SNC SNC Lavalin Group Inc

MONTREAL, March 9, 2021 /CNW Telbec/ - SNC-Lavalin Group Inc. (TSX: SNC), a fully integrated professional services and project management company with offices around the world, today announced its results for the fourth quarter and year ended December 31, 2020.

Fourth Quarter Key Metrics from Continuing Operations and Highlights

• Net loss from continuing operations attributable to SNC-Lavalin shareholders of $322.9 million, or $(1.84) per diluted share.
• • Q4 2020 included, as announced on February 9, 2021, an aggregate amount of $480 million (before taxes) in charges, adjustments to provisions and claims receivable reductions, as well as a cost reassessment of the remaining Canadian LSTK Infrastructure projects in light of COVID-19.
    
    
• SNCL Engineering Services delivers solid Q4 results
• • Q4 2020 revenues of $1.5 billion.
  • Q4 2020 total Segment Adjusted EBIT⁽¹⁾ of $153.1 million, representing a 10.1% margin.
  • Q4 2020 Segment Adjusted EBIT to revenue ratio⁽²⁾ of 9.0%, 14.8% and 9.6% for EDPM, Nuclear and Infrastructure Services, respectively.
  • Q4 2020 net cash generated from operating activities of $250 million.
  • Q4 2020 bookings of $1.7 billion, representing a 1.10 booking-to-revenue ratio⁽⁶⁾. Backlog at $10.9 billion as at December 31, 2020.
    
    
• Financial position remains strong
• • As at December 31, 2020, the Company had cash and cash equivalents of $932.9 million and a net recourse debt to EBITDA ratio⁽⁷⁾ of 2.1 (calculated in accordance with the Company's Credit Agreement).

2021 Outlook provided for SNCL Engineering Services

• SNCL Engineering Services revenue for 2021 forecast to grow by a low single digit percentage, compared to 2020, and Segment Adjusted EBIT to revenue ratio⁽²⁾ expected to be between 8% and 10%.

IFRS Fourth Quarter and Year-End Financial Highlights

Non-IFRS Fourth Quarter and Year-End Financial Highlights

CEO Commentary

Ian L. Edwards, President and CEO of SNC-Lavalin Group Inc., made the following comments:

"Our Engineering Services business continued to deliver solid results in the quarter, with strong performance in our three segments, EDPM, Nuclear and Infrastructure Services. We have significantly improved our operating cash flows in 2020, Segment Adjusted EBIT margins remained strong, and the backlog for EDPM business increased by 9% year-over-year, despite COVID-19. Since the onset of the pandemic, we have prioritized the health, safety and well-being of our employees and of all those we work with. We are incredibly grateful for their dedication and perseverance and I would like to thank everyone for their efforts through an unprecedented and unique year."

"Following 18 months of focus and hard work executing on our new strategic path, SNC-Lavalin is well positioned for the future with a focus on growth, around which the team is energized to deliver. The recent award of a major infrastructure project in the UK, which will be delivered through a risk-capped alliance agreement, underscores the global potential of our infrastructure services offering and demonstrates the opportunity to apply our major projects expertise through new and beneficial contracting models."

Fourth Quarter Results

The Company reported a net loss from continuing operations attributable to SNC-Lavalin shareholders of $322.9 million, or $(1.84) per diluted share in Q4 2020, compared to $180.2 million, or ($1.03) per diluted share, for the corresponding period in 2019. These net losses were comprised of a net loss from continuing operations from PS&PM of $356.4 million, or $(2.03) per diluted share and a net income from continuing operations from Capital of $33.5 million, or $0.19 per diluted share in Q4 2020, compared to a net loss from continuing operations from PS&PM of $197.7 million, or $(1.13) per diluted share and a net income from continuing operations from Capital of $17.5 million, or $0.10 per diluted share, for the corresponding period in 2019. Q4 2020 net loss was primarily due to a negative Segment Adjusted EBIT⁽¹⁾ from SNCL Projects. This Q4 negative Segment Adjusted EBIT⁽¹⁾ was mainly attributable to the charges, adjustments to provisions and commercial claims receivable reductions, following an expanded review of legacy LSTK litigation matters and other significant claims, as well as a cost reassessment of the remaining Canadian LSTK Infrastructure projects in light of COVID-19, announced by the Company on February 9, 2021. Q4 2019 included the Federal charges settlement of $257.3 million.

Adjusted net loss from PS&PM⁽⁴⁾ in Q4 2020 amounted to $268.7 million, or $(1.53) per diluted share, compared with an Adjusted net income from PS&PM⁽⁴⁾ of $109.6 million, or $0.62 per diluted share, for the corresponding period in 2019. The variation was mainly due to a negative Segment Adjusted EBIT⁽¹⁾ of $412.8 million in SNCL Projects in Q4 2020, compared to a positive Segment Adjusted EBIT⁽¹⁾ of $17.4 million in Q4 2019, as well as higher Corporate selling, general and administrative expenses in Q4 2020, which included investments related to a new digital transformation initiative.

Lines of Business

SNCL Engineering Services

The SNCL Engineering Services line of business (comprised of the EDPM, Nuclear and Infrastructure Services segments) continued to deliver solid results, benefitting from a diversified business model, long-term client relationships and a strong public sector focus. Many services provided by SNCL Engineering Services are deemed essential and are characterized by long-term contracts, particularly in the Nuclear and Infrastructure Services segments. Revenue from SNCL Engineering Services totaled $1,523.0 million in Q4 2020, a 3.2% decrease from the corresponding period in 2019, while Segment Adjusted EBIT⁽¹⁾ totaled $153.1 million in Q4 2020, compared to $159.0 million in Q4 2019, representing a margin of 10.1% for both periods.

EDPM revenue amounted to $943.3 million in Q4 2020, compared to $984.0 million in Q4 2019.  EDPM Segment Adjusted EBIT⁽¹⁾ totaled $84.9 million, representing a margin of 9.0% in Q4 2020, compared to $93.4 million in Q4 2019. The variance reflected the impact of COVID-19 across some markets, such as aviation and commercial property, and in the Middle East, which saw reduced investment associated with the fall in the oil price, partially offset by the strength of transportation and defence markets within the core region of the UK & Europe. Backlog was strong at December 31, 2020 at $2.9 billion, an increase of 8.9% compared to December 31, 2019. Bookings in Q4 2020 totaled $1.0 billion, representing a 1.10 booking-to-revenue ratio⁽⁶⁾.

Nuclear revenue amounted to $245.3 million in Q4 2020, compared to $250.8 million in Q4 2019. Nuclear Segment Adjusted EBIT⁽¹⁾ totaled $36.2 million in Q4 2020, representing a margin of 14.8%, compared to $45.4 million in Q4 2019. The variance was mainly due to a decreased level of activity on certain major Canadian projects resulting from major delivery milestones being achieved, partially offset by higher contribution from the US and Europe. Backlog decreased in the quarter mainly due to progress on the Company's major long-term contracts in Canada, yet remained strong at $891 million as at December 31, 2020. The segment continued to be awarded extensions to ongoing contracts in Canada and other long-term contracts in the US and UK regions.

Infrastructure Services revenue amounted to $334.4 million in Q4 2020, compared to $338.7 million in Q4 2019. Infrastructure Services Segment Adjusted EBIT⁽¹⁾ totaled $32.0 million in Q4 2020, representing a margin of 9.6%, compared to $20.3 million in Q4 2019. The increase was mainly due to a higher level of revenue from certain Operation & Maintenance contracts in the operations phase and increased scope of work on certain other contracts, from higher activities on Program Management & Construction Management services, lower overhead costs and a higher contribution from Linxon. Backlog remains strong at $7.1 billion, which includes long-term Operations & Maintenance contracts, which can cover periods of up to 40 years.

SNCL Engineering Services total backlog amounted to $10.9 billion as at December 31, 2020, compared to $11.1 billion at the end of 2019. Total bookings for 2020 amounted to $5.7 billion despite the current COVID-19 environment.

SNCL Projects

As indicated in the Company's press release of February 9, 2021, the Oil & Gas business was classified as an "Asset Held for Sale" and as "Discontinued Operations" in Q4 2020, as the Company entered into a binding agreement to sell this business. As a result, the Resources segment, under the SNCL Projects business line, excludes the Oil & Gas discontinued operations, and comparative figures have been re-presented accordingly.

In line with the Company's previous decision to exit LSTK projects, revenue from the SNCL Projects line of business (comprised of the Resources and Infrastructure EPC Projects segments) continued to decrease and totaled $152.3 million in Q4 2020, a decrease of 57.4% compared to Q4 2019. This decrease is also in line with the expected continuing backlog run-off of Canadian light rail transit LSTK construction projects.

The Resources Segment, which is now largely related to the Mining & Metallurgy ("M&M") business, generated revenues and a negative Segment Adjusted EBIT⁽¹⁾ of $53.7 million and $93.4 million, respectively, in Q4 2020, compared to revenues and a negative Segment Adjusted EBIT⁽¹⁾ of $64.0 million and $5.9 million, respectively, in Q4 2019. As announced on February 9, 2021, the variance is mainly due to charges related to a reassessment of historical claims and litigation matters, as well as the reassessment of the remaining Resources M&M LSTK project, which is forecast to be completed in Q2 2021.

Infrastructure EPC Projects revenue amounted to $98.6 million in Q4 2020, compared to $293.8 million in Q4 2019, while Segment Adjusted EBIT⁽¹⁾ was negative $319.4 million in Q4 2020, compared to a positive Segment Adjusted EBIT⁽¹⁾ of $23.4 million in Q4 2019. As announced on February 9, 2021, Q4 2020 included a total amount of $326 million in adjustments to provisions and commercial claims receivable reductions, for which approximatively 65% is non-cash, following a review of legacy LSTK litigation matters and commercial claims, as well as a reassessment of the remaining Canadian LSTK Infrastructure projects in light of COVID-19.

SNCL Projects backlog at the end of December 31, 2020 totaled $2.2 billion and included $1.8 billion of LSTK construction contracts and $0.3 billion of reimbursable and engineering services contracts. SNCL Projects backlog for LSTK construction contracts of $1.8 billion represents a significant decrease compared to $2.8 billion as at December 31, 2019, as the Company continued to execute on its LSTK projects. The main projects remaining in this backlog are three ongoing Canadian LSTK light rail transit Infrastructure projects. The Oil & Gas projects backlog, for which the Company entered into a binding agreement to sell, is no longer included in the SNCL Projects backlog.

Capital

Capital revenue and Segment Adjusted EBIT⁽¹⁾ totaled $22.6 million and $19.1 million, respectively, in Q4 2020, compared to $36.2 million and $31.5 million, respectively, in Q4 2019, due to lower dividends received from Highway 407 ETR. Despite a reduction in traffic volumes since mid-March 2020, mainly due to the impact of COVID-19, SNC-Lavalin's management continues to believe in the long-term value of the Highway 407 ETR concession. Excluding Highway 407 ETR, the other concessions, which are primarily availability-based contracts, continued to perform well during the fourth quarter of 2020.

Cash Flow

The Company's net cash generated from operating activities was $121.5 million in 2020, compared to a net cash used for operating activities of $355.3 million in 2019. Q4 2020 net cash generated from operating activities was $104.6 million, compared to $312.2 million in Q4 2019. This reduction in net cash generated from operating activities was primarily driven by a usage of cash in Q4 2020 from discontinued operations. The Company expects net cash generated from operating activities in 2021 to be broadly breakeven, as positive operating cash flow from SNCL Engineering Services will be largely offset by an operating cash flow usage in SNCL Projects.

Financial Position

As at December 31, 2020, the Company had $932.9 million of cash and cash equivalents. The Company also has an additional $2.0 billion of available drawing capacity under its revolving credit facility should it be required. As at December 31, 2020, the Company had $1.2 billion of recourse debt and $0.4 billion of limited recourse debt and its net recourse debt to EBITDA ratio⁽⁷⁾ calculated in accordance with the terms of the Company's Credit Agreement was 2.1, below the required covenant level of 3.75.

Quarterly Dividend

The Board of Directors today declared a cash dividend of $0.02 per share, unchanged from the previous quarter. The dividend is payable on April 6, 2021 to shareholders of record on March 23, 2021. This dividend is an "eligible dividend" for Canadian federal and provincial income tax purposes.

SNCL Engineering Services 2021 Outlook

The following statements are based on current expectations. These statements are forward-looking and the actual results could differ materially. The 2021 Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.

The Company expects SNCL Engineering Services revenue for full year 2021 to increase by a low single digit percentage, compared to 2020, and for its Segment Adjusted EBIT to revenue ratio⁽²⁾ to be between 8% and 10% for the same period.

As COVID-19 did not significantly impact SNCL Engineering Services in Q1 2020, it is expected that its revenue for Q1 2021, compared to Q1 2020, would decrease by a low single digit percentage.

This outlook is based on the assumptions and methodology described in the Company's Annual 2020 Management's Discussion and Analysis under the heading, "How We Budget and Forecast Our Results" and the "Forward-Looking Statements" section below and is subject to the risks and uncertainties summarized therein and in the Company's 2020 Annual Management's Discussion and Analysis.

Conference Call / Webcast

SNC-Lavalin will hold a conference call today at 8:30 a.m. EST to review results for its fourth quarter of 2020. A live audio webcast of the conference call and an accompanying slide presentation will be available at www.investors.snclavalin.com. The call will also be accessible by telephone, please dial toll free at 1 800 319 4610 in North America or dial 1 604 638 5340 outside North America. You can also use the following numbers: 416 915 3239 in Toronto, 514 375 0364 in Montreal, or 080 8101 2791 in the United Kingdom. A recording of the conference call and its transcript will be available on the Company's website within 24 hours following the call.

About SNC-Lavalin

Founded in 1911, SNC-Lavalin is a fully integrated professional services and project management company with offices around the world. SNC-Lavalin connects people, technology and data to help shape and deliver world-leading concepts and projects, while offering comprehensive innovative solutions across the asset lifecycle. Our expertise is wide-ranging — consulting & advisory, intelligent networks & cybersecurity, design & engineering, procurement, project & construction management, operations & maintenance, decommissioning and sustaining capital – and delivered to clients in four strategic sectors: EDPM (engineering, design and project management), Infrastructure, Nuclear and Resources, supported by Capital. People. Drive. Results. www.snclavalin.com

Non-IFRS Financial Measures and Additional IFRS Measures

The Company reports its financial results in accordance with IFRS. However, the following non–IFRS measures and additional IFRS measures are used by the Company in this press release: Segment Adjusted EBIT, Segment Adjusted EBIT to revenue ratio, Adjusted EBITDA, Adjusted net income (loss) attributable to SNC-Lavalin shareholders, Adjusted diluted EPS, and Booking-to-revenue ratio. Additional details for these non-IFRS measures can be found below and in section 13 of SNC-Lavalin's 2020 Management's Discussion and Analysis ("MD&A"), filed with the securities regulatory authorities in Canada, available on SEDAR at www.sedar.com and on the Company's website at www.snclavalin.com under the "Investors" section. Non-IFRS financial measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with IFRS, these non-IFRS measures provide additional insight into the Company's operating performance and financial position and certain investors may use this information to evaluate the Company's performance from period to period. However, these non-IFRS financial measures have limitations and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Furthermore, certain non-IFRS financial measures and additional IFRS measures are presented separately for each of PS&PM and Capital, as the Company believes that such measures are useful as these activities are usually analyzed separately by the Company. Reconciliations of non-IFRS measures to the most comparable IFRS measures are set forth in Section 13.3 of the 2020 MD&A and certain of those reconciliations are set out at the end of this press release.

⁽¹⁾ Segment Adjusted EBIT consists of revenues allocated to the applicable segment less i) direct costs of activities, ii) directly related selling, general and administrative expenses, and iii) corporate selling, general and administrative expenses that are allocated to segments. Segment Adjusted EBIT is the measure used by management to evaluate the performance of the Company's segments, and gives investors an indication of the profitability of each segment, as it excludes certain items that the Company believes are not reflective of the segment's underlying operations. Such financial measure also facilitates period-to-period comparisons of the underlying segment's performance. Expenses that are not allocated to the Company's segments are: certain corporate selling, general and administrative expenses that are not directly related to projects or segments, impairment loss arising from expected credit losses, gain (loss) arising on financial assets (liabilities) at fair value through profit or loss, restructuring costs, acquisition-related costs and integration costs, amortization of intangible assets related to business combinations, the federal charges settlement (PPSC) expense and gains (losses) on disposals of PS&PM businesses and Capital investments (or adjustments to gains or losses on such disposals), impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell, net financial expenses and income taxes. Also, it should be noted that the following adjustment was removed from the list of adjustments disclosed in prior periods as there was no adjustment of this nature in the current periods and the previous year: the net expense for the 2012 class action lawsuit settlement and related legal costs. Furthermore, impairment of goodwill and impairment of intangible assets related to business combinations were removed in 2020 from the list of adjustments disclosed in prior periods as the impact of these elements for 2019 were related to discontinued operations. See the reconciliation of total Segment Adjusted EBIT to net income (loss) in the 2020 Annual MD&A, Section 4. A reconciliation of Segment Adjusted EBIT from PS&PM and from Capital to net income (loss) as determined under IFRS is also presented in Note 4 to the Company's 2020 Annual Financial Statements.

⁽²⁾ Segment Adjusted EBIT to revenue ratio is a measure used to analyze the profitability of the Company's segments and facilitate period-to-period comparisons, as well as comparison with peers. This financial measure is calculated by dividing the amount of Segment Adjusted EBIT of a given period to the amount of revenue for the same period.

⁽³⁾ Adjusted EBITDA is a non-IFRS financial measure used by management to facilitate operating performance comparison from period to period and to prepare annual operating budgets and forecasts. Adjusted EBITDA is based on EBITDA from continuing operations and excludes charges related to restructuring costs, acquisition-related costs and integration costs, gains (losses) on disposals of PS&PM businesses and Capital investments (or adjustments to gains or losses on such disposals), the adjustment to provision for the Pyrrhotite Case litigation (as described in the 2020 Annual MD&A, Section 14, and in Note 33 to the 2020 Annual Financial Statements), the Federal charges settlement (PPSC) expense, the fair value revaluation of the Highway 407 ETR contingent consideration receivable, the GMP equalization expenses and the impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell. It should be noted that, in 2020, management has added as components to Adjusted EBITDA the amounts of the fair value revaluation of the Highway 407 ETR contingent consideration receivable, the adjustment to provision for the Pyrrhotite Case litigation and the impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell as it believes that such items are not reflective of the Company's underlying operations. Such additions did not result in any change to comparative figures as there were no significant adjustments of this nature in the comparative periods being presented. Also, it should be noted that the following adjustment was removed from the list of adjustments disclosed in prior periods as there was no adjustment of this nature in the current periods and the previous year: the net expense for the 2012 class action lawsuit settlement and related legal costs. The Company believes that Adjusted EBITDA is useful for providing securities analysts, investors and others with additional information to assist them in understanding components of its financial results, including a more complete understanding of factors and trends affecting the Company's operating performance. Adjusted EBITDA is believed to supplement information provided, as it highlights trends that may not otherwise be apparent when relying solely on IFRS financial measures. Refer to the 2020 Annual MD&A, Section 13.3 for a reconciliation of Adjusted EBITDA to net income (loss) from continuing operations as determined under IFRS. Such reconciliation is provided on a consolidated basis and also separately for each of PS&PM and Capital, as the Company believes that such measures are useful since these activities are analyzed separately by the Company.

⁽⁴⁾ Adjusted net income (loss) attributable to SNC-Lavalin shareholders is defined as net income (loss) attributable to SNC-Lavalin shareholders from continuing operations, adjusted for certain specific items that are significant but are not, based on management's judgement, reflective of the Company's underlying operations. These adjustments are restructuring costs, acquisition-related costs and integration costs, amortization of intangible assets related to business combinations, gains (losses) on disposals of PS&PM businesses and Capital investments (or adjustments to gains or losses on such disposals), financing costs related to the agreement to sell shares of Highway 407 ETR, the fair value revaluation of the Highway 407 ETR contingent consideration receivable, the federal charges settlement (PPSC) expense, the adjustment to provision for the Pyrrhotite Case litigation, impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell and the GMP equalization expense. It should be noted that, in 2020, management has added as components of Adjusted net income (loss) attributable to SNC-Lavalin shareholders the amounts of the fair value revaluation of Highway 407 ETR contingent consideration receivable, the adjustment to provision for the Pyrrhotite Case litigation and impairment loss on remeasurement of assets of disposal group classified as held for sale to fair value less cost to sell as it believes that such items are not reflective of the Company's underlying operations. Such additions did not result in any change to comparative figures as there were no significant adjustments of this nature in the comparative periods being presented. Also, it should be noted that the following adjustments were removed from the list of adjustments disclosed in prior periods as there was no adjustment of this nature in the current periods and the previous year: the net expense for the 2012 class action lawsuit settlement and related legal costs, and the impact of U.S. corporate tax reform. Furthermore, impairment of goodwill and impairment of intangible assets related to business combinations were removed in 2020 from the list of adjustments disclosed in prior periods as the impact of these elements for 2019 were related to discontinued operations. The Company believes that Adjusted net income (loss) attributable to SNC-Lavalin shareholders is useful for providing securities analysts, investors and others with additional information to assist them in understanding components of its financial results, including a more complete understanding of factors and trends affecting the Company's operating performance. Adjusted net income (loss) attributable to SNC-Lavalin shareholders is believed to supplement information provided, as it highlights trends that may not otherwise be apparent when relying solely on IFRS financial measures. It is also used by management to evaluate the performance of the activities of the Company from period to period. Refer to the 2020 Annual MD&A, Section 13.3 for a reconciliation of Adjusted net income (loss) attributable to SNC-Lavalin shareholders to net income (loss) as determined under IFRS. Such reconciliation is provided on a consolidated basis and also separately for each of PS&PM and Capital, as the Company believes that such measures are useful since these activities are analyzed separately by the Company.

⁽⁵⁾ Adjusted diluted earnings per share ("Adjusted diluted EPS") is defined as adjusted net income (loss) attributable to SNC-Lavalin shareholders from continuing operations, divided by the diluted weighted average number of outstanding shares for the period. Adjusted diluted EPS is a non-IFRS financial measure that is an indicator of the financial performance of the Company's activities and allows the Company to present the adjusted net income (loss) attributable to SNC-Lavalin shareholders on a diluted share basis. Refer to the 2020 Annual MD&A, Section 13.3 for the reconciliation of Adjusted diluted EPS to diluted EPS (namely, net income (loss) per diluted share) as determined under IFRS. Such reconciliation is provided on a consolidated basis and also separately for each of PS&PM and Capital, as the Company believes that such measures are useful since these activities are also analyzed separately by the Company.

⁽⁶⁾ Booking-to-revenue ratio corresponds to contract bookings divided by revenues, for a given period. This measure provides a useful basis for assessing the renewal of business, as it compares the value of performance obligations added in a given period to the amount of revenue recognized upon satisfying performance obligations in the same given period.

⁽⁷⁾ While net recourse debt and EBITDA are non-IFRS measures, the reference to the ratio of "net recourse debt to EBITDA" is a defined term under and calculated in accordance with the Company's Credit Agreement and is not a specific reference to the actual non-IFRS measures in question.

Reconciliation of IFRS net income (loss) from continuing operations to Adjusted net income (loss)

Forward-Looking Statements

Reference in this press release, and hereafter, to the "Company" or to "SNC-Lavalin" means, as the context may require, SNC-Lavalin Group Inc. and all or some of its subsidiaries or joint arrangements or associates, or SNC-Lavalin Group Inc. or one or more of its subsidiaries or joint arrangements or associates.

Statements made in this press release that describe the Company's or management's budgets, estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "aims", "anticipates", "assumes", "believes", "cost savings", "outlooks", "estimates", "expects", "goal", "intends", "may", "plans", "projects", "forecasts", "should", "synergies", "target", "vision", "will", "likely", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. Forward-looking statements also include statements relating to the following: i) future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects; ii) business and management strategies and the expansion and growth of the Company's operations; and iii) the expected additional impacts of the ongoing COVID-19 pandemic on the business and its operating and reportable segments as well as elements of uncertainty related thereto. All such forward-looking statements are made pursuant to the "safe-harbour" provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular projection materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Forward-looking statements made in this press release are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company's 2020 Annual MD&A (particularly in the sections entitled "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" and "How We Analyze and Report our Results"). If these assumptions are inaccurate, the Company's actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company's assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. These risks include, but are not limited to: (a) additional impacts of the COVID-19 pandemic; (b) execution of the strategic direction announced in 2019; (c) fixed-price contracts or the Company's failure to meet contractual schedule, performance requirements or to execute projects efficiently; (d) remaining performance obligations; (e) contract awards and timing; (f) being a provider of services to government agencies; (g) international operations; (h) Nuclear liability; (i) ownership interests in investments; (j) dependence on third parties; (k) joint ventures and partnerships; (l) information systems and data and compliance with privacy legislation; (m) competition; (n) professional liability or liability for faulty services; (o) monetary damages and penalties in connection with professional and engineering reports and opinions; (p) insurance coverage; (q) health and safety; (r) qualified personnel; (s) work stoppages, union negotiations and other labour matters; (t) extreme weather conditions and the impact of natural or other disasters and global health crises; (u) divestitures and the sale of significant assets; (v) intellectual property; (w) liquidity and financial position; * indebtedness; (y) impact of operating results and level of indebtedness on financial situation; (z) security under the CDPQ Loan Agreement; (aa) dependence on subsidiaries to help repay indebtedness; (bb) dividends; (cc) post-employment benefit obligations, including pension-related obligations; (dd) working capital requirements; (ee) collection from customers; (ff) impairment of goodwill and other assets; (gg) the impact on the Company of legal and regulatory proceedings, investigations and litigation settlements; (hh) further regulatory developments as well as employee, agent or partner misconduct or failure to comply with anti-bribery and other government laws and regulations; (ii) reputation of the Company; (jj) inherent limitations to the Company's control framework; (kk) environmental laws and regulations; (ll) Brexit; (mm) global economic conditions; (nn) fluctuations in commodity prices; and (oo) income taxes.

The Company cautions that the foregoing list of factors is not exhaustive. For more information on risks and uncertainties, and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the sections "Risks and Uncertainties", "How We Analyze and Report Our Results" and "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" in the Company's 2020 Annual MD&A filed with the securities regulatory authorities in Canada, available on SEDAR at www.sedar.com and on the Company's website at www.snclavalin.com under the "Investors" section.

The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake to update publicly or to revise any such forward-looking statements whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation.

The Company's audited consolidated financial statements for the year ended December 31, 2020, together with its MD&A for the corresponding period, can be accessed on the Company's website at www.snclavalin.com and on www.sedar.com.

SOURCE SNC-Lavalin