.2)
123.9
46.2
1,626.2
(2,536.6)
2,409.0
—
—
(73.0)
(21.4)
(973.1)
Balance - As at January 1
Increases due to cash received or amounts invoiced
prior to rendering of services
Transfers to revenues once related services have
been deemed rendered
Additions to contract assets through revenues
recognition
Transfers from costs and anticipated profits in
excess of billings to trade receivables
Changes due to business acquisitions and disposals
(note 5)
Effect of exchange rate changes
Balance - As at December 31
In the year ended December 31, 2023, revenue recognized that was included in contract liability as at January 1, 2023
amounted to $819.7 million ($738.7 million in 2022). In the year ended December 31, 2023, revenue recognized from
performance obligations satisfied or partially satisfied in previous years amounted to $86.2 million ($22.4 million in 2022).
Unfulfilled performance obligations, representing the Corporation's remaining contractual obligations related to signed
cost-plus contracts with ceilings and fixed-price contracts on which work has commenced, amounted to $11.4 billion as of
December 31, 2023 ($11.1 billion as at December 31, 2022). Cost-plus contracts without stated ceilings have been excluded as
the full amount of the contracted work cannot be definitively assessed.
Timing of contract execution is subject to many factors outside of the Corporation's control. Project scope changes, client-
driven time lines and customers' project financing are just a few examples of such factors. The Corporation estimates that
approximately 60% of the unfulfilled performance obligations as at December 31, 2023 will unwind over the following
12 months.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-51
16 OTHER FINANCIAL ASSETS
As at December 31
Investments in securities
Other
2023
$
123.1
0.2
123.3
2022
$
107.4
0.8
108.2
Investments in securities include investments in a multitude of mutual funds, based on employees’ investment elections,
with respect to the deferred compensation obligations of the Corporation in the US as disclosed in note 9, Pension schemes.
The fair value of these investments is $122.6 million ($107.0 million in 2022), determined by the market price of the funds at
the reporting date, which are Level 1 inputs (unadjusted quoted prices in active markets for identical assets).
17 RIGHT-OF-USE ASSETS AND LEASE
LIABILITIES
RIGHT-OF-USE ASSETS
Balance - Beginning of year
Additions through business acquisitions
and measurement period adjustments
Additions
Lease renewals, reassessments and
modifications
Disposal of a business
Depreciation expense
Impairment
Utilization of lease inducement
allowances
Exchange differences
Balance - End of year
For the year ended
December 31, 2023
Real estate Equipment
$
43.2
$
935.7
Total Real estate Equipment
$
31.1
$
830.4
$
978.9
For the year ended
December 31, 2022
Total
$
861.5
43.1
97.3
65.9
(5.7)
(293.5)
(65.1)
8.9
(6.4)
780.2
2.0
22.1
0.1
—
(22.9)
—
—
(0.5)
44.0
45.1
119.4
66.0
(5.7)
(316.4)
(65.1)
8.9
(6.9)
824.2
125.7
144.0
95.5
—
(270.9)
(17.1)
15.3
12.8
935.7
17.5
12.9
(1.5)
—
(17.6)
—
—
0.8
43.2
143.2
156.9
94.0
—
(288.5)
(17.1)
15.3
13.6
978.9
In 2023 and 2022, the Corporation recorded impairment charges against certain real estate right-of-use assets, in the context
of on-going reorganizations as part of its real estate strategy.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-52
LEASE LIABILITIES
For the year ended
December 31, 2023
Real estate Equipment
$
39.9
$
1,089.9
Total Real estate Equipment
$
26.3
$
1,129.8
$
994.0
For the year ended
December 31, 2022
Total
$
1,020.3
Balance - Beginning of year
Additions through business acquisitions
and measurement period adjustments
Additions
Lease renewals, reassessments and
modifications
Disposal of a business
Interest expense on lease liabilities
(note 11)
Payments
Exchange differences
Balance - End of year
Current portion of lease liabilities
Non-current portion of lease liabilities
36.1
97.3
64.3
(6.0)
39.0
(349.6)
(8.5)
962.5
239.7
722.8
1.5
22.1
—
—
1.9
(25.5)
(0.3)
39.6
17.8
21.8
37.6
119.4
64.3
(6.0)
40.9
(375.1)
(8.8)
1,002.1
257.5
744.6
130.5
144.0
92.5
—
36.4
(323.5)
16.0
1,089.9
255.3
834.6
19.0
12.9
(2.3)
—
1.0
(17.8)
0.8
39.9
17.7
22.2
149.5
156.9
90.2
—
37.4
(341.3)
16.8
1,129.8
273.0
856.8
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-53
18 INTANGIBLE ASSETS
Software
$
Contract
backlogs
$
Customer
relation-
ships
$
Balance as at January 1, 2022
Cost
Accumulated amortization
Net value
Additions
Additions through business acquisitions and
measurement period adjustments (note 5)
Amortization for the year
Exchange differences
Balance as at December 31, 2022
Balance as at December 31, 2022
Cost
Accumulated amortization
Net value
Additions
Additions through business acquisitions and
measurement period adjustments (note 5)
Disposals through business disposals
Amortization for the year
Exchange differences
Balance as at December 31, 2023
Balance as at December 31, 2023
Cost
Accumulated amortization
Net value
218.2
(147.2)
71.0
35.6
1.8
(60.8)
(0.9)
46.7
217.9
(171.2)
46.7
123.3
2.6
—
(40.0)
(0.1)
132.5
320.4
(187.9)
132.5
Trade
names
$
105.2
(5.3)
99.9
Total
$
981.5
(431.6)
549.9
171.9
(138.6)
33.3
486.2
(140.5)
345.7
—
—
—
35.6
208.0
(33.1)
2.4
210.6
266.6
(56.0)
210.6
—
20.6
(1.0)
(88.7)
(1.5)
140.0
234.2
(94.2)
140.0
465.5
(72.5)
15.0
753.7
972.5
(218.8)
753.7
—
(7.0)
(1.3)
91.6
104.2
(12.6)
91.6
675.3
(173.4)
15.2
1,102.6
1,561.2
(458.6)
1,102.6
—
—
123.3
77.2
(2.7)
(84.2)
(6.5)
737.5
1,028.6
(291.1)
737.5
10.1
—
(8.8)
1.2
94.1
115.3
(21.2)
94.1
110.5
(3.7)
(221.7)
(6.9)
1,104.1
1,698.5
(594.4)
1,104.1
The carrying amount of intangible assets assessed as having an indefinite useful life, which consists of the WSP trade name,
is $48.0 million as at December 31, 2023 ($46.7 million in December 31, 2022).
In 2023, the Corporation acquired intangible assets amounting to $233.8 million ($710.9 million in 2022), all of which are
subject to amortization.
WSP Global Inc.
Consolidated Financial Statements
2023
F-54
Total
$
924.2
(560.6)
363.6
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
19 PROPERTY AND EQUIPMENT
Freehold
land and
buildings
$
Leasehold
improve-
ments
$
Furniture
and
equipment
$
Computer
equipment
$
Balance as at January 1, 2022
Cost
Accumulated depreciation
Net value
Additions
Additions through business acquisitions and
measurement period adjustments (note 5)
Disposals, including through business disposals
Depreciation
Impairment
Exchange differences
Balance as at December 31, 2022
Balance as at December 31, 2022
Cost
Accumulated depreciation
Net value
Additions
Additions through business acquisitions and
measurement period adjustments (note 5)
Disposals, including through business disposals
Depreciation
Impairment
Exchange differences
Balance as at December 31, 2023
Balance as at December 31, 2023
Cost
Accumulated depreciation
Net value
30.8
(7.4)
23.4
0.1
0.4
—
(1.0)
(4.5)
1.1
19.5
26.2
(6.7)
19.5
285.3
(155.4)
129.9
303.5
(206.5)
97.0
304.6
(191.3)
113.3
23.4
29.6
77.8
130.9
3.6
(0.1)
(29.8)
—
4.6
131.6
15.3
(0.8)
(29.3)
—
(1.5)
110.3
0.4
(0.7)
(54.5)
—
1.2
137.5
19.7
(1.6)
(114.6)
(4.5)
5.4
398.9
299.6
(168.0)
131.6
340.3
(230.0)
110.3
363.6
(226.1)
137.5
1,029.7
(630.8)
398.9
—
27.4
44.8
87.7
159.9
32.2
—
(1.1)
—
3.2
53.8
61.8
(8.0)
53.8
0.2
(1.2)
(32.1)
(16.1)
(1.3)
108.5
0.4
(4.3)
(30.7)
(1.6)
(0.3)
118.6
0.8
(0.1)
(71.2)
—
(0.3)
154.4
33.6
(5.6)
(135.1)
(17.7)
1.3
435.3
319.7
(211.2)
108.5
366.7
(248.1)
118.6
443.1
(288.7)
154.4
1,191.3
(756.0)
435.3
In 2023, the Corporation recorded impairment charges against certain leasehold improvements and furniture & equipment,
in the context of on-going reorganizations as part of its real estate strategy.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
20 GOODWILL
Balance – As at January 1
Goodwill resulting from business acquisitions
Measurement period adjustments
Disposal of a business
Exchange differences
Balance – As at December 31
2023
$
6,792.2
296.4
163.6
(28.4)
(68.0)
7,155.8
F-55
2022
$
4,762.3
1,885.4
4.8
—
139.7
6,792.2
In August 2023, WSP sold Louis Berger Services, Inc. (“LBS”) to Versar Inc., a global engineering, environmental, and security
services company. LBS specializes in operations and maintenance services for complex infrastructure assets at mission-
essential defense and civilian facilities worldwide and employed approximately 1,400 people at the time of the divestiture.
Goodwill is allocated to the Corporation’s CGUs. The carrying value of goodwill by CGU is identified in the table below:
As at December 31
Goodwill allocated to CGUs
US
Canada
UK
Nordic Europe
Australia
New Zealand
Central Europe
Asia
Latin America
Middle East
2023
$
3,566.3
1,712.8
448.2
344.4
488.9
180.6
201.5
84.0
75.3
53.8
7,155.8
2022
$
3,563.6
1,654.7
417.7
345.6
283.1
185.4
127.9
85.6
73.6
55.0
6,792.2
IMPAIRMENT TEST OF LONG-LIVED ASSETS
The Corporation performed its annual impairment test for goodwill and other indefinite-lived intangible assets as at
September 30, 2023 in accordance with its policy described in note 2, Material accounting policies. The key assumptions used
to determine the fair value of each CGUs for 2023 are discussed below. The Corporation has not identified any indicators of
impairment at any other date and as such has not completed an additional impairment calculation.
VALUATION TECHNIQUE
FAIR VALUE LESS COSTS TO SELL ("FVLCS")
The recoverable amount of a CGU is determined based on the FVLCS. Fair value measurement is a market-based
measurement rather than an entity-specific measurement. The fair value of a CGU must be measured using the assumptions
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-56
that market participants would use rather than those related specifically to the Corporation. In determining the FVLCS, an
income approach using the discounted cash flow methodology was utilized. The inputs used in the discounted cash flows
model are Level 3 inputs (inputs not based on observable market data). In addition, the market approach was employed in
assessing the reasonableness of the conclusions reached.
INCOME APPROACH
Management has determined that the discounted cash flow (“DCF”) technique provides the best assessment of what a CGU
could be exchanged for in an arm’s length transaction. Fair value is represented by the present value of expected future cash
flows of the business together with the terminal value of the business at the end of the forecast period. The DCF technique
was applied on an enterprise-value basis, where the after-tax cash flows prior to interest expense are discounted using a
weighted average cost of capital (“WACC” or “discount rate”). This approach requires assumptions regarding revenue
growth rates, adjusted EBITDA margins, level of working capital, capital expenditures, tax rates and discount rates.
MARKET APPROACH
It is assumed under the market approach that the value of a CGU reflects the price at which comparable companies in the
same industry are purchased under similar circumstances. A comparison of a CGU to similar companies in the same industry
whose financial information is publicly available may provide a reasonable basis to estimate fair value. Fair value under this
approach is calculated based on an adjusted EBITDA multiple compared to the average median multiple based on publicly
available information for comparable companies and transaction prices.
MATERIAL ESTIMATES USED IN DETERMINING THE FVLCS
CASH FLOW PROJECTIONS
The cash flow projections are based on the financial forecast approved by Management and the Board of Directors. These
projections use assumptions that reflect the Corporation’s most likely planned course of action, given Management’s
judgment of the most probable set of economic conditions, adjusted to reflect the expectations of a market participant.
Adjusted EBITDA margin is based on budgeted values in the first year of the five-year projection period (“projection period”),
with increases over the projection period using an estimated revenue growth rate. The revenue growth rates applied
following the first year's projections ranged from 2.0% to 5.0%. The adjusted EBITDA margin ranged from 11.8% to 23.5%.
Management considered past experience, economic trends as well as industry and market trends in assessing reasonableness
of financial projections used.
DISCOUNT RATE
The discount rate reflects the current market assessment of the risk specific to comparable companies. The discount rate was
based on the weighted average cost of equity and cost of debt for comparable companies within the industry. The discount
rate represents the after-tax WACC. Determining the WACC requires analyzing the cost of equity and debt separately, and
takes into account a risk premium that is based on the applicable CGU. The discount rate applied ranged from 8.0% to 11.0%.
TERMINAL GROWTH RATE
Growth rates used to extrapolate the Corporation’s projection were determined using published industry growth rates in
combination with inflation assumptions and the input of each CGU’s management group based on historical trend analysis
and future expectations of growth. The terminal growth rate applied was 2.0%.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-57
SENSITIVITY TO CHANGES IN ASSUMPTIONS
The following analyses are presented in isolation from one another, i.e. all other estimates left unchanged:
A 5% decrease, evenly distributed over future periods, in the expected future net cash inflows would not have resulted in an
impairment of goodwill in any CGU.
An increase of 50 basis points in the discount rates used to perform the impairment tests would not have resulted in an
impairment of goodwill in any CGU.
A decrease of 25 basis points in the terminal growth rates used to perform the impairment tests would not have resulted in
an impairment of goodwill in any CGU.
21 OTHER ASSETS
As at December 31
Investments in associates
Investments in joint ventures
Receivables from insurance companies
Retirement benefit assets (note 9)
Other
2023
$
89.8
35.6
70.7
15.2
6.0
217.3
2022
$
87.8
32.4
57.0
—
6.4
183.6
22 ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES
As at December 31
Trade payables
Employee benefits payable
Accrued expenses and other payables
Sales taxes payable
Derivative financial instruments
Amounts due to joint ventures and associates
2023
$
1,107.8
944.4
525.6
128.6
25.9
6.0
2,738.3
2022
$
1,038.8
952.2
587.0
121.3
33.3
3.8
2,736.4
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
23 PROVISIONS
Balance as at January 1, 2023
Additions through business acquisitions
Additional provision recognized
Utilized or reversed
Exchange differences
Balance as at December 31, 2023
Current portion
Non-current portion
Claims
provisions
$
Other
provisions
$
311.3
68.9
109.9
(63.2)
(3.6)
423.3
98.1
325.2
129.8
41.8
7.4
(68.9)
0.8
110.9
36.8
74.1
F-58
Total
$
441.1
110.7
117.3
(132.1)
(2.8)
534.2
134.9
399.3
Some of the claims provisioned qualify under the Corporation's insurance coverage for reimbursement and as such
receivables from insurance companies are recorded for certain claims in other receivables (note 14) for current claims and in
other assets (note 21) for long-term claims.
24 LONG-TERM DEBT
As at
Borrowings under credit facilities
Senior unsecured notes
Bank overdraft
Other financial liabilities
Current portion
Non-current portion
2023
$
2,124.7
996.2
16.1
125.5
3,262.5
204.2
3,058.3
2022
$
2,401.3
500.0
4.6
48.6
2,954.5
173.4
2,781.1
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-59
The table below presents the contractual maturities of long-term debt as at December 31, 2023. The amounts disclosed are
contractual principal repayments and exclude interest payments.
Carrying Within 12
months
amount
$
$
—
369.9
132.4
1,754.8
—
996.2
16.1
16.1
55.7
125.5
204.2
3,262.5
12 to 24
months
$
—
562.8
—
—
24.3
587.1
24 to 36 More than
36 months
months
$
$
267.0
102.9
529.8
529.8
996.2
—
—
—
23.4
22.1
1,816.4
654.8
US$1.50-billion credit facility
US$1,325-million term loans
Senior unsecured notes
Bank overdraft
Other financial liabilities
CREDIT FACILITIES
WSP has in place a US$1.5-billion credit facility with a syndicate of financial institutions comprised of:
- a senior unsecured revolving credit facility to a maximum amount of US$500.0 million maturing in April 2026; and
- a senior unsecured revolving credit facility to a maximum amount of US$1.0 billion maturing in April 2028.
The amount available under the US$1.5-billion credit facility was $1,467.8 million (US$1,108.3 million) as at December 31,
2023.
WSP has in place a US$325-million credit facility. As at December 31, 2023 this committed credit facility has been fully drawn
in the form of a term loan maturing in April 2025.
WSP has in place a fully-committed US$1.0-billion credit facility in the form of term loans with various tenors of up to 4
years. As at December 31, 2023, the US$1.0-billion credit facility was fully drawn.
The US$1.5-billion credit facility bears interest at Canadian prime rate, US-based rate, Bankers’ acceptances rate or Term
SOFR (Secured Overnight Financing Rate) plus an applicable margin of up to 2.00% that will vary depending on the type of
advances. The Corporation pays a commitment fee on the available unused credit facility.
Under the US$1.5-billion, the US$325-million and the US$1.0-billion credit facilities, the Corporation is required, among
other conditions, to respect certain covenants on a consolidated basis. The main covenants are in regard to its consolidated
funded debt to consolidated adjusted EBITDA and the interest coverage ratios. Management reviews compliance with these
covenants on a quarterly basis in conjunction with filing requirements under its credit facilities. All covenants have been
met as at December 31, 2023 and December 31, 2022. Borrowings under these credit facilities were mostly denominated in US
dollars as at December 31, 2023 and December 31, 2022.
Under the US$1.5-billion credit facility and other facilities, as at December 31, 2023, the Corporation may issue irrevocable
letters of credit up to $936.0 million ($954.2 million as at December 31, 2022). As at December 31, 2023, the Corporation issued
irrevocable letters of credit totaling $597.6 million ($559.5 million as at December 31, 2022).
As at December 31, 2023, the Corporation had available other operating lines of credit amounting to $216.6 million
($181.3 million as at December 31, 2022), of which $193.0 million were unused at year end ($168.1 million as at
December 31, 2022).
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-60
SENIOR UNSECURED NOTES
WSP has senior unsecured notes outstanding, issued at par (the “Notes”), with a book value of $996.2 million. The table below
describe the key terms of the Notes.
Issuance date
Face Fixed interest rate
per annum
value
Maturity date
Semi annual interest payment dates
April 19, 2021
$
November 22, 2023 $
500.0
500.0
2.408 %
April 19, 2028
5.548 % November 22, 2030
19th day of April and October in each year
22nd day of May and November in each year
The Notes are senior unsecured obligations of WSP, ranked pari passu with all other unsecured and unsubordinated
indebtedness of WSP, issued pursuant to a Trust Indenture, as supplemented by a first supplemental indenture, each dated
April 19, 2021 and November 22, 2023, respectively.
INTEREST-RATE HEDGING
The Corporation uses a combination of interest swaps and fixed rate debt to hedge its exposure to interest rate fluctuations.
As at December 31, 2023, 66% of the Corporation's long-term debt is protected against interest rate fluctuations either
through the usage of interest rate swaps, options and/or fixed rate debt.
25 SHARE CAPITAL
AUTHORIZED
An unlimited number of common shares without par value, voting and participating.
An unlimited number of preferred shares without par value, participating, issuable in series.
ISSUED AND PAID
Balance as at January 1, 2022
Shares issued related to bought deal public offering
Shares issued related to private placements
Shares issued under the Dividend Reinvestment Plan (DRIP)
Shares issued upon exercise of stock options
Balance as at December 31, 2022
Shares issued under the DRIP
Shares issued upon exercise of stock options
Balance as at December 31, 2023
2022 Equity Financing
Number
Common shares
$
117,783,015
3,031,400
3,032,550
584,457
22,295
124,453,717
147,859
62,374
124,663,950
3,801.2
445.9
446.1
89.2
2.0
4,784.4
24.6
6.3
4,815.3
On August 16, 2022, the Corporation completed a bought deal public offering (the “Offering”) of common shares of the
Corporation (the “Offering Common Shares”) and a private placement (the "Concurrent Private Placement") of common
shares of the Corporation (the “Private Placement Common Shares”) for aggregate gross proceeds of $920.2 million.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-61
The Corporation issued from treasury 3,031,400 Offering Common Shares, including 395,400 Offering Common Shares issued
as a result of the exercise of the over-allotment option at a price of $151.75 per Offering Common Share for aggregate gross
proceeds of $460.0 million.
In addition, the Corporation issued 3,032,550 Private Placement Common Shares at a price of $151.75 per Private Placement
Common Share by way of the Concurrent Private Placement with GIC Pte. Ltd. ("GIC"), Caisse de dépôt et placement du
Québec ("CDPQ") and a subsidiary of Canada Pension Plan Investment Board ("CPP Investments") for aggregate gross
proceeds of $460.2 million, which includes 395,550 Private Placement Common Shares issued pursuant to the exercise in full
of the additional subscription options.
Preferred Shares
As at December 31, 2023, no preferred shares were issued.
26 CAPITAL MANAGEMENT
The Corporation’s primary objectives when managing capital structure are as follows:
• maintain financial flexibility in order to meet financial obligations, to provide dividends, to execute growth plan
and to continue growth through business acquisitions;
• manage the Corporation’s activities in a responsible way in order to provide an adequate return for its shareholders;
and
comply with financial covenants required under the credit facilities.
•
For capital management, the Corporation has defined its capital as the combination of borrowings under credit facilities,
shareholders’ equity and non‑controlling interest, net of cash (net of bank overdraft).
As at December 31
Borrowings under credit facilities
Senior unsecured notes
Equity attributable to shareholders of WSP Global Inc.
Non-controlling interests
Less: Cash and cash equivalents, net of bank overdraft
2023
$
2,124.7
996.2
6,328.9
4.5
9,454.3
(361.9)
9,092.4
2022
$
2,401.3
500.0
6,006.0
3.1
8,910.4
(491.0)
8,419.4
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-62
The Corporation’s financing strategy is to maintain a flexible structure consistent with the objectives stated above, to
respond adequately to changes in economic conditions and to allow growth organically and through business acquisitions.
The Corporation monitors its capital structure using the consolidated net debt to consolidated adjusted EBITDA ratio. This
ratio is used to determine what the maximum debt level could be.
As at December 31
Long-term debt(1)
Less: Cash and cash equivalents (note 28)
Net debt
For the years ended December 31
Adjusted EBITDA
Net debt to adjusted EBITDA ratio
(1)
Including current portion.
2023
3,262.5
(378.0)
2,884.5
2023
1,921.3
1.5
2022
2,954.5
(495.6)
2,458.9
2022
1,530.2
1.6
In order to maintain and adjust its capital structure, the Corporation may issue new shares in the market, contract bank
loans and negotiate new credit facilities.
27 DIVIDENDS
In 2023, the Corporation declared dividends of $186.9 million or $1.50 per share ($181.8 million or $1.50 per share in 2022).
Subsequent to the end of the year, on February 28, 2024, the Board of Directors of the Corporation declared a quarterly
dividend of $0.375 per common share of the Corporation, payable on or about April 15, 2024, to shareholders of record as at
the close of business on March 31, 2024. The final aggregate amount of the dividend payment will depend on the number of
issued and outstanding common shares at the close of business on March 31, 2024, and has not been recognized as a liability
as at December 31, 2023.
DIVIDEND REINVESTMENT PLAN (DRIP)
Under the DRIP, the holders of common shares could elect to have cash dividends reinvested into additional common shares.
The shares to be delivered could be purchased on the open market or issued from treasury at the discretion of Management.
The shares issued from treasury could be issued at a discount of up to 5.0% of the applicable average market price.
In 2023, the Board approved the termination of the DRIP in accordance with its terms, effective May 10, 2023 (the “Effective
Date”). Upon the termination of the DRIP, all cash dividends or distributions on the Corporation's common shares with a
record date for payment of such dividend or distribution after the Effective Date are being paid in cash rather than in shares
of the Corporation.
Following the payment of dividends declared on November 9, 2022 and March 8, 2023, $24.6 million was reinvested in 147,859
common shares under the DRIP during the year ended December 31, 2023. Shares issued under the DRIP in 2023 and 2022
applied a 2% discount of the applicable average market price.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
28 STATEMENTS OF CASH FLOWS
CASH AND CASH EQUIVALENTS, NET OF BANK OVERDRAFT
As at
Cash on hand and with banks
Less: Bank overdraft (note 24)
Cash and cash equivalents, net of bank overdraft
2023
$
378.0
(16.1)
361.9
F-63
2022
$
495.6
(4.6)
491.0
In 2023, cash disbursed related to acquisitions made prior to January 1, 2023 amounted to $42.2 million ($34.8 million in 2022,
related to acquisitions made prior to January 1, 2022).
ADJUSTMENTS
For the years ended December 31
Depreciation, amortization and impairment of long-lived assets
Non-cash movements in investment tax credits
Share of income of associates and joint ventures, net of tax
Defined benefit pension scheme expense
Cash contribution to defined benefit pension schemes
Foreign exchange and non-cash movements
Gains on disposal of property and equipment
Other
CHANGE IN NON-CASH WORKING CAPITAL ITEMS
For the years ended December 31
Decrease (increase) in:
Trade, prepaid and other receivables
Costs and anticipated profits in excess of billings
Increase (decrease) in:
Accounts payable and accrued liabilities
Billings in excess of costs and anticipated profits
2023
$
760.3
(28.5)
(29.7)
10.7
(9.8)
(2.5)
(1.0)
(40.6)
658.9
2023
$
(119.9)
(291.7)
(46.2)
172.1
(285.7)
2022
$
598.1
(37.5)
(24.0)
1.4
(13.6)
17.1
—
(4.7)
535.6
2022
$
(291.9)
(299.7)
179.2
127.7
(284.7)
WSP Global Inc.
Consolidated Financial Statements
2023
F-64
Total
$
2,841.2
654.3
157.8
247.1
3.5
112.9
114.2
4,131.0
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Long-term debt
$
Lease liabilities
$
Dividends
payable to
shareholders
$
Balance as at January 1, 2022
Changes from financing cash flows
Addition through business acquisitions and
measurement period adjustments
New leases, renewals, modifications
Net proceeds of bank overdraft
Foreign exchange rate adjustments
Other non-cash changes
Balance as at December 31, 2022
Changes from financing cash flows
Addition through business acquisitions and
measurement period adjustments, net of
business disposals
New leases, renewals, modifications
Net proceeds of bank overdraft
Foreign exchange rate adjustments
Other non-cash changes
Balance as at December 31, 2023
1,776.7
1,048.3
8.3
—
3.5
96.1
21.6
2,954.5
131.7
0.2
—
11.5
8.3
156.3
3,262.5
1,020.3
(303.9)
149.5
247.1
—
16.8
—
1,129.8
44.2
(90.1)
—
—
—
—
92.6
46.7
(334.2)
(162.2)
(364.7)
31.6
183.7
—
(8.8)
—
1,002.1
—
—
—
—
162.3
46.8
31.8
183.7
11.5
(0.5)
318.6
4,311.4
29 RELATED PARTY TRANSACTIONS
KEY MANAGEMENT PERSONNEL
Key management includes the Board of Directors, the President and Chief Executive Officer and the members of the GLT. The
following table shows the compensation paid or payable to key management included in personnel costs for the years ended
December 31:
Short-term employee benefits
Share-based awards
2023
$
27.9
35.6
63.5
2022
$
25.6
8.9
34.5
JOINT VENTURES AND ASSOCIATES
The Corporation related parties include its joint ventures and associates. Refer to note 14, Trade and other receivables, and
note 22, Accounts payables and accrued liabilities, for balances receivable and payable from and to these entities.
WSP Global Inc.
Consolidated Financial Statements
2023
WSP GLOBAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(Tabular figures in millions of Canadian dollars, except the number of shares and per share data and when otherwise stated)
F-65
30 CONTINGENT LIABILITIES
LEGAL PROCEEDINGS
The Corporation currently faces legal proceedings for services performed in the normal course of its business. The
Corporation defends such proceedings and adopts appropriate risk management measures to resolve and prevent such
proceedings. Furthermore, the Corporation secures general and professional liability insurance in order to manage the risks
related to such proceedings. Based on advice and information provided by its legal advisors and on its experience in the
resolution of similar proceedings, Management believes that the Corporation has accounted for sufficient provisions in that
regard and that the final outcome should not exceed the insurance coverage materially or should not have a material effect
on the financial position or operating results of the Corporation. The claims provision recognized as at December 31, 2023
amounted to $423.3 million ($311.3 million as at December 31, 2022). The movements in this provision are described in
note 23, Provisions.
REGULATORY INVESTIGATION AND ACTION
As a government contractor, the Corporation may be subject to laws and regulations that are more restrictive than those
applicable to non-government contractors. Government scrutiny of contractors’ compliance with those laws and regulations
through audits and investigations is inherent in government contracting, and, from time to time, Management receives
inquiries and similar demands related to the Corporation's ongoing business with government entities. Violations could
result in civil or criminal liabilities as well as suspension or debarment from eligibility for awards of new government
contracts or option renewals.
On December 27, 2019, over 100 plaintiffs filed suit in the US District Court for Washington, DC against a number of US
government contractors, including The Louis Berger Group Inc. and Louis Berger International Inc. (collectively, “LB”),
which the Corporation acquired in December 2018, alleging that between 2009 and 2017 they had violated the Anti-Terrorism
Act. The Corporation is of the view that LB has a strong defense to offer on both the legal aspects of the litigation and the
factual underpinnings in this complex and rarely litigated statute. The Corporation intends to vigorously defend this matter
and has filed Preliminary motions to dismiss. It is too early to predict the outcome of this suit.
WSP Global Inc.
Consolidated Financial Statements
2023
I
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FORWARD-LOOKING STATEMENTS
the joint arrangements into which the Corpora-
tion has or will enter; capital investments made
by the public and private sectors; relationships
with suppliers and subconsultants; relationships
with management, key professionals and other
employees of the Corporation; the maintenance
of sufficient insurance; the management of en-
vironmental, social and health and safety risks;
the sufficiency of the Corporation’s current and
planned information systems, communications
technology and other technology; compliance
with laws and regulations; future legal procee-
dings; the sufficiency of internal and disclosure
controls; the regulatory environment; impairment
of goodwill; foreign currency fluctuation; the tax
legislation and regulations to which the Corpora-
tion is subject and the state of the Corporation’s
benefit plans.
Although WSP believes that the expectations
reflected in such forward-looking statements
are reasonable, it can give no assurance that
such expectations will prove to have been correct.
These statements are subject to certain risks and
uncertainties and may be based on assumptions
that could cause actual results to differ materially
from those anticipated or implied in the forward-
looking statements, and such risks include, but are
not limited to, difficulty in accurately measuring,
evaluating and disclosing the company’s ESG
performance; the unwillingness of suppliers to dis-
close GHG emissions data and reduce emissions,
including for historical years; the deterioration
of our financial position or net cash position;
our working capital requirements; our accounts
receivable; our increased indebtedness and raising
capital; the impairment of long-lived assets; our
foreign currency exposure; our income taxes;
underfunded defined benefits obligations, and
any other risk factors described under section
20 “Risk Factors” of WSP's MD&A for the fourth
quarter and year ended December 31, 2023 which
is available on SEDAR+ at www.sedarplus.ca.
WSP's forward-looking statements are expressly
qualified in their entirety by this cautionary sta-
tement. The complete version of the cautionary
note regarding risk factors, which, if realized,
could cause the Corporation's actual results to
differ materially from those expressed or implied
in forward-looking statements, are discussed
in greater detail in section 20, “Risk factors” of
WSP's MD&A for the fourth quarter and year
ended December 31, 2023 which is available on
SEDAR+ at www.sedarplus.ca. The forward-
looking statements contained in this Annual
Report are made as of the date hereof and, ac-
cordingly, are subject to change after such date.
Except to the extent required by applicable law,
WSP does not assume any obligation to publicly
update or revise any forward-looking statements
made in this Annual Report or otherwise, whether
as a result of new information, future events or
otherwise.
Certain information regarding WSP contained
herein are not based on historical facts and
may constitute forward-looking statements or
forward-looking information under Canadian
securities laws (collectively, “forward-looking
statements”). Forward-looking statements may
include estimates, plans, strategic ambitions,
objectives, expectations, opinions, forecasts,
projections, guidance, outlook or other state-
ments that are not statements of fact. Forward-
looking statements made by the Corporation
in this Annual Report include statements that
reflect our expectations regarding the use of
our technical expertise to leverage innovations
for our clients, our commitment to provide sus-
tainable future-focused services to our clients,
our commitment to achieve net zero emissions
across our value chain by 2040, meeting our 2024
strategic financial ambitions, future growth,
results of operations, performance, business
prospects and opportunities, and the achievement
of our targets or ambitions under our 2022-2024
Global Strategic Action Plan, including financial
and ESG objectives.
These forward-looking statements are based on
a number of assumptions believed by the Corpo-
ration to be reasonable as at February 28, 2024,
including economic and market assumptions
regarding the competition, political environment
and economic performance of each region where it
operates; sufficiency of internal and external re-
-
sources, the continuation of supportive stakehol
der engagement and collaboration; our ability to
develop and implement various corporate and
business initiatives, including new procedures,
policies and targets to decarbonize our operations
and supply chain, reduce our energy consumption
and foster a new culture of low carbon behaviou-
ral change and choices; our ability to purchase
sufficient credible carbon credits and renewable
energy certificates to offset or further reduce
our greenhouse gas (GHG) emissions, if and when
required; Sufficient supplier and business partner
engagement and collaboration in reducing their
own GHG emissions; our ability to access and
implement all technology necessary to achieve
our science-based greenhouse gas emissions
reduction targets, as well as the development
and performance of such technology; no new
business acquisitions or technologies, invest-
ments or joint ventures that would materially
increase our anticipated levels of GHG emissions;
no negative impact on the calculation of our GHG
emissions from refinements in or modifications
to international standards; suppliers’ compliance
with our agreed requirements including the bu-
siness partner code of conduct, assumptions set
out through this Annual Report, assumptions
about the state of and access to global and local
capital and credit markets; interest rates; wor-
king capital requirements; the collection of ac-
counts receivable; the Corporation obtaining new
contract awards; the type of contracts entered
into by the Corporation; the anticipated margins
under new contract awards; the utilization of
the Corporation’s workforce; the ability of the
Corporation to attract new clients; the ability of
the Corporation to retain current clients; changes
in contract performance; project delivery; the
Corporation’s competitors; the ability of the
Corporation to successfully integrate acquired
businesses; the acquisition and integration of
businesses in the future; the Corporation’s ability
to manage growth; external factors affecting the
global operations of the Corporation; the current
or expected state of the Corporation’s backlog;
2023 ANNUAL REPORT
As one of the largest professional
services frms in the world, WSP
exists to future-proof our cities and
our environment. It provides strategic
advisory, engineering, and design
services to clients seeking sustainable
solutions in the transportation,
infrastructure, environment, building,
energy, water, and mining sectors.
Its 66,500 trusted professionals are
united by the common purpose of
creating positive, long-lasting impacts
on the communities it serves through
a culture of innovation, integrit,
and inclusion. In 2023, WSP reported
$14.4 B (CAD) in revenue. Te
Corporation’s shares are listed on the
Toronto Stock Exchange (TSX: WSP).
WSP Global Inc.
1600 René Lévesque Boulevard West
11th Floor, Montréal, Québec
Canada H3H 1P9
wsp.com