March 26, 2014 WE ARE WSP TD 2014 E&C Conference Pierre Shoiry, President & CEO 2 WE ARE WSP ONE OF THE WORLD’S LEADING PROFESSIONAL SERVICES FIRMS. MISSION “Be a solution-driven advisor with outstanding expertise.” VISION “Always be the first choice for clients, partners and employees.” 3 FIELDS OF EXPERTISE NET REVENUES PERCENTAGE BY MARKET SEGMENT* 4 3 1 2 1. 2. 3. 4. BUILDINGS………………….… INFRASTRUCTURE………..… INDUSTRIAL/ENERGY…….… ENVIRONMENT………….…… AN INTEGRATED MULTIDISCIPLINARY APPROACH 42% 31% 15% 12% Planning Environment Engineering and Design CONSULTANCY SERVICES THROUGHOUT THE ASSET LIFE CYCLE *As at December 31, 2013 Project Execution Services 4 A GLOBAL NETWORK OF EXPERTS 5 3,400 Northern Europe CONTINENTS 2,500 UK 4,400 Canada 1,100 USA 750 Asia 950 South America 1,450 Africa, India & Middle East 450 Australia 15,000 + 300 30 EMPLOYEES OFFICES COUNTRIES 5 OUR GEOGRAPHICAL PRESENCE NET REVENUES WE HAVE ONE OF THE WIDEST GEOGRAPHICAL SPREADS IN THE INDUSTRY WITH AN EXCEPTIONAL GLOBAL PRESENCE. PERCENTAGE BY GEOGRAPHY* 5 1 4 3 2 1. 2. 3. 4. 5. CANADA…………………. NORTHERN EUROPE…... UK…………………………. REST OF WORLD……….. USA……………………….. 31.6% 27.4% 16.7% 14.2% 10.1% *As at December 31, 2013 6 KEY FINANCIAL DATA $2.0 B REVENUES December 31, 2013 $1.7 B NET REVENUES December 31, 2013 $171.1 M EBITDA December 31, 2013 $1.5 B BACKLOG December 31, 2013 WE PROVIDE SERVICES TO TRANSFORM THE BUILT ENVIRONMENT AND ENHANCE THE NATURAL ENVIRONMENT. 7 HIGHLIGHTS OF FISCAL YEAR 2013 Fiscal 2013 outlook targets met Strong free cash flow, which amounted to 130% of net earnings Healthy backlog, up 5.4% year-over-year Positive net revenues organic growth of 2.6% Corporate reorganization and rebrand set foundation for growth Strong balance sheet supports M&A strategy 8 2013 FINANCIAL SCORECARD ACTUAL RESULT TARGET Not met Met $1,500 million to $1,700 million $1,677 million Approx. 10.5% of net revenues 10.8% Approx. 24% 25.3% Seasonality and EBITDA fluctuations Between 20% to 29%, the first quarter being the lowest and the third quarter being the highest Q1: 22% Q2: 24% Q3: 28% Q4: 26% Free cash-flow as a percentage of net earnings ˃100% 129.8% 90 to 95 days 91 Amortization of intangible assets, excluding software Approx. 1.3% of net revenues 1.3% Capital expenditures Approx. 2.5% of net revenues 1.7% Net revenues EBITDA margin* Tax rate DSO *Excluding restructuring charges Excee ded 9 STATEMENT OF FINANCIAL POSITION* (in millions of dollars) Total assets Financial liabilities Less: Cash and cash equivalents Net debt Net debt / TTM EBITDA *Prior to Focus acquisition and related financing Q4 2013 $1,859.9 $242.1 ($131.9) 110.2 0.6x 10 THE WSP OF TOMORROW – 2015 PLAN A STRONG WSP GLOBAL BRAND GROWTH EMPLOYEES 20,000 employees by 2015 CLIENTS 10% of our revenues from global clients OPERATIONAL EXCELLENCE 11.0 to 11.5% EBITDA margin 11% organic growth $500 M in net revenues through acquisitions OUR VISION ALWAYS BE THE FIRST CHOICE FOR CLIENTS, PARTNERS AND EMPLOYEES 11 TARGET GEOGRAPHIES FOR ACQUISITIONS CAPITALIZE (Canada, UK, Sweden) DRIVE (US, Australia, France, Germany, Finland, Norway) ASSESS (Peru, Brazil) BE OPPORTUNISTIC (other regions where we have a presence) 12 MARKET SECTOR FOCUS MARKET SEGMENT CAPITALIZE DRIVE DEVELOP Property & Buildings Industrial Energy Municipal Infrastructure Mining Oil & Gas High Rise Aviation Wind Power Rail Sustainable Development Transportation Environment PRIORITY SUBSEGMENTS SERVICES Project Management Program Management 13 OUR 2015 STRATEGIC PLAN IN NUMBERS Net Revenues $2.3 billion • Acquisitions: $500 million of top line growth EBITDA margins 11.0 to 11.5% • Economic recovery • Operational excellence (employee development, project management improvement) • Economies of scale and cost synergies DSO 85 days Debt level 1.5 to 2.0x pro-forma 2015 EBITDA 14 THE FOCUS ACQUISITION A WELL-ESTABLISHED ENGINEERING AND GEOMATICS FIRM PRINCIPALLY SERVING THE OIL AND GAS INDUSTRY THROUGHOUT WESTERN CANADA A leading firm in Western Canada, with approximately 1,700 employees Recognized platform Strong expertise in the oil and gas industry EXPERTISE IN UPSTREAM, OIL SANDS, MIDSTREAM AND LNG EXPORT INFRASTRUCTURE DEVELOPMENT PROJECTS 15 A WELL-BALANCED ARRAY OF SERVICES FACILITIES GEOMATICS PIPELINE CIVIL ENGINEERING WELL-DEVELOPED REPUTATION AND LONG-TERM TRACK-RECORD 16 A GOOD STRATEGIC FIT Expansion of WSP’s presence in Western Canada Opportunity to leverage multidisciplinary expertise and offer a full range of professional services to oil and gas clients Benefit from Focus’ long-standing relationships with blue-chip clients Expertise in oil and gas to be leveraged across international platform 17 PRO FORMA CANADIAN FOOTPRINT AND REVENUE BREAKDOWN* West 50% Quebec 30% Ontario 15% Atlantic 5% WSP offices: 4,400 employees Focus offices: 1,700 employees *Based on December 2013 pro forma revenues 18 A COMPLETE ALIGNMENT WITH OUR 2015 STRATEGIC PLAN STRATEGIC PLAN OBJECTIVE FOCUS ACQUISITION Capitalize on acquisition opportunities in countries where WSP is well-established Focus is a rare opportunity to consolidate and strengthen WSP’s position in its home market Develop energy and oil & gas market sectors Focus serves energy-related customers across Western Canada. Adds recognized industry leaders to its team Focus CEO, David Ackert and his management team add depth to our group and experience Employ 20,000 people Focus will add 1,700 employees, increasing WSP’s headcount by more than 10%. Generate $500 million of top-line growth from acquisitions With ±$280 million of revenues*, Focus will contribute approximately half this amount. Increase EBITDA margins to between 11.0% and 11.5% Focus’ margins are expected to increase WSP’s overall margin profile Achieve debt level of 1.5x to 2.0x EBITDA Deal will move WSP towards this range with debt capacity remaining for future acquisitions. *For the trailing 12-month period ending February 2014 19 TRANSACTION SUMMARY Cash purchase price of approximately $366M Transaction Financial Impact 1 2 3 Purchase price multiple is equivalent to approximately 8.3x1 TTM adjusted EBITDA of Focus for the period ending February 2014 Focus generated revenues of ±$280M for the TTM period ended February 2014 Approximately 10% accretive to 2013 EPS2 prior to any revenues and cost synergies nor any restructuring or integration expenses Annual dividend of $1.50 per share3 Payout ratio supported by Caisse and CPPIB’s commitment to DRIP for all dividends with a record date on or before September 30, 2014 The Purchase Price multiple is equivalent to approximately 8.3x the trailing 12-month Adjusted EBITDA of Focus for the period ended February 2014 and using the preliminary information for the month of February 2014, excluding any revenue and cost synergies Management expectations based on the financial information of Focus and WSP for the 12 months ended December 31, 2013, excluding any restructuring and integration charges If the closing of the offering occurs after 4:00 pm on March 31, 2014, holders of common shares will receive one dividend equivalent receipt entitling them to receive an amount equal to the annual dividend on April 15, 2014. 20 EXPECTED TIMELINE Acquisition to be completed through a plan of arrangement Expected completion on or about April 17, 2014, subject to customary closing conditions − Approval by holders of 662/3 of Focus shares present at special meeting (WSP obtained voting support agreements representing approximately 80% of Focus shares prior to announcement) − Competition Act approval − Approval by the B.C. Supreme Court 21 THANK YOU!