Stantec (STN) 27 Feb 222021 Q4 Earnings call transcript

Welcome to Stantec’s Fourth Quarter and Year End 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 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’s the All purposes in today’s incorporated Slide X, otherwise in call in amounts are rounded. discussed are dollars and generally dollar noted, expressed Unless today’s Canadian that, I to over Mr. am With pleased call to turn the Johnston. Gord sir. ahead go Please

and morning thank Good joining today. you us for

solid to pleased base results report our of full We and strategy. XXXX and the through by strategic employee very QX which acquisitions. an year grew reflect engagement employee our We pre-pandemic are our scores execution XX% global levels multiyear performance our financial saw strong. We our in from increase around was

we an net record $X.X both execution reported on basis increased delivered the an as by of share, per strategy constant prior adjusted currency taxes, year revenue estate on real on X%. and year, stronger the on basis roughly earnings lower our of For margins, ongoing approximately a and the billion and XXXX

units Excluding operating of QX expected. in we to organic quarter improving growth every flat or in one And our growth had organic business organic and sequentially, year, the QX Trans with of each QX. positive returning Mountain, as growth positive had

are this Cardno a adjusted of margin in with In $X.X to And representing materially more and than pursuing synergistic the to size XX% $XXX sized our record Environmental in footprint business a we doubling X to having billion, offerings announce our a is deploying taking well. ambitions Cardno Services targets and work. than increased adding The Australia, our record strategy of both of to note, built completion XX.X%. bolster consistent the months revenue increase these CEO, million Our of Services capital drive of the and of going employees boosting strengthen second pleased of advance a backlog through EBITDA acquisitions acquisitions, to XXXX to We our growing markets. our growth. Each the leadership geographies. firms is medium the significantly small Stantec’s XXXX. in quarter ‘XX And ability in presence in we XXX more particular Environmental And from entered XX growth XXXX. these our in over lines integration key address business our U.S., that Susan is we Reisbord, the that of are demand of

$X.X $XXX U.S. business in Moving to the million region, of fourth revenue delivered quarter XXXX. by our our net results and billion for

As we U.S. throughout slower in headwind noted the dollar recovery was Canadian XXXX, stronger than in other and start a to regions. was the

quarters, for achieved is U.S. as business, XX% business $X growing the is more for stock has backlog coupled while is built backlog to to will their and our to reuse chain another bolster a emissions. ecommerce creating a healthcare performance L that we’re ever where confident us The The way This in deliver or contract the security XXXX. take excess wrap our U.S. for to work to may Great it passengers. addition evident our discussed up, business, strong is use so will Denver in recently momentum our quarter our such we’ve preserve in that clients security to buildings won U.S. XX% Services design fees properties improve Hall the largest previous strong in with growth, carbon of US$XXX also significant to we organic environments, foot The that project, accommodate pictured organic The growth. drive through a in than Redevelopment growth favor with Environmental terminal, backlog to Station stimulus supply greater U.S. as begun. of record square achieve creating building the the expansion Street transform are need recovery Our our indicators goal and The and we’re economic And also billion team. all client year of momentum recording in infrastructure for adaptive heritage construction million XXX Airport International a X opportunities sustainability existing reduce increased with this help here. among million main and million Stantec. opportunities new gaining for seeing

in work a to in growing production have the recently began as new a U.S. push supply on facilities California. this States, vaccine United a domestic work facility with the is example We’re need major of global highlighted in chain seeing capability. on onshore One the domestic disruptions company where retrench for our production manufacturing pharmaceutical we

in Canadian due we sector Growth Our with virtually development was on million what in project the is in reflected saw the demand slide. $XXX in land in strength in delivered for contract. extreme wins Western the the markets solid in as net these There consideration the increased we Trans frequency transit fourth that of healthcare, year consistent taking better a quarter every weather growing than expected a for to events, $X.X also see billion XXXX. generally and British of expertise the Canada. the the systems descoping and business of for Mountain revenue And strong and last we year, into continued our result demand Columbia in we like as have highlighted

through cloud-based to is the in technologies application in readiness Students grade assist the the new We’re as design our post-secondary Edmonton. and picture And isotopes prediction. the both manufacturing predictor, the And efforts business. underway draw with accurate States, times building Education, clients innovation Association slide efforts MacEwan to of strengthen to treatment reduces strong machine are prime that we highlights to we on the remediation and United lead development for upon at flood the in center. in for upon with similar learning is by supply a reshoring work future of for our the A working of driver our on the example significantly pharmaceutical buildings facilities developed which be called a University for Canada. being K-XX cancer continues radioactive floodplain our

Our same Global to revenue delivered compared well business last a net year. quarter, period the $XXX million XX% in increase the in and very performed fourth

the For by year, $XXX reflects million. This net revenue increased both equal growth from growth. XX% revenue and net contribution organic to roughly acquisition

New Specifically, mining prices water growth strong in the we in business. transportation and commodity our strongest and saw drove while revenue UK the our growth sector Zealand, in

and being supplemented transportation, stimulus that high our private more utilities. national been transportation This and We on transportation £XXX UK to than programs. to the we’ve also saw government contract by energy projects expansion in in increased buildings infrastructure awarded strategy, will has which in in investment additional is billion like commodity the Australia. economic the clients The planning AXX is recently infrastructure lead prices from won crossing public focus UK and Private both business and expected the due opportunities committed to recently we X spending services Tees Scotland. to

programs. strategy. the industrial energy, £XX been the years and over In to has addition funding, committed to billion green funding £XX government billion revolution rail XX spent social waste $XXX billion Australia, to the transportation, water, and this integrated UK has

global we factors Theresa during more global backed backlog performance things continued a macroeconomic contributed continue I’ll from All expect our in infrastructure. review our to investments of by year detail. operations strong XX% over increasing level. drivers financial to new strong in now over in these to XXXX, to And turn and the to record results

Gord and morning everyone. good you, Thank

Instruments we on have the comply into dive presentation in made details, measures. I non-GAAP changes to order Before new some the National minor with

You’ll calculated. margin call margin. we in using that for also There we’re it’s new term no gross the is note how difference project used what to

the in our mentioned months a U.S. your pronounced first on rate exchange substantial our this X Canadian/U.S. the key the line impact the earnings and on on change it year. We’ve has in the was financial this Gord summarized slide items reference. for As year, of particularly impact

year. EPS the year. acquisition QX very recall growth X.X% and grew compared of fourth stronger claim But last to compensation year, mentioned as a last adjusted in compared margins XX.X%. fourth certain performance XXX translated $X.XX increasing the last by due reduction was Project as than of which XXX $X.XX revenue Net we included margin The of by well increased of reported strong X.X% last the million, lower exchange. that year of utilization a mainly certain from and points margin. expense, favorable results net increased previously matters. points basis X.X%, decrease reflects resolution X.X% to recorded For offset margin. share XX.X% $XXX.X foreign project quarter, $XX.X organic year. of basis Operating costs of claim last last is execution was EPS recovery recovery $X.XX year’s $X.XX Decreased in with partially with to tax and the costs a U.S., representing based growth, Adjusted also EBITDA by million due as and revenue by QX to to quarter percentage

reflects income onerous real costs pretax $XX.X also Our QX XXXX basis impairment strategy. an estate an of ongoing contract as the in aggregate reported from and net million on arising execution our

with retracted points EPS on compensation $X.XX, net by reported increased a growth basis, reduction exchange an EPS margins to was by adjusted XXX delivering amounts points a $X.X net offset X.X%, margin increased acquisition net the basis million, year, EBITDA increase due to both of a Full Stantec. full a currency partly X.X% the For generated of $X.XX $XX.X. basis record slight constant which Project effects records and approximated last attraction, percentage as organic X.X%. increase by year basis XX.X%, XX for and of of billion, despite we by of revenue share-based year, expense. a revenue increased driven are XX Adjusted $XX.X point foreign a revenue of

which record On target EPS our footprints strategy, track savings success share X% the than per this increased more relative XXXX a estate impact further to cost of the by by the Our our to margin baseline end estimate to real EBITDA $X.XX remain for points. XXXX. by would We reported of of XXXX deliver cumulative than of as also $X.XX end $X.XX have in per to adjusted reduction reflect estate expect more a a EPS. XXX we in XXXX pre-IFRS initiative to adjusted the basis XXXX contributed share earnings or ongoing real basis, of XX $X.XX on and our

December Our leverage consistent EBITDA range. net the over days was reducing balance sheet year-end remains XX strength We debt outstanding the generation. at year-end, on XXXX XXXX. of of our cash sales expected within flow At course was leverage adjusted Days to with XX, anticipate strong. X.Xx our

payments deferral the XXXX the did certain strong, significantly dollar. Our measures. to decrease government the elevated due of reflects level of tax due was stabilized Canadian operations and generation from success payments reduce relative cash cash the of efforts was XXXX stronger DSO although and XXXX under flow introduced the to to from to our tax it XXXX. effect lower deferred pandemic DSO, the ops outflow cash of those substantial of

flow, and the Beyond million bid. deployed acquisitions we and returned repurchase cash course our of million to dividends operating normal to issuer $XXX through through $XXX shareholders fund shares

Directors things This our shareholders. turn Our outlook is to yesterday has and review commitment consecutive the by now ninth our our Board reflects increased XXXX. increased for capital dividend XXXX. and X.X% will return for in to cash to Board flow it I of our our annualized ongoing Gord generation our our confidence back dividend to year

Thanks Theresa.

see backlog that the confirmed occurring around we come. that’s well enter particularly the infrastructure world macro magnitude record of we on well already said months with As to to in on capitalize the our is number positioned trends been we’re of Much spending on. stimulus books, XXXX capitalize and that to years a positioned has Stantec a about XX of

a growing component community directed is disadvantaged Stantec of clients. benefit an which spend However, will is to area infrastructure our particular towards a communities, where be this focus

multidisciplinary Our for resilience and strengthen diversity our helps a to advantage and align us. equity to of is expertise the competitive supplier these funding team, and communities

focused as partners, funding infrastructure other specialists that clients leaders, public is further eye projects. with work communities for America. their additional In team towards community for funding Collaborating helping is North addition, with access look This our communities funding on technical over a staff have an sources across long-term this they for sustainability. XXX of and benefit with we to

curtailed. critical governments examples to full the competitive that around continues are just takeaway of is breadth for resources our the this two supply the been great service if fragile advantage. of world the major to has or global So create how our from A access creates offering chain products And for is. economies the domestic pandemic exposure these

we isotopes, earlier, of vehicle like actively involved panels mentioned are and manufacturing are I for these batteries and on capability or strategic seeing solar growing radioactive As products we electric investment domestic in vaccines, fronts. essential all

domestic related Another great than $XX U.S. this the strengthening of to that’s more chain manufacturing example semiconductor involves billion the supply in been announced

in is currently that Canada We XXXX each multiple and the U.S., in change & the disasters, XX semiconductor over and are full our energy climate we world. project and events. services. the addressing scale globally supply, reminders The is driving and spending industrial world. is Canada, on effect in in action from water the in work taken occurred power projects security has water where The in losses engaged And we’re involved awareness prioritizing on world have billion working their Resources climate increasingly experienced project energy assets globally. to of be responding service And on around Energy Stantec events of Stantec as infrastructure continue design on are with towards on scarcity. engaged and harden to some severe the the environmental diesel resilience, wind and facilities currently facility around largest largest extreme that $X buildings, growth fabrication the to must frequent serve the the suite to improve against solar in multiple critical exceeding large global the in water heightened governments renewable in-store of with related Stantec and currently transition global work clients first to these business, chain supply development, treatment, weather offerings wastewater site draw water with

treatment which will For improve currently are water example, in project on involved region. California, our large the advanced teams meaningfully supply underway, security every water flagship in

And by our to and ability I’m the on our and their the recognition on health, majority we’re ahead our improved resilience future ability with capitalize prioritizing retain heavily from score safety and to opportunities to home, of a industry pre-pandemic for of talent people, X% we’ve staff talent the our the all continuing grateful attract in By Stantec perseverance. relative engagement continues dependent to while and our course, sectors, prospects. workforce. And Of work to seeing of in migrate wellbeing employee is talented top competition our levels. collective to culture

business. progress the describe framework. a IDIQ related our in growth Water California, the been have strategic for value in out these in key our iconic and growth started hire, other of talent hires of several we’ve Texas federal revenue movement and a our are team. with follow-on tenfold our You building precipitating catalyst who’s heard portfolio increase and hires our me scale in direction. projects broad U.S. Similarly, And strategic this In large federal completed recently

growth and to economic propelled Organic Global growth, high and expect sectors. high record continued high in trillion low in growth organic to of achieve drive trends year in revenue that driving from and arising in single organic half second driven the XX% the low to range weighted growth about We just expected growth, stimulus single by stimulus double-digit digits, levels digits acquisition U.S. net recent is XXXX, strong high opportunities the of Canada digits. to After the the net as growth bill. for in maintain infrastructure growing single organic in the in to U.S. growth in in the strong evidenced be momentum with we XXXX, the of infrastructure our expect project I XXXX high single backlog the to talked the mid activity to our is robust demand $X.X expected by XX% to revenue by year. growth Organic a

workforce, EBITDA ongoing our ahead. support full healthy adjusted are the margins in backdrop, make by and the a This our and be drive investments net range invested percentage we and XX.X%. to of are continue XX.X%. we bolstering engaged to years EPS between project to capital technologies. an adjusted and favorable sheet, a Strong EBITDA, our With to As above the to questions. to or expected adjusted for the And is as very our innovations with execution a and pipeline M&A to efficiency, operational expected expect growth deliver net a And XX% above resources margin market at I we our growth discipline internal to range an of XX%. are on the will range of turn making real balance estate in commercialization we revenue, of and back the optimistic X.X%, execution operator for that, call reflects strategy to XX.X% income adjusted return Operator? new

Instructions] take from question first from go Please our now you. Thank Jacob We CIBC. [Operator will Bout ahead.

Good morning.

Jacob. Good morning,

Yes.

EBITDA, on on I moving SG&A you XXXX to labor to reopening mix saying better am parts XX%. inflation, Maybe XXXX guidance. guess First with your I the moves is XXXX footprint. real range, as assuming in that’s and some I XX.X% to is there so still you XX% question I estate margins, valid. at guess are higher XX.X% comment with offset of mean, be higher costs reduced and I think going just

your how maybe about So, talk ‘XX, XXXX. then And that’s on get the to on ‘XX? on bridge guidance you from ‘XX just

Sure.

really – out the XXXX in what where for expecting actually, So Jacob, come nicely, we are we and have the you expect outlined year. to

investments such internal the HR, we making expectation resources, move are underlying the is XXXX are And benefit our us growing from for beyond front, coming into and office innovation, will it we investments really as into strong we systems should making that. back to whether into continue just and we a on. Because that in XXXX. expectation productivity is that is As to XXXX move that on efficiency we so and cycle of see that XXXX, that, see we IT part the multiyear the a continue strengthen in ahead of accounting, XXXX,

a So large that’s expecting. we’re in not part,

about substantially to thinking have we also we pruning synergies with through which the grow continue toward Manila focus Cardno grow delivery came continuing can acquisition, operation, determine well. to continuing on Cardno grown our and work to we how goals our are now that that where and We the operations much XXXX grow as savings in integration center on and can

two things. can a one we margin, we – So, number a key drive multiple number And there is the that to have it always of a is things or really is things as there change of said, but I just towards. will do that

mind, the And actually in as as what’s your these targets? biggest achieving risk far XXXX

I have labor talked guess is we – about the talking shortage. the everyone about

that. we to going confident that the we heard not large is Gord drawn And to much about the kind back Stantec year of of this in bit culture one. to we’re be just – end positioning the that You’ve remains we as Cardno that But people acquisitions, and people we And as hire immune a why, with described elements complicated. be people address why to us. are it into of our of the feel the to the hire think very I that, good to that Will because coming need a to although next? a towards able is our unknown of risk integrate growth is has abilities

we with to you’ve the be making that feel disruptive activity firm and integration, successful are progress that but that how risk kind So that about timing we associated and progressing, the confident in be will always acquired. there – we’re it’s good a can of is as we

watching. things those So that we’re couple a of are

and Russia-Ukraine Any or about here. the you question for exposure how are thinking Last implications conflict Stantec?

and We in researched up, might as to any and with temperature project report. have withdrew We year last we project the our fall, temperature ongoing. Ukraine from increase ongoing – did that clients the that development an a Ukraine. the the we Ukraine in the wrote our January, this began in We our people have continued final the last increase late year, wrapped project, project EU-funded to we was we met as

than other are so out, So projects. on it all very a see significant to we of some people the Ukraine people point we and certainly – don’t or are exposure our really EU to haven’t our all other. us the be had through one development at impact way much safe, historically And this of

That’s helpful. you. Thank

you. Thank

our take now Please next from will Desjardins ahead. Capital We Lavoie from question Jean-Francois go Markets.

much good and Yes. morning. Thank you very

Pacific I know Cardno’s the early wondering about next it’s what’s the the you years, I have margin process, of but to still X please? your integration could was over profile business you. if Thank talk vision So X in for as you

Certainly.

U.S., to noted we’re legacy we and the overall, is profile expect it largely that margin As with is continue Australia profile a have between Stantec. driving where the does consistent work the environmental we ours focused services about as margin be over largely U.S. business acquisition, to In business, and tend that the on be we to that, business. we when higher to within And is margin talked improve different. the announced time Cardno’s

more our Cardno where lower are portion consistent be Stantec so will business will than that In little and as on a the as focused ES. those that that generate average. than Stantec’s high margins but margins. with businesses, would is continue to still sectors And say not We of other bit stronger average transportation Australia

a of profile to continue good and initiatives streamline why for fit our us, all those a distress to continue opportunities it’s kind to we specific as all, expand Stantec. was margins such it consistent So and margin sectors in very within

was Thank talk very much. wondering more I M&A Okay. if about you That’s helpful. really And bit strategy. then your a you could

opportunities could the expect You year? that that later early pipeline is of the this more still the tuck-in Or mentioned materialize is in XXXX? approach we a there near-term but integration considering that for should was phase, some on its full,

Yes.

ensure from Cardno. primary us of are smooth the to integration our is firstly, that focus teams the So joining

is said, really To Cardno on hard even the sheet after So potential we’re firms really balance remains strong your that. robust. our that point, transaction. The working of pipeline

continuing we’re firms. So for look to

Zealand, geographies. environment so looking at are United in Primarily We’re transportation, the the we’re firms buildings, different discussions now, looking firms in time Western Europe, at with firms on. right UK, any New in States, Canada, at and primarily as active water, we

while so we’ve in And teams the there, there. we’re group look continuing doubled of size the almost Australia, our to

we want layer significantly to in acquisition wouldn’t sized So Australia. another on

we there. certainly the of integration this year I half the kind the get first overall of within over with think hump until

think So still the is very full. pipeline I

still is And appetite too very in that. much Our it the we strong. additional Australia XXXX, then Australia to as one be Cardno. think but it ability would our and there, do firms, could well, an We probably to additional we remember, capacity do GTA, I in just in have integrate still to later acquired Engenium on because

So we’re Stantec Australia. really in three into One the in integrating process firms of our philosophy

give we’re and So for settle a chance that good want we the success more. much before that layer of to too we getting on to ensure

mentioned that have And bit detail commercialization provide you one Okay. last technology. a the I could in the you the if me, you’re much. on wondering very release – in might the beyond. was more investment That’s you it of and on about for and great. press the Thank margin making for impact the XXXX

Yes.

within innovation things. we’re a within on our working excuse me, group, – So number of our

Firstly, net per be able we’re projects to that that projects make more able deliver FTE. we and ourselves increase generation internally – revenue can so on faster, the efficient systems working develop employee to per to be will processes

we’re with to working a And working to But of number clients will things so process. meet that on there needs. develop of expedite automate systems their number we’re the externally, a and design

and assess remarks, where the I the flooding mentioned model floodplain And prepared be things. landslides us events predictor there might that these where see in sorts we might so of to helps

on type software help a well We but planning process. and sort – annual clients financial work then often have like renewal have capital deliver it is is agreement, service renewal a our the is more consultative software that we’re software And them of to and both hired the other which system using XX it. clients an that that their helps management products of with it, practice and as that a we’ve of or automate a beauty – developed as

we’re types So examples doing those few are just of and internally the externally. a things of both

things we So those year. in investing are this

third-party to also like clients. add the additional some in will underway talked BlueSky about of are our previously Resources getting that – We firms we’re and making have are benefit that investments that

it example, –concentrations our the and uses world really an as can remote and be the we’ve in to regulatory about BlueSky of So in things in sensing locations. pollutants provide anywhere multinational information on to different they of of are understandings that around with provide Resources talked meeting requirements clients their contaminants used some previously, information atmosphere, terms of,

are in investing number them these bearing we’re delivering, now, of a that types the of things So already but are us. fruit for

So we’re pleased area. progress in with that really the

very Thank Great. much. you

you. Thank

from from ahead. We Please will Canaccord. now Yuri question take go our next Lynk

Gord morning, and Hi, good Theresa.

morning. Good

morning. Good

Wondering, for I versus don’t who year? it, expectations take your about utilization in if XXXX know wants to last wondering but just you could talk

hear, really were couldn’t you you just soft – there. you utilization? quite would did I ask – Yuri, Sorry,

Yes. over Utilization XXXX. for XXXX

Yes.

has as we for than and expected. Okay, have the up U.S., XXXX, we the to excellent. XXXX for lot perspective, said and we’ve slower guidance in come seen From recovered given was – utilization you results reflected a our a

we infrastructure in portion we which to or spending maintained to not was that we notified as would latency as much workforce managing as the want size utilized have the flow. U.S., there good workforce, highly because in there momentum we so awards to is our some of of at our continue expect. the typically XXXX look starts And and build been a We’ve backlog as then expect and when as

into in year, we next is as and in continuing we think QX of ramp-up. so we’re that do And that seeing go terms to be slow

in bit build and but range our first utilization probably margin again, that below low low be, our saying lower reasons, the with EBITDA at beyond. quarter to really lower, of the the seasonal will or utilization U.S. U.S. that little coupled get a bit so lower. the And typically we expect And end bit why probably a even the second for to we’re maybe a going QX be little that’s into end in is it’s we the as past

situation it’s that we that’s in technical labor that thing of the retain of we growth improve. the need, light we to were, address course, So employees of shortage so is we skilled very believe have And, that and employees course, the those and right expect that to the available coming. to the

not on utilization not maybe in ‘XX? the – big So a change in whole,

think we a second we towards much. significant as of I not expect get think maybe improvement, year, so I the half the but QX

Yes.

wrong, one of correct would And I’m but biggest your project if of Okay. margin? me utilization the be drivers

because to we project minus but to labor, workforce the your costs, expect but bit have and admin cause be a continue little when higher. marketing goes to that that that chargeable that your be Not isn’t revenue margin expenses EBITDA margin, those quite will to extent into direct you and a is strong, just that margin it’s project

So reflected and be more project not in our margin. will EBITDA margin in it

in growth be last Okay. it And on first X.X% why digging the the back in easy second really comps organic you’re weighted half just first one, your when down facing quarter, year? almost really, would quarter, was

backlog is the that we winning to see these and there. that into somewhat U.S. as in projects larger global that in us are think in the work our gives quarter, backlog, we’re as and so I but continue the first – confidence the well, are looking we

processes winning They We a and the little are it complete complex. longer sized to is the work we’re There more projects. finding are bit get taking started. larger

staff numbers of projects we orders And scoped handful to work out to It’s those specialists running. labor-intensive. dealing then up that work the can have of so And the we the issued. projects with ramp in not do really deploy specific when and get of get kind up, it’s is to our early the those large really a as client

in first the our an is factor easy converted into lag what deploy that’s quarter. say and probably that’s the just orders large towards. backlog being comp, work And workforce portions can biggest that, we’re I actually getting the we QX in would seeing that that despite task orders So of

one bleed last wouldn’t the second And why quarter? that into Okay.

may. It

running. that projects given sort what’s have expectation. our work is our will That’s we towards our second early in passed that that and and those quarter, think get I as that expectation hurdle of that the we largely have up and backlog

another that people Cardno in particularly seen Canada, And organically environmental up we And rolling second there really those you’ve ES Northern in typically I services the too, in and our when think can backlog. then backlog And States add the the in that, is factor United on U.S. by gets out XX% quarter, Yuri, put the field. in folks.

And which, that in think But two – see show up growth first business, pretty Environmental I Services in organic think we so the course, year. growth robust quarters of up three. and really for in won’t and our ramps I

Thank you.

Thank you, Yuri.

from Michael question Please ahead. We take now TD from our Tupholme go will Securities. next

Thank you. Good morning.

morning. Good

of the there Global, little the Maybe growth build Yuri’s through progression and sort detail just various one on just more in cadence a across overall, respect guess, of with questions year, also Canada U.S.? provide the you and just regions, Are to I last guidance bit XXXX. to about able to organic but regions, the the

Yes.

So sure, I’ll start can when it’s in appropriate. that dive with Theresa perhaps and

strong good really We mentioned in growth Global. in high with in We And organic backlog start in XXXX. see coming that to got, we almost year we the I’ll X% double-digit low growth. a single with maybe growth Global, had we’ve backlog that XXXX. really, – So

So down Footscray others. the and about results lot in in of prepared seeing New the Hospital We’ve Australia mentioned the we a work. and we’re UK are some buildings Zealand transportation I there. certainly, – seeing talked work

prices support mining in commodity talked in – and on. our we and And some infrastructure amount of the and copper so UK, businesses Australia. so high Western and stimulus, South from other of Also, we’re America Australia about getting the

we Global I So in robust well. in and good and Then revenue Canada, Trans will talking XXXX feel our feel – of Mountain strong about it’s we be pretty project. be that think happy mention was growth. we to strong, have so again excluding ever it after going impact about on as Even don’t XXXX, this though quarter, the organic pretty maybe we to that that

had over Excluding this X%. year organic that, we Canada, growth in just

And of you a growth XXXX, the we’ve half the year. over second our Canada XXXX. organic XXXX. did from as the in as organic record Global interesting tailwind Canada I got into so seen performance backlog, when And add in the Canada significant there. the think U.S. digits U.S. in backlog that lot growth backlog came in – single pretty in that good Strong XX% of is so CADX growth XXXX. And in gate out XXXX, go and of in out billion, be gates sort up is But see because pretty to we quick a because came organic acquisition the there, stimulus, XX% you’ve in low so U.S. a we we of infrastructure of of still will expect

RFPs see is are that from law some bipartisan street to now infrastructure starting come. those We hit to the anticipated of the

we’ve the anticipation some seeing state weeks We’re work network five lead out past line Interesting, RFQs coming local in in alone. replacement, transportation. In EV X service it. to responded water, and charging of

So a certainly, those of there a already. is lot areas, about facilities We on there we’re these semiconductors, work come. talked out more is in And working to coming too. where number of

growth global we But So many other organic with consistent peers of think the pretty little the do feeling part. a about is – I being first talked U.S. that. slower second I year part feel what have our we’re in good the multi-sector And about than of the think you

Okay. helpful. very That’s Thanks much, very Gord.

in the the the Just shifting resources growth the EBITDA business your guidance about release, you the elaborate the being to the just those to growth and commercialization of what internal on margin, margin your on support you’re in are and making investments to over guidance, in reflecting talked Can in factors you’re technologies new you and going innovations as areas? margins. that doing weigh investments

Sure.

some the So everybody I coupled as with are components But again, couple in earlier, that see that we overall labor is growth mentioned coming, to experiencing. there disruption a of it.

human for internal hot to people talent need, a the instance, now. to seeing because right bolster acquisition are that’s hire need And really market resources a resources to our We the people, projects. we and to these deploy

back continues something that to federal that of in Cybersecurity coming. some the the last support per quite see well, that and coming, area an so need those loosen in increased to achieve there as have just a been both IT we and bit. And talked that work our system requires around that requires – people the people now investment, office we’re systems and we’ve requirements additional regulations support to our brutal Canadian believe your on hiring our see about to there to toward us we in particular growth additional constant just doing to of are little on And – increased the it kind to be systems, strings other teams is growth Gord for referencing, and meet the investment put and we on HR, of that the client. IT able hiring that to requirements work been couple years order be we IT has the some us IDIQ U.S. of

work and our us or that efficient new margin either are other either to of innovation with services competitive internally. around to deliver those entry things foolish in toward terms drive comes not focused we it in pricing the standpoint, are capital it that able be stickier our as clients our we’re ensuring we can will to activities determining that pound create what or really on to keep. through penny-wise kinds that we are is So but an that can add we from ability of opportunities innovation, and are on And an more dollars critically to way innovation greater them to that and put when it, our such services to expansion make or more where

of that the general looking things at. So of kind we’re suite that’s

much, Okay, last as just one, maybe thanks Theresa. probably for then well, one And very Theresa. you

you EBITDA adjusted relates with XXXX But said it margin not made have what your movements sticking your with respect impact would as the year-end to subject comps. to guidance you to share assumptions into EBITDA what baked you relative Just around have in compensation you’ve the of guidance, of I margin price expensed since XXXX? stock-based any know stock-based

end in have at year. that stable it the we – remains what is So that we share where baked the as assumption of the was an price of

thing at to I MD&A, haven’t market will So it forward. our today and in our or how hurt mention given it it’s activity us stock-based lasts, may long we suspect with and comp as we help I and One mitigate gotten respect go saw those to into But this for volatility enter the end compensation our the try some of we to swap yet pages that a portion the year. in our of stock-based year we of public disclosures. did a and

in have of the to fluctuations, the balance subject have then for should but volatility about that we be somewhat. effectively, have aggregate, we in been the units movement of to able price will XX% help should units price swaps have so hedged The we mitigate share – we outstanding. it And remains outstanding portion that and offset share those to

take I’ll a that follow-up. and at Okay. Thank look you.

Michael. Thanks,

Please take now go Raymond next will Frederic our question We from ahead. from Bastien James.

drive you the have Good coming been Stantec together to the morning. Have might revenue of seen that not Cardno opportunities and prior new attainable combination?

Yes.

outpouring that there we about chatting is really was what’s that working through we doing in some And good the only was executive Stantec, folks due process, think the are it. aware of that company, of and been the But the Cardno are we Cardno with their of diligence, clients we the employees individuals. from project work combining both or transaction the company and said, this with who with worked interesting – level Stantec when or was it just felt we Frederic, at that I synergy this just has and transaction, here certainly been while the on a synergy of the I group the with announced fantastic. them and the between previously amount

So, of more I terms without think we excitement that in actually initially. than thought – and opportunities, question, that more has was there driven

pleasant surprise a So, us. for it’s been

you is pretty were good everything may but not cautionary like something asking example acquisition, pleasant there have more question, anything the don’t overall that or surprised or been go? that from of that about a to I super

had to diligence, hard due from project and concerns might IT – unearth so on. through due we any tax have really searched the we diligence, and diligence due We that

downside has surprises So due had been because diligence. no actually we no, those real things during there unearthed

the towards this go target Okay. do end Is it Super. leverage expect low of year, you by acquisitions? end range? don’t you possible you that to any finish Where do major assuming the the your of

Yes. towards if acquisitions, our that my range. be don’t around pay low assuming is the end we of assumptions expectation, any That we around should

Excellent. very have. That’s much. I all Thank you

Thanks Frederic.

go Stifel. Please Gillies next now our We take will from ahead. question Ian from

everyone. morning Good

morning. Good

morning. Good

Could on may you would impacts the it on hiking cycle have the a your buildings of on how side factored portion a business, it residential bit in the commercial the elaborate little whether and/or you side? on and have rate be

building our in they buildings haven’t with seen sensitivity to too Where of as we haven’t how of more have in inflation to some the regards it be. And our to can the a of amount, discussions things with supplies. a clients, in our sensitivity terms if have of we So, with been line really certain at of back clients cost commercial down where increases the – hikes. been by we cost lot seen talking point we engineer been has from this value rate might kind get

just about been the less we about so that having overall. hikes so discussions rate have pressures yes, far and been So have more inflationary

bill, to than large on projects, pressures. have larger proponents to I rather or we other Stantec already going participate see of mean infrastructure respect commentary small some or given people this to And does are to inflationary helpful. thing ask or kind preference U.S., whether starting is bill you respect That’s equal? I any projects are Okay. working are projects wanted with to all the the to moving the on in about it that smaller or with

Yes.

beauties global scaled I community think several class ones actually of have that of on projects that’s whole larger smaller fees. those in of fees hundred And to the projects. from dollars from of in is of model the to one the Stantec millions kind sort work type $X,XXX operation our we we

I no, think are we okay. So

with to fine us. the put just clients be will out However, decide our projects

back Thanks much. Okay. it over. I will very turn

Thank you.

question next comes National Our Please from Financial. Sytchev from go Maxim Bank ahead.

morning. good Gord there. Hi Theresa,

morning. Good

quick we XXXX. from benefiting potential I the people U.S. of at the in the sort terms a of Gord, when pointing are think stimulus to in just of back peers, look half, Biden question some

of what maybe about little bit confidence inflection wondering you Yes. just a the sort point So, earlier. gives that

I any So, guess comment there?

great Maxim. interesting. It’s point, No, Yes.

week, earlier out came that ones XXXX. the this of they One were talking about

XXXX in QX. I our starts think their

to half are talking So, it’s kind as about maybe even they us. of XXXX back

do But starting think calendar revenue QX. some are a start QX I we or we do story be that story of this and projects for will in I won’t go QX, think see So, for year hit into I see strong, strong the this us we some will QX the providing as streets now us XXXX – to certainly be also. to generated think a because tailwinds

in right it’s are then deflation seeing kind And have just one targets, private public now of conversation Okay. in have Thank pretty you the with sellers, obviously, still any That’s you. of helpful. – a market, the seen or of that multiples line, potential of the last question, but we terms expectations sticky. if which change if you the wondering bottom in

color any just maybe So, there?

Yes.

of latter up that Some discussions multiples year, of been a have in crept sellers were part well. as in concert, the company perspective the public upwards certainly, creeping having, from as multiple we expectations last of the

the – multiples some the of So, that year since down the we a it’s seen been bit. come public of little beginning have

they that a is we academically, delta that accretive – the that are talking need there firms hold understand certain I we we between think So, the to, to on to.

And are had we discussions it, they what So, just some those some with to on I waiting have think on happens sellers. things. with of kind see

where beginning response being seen into haven’t it stay quite since in know but is has all beginning really year transactions everyone we the the to they private will, things that of firms these reasonable, plays out. I the year, of public are, think the any yet. crept So, of if market But some the since I it this but think how

Thank so very helpful. That’s Thank Okay. you. you much.

Maxim. Thanks

We take Neville ahead. Mark Please our from question will Scotiabank. now from go next

Two Hey. questions. morning. Good

business the clear, be to in some organic QX? just First, growth do to expect you put up

strengthening growth latter were do into as we quarter-over-quarter looking respond. who organic in We absolutely. terms the – I QX, is year. to of we the But sort just part each Yes, of at other and expect going of in go Theresa

it. Okay. Got

Gord, – could the of quantum of of a appreciate Theresa to and laid sort the terms this is maybe In impact having just But that’s the size of understand investment, any the of there sort investments that out, provide have color. you I that you year?

in to XX.X% effectively It’s put EBITDA the range out, have embedded that the we XX.X%. adjusted

spending with So, assumptions go around increased will some that spending. our where coupled

that’s IT the – about haven’t activities. I hit business marketing area talked I think one development that is actually, the one on. I our HR and

explicitly. of that provided might sort margin, and specific what assumption costs those that baked ranges haven’t EBITDA dollar be into for So, is we additional

just working of sort know? with CapEx Okay. think cash I free last there in about anything mean grows question, of in flow. on earnings. No, that’s or I fine. expectation don’t Is sort to terms Maybe Cap or the line of just

flow would Well, along will that The our with expectation with free say cash I earnings. is grow you. I agree that

bit be should cost careful just pretty never creep probably that capital by we have won’t bit year. been pretty overall It this relative will probably CapEx because spending. to is spend. this little any up So, our in notch a a be of little a for pandemic, next back but will outsized stretch, huge camping year. robust part It it year the up through

Thanks appreciate I Alright. it. the it. for Got time.

you. Thank

ahead. We from next now go RBC Please our take Capital. Khan will Sabahat from question

infrastructure bill of trying of year digit just when mid think and build an mid-single and sort high organic about Thanks pushed of into a on sort to is morning. company. has get ‘XX. organic this guess a of discussion Great. for building digit to growth get spend good single infrastructure range the U.S. the total buffer, pushes of there growth what that into for the maybe the that Hi. from contribution. the I guidance, Is some been you bit idea the the the I

understand Just be much the contribution in for reflected want guide buffering may kind this to how year? or of the

Yes.

of – to to of what’s front our are see level our things put embedded from we marketing as thoughts activity U.S., together starting expectations we the of you the isn’t in always So, both think in revenue component you it right. on are identified the projects explicitly to And high-single what the maybe I yet. that there you that there were are that growth. a backlog win, is for our mean on two to going is mid is – but digit some organic

and a be mid embedded and and get year, embedded up of end actually towards how to assumptions that that a But bit towards up so getting those to those as us and the be range. running the utilization in remains how with And getting slower digit is range. talked And about uptick, it projects seen. are again, QX higher have high-single end, quickly whether pushes the unfolds year in of we we in that would the the that moving that

some clarity that I Okay. I to offset if buildup, in on maybe related line going as just have for And understand you to rate strategy. from it want estate Great. also space, at to to is sublet guess you accounting than might are of operating related to of a looks if lower comment would can kind assets on subletting And last. of on really then impairment one you be – income SG&A the balance space statement sheet. leasehold might I what rationalization real sure the understand one be the costs, an just bit statement? that flow into your being I able that. I please. like that make those you that your that. where sure Is looks there kind want a to your we And here. make recognized like was think items, maybe Thanks there the of is your It non-cash a just Just gotten? or income to just

sure. Yes,

IFRS the anyone convoluted on complex. if XX, mean is It crack a very I So, and they metal. can nut deserve

first. the impairments lease let’s So, talk about

we sublet not to did impairment could we and could to large both we take that then or And and so that identified we at available exit last a related leases that year space that time. downsize make

identification determination could have that we in There value took up of that as leases of kinds impairment we spaces impaired this low of so year. into that the goes XXXX of the conditions up some would two we be to in the of And further end the of some to all second what through and for we rationalize made you that space One pieces. last of of outside the the year, XXXX relates And lease advance that is space, to and is market we modeled. those what modeling ended write-off. the

take spaces. those So, impairment a had to we further on

longer going So, combination what that then as to does cash. is spaces or mean we means, that subleasing from look having no in cost that paying into we inflow have be for of rationalized will and result that forward earnings some savings we exited it there are and spaces a of and are that

And of and see, so I inflow can as marketing expenses. will cash as through admin our far not that flow

if flow EBITDA calculation. to a the cash our going And it a be leasing still to little cash But course, calculation. it effects will bit show – But largely the really apart. outside is and convoluted majority EBITDA it now think the up tough of of I pick of statement. of of reside flow, it our in outside will this is

to of I just, savings those I the a ‘XX. savings definitely of towards, in so? year seems appreciate done or terms came terms the for like I of work No. the leg convoluted. and of in a just of guess the there amount remaining, it color And chunk bit work guess next the Is maybe Okay. already left a or in of more good get this subleasing/exiting just leases bit

We perspective, have from work. a that the lot subleasing. of identification done bit pretty of an good still impaired go. a I There to a identified that land both or being it’s think have is managed for sort of we space we available portion carefully. have But But

spaces available that EPS become say initially we we the years to But initiative. over might X is continue uplift $X.XX we next identified possible. or this $X.XX would the potential from some so of always to again that And there hadn’t that be paid that

Great. Thanks very much that. for

Thanks.

Please BMO question our Capital Devin now Dodge Markets. take ahead. will from final We go from

some figure I favorable Thanks. Hi. strong there wanted don’t settlements, – I I before. segment. really recall number reported. see can underlying growth the of revenue just growth reflection us the this an high And help or that to you that you organic is a understand true or that demand. Global with start Were net don’t seeing that, closeouts revenue

ahead. Go

on. But year, really just was Zealand, in collection of there was some we of for previously reserves, a was overall, as that UK, but saw doing for the and pretty development executing that in bit we were what of New QX, performance and successful was strong. in of of strong the as the material that work are transportation In were to we half provided the things, we large back there some some QX. we in pretty not strong Australia swing projects kind the we especially towards was year enough community Mining also really winning and talk – and

that is AMP a program growth supportive So, the in the also standpoint. organic being in from and UK is revenue swing, really full

of UK into factors continue really next And in really, we regions, expect the in that occurred. drive those regions the is look really Australia, and New is growth macro Zealand growth. strong will what to two would we particular, those much where So, as year,

– X%, been seeing. reflective that year, in seen But like we sort the higher certainly back at what organic XX% of mid is QX range. we growth the it’s finished XX% retraction go And a overall, And in QX, minus in It’s look a then and QX interesting, of X%. part so this of each we or at what growth were the in have we of I organic little the as quarter have and year year, did but the both plus kind have QX. sort it’s of

let’s with is it subcontractors in should on, just a guess hires kind internal Okay. been coming Have to – that how into segment? the this, how you able unfolds you of you more trying have been Global next that that because, understand, XXXX think lot year – that is guys of we that I plays or obviously, accommodate have I – say, am work, to or

hiring our And able labor to I that do perspective. robust regions The certainly be have a market a from our move we We the been continue work actively it’s majority out thing in to have of been to there. is think one global we able around.

UK and and Canada So for into example, Australia we over can send work so versa then the on. to project vice from and

think I So, certainly been that’s beneficial.

I migration we because that the think by locations. the Australia benefit that in the of and ground sealed there XXXX influenced in And one in into as to is – really, those New Zealand little was size well. have none going workforce the is a were lot in borders that XXXX, very of of our

New see to people individuals starting so that source will hire we And help open of those that did That think will locations again, borders that something as hire in an give from we people XXXX. I draw those we certainly we Australia, now that not can as have into additional are well, Zealand. into us in really

cadence in XX% just in pointing and the guidance Okay. QX. here, was of of off to EPS Thanks to XXXX, lot. EPS part a QX Maybe the close

greater pointing – XX%. a share half, QX presumably more stronger will to are of a so that You second take

you So, numbers the an I here. to get stuff, wanted granular opportunity I on too to usually to just consensus this frame give don’t like but

do quarter despite a full contribution QX earnings expect improve QX Cardno? into sequentially, so to from So, you from

the are that what QX. Yes. QX quarters be But right. to than case you be The second split quarter weather, Thank because being will shoulder and will XX/XX expect when than and because time XXXX, we But the expect away. part we holiday just QX, up. that, and stronger you in with is of absolutely – expect we your Typically, be productive. for the the that’s for is be will happy QX, stronger of most it ramp-up third of bringing can roughly that very QX even QX in because do we that probably

more easily QX – should that don’t overall, not weighted you think expect split So, should be XX% QX, be between the we towards and it fourth that quarter. to

lot. a Thanks Okay.

you. Thank Great.

no your are time, or there queue As further back remarks. would in turn to any questions closing for this the the speakers to I call like additional at

look for a today. about Well, And to the forward speak call us thanks to the throughout about. continuing joining again, year excited progress, pretty are you our on everyone, we that continued we with Great. year

Have So day. everyone. again, thanks good a

and call. participation. gentlemen, Thank you. Thank you now today’s conference you That your Ladies will may disconnect. conclude for