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WSP CEO 'absolutely' sees company in same league as McKinsey as growth spree persists

The Canadian Press
WSP CEO 'absolutely' sees company in same league as McKinsey as growth spree persists

MONTREAL — The head of WSP Global Inc. says it aims to keep growing apace following its latest spate of acquisitions, as he aspires to boost earnings and, eventually, vault into the same competitive arena as the world’s largest professional services firms.

The engineering outfit projects between $10 billion and $10.6 billion in revenues this year, marking a jump of up to 19 per cent from 2022, chief executive Alexandre L’Heureux said.

He forecasted adjusted earnings growth for 2023 of about 18 per cent, or between $1.76 billion and $1.84 billion.

L’Heureux said the broader WSP footprint will come from more acquisitions as well as organic net revenue growth, which it pegs at three to six per cent this year following a record 7.3 per cent organic growth in 2022.

Asked by an analyst whether he could envision a time when WSP competes more with the likes of global consulting giants like Deloitte and McKinsey than pure-play engineering firms, L’Heureux replied unequivocally: “Absolutely.”

“In my mind, we’re not competing against peers in our industries; we’re competing against all the management consulting firms, all of the engineering firms, all the IT firms. So to me, I don’t like to put WSP into a box. And we are already competing with the Big Four firms in many instances,” he said, referring to Deloitte, KPMG, PricewaterhouseCoopers and Ernst & Young.

“We bump into them all the time.”

The CEO’s comments came on an conference call to discuss the company’s latest results. WSP reported a profit of $120 million for the quarter ended Dec. 31, down 5.3 per cent from the same period a year earlier.

Nonetheless, the expected boost in net revenue this year reflects “strong prospects for the U.S. and Canadian operations, coupled with a more cautious outlook” in the U.K. and Europe, Raymond James analyst Frederic Bastien said in a note to investors.

WSP has closed six acquisition deals since June, and more than 120 since 2006.

Once a boutique firm called Genivar, the 64-year-old company has more than doubled its head count over the past decade, swelling to 66,200-plus employees with an additional 10,900 in 2022.

Heftier earnings last quarter came not just from new purchases but from organic revenue growth, which jumped a better-than-expected 4.8 per cent.

“But growth from M&A was below expectations, leading to a modest revenue miss,” Bastien said.

© 2023 The Canadian Press

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