Stantec (STN) 6 Nov 212021 Q3 Earnings call transcript

Welcome to Stantec's Third Quarter 2021 Earnings Results Conference 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 webcast. Please be advised that if you have dialed in while also viewing the webcast, you should mute your computer as there is a 20-second delay between the call and the webcast. and this set is detailed call. out management's and during forward-looking to in provided for discussion qualification full statement on analysis information conference of subject call the Stantec the All purposes in today's incorporated Slide X, amounts are in and today's Canadian call generally rounded. in discussed dollars Dollar expressed are that, to the turn With call over I'm pleased to Mr. Gord Johnston.

Asia United will our people presence in States, to by XX%. CEO, and we In one Asia speak Cardno's of what Stantec thank for you clients webcast has and and ago, the feedback our as who one by virtual today, increase our jointly agreement in There's weeks Pacific employees, a the number XX,XXX later to joining about Pacific. are X,XXX and XX% forward. other we of I and team, American accomplish businesses, us employees joining X Cardno Good acquire to people add increasing us. forward you our and daily North those morning, and been we all-staff the weeks We and today, chart ahead. headcount from Susan for will will I large U.S. Cardno overwhelmingly to on consulting Cardno's host excitement almost are really tangible had can for our for employees, announced for Cardno And X path Services investors to together. Susan events Reisbord week. the you the Environmental this we the positive. looking a And space welcoming

climate Services has and in U.S. grown backlog Stantec's environmental year. world concerns, and our change As this clients dramatically the respond to the Environmental

Cardno our presence with underway. years footprint up Australia with it's critical been the of our us we're of X our over market. of us ago. is presence rapidly size accelerate operations compared Australia, one -- Cardno's growth. to Expanding almost client needs Year-to-date, with year. environmental this double well diversity meet fact, will to the from our to meet XX% essential. In to markets Cardno, start to Pacific exposure Asia going And In the Stantec's double a give has will COVID strongest provide increased and growing the recovery mass and our since

to the net firms together. told, And Cardno So once bring closes. million to revenues X add annual to bringing XX,XXX Cardno acquisition than better will more count X,XXX be our timing couldn't than XXXX. by global our the our increase to Stantec, employee USDXXX employees more expect we All in

stood the and expect that we climate as carbon to change process so year, sustainability-linked the to to Friday, targets. our transaction net-zero emission existing we achieve which part soon the neutrality week, around credit we our We have wrapped change committed around warming and discuss Stantec's structure we this remains climate a world the team before and and pledges. global announced the required we've ground in the Glasgow, to begun Scotland the already up This as are leaders of hit close. close from running planning end can integration address to scenarios. Stantec our through prevent worst incorporates doing Last our loan facility, gathering commitments

metric. Bloomberg the as we organization a first part be Gender-Equality As very to score new to of structure, Index this proud the globally are incorporate

innovation driving of His were towards awarded world our social only to Stantec note, Wales sustainable Stantec's that financing market. climate And XX Seal only our of announced loan equity. in auction performance. the was selected we companies also the of for live for commit what's And are doing the the to communities Royal another in a yet our sustainability our with the commitment and This is right. corporate momentum sustainability-linked world. core The our and to from accolade of We directing and engineering to Terra ESG genuinely Canada yesterday, one Aligning in our firm into first strategy Prince back by performance proceeds value Carta design Highness further demonstrates

we Beyond our operations, to to recognize we within commitment our ESG helping respond climate our our change. that impact greatest make clients

greenhouse than integrated platform and to changing Stantec's adapt that offering clients Solutions operating Climate communities units gas business spanning Our and services is all our and climate. XX an of of more mitigate help disciplines, emissions

our Now QX results. turning to

Trans almost the revenue. XX% progress excluding excluding net Mountain. organic record significant backlog As Mountain Organic was reflected our impact continues our The by Project. X.X%, growth as to Expansion X.X% the the and perform for quarter Global or well. Trans begin This of into Canada, extremely notified towards revenue the demonstrated in quarterly earnings, X% to U.S. to awards and demonstrated and growth recover business growth move growth continues market in descoped

growth returned quarter in of the organic our expected, unit Australia. this business activity on and Buildings As strength Canada to

markets the business organic throughout strength also Canadian markets America. North positive to geographies, Infrastructure of the Our the our and this transportation housing in on quarter Global returned growth and in

excluding this And acquisition. to all achieve continue fact, from & the impact Group, Trans all growth Mountain organic In Energy of them. quarter, our our units through growth business on achieved we Resources of

e-mobility. deepened upgrades navigating with our In Netherlands our is a the we firm week, of expertise acquisition building energy Values. and this generation, for the in trusted transition transition sustainable towards partner public to engineering Cardno XX-person This addition entities, consulting private the energy sustainable and Driven recent energy announcement, and infrastructure by design,

key now our Turning by results geography. to

as Our positive we major transmission an companies the power billion continue on on and on the last capacity native in Services in in we Environmental to their awards growth. both grew well Backlog and both and the saw the quarter referenced progress line quarter. strengthen grids. U.S. coasts strength all-time quarter we currency and surge expectations, and X% in that growth QX. in organic USD of the to from projects dominated began acquisition with very performed X.X operations converting notified planning of this resiliency of towards high wins permitting Thematically, performed largely as utility both work organic project

expected, we're strengthening in we seeing Buildings. As continued

Our Buildings pandemic pace is care, weathered the win building much our and previous XXXX momentum better processing. health and significantly of Buildings X industrial contract broader the the in our to-date by in in group of the civic years. than sector This each has being driven exceeds wins

recently for California. On signed lab and we XXX,XXX technology the foot science a square contract major in pharmaceutical a front,

expectations. in Infrastructure, Water U.S. & with Our line Resources group all delivered and Energy

to growth as we pleased in and into backlog organic stimulus see the So results quarter, the optimism. XXXX. adds the infrastructure increasing in overall only we we're to growth anticipation move bill our for with And and continue U.S.

quarter, sector St. excellent net Mountain. continues and in organic and work excluding Our to achieving the Canadian in projects X% Vancouver Buildings continues. revenue as deliver robust on large growth health business major Trans Ontario from another growth, Paul's volume care Saskatchewan on had other strong projects Hospital hospital

is mass of connection projects East with and continued to permitting care, in focused civic number Ontario very growth infrastructure with to Canada in Canada Sustainability projects strong collaboration Environmental Generation key thanks transit and by of existing timber Services Edmonton's Power to goals. West strength the design health cities. work on innovation development, continues corporate win rail achieve Canada, double-digit to enhance in is support our constructed and the in its transit are a spending and strong and Ontario we're leverage to light like technology Line community to LRT in revitalizing very in we city large-scale Canada, Beyond that Transportation a work led Waterfront corporate recent sustainability projects and extension recent on of started mixed-use a This carbon also to see like inner seeing repurposing win where from aspect Infrastructure Toronto's and growth new commercial performance the on Ontario. also and in properties campus. Metro be campus Northwest. healthy of will net-zero their in and benefited project our transit fulsome. in continued

Stantec work, to a been recently monitoring storage carbon program has Alberta. awarded Shell's capture to addition Central groundwater In and project in this support

Buildings our global care. Organic for critical continued hospital the Zealand. and levels, in mining energy indigenous wind in also continues programs is engineering framework new excellent sector. our currently growth in is surrounding in Kingdom and with United revenue, Australia equal renewables parts in momentum new Transportation's a design XX% are our the the in Shellharbour strong North New scale number net build services rates our multi-disciplinary Tidewater Australia growth. momentum in And by to Scotland and renewable solid In be South as mechanical this in and New & win some Stantec Wales. Power is We to decarbonization and energy our with continues in driven organic for project diesel by in above to AMPX in in already in robust and resources working water transport KiwiRail will virtually employment was in growth diversifying solid delivered with GDP X-year particularly Hospital focus services on working growth commercial see activities now New as first New who organic recent transition frameworks Of reflected wins, QX are care of Canada. strong This driving recent the of Canada, team, growth Global resulted roads-based water for Zealand the communities. several including for and has transportation double-digit in and health practice, and large well acoustics and in growing Beyond solar Australia and on by in performance Dams, note, Zealand. Zealand. acquisition for largest projects. facility growth hydrogen and provide to results Like Ireland pre-pandemic and in driven driven every Australia, New under with a increase a and this America's

commodity to in Theresa the strong now driven strong turn Our Global results very more I'll fuel of continue results group prices in Overall, detail. mining, we're Energy confident were financial over by to in review demand. the business. strength the to strong where & things global quarter's continued Resources

points margin Within Good quarter. XXX largely to gross major work. to marketing comparable basis shift due bids. but efforts Thank execution EPS was project year adjusted on by margin EBITDA, our basis. Adjusted last FX-neutral we a administrative an the higher you, Gord, and This in delivered in mix to EBITDA development increased on with higher project and and was expanded everyone. We business stronger offset programs with expenses and record adjusted morning, higher

compensation revaluation compensation as was of share-based due compared $X increased price. share percentage XXXX, our or of net expense a share-based QX revenue. basis impact well, our to increased million in points to part significantly As XX The

matching XX.X%, been year's have would margin margin. EBITDA adjusted last our factor, this after So

Estate Our been have a our by have EBITDA. on Strategy would we expanded deliver XX of track Real XXXX estimate that would points. how Estate EPS XX year. in roughly XX to basis, eliminated by the the But end estate for reference, visibility has basis adjusted this optimization $X.XX impactful to our remains Strategy on IFRS EBITDA of margin real our Real pre-IFRS

to generated growth last value the in Collectively, $X.XX of the $XX increased has these increase share. by per is income contributed our you XX.X% EPS over record net and income Adjusted very debt been adjusted material at is record a However, clear management which diluted our year. to million, when net QX efforts XX% which a strategies. look further EPS, tax augmented and

debt sheet fund from drawings our we remains And balance adjusted using below previously announced, the on strong. a hand to as EBITDA and acquisition XX, intend net combination Cardno credit cash Our our of range. September was At targeted to facilities. X.Xx,

to with foreign in due working Gord reduction back up factors, our due the is and was was was timing target within day seasonal low to time and from end, at $XXX cash Free last year. DSO close, X but on range We which down days quarter million, expect the end QX, of well by of same compared to Day leverage to XX year-to-date largely sales flow to the the is end by his undrawn deliver XXXX. range target towards remain sufficient changes our our revenue facility year us largely the reflecting exchange September, down I'll to effects with fund $XXX that, room X/X million aspiration. I our mentioned balance acquisition earlier, and turn of at growth end And to closing for was from the as about call the and last providing capital. the of remarks. And of outstanding

Stantec delivered strong. finish another organic return Thanks, earnings growth, with great and quarter Theresa. we're and looking to record the a year to

United optimistic States. Looking forward, we the about very remain

focus IDIQ our on on In infrastructure our to the step growing change federal addition our U.S. a share has in of programs this spending exposure in market increased resulted quarter. horizon, federal significant

framework we XXx were total now a value IDIQ supporting are ago. the We year that

and our our both at record Canadian benefit are this the infrastructure our already XXXX. increased achieved future expect U.S. operator quarter. in recent strong we to and to We levels seeing this federal positive which from other Global backlog, call turn to level Add stimulus the presence the already further back the bolster we and acquisitions, see enter our tailwinds I'll the Operator? that, as with Cardno operations and and we strength for questions. And

our from Bastien Frederic James. with And question comes Instructions] [Operator first Raymond

expected was Guys, costs, development highlighted an with economy you to which be the reopening. increase slowly in business

ramp-up a are activities quarters? the back pre-pandemic whether still levels few to gradual wondering of a Just or next you're seeing sort -- over those

yet next -- restricted year. or those a same. staying -- demand but fact, for it -- pre-pandemic being year, Those same again, now it to of remains early even conference elevate people into again, people our see to pre-pandemic question. and but a into position certainly get There that as back not out some the our than to not we year levels. certainly to is the travel see be restricted, that clients and with great there think Frederic, in lot the -- it's to sort go remainder was And the meet to of trade we our below next BD previously. the levels, we part show the And are where for a of costs Yes. slower is for

positive Okay. was we related it U.S., I lower I in question that's a anyway. to territory you than but Great. expecting saw I mean, the guess was maybe to what that. growth slightly -- organic return

to healthy couple territory? do seeing as this ramp-up when sort quarters. the I growth you the resume next of curious you're expect to really that organic the Just of mean, over in

or the in particular, overall? U.S. Frederic, Well, in

No. I wrong other mean, the with there's demonstrated. you've as absolutely regions nothing

about curious specifically. Just the U.S.

Yes.

So things couple of in U.S., the a interest. of

U.S. government. over up our mentioned XX%. what backlog year-to-date. XX% a are it in the backlog is over for the was our is And over Energy are was in our Our Couple of further space, because overall the to those & Resources with again, power task earlier the couple Again, up -- up billion. I -- renewable the Cardno. forward. those that lot that a the XX% in Environmental order-driven not are And backlog it things addition is of that supporting up Services over interesting. IDIQs in well that of U.S. year, backlog, That's $X included federal going XXx over previously specifically,

XXXX. in in go the into -- And good get infrastructure strong says of as the on with we stimulus doesn't bill the my gut opportunities lots horizon, there. So couple tailwinds it then and we'll the strong, But U.S. if we that will see QX, line above Frederic, QX.

hear. curious when Mountain. happened, growth did Good least the Trans the will descoping into when last My eating Okay. start When I'm -- start or organic it to just at to Canada? in one it relates

in will don't Yes. it happier me Frederic, I year nothing anymore. when QX of have to we -- make reference next than

the year. the way descoping, started X change So January we this of in was

Trans from so to on QX, we'll to have with be last anything do next Mountain. growth the impact the So reference quarter will time

Our Genuity. with next question Canaccord comes from Yuri Lynk

in Frederic's ask organic I it bit wanted question mean, X% guiding I a guess, different way. X% I'll to on up, of a to still to you're on XXXX. follow organic I growth growth.

across you're I segments. growth going X need all double-digit think there, to to get organic

should the quarter? math fourth the in about off United we growth, think in organic or So States particularly how is my

Yes.

the a So each we better positive as growth what seen kind in that the States, fourth overall, growth to little point, organic are of business, the at United expecting unfolding Services certainly, growth quarters, returning look -- that quarter, returned XX also here as organic and to some as last be at Waters quarter, to sort look positive this and year growth growth positive. Buildings is of We've Environmental QX. to the It's interesting in Energy positive Mountain Trans & in expected. this bit Resources to our we Infrastructure growth the organic -- organic we've for in QX, returned overall But without had we've of organic quarter. you the we your seen returned quarter, business at to got. segments growth

the ideally for QX's be so going think what's bring see forward. I the the organic out. to enough we're continuing growth really year? XXXX, But everything And into that with for the really opportunities that is don't penciled strong set that going backlog and QX. it I above Will important know, I is we haven't line that up be to

So for growth guidance I how to should about X% that then XXXX? X% organic think

range would we get And there, range. that end lower of if certainly, it -- of it is we near and a see -- would were the be to

Okay.

So give I thinking if Cardno about would for number me what rate better. be that you tax could that And even XXXX? kind of should with be

Yes.

XXXX, what for yet, our it look might have Cardno. and we guidance out particularly not like So with put

So relative a there don't is generally underway. this I will that like work that significant expect year. increase to still be

we've what also for year. this ought true next think seen to hold year I

out significant we actually But year So confirm we'll at a -- to again, have the I the expect February end that do of change. at guidance. end don't the our of roll when

be So to that XX% that would XX% range?

Yes.

assumption I at this think good working that's stage. a

CIBC. question Bout comes next with Our Jacob from

stand otherwise, the off the is regulatory going December Yes. by than vote X, expected close to Cardno hurdles, the what you way? the this of other in year-end. that or Other shareholder with I'll timing know start closing. I

there a one main really the U.S., Jacob, December but The is we would impede to get don't close. anything in their are need customary on -- that approvals that think I shareholder vote there's done that The X. there few

don't know earlier a a So December, middle, we'll coming -- we don't after huge see and soon we that, in, Say like -- assuming amount they in closed that little in from a revenue come Christmas. very the see Cardno we go that I in just than QX. of then into

we just try to thinking about as it, to that we -- through. wanted walk were So just

Okay.

How is of award of a couple backlog? last much know conversion. notification that just I of notifications. was in Second converted waiting And question that that in to billion mind? quickly happen buildup building we bit is here -- quite infra on costs talk and the your how the would award parts about $X.X conversion this with there still quarters the U.S. are for then or post infra

Yes.

we U.S. over of the things high we us it quarter, to of in sort on So in and billion. in U.S. X% is little U.S. backlog growth because saw stimulus in that begun of any dollars the $X the all-time has some it again, of dependent soft yet. -- of convert an of in And last in haven't we we that backlog, of record taking because none that half really was mentioned U.S., already one quarter, the to factored

very, healthy. very So

the fact, U.S., absent in In even backlog program. record the U.S. stimulus

And our with Michael next Securities. comes question Tupholme from TD

what extent there? an benefited Real Estate XXXX the what you to update in that any but also, to -- updates seems progressing It like quarter? Can And it's plan, third EPS on the then provide Strategy?

Sure.

addressing over that lease of we really have work next base in a and work generally, of We've the through is of done terms that years. couple So will how the lot the well. we plan going

for about we So we year, on to that generate share track and per with would we for certainly the XXXX, that. had are expect indicated $X.XX

indicated workplace end been remaining per towards And The strategy choices of previously, want loaded. and that, XXXX, come noted the just that would again, flexible office I've will so they're they where making how $X.XXX the leases $X.XX are, $X.XX would And where as have plan in XXXX. $X.XX identifying that people positioning, with there's is, the to into more work. come more beyond generated. to about share has back-end that we -- That QX, around reentering understanding those our is the it's overall

an in was and we're overall, with a a us, a really So engaging to positive them P&L think that's in standpoint. pleased perspective, do just they going. not of their giving how it well terms want as work choice really for overall emissions move yes, from reduction how but We our from employees,

just on So track. positive it's us really is a for program and

gross Do we The strong. the representative great. margin. as margins that quite see current And going the as what you something you margin of see talked this That's expect should the in saw quarter being you mix about were quarter strength Okay. the sustainable? mix forward? Is you benefiting

really the we review projects take a from of gross that think -- diligent and to to our are this and we choose continued margin ones on. And certainly over in perspective, I focused strengthen the being year. the it's course that of

as So we to aspire we're really we then from seen, overall we is we've and down. do much lower achieve discretionary we at where spending but benefit are certainly also And perspective, from managing typically that's today to keep feel what would well. our forward to cost healthy, EBITDA like continue going an than

we rest margin because as year, this typically the holiday the of the somewhat QX, season. out compresses So of just round

our out. holidays But so hours as many coming pleased is And have with America. where the particularly we're margin I think in EBITDA North with don't really chargeable

net And not the great. higher be organic Mountain net Canada's looking for growth, That That's lastly, at would drag. then Okay. know revenue Trans were said, just organic it it I just to you if X% in I'm quarter revenue wondering whereas on the comment third closer growth in the X.X% quarter-over-quarter. that driver to second. pullback the slipped can behind was it

you're Mountain, right, X%. that would have without Trans been also, And Yes.

have to Mountain the results. our So forward -- more that then sort and when really will that here. we're anymore we Trans to of a -- clear reference be Mountain quarter, and that Trans have continues looking certainly One actually impact to of don't an has of

both I'm Trans impact Okay. in Fair the was and QX though, wondering there I guess just enough. Mountain in QX.

bit a third softer in just it looks like was the So quarter.

that. if there's anything behind kind wondering Just of

particular. in Nothing

a land roar we're -- Infrastructure, Buildings group. big Services that transportation, I of very very, do Our jobs. -- think group and projects Energy hospital Environmental was with getting group, number development sorry, & new Tidewater. ahead Resources in both mentioned strong. mentioned going we some to the our continued the We

some these that for were of some up just were, ES projects quarter the of again, well carbon as the and of the starting projects in so Shell on. So capture the some as starting projects just up,

I think was blip that of a probably just number restarting. quarterly we're projects as the

question next Murray ATB from Our comes Chris with Markets. Capital

same Maybe continuing theme, growth. just of kind around ask the to this different question on way a Canadian maybe

ex does growth. TMX, Gord, go So you're Is we to as XXXX? running an that X% organic you into clip in sustainable feel -- that

and I off a that emerge do Canada from start stronger the think got Global to as we pandemic.

like -- ex TMX, little XX% QX, Canada organically XX% in can X% Q -- You in QX. Global over in look our a --

those think earlier. I that started

yes, we early great jump here slower. Canada Global, in growth out in XXXX, that yes, So to and an saw certainly, a the we gate little said both U.S. bit

numbers much in So but the in organic growth year, lower little States. Global, see suspect and next Canada a that bit stronger we'll United I

U.S., then area interesting government, and And to one think of is with security about their participate in an that's federal I now. U.S. Okay. you don't the mean, fair. I That's business that really that's the Cardno things the

business? little And that actually about thoughts better. that it's services closing be being of And would any a margin in -- item that the you leverage business? can be the around transaction. that in -- the growth Stantec that around that think a should But Can impact talk of a thinking you're profile little how assume you existing helpful. for about I into that world, what bit would exclusivity I because bit

are And it. expand more to about your business, of work, more area it. into Stantec the opportunities a learning type still DoD to there secure particular That for Yes. But we're is there and point, offerings us. interest service great

overall I our In kind around margins wrapping of the of that we're still of just terms of think truly and what overall would heads that, terms in size be.

a probably earnings little better better we clear you more so QX -- call. clarity picture at have bit a give to And

Capital Poirier Markets. Benoit next from Desjardins And question comes our with

back come on although the still to the growth maintaining for for expectation Just about organic the year, you full QX. the commented guidance,

cost containment at to I and growth. look dependent the on that improvement, on it's say your range? we the focus end the given the high when to margin margin And EPS growth am ability of right more gross strong improvement, less the those organic However, is achieve efforts

Yes.

rest you I towards about doesn't push think we I of gravitate necessarily Benoit. it's expect of on that's indicated, provide that of the the we it at year, I middle end mean, for whole why will think lands this to But mean outlook year, then the do be range growth as reminder lower the a us it, expect range. that And is of that just of mean toward back we it. continued the in where a for that the for a that full well And quarter do we Gord too, that I I kind growth reiterate in bit range. think range, for a right, for organic QX. as organic the as I year, least mean, the

on is our actually, other successful And factors delivering I so that in focus. course, on. absolutely focused would thinking of EPS growth your to range so at range drive question EPS we that we're But kind is what are a and we a where there the are so EPS growth, for sense that provide been be about point. we we've and give quite growth of that that think going sit a but we think, growth, outcome I of revenue about this to many can

made is real a have that it's our really estate like meaningful our better gross EBITDA, containment. but so contribution that cost margin, also It's employed around And around to EPS. the we've strategies

that together all reflection our is we running that at driving think things from bottom-line we about business. a how those a we perspective. are of on, is very metrics looking it And that So are up stronger of this focused

you returning the toward expectation the home office. in has employees' the Okay. work are process if to from I changed of employees versus mentioned wondering MD&A, plan. preference the just in that initial And for the was

a been couple And we've hey, that interesting -- Day. because said, after all times let's stop, everybody go seen of It's okay, again. in home don't then, of as Labor we where go over pandemic there's back everybody the

I we a sort ready waves so come okay get seen -- this stop. And ready we to of have little But weekly track reentry. of of a in, basis, come, these think to stop, bit get on -- okay

We people back seeing that to to to forward and the more more coming more people the office, are coming looking office. back and they're more saying

we'll -- in have to had overall So it in think of as is it's discussions country, with different different. strategy we by terms regions general, I the different our employees just by And estate Even sound. then real well. remains

States for United that areas, areas, in Some example, urban people public in are travel lot people where -- of transit. cities, large the

a to transit. as lot would building where basis we office without We park people go a in center the bit back and little needing parking a in in to have you public than percentage the smaller elevator an coming the walk or less into

our seeing So estate some to strategy. just talk in of those confident to -- real but monitor still and we remain we're overall things. and folks, continuing We're so we're

-- forward impacts increase respect Okay. That's of some you maybe organic the provide how boost price could labor pass-through on the And on how it great it with going could to shortage, overall whether you it growth, customers? color, will organic provide growth Gord. wage provide color those to much as increase,

Sure.

couple there. things of a So

increasing is that overall staff we've to since to -- keep other always Stantec Firstly, through about to each not be find began the way high the that and ensuring been we've to there best always losing counts the comp our And felt how staff employees pandemic. pandemic about the talked communication connected people. about numbers. and just your We

the interesting engagement did employee overall just have rose the last it's in employee to fallen compare globally, and survey engagement X% whereas since scores conduct able our overall fall results pandemic. pre-pandemic that actually almost engagement And numbers. by our the an to score we through firm's survey, So

often by where X% coming So out, certainly, the But else's always turnover is couple risen, about got well. did Delta X% our industry. were still points we're our of engagement voluntary average. of Certainly we've now and XXXX, of rates talked we're one But a industry voluntary percentage the to below below turnover very but overall we've pandemic. our the have fell ours everyone but to are rates they level that as pleased before that things they're that during

how many impact top losing than things salary and all on again, paper it resignation do the pre-pandemic. be having in of seeing and levels still And this then that. and grow some our perspective more pressure through might But about a and us of salary And join we're certainly, than that is is cost from increase sort and not rather mind importer no question we is -- that people that about we of so to pressure. them, absolutely people what there, so going something period hope of but pressure absolutely contracts, -- we of a the living and our certainly, but were talking of forward, we read day. In there them. then have a we're every but that uncertainty, margins to we'll So that great net below continue the still of --

the significant, year, to be So could there half particularly possible never be might some don't but next anticipate a some but we we as significant it's don't of you to first go anticipate say but certainly XXXX, see into there. impact -- and we in never we can margins impact that it

Our Markets. next from with RBC question Capital Sabahat comes Khan

and a as Just want private from there see continues versus was lot the you you're of public a But color sounds bit seeing guess, a on with the look, was in of bit to and these like wait is color customers? that wanted well Or to are on what on caution. -- it little that in color maybe indicated you you're get bit proceed more late where a quantum your there people that this U.S. really one the I clients share And spend? Just is it, I of seeing we'll infrastructure one more year. projects what think hey, some region. infrastructure get to it the into hearing if bill do? dynamics taking peers little the of comes what approach, in a Can bit a We're are recently of the

basis. in and still jobs lot backlog U.S. in from seen grids, Services that's that XX% we've the exception transmission over towards where a I from of -- a Interesting to our still distribution mentioned, attitude operating are -- of grids, that there's our out remarks, prepared in an out, business in a infrastructure business year-to-date think while year got infrastructure towards transition Yes. of -- and and a with increase because called we in year-to-date, as all growth And sorry, Environmental business. units we've XX% a we're backlog people companies you Resources of the relating the perspective, bit on Energy replacing the electrical & work -- our strengthening Infrastructure coming and over a their particular, over taking for wait the energy both In increase see build.

pretty there. So significant

some we're but to the begin -- lot the distribution in -- private the utilities electrical like facilities, seeing, are centers, and e-commerce things -- sector a we've So like. but actually that growth we of certainly with sector, backlog talked seeing public there

once So I -- growth backlog think in going think again, U.S. only infrastructure that's solid we're U.S. growth, to year-to-date. I over the XX% But hits. stimulus the stimulus increase that bill seeing

And Environmental other X going just, I guess, Great. well, Services. and pretty Okay. your that on markets are the Water then

in is in you businesses how head these your share X long a is to going this perspective Are this at of elevated you want rising the those can of, your end X those positioning point, lap numbers. get this just just your -- because capturing of to X tide of we of and market sort on XXXX markets? And more level into on as growth Just there? bit a continue? in end understand those Water some I thoughts of want on markets

Sure.

in our certainly, perspective, Water we've Water each that last organic mentioned the a So growth of in quarters business. seen we XX from

U.S. Certainly, perspective. opportunities, protection that very of Australia, coastline Canada, of the lot talked in some coastline New particular, strong in we've certainly we're business. about so the And in the U.S., in from U.K., long-term and hardening, a a Zealand, awards framework

term, our the Services? Environmental feel other was one we Water to And about good long continue So business.

Yes.

-- so yes. And

seen our in Environmental overall, overall. in the Services year-to-date, strong. So ES XX% sorry, U.S., over very business, over XX% also well Again, we've XX% business, backlog is growth our

of So good a lot continued work there.

So we do think and from we Water share. that both gaining perspective an perspective a are market ES

do it guess growth into of see towards guess, rates? of normalizing I next year? level broader of sort continue more we just you this as into 'XX, expect elevated to could head just And we kind Or like growth industry I

coming of we'd talking now, on still environmental Right we -- hard our But a in think hard the overall basis, annual year be seems But be from lot of converting I there what other our excess some work growth backlog Energy do see into to similar an that backlog anticipate we're is group I as XX% very clients, out. an like revenue, it'd would getting, and to there's in pretty to imagine. next Resources to basis, groups. be & of that

those about verticals we year. positive So going quite next feel into

comes from Maxim Sytchev And Bank our next Financial. with National question

people the is you if it? terms of we Or Can would should be right color just a there clearly, the maybe is rate around there that? maybe be structural in of Because, is conversion about different that projects curious going is revenue on provide any duration this to on bit these how comment Gord, kind that think talk projects backlog. when that different? now, of commensurate versus building obviously, about maybe assume you actually, sort will I history? anything mean, you XX% run the of backlog but I'm growth, jump,

U.S., a revenue. so the to from be backlog an to from slower convert I Yes. a not of Stantec Not in but to It much just duration think seems a bit perspective, projects phenomenon. we seeing little from just Max. that a perspective, industry-wide do have seen

Just slower but jump people to get going. work are out the the on there, getting a little things

our first clients discussions this -- of hope those of based year, with it's will things the and latter our part next half really will get of that going, our into on but the So some year.

have to seen was there structural But kind would right? terms convertibility what you nothing relative historically, of Okay. of in duration

at all. No. Not

lot And Okay. was U.K. about AMP we talked in I then the programs past the also wondering, in a

right any for now, cycle sort curious of is XX the XX or months? coming up to rebuild status let's Just it, there everything is call significant quo next, like

the there No, cycle, think this Yes. capital about AMP increase I and over typical a that with cycle previous. in is the XX% AMP

couple years into to well. and sort We there. year of nothing roughly growth that now. ramp-up design will -- of fee then tend where next X, going, that's just years and in are continuous things we structural year the are translate of So there's our as No, having

pretty jobs So kind actually. of performance the on XXXX, our we AMP to to expect -- cycle XXXX be for stable,

I helpful. Super And if just maybe Okay. question last for Theresa, may.

front, guess the optimization, Just mind on if think sort a we do what you And how I about when guys tax question. that? talk maybe this exactly doing sharing are first this permanent Is change? should you strategies' that's you about you this? of disclose can

Yes.

other what legislation are all detail, are to various and that the completely that around they we employing sound to the Max, around strategies it's are So world. go of within some than hard into say permissible

that optimize optimize what locations to and is the -- operate try taxes we incur various we And that the do try in effectively is geographic we in, to so jurisdictions. given those

that typically in as as we tax expected. changes there strategies or we have particular, that place and reform a U.S. with around globally some And of a not be that in proposed to kind various do have is some the long-tailed tax have have other strategies may would taxes, the a to we potential -- strategies the discussions horizon of we so use now given And of them.

So it's to early say. something too -- it's

be we to we there's feel think guidance next for haven't I change stage, but a given going we don't this think year. again, next -- year at material

have to changes what to see legislation. happens and monitor going with we're that, Beyond in cash

Right.

terms the for that pushing would you're sorry, any globally that kind tax requirement at are And of tax right effect some not be how rates of minimum now, have going or approaching to in all? taxes$XX:XX and

really that that, don't that's think significant XX% organizations have in by bringing is currently the We will, rules a OECD. on really you're to approach, us. where activity discussed are taxed. So do tax don't lower understand the have capture they're referring and as economic impact minimum rates are corporate we that's again, that countries we in Stantec's operations. -- I of carry tax where those different being that advantage to And on of trying the the we try they think And take it, are to that where globally, from

written we yet. see been again, impact big But so And don't that fully hasn't a us. to

never the for page, on chance got you sure review actually And so the know had it. down and you've a until to they've words

comes question Gillies Stifel. next with from Our Ian

with the wanted start backlog. to I

about obviously that Environmental You in you operations. how noted Can what you believe, in backlog Services into that? the bit to consolidated may to Stantec's talk be the the saw material gets year-over-year. release, margin going XX% is we business' increase a profile thinking once Cardno in and little increase about I have that moving do a ahead should it

largely backlog ours. U.S., in in look you at the is same When business order, is the the of Cardno in range as their sort environmentally-focused,

We have about months XX backlog.

-- I margins are the stronger bit But we've has than as their U.S. in even a have think that -- actually think noted they roughly ours. the it I XX.

Environmental So be in group. if the these add groups together, and not will backlog be X as similar, I then strengthened margins we will think similar, slightly

Okay. That's helpful.

you place basis. The I back can need consolidated might maybe people other employee put to there to a where been any per in so as pre-pandemic. the get there? one revenue for bit process high think I you kind you it isn't on touch quite up as mean, And think? Do was has of on get new a was where thing better, wanted inching it's

for to any to where back I up. see get we were. creep reason to to sort become we're won't Design efficient. of continues why And more and that more looking revenue right, that -- number we be to the are come continue you're program -- a don't our There to efficient. tools of They're like and things ourselves more through automation make employee innovation where

bit to think more potentially certainly, as it we increase out how both our that still potentially as increase well. a competitive margin forward little we're of do employee, as will some per But working I even well incrementally squeeze the might -- opportunities to be. positioning that So revenue as through there's go even much it. But

[Operator next comes question with Securities. Instructions] Bank Our Laurentian Troy Sun from

to can first question. you Gord, market. I'm the data some the back just Gord, now. if wondering, a on appreciate incremental comments make Australian pre-pandemic fact that GDP Obviously, is the levels maybe employment and

profile given is as for the in very be the thinking about mid-term how geography profile growth reasonable for Just well, country in assumption coming Stantec how of we out knowing that headcount region, doubled restrictions, should in the COVID that growth what's the the organic strict XXXX? for region sort you've please? And a of

Yes. Great.

XXXX. guidance for We haven't provided

some the grow announced perspective, from -- roughly we high, have of business. our commodity very that transportation very environmental that So very, funding. grow already grow. to to Water. And things be transportation higher prices on it's a little transportation one huge certainly, I there. group funding combine look Certainly, continues that. mining down groups They've there. we will largest -- that could comment a we couple hard the we opportunities with what, great Stantec a in continue to though comment of certainly, to the But when our of on largest opportunities AUD in that. strong the strong Also billion XXX and continue is you know to to We're teams, And

size very QX, such relationships tailwinds very, going very well and think very, Australia, client our there. of that of for continued but team, and Zealand I we'll in The for the next is good about remainder expanded the of we going get to Australia also New So year, growth. strengthening into us feel situate great

expect depreciation Great. to question on for decrease down the just there. line Strategy from to That's Estate switching continue the future? Theresa. that fair in super on helpful. to item the color Appreciate gears, lease And maybe Real trend quick near it Is the the

Yes.

the Strategy where part a XX, with Real That those now reside sure. and is depreciation costs overall -- Estate the in -- IFRS as do For of interest lines.

execute items. should continue strategy, we in reduction as on line our those be so to that And realized

just Theresa, sorry, And to confirm.

the to Strategy be Real you're points, itself, impact like legacy on from expecting basis So the right? Estate EBITDA XX

year-to-date, said XX quarter. was And to XX margin. been in EBITDA for that basis. I what bit higher pre-IFRS point a pre-IFRS would Well, actually a think I on it's XX Yes. basis Yes, XX for the uplift a have little

remarks. will And conference concludes today's for question-and-answer that closing this or you additional the Session. at time, to Mr. Johnston, turn any I back

in thanks say to look Well, progress. you I to us forward the everyone, on speaking to continued near great, the for just about with joining future call We again today. our wanted

So everyone. day, have a great

Thank you.

today's you your And participation. call. all this for Thank concludes

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