Stantec (STN) 8 Aug 212021 Q2 Earnings call transcript

Good day, everyone. Welcome to Stantec's Second Quarter 2021 Earnings Results Call. Leading the call today are Gord Johnston, President and Chief Executive Officer and Theresa Jang, Executive Vice President and Chief Financial Officer. Stantec invites those dialing in to view the slide presentation, which is available in the Investors Section at stantec.com. Today's call is also a webcast. between if you dialed as should a second that viewing while there advised the XX webcast, and the mute delay be you in, have also is webcast. Please call the your computer today's All incorporated to forward-looking information the in Slide detailed full statement subject discussion management's of on the in out for provided Stantec's conference call. set and is this two, during call qualifications analysis purposes and generally rounded. in Dollar are amounts Canadian call expressed in discussed dollars today's are and With pleased over am that, Mr. to call I the turn to Gord Johnston. Please go ahead, sir.

to solid joining strategy, Good a match Through and of thank margins value our of second you record morning delivered historical leading performance. our through and us. per quarter for Stantec financial earnings we've share. our delivered another higher creators, quarter that commitment $X.XX four executing to considerably operational quarter-over-quarter,

grew well strongly the key we're seeing through had X% Our a growth, surge remainder the currency slower to Canadian of the look $X US. than recovery. wins is half in award We've backlog, in in to On all to over we of a with of beyond billion of our more recorded first than this we markets, X%, this little line, beyond. across while quarter. our better actually into half the organic year and as the gross we revenue of have global growth momentum constant a to which generated backlog year. revenue, markets clear notifications, is And in off which evidence was see start net building expectation and a We in coming by over rebounded US basis,

backlog, confident can large filter into our notified especially be outlook. frameworks, us to sheer every take to their in longer months or awards give magnitude for these reason multiyear While our

the remainder On raised for the year, guidance. and our of year-to-date positive earnings of the strength XXXX we've results outlook our

Canada has recovery been geography. opportunity results every in. has now created tremendous The virtually remarkable by in our pace this key operate to and in of Turning we sector

have organic Environmental Investment strong, revenue used with a and the growth. which the And quarter. overall. spur Project the key projects, tool move Buildings over significant generating is in Organic particularly de-scoped governments large Quebec been high Services each was the governments Infrastructure, X% of transportation Canada to TransMountain in transit without forward infrastructure revenue already by Ontario Our XX% being business. we've in businesses and are and effect economic teens for for of our growth driving seen net the growth

sustainable continues in hospital and Alberta well to in in heightened bodes major backlog strong which the opportunities municipality. several due Quebec community healthcare Canada expect the our drinking hospital Toronto fueling industrial to Our business. additional St. Western growth ESG from Canadian and on A engineering also organic for optimism environmental to in with causing buildings strong Services seeing and activity within demonstrates of healthcare expertise. drive British people we a awarded We're a design. our well of Environmental in With We're reevaluate practice. were transportation demand project is our large provide seven-year in the growing their projects growth. The are seeing economy Ontario, improving very continued organic our work solutions driving upon us. for growing growth and new with Ontario In projects the attributable rail a strong are Montreal and to sustainability sectors, buildings for to Columbia choices, revenues light and Buildings sustainable to provide also the pandemic our the historically and large projects business architectural transit high related to in rates, innovative business. major expertise utilization volume housing Metrolinx advancing historically and our and demand Paul's and market our for Vancouver development development high in for installations and of the civic projects, draw agreement low-interest significant organic water number high in focus Saskatchewan services we sector. to exceptionally on levels performing QX,

wins Western and irrigation a support Recent Overall, like US large-scale start. with in the the of for these archeologists is wastewater in slightly regulatory of months As is US our we're themes win a and manufacturing recently and playing services US, Resources great QX transition recent Canada their growth X.X% water demand Energy so emerging feedstock project year. are was in biogas environmental market space. of quarter. upgrade a source slower retraction in our line process, growth Organic contrast organic the we're won to is in activity And of Ontario, the instrumentation in And the as provide with facility we a off ahead. out steady underway, in in expectations, also of services be group the And to this doing in up, and growing energy Canada of to last continue mining, initiatives. the organic role be a work Many revenue energy. performance will the here was too our consultant in recovery the seeing treatment renewable for prime our multiple Southern business with projects and in we opportunities in example although Saskatchewan. to transportation, mechanical for to for ramps as as they commercial on our leaders development requirements sectors recognized scientists in water increased activity the

Teresa results Our bit Canadian the go impacted the US of strengthening were by later significantly this into in a presentation. the dollar, will and

when down the investment be approval in tends Unlike has to continues business the delivery it order of are work slow crystallized, due beneficiaries Canada, recognition transportation but positioned complexity of end wind-down not occurs. major stimulus to alternative of revenue infrastructure projects, US through the process. several well Our to yet where we the at projects very change to

traditional infrastructure With public like funds we stimulus turn strong the corner once spending investment private to starting infrastructure as focus US will expected the bridges, and flow. drive gaining to expect transit, begin Building growth roads, in and on is is momentum.

sectors, we're US, the weak, Canada and the very in sector where beginning positive over creating feet Energy We resulted While to XX% year-end dimension emerging of The theme growing shoots pursuits sustainability Resources seeing in a expertise since and is which This the industrial in wins Services of around NAVFAC. and a has and and will recent of civic sectors. in in of the and also commercial the a other we've States. awarded especially size. our XXXX. in million a backlog see in number hospitals were for our we've businesses, in remains that state-of-the-art successful we're in all work number our United pursuit Engineers for large-scale one And focus XX%, IDIQ's have in been growing Environmental and square healthcare is world, in pronounced the Army recently of growth this respectively, Activity seen organic design Corps US is for the on achieved sector care facility design that facilities. be urgent recent is of the green neurological

work to our this trend Services group the Environmental for solar will in awarded contribute and were groups support projects. the capabilities look expect imminent, to value FEMA water considerable and storage mandate to complements we of this infrastructure we signed And opportunities US presence Solutions. ahead. to and that's acquire net past stimulus. extremely awarded in expertise, approximately of archeological engagement Earlier intent to and largest in anticipated offshore letter Paleontology our States. worth with and like firm has these transmission $XXX the our the the to transition energy their And growth renewable wind United risk any natural a and hazard utilities us enhance to as week, space strengthen existing million in responds our meet Paleo coupled in their the and Paleo the this volume usability electrical in increasing complement revenue positions We well further information, infrastructure that and with to feasibility of pump strong quarter, quarters industry a staff study that recently of and backlog continue the continued on of major this announced

revenue to growing outperformed growth that larger with in the So backlog. are by solid and than backlog in in in Like X.X%. scope. the X.X% awards in net Canada, quarter, And evidence will of scale wave million US, is $XXX of that we've yet be this in certainly and in included not we while second the global it the see the coming our slower expectations logged Canada, organically organic materialize notified

Backlog of our significant seeing project growth in year, in teens. growth mining organic contract acquisition Australian our large global prices our a frameworks client also further Australia in net for UK our the growth of growth during our We terms from remains yet the healthy. Our high program. in we're sector, our M&A not and second this to High we're AMPX particularly the Australia UK peak in region driving businesses. seeing the awards water Ingenium highlighting commodity Acquisitions of business acquisition and in as over combining of generated and demand added organic notified our benefit respect the and activity. which backlog, water strong opportunities. quarter, in We're teams closed also again, operating business, achieved with revenue X.X% our global to value driving multi-year very globally, are water are of at in frameworks interest XX%

global story not XX clients review great the a things are continue the has We've storage energy. retail, appointed in and transition addition, to I'll mixed-use role conceptual multi-disciplinary very other Theresa, turn also been support commodity been of a yet awards community in over for These business the to with examples include significant of in spaces, commercial our backlog residential, active detail. pump Australia, mining quarter UK. facilities renewable to also are prices. now in in the to to our In separate in design in development how and that more two we increase consisting

morning, Gord, Thanks, and everyone. good

our the of on earnings a impact US Canadian million. impact on metrics revenues our As Gord estimates quarter $XX the key dollar also by The rate change mentioned, had on by which quarter. other for provided the strengthened decreased this basis, financial margin FX and a US a were we quarter-over-quarter Canadian to revenues, We've the XX.X%, in drive net substantial $X.XX exchange the able QX EPS achieved in foreign a on the and estimated and project Without basis disciplined year-to-date. continued that grow new our our negative discretionary to have record. impact execution EBITDA net focus spending. through on Despite point exchange would $X.XX impact, XXX had increase adjusted our

focus also of on aspects Our QX results business. our our all reflect managing

our adjusted our EPS the industry-leading track to our estate to maintain XXXX margin, of Beyond share to EBITDA per deliver in we're and execute strategy, $X.XX drive on grow which on XXXX. remains real by end continuing

on reduction we've contributed representing in tax rate interest in respectively. increases, benefit diluted strategies. lower These focus management, collectively and EPS, tax offering working adjusted XX% effective senior our QX along are our implementation $X.XX with note the expense, to rates income in and of adjusted to net optimization $XX the million of and reduced Our a last capital year materially interest from driving XX% efforts

the maintain our Free days million our level. days, receipts, EBITDA in range. the same $XX the at quarter-end, target revenues compared to Our and balance our million, which ability to six relatively downward flow outstanding this effects revised year remains than the X.X for targeted time less half reflecting XXXX XX XX with consistent We year. days was first DSO times, of QX including cash is sheet foreign changes days cash to debt-to-adjusted net down DSOs sales $XX from which with below last to of strong corresponding below XX reflects decreased Days confidence and in of our exchange.

strategy. to execute quarter, capital shareholders through while period same $XX and various from of relief $XX through our we're resulted capital deferral demonstrating capital last financial repurchases, million and $XX spending tax in confidence payments, As has in allocation to activities plan, to on date raising in benefited which to payment ongoing XXXX. dividends, the our million of share on our from earnings recent second our well, the and investing reflects And other cash million expenditures returned for our commitment we Increased on cash year remained our the the in flows activity, our guidance Based for income continuing performance acquisition consistent. used programs. pandemic

revenue organic low-to-mid-single organic the expect in We slightly to than to previous be X% our growth to a relative recovery X%, stronger digits now to global mix continue with thoughts. and XXXX or the in in US. offsetting a shift slower be but in slightly full-year slight to Canada initially the net expect growth to projected, start We

on XX% a end the whenever growth, of lower organic now on We're we financial basis. ranges it talk currency projected reminder, a about As raising revenue. be talk to we about net of margin targets. Adjusted EBITDA always XX% to is constant all our our

expect our is to higher. Our growth where now X.X% to XXXX income adjusted And or to margin guidance net adjusted be EPS, for for or X% to diluted And in expected of X% compared is was revenue previous as adjusted higher. X% ROIC growth achieve or target X%. XX% XXXX, now net now we to low-to-mid-single-digit

around regarding foreign our QX shift turn XX% uncertainty earnings exclude refer represent Gord. revised continued sensitivities, This that, infrastructure back seasonality information including to QX from of expectations a stimulus timing US to our our earnings, stimulus this guidance call believe effective and more And tax exchange and quarter's a rate, the spending to from for XX%. revenue prudent to bill, QX expectation about is I'll XX%, and and a US split. potential QX MD&A we XXXX for any outlook, XX% the still XXXX updated Given represent where now our of with it's previous upside project our of on expectations. Please detailed in we our to

Teresa. Thanks,

We year are rest very optimistic of and the as we look toward this beyond.

more on backlog. yet growth Our aren't in that X% year, performance increased is our booked $X EPS our XXXX guidance the into than backlog first and our predicated the in award for of in billion to strength the half solid X% of notifications

our proposed our areas While we have strength. assumptions roads, water matches revenue XXXX, infrastructure US traditional any yet for not incorporated with the spending on like stimulus transit, and squarely and into bridges, focus of up

these growth Given the we capitalize our goal these operations. sustainable to expected ideally our of development to UN US focus on on opportunities positioned are part and exposure sustainability and related significant investments in as revenue, industry-leading drive

largely Our highlighted proud to as ability retain by dependent the high and And our deliver of our results on ability to maintain clients win employer on on best unparalleled pursuits the accolades some rate recognized to an our as talent. of we're this for is choice, be noted slide.

the out While Stantec the space maintain environment percentage top-ranked continues an it's stand where for that's feels our a of voluntary turnover to rate has to us remained and everyone continues and And low to continuing pandemic better inspired than why engaged included key a priority highly workforce. sustainability. an industry a culture and supported. we're empowered throughout and to welcomed, strive its in as work firm the maintain points couple average, be to for

the the fifth XXXX. Corporate top named we Best year, sustainable XX industry's Citizens were ranked Knights this in world also to Corporate by most the Canada's In recently being of addition firm company in

around emphasis from and to and the interwoven call talented staff the supporting our Operator? create thank clients journeys the more our sustainability we'll to commitment our sustainable who guide team continued leadership communities And Our colleagues and their And on clients on of diligence futures. that, our with is I to for employees open all to in questions. up want their world.

Instructions] from We'll Please Poirier go our Markets. ahead. with Desjardins take question Capital [Operator Benoit first

morning, Yes. everyone. Good

of current I could how closing throughout get on and the respect current employees a many front based you opportunity of want of ahead you of rate, in in have sense acquire pipeline XXXX? M&A you the you just to a assuming your Just M&A with remainder normal of context. on the

market And a discipline over the for and letter of a some Paleo announced going person the that taxation that year, States what the the Yeah. more range. would that the a number there's activity to And earlier at remainder X,XXX there's we less the in are But our because perspective. for less suspect Certainly, Thanks in coming we're intent because lot finding in typically also and that you question of folks the of particularly X,XXX from X,XXX-plus lot Benoit, a seeing person market in in we're are additional these activity there's firms that United spot. a wondering looking noted of that is key days, for Benoit. be I person to this us, players. as we sweet lot week, the of of activity there's market, Solutions. And in happen

multiples in long-term the have accretive transaction pay And perspective. any us so to be lumpy. from to maintaining for discipline on are - we're to things these But that really always prepared order be a

folks to count I say And a there's from many of of of the that that. I'd don't guess difficult a us end guess at close perspective, people posit year firms we we lot how to to add staff before so like full, think for space, is could many a the would how pipeline activity the really but would the in and be only to

Okay. to billion it bit slower from is a dollar with the the excluded package. the trillion Thanks. US, the recovery, of potential color. of but award Great And impact of $X obviously, notification infrastructure seems respect little

work, update begin segment to I So with funds would Gord? down flow? curious an most the be benefit the respect road timing which to And for would to have the to the

question, books that more we the to to for relation the stimulus? coming we specifically see soft the is do have Benoit, what from US with related backlog And mean or that your you on

More about yes. what's US stimulus, the coming from

grid, roads, - US low-emission $XXX at for and the $XX our And ties billion $XX When grid, five wheelhouse. $XX new billion upgrading other ports, water strength back just really infrastructure, of million of electrical also $XX that to year, from billion, billion a well. - the electrical lot in at things. you very, is a it so well had, right $XXX electrical look billion Paleo roughly plan stimulus in billion billion you public for going the a lined years, to the Yeah. transit, $XX work clients airports, in our and perspective, funding with the that look very in that's It's infrastructure, sorry, interesting. plus which in Teshmont $XXX for upgrade When as space we major acquisition bridges, for existing grid, lot buses, does of with last but for zero over up

So I the think we set of infrastructure bill finally capitalize the some will the are on we've from added with our it's skill with to skillset, ideally existing recently, situated anticipate firms when what we of passed. US come that

Thanks for the color. Okay.

Great. Benoit. Thanks,

We'll Securities. Michael take question with Tupholme next TD our from

morning. Good Thanks.

Good morning.

Good lower reduced or was morning. admin quarter, Teresa, the noted part marketing that spending were favorable of resolution the in Gord expenses the and and due claims. certain expenses it this to discretionary

off, Just to two secondly, continuing progress? also that questions there. resolution, to claims about to was? of could the the with you speak thinking the if I how guess, material discretionary how you're And you going then can speak reopening details forward first economic expenses

Sure.

last So claims I recorded a enough what as respect wasn't say I material think. we million QX couple with it dollars, but of to of recovery, would as to the it be noteworthy, was year, at

discipline. and our to on baked on spending able also of discretionary EBITDA we as into know everyone be back start continued savings, we've and as get road expectations open it sort But travel, for to forward, about year, going things planes well, to so the pushing up. we that continued think is is this margin And

and and will were look on, the our part bit go a we probably And we in and QX we're as So, the back intention QX. not that see of XXXX pandemic. spending bump before travel into though, to that is expecting toward beyond, up of a it toward latter so to at discretionary levels

before the is, what our expectation as cap as but pandemic, to to what the fully percentage will during reduction remain we're high as not that going try is low yet pandemic. as not low, So that we've target it established but at, it that not

Okay. year-over-year improvement quarter, the Thank you. you in QX. the looks hear ahead improvement, year I color. whether If we that. Are believe third like quarter? great the look appreciate look That's to If see healthy. at or improvement can comp prior me? margin EBITDA in third margin was margin in QX, to we about it the is continue you not you more Can year-over-year able it talk margin difficult to you that

yes. now, can We

Sorry about that.

will sure that maybe Okay, re-ask I of through. not perfect. the came am how question. Or much I

the - was just question So,

margin great. right. Yeah, that be would EBITDA

quarter, on year of the you am was I so about is a yeah, look the question wondering like quarter, Yeah, in the we good the comp had improvement to third the ahead margins, in more - year-over-year as prior comp. looks - second difficult it terms

I in see the given quarter, do quarter. range the for you've full guidance So But third improvement the be continue year-over-year able EBITDA third wondering, I'm the to margin year. appreciate just to expect to you in

finished Theresa, So, were response. your with you

getting started able to just I got you No, cut Michael, us? hear off. are I was when

can yep. fine, you I hear

Apologies again.

So in And that of margins And there roughly about that way the out seasonality go we the have is we the to it the the pretty a will EBITDA - year. over the our be confident bit EBITDA same. we we course still that feel does margin, - tend year. put for think still of range

quarter, to again, target. hope back would fourth it's strong set in the that it in that the relatively be we've You our and off think the comfortably to in range going will third be quarter, as

Okay. in Thank back get the I'll queue. you.

Thanks, Michael.

Bout ahead. take We'll Please with from Jacob question Alright. CIBC. go next our

Good morning.

morning, Jacob. Good

Good morning.

the revenue we or infra was projects in this organic in resurgence delay US. maybe the in I variant say, of Delta of the How the US retraction versus, the saw want transport much wind the to into back to down go of the and infrastructure drivers the dig negative US the stimulus?

Yes.

half booked operations term. seen that growth far coming that absent And QX year. roughly We've stimulus. the and so say or that some in which to in organic even we - this we soft over is infrastructure billion long-term - $X.X the have we talked backlog as about just off organic had We've certainly, X.X% comparison our to start in US to there, US our of confidence well XXXX backlog also So long growth. our note

the in did bit. don't So in major the projects, QX, buildings related retractors to - see two are is we right currently there's US, as we that well business were and call that to now, two but our about winding them individual like of retracted in down point transportation, a those that that your typically out to stage where we're as

that turn Now with begun has in to we've noted buildings really projects. corner of addition new the the QX

feeling I so And we're that. about positive think

I and impacted only the do would into don't spending, So Jacob, see of the Delta US QX, we'll the US by forward, going next but really, believe these us. provide we stimulus absent continued stronger QX, a that even that that were not, variant. resurgence year, And infrastructure the in at tailwind growth all for believe, certainly

billion And Okay. that how awarded it should $X.X or award notifications, the be be Is about added quarter. that backlog the to thinking we will in fourth in that? sounds like

No.

health those of our the to there just Some absent do those we've infrastructure US stimulus. of indicates what even - it is, tried markets, overall

some start on backlog to them some we $X in to gross take of away; So some were but true, those right quarters and in we'll were and - add revenue in that will and be the notified billion quarter, award that several of those of are actionable even longer. excess will is immediately,

in the award For prepared results, that example, a with That's were we FEMA I the project multi-year FEMA. long-term mentioned awarded.

And business group is of project. multi-years what us a that but provides so that years no us through take admin, and of no the just on people full-time backlog work will with several it to working development, for

the So But overall of no, indicative of I the of drop wouldn't backlog, think it's billion more expect in I markets. just to our into overall health QX. see $X backlog health

supportive And our view things to gives so tailwinds. that continuing us just improve are solid and of long-term

tax really on rate you the Can play is a that then about second question into guidance. this lower is just of XXXX? talk XXXX mix And look my as Okay. just for we sustainability or the

say tax lower implement of should that we year we'll with. XXXX for at I haven't we would lower a yet. rate our to that some things But the we expect course, relative XX% to XX% a this strategies sustain we maintain done do equal, this all level. did being But able it be full started year budgeting to

Of US course, corporate a whether discussion of reform. there's reform, it's global around tax lot tax

So, there there's we're being effective monitoring. But the year rate all a certainly things able tax floating should than few lower be things a with. out we started we that keep to equal,

Okay. Thank you.

Murray comes Markets. ahead. question with Our next from Cap Chris ATB Please go

Thanks, folks.

companies So, just change we've the tax there other from kind Theresa, second. seen your also the tax is already UK assuming, of quarter, commentary year, rate. of discussion I'm the was for for some continuing in a that on lower slightly one numbers about the that's baked things a of in in that And to impact? guidance, kind maybe assuming year, in? I'm does your - this next statutory

right. be would That Yeah.

And when double-digit Canadian this slow? going might you some Gord, rate but think on impact then certainly other I the rate organic my other And you rate. by be? TransMountain, that growth growth Can Thanks. the organic guess And double-digit sustainable is kind think numbers, piece TransMountain to TransMountain. give the indication us you just the Okay. of operations around question how kind excluding the certainly is growth of is impacted of and

this of headwind, organic Chris. year, relationship changed the growth of an contractual year. really will end persist just Thanks, as them impact The with we our Yes. end for the at TransMountain of the

QX, last year. that QX So, QX, we of revenue TransMountain generating were with

organic absent so in oil Canada lines and growth QX. our in had every business And gas, of last one -

in so seen Canada. And we've are up backlogs

good, the for still But we backlog is looking new in quarter, one pretty the all the groups virtually in in book-to-burn global, for our US, of Canada, is Canada. had basically, excess every for and I feel of good book-to-burn above there, of sustainability, is Chris. think And pipeline of of all combined, a opportunities so Our about that. our overall, group one terms

but So That's will digits growth organic do see hard say, for remainder we Canada double of strong to quarter-on-quarter? the in year. keep the we

Thank helpful. That's Okay. you.

Thanks, Chris.

We'll Capital Sabahat RBC take our Khan next question Markets. from with

on I'm Great. Thanks or pipeline of what your bit that even benefit kind should some up outlook following Obviously, discussion. about But little you from of internationally? across stimulus. and the just regions? infrastructure market the that the US kind major seeing the you in end maybe that's in a of the market good are for specifically morning. talk Can a

look is still, what be we to When Sabahat. sort think we seeing is I a getting XX% seamless there there. clients, board continuing work coming. at hiring time negotiated, putting Thanks, anticipation on of of is and what's conceptual US, design, their frame the designed, the consultants, But what infrastructure we'll a of of course, out number get in interesting that see we're people

to that, that absent there. institute So I We're create nice US, we for neurological a that is in going even think that's But we large hospital, talked the awarded. backlog soft about tailwind the us. seeing are

even lot in in clients, US absent infrastructure stimulus. US of the there's So the growing a confidence, confidence,

south down really we're global by that. So in I our organic down forward, Australia and driven that acquisition backlogs are up from there. through Zealand. work Certainly, United of way in the good lot stronger forecasting recent going we're of work seeing well of a New a growth think as global GTA about some certainly, Outside States, the a From we transportation perspective. perspective, feel in even XX% Canada,

So next infrastructure, a for and Canadian, think. it's feels I the global I perspective, couple to for good years, industry, going pretty like tailwind our for a the remainder - think of provide US a from

of of and kind over Thanks for the which have that. is a And years, a markets tailwind over end last bit just the had turning water. to few that the then environment

growth good XX end those And those end XX, maybe, kind markets market you, [inaudible] we as well. see those, demand as to had look growth which specifically You've markets? the forward as continuing? are in seeing two maybe for good And do you in of next more you tailwinds months, those

quarters. water talk business each our in we've we or seen quarter When growth for first, Yes. our the eight water organic business nine last about

of pandemic. in the pre-pandemic very, presence to And the are there, Backlogs really, in I or think water it States, in So strengthen, market through whether is it's continues our just United it's globally, Canada, even just solid. and perspective, growth water space. very continued soft about in the strong, there, there. talked about. we've backlog is again, portion that we a great growth see really, From large backlog and as that environmental talked the And we

overall the Environmental quarter. in And in overall good extremely certainly as strong. book-to-burn one It's Our about for Theresa backlog growth Services feels the talked above being us.

to come strong that believe, to support we into as so growth feed And the continuing I the revenue just that see and quarters backlog will well. XXXX generation, for continue

If just one squeeze I in could more.

the the larger an and on at kind as right point of transactions past the top in now kind your small for Can still Just looking transactions sheet pipeline opportunities in you've is good out of balance you at the chipping to medium-sized been position while. with away of this there comment the it of the what opportunity looks here, and on well? Just year? maybe set

whether is discipline the long key we ensure us the But been see pipeline before, second kind we're mentioned and as earlier, firms that historically firms here But, market, mentioned full person the Stantec opportunities well; not going tax Canada, firm the capital, of to there us of for the and discussion do in half accretive year ones the pending the will really opportunity in to As in as changes term. of of sheet I with now. And in but from transactions the as be that heard of we coming of half we've there a to balance that the briefly and a that in there's number in couple are number coming year. market. we'll about which of I are latter excess to a particular, for United of we it come then that to the perspective is evaluate. market additional it's can see deploy look The as a - already, spot, or is US, like, sweet I additional strong, lot globally. But short States, our has coming live in the in the the of X,XXX is see, that longer sub-X,XXX think people,

is maintain our of sheet quite but level you'll discipline, is there, strong, and So see balance I our think strong. is for our also appetite maturity our us growth global

opportunities feel going we So, good I forward. about think

Okay. Thanks much. very

Sabahat. Thanks, Great.

Ian We'll take Gillies our with next question from Stifel.

Good morning.

it you Good the especially you're hoping and just you in move about share another bit thinking that you're about it was how especially in to point, pretty buyback little thinking active seeing with fair bit you price? there's can it was - given highlighted solid I everyone. the given stuff how a QX moving ahead, talk at morning, maybe a about or you're in versus M&A that this pipeline, of

Yes.

our always I what consistent share to it's been. think buyback with approach is

when that's powerful through not so think, approach to little we the good our But shares. Sorry, in I deploying consistent, preference. will in see a that. May But We getting pricing the coming of and of our and is buy look we and bit the a opportunity Ian, preference, so dislocation in again, a opportunity, But certainly, I'm from. found go M&A, in bit to to and June. where more the we and use markets is I'm our opportunistically approach feedback. in sure we do just really, pretty have the that's capital NCIB

Understood.

to how talk add change that grow I ability M&A a regard? haven't people able unemployment, been been given like hard now, organically you people to thing The if up to way. about they've the that find? it on [ph] other of jobs you follow there's people levels continue been low talk right I'd of happy very the adding that business in feels to on, curious lot - be to Are wanted and to So

Yes.

had - - So a that significant we yesterday. discussion just have And interestingly, we're on what things actually we there. a of couple

of our Firstly, industry so the industry. the - below typically average. turnover turnover while of are those our our did And rates declined pandemic, to early voluntary the of rates voluntary stages during X% X%

of they're of is begin we're voluntary number turnover. digits. on, up, the we're And rates and while through it to exceeding to certainly folks seeing able so losing that folks creep hire And we bring still for that we're number single the voluntary us look at as the in

be always that finding staff of importer net this during a and case. we'd to volatile we're wanted the so period to And be

want to and that lose them to to or we can feel they that there. going think success ensure our and everything course, had existing competitors, I that - do we've some employees valued we Of that not to clients we're

look staffing date, mentioned, When our at our now the to - importer, we up. a numbers as So at the to versus adding numbers net I been a are of staff. versus I ago, we've quarter are end year

focus existing And want to so retaining new we staff. continuing staff in recruit to on feel again, our and good about But on we that.

turn the very back. Thanks much. helpful. I'll call That's

Thank Great. you.

from question next our Financial. take Bank with We'll National Sytchev Maxim

Gord, Hi. Good Theresa. morning,

morning. Good

Good morning, Max.

circle wanted just Gord, to acquisitions. back to

kind I time So frame, when at we look $X.XX XXXX, of time historically XXXX mean top when the was around line billion.

executing been accretive really kind the were allocating thoughts some we're billion. M&A you million - that's think now, of over you right the have acquisitions, that changing about to needle there. is maybe, last as looking close of two obviously, of dramatically makes And to at materiality ability years? whether maybe sense. I every kind You But doing how better $X And while to and same, appreciate the through $XX year. revenue kind the like the acquisitions So, been move and do things

great Yes. perspective, No, that's Max. a

strength those execute look if you've the and a of at our and the probably appetite firms. small be that of sense And having last the I to balance and we're larger - say heard And certainly and operations them. our that over of think we'll they'll these at our from in continuing again, maturity quarters can and long-term as management objectives, that strategy, to meet person those; So find the couple on global make our X,XXX But longer our our but, sheet of and us where think we our along, only Board, some think shareholders the are is less accretive that, we term. strategy. we come from solid look because we they to of midsized transactions some certainly,

Right.

more acquisitions, financial And in sense. makes you're of it seeing as of landscape competing on tires or well, is are you that strategic things for all keeping buyers kind Okay, the players against? the terms competitive these

annual a buyers financial buyer. now, We maybe more XX% anticipated, years to are that the basis, And absolutely looking interesting, other ago, five we financial of were years an come transactions five the might to just stats the some Max. from day at roughly, table, to it's seeing we have ago went on

transactions so be as very, perspective buyers. have of XX% far could think, some opportunities. year, there's financial a cases, high difficult for we've the I some be well, unless very the to in that you getting them into seen up as of to and growth high that you're multiple this seen, multiples, gone from is be of And to the pretty of those have strategic, teens significant it'd these very accretive would

financial we're acquisitions. platform these - it as our focus, for there, environment we discipline. of is competitive our see certainly more buyers maintaining just a some we're but maintaining coming We're again, So and looking

may. then That's if just for clarification one Theresa, helpful. I And Okay. quick super

So Is accurate? margin in that I profile the confirm telegraphing in the actually able kind going what of then margin improvement terms you're back to to be QX Michael you was that it half question grow flattish in think Can just the that that's asking year-on-year. of and QX? you're

will I don't it know from grow if to QX necessarily QX.

of I QX. in be stable would think to end do think QX. for typically will at we the expect come we it But see it we back relatively higher what down

QX. able QX, So, to replicate we did to in expecting we're be what

you That's me. Okay. I Thank much. for it clarification. the so appreciate

Thanks, Max.

next with take James. our And question from Bryan we'll Fast Raymond

morning. Good Thanks.

the business. regions there that vertical? water space. your commentary Obviously, up that weight on water market as above are punching the in follow your to on leader you're in the Are you Just any not seen

States, the United we punching while easily think, Australia, in the market extremely we I think as major the we're Canada, US, our I UK, Canada, player our strong UK, Australia. the know, probably You markets, and above and weight in are look dominant around, a

some won the they've I The really think there that would you have I more growth have presence our really, think addition to we certainly focus awards, and opportunities resources. we of us in add But going an And strong for forward. be the area numbers. is fantastic. there can staff and additional can team there see strengthen - continue we some so that of to by through

And Okay. Thanks, And how US that vertical. is shaping the I healthcare bidding a specifically? Gord. the nice then in project the opportunity is healthcare, in guess guess you US, highlighted for win I pipeline? up

saw is we've for In first Yes. opportunities of States. the and year strong in It's interesting. But particular through the in the United in bidding of seen what blossoming healthcare Australia. healthcare on remainder coming really the is really the QX year, Canada we coming the really in quarter pipeline and

that us go was But a award think continue see here. year. for that as really momentum I we'll for nice remainder So we of this to build, forward, the

Thanks. me. for it That's Okay.

Thanks, Bryan.

from Our comes Please Sun Laurentian ahead. question with go next Troy Bank.

morning. Good

Good morning, Troy.

target wondering can on seeing if year? a I'm you more this the how DSO gave And for improvement you profile in that year? should free just to that this for flow beyond morning. we be terms been bit like, of continue, cash color the business? you've is XXXX think a we Good little improvement conversion sustainable provide And the the when structural of change expecting if that

range worked hard sort the the of And over XX awfully that DSO. us, at to out ongoing last days our couple is for basis. think level pretty an years I of it currently We've on sits achievable Yes. that XX

certain really this them a outflow pretty we programs range thrown since effect this that year defer, last we're would course, we year. had of were related be aren't as of then, always catches course to that further and think uplift from any are higher flow last confident I or can normalize. for And got bit a year. - we up payments so than expect that arrangements, pretty we of aware of but pandemic. is good things There disruption able achieve. to in cash some usual And this you tax with from I off participating that contracts that will But the from bit Now free can large a standpoint a the year by we I

think I that I but no structural it So, think changes is can of. normalizing,

market. the wondering, on quick Okay. energy question, maybe coming Great. just maybe Thank some more just you the on I'm Any the comment vertical. that in just in energy there, Can in space? the targeting backlog you. now, and That's make very a good helpful. comment renewable of And next you're becoming pipeline seeing my color also space, back you you're It's Gord, metals that the the of also see to that commodities some if can work that Thank - end then pricing particularly healthy please? you.

Absolutely. Sure.

interest seeing right in about and locations first, so space, getting So of Australia wind in States lot and and and in that, started mentioned now talking we're the both working working with. farms, well, on other Saskatchewan, on farms. that we're solar facility a energy where renewable Canada we're United as a We the biofuel

storage as a seeing work. mentioned a we're uptick projects expertise. area of pump where number we in well have So of We particular a real

see just of grid to backlog work-related that renewable I strengthening. in lot space, that a And work think to we'll continuing. addition we of see So

the rebuild storms billion is US issues we've Texas. of with One bill the in electrical ice proposals seen related the certainly $XX that, to And infrastructure grid. in to the

wildfire bury - sorts reduce You've a the to transmission commitment of make to a utilities seen some XX,XXX electrical California cabling and as other damages. to in result of up of miles of

seeing couple high. the South are tailwind looking South continue distribution, the and America. of that of lot South that think our transmission, America to the South we of to America. with some work have lot ore, a commodity lot into in is a lithium that And renewable and our seeing is mining for And the coming firms well area a the get through of for the with space, or work see prices next electrical us of production then this real producers. coming I also certainly And Ingenium So acquisition regards lot We're But for quite of of are year years. active - a work the strong in stores of particular certainly lithium field. number business America in iron in remainder growing in as of gold, we're We're I that in Australia, are a there; copper, so lithium. a on, of in in junior gold or either expertise space; already

lot we think potential well, see to to Troy. as that I So lithium of a upside

you prospective slightly say the seen business? in you that you've qualify would growth the that would energy from I what guess, So higher to vertical rate than sort be, of traditionally

Yes.

in projects. a last saw these in uptick I Energy mining, really involvement - as now uptick we're energy think coming upswing or that some that the in electrical winding years significant of really the we're down, we overall winding over our But distribution. those coming and the from of TransMountain Resources in in previously, are seeing revenue seeing our business, couple pipeline the down, transition,

So, I probably a we'll see - bit it think from a go-forward little out perspective. even will

Great. Thank you. That's it for me.

Troy. Thanks,

from Securities. Michael We question Tupholme have a TD follow-up with

Thanks for taking the follow-up.

how historically So, wondering just figure. said if award you award wanted I'm the to to context of in you I terms you billion revenue you notifications would go can think that in back seen have on compare Gord; basis? was put what into quarterly would a quarterly notifications to $X.X and that highlighted, that gross a figure

Yes.

is industry the of that health the just of that in the of that quarter, and overall it for Michael, our saw, - we and health was us, base. backlog, client think probably really an sure. healthy, I overall the And for indication

backlog to that something but quarter very indicative X% that it's and just not also thought is out know just call don't of was that be something it's good because would soft out nice we I particularly strong up since we'd very, healthy year, quarter, just thought so of every backlog the call quantify And beginning that markets. but and it to underlying as the this healthy. look it we healthy we'll that

year-to-date, Okay. just be with speaking - employees. net turnover current you the up wondering, the to organically And is backlog that. X% to and I'm in difficult market? that were And I here? seeing you staffing I'm are then appreciate going about additions employee up from to do how

Yes.

hiring virtually in are virtually geographies. and business of lines our of actively all absolutely staffing actively up, all we our So

previous is I do continue there. there One war been to as for a certainly to-date, we Pune, other thing quarters, staffs, operations yet We're there XX% continued year in a there. have talked is our up to also would to India. where so bring center didn't But we importer net to we've resourcing in been our about today And talent look of we've delivery we'll our that. over And that mentioned, a these and ago. XX% grow we've in up

our think but staff markets, I us, So and staff also is, retain But feel focus to good staff that continue we say retention Pune, all is this forward, our area India a going huge attract to our for attraction. to of center. about is and ability in in

inflation as to related And - Okay. you just in you to lastly all you're work can then at what of that, seeing to staff, attract speak terms wage pressures?

positive instead, resignation our in while a read the they're programs people it. are looking the they positive, it we large to it. And who seeing often competitors; when lose inflation we're have. to us but net wage in know and in clients, leaving capital And also us never know deliver, we who is a like happen we for them. geographies all in are have term. calling people for so have for because going help great some we is of the and of the certainly things to absolutely positive all not We're execute number There that lines, is, business pressures, the term longer the employees, as employees our us papers quality go couple coming that in probably not They clients you people work about up good seeing all are them, they're going seeing these to aren't to of often longer net is that

that individual, that to Of are some pressures. course, we'd wage but staff lose we seeing say rather not all

with. I grappling and think an just industry-wide that phenomenon all that's we're

Okay. the follow-ups. Thanks taking for

Thanks, Michael.

from next Lynk Canaccord. Yuri comes question with Our

Hi. Good morning.

Yuri. morning, Good

wants who don't take this Maybe good to Gord. one. Theresa - I know morning,

guidance organic on the X%, United organic clarification the guidance imply Just negative States? positive a of to or that does midpoint of your in X% growth growth

US roughly what it's going the year, on expecting end the to flat come think a that we're at basis. is I for year-over-year of out the

quarters work it as coming. through times, a as few the a on year, noted off it, recovery see like the of number finish rest we've As this Gord we be will will overall, saw the of given is But think we We noted, likely fronts. probably to be than will first the think second the relatively we this and better QX flat. that slightly retractions be of - we whole hope we year in year, neutral. But the

Okay.

So of X.X% in I But, a pretty kind that's QX. QX. the right, swing lapping part implies look negative when that big - comps, of reason, you're at down X.X% the in

bit comp the So a recovery, easier combined that's of guess. explanation, I a with the

Yeah.

Yeah.

Okay.

will this this clarify but be third time think you're to go I'll forward. I the asked

you EBITDA right? just roughly flattish with quarter QX talking margins You're the reported,

second would we and but Yes. be that bit QX and occur still that margin quarter the is questionable, tends quarter; the able expect traditionally regarded to so a recovery and QX, maintain off to we fall tend of to then expect, we'll expect highest again. we and margin QX in For be again we would our so mean, QX the EBITDA pace little yes. I given to

would be shape. general that So, the

sense. Yes. We're that make basis last just sure increased straight-lining XXX over trend. No, so wanted to points, makes not we're - sequentially year, it they

turn I'll over. color the So, it appreciate I and

Okay. Thanks.

the for like remarks. or there are I'd and Gord turn closing over further right additional questions. All Johnston any no call back to to

about you the the to future for near IT in We on Great. forward goal. I call issues speaking were joining today. that just look our progress through. again us thank partway toward with Well, apologize continued all the our for you

again a day. and thanks great So, have

And you your that does conclude today's for participation. Thank presentation.

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