Stantec Reports Record Earnings with Increased Dividend for 2025
Stantec Achieves Exceptional Financial Performance in 2024
Stantec has recently announced that 2024 was a year of remarkable growth and success, as the company reported a net revenue of $5.9 billion, marking a robust increase of 15.8% compared to the previous year. This impressive growth is largely credited to a combination of strong organic growth and successful acquisitions, signifying Stantec's solid foothold in the engineering and design sector.
The adjusted EBITDA reached $980.3 million, reflecting an 18% increase, while the adjusted EBITDA margin rose to 16.7%. These figures showcase Stantec's operational efficiency and effective cost management strategies that have been implemented throughout the year.
Key Highlights from 2024 Results
Several key aspects stand out from Stantec's financial report for 2024:
- The company recorded a backlog of $7.8 billion, which illustrates a 24.1% increase from the previous year. This substantial backlog highlights confidence in future projects and continued demand for Stantec's services.
- With an adjusted diluted EPS of $4.42, representing a substantial growth of 20.4% year-over-year, Stantec demonstrates not only profitability but also strong returns for its shareholders.
- Stantec has received recognition as the 8th most sustainable corporation globally, spotlighting its commitment to environmentally responsible practices and sustainability in engineering.
- The fourth quarter alone saw a remarkable 19.0% rise in net revenue, bringing in $1.5 billion, thereby signifying Stantec's capacity to grow rapidly in a competitive market.
Leadership Comments on Company Outlook
Gord Johnston, the president and CEO of Stantec, expressed enthusiasm regarding the company's trajectory: "Our strong results in 2024 position us well towards achieving the objectives outlined in our 2024-2026 Strategic Plan. The combination of aging infrastructure needs, water security issues, and climate change are driving demand for our services. We are equipped to tackle these challenges, and we anticipate another year of robust performance in 2025.”
Future Projections for 2025
Looking ahead, Stantec has set ambitious targets for 2025, anticipating a net revenue growth rate between 7% and 10%. They expect to achieve organic growth in the mid- to high-single digits in both the US and Canada, supported by the record-high backlog that reflects stronger project initiatives.
The adjusted EBITDA margin is expected to remain strong, ranging from 16.7% to 17.3%. This anticipated margin growth is attributed to discipline in administration, optimal cost management in marketing, and continued investment in technology to enhance project delivery.
Financial Stability
Stantec is also focused on maintaining a solid financial structure, targeting an adjusted net income margin above 8.8% of net revenue. Additionally, the expected adjusted EPS growth of 16% to 19% compared to 2024 underscores the management's confidence in financial performance going forward.
Investment in Growth
Stantec’s proactive approach to managing its project portfolio is evident through its investments in capital expenditures, expected to be between 1.5% to 2.0% of net revenue. This strategic allocation will support growth initiatives and enhance the company's capabilities to handle future projects effectively.
In alignment with its focus on sustainable growth, Stantec has also announced a dividend increase of 7.1%, with the upcoming dividend set at $0.225 per share. This move reflects the company's ongoing commitment to delivering value to its shareholders.
Frequently Asked Questions
What is Stantec’s primary revenue growth strategy?
Stantec primarily relies on a combination of organic growth and acquisitions to increase its revenue, focusing on sustainability and infrastructure projects.
How did Stantec perform in the fourth quarter of 2024?
In Q4 2024, Stantec achieved a 19.0% increase in net revenue, amounting to $1.5 billion, driven by strong project execution.
What are Stantec’s targets for 2025?
Stantec targets a net revenue growth of 7% to 10%, with expectations for adjusted EBITDA margins ranging from 16.7% to 17.3%.
How much has Stantec increased its dividend in 2024?
The dividend has been increased by 7.1%, up to $0.225 per share, reflecting the company's robust financial performance.
What did Stantec achieve in terms of sustainability?
Stantec was ranked 8th among the most sustainable corporations worldwide, showcasing its dedication to sustainability in engineering and design.
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