WSP Global Inc
TSX:WSP
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
181.27
252.42
|
| Price Target |
|
We'll email you a reminder when the closing price reaches CAD.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
WSP Global Inc
You don't have any saved screeners yet
[Foreign Language] Good afternoon, ladies and gentlemen. [Foreign Language] Welcome to the WSP's First Quarter 2019 Results Conference Call.I would now like to turn the meeting over to Isabelle Adjahi, Senior Vice President, Investor Relations and Communications. [Foreign Language] Please go ahead, Ms. Adjahi.
Good afternoon, and thank you for taking the time to join us today to discuss our Q1 2019 performance. We will first make a few remarks and then we would open the line for our Q&A session.With me today are Alexandre L’Heureux, our President and CEO; and Bruno Roy, our CFO.Please note that the call is being webcasted, and we will make it available on the website. During the call, we will be making some forward-looking statements and the actual results could be different from those expressed or implied, and we undertake no obligation to update or revise any of these statements.With that, I will now turn the call over to Alexandre L’Heureux. Alex?
Thank you, Isabelle, and good afternoon, everyone. I am pleased with our Q1 performance which we will be discussing in detail in a few moments. There are 3 points I would like to highlight today. First, we are pleased with our Q1 financial performance as it met our targets set out in our 2019 outlook and provide a good start to our 2019 and 2021 strategic cycle. We posted solid overall organic growth in net revenues which demonstrates how our diversification across markets and geographies provide solid foundation for sustainable growth.Second, our backlog continues to grow organically, and we have had a -- and we have had, I'm sorry, a few major projects to our portfolio which bodes well for the remainder of 2019.Third, on the M&A front, after a full quarter of combined activities with Louis Berger, we are now executing on our integration efforts according to plan. We had already begun and noticing the impacts stemming from the collaboration of our teams and the synergistic benefits of the transaction. In parallel, we have continued with our acquisition program with a series of tuck-in acquisition helping to strengthen our expertise in Australia, the U.S. and Western Europe.Let me start with a few comments on our Q1 financial performance. As a reminder, effective January 1, 2019, we have adopted IFRS 16 leases using the modifier retrospective method for which no restatement of prior year financial statement was required. We will discuss the full impact of this adoption in a few minutes.For the first quarter, net revenues were $1.7 billion, up 13.2% year-over-year. On a constant-currency basis, organic growth and net revenues stood at 3.2%, in line with our expectations. Adjusted EBITDA was $216.9 million, with adjusted EBITDA margin reaching 13%. Most of the increase being attributable to IFRS 16. Without the IFRS 16 adjustment, adjusted EBITDA would have stood at $153.1 million with a 9.2% adjusted EBITDA margin.Finally, our backlog, which stood at $7.9 billion at the end of the quarter, represent approximately 10.7 months of revenues. It grew 1.4% organically compared to Q4 of '18.Let's now move to our regional operational performance. Organic growth in net revenues from our Canadian operation, although slightly positive at 0.7%, was impacted by provincial election in Ontario and Alberta which resulted in the start of some projects being delayed. On a pre-IFRS 16 basis, adjusted EBITDA margin before global corporate costs stood at 10.1%, an improvement compared to the same period in '18 and in line with our expectation. Including IFRS 16, it amounted to 15.5%. Our Americas reportable segment posted negative organic growth in net revenue of 0.5% and a 10.6% pre-IFRS adjusted EBITDA margin before global corporate costs, and including IFRS 16, it amounted to 14.6%. Excluding the impact of FEMA on 2018 results, we would have posted positive organic growth of 5.3% for the quarter. Our EMEIA reportable segment delivered organic growth in net revenues of 5.7%, and pre-IFRS adjusted EBITDA margin before global corporate costs at 10.6% of net revenues, slightly above our expectations. Including IFRS 16, it amounted to 13.6%.Our U.K. operation posted higher-than-anticipated organic growth in net revenues with rail continuing its strong showing from 2018. The Nordics operation performed as anticipated and continue to focus on improving operating margins. Our APAC reportable segment posted organic growth in net revenues of 6.9%, and pre-IFRS 16 adjusted EBITDA margin before global corporate costs at 10.2% of net revenues. Including IFRS -- the IFRS adjustment, it amounted to 14.3%. This performance which was slightly above our expectation was mainly driven by Australian operation which posted strong organic growth in net revenues for the quarter.Now that we have discussed our regional performance, the second element I want to highlight is how the depth and the breadth of our expertise combined with our collaborative approach is translating into major project wins across the globe. Let me highlight a few of these wins. In Canada, as part of the East West Connectors joint venture partnership, we were selected to provide design engineering services related to the $2.6 billion Ottawa confederation line LRT extension project.In the U.S., WSP was selected for the design of the $2.2 billion North Carolina 540 Highway project in Raleigh. As a lead designer for the construction joint venture, WSP will also provide management permitting and construction drawings for the entire project.Finally, in New Zealand. Following outstanding collaboration between our New Zealand and our Australian colleagues, our consortium have been selected as the preferred tender for the Auckland city rail loop station and tunnels. This is New Zealand's largest transportation infrastructure project ever with an overall value of NZD 4.4 billion, and this achievement is the direct result of combining legacy local depth of expertise with our rail capability in Australia. These are just a sample of some of the projects we won, and we are optimistic about the continued growth of our backlog.Third, we have carried on with our M&A activities. Since the beginning of the year, in line with our strategy, we completed 4 acquisitions being [ CTI ], GGP and Indigo Europe as well as Leach Wallace Associates in the U.S. Although not large, they each bring specific expertise or access to specific geographies. These acquisitions totaling approximately 300 employees were financed using our available cash and credit facilities. I would like to officially welcome our new colleagues to the WSP family.Finally, I would like to briefly mention the impact of IFRS 16 which we adopted as of January 1 of '19. Although this does not change our way of doing business or alter our cash flows, the main impact of IFRS 16 are twofold: one, on our balance sheet, it resulted in a significant increase to both asset and liabilities; and also on our P&L, our operating lease expenses are replaced by depreciation expense on the right to use assets and in interest expense on our lease liability. As a result, we have updated some metrics of our 2019 outlook and of our 2019 and 2021 global strategic plan which Bruno will go through in a few minutes. Bruno will share these updates with you in a few minutes, but first he will review our Q1 financial results in more details. Bruno?
Thanks, Alex, and good afternoon, everyone. I'm pleased to comment on our results for the first quarter of 2019.Overall, we are pleased with our Q1 financial results. Organic growth in net revenues was 3.2%, in line with our expectations. Adjusted EBITDA margin was at 13%. Trailing 12-month free cash flow amounted to $453.8 million, representing 173% of net earnings attributable to shareholders. DSOs have remained stable at 78 days, in line with Q1 2018. Finally, our balance sheet has remained solid with a net debt to adjusted EBITDA ratio incorporating a full 12-month adjusted EBITDA for acquisitions of 1.7x. Now let me take you into the details. For this first quarter, revenues and net revenues were $2.2 billion and $1.7 billion, respectively, an increase of 13.8% and 13.2% compared to 2018. Adjusted EBITDA for the period stood at $216.9 million, up $83.4 million or 62.5% compared to Q1 '18. This increase mainly is the result of the adoption of IFRS 16. Excluding the impact of the adoption of IFRS 16 results, adjusted EBITDA would have stood at $153.1 million. IFRS 16 also had an impact on adjusted EBITDA margin which came in at 13%. Excluding IFRS 16, adjusted EBITDA margin would have been 9.2%, slightly higher than Q1 2018.Adjusted net earnings were $70.2 million or $0.67 per share, up 27% and 26%, respectively, compared to 2018. Including the impact of the adoption of IFRS 16 - leases, adjusted net earnings would have stood at $75.5 million or $0.72 per share.Net earnings attributable to shareholders amounted to $63.6 million or $0.61 per share. On a dilutive basis, up 28% and 27%, respectively, compared to Q1 2018. Excluding the impact of the adoption of IFRS 16 - Leases, net earnings attributable to shareholders would have stood at $68.9 million or $0.66 per share. Our backlogs stood at $7.9 billion, representing approximately 10.7 months of revenue, up $194 million or 2.5% compared to the previous quarter. Organically, our backlog grew at 1.4% when compared to Q4 '18.Turning to the balance sheet. We ended the quarter with a DSO of 78 days, in line with seasonality and comparable to Q1 '18. Incorporating a full 12 months adjusted EBITDA for all acquisitions, our net debt-to-EBITDA ratio came in at 1.7x, slightly lower than Q1 and Q4 2018. Excluding the impact of the adoption of IFRS 16 - leases, incorporating the full 12-month adjusted EBITDA for all acquisitions, net debt-to-adjusted-EBITDA ratio would have stood at 1.9x.We also declared a dividend of $0.375 per share to shareholders on record as of March 31, 2019, which was paid in April 15, 2019. With a 50% Dividend Reinvestment Plan participation, the net cash outflow was $19.7 million.Before turning it back to Alex, I wanted to highlight the impact of IFRS 16 on both our 2019 outlook and our 2019-2021 global strategic plan.For 2019 outlook, IFRS 16 has an impact on adjusted EBITDA, which we now forecast to be ranging between $950 million and $1 billion; adjusted EBITDA seasonality fluctuations, which we now forecast to range between 20% and 30% with Q1 being the lowest and Q3 being the highest; and net debt-to-adjusted-EBITDA ratio, which we now forecast to be ranging between 1x to 2x. In order to facilitate comparison, we have provided a reconciliation for Q1 2019 so that you can compare what our results are under IFRS 16 versus what they would have been excluding IFRS 16. You can find a reconciliation in the slide deck accompanying this presentation, which is posted on our website in the Investor Relations section.For the 2019-2021 strategic plan, updates to reflect the impact of IFRS 16 are as follows: adjusted EBITDA margin is now forecasted to be between 14% and 15% and net debt-to-adjusted-EBITDA ratio is forecasted to be between 1x and to 2x. Alex, back to you.
Okay. Thank you, Bruno. I would like now to open the line for question. Thank you.
[Foreign Language] [Operator Instructions] Your first question comes from the line of Jacob Bout from CIBC.
This is Rahul on for Jacob. So maybe starting with the revised 2019 outlook target. If we annualize the positive IFRS 16 EBITDA impact in Q1 '19, that comes out to about like $255 million, while the revised 2019 EBITDA outlook bumps up by about $210 million. So what explains that delta?
So good question, Rahul. We are working with a portfolio of 500 offices as you know. And over the course of the year, we will add some leases. We'll also renegotiate some, and we'll terminate others. Think about the fact, for instance, that we're integrating Louis Berger and we'll consolidate the Louis Berger teams in many of our offices. So the number of leases is going to move around quite a bit over the course of the year. Add to that, FX in the mix as such is very -- it's not a static number. It's a very dynamic number and as such, you can't annualize simply by multiplying by 4. At this stage, $210 million is our best estimate for the impact on the full year.
Right. Okay. No, that's helpful. And maybe just on the Louis Berger integration. How's that coming along? And when could we anticipate seeing the benefit of synergies to margin? Would that be more towards the back end of the year? Or...
Yes, we closed the transaction late in the year, like the last month of the year in '18 and now we're in May. So obviously, in the first quarter, it is quite hard to reflect some of those either revenue synergies or cost synergies to the transaction. I think we provided in the outlook and in the past in our press release when we released Louis Berger the type of cost synergies and the amount of cost synergy we were hoping to realize in the first year. And so far, what I can tell you is that the integration is going very well. The U.S. team is already working closely with the Louis Berger team. And equally, in the Middle East and in all the other major hubs, we do expect certainly the Middle East to have the integration completed anytime soon. So -- whereas Louis Berger is going to take a bit more time to bring them on our systems and then harmonize the benefits and so on and so forth. But what I can tell you that we're tracking on plan and on budget on what we've disclosed at the time of the acquisition.
Your next question comes from the line of Yuri Lynk from Canaccord.
Alex, on the Louis Berger acquisition, what should we make of the higher cost structure of the businesses? Is that something that can't be altered too much? Or is the goal -- part of the synergy goal to realign that cost structure so that it's more consistent with the rest of your operations?
It's to realign it. But essentially, it's to replicate what we've done in the old days with, for instance, Parsons Brinckerhoff or with Mouchel when -- Mouchel, at the time of the acquisition, they were delivering 6%, 7% margin and now they are in line with the -- our U.K. business. So I think obviously we're going to need a bit of time. But we saw a lot of potential in the Louis Berger acquisition, lots of expertise. But we believe that their cost base was skewed compared to ours, and we believe that we could bring them up to our standard essentially. But this will take a bit of time.
And is that primarily real estate?
No. It's people. It's real estate. It's IT. It's consultant fees. It's bidding activity as well project selection, project management. So I think I may have said that in a few occasions in past conference calls. It's not one lever that will really get the bar up to where we're at. It's a number of initiatives in a number of different jurisdictions to get the margin level closer to ours. But nothing dissimilar to Parsons Brinckerhoff when we acquired the business at 7%, 8% and essentially brought them up to where we're at today.
Okay. Last quick one for me, a bit of nitpicking. But the new 2021 target, if I take the midpoint of the EBITDA margin, it doesn't really imply much of an increase from the midpoint of the 2019 EBITDA margin. Whereas pre-IFRS, there was a bit more of an improvement implied. Any reason why?
Well, because of the previous question we had from Rahul. As I've said clearly, I think when we look at the spread between the 2, in the first quarter we are reporting IFRS 16 and as such -- I mean, this is a moving target for all companies and I'm hopeful that we're going to get more visibility as we progress in the next few quarters and be able to adjust accordingly if we need to. I think the essence of the message that I think you should all get today is that we haven't changed our targets. Fundamentally, they're the same and this is obviously an accounting -- it's accounting gymnastic, but it's not changing our cash flow profile. It's not changing our debt level nor it's changing our aspiration for 2021.
Your next question comes from the line of Mark Neville from Scotiabank.
Maybe, sorry, just to follow up on that and I apologize for sort of beating it to death. But the difference between the Q1 impact and the annualized number, it will really just be a function of what you renegotiate, what you get rid of with Louis Burger and what leases you add during the year. There is really nothing more than that?
And then FX is there obviously.
Okay. But I mean that's essentially it?
Yes.
Okay. And maybe just -- and then on the cash flow, the lease payments and, again, the [ $65 million ] in the quarter, the financing activities, is there a number you can provide us with for the year? Or does that sort of move in line with the impact on the EBITDA as well?
Something that I think we -- we'll take this offline with Bruno. I think the best thing to do is to get back to you on this question, maybe on this call while they're looking into it or while he's looking into it or afterwards.
Yes, okay. Okay. And maybe just one last one, I guess, just on the working capital. Again, just based on where you ended last year and sort of the target for this year. I guess, again, that would imply a couple of days of investment. And again, is that sort of the right interpretation?
Yes, on working capital, so we added a couple of days versus Q4 of last year, and it's in line with seasonality.
Okay. But for the end of the year, it's sort of 70 to 83, call it, 80 days I guess. So there would be, again, the expectation for maybe some investment this year, right, versus '18?
Onto the -- back to our outlook that we provided, I think the goal is to finish the year below 80 days, and that hasn't changed.
Your next question comes from the line of Benoit Poirier from Desjardins Capital Markets.
Just related to EMEIA, you previously -- you were previously expecting a low single digit for the year, but you reported 5.7% in the quarter, so very good performance. So is the region more resilient than your initial expectation? What does explain the strong performance versus initial expectations for EMEIA?
Well, frankly speaking and to be totally transparent, Benoit, and I mentioned it in my commentary, I mean, the U.K. performed better than we had expected. You need to remember, I mean, you start the budget -- you put the budget together in the fall. You get it approved by your board in December, and then you get into the new year not really knowing what external factor could impact your business. We all know, and that's a fact, that the private sector has been cooling off a little bit in the U.K. and we are aware of this. So we've taken a prudent approach regarding the -- in regards to the U.K. And I think at this point in time, it would be premature and probably reckless to make -- to change our estimates at this point of time given that there's a lot of uncertainty out there still. But if we see that things are changing over the course of the year and we have more confidence, I mean, clearly we will update you on it.
Okay. And for Canada, you mentioned some delays in terms of project starts with respect to the elections. So are you confident that those delays will basically recover in the Q2 and the back half of the year? So would you expect a low to mid-single digits for Canada for the year still, Alex?
Look, it's always, Benoit, always hard to recover what you've lost in any given quarter in the past. But as I mentioned, we were awarded the LRT in Ottawa, so that's good news for us. And I feel now that the plan has been communicated by the conservative government in Ontario, and I feel that things have been -- I mean, if the plan and the vision for the province has been communicated, that hopefully now activities will pick up again and we'll finish the year in a good note.
Okay. And Australia, if we look at APAC, you mentioned that the region is pretty solid these days. What about New Zealand? Is it performing in line with Australia? Is there any change in terms of outlook for New Zealand, Alex?
No, there's not a change on the outlook. The utilization in the first quarter was a bit low in New Zealand. But we've just been awarded one of the best -- I think the largest transportation project ever procured in the country. So -- and then we are like the sole designer on it. So we're obviously feeling good about New Zealand, and it's just reinforcing our belief that Opus was a good acquisition.
Okay. Perfect. And the last one for me, any color on the M&A pipeline right now, Alex?
What we have, we have great aspiration when I look at the next 3 years for the company. Clearly, we have an ambitious plan, and I mentioned it when we unveiled it in January that a good portion of that will have to go through -- will have to come through acquisition. So I still believe that that's the case. The pipeline is as good as it's ever been. I've had a lot of active and informal discussion with third parties, and I'm confident at this point in time that we will deliver on the acquisition front.
Your next question comes from the line of Chris Murray from AltaCorp.
Bruno, I was wondering if we could return back to your thoughts around your leverage metrics. And I noticed that as you reported net debt to EBITDA for this quarter, of course, with the trailing number, you don't include the new lease liability. Just wondering how you're thinking about how those fall into the balance sheet. I know they really just move on balance sheet. They're not really that different. But how does that impact your metrics? So for here, a year from now when you've got like for like, how should we see that -- those metrics evolving? And I guess the second part of that is do these changes, how do they flow through any of your credit agreements?
First part, look, we -- [ looking ] throughout the year, I simply show the numbers including IFRS 16. So the 1.7x figure, which includes the uptick in EBITDA and keeps the net debt level the same. And we'll show it without IFRS 16, which is 1.9x, which removes the $63.8 million in this case for this quarter. So we'll keep it as is for the year, so we'll show you both numbers throughout the remaining quarters. So you're going to -- you can see it by yourselves. Second part of the question?
Was with the changes, you've got the additional liabilities around -- the lease liabilities that come on balance sheet now. Do those changes fall into your debt covenants or anything like that? Or is that something that might have to be renegotiated at a later date?
No, it's something that we'll be looking at with the banks over the course of the year.
Okay. Sounds good. And just a couple questions just on your interest expenses. Is it fair to assume the reduction -- I guess it was -- is that the same sort of thing around the pension liability with the stock-based liability, the reason that the interest expense was so low in the quarter?
Yes.
Yes.
Okay. Good. And then just the last thing, just the -- now that you've removed the occupancy cost from your operating expenses, is it fair to think that you're stabilizing now at a level that's good? Or is there additional cost you think you can take out of the system?
You mean WSP legacy or Louis Burger or the combination of both?
Well, with the combination of it. I'm just trying to think about if the run rate in Q1 is more indicative of what we should be expecting as we go through year.
Look, we have the aspiration to grow. And I'm going to use the old outlook between -- our margin profile between 11.5% to 12.5% and look, I'm not suggesting they're going to grow -- we're going to grow our margin profile in equal incremental. So depending the type of job that we're working on, the back load that we're burning, obviously this is having an impact on our margin profile. So I think I've always said in the past that looking at one given quarter and extrapolate it over a year is dangerous. You need to look at trends. You need to look at on an annual basis what we've been delivering. So what I am saying is we have the aspiration this year to grow our margin profile a bit higher than what we completed the year at, which was 11%. But is it going to be 11.2%? Is it going to be 11.3%? Is it going to be 11.5%? Is it -- I mean, at this -- we will talk about decimals at this point in time. But we're working at improving the margin profile, Chris.
Your next question comes from the line of Derek Spronck from RBC.
As you increase the scope and depth of your expertise, are you finding more and more opportunities to export your design bank across your regional segments?
What do you mean by design bank, I'm sorry?
Well, if you're doing a transit project in Australia, you acquire a certain level of knowledge and then can you export that into other regions? Are you finding...
Absolutely. I mean right now I cannot disclose it, but there's 1 or 2 bids that we're working on where we have [ 3 ] regions assisting 1 big 1 at this point in time, and they are part of the bidding process and that's a rail project. So the answer is absolutely.
Does that make you more efficient then and more competitive at the bid table in terms of what you're able to offer for...
Yes. I would argue yes, definitely. I mean you take the rail project that we've just been awarded in New Zealand. This was not just a product of Australia, New Zealand. We had specialists from outside the region to assist on the bid. So obviously, from a CG point of view, it's really increasing our rank -- our pointing system around quality of our work but also around price definitely.
And do you see more and more opportunities to leverage that in the future?
Always. I mean that's the thesis of our platform. I mean to foster collaboration and to leverage the platform, I mean, that's the goal of any single professional services firm not just in our industry. But you take the accounting firms, you take the law firms, you take the management consulting firms, every year, they aim at improving this and fostering the overall collaboration.
Okay. Great. And then just on the backlog, was that -- that $200 million pickup, was that largely organic growth? Or was that pickup from...
No, year-over-year, the backlog grew 0.8% organically and 1.8%, if my memory is not failing me, quarter-over-quarter. So that's the organic growth and the remaining was acquisition growth and that's it.
Okay. And then how do you see the backlog trending? I know it's probably difficult, but any insight for the rest of the year around the backlog?
Look. We've -- the wins I just talked about, at least 2 of them, have not been included in the backlog. So this will obviously increase the backlog in the next quarter. Obviously, this is a moving target. But with the recent wins, clearly we are feeling okay about the -- how the backlog's rolled at this point in time.
[Foreign Language] [Operator Instructions] Your next question comes from the line of Maxim Sytchev from National Bank Financial.
Just a quick question, Alex. I think there was a mention of Sweden and the drive to improve the margins. Do you mind maybe expanding a little bit on the geography in terms of what you're doing and the progress you are seeing right now?
Yes. If you look back, Max, the -- in the recent years, and you could go all the way back to 2015 and look at our annual MD&A, you've seen that the margin profile in Sweden has gone down. And that's a result of a number of different factor, one being external, more fierce competition; also procurement process, which has changed over the last 5, 6, 7 years. There are more design-build work, more fixed price work. But mostly it's been self-inflicted if you ask me for my personal opinion. In Sweden, we've been extremely busy doubling the business. We, in the last 3, 4 years, added 1,000 people through acquisition and 2,000 organically. And if you look back and remember the history, I mean, there are many times where we were posting double-digit organic growth in any given year, and that's for many years in a row.And that takes a toll on your margin profile. You have to train those 2,000 people that are joining your firm. You need to train that 1,000 people that is joining you through acquisition, and that has an impact on utilization. And the vast majority of our work in Sweden is timing material. So utilization is by far the biggest key -- the key influencer on our margin. So I'm not trying to find some excuses. But now that we've built this platform in Sweden, now is the time to have an inward focus on our profitability and get this utilization back up. And that's the goal for this year and the years to come in Sweden and in the Nordics.
Okay. That's very helpful, Alex. And then in terms of -- do you mind reminding us the exposure to public versus private sector in that geography?
Look, I will get back to you with more detail. But right now it's about 2/3-1/3 approximately. But we can get back to you with more the exact number. I'll ask Isabelle to get back to you. But from a high level, it's around 2/3-1/3 public versus private.
Okay. No, that's great. And then on -- just going back to Canada. I know -- I mean, obviously you just mentioned that you expect the back half to pick up. But I mean is that what you're seeing right now in Q2? Or is this still something that you have to backfill a little bit for the back half to see better growth? Just trying to get the timing right for Canada.
Yes. No, to be transparent with you, April -- we haven't seen May yet. Obviously, we're right in the middle of it. April looked like March and February. But you know that, that does not necessarily signal that things are not changing. I mean in Canada, seasonality and the winter is having a big impact on our utilization rate and our level of activity. So I think it's a bit premature, Max, to conclude that the year, the back end, is not going to be good because April was slow.
Okay. I guess structurally, you still feel pretty confident?
Yes, structurally, we have a good backlog. And we have a good backlog and you know we didn't win the REM in Montréal. But if we recall, I said you lose some and you win some, and we were quite ecstatic to won a project very similar to the REM in Montréal but this time in Ottawa. So that's looking good for us.
Yes. No, absolutely. And then just one quick question for Bruno, if I may. Just wanted to clarify your commentary around the noncash working capital. When you were talking about positive contribution, you're talking about the overall not just on the DSOs, right, when we look at the cash flow statement, so that you still expect a positive contribution from noncash working capital for the combined 2019. Is that how we should be thinking about this or not?
Yes.
I wanted to get back, Max, on the split. It's 40 private, 60 public. So I was not too far, but a bit off.
Your next question comes from the line of Michael Tupholme from TD Securities.
Just a question about the Americas region. So I know you had the higher than usual FEMA-related work in the prior year. Just wondering as we think about the balance of 2019, is there anything over the Q2 through Q4 period in 2018 of that nature that we need to be mindful of?
So in Q1 -- so as you remember, the big chunk of our work with FEMA was over the fall of 2017. It bled into the first quarter of 2018, hence the explanation of organic growth for U.S. We had a little bit of work in Q2 as well but less material.
Okay. And then when you reported your fourth quarter, you gave us the outlooks for the various regions. As far as the Americas region, you were talking about mid- to high single-digits growth for the full year. So did that factor in, I guess, the reported -- sort of slower reported growth you saw in the first quarter when you gave us that guidance?
Yes, it did.
Okay. So we should see the Americas region pick up as we go forward here. And I know the backlog, I guess, for Americas, that would support that idea as well?
Our mid- to higher single-digit growth range doesn't change, so same as we said.
[Foreign Language] There are no further questions at this time. I turn the call back over to management for closing remarks.
Thank you. One, circling back on the question on the impact on free cash flow, so whether the $65.4 million could be annualized. The answer there is the same with the adjustments for the EBITDA as well as that number was the number for the first quarter. It will be a very dynamic number as we add, as we retire, as we negotiate new leases. So this number is impacted by FX. So hard to say [ you should build ] the buyback for, and that's it.
Thank you, Bruno. I would like to thank you. Please do not hesitate to contact us directly should you have any additional questions, and I look forward to updating you at our next conference call. So thank you, everyone, and have a good evening.
[Foreign Language] This concludes today's conference call. You may now disconnect.