WSP Global Inc.

Good afternoon and thanks for taking the time to join the call, during which we will be discussing our Q4 and fiscal 2018 performance. We will first make a few remarks, and then we will follow these by Q&A session.

Joining me today are Alexandre L’Heureux, our President and CEO; and Bruno Roy, our CFO. Please note that this call is also available on Internet via webcast.

During the call, we may be making some Forward-Looking Statements and 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 hello everyone. We are pleased with our 2018 performance and before we get into the details, I would like to outline the main highlights for the year.

First, we posted organic growth and net revenues of 3.5% spanning across all of our reportable segments. Second, we met our key 2015, 2018 global strategic plan objectives, adjusted EBITDA margin reached 11%, headcount reached approximately 48,000 people and free cash flow hit $547.4 million or approximately 221% of net earnings attributable to [indiscernible].

Lastly, on the strength of our 2018 reported financials, we recently presented our ambitions 2019, 2021, global strategic plans for different stakeholders. Let me now elaborate on these points further and make a few comments on our overall 2018 financial performance, which Bruno will discuss in greater detail shortly.

For the year, we generated net revenues of $6 billion in line with our expectations. This presented at 12.4% increase compared to 2017.

Adjusted EBITDA was $660 million with adjusted EBITDA margin of 11% hitting our targets for the year. Lastly, our backlog grew from $6.4 billion last year to $7.7 billion at the end of 2018 increasing 4.2% organically year-over-year and remaining stable at 10.1 months.

During the year we acquired four companies adding over 5000 employees to our workforce, expanding our geographical presence in the United States, continental Europe and Australia while strengthening our expertise in other regions. These acquisitions will finance using our balance sheet.

And before I continue, I would like to take this opportunity to once again welcome all of our new colleagues to WSP family. Looking at the performance of our regions, Canada posted organic net revenue growth of 3.5% and 14% adjusted EBITDA margin before global corporate cost for the year.

This performance was a result of a steady utilization rates, improved project delivery and cost containment efforts. Shortly after the close of the year, East West connectors a consortium we are part of along with [indiscernible] Vinci and Hatch was officially selected by the City of Ottawa as a preferred proponent for the $2.6 billion consideration line extension project.

This project into 27 kilometers of new LRT tracks, several new bridge structures, fixing stations, tunneling, winding of several new roads and construction of a new road. We will be the lead designer for this project.

As you know, we do not press release projects win, but this iconic award is a testimonial of our multi disciplinary expertise. I would like to congratulate all of our experts involved in this project.

With an extending pipeline of opportunities we expect further momentum and are optimistic about the long-term prospect in the Canadian markets. The Americas reportable segment posted 0.7% organic growth in net revenues for the year in line with our expectation.

We saw that in 2017 our U.S. operation derive a significant amount of FEMA related revenues, which were in excess of our expectations.

Adjusted to these 2017 FEMA related revenues the America’s reportable segment would have reported mid single-digit organic growth in net revenues. This region delivered adjusted EBITDA and adjusted EBITDA margin before global corporate cost of $257.3 million and 14.6% respectively.

Once again, the highest among all of our reportable segment. The pipeline of opportunities for the Americas remains healthy with a book-to-burn ratio above 1.2 for the year.

Shortly after the close of the Louis Berger transaction, we were selected in collaboration with LB by the Europe - District of the U.S. Army Corp of Engineers for five year contract of general engineering design work to be performed in various European countries.

It is a direct result of a collaborative effort between our U.S. team and Louis Berger team.

Across the Ocean, EMEA reportable segment delivered organic net revenue growth of 5.1% slightly above our expectation. The Nordics delivered organic growth and net revenues of approximately 6% led by Swedish operation.

Our UK operation despite the uncertainty surrounding Brexit delivered organic growth in net revenues slightly over 7% for the year and I would like to comment the entire team for this achievement. We have been re appointed by the North and Mid West trunk the road agency on a four year transport framework to provide consultancy services and support of projects to maintain and improve capacity, resilience and safety across the 680 miles of strategic trunk load in the region.

The contract will involve utilizing a wide range of expertise across our 2500 strong transport and infrastructure business, which includes highways and intelligent transport systems, ground, civil, as well as bridge experts. Continuing in EMEA for both the Middle East and South Africa, most performance metrics were in line with our expectation.

In December 2018 our Middle East operation of payment two year contract extension from the public work authority of Qatar pertaining to the local roads and drainage program initiative in 11. The capital costs of the entire project is estimated to be approximately $30 billion EMEA region as a whole delivered adjusted EBITDA and adjusted EBITDA margin before global corporate cost of $225.4 million and 10.3%, respectively.

Our APAC reportable segment posted organic net revenue growth of 5.6% for the year. Specifically at Australia the operations perform ahead of expectation with a 16% organic net revenue growth while our Asian operation continue to be impacted by slowdown in the private property market.

Subsequent for our fiscal year-end, we were appointed as co-lead designer of the West Connects rolls out interchange projects considered as one of the most complex infrastructure projects ever undertaken in Australia. At peak, we anticipate this project to require over 200 WSP employees.

We continue to be pleased with the performance of our New Zealand operation, which benefited from our Opus acquisition results were slightly above our expectations. Results were slightly above our expectations.

Overall, 2018 was a fruitful year during which we strengthened our business around the globe and pursued our acquisition strategy leading us to attain our key 2016, 2018 global strategic plan objectives. I would like to thank all of our leaders and employees for this outstanding performance and for their continued dedication.

Speaking of people, we continue to strengthen our leadership team with four key executive appointments during the first quarter of 2019 and these includes first, Ryan Brian, as President and CEO of our Canadian operation. Second, Ivy Kong as a Managing Director of our Asian operation.

And lastly, Alain Michaud, who recently came on board as Senior Vice President Operational performance and strategic initiatives, in parallel André-Martin Bouchard was promoted to Global Director, Environment and Resources. I would like to once again welcome each of them to WSP Global Leadership team where their talent and expertise would be a great asset to support our continued growth in the next strategic cycle.

It is also with mixed feelings and emotions to inform you that Steve Robitaille Chief Legal Officer Executive Vice President of Merger and Acquisition and Secretary of the corporation will leave his position in next few weeks to assume a new role at another firm. On behalf of the Board of Directors and the management team, I would like to thank Steve for his contribution to the Corporation and wish him the very best in his future endeavors.

The search process to identify successor will begin soon. I will now turn the call over to Bruno, who will review our fiscal financial results in more detail and share 2019 outlook.

Bruno.

Thank you, Alex. I'm pleased to share results for the fourth quarter and for fiscal 2018.

First, we posted organic growth and net revenues of 3.5% for fiscal 2018,. Adjusted EBITDA margin reached 11% in line with our expectations.

Our DSO improved to 76 days. The second continuous process improvement in both billing and collections.

Our free cash flow for the full-year was nearly $560 million for net earnings conversion ratio of 221%. Our balance sheet remain strong at 1.8 times net debt to EBITDA.

As Alex mentioned earlier, all 2018 acquisitions were financed with available cash and credit facilities and then we are entering this year in our 2019, 2021 global strategic plan on the front foot. Let me now dig into the details.

For the quarter, revenues and net revenues were $2 billion and $1.5 billion, up 4.6% and 4.2% respectively, compared to the same period of 2017. Organic growth of net revenue was negative 2.4% on a constant currency basis.

Adjusted for 2017, FEMA related revenues in excess of expectations, organic growth and net revenues would have been 2.6% for the quarter. For the full-year, revenue and net revenue were $7.9 billion and $6 billion growing 13.9% and 12.4%, respectively.

Organic growth amounted to 3.5% in line with our disclosed outlook. Let's move to adjusted EBITDA.

For the fourth quarter, adjusted EBITDA was $169.5 million, up $29.5 million or 21%. Our adjusted EBITDA margin was 11%, as compared to 9.5% last year.

For the full-year, adjusted EBITDA was $660 million, up 18.9% with adjusted EBITDA the margin also at 11%, up 10.4% in 2017. Now turning to adjusted net earnings.

For the fourth quarter, adjusted net earnings and adjusted net earnings per share were $59 million or $0.50 per share. Both metrics up 50% compared to Q417.

For fiscal 2018, our adjusted net earnings were $295.2 million or $2.83 per share, up 26% and 24% respectively, compared to 2017. Non-cash finance expenses had a negative impact of approximately $0.14 per share and $0.12 per share for the fourth quarter and for the full-year respectively.

I will now review a few key cash flow metrics. For the year, cash flow from operating activities stood at $669.7 million, compared to $395.4 million in 2017.

Our free cash flow for the year came at $547.4 million, or 221% of net earnings above our cash flow conversion target of 100% of net earnings. At 1.8 times, our net debt to adjusted EBITDA ratio remained within our target range of 1.5 to two times.

We remain below the two times threshold while making acquisitions requiring over $500 million without the need for equity. The upper range of the net debt to adjusted EBITDA ratio was increased to 2.5 times in our 2019, 2021 global strategic plan, which is effective of our increase resiliency.

Lastly, our DSO was strong at 76 days at the end of 2018, as compared to 79 days at the end of 2017. The same collection efforts during the year where the heart of this improvement.

During the quarter, we also declared a dividend of $0.3705 per share to shareholders on record as at December 31, 2018 which was paid on January 15, 2019. With 50.1% with participation the net cash outlay was $19.6 million.

In conclusion, we have delivered in many cases over deliver on our key 2018 financial outlook metrics. I like now to take a few moments to discuss or 2019 financial outlook, which I think that assisting analysts and shareholders and refining your perspective on our performance.

The slides are getting prepared based on the foreign exchange rates effective yesterday March 13, 2019, we anticipate net revenues to be in the $6.6 billion to $6.9 billion range, and suppose organic growth and net revenues in the 2% to 5% range. Adjusted EBITDA is expected to range between $740 million and $790 million.

This adjusted EBITDA range is not taken to considerations the adoption of IFRS 16 sorry, effective January 1, 2019 in order to provide a common base comparison with our 2018 results. While non-cash in nature, the adoption and applications for IFRS 16 will impact the presentation of our financial statements.

On a balance sheet that will result in an increase to our assets and liabilities to the recognition of right to use assets and lease liabilities. Under P&L our operating lease expenses will be replaced by depreciation expense on the right to use assets and interest expense on our lease liability.

We will update our 2019 outlook to take into consideration the adoption of IFRS 16 on May 14th with the release of our Q1, 2019 results. On the same day we will also provide an update to our 2019, 2021 strategic plan financial ambitions to take into account the adoption of IFRS 16.

As in past years, we provide the markets with a quarterly adjusted EBITDA range of our anticipated full-year adjusted EBITDA. For 2019, we anticipated our quarterly adjusted EBITDA to range between 18% to 30% of the total annual adjusted EBITDA.

Given the proximity to the first quarter of 2019 reporting close, we are forecasting that our Q1, 2019 adjusted EBITDA will range between 18% and 20% over the full-year adjusted EBITDA guidance provided. Training for tax.

We expected our effective tax rate for fiscal 2018 to be in the 26% to 28% range. In 2019, we are targeting a net debt to adjusted EBITDA ratio ranging between 1.5 to 2.5 times excluding potential 2019 acquisitions and we anticipate capital expenditures to range between $120 million and $135 million.

Lastly, we anticipate between $30 million and $40 million in acquisition, integration and reorganization cost driven by the integration based operational optimization, we have a - consolidation and restructuring related to Louis Berger acquisitions as announced at the time of the acquisition. Global corporate costs in 2018 will range between $90 million to $95 million compared to $87.3 million in 2018 mainly due to the acquisition of Louis Berger in Q4 2018.

Alex will now comment on the operational outlook for each of the regions. Alex, over to you.

Thanks Bruno. And let's start our 2019 operation outlook with Canada.

With a solid 2018 performance and the strong transportation infrastructure sector pipeline, we do anticipate organic growth in net revenues to range in the low to mid single-digits. We also anticipate a strong year for the Americas an expanding transportation infrastructure market sector in the U.S.

should provide a solid base for continued growth. As far as Latin America is concerned after the acquisition of ConCol plus and the recent addition of Louis Berger operation in region, we are entering the final stages of integration.

Organic growth in net revenue for the region is anticipated to be flat with some improvement in operating margin. On a consolidated basis, we anticipate mid to high single-digit organic growth in net revenues for the Americas reportable segment.

For the EMEA region as a whole, we anticipate delivering organic growth and net revenue in a low single-digits, mirroring the expectations for our UK and Nordics operation. After several years of strong organic growth in net revenues in the Nordics region, economic indicators now point towards somewhat of a cooling off period for Sweden and Scandinavia.

In light of the numerous acquisitions made over the last few years, focus in the Nordics for 2019 will be on operating margin improvement. In the UK prospects, the public sector remains solid.

However, concerns over Brexit and its potential negative impact on private sector activity level has led us to a slightly more cautious outlook when compared to 2018. We therefore anticipate organic growth in net revenues in the low single-digits.

Turning to APAC, we anticipate another solid year from our Australian operation with organic growth and net revenues to range in the mid to high single-digit stemming from several large project wins in the transportation and infrastructure sector obtain early in 2019 and a strong pipeline. Our New Zealand operation now representing approximately a quarter of a APAC’s net revenue are anticipated to post organic growth in net revenues in the mid single-digit derived mainly from the transportation and infrastructure sector.

In Asia, we anticipate organic growth and net revenues for 2019 to range in the flat to single-digit range, as we continue to focus our efforts on profitable business development. On a consolidated basis, we anticipate the APAC region - organic growth and net revenues in the mid single-digits.

Now, I would like to open the line for questions.

Hi good afternoon. So just going back to your outlook.

So it sounds like your pipeline is pretty strong. So the softness that you are seeing is primarily in the UK, Nordics.

The pipeline is pretty strong, the book-to-burn is good. I think in the UK, what I just said is we are taking a more cautious approach to it.

Having said all that, that the Brexit issue has been there now for 24 months. And last year, we posted 7% organic growth.

So we could be pleasantly surprised. But given the current environment, all I'm saying is we are taking a more cautious approach to it.

But so far, I mean, our backlog is good. The beginning of this year is also good.

So we would like to investors to keep that in mind. In the Nordics, look, Sweden has been delivering now for 18 consecutive years.

They have been posting great results since the early 2000, way before we acquired WSP. So all I’m saying is that the region has been doing very well for many, many years now.

And we are also taking a bit of a more cautious approach to it. But that doesn't mean that the performance is not going to be good.

Okay. And then the flip in organic growth being negative in 2018 to be lot to positive in 2019.

What is that a function of?

That is a function of FEMA Jacob, if you adjust for FEMA or any growth was very positive half percent with that all in 2018.

Sorry, I was asking specifically about Asia?

Okay. Asia, I mean well, look a lot of work has going into the business over the last two years.

So we work tirelessly to really streamline the operation, to reduce costs, to look at our book of business, to perhaps do a better job at client selection, project selection such that we run a tighter ship with a better business in a difficult environment. And that is why this year, we believe that we should hopefully be generating organic growth for 2019.

And not taking on any more additional risk.

No. Absolutely not.

Okay. And then on FEMA, so obviously a large impact in the fourth quarter for year-on-year.

But is there any impact in the first half of the year?

No. No, at this time.

I mean FEMA, it's the work we do at FEMA mostly is inspection. So it's truly difficult to actually try to determine one the whether - the winter will end in Montreal.

So it's really difficult to predict. So we don't know, and I’m in inspection and inspection work will be doing in any given year.

Every year is different, so it's a bit different than the type of work we typically do in our business, so that is why we tend to try to give you a bit of an outlook on FEMA, not an outlook, but I mean to give you a bit more granular details around FEMA, because sometimes it's tends to - the numbers and the quarter when that happen.

Yes. Keep in mind Jacob that in 2017, within a quarter we had hurricanes Harvey, Irma and Maria.

And that is what to these types of results or facilities. We had nothing of the sort in 2018, so as such you can expect a more normal [indiscernible].

Yes, I don't mean that is basically what I was getting us. So there was no bleed from fourth quarter 2017 and this work didn’t continue in the first quarter of 2018?

Oh Sorry. So you meant the first half of 2018, I thought you mean the first half of 2019.

Sorry about that. I misunderstood.

No, there is no particular effect.

Okay. I will leave it there.

Thank you very much.

Okay. Thank you Jacob.

Yes, good afternoon. My question is on a free cash flow, you finished the year with a very strong free cash flow conversions, obviously driven especially by working cap.

So I was wondering, if you could provide more details about the conversion whether we should expect a reversal from the 14 capital spend point or there are something non-recurring going forward on a free cash flow side?

Thanks Benoit, Bruno here. So the big driver in our improved free cash flow as you indicated was working capital specifically are the [indiscernible] year-on-year.

We are very pleased with the results there, mostly due to better collection. And look at the end of the day when your team do good work, it’s so easier to go out and collect your clients are happy to pay those.

So this is a testimony and only to the finance teams globally, but all things are going to affect work. Going back to the conversion ratio our target remains to be above 100%, and that target is the same for this year.

Okay. And do you still expect a lot of improvement from the DSO or would you say that you are at a more sustainable level right now Bruno?

I wake up every morning trying to improve it.

So if you look at the outlook…

Yes. And if you look at our outlook, so again [indiscernible].

But again, we will be trying to do better than that that as we go all the time.

Yes. Okay, perfect.

Very good color. And there has been a recent budget proposed by the U.S.

president over the last few days, I was wondering if you could provide any color, how do you read the budget proposed for the U.S. Department of Transportation, if you see any recruit for your transportation business in the U.S?

Anytime Governments are talking about investing infrastructures is going to use the WSP. So I will leave it at that, because I just don't know how this will translate into the marketplace just yet.

But it's always good to hear that Governments are mindful about reinvesting in the country, in their respective countries. So obviously, from what we heard, you know, hopefully it would translate into a positive outcome, but who knows, so I will leave it at that for the time being.

Okay. And from a booking standpoint, you ended up with one-time book-to-burn a ratio in 2018, and got also some major contracts in Canada and APAC early in 2019.

So I was wondering if you could provide some color about the expectation in terms of the book to rate for 2019?

Look I mean, so far it's looking good. That is all I can say.

You will recall when we didn't get the assignment and the - I mean, if you, you all recall, I said you know sometimes you lose some and you win some. I mean, I'm extremely pleased and delighted by the recent win in Ottawa, that is not something we could disclose before, but then I'm very pleased about this.

This is a major win for WSP in Canada. So obviously the backlog is doing better today than it was at the end of December, given the two through recent big ones that I just talked about.

The book to burn was 104%.

Okay, perfect. Okay.

Thank you very much for the time. I will leave it there.

Thank you Bruno.

Thank you. Good afternoon.

In the outlook you have talked about aiming to improve margins in Canada. And we have actually already seen some pretty healthy improvements over the last couple of years.

Just wondering if you can talk a little bit about how much more room you think there is to go there and maybe help us understand what sort of degree of improvement we could be thinking about in Canada?

Look Michael, I mean, typically, we are not providing an outlook country-by-country, I mean that that would be too granular at this point in time. All I can tell you is and we talked about this when we unveiled our strategic plan.

We have a defined operating plan between now and 2021 to get to the 11.5% and 12.5% EBITDA margin globally in the aggregate and in order to achieve that every country will have to be aligned and push in the same direction and that there is no difference for Canada. So clearly this year, we are aiming and hoping for a margin improvement in Canada.

You will recall that not too long ago, we were posting close and slightly below 10% EBITDA margin like 24 months ago and I had mentioned back then that that we would steer the ship in a different direction and really work hard to improve our margin and generate quality organic growth in Canada. And that is what we have done but that is unfinished business.

We have the aspiration to bring kind of the higher and I will continue to do that this year to achieve that.

Okay, thank you. I noticed it looks like you stopped disclosing soft backlog, which was a metric you have been giving us previously.

Just wondering what the rationale for no longer disclosing that was?

Because our backlog is a better solid number, simple as that. The soft backlog could be useful and I know most of our competitors they like to release and provide a bigger number.

I'd rather take a more conservative stand personally and Michael. What we know for sure, we are going to be working with the hard backlog - to signed and approve.

And personally, I think that is the best measure for you to measure the future trend of the Company. Soft backlog often time are master service agreement that we have with the large client.

They approve for millions and millions and millions, but they approve just at a defined. So that may sound and look sexy to hear that we have a big backlog, but in effect I cannot guarantee you that will translate into hard backlog.

So I'm not sure that this is a measure I would put a lot of weight and despite what others may say.

And hard backlog again for us is approved, signed and we funded projects, and these are real projects.

Okay, makes sense. And then just Bruno with respect to IFRS 16, if I understood correctly, you are going to be providing us with more information when your report Q1.

But will you also provide enough information for us to sort of desegregate whatever you do report in Q1 and sort of look at it relative to the guidance you have provided now. So some further guidance at this time, it's a little bit hard to come up with IFRS 16 compliant numbers.

So will you provide enough detail to sort of break it out and look at it I guess on a historical basis as well?

So we will do the modified retrospective approach which means that you will be able to compare what our results with the other IFRS 16 versus what would have the plan to able to make that so 2019 to 2019.

We will try Michael. We realize for you our analysts following WSP that this is a bit of a curveball, so we will work internally to try to provide you with the best information for you to make the best informed reports.

So we will look at what can be done to make sure that you fully understand the lay of the land with WSP.

Okay. I appreciate that.

Thank you.

Thank you.

Hey good afternoon. Thank you for taking my questions.

Just on the M&A environment. Have you seen any changes in seller expectations just with the kind of broader macro uncertainty that kind of crept into the marketplace in October?

Well, I'm going to repeat what I said when we unveil our strategy direct. This is not something that we have control over and if you recall that I said during the last Analyst Call.

I said look, I’m entering this strategic cycle positively for a very simple reason. If the market is holding on for the next three years, I think WSP will do very well.

And if for some reason that, we have no control over the market its turning. I clearly believe there will be plenty of opportunities for us to be creative, innovative and from firms perhaps at attractive price for us to take advantage of.

So and given the support that we have from our long-term shoulders, I feel that, I don't spend too much time looking at the stock market. We are quite busy and I believe, I should be and the team should be busy executing on the plan and not be distracted by what is happening in the stock market.

And essentially, that is what we are doing. So we are going to continue to execute, we are going to try to find the best available opportunities for us.

And I'm confident that they will come win in next cycle.

Okay. That makes sense.

I'm just trying to get a sense of whether you are operating right now in a more elevated M&A environment and perhaps the seller multiple expectations might have come down a little bit here whether it was a recent pull back. Into that one, I will just ask one more question kind of in the same context.

In the U.S., do you see a more elevated M&A opportunity environment with potential sellers looking to get - maybe the company sold ahead of or during the current tax regime in the U.S., is that providing me a more robust M&A environment in the U.S?

Well, you could argue that flip side as well, why selling now when things are quite exceed and tax and perhaps sellers would like to take advantage of the tax break. But the reality is, I spent most of last year trying to - not trying, I think most of last year reaching out meeting a number of different interesting firm and CEOs within the industry, I will continue to do that in 2019.

I think the target pipeline is good. But and I'm sure I will sound like a broken record here.

But what has made a success or recipe of success is that we remain disciplined and focused in our M&A approach. So I don't feel we have gun on our head to do something, if the starts are not aligned.

So we will action when we see all the investment criteria and pieces are met. So but I can tell you that the dialogues that I have are good, are healthy.

I think that there are some firm outs, that is how they will be fitting our strategy at some point in time. We just need to be patient and wait for the right opportunity to come our way.

Okay, that make sense. In the recent arena of [indiscernible] does that kind of highlights the fact that, potentially this could be a big four like accounting firm but in the consultancy space and eventually say 100,000 employee firm at some point?

Are you suggesting that because I'm a next [indiscernible]. Now when the secrete way of he - our first guiding principle Derek as a company and as a firm is that our people, and our station are our greatest assets.

And we are going to be able to attract the clients and projects if we attract and devote an enormous amount of time and energy attracting and developing the best talents out there. I think Alain was a talent, I have been working with Alain for many years.

I knew of him in prior life and I think he is a talent and I feel very fortunate that we were able to attract him to WSP. But we are not managing an accounting firm or managing a great professional services firm and the E&C space and we will continue to do that.

That is the goal and we are not going to change our business model. But the clearly or the goal is to grow the business and when I see talent out there that I believe can add value to the business, I try everything I do to attract them to the business.

Okay, that is great. Just one quick housekeeping and I will turn it over if I could.

The net debt to EBITDA ratio for 2019, you have it at 1.5 to 2.5 times you are at 1.9 times now. Like is there an anticipated cash draw in first half of the year or how should we be thinking about that?

Well typically in the first half of the year, typically our DSO given our seasonality tends to go up a little bit. In 2018, this was less true than in years before.

I think Bruno did a great job with the finance team and our project managers worldwide to actually reduce the standard deviation around the need. But yes I do expect working capital still to increase in the first half of the year.

And the reversal effect in the second part, but do I expect a significant draw down on our facility? The answer is probably no.

Okay, got it. I appreciate the color.

Thank you.

We are at 1.8 time now 1.9, 1.8.

Got it.

Hi, good afternoon guys. Can you share with us whether Steve has accepted a role in the industry or is he switching gears completely?

Yes, I mean I don't mind saying it, because this is a great plan of ours, but it's been just press release, I think that minutes ago if I'm not mistaken. Steve is joining one of our clients [Bombardier] (Ph).

So he is not going to a competing firm.

Okay, great. Good to hear.

We wish him luck. I don't know if you have answered this, and I apologize if you have already.

But with respect to this deferred comp plan in the U.S. that increased your interest rate expense in Q4, is there anything that we should be thinking about for the modeling going forward.

Its Bruno. You have got quite a bit of detail in the financial statements in note two and note 17 rate of the [debentures] (Ph).

So in a nut shell, we do have deferred competition and assets related to the U.S. plant for a $120 million.

Two IFRS 9 this now leads variations in the - give a quarter essential expenses in the P&L, but beforehand it would have been a comprehensive income - through IFRS 9. For this quarter the delta was about $0.06 per share.

And again on a quarterly basis we will move depending on whether it appreciate or depreciate and we will clearly describe the impact [indiscernible]. But if you want more details, we have given a bit of read on page 23 of the MD&A but it is into financial statements fiscal note 17.

Alright, I will leave it over. I got some more work to do.

Thank you. Bye.

Thanks Frederic.

Okay, thank you for attending our Q4 2018 results and I look forward to updating you at our next conference call, in our AGM in a few weeks time. So thank you very much and have a great day.