Q1 2024 WSP Global Inc Earnings Call
The Quentin Webber Investor Relations. Please go ahead, Mr. Weber.
Good morning. We hope you're all doing well and thank you for joining our call today.
We will be discussing our Q1, 20204 performance, followed by a Q&A session. Joining us today this morning are Alexander He, our president and CEO , and Alamishu, our CFO . Please note that this call is also accessible on our website of the webcast.
During the call, we will be making some forward-looking statements, and actual results could differ from those expressed or implied. We undertake no obligation to update or revise any of these statements.
Yes.
Good morning, everyone welcome to Ws piece first quarter 'twenty 'twenty four results conference call I would now like to turn the meeting over to Quentin Weber Investor Relations. Please go ahead Mr. Weber.
Relevant factors that could cause actual results to differ materially from those forward-looking statements are listed in our MDNA for the quarter that ended March 30s, 2024, which can be found on CEDAR and on our website. In addition, during the call, we may refer to certain non-IFS measures.
Good morning, we hope you're all doing well and thank you for joining our call today.
Quentin Weber: We will be discussing our Q1 2024 performance followed by a Q&A session. Joining us today. This morning are Alexandre.
These measures are also defined in our MDNA for the quarter that ended March 30th, 24. Our MDNA includes reconciliations of non-IFS measures to the most directly comparable IFS measures.
Speaker Change: Let me show our CFO. Please note that this call is also accessible on our website.
During the call, we'll be making some forward looking statements and actual results could differ from those expressed or implied we undertake no obligation to update or revise any of these statements.
Management believes that these non-affares measures provide useful information to investors regarding the corporation's financial condition and results of operation as they provide additional key metrics of its performance.
Speaker Change: Relevant factors that could cause actual results to differ materially from those forward looking statements are listed in our MD&A for the quarter that ended March 32.
These non-affirous measures are not recognized on the FRS, do not have any standardized meaning prescribed under ISRS and may differ from similarly named measures as reported by other issues. And accordingly, may not be comparable.
Speaker Change: 2020, which can be found on SEDAR and on our website. In addition during the call. We may refer to certain non <unk> measures. These measures are also defined in our MD&A for the quarter that ended March there yet.
These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS. I will now turn the call over to add ex-on.
Speaker Change: 2024, our MD&A includes reconciliations of non <unk> measures to the most directly comparable labors measures management believes that these measures provide useful information to investors regarding the corporations financial condition and results of operation I think provide additional key metrics of its performance.
Thank you, Canton and good morning everyone. I am pleased with our first quarter performance as it sets a solid foundation for the remainder of 2024 and reflects the positive momentum we continue to experience in our business.
Speaker Change: That first measures are not recognized under correct did not have any standardized meaning prescribed by the isos and may differ from similar Lee lean named measures as reported by other issuers and accordingly may not be comparable.
Globally, our backlog and pipeline of opportunities remains robust across all sectors, especially in the Americas which recorded a double-digit organic backlog growth.
Speaker Change: These measures should not be viewed as a substitute for the related financial information prepared in accordance with IRS.
In Q1, we delivered strong results in line with our expectations, and our top line and profitability continued to trend positively.
Speaker Change: I'll now turn the call over to Alex.
During the quarter, we continue to future-proof WSP over indexing three core elements.
Alex: Thank you Dan Good morning, everyone I am pleased with our first quarter performance as it sets a solid foundation for the remainder of 2024 and reflects the positive momentum we continue to experience in our business globally.
First, we focus on optimizing our global platform to unlock even more possibilities and drive sustained organic growth and margin improvement.
Alex: Globally, our backlog and pipeline of opportunities remains robust across all sectors, especially in the Americas, which recorded a double digit organic backlog growth.
Second, we added expertise in new clients through a number of acquisition completed in the first quarter. And third, we remain dedicated to being the premier partner to our clients and our communities. And let me review each in further detail.
Alex: In Q1, we delivered strong results in line with our expectations and our topline and profitability continued to trend positively.
On the optimization front, I'm sorry, we elevated further our outstanding platform, seizing productivity opportunities and bolstering project performance.
Alex: During the quarter, we continued to future prove WSB over indexing tree core elements first we focus on optimizing our global platform to unlock even more possibilities and drive sustained organic growth and margin improvement.
These efforts are allowing us to already report an impressive increase of 50 basis point and not just a deep at the margin when compared to the first quarter of 2023.
Alex: Second we added expertise in new clients through a number of acquisition completed in the first quarter.
Moreover, it provides us with the confidence to deliver on our three-year strategic plan ambitions to increase our margin profiled by at least 150 basis points.
Alex: In turn we remain dedicated to being the premier partner to our clients and our communities and let me review each in further detail.
Alex: On the optimizing.
We also concluded the Go Live of our global ERP in the UK.
Alex: <unk> front I'm, sorry, we elevated further our outstanding platform.
This region is the third key geography to onboard to the platform after Canada and the US, and we now have over 70% of our EBITDA converted and more than 50% of our employees on the new platform.
Alex: <unk> productivity opportunities in ball string project performance. These efforts are allowing us to already reported an impressive increase of fifth.
Alex: <unk> basis points, and adjusted EBITDA margin when compared to the first quarter of 2012.
This is one of the largest transformation we have undergone as a business and it covers the modernization of ourselves, procurement, project management, HR and finance functions.
We are already beginning to read the benefits of this initiative through enhanced business intelligence capabilities, the exchange of best practices, the leveraging of insights and data, and increase collaboration.
Also, we are pleased to report that our deployment schedule is on plan and on budget.
Since the beginning of the year, we have continued to bolstered our platform by deploying capital towards strategic acquisitions, and we have announced four transactions recently.
The first Communica is one of Canada's leading indigenous and stakeholder engagement and information management consulting firms.
Over 70% of our EBIT converted and more than 50% of our employees on the new platform.
It is recognized for its collaborative approach and its ability to deliver authentic, open, and transparent, stakeholder and wider community engagement, including with indigenous communities.
This is one of the largest transformation, we have undergone as a business and it covers the modernisation of ourselves procurement project management, HR and finance functions.
This acquisition reinforces WSP's commitment to delivering impactful community projects and enhances its ability to respond to the increasing demand for stakeholder engagement and information management services.
We're already beginning to reap the benefits of this initiative through enhanced business intelligence capabilities. The exchange of best practices, the leveraging of insights and data and increase collaboration.
The second is Proxon, one of Finland's largest rail consultancies that offers a range of railway and railway system design services, including traffic and energy services as well as safety and security expertise.
Also we are pleased to report that our deployment schedule is on plan and on budget.
Since the beginning of the year, we have continued to bolstered our platform by deploying capital towards strategic acquisitions, and we have announced four transactions recently.
Proxion adds key rail expertise in Finland to WSP's transport and infrastructure capabilities in the Nordics and strengthens are market position and ability to lead large-scale projects in the Finnish market.
The first community count as one of Canada's leading in digital this and stakeholder engagement and information management consulting firms.
It is recognized for its collaborative approach and its ability to deliver Atlantic open and transparent stakeholder and wider community engagement, including with engineer to engineer and Bijan. This sorry communities.
By combining our respective expertise and teams, we aim to elevate our capabilities, broaden our portfolio, and strengthen our market position in the country.
This acquisition reinforces <unk> commitment to building actual community projects and enhances its ability to respond to the increasing demand for stakeholder engagement and information management services.
The third is one day engineros.
a Spanish consulting firm in transmission and distribution, operating mainly in the power and energy sector, which will enhance WSP capabilities in Spain, creating a strong multidisciplinary business in the region with a balanced portfolio in our core end markets.
The second is <unk>, one the Finland's largest railroad consultancies that offers a range of railway and railway system design services, including traffic and energy services as well as safety.
It will also increase our local workforce by approximately 70% and expand our geographical presence in the country by adding four new regions.
And security expertise proxy.
<unk> adds key rail expertise in Finland to Wsb's transport and infrastructure capabilities, and the Nordics and strengthens our market position and the ability to lead large scale projects in the Finnish market.
Through this acquisition, WSP will be positioned as one of the leading international engineering firms in Spain.
The Fort is AKF Group, a specialized mechanical, electrical firm that design complex healthcare, science and technology, and mission critical facilities.
By combining our respective expertise and teams we aim to elevate our capabilities broaden our portfolio and strengthen our market position in the country.
AKF enables us to strengthen our scale in the US and expand our expertise within property in building by 20% in the US alone.
The third is one <unk> and generic <unk>.
Spanish.
Consulting firm and transmission and dispute and distribution operating mainly in the power and energy sector, which will enhance <unk> capabilities in Spain, creating a strong multi disciplinary business in their region with a balanced portfolio in our core end markets. It will also increase our local workforce.
Through this acquisition, we aim to enhance our technical practice and boost our capabilities and presence in several
essential high-hand demand markets and in a wide variety of sectors such as corporate, cultural, health care, education, hospitality, retail, science and technology.
Approximately 70%.
And expand our geographical presence in the country by adding four new regions.
The sustained expansion of our platform is attributable to strategic capital deployment and organic growth, but also to nurturing our internal talent and resources.
Through this acquisition <unk> will be positioned as one of the leading international engineering firms.
This is why I'm proud that we continue to focus on internal promotions and have set high ambitions in our strategic action plan.
Spain.
The <unk> group of specialized mechanical electrical firm that designed complex healthcare science and technology and mission critical facilities.
In 2023, we filled over 75% of our global leadership roles with internal candidates, and since the beginning of the fiscal year, another example was Joe Serco being promoted to the role of president of our business in the United States.
Hey, JF enables us to maintain our scale in the U S and expand our expertise within property and building by 20% in the U S alone.
Through this acquisition, we aim to enhance our technical practice and boost our capabilities and presence in several essential high Ham.
Joe brings decades of invaluable leadership experience and a deep understanding of the industry and evolving client needs. I'm thrilled to see him and many others take on new challenges.
Demand markets and in a wide variety of sectors, such as corporate cultural healthcare education, hospitality retail science and technology.
The third core element of focus in the quarter was and will continue to be elevating the standard in client experience and being a premier partner to communities.
The sustained expansion of our platform is attributed attributable to strategic capital deployment and organic growth, but also to nurturing our internal talent and resources. This.
We are making great strides on this front as witnessed by some recent project wins. Today I have selected three that best illustrate this.
This is why I'm proud that we continue to focus on internal promotions and have set high ambitions of R.
In the UK, we have confirmed our work on one of the largest programs ever won by WSP in the UK in terms of scale, revenue, length and complexity, which is aligned with our ambition to stay at the forefront of the energy transition and brings
In our strategic action plan.
In 2023, we filled over 75% global leadership roles with internal candidates and since the beginning of the fiscal year and as an example was Joe circle being promoted to the role of President of our business in the United States, Joe brings decades of invaluable leadership experience and a deep.
exciting new career opportunities for talent.
The great grid upgrade is a major program to deliver electricity transmission infrastructure across the United Kingdom and enable 50 gigawatts of network capacity by 2030.
Understanding of the industry and evolving client needs.
Im thrilled to see him and many others take on new challenges.
It is a critical step in the pathway to net zero to reduce reliance on fossil fuels and enable a shift towards renewable energy.
The third core element of focus in the quarter was and will continue to be the standard and client experience and being a premier partner to communities.
WSP has been appointed as one of seven industry partners tasked with providing over 9 billion British pounds work of design and construction for national grids over 12 years.
We are making great strides on this front as witnessed by some recent project wins.
Our scope consists of providing professional services across the old delivery life cycle from early stage scheme development to environmental services, planning, consent and detail design.
Today I have selected treat that best illustrate this.
In the U K, we have confirm our work and one of the largest program ever won by <unk> in the U K in terms of scale revenue length, and complexity, which is aligned with our ambition to stay at the forefront of the energy transition and bring exciting new career opportunities for our talent.
This win is well aligned with our ambitions to stay at the forefront of the energy transition and bring exciting new career opportunities for our talent.
In Los Angeles, we have also signed a new $100 million US program management contract to support LA County Metro.
But Greg grid upgrade is a major program to deliver electricity transmission infrastructure across the United Kingdom, and enable 50 Gigawatts of network capacity by 2030.
on the 15-mile light rail extension to southeast Los Angeles County, which connect underserved communities from 10 cities to downtown Los Angeles.
It is a critical step in the pathway to net zero to reduce reliance on fossil fuels and enable a shift towards renewable energy.
The project is important as it broadens the scope of WSP traditional design services for this important customer.
WSB has been appointed as one of seven industry partners tasked with providing over 9 billion British pounds worth of design and construction for national Grid's over 12 years.
During the selection process, WSP score highest amongst competing firms, achieving the best score in each of the major categories. Firm experience and capabilities, key personnel,
Our scope consists of providing professional services across the old delivery lifecycle from early stage <unk> development to environmental services planning consent and detailed design. This win is well aligned with our ambition to stay at the forefront of the energy transition and bring exciting.
and project approach. WSP has been the leader in the rail and transit sector in the U.S. since the design of the New York City subway system in the 1880s, and we fully intend to remain in the top position.
New career opportunities for our talent.
In Australia, we are supporting the Queensland Train Manufacturing Program, which aims to deliver 65 new six-car passenger trains in time for the Brisbane, 2032 Olympic and Paralympic Games.
In Los Angeles, we have also signed a new $100 million U S program management contract to support early County Metro on the 15 my life.
Pension to South East, Los Angeles County, which connect underserved communities from 10 cities downtown or to downtown Los Angeles.
This initiative is a pivotal support system for the region's growing population and economy. The program will not only boost Queensland's jobs market, but also offers substantial training and development opportunities.
The project is important as it broadens the scope of WSB traditional design services for this important customer.
WSP provides civil, structural, rail, geotechnical, building, and power design services for the Greenfield facility.
During the <unk>.
During the selection process WSB score highest amongst competing firms achieving the best score in each of the major categories firm experience and capabilities.
These three examples are a testament to the types of projects that allow us to partner with like-minded clients and deliver projects that profoundly enhance and impact the lives of communities.
Personnel.
And product approach WSB has been the leader into rail and transit sector in the U S. Since the design of the New York Subway.
System, and the 18 eighties, and we fully intend to remain in the top position.
On that note, I will now invite Elaine to review our financial results.
Thanks, Alex. I'm very pleased this morning to report on our strong result for the first quarter of 2024, where we've seen net revenue grow organically by 4.6%, EBITDA by 8%, and earnings per share by 13%.
In Australia, we are supporting the Queensland train manufacturing program, which aims to deliver 65, new six car passenger trains in time for the Brisbane 2032 Olympic and Paralympic games.
Let me elaborate further on each of these points, starting what are top lines.
This initiatives as a pivotal support system for the region's growing population and economy that program will not only boost queens lens jobs market, but also offer substantial training and development opportunities.
Well, the first quarter revenues and net revenue reached $3.6 and $2.8 billion, up 2.7 and 4.7 percent respectively compared to the first quarter of 2023.
There'll just be provide civil structural rail geotechnical building and power design services for the Greenfield facility.
We achieve net revenue organic growth of approximately 6.5% when normalized for the same number of billable days compared to Q1, 2023.
These three examples are a testament to the types of projects.
As stated in our outlook issued in March, these additional billable days will reverse in Q4.
Now us to partner with Likeminded clients and deliver projects that profoundly enhance and impact the lives of communities.
Backlog, as of March 30th, 2024 stood at $14.2 billion, representing 11.8 months of revenues, and of interest, as Alex stated, the America's reportable segment achieve organic backlog growth of 10.3% over the last 12 months.
<unk>.
We'll now invite <unk> to review our financial results.
Thanks, Alex very pleased this morning to report on our strong results for the first quarter of 2024, where we've seen net revenue grow organically by four 6% EBITDA by 8% and earnings per share by 13%. Let me elaborate further on each of these points starting with our top line.
At just that a bit done, the quarter reached $446 million, up 7.9% compared to the first quarter of 23.
Adjusted EBITDA margin for the quarter reached 16%, an increase of 50 basis point when compared to the first quarter of 2023. And for the last 12 months, our EBITDA margin now stands at 17.7%.
While the first quarter revenues and net revenue reached $3, six and $2 $8 billion up two 7% and four 7% respectively compared to the first quarter of 2023, we achieved net revenue organic growth of approximately six 5% when normalized for the same number of billing.
This increase is mainly attributable to our continued focus on productivity, as evidenced by a reduction in our personal cost as a percentage of net revenues.
<unk> days compared to Q1 2023.
As stated in our outlook issued in March these additional billable days will reverse in Q4.
For the quarter, adjusted net earning reach $194 million or $1.55 per share, up approximately 13% compared to the first quarter of 23.
Backlog as of March 32024 stood at $14 2 billion dollar representing 11 eight months of revenues and of interest as Alex stated, Eric because of affordable segment achieve organic backlog growth of 10, 3% over the last 12 months.
Precash outflow reach $125 million for the three-month ended March 31st, 2024, better than the same period last year and slightly ahead of our expectations.
Adjusted EBITDA in the quarter reached $446 million up seven 9% compared to the first quarter of 'twenty three.
Our DSO stood at 76 days as of the end of March, stable and on change when compared to December 31st, 2023.
Adjusted EBITDA margin for the quarter reached 16% an increase of an increase of 50 basis points when compared to the first quarter of 2023 and for the last 12 months, our EBITDA margin now stands at 17, 7%.
Our net debt to adjust the EBITDA ratio stood at 1.6 sign within management's target range of 1 to
As we progress through our business transformation journey, we continue to aim for a 100% conversion of net earnings to free cashbook for 2024.
This increase is mainly attributable to our continued focus on productivity.
In conclusion, we're off to a great start with a solid sets of result, a strong operating plan, and healthy market condition. We are therefore reiterating our outlook with confidence. I'll back to you, Alex.
Evidenced by a reduction in our personnel cost as a percentage of net revenues for.
For the quarter adjusted net earnings reached $194 million or $1 55 per share up approximately 13% compared to the first quarter of 'twenty three.
Well, thank you, Alain. Given our prudent start of 2023 compared to our solid start in 2024 and given our progress made in the current strategic cycle, we are confident in the future.
Shelf slow reached $125 million for the three months ended March 31, 2024, better than the same period last late last year and slightly ahead of our expectation.
We welcome approximately 10,000 employees through 15 acquisitions
Our DSO stood at 76 days as of the end of March stable and unchanged compared to December 31, 2023 or.
since the beginning of our plan and notably four since the beginning of the current year. We continue to have a promising pipeline of growth opportunities, a solid balance sheet, and looking at the rest of 2024, we are moving forward with confidence.
Our net debt to adjusted EBITDA ratio stood at one six times within management's target range of one to two times.
Our focus remains on delivering on our ambitions bolstered by healthy market conditions.
Progress through our business transformation journey, we continue to aim for 100% conversion of net earnings to free cash flow for 2024 and.
Our shared vision and collective efforts are the cornerstone of our success, and I am confident they will continue to guide us on our journey to be recognized as the undisputed leader in our industry.
In conclusion, we're off a great start with a solid sets of results our strong operating plan and LTE market condition. We are therefore, reiterating our outlook with confidence back to you Alex.
On a final note, I would encourage you to explore our 2024 Global ESG report, which will be published shortly.
Well, thank you and I and given our prudent start of 2023 compared to a solid start in 2024 and given our progress made in the current strategic cycle. We are confident in the future. We will come approximately 10000 employees through 15 acquisitions.
You are also invited to take part in our annual general meeting, which will be held in person and virtually at 11 a.m. Eastern Standard Time today. More details can be found on our website, and I will now open the line for questions.
The beginning of our plan and notably for since the beginning of the current year. We continue to have a promising pipeline of growth opportunities our solid balance sheet and looking at the rest of 2024, we are moving forward with confidence.
Thank you. To ask a question, you'll need to press star one and one on your telephone and wait for your name to be announced. And to withdraw your question, please press star one and one again.
Thank you. We will now take our first question. The first question is from the line of Benoit Poirier from Desjardin.
Our focus remains on delivering on our ambitions bolstered by healthy market conditions, our shared vision and collective efforts are the cornerstone of our success and I am confident they will continue to guide us on our journey to be recognized.
Yeah, good morning, Alex, and congratulations for the strong start.
Thank you, Benoit. Thank you, Benoit. Yeah. Hey, just in terms of Ed count, you added about 700 people so far this year. Obviously, you've been through four MNA transactions. So I was just curious to know how many people came from acquisition and what's your expectation for the reminder of the year in light of your growth trajectory. And also, if you could comment about the greatest opportunity, you still. see from the productivity improvement standpoint.
As the undisputed leader in our industry on.
On a final note I would encourage you to explore our 'twenty to 'twenty four global ESG report, which will be published shortly.
You are also invited to take part in our annual General meeting, which will be held in person and virtually at 11 am Eastern standard time today.
Details can be found on our website and I will now open the line for questions.
Thank you to ask a question you will need to press star one and one on your telephone and wait for your name to be announced and sequentially. Your question. Please press star one on one again.
Well, look, I think if I start with M&A, we have a very good start, very pleased with where we stand at this point in time. And the pipeline is healthy, so I'm confident that the remainder of the year should be
Thank you we will now take our first question.
First question is from the line of Ben <unk> from day shutdown. Please go ahead.
should bear fruits. So I think on that front, I'm feeling good that we should have a good year in 2024. Perhaps, Alain, you want to comment on headcount? Yeah, so on Ed Count Benoit, with the Communicant Proxon acquisition in Q1, we've added about 200 people.
Yes, good morning, good morning, Alex and congratulations for the strong start.
Thank you Benoit Thank you Benoit.
Just in terms of count you added about 700 people. So far this year, obviously, you've been through four M&A transaction. So I was just curious to know how many people came from acquisition and what's your expectation.
Our focus, as we've discussed many times in 2023 and at the start of 2024, we've been
heavily engage on maximizing the productivity of our business.
For the reminder of the year in light of your growth trajectory.
So at count growth is important, but it's a balancing act delivering also on increased productivity and efficiency.
And also if you could come in about the greatest support can it be.
You will see from a product improvement standpoint.
We are in line with our budget in terms of growth, bed count, and for the reminder of the year, we intend to continue on a similar path of maximizing our productivity.
Well look I think if I start with M&A, we have a very good start I'm very pleased with where we stand at this point in time.
Okay, Craig. We need to remember that the last two acquisitions have been completed in Q2. That's right, beginning at Q2.
And the pipeline is healthy so so I'm confident that the remainder of the year should be.
Should bear fruits. So so I think on that front I'm feeling I'm feeling good that we should we should have a good year in 2024.
Yeah, okay, that's great caller. And some of your peers mentions weakness in the Chinese housing market, as well as in the UK, where one player proceeded to some cut head count in their transportation division. I know China is not material for you, but I was wondering if there was any update and whether you were seeing anything similar.
<unk> you want to comment on head count, yes, so on Ed Camden.
With the community Count <unk> acquisition in Q1, we've added about 200 people.
Our focus is as we've discussed many times in.
In 2023 and at the start of 2024, we've been.
No, but no, actually yes. I think we've consistently been saying over the last three or four quarters that
Heavily engage on maximizing the productivity of our business.
So Ed count growth is important but it's.
Balancing act.
Asia is challenging. There's no doubt about that. Having said all that, as you just mentioned, mainland China for us, it's 300 people out of 67, so for us it's the minimis.
Delivering also on increased productivity and efficiency. So we.
We are in line with our budget in terms of growth bed counts and.
Quentin Weber: For the reminder of the year, we intend to continue on a similar path of maximizing our productivity.
As it relates to the UK market, we are not seeing what has been perhaps described by others. The market is we're feeling good about our performance. We're feeling extremely good around our recent win of a national grid.
Speaker Change: Okay great.
Quentin Weber: You remember that the last two acquisitions have been completed.
Quentin Weber: That's right beginning of Q, yeah, Yeah, yeah, Okay, that's great color and some of your peers mentioned weakness in the Chinese housing market as well as in the UK, where one player proceeded do some coke head.
which would provide good organic growth for the business for years to come. So overall, I'm extremely pleased with our performance in the UK market.
Speaker Change: At calendar Transportation Division I know, China is not material for you.
Speaker Change: But I was wondering if there was.
Thank you very much for the time.
Speaker Change: Any update and whether we're seeing anything similar.
Thank you. Thank you.
Speaker Change: Okay.
So we'll now take our next question.
Speaker Change: I think we've.
Speaker Change: Systems, we've been saying over the last three or four quarters that.
This is from the line of Chris Murray from ATB Capital Markets. Please go ahead.
Speaker Change: Asia as is.
Yeah, thanks much. Good morning. Just really quick, just looking at the backlog in Canada. The organic number was actually slightly negative this quarter. Just wondering if there's anything going on or it's just sort of a temporary thing. If you can just give us more color on maybe the reason for it being kind of flat to death.
Speaker Change: This challenging.
Speaker Change: There's no doubt about that having said all that as you just mentioned.
Speaker Change: Mainland China for US, it's 200 people out of 67, so for US it's de Minimis as it relates to U K market, we are not seeing.
Speaker Change: What has been perhaps described by by others.
Yeah, Chris, it's, if anything, we feel extremely confident with the backlog in Canada and the market condition.
Speaker Change: Mark Jeff is we're feeling good about our performance.
It's mostly timing related, the ins and out of a larger job. Underlying business is performing quite well and the backlog is solid, so no issue in Canada. Same common for the America, so that matter.
Speaker Change: Feeling extremely good around our recent win of a national grid.
Speaker Change: Which would provide good organic growth.
Speaker Change: <unk> for the business for years to come so so.
Speaker Change: Overall I'm extremely pleased with our performance in the UK market.
I'm feeling very, very good about Canada at this point.
Speaker Change: Okay. Thank you very much a affords us.
Speaker Change: Thank you.
All right, no, that's helpful. And then just following on, maybe your comments about the ERP system, so congratulations on getting to 70% complete.
Speaker Change: Thank you.
Speaker Change: I will now take our next question.
Alex: This is from the line of Chris Murray from <unk> capital markets. Please go ahead.
But thinking maybe over the next year or two, you know, what's left to be done on this program? And is it fair to think that it should be substantially complete by the end of this fiscal year?
Christopher Allan Murray: Yeah. Thanks. Good morning, just really quick just looking at the backlog in Canada. The organic number was actually slightly negative this quarter.
Speaker Change: I'm, just wondering if theres anything going on.
Well, currently are, as Alex said, 70% of our EBIT does, so Canada, US, and UK is done. And when we reflect that what we've achieved since the beginning of the year, it's 25,000 and more that have been onboarded on the platform. So we're extremely proud of that and proud of our team that have devoted significant effort on that front. We are now moving to the east. There's other regions to be done, the Nordics, Australia, New Zealand.
Dan: Or is this sort of a temporary thing if you could just give us more color on maybe the the reasons for the birth being kind of flat to down.
Speaker Change: Yes, Chris.
Speaker Change: If anything we feel extremely confident with the backlog in Canada the market condition.
Alex: It's mostly timing related.
Alex: Ins and outs of.
Alex: Larger job underlying business is performing quite well and the backlog is solid so no no issue in Canada same same comment for the Americas for that matter.
Speaker Change: And I, probably I'm not feeling very very good.
Speaker Change: About Canada at this point.
So I think it's more 25, 2025 calendar year that we will see the majority of our business into one platform.
Speaker Change: All right no that's helpful.
Speaker Change: And then just following on maybe your comments about the ERP system. So congratulations on getting to 70% complete.
That's the intention, Chris. The way Chris I'm thinking about it and the way I think you should view this is we have, I like to think and I'm saying that in a very, I'm obviously cautious in the way I'm saying it, but I feel we have substantially de-risk.
Alex: But thinking maybe over the next year or two what what's left to be done on this program.
Alex: And is it fair to think that it should be substantially complete by the end of this fiscal year.
Alex: Well currently our as.
this program at this point in time with our three largest countries
Alex: Alex said, 70% of our EBIT, So Canada U S and UK is done.
Alex: And when we reflect that what we've achieved.
on the platform with 70% of our
Alex: Since the beginning of the year, it's 25000.
profit on the platform. However, we are operating in 60 countries. So the remainder 30% will take a bit more time, but we're highly confident that things are going to go well and they're going to be smooth.
Alex: And more that have been on boarded on the platform. So we're extremely proud of that and.
Alex: Proud of our team that I have devoted significant effort on that front.
Alex: We are now moving to.
Alex: To the east and Theres other region to be done the Nordics, Australia New Zealand.
What I'm especially proud of is, and you may have noticed it in our numbers,
Alex: So I think it's more a 'twenty five 'twenty.
Alex: 2025 calendar year that we will see the majority of our business into one platform.
Yes, the DSOs have increased slightly, but given the sheer task that we had to go through, I'm very proud that we kept our DSO stable and I feel it's only going to improve from now.
Alex: That's the intention Chris there was a way Chris Im thinking about it and the way I think you should view. This as we have I like to think and I'm, saying that in a area.
All right, that's helpful. Thanks, folks. Thanks, Chris.
Alex: Obviously cautious in the way I'm, saying, it but I feel we have substantially de risked.
Thank you.
We'll now take our next question.
Alex: The.
Alex: This program.
Please stand by.
Alex: At this point in time with our three largest countries.
This is from the line of Jacob Boo from C. From CIPC. Please go ahead.
Alex: On the platform with 70% of our.
Good morning. Hello, Jacob. Hi, Jacob.
Alex: Profit on the platform.
Yeah, I had a question just on M&A. I know you're saying that the pipeline looks pretty strong.
Alex: <unk>.
Alex: Our operating in 60 countries. So the remainder 30% will take a bit more time, but we're highly confident that things are going to go well and they are going to be smooth.
But maybe you could talk a bit about how the pipeline is looking for the mid to larger size acquisitions. And then my second question just on this M&A, you know, what the margin profile of the recent acquisitions look like.
Alex: What I'm, especially proud of is and you may have noticed in our numbers, yes, the dsos have increased slightly but given the task.
Yeah, margin acquisition of the acquisition we just, the margin, sorry, of the acquisition we just completed.
Alex: We had to go through I'm very proud that we kept our DSO stable and I feel its only going to improve from now.
are fairly similar to our margin profile at this point in time. However, we continue to believe that we can improve the margin profile of those firms as soon as they
Speaker Change: Alright, that's helpful. Thanks, Bob Thanks, Thanks, Chris.
Speaker Change: Thank you.
Speaker Change: Well now take our next question.
You know, we are in a position to integrate them into our platform. So feeling very good about this, Jacob. Look, around myth to larger size acquisition, I think I've said that in numerous occasions in
Speaker Change: Please standby.
Speaker Change: This is from the line of Jacob <unk> from CIBC. Please go ahead.
Jacob: Good morning.
Jacob: Jacob Jacob.
Jacob: Yes, I had a question just on M&A I know, you're saying that the pipeline looks pretty strong.
extremely difficult to
to time
acquisition.
Jacob: But maybe you could talk a bit about how the pipeline's looking for the mid to larger sized acquisitions.
Often time, it takes many years to convince a firm to join your ranks. It takes a lot of nurturing. What I can tell you is that I continue to have formal and informal discussions.
Then my second question just on this M&A, what the margin profile, but recent acquisitions look like.
Speaker Change: Yes margin acquisition.
Speaker Change: The acquisition, we just the margin sorry of the acquisition, we just completed.
with smaller size, medium size and larger size acquisitions. I cannot guarantee you when we are going to complete these, but what I can tell you is that I'm encouraged by the discussion that I'm having right now.
Speaker Change: Are fairly similar to our margin profile at this point in time. However, we continue we continue to believe that we can improve the.
That's fair. Maybe just going back to backlog and just looking specifically at
Speaker Change: <unk> profile.
Speaker Change: Of those firm as soon as they are.
Speaker Change: We are in a position to integrate them into our platform. So feeling very good about this.
APAC, you know, it's down organically year on year.
Speaker Change: Ed.
Speaker Change: Look around mid to larger sized acquisition I think I've said that in numerous occasions in the past.
Talked a bit about China, but how about Australia and New Zealand? I know you called it the timing of some projects there, but are you expecting a slowdown or is just this just all timing? I think in New Zealand with the recent election, I think there has been a pause, like any governments, now I think it's a...
Speaker Change: Streaming is difficult to time.
Speaker Change: Acquisition.
Often time it takes many years to convince a firm to join your ranks.
Speaker Change: It takes it takes a lot of nurturing.
a more center-right government and took a pause on infrastructure spending. We expect that to check and resume in due course.
Speaker Change: What I can tell you is that I continue to have.
Speaker Change: Formal and informal discussions with smaller sized medium sized and larger size acquisitions.
Are we overly concerned by that? No. I think we're calm when things are hot and we're calm when things are cooling off a little bit because we believe this is
Speaker Change: Cannot guarantee you win.
Speaker Change: We are going to complete these but what I can tell you is that I'm encouraged by the discussions that I'm, having right now.
Speaker Change: Yes.
This is timing and infrastructure needs are needed.
That's fair.
Speaker Change: Maybe just.
Same with Australia.
Speaker Change: Back to backlog.
We've experienced double-digit organic growth for, I think, two years now.
Speaker Change: And just looking specifically at <unk>.
Speaker Change: APAC.
Speaker Change: It's down organically year on year.
So, obviously we're starting from a higher base, but the activity level is good. We have a very strong business, we have a very strong team.
Speaker Change: <unk> talked a bit about China, but how about Australia and New Zealand.
Speaker Change: You called out the timing of some projects there, but are you expecting a slowdown or is this just all timing.
So I'm positive in the longer term for that region. And yes, Asia is, as I said earlier on today, it's been challenging and I believe will continue to be challenging for some times.
Speaker Change: I think in New Zealand with their recent election, I think there has been a pause like any governments now I think I'd say.
Speaker Change: A more center right government.
Thankfully for us, this is a small part of our business.
Pause on infrastructure spending.
Speaker Change: We expect that to change and resume in due course.
Appreciate the colon. Thank you. Thank you. Thanks, Jacob. Thank you.
Speaker Change: Are we overly concerned by that no.
Speaker Change: I think we're.
We'll now take our next question.
Speaker Change: When things are Hot then more calm things are.
This is from Devon Dodge from BMO Capital Markets. Please go ahead.
Speaker Change: Our cooling off a little bit because we believe this is timing and the infrastructure needs are needed.
All right, thanks. Good morning. Hello, Devin.
Speaker Change: Same with Australia.
Maybe a couple questions, maybe not so much related to Q1, but maybe, you know, longer term. But look, the demand environment is really quite strong across many of your regions.
Speaker Change: We've experienced double digit organic growth.
Speaker Change: For I think.
Two years now so it's obviously, we're starting from a higher base.
Speaker Change: But the activity level is good we have a very strong business, we have a very strong team.
How do you think about the balance between pursuing the growth opportunities that are available and being more selective in your bidding activity to drive margin expansion?
Speaker Change: So.
Speaker Change: Positive in the longer term for that region and yes Asia is as I said earlier on today.
Well, this is a balancing act, as you just mentioned, right? If I look where we are today as a company, WSP,
Speaker Change: It's been challenging and I believe we will continue to be challenging for some time.
I look at the brand awareness of the company. I look at the type of projects that we are now in the position to tackle as a prime.
Speaker Change: Thankfully for us.
Speaker Change: A small part of our business.
Speaker Change: I appreciate the color. Thank you.
Speaker Change: Thanks Jacob.
designer or prime consultants, and I compared that to where we were 5, 7, 8, 9, 10 years ago. We are in a different space. Again, I mentioned and I highlighted three projects this morning that
Speaker Change: Thank you.
Speaker Change: We'll now take our next question.
Speaker Change: This is from Dutch from BMO capital markets. Please go ahead.
Dutch: Alright, thanks, good morning.
is a testament of what I just mentioned. I look at the great...
Dutch: Hello Devin.
Dutch: Maybe a couple of questions maybe not so much related to Q1, but maybe longer term, but the demand environment is really quite strong across many of your <unk>.
thrive that we're making in sectors where three, four years ago, we were not big. I mentioned a few quarters ago the award of Propel
Dutch: How do you think about the balance between pursuing the growth opportunities that are available and being more selective in your bidding activity to drive margin expansion.
Propel project and other energy transition project in the state of New York, massive project for us. And now national grid three, four years ago, we were not there.
Speaker Change: Well this is a balancing act as you just mentioned right.
Speaker Change: If I look where we are today as a company WSB.
I was telling our board this week, you know, the absolute number in organic growth is obviously important.
Speaker Change: I look at the brand awareness of the company I look at it.
Speaker Change: The type of projects that we are now in a position to tackle as a prime.
And we're pleased, if you compare orange with oranges or apple with apples, that we grow 6.5% this quarter.
Speaker Change: Designer, where prime consultants and I compare that to where we were $5 789 10 years ago.
But it's the type of growth that we are able to generate in sectors where we were
Speaker Change: We are in a different space again I.
Speaker Change: Mentioned and I highlighted three projects this morning that.
fairly small few years ago, I'm extremely pleased with
Speaker Change: As a testament of what I just mentioned.
Speaker Change: Look at the <unk>.
the type of award that we are able to secure right now. So that's
Speaker Change: Great.
Speaker Change: Drive that we're making in sectors, where three or four years ago, we were not.
That's telling me that we are continuing to diversify the platform. We continue to grow in sectors where we were not a leading firm. And then we continue to capitalize on the sectors where we have a strong presence.
Speaker Change: We were not big.
Speaker Change: I've mentioned, a few quarters ago the award of propel.
Speaker Change: Profiled project.
Speaker Change: Their energy transition project in the state of New York massive project for Us.
and the proxan acquisition in Finland is a testament or an example of that.
Speaker Change: And now national grid, three or four years ago, we werent up there so.
Now in the rail sector where we have the leadership franchise around the world we're going to be able to tackle large projects in Finland So overall I'm feeling very good about that and even though we're going through a
Speaker Change: It's.
Speaker Change: I was telling our board this week.
Speaker Change: The absolute number and organic growth is obviously important.
Speaker Change: We're pleased.
Speaker Change: Should you compare orange with oranges or Apple with apples that we grew six 5% this quarter.
conversion, an ERP conversion,
We have been able to increase our utilization and we have been able to increase our margin over the recent past. So I feel that as Ally mentioned, our team should be commended for the extraordinary work that has been accomplished recently.
Speaker Change: But that's the type of growth that we are able to generate.
Speaker Change: It shows where we were.
Speaker Change: Fairly small few years ago.
Speaker Change: Extremely pleased with the type of award that we are able to secure right now. So that's that's telling me that we are continuing to diversify the platform.
Thanks for that. That's a good color. Okay, second question on PFOS, lots of interest on the back of the EPA releasing some final rules last month. Yes. Do you view this as an opportunity for WSP? You know, can you walk, and if so, can you walk us through the services that you provide and where you expect to see the most benefit going forward?
Speaker Change: We continue to grow in sectors, where we were not the lead a leading firm and then we continue to capitalize on the sectors, where we have a strong presence and approximate acquisition in Finland is a testament or an example of that now.
Speaker Change: Now in the rail sector, where we have the leadership franchise around the world, we're going to be able to tackle large projects in Finland. So so overall.
Speaker Change: I'm feeling very good about that.
that the rules and that regulation are strict.
Speaker Change: And even though we're going through a.
Speaker Change: Conversion and ERP conversion, we have been able to improve to increase our utilization and we have been able to increase our margin over the recent past so.
and the requirements will increase demands for our services.
So I feel that over the coming years we'll have our share and be winning our share of work in that space. Yeah, definitely positive, Devin, in terms of development. The rules in the US are probably the most strict that we've seen and I think it's a
Speaker Change: I feel that as Alan mentioned, our team should be commended for the extraordinary work that has been accomplished recently.
Speaker Change: Thanks for that that's a good color Okay second question.
It bodes well for our expert. We probably have around 500 PFAS expert in the US alone. Our backlog in Q1 has already seen some good level of work.
Speaker Change: On the P farce.
Speaker Change: Lots of interest on the back of the EPA, releasing some final rules last month, yes, do you view this as an opportunity for W. P.
Speaker Change: Can you walk and if so can you walk us through the services that you provide.
You know, we're extremely positive about the impact of the new regulation and the flow of work that should come our way, given our expertise and profile in the space.
Speaker Change: And where do you expect to see the most benefit going forward <unk>.
Speaker Change: Tremendous opportunities, perhaps I know you can cover.
Speaker Change: For us like.
Great. Thanks for that. I'll turn it over. Thank you. Thank you.
Speaker Change: Any other firms in this space, it's a real opportunity.
Speaker Change: No.
We'll now take our next question.
Speaker Change: The rules and regulation are tricky.
Speaker Change: Yeah.
This is from Frederique Bastien from Raymond James. Please go ahead.
Speaker Change: And their requirements will will increase demand for our services. So I feel that over the coming years will have our share of that would be winning our share of work in that space. I mean, it's yes definitely positive Devin in terms of development. The rules in the U S are probably the most strength that we've seen.
Yes, good. Hello. Hello. Guys, I'd like to circle back on MNA for a bit.
And really, wondering what has changed from an internal or external standpoint to make you say, hey, okay, now it's time to open up the MNA valve again?
Speaker Change: But I think it's.
Speaker Change: It's all bodes well for our expert we probably have around 500.
Yeah, if you remember, Frederick, I think it was the last quarter, the last investor call, I mentioned that we viewed 2023 as a year of consolidation.
Speaker Change: Fast expert.
Speaker Change: <unk>.
Speaker Change: Our backlog in Q1 has already seen some some good level of work.
Speaker Change: So we're.
Last year alone, we grew our top line by over 20%.
Speaker Change: We're extremely positive about the impact of the new regulation and the flow of work that should come our way given our expertise in profile in this space.
Yes, not all of this was organic growth. There was a lot of acquisition growth, but
We grew our top line by one fifth in one year. So I considered that to be very meaningful and very transformative. So last year was a year of consolidation. We wanted to extract the value from the platform. We wanted to
Speaker Change: Great. Thanks for that I'll turn it over.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Well now take our next question.
Speaker Change: Okay.
Speaker Change: <unk> <unk> from Raymond James Please go ahead.
Speaker Change: Okay.
complete the integration of Golder. We wanted to activate our work.
Speaker Change: Sure.
Speaker Change: Sorry.
Raymond James: Guys I'd like to circle back on M&A for a bit.
on the integration of Woody and I. So that's why I considered last year, a year of consolidation. This year, we've had a strong start of the year. Mind you, these are not large acquisitions, but are very strategic to us.
Speaker Change: And wondering what has changed from a from an internal or external standpoint to make you say hey, Okay. Now it's time to that to open up the M&A valve again, yes.
Speaker Change: If you remember Frederic.
Frederic: I think it was the last quarter, yet the last investor call.
And yes, we're clearly open for business. We have a strong balance sheet. As I said before, I feel we have substantially derrisk the ERP project and transformation. So I feel that all of the...
Speaker Change: I mentioned that we view 2023 is a year of consolidation.
Speaker Change: Last year alone we grew our top line by over 20% yes.
Speaker Change: Yes, not all of this was organic growth there was a lot of acquisition growth, but we grew our topline by one fifth and one year.
All of the ingredients are now in place for us to continue to grow in organically and organically.
Speaker Change: So I consider that to be very meaningful and they retrench from it informative. So so last year was a year of consolidation we wanted to extract the value from the platform we wanted to compete.
Thanks, super helpful here. Next one is perhaps for Alain. We saw
sell better than expected margin expansion in the quarter, at least from our standpoint. That sets you up quite nicely for the rest of the year. Do you anticipate similar gains in future quarters or will we see a bit of variability as we build into Q2, Q3 and Q4?
Speaker Change: Complete the concept that the integration of Boulder, we want it to.
Speaker Change: Activate our work on the integration of wood Eni. So so that's why.
Speaker Change: Consider last year, a year of consolidation. This year, we've had a strong start of the year mind you. These are not large.
Yeah, so
As Alex said, we're very proud of the list in Q1. We usually...
Speaker Change: Large acquisitions, but are very strategic to us.
at lower margin expansion in the first quarter of the year, so we're extremely proud about that. We've devoted significant effort on working on all those levers. As you know, Fred,
Speaker Change: And yes, we are clearly open for business, we have a strong balance sheet.
Speaker Change: As I said before I feel we have substantially de risked.
on productivity. We are certainly aiming to push and continue to increase margin in following quarter and we're feeling confident about the 65 basis point increase that we have guided
Speaker Change: <unk>.
Speaker Change: Project and transformation.
Speaker Change: I feel that all of them.
Speaker Change: All of the ingredients are now in place for us.
Speaker Change: Two to continue to grow Inorganically and organically.
for the full year. So we'll keep on working hard and pushing hard on improving productivity of the firm.
Speaker Change: Thanks Super Helpful Hill next one is.
Speaker Change: Perhaps for airlines, we saw.
Speaker Change: Better than expected margin expansion in the quarter at least from our standpoint.
Okay, but do you expect that to be linear or, you know, I mean, 65% is a massive improvement
Speaker Change: You're up quite nicely for the rest of the year.
Speaker Change: You anticipate similar gains in future quarters or will we see a bit of variability as we build into Q2 Q3 and Q4.
Would that be back-end outed? You're very persistent. That's the intention to continue to push in that direction.
Speaker Change: Yeah. So.
Speaker Change: And as Alex said, we're very proud of.
All right, thank you. Thank you.
Speaker Change: The lift in Q1, we usually.
Speaker Change: I have lower margin expansion in the first quarter of the year. So we're extremely proud about that we devoted significant effort on working on all of those leavers as you know fed.
Thank you.
We'll now take the next question.
This is from Maxim Sitcher from NBS. Please go ahead.
Speaker Change: On productivity.
Hi, good one gentleman. Hello, Max.
Speaker Change: We are certainly aiming to push and continue to increase margin in the following quarter.
I have a third question for you, if I may, in terms of
certainly feels like there's a theme emerging when it comes to power, you know, big
Speaker Change: And where.
Speaker Change: Feeling confident about the 65 basis point increase that we have guided for.
when in UK, you know, Spanish acquisition, you know, we're reading that, say, UK will read to the Netflix
Speaker Change: For the full year.
Speaker Change: So we will keep on working on pushing hard on improving activity of the firm.
by factor of seven when it comes to cool energy transition. Do you mind me be expanding a little bit on this important theme and maybe the opportunity potentially in the U.S. and Canada how to sort of take advantage of this? Thank you so much.
Speaker Change: Okay, but do you expect that to be linear or.
Speaker Change: 65% is a massive improvement.
Speaker Change: Thank you.
Speaker Change: [laughter] very persistent.
Yes, look,
Speaker Change: That's the intention to continue to push in that direction.
You've been following us for a very long time, Max, so you know us inside out. We've always have taken a very disciplined approach in the way we're building our firm.
Speaker Change: Alright, thank you.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Well now take the next question.
You know, as I said, the first pillar we started with
Speaker Change: Hi.
Speaker Change: This is from Maxim <unk> from UBS. Please go ahead.
more than 10 years ago was with property and building, then we moved to transportation infrastructure
Maxim: Hi, good morning, gentlemen.
Speaker Change: Max.
Maxim: I'll take the first question for you if I may in terms of.
and we continue to raise the bar in those two sectors. More recently,
Speaker Change: Certainly <unk>.
We said that we wanted to become the leading firm in the green transition. So we build our pillar around Earth and environment.
Speaker Change: <unk> margin when it comes to power big win in.
Speaker Change: The UK Spanish acquisition.
And now I feel that we are ready to make a big push in the energy transition. So more recently we've invested a lot in talent.
Speaker Change: We're beating them you can't move to Netflix.
Speaker Change: When it comes to energy transition.
Speaker Change: Mind may be expanding a little bit on this.
Speaker Change: And maybe.
and we invested a lot of effort in growing our presence in that sector. And as I said before, I could not be prouder of the work that has been accomplished in this strat plan.
Speaker Change: The opportunity potentially in the U S and Canada, how to some tickets.
Speaker Change: Thank you so much.
Speaker Change: Yes look.
Speaker Change: Yeah.
Speaker Change: You've been following us for a very long time, Max So you know us inside out we've always said.
to grow a presence there. I think now we're tackling some of the largest energy transition program.
Speaker Change: After taking a very disciplined approach and that we were building our harmon.
in the United States and in the UK. So I'm extremely pleased about that. And you're right in pointing out that our push in Central Europe with the 250 people acquisition in transmission distribution is another example of our
Speaker Change: As I said the first pillar we started with.
Speaker Change: More than 10 years ago was with proper tin building that will move to transportation infrastructure and we continue to.
of our core strategy at this point in time. So yeah, we're going to continue to push in that sector.
Speaker Change: Raised the bar in those two sectors more recently, we said that we wanted to become the leading firm in the green transition. So we build our pillar around urban environment.
I appreciate that. Thanks so much for us. And then one other follow-up that I have, do you have any update in terms of IA and how that's funding?
Speaker Change: And now I.
is flowing through and how should they think about this. Yeah, in terms of the impact. Yeah, thank you. I could take that one, Max. So the latest number that have been published, there's about 40% of funding that have been deploy.
Speaker Change: Field that we are ready to make a big push in the energy transition. So some more recently we've been.
Speaker Change: A lot in Thailand.
Speaker Change: And we invested a lot of effort in.
Speaker Change: Growing our presence in that sector.
This is April data and it's up.
Speaker Change: And as I said before I could not be prouder of the work that has been accomplished and distract plan.
from February data by more than 30%. So we were at 30% deployment in February , 40 in April . So it's moving.
Speaker Change: To grow our presence there I think now we're tackling some of the largest energy transition program.
Certainly in the right direction. Forty thousand projects have been awarded funding through the Biden infrastructure bill. So that continues to support our thesis around and our confidence around the U.S.
Speaker Change: In the United States and in the UK. So I'm extremely pleased about that and youre right in pointing out that.
Speaker Change: Our push in Central Europe, with the 250 people acquisition and transmission distribution is another example of our.
And if you combine that with the regulation and PFAS we've covered before we
Speaker Change: Our core strategy at this point in time, so yeah, we're going to continue to push in that sector.
you know we continue to feel very strong
about the US and especially given our leadership position in the transportation business and I have to say transportation Represent currently about two-third of all the funding that have been deployed through the bill so that's good news for us and
Speaker Change: I appreciate that thanks, so much and then one other follow up.
Speaker Change: Do you any update in terms of IAG and how much on it.
Speaker Change: It's flowing through and how we should be thinking about this.
Speaker Change: Absolutely impact.
Speaker Change: Thank you I could take that one Matt so the.
and supports our thesis.
Speaker Change: The latest number that have been published there is about 40% of funding that have been deployed.
OK. Excellent. That's it for me. Thank you so much, everyone.
Thank you.
Thank you.
Speaker Change: It says April data up from February data by more than 30%. So we were at 30% deployment in February 40 in April so it's moving.
We'll now take the next question.
This is from Michael Tupon from TD Securities. Please go ahead.
Speaker Change: Certainly in the right direction.
Thank you. Good morning. Good morning.
Speaker Change: 40000 projects have been awarded funding.
This may tie into the last answer you just provided there regarding IJAA, but the 10.3% organic growth and backlog in the Americas that you've highlighted a few times, can you talk a little bit about the areas that drove that increase?
Speaker Change: Through the the bite an infrastructure bill.
Speaker Change: So that continues to support our thesis around and our confidence around.
Speaker Change: The U S and if you combine that with the regulation of DFAST, we've covered before.
in the quarter.
Speaker Change: We continue to feel very strong.
How the sector, Michael, I mean, transportation, property and building, earth environment, we are seeing growth in those sectors.
Speaker Change: About about the U S, especially given our leadership position in the transportation business and I have to say transportation, representing currently about two third of all the funding that has been deployed through.
We've seen growth in power as I talked about. So at the moment, I feel
Speaker Change: So the bill so that's good.
Speaker Change: Good news for us.
we are going to continue to grow in those sectors. And one that I would perhaps
Speaker Change: <unk> supports our thesis.
Speaker Change: Okay excellent. Thanks Moshe.
Speaker Change: Thank you.
Speaker Change: Thank you.
ad as well as advanced manufacturing.
Speaker Change: Well now take the next question.
We are doing more work in that space and I expect to continue more and more. So that also is a real opportunity for us to grow and to develop new sectors.
Speaker Change: This is from Michael <unk> from TD Securities. Please go ahead.
Michael: Hey, good morning.
Michael: Hey, good morning.
Michael: This may tie into the last answer you just provided there regarding <unk>, but.
And it doesn't sound like it from your response just now or any of your other comments, but more broadly when we look across the business from an end market perspective, are there any areas that are looking weaker right now or causing you to be concerned at all?
Michael: The 10, 3% organic growth in backlog in the Americas that you've highlighted a few times can you talk a little bit about.
Michael: The areas that drove that increase.
Michael: In the quarter.
Michael: How the sector, Michael I mean.
Are you talking in the Americas or you're talking globally? Globally, and I don't mean regionally. I mean, I know you've touched on Asia in China regionally, but just from an end market perspective globally, is there anything that you see as slower?
Michael: Transportation prop.
Michael: Proper tin building.
Michael: <unk> urge environment.
Michael: We are seeing growth in those sectors we've.
Michael: We've seen growth in power as I talked about so at the moment I skill.
I don't think we can look at our sectors and conclude that the things are slowing down to the contrary.
Michael: We are.
Michael: We are going to continue to grow in those sectors and one that I would perhaps add as well as advanced manufacturing.
We're in a good spot right now, but yes, there are some pockets of geographies that are more challenging than others, but for the most part, I feel our top countries are performing well at this point.
Michael: We are doing more work in that space and I expect to continue more and more.
Michael: So that also is a real opportunity for us to grow and to develop new sectors.
Okay, perfect. And then just lastly, looking at the margins in the APAC segment, you did see a decline in EBITDA margins year every year in Q1.
Michael: And it doesn't sound like it from your response, just now are any of your other comments, but.
Michael: More broadly when we look across the business from an end market perspective are there any areas that are looking weaker right now are causing you to be concerned at all are you.
I see from the commentary that the performance in Asia was the source of that. I guess I'm just wondering how we should think about
APAC margins going forward as you as you move through the year. Is there an opportunity to
Michael: Talking in the America or you're talking globally.
Michael: Globally, and I don't mean regionally I mean, I know you've touched on Asia.
you know, to grow margins or how should we be thinking about margins? No, actually Australia margin profile.
Michael: And in China.
Michael: <unk>, but just from an end market perspective globally is there anything that.
Michael: Do you see is slower.
We're not reporting the different countries, but just to give you a sense.
Michael: Sure.
Michael: I don't think we look at our our sectors and conclude that the things are slowing down to the contrary I feel were.
In Australia, we have seen our margin profile going up, not going down.
equally New Zealand has been stable. So overall, I think we're feeling good. And if you look at Asia specifically, Q1 last year was a quasi-normal quarter, so the comparison Q1 over Q1 is a little
Michael: We're in a good spot right now, but yes, there are some pockets of geographies that are more challenging than others, but.
Michael: But for the most part I feel.
Michael: Our tops are top top countries are.
Michael: Our are performing well at this point.
tougher, but if you look sequentially versus Q4, Asia is not significantly moving down. So overall, if you think about Australia and New Zealand, feeling confidence about their margin profile improvement for the rest of the year and stabilization in Asia.
Speaker Change: Okay, Perfect and then just lastly.
Michael: Looking at the margins in the APAC segment, you didn't see a decline in EBITDA margins year over year in Q1.
Speaker Change: I see from the commentary that the performance in Asia was the source of I guess I'm just wondering how we should think about APAC margins going forward as you as you move through the year is there an opportunity to.
Thank you.
Speaker Change: To grow margins or how should we be thinking about margins.
We'll now take the next question. This is from Michael Dume, from Scotia Bank. Please go ahead.
Michael: Actually Australia margin profile.
Speaker Change: Not reporting.
Speaker Change: Different countries, but just to give you a sense in Australia, we have seen a margin profile going up not going down.
Hello, good morning guys. Hey, Michael. Hey, Alex. You guys discussed productivity again as being focused, you know, a focus in 24. And when I look at the project margins,
Speaker Change: Equally in New Zealand has been stable. So were overall I think we're feeling good and if you look at Asia, specifically Q1 last year was.
And the improvement there, obviously great in the first quarter. You know, I can think about that as coming from an increase
Speaker Change: As a quasi normal quarter. So the comparison Q1 over Q1 is a little.
you know, from a combination of higher price and higher utilization. Is there a way maybe that you can discuss the trend of each? And I'm just curious going forward where you think there's more rooms.
Speaker Change: Tougher, but if you look sequentially versus Q4 Asia is not.
Speaker Change: Significant moving down so overall.
Well, we definitely, we definitely
Speaker Change: If you think about Australia, New Zealand, feeling confident about their margin profile improvement.
believe there's more room in the years to come.
You can always improve, so
Speaker Change: The rest of the year and stabilization in Asia.
So we believe there are some geographies and some sectors where the productivity is nowhere needs to be as far as we are concerned, number one.
Speaker Change: Okay. That's helpful. Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Well now take the next question.
And number two, going back perhaps to a question that was asked earlier on this morning.
Speaker Change: Yes.
Speaker Change: This is Michael <unk> from Scotiabank. Please go ahead.
being more selective in the projects that we undertake. WSP, we excel in the complex projects.
Michael: Hello, Good morning, guys.
Michael: And Michael.
Michael: You guys discussed.
That's where we feel we can do better and we can increase our margin profile.
Michael: Productivity again as being.
Speaker Change: Focus in 'twenty, four and when I look at the project margins and the improvement there obviously, great in the first quarter I can think about that as coming from an increase from.
So, the type of projects that we undertake is also going to have an impact on our margin profile.
Michael: From a combination of higher price and higher utilization is there a way maybe you can discuss the trend.
So obviously by selecting projects where we believe we can really raise the bar, provide a better service or differentiated service will allow us to increase our margin profile. So I would argue that this is all of the above at this point.
Speaker Change: Each and I'm, just curious going forward, where do you think theres more room.
Speaker Change: Well with that definitely we definitely do.
Speaker Change: Believe there's more room.
Okay, no, that makes sense. And Alex, maybe just turning time in A. Look, you've been here for a long, long time, and you've done a lot of deals.
Speaker Change: In the years to come.
Speaker Change: You can always improve so so we believe there are some geographies and some sectors, where do your productivity is nowhere it needs to be as far as we are concern number one.
We're living in a world where valuations are high and interest rates are high. You would think that maybe one of the two would have given a little bit. But when you look at deals today, do you feel more strongly about the need to drive synergies to get to the appropriate IRR? Or do you still think that there is sufficient value out there, particularly when we're talking about the medium to larger deals?
Speaker Change: Number two going back perhaps to a question that was Australia on this morning.
Speaker Change: Being more selective in the projects that we undertake.
Speaker Change: WSB, we excel.
Speaker Change: The complex projects.
Speaker Change: That's where we feel we can do better and we can increase our margin profile.
Yeah.
Look, it's not the first time we're going through an environment that is challenging. I think you heard me saying that before. You just mentioned I've been there for a very long time. So we've gone through times where I remember 2014, the turn...
Speaker Change: So the type of projects that we think is also going to have an impact on our margin profile. So so obviously by by selecting projects, where we believe we can really raise the bar.
Speaker Change: Provide a better service or differentiated service will allow us to increase our margin profile. So so I would argue that this is all of the above at this point.
That's 10 years ago, but the turnaround and
in oil and gas and the markets were challenging. But you know what, in those difficult time, there are also some opportunities. So if you recall at the time, the exchange rate between the US and Canada was one for one. So we were able to acquire Parsons Brinkoff in a difficult period where, however, from an exchange point of view,
Speaker Change: Okay, No that makes sense and then maybe just turning to M&A look you've been here for a long time, we've done a lot of deals.
Speaker Change: Yes, we're living in a world where valuations are high and interest rates are high.
Speaker Change: You would think of maybe one of the two we've given a little bit but when you look at deals today do you feel more strongly about the need to drive synergies to get to the appropriate IRR or do you still think that there is sufficient value out there, particularly when were talking about the medium to larger deals.
We had a federal tailwind. So my belief is that in good times and in bad times, you have to be creative and you have to find value in the transaction that you look into. Mind you, you're right. We have to be disciplined.
Speaker Change: Okay.
Speaker Change: The first time, we're going through an environment that is.
Speaker Change: <unk> doing anything I think you heard me, saying that before you just mentioned have been there for a very long time, so [laughter]. So.
If the interest rate is impacting financial sponsor, I don't see why it would not impact us.
Speaker Change: We've gone through times, where I remember 2014, the turn.
So we have to be disciplined in the way we're thinking about the transactions.
But for the right acquisition, I am not going to shy away because of the current environment. We need to have a long-term view on transaction and what we're trying to build as a company.
Speaker Change: That's been years ago, but the turnaround in an oil and gas in the markets, where we're challenging and but you know what in those difficult time. There are also some opportunities. So if you recall at the time the exchange rate between the U S and Canada was one for.
So that would be my take at this point in time is we should not be using the market conditions as an excuse. We should instead push ourselves to be creative and find value.
Speaker Change: So we were able to acquire Parsons brinkerhoff, and a difficult period, where however from a next change point of view.
Yeah, no, I appreciate those comments. Look, maybe I'll ask me third. I'm assuming I'm lost here. But, you know, just to...
Speaker Change: We had we had favorable.
Speaker Change: Tailwind. So so my belief is that in good times and in Bad times, you have to be creative and you have to find value in the transaction that you are you looking to mine you you're right we have to be disciplined.
This is a clarification, you know, should we interpret your reiterating of your guidance as it being unchanged?
you know, including the recent acquisition and the favorable effects are just, you know, not updated yet.
It's early in the year, Michael, so we didn't feel given this
Speaker Change: If the interest rate is impacting financial sponsor I don't see why it would not impact us. So we have to be disciplined in the way we're thinking about the transactions.
the impact of the recent acquisition we didn't feel the need to increase or change our guidance. We'll continue to track that and see in Q2 and Q3 what we do, but we're feeling equally strong as we felt in March when we issued our guidance.
Speaker Change: But for the right acquisition.
Speaker Change: I am not going to.
Speaker Change: Shy away.
Speaker Change: As of the current environment, we need to have a long term view on transaction and what we're trying to build as a company. So so.
with the platform we added the time.
Let's revisit this and chew to our Q2. That's right. That's clear. Perfect. Thank you, guys. Thank you.
Speaker Change: So that would be my take at this point in time is we should not be using the market conditions as an excuse.
Speaker Change: Shouldn't that push ourselves to be creative and find value.
Thank you.
We'll now take our next question.
Speaker Change: Yes, no I appreciate those comments.
Speaker Change: Look maybe I'll ask a third I'm, assuming I'm lost here, but just a.
This is from Ian Gillies from Steeffle. Please go ahead.
Morning everyone. Good morning.
Speaker Change: Just as a clarification should we interpret your reiterating of your guidance is it being unchanged.
I just wanted to follow on some of the questions in and around power and your intention to grow there. I'm just curious on how that business, or perhaps the ones you've looked at or in broad strokes, how it stacks up, I guess, maybe against the corporate averages.
Speaker Change: Including the recent acquisition and the favorable FX or just you know not updated GAAP.
Speaker Change: It's early in the year, Michael So we didn't feel given the.
Speaker Change: The impact of the recent acquisition, we didn't feel the need to increase or change our guidance.
One of the great things about growing that earth environment business, it appears to be higher margin than the corporate average. I'm wondering if power tends to have some of the same traits.
Speaker Change: We'll continue to track that and see in Q2 and Q3, what we do but.
Speaker Change: We're feeling equally.
Yeah, it's a fair assumption. It's a fair assumption. Right now, the world is in dying need of new sources of energy. So I feel, you know, I mentioned a few projects this morning.
Speaker Change: Equally strong as we felt in March when we issued our guidance.
Speaker Change: With the platform we added this time so.
Speaker Change: I think that that slips, let's revisit this in Q2 or Q3, that's right.
Speaker Change: Unclear perfect. Thank you guys.
This has not gone unnoticed for us and we believe that WSP's uniquely positioned.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Well now take our next question.
to provide services in that space, because the power space, it's not just about
Speaker Change: This is from Ian Gillies from Stifel. Please go ahead.
Ian Brooks Gillies: Good morning, everyone.
and around connecting new sources of energy to existing grid. There is also a collateral impact on other sectors, such as building, earth environment and transportation.
Ian Brooks Gillies: Morning.
Ian Brooks Gillies: I just wanted to follow on some of the questions in and around power and your intention to grow there I'm just curious on.
Ian Brooks Gillies: How that business or perhaps the ones you've looked at or in broad strokes, how it stacks up I guess, maybe against the corporate averages because one of the great things about growing out our environment business. It was higher margin it appears to be higher margin than the corporate average I'm wondering if power tends to have some of the same traits.
So, you know, we want it in a very disciplined way to build our presence and Earth environment, which we've done since.
late 2018, but clearly, as you can see and notice, I've been talking about this over the last few quarters.
Ian Brooks Gillies: <unk>.
Speaker Change: Yes, our assumption is a fair assumption right now.
I'm quite keen to continue to diversify our platform and I'm quite keen to continue to grow in sectors where we're not leading and we have the aspiration to become leading firm, a leading
Speaker Change: The world is in dire need of new sources of energy so.
Speaker Change: So I feel I mentioned, a few projects this morning.
Speaker Change: This has not gone unnoticed bras and we believe that.
That's incredibly helpful. Thanks very much. The other separate question I had, one of the things that's been talked about on prior calls is...
Speaker Change: Wsb's uniquely position.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Power prices.
trying to increase your presence in the U.S. with respect to federal government spending, whether it be through GSAs or other avenues. Is that still a focus or is there enough work going on elsewhere that you've shifted priorities?
Speaker Change: Okay.
Speaker Change: Hmm.
Speaker Change: Thanks.
Speaker Change: Thank you.
Speaker Change: There is also.
Speaker Change: Collateral impact on the other sectors such as building.
No, we, they're not mutually exclusive. That's the way I would answer the question. I think we can continue to push. I talked about power.
Speaker Change: Environment and transportation so so.
Speaker Change: We want it in a very disciplined way to build our presence in urban environment, which we've done since.
But I mentioned advanced manufacturing. I think there's real, real opportunities for us to grow in that space organically.
Speaker Change: Late 2018.
Speaker Change: But but fairly as you can see a notice I've been talking about this over the last few quarters.
and potentially through acquisitions over time. So I think these are new sources or new opportunities for WSP and we intend to take advantage of them.
Speaker Change: I'm quite change continue to diversify our platform and I'm quite keen to continue to grow in sectors, where we are we're not leading and we have the aspiration to become leading firm a leading firm.
Okay, that's very helpful. Thanks very much. I'll turn it back over. Again.
Speaker Change: Yeah.
Speaker Change: That's incredibly helpful. Thanks very much.
Speaker Change: The other separate question I had one of the things that's been talked about on prior calls as well.
Thank you.
And we have one more question.
Speaker Change: Trying to increase your presence in the U S with respect to federal government spending whether it be through <unk> or other avenues.
A last question today is from Sabahat Khan from RBC. Please go ahead.
Great. Thanks and good morning. I guess, you know, just hearing a little about where you see the demand, whether it's by reason and market, how are you balancing
Speaker Change: Is that still a focus or is there enough work going on elsewhere, you've shifted priorities.
Speaker Change: No.
Speaker Change: We.
these demand indicators against hiring and then trying to just maintain the right level of utilization and drive margins. They're trying to understand what, you know, the demand environment still seems like it's in a reasonable place.
Speaker Change: They're not mutually exclusive.
Speaker Change: Way I would answer the question.
Speaker Change: I think we can continue to push I talked about power.
Speaker Change: But I mentioned that fence manufacturing I think theres real real opportunities for us to grow.
labor situation is somewhat better than a few years ago, but just curious how you're deciding on the right number of employees to onboard while also considering MNA there. And Nicole will be helpful. Yeah.
Speaker Change: That space organically.
Speaker Change: And potentially through acquisitions over time.
Speaker Change: So I think these are new sources or new opportunities for <unk>, and we intend to take advantage of them.
Well, I'm glad you bring this topic, Saba. I mean, if I look at our trailing 12 months numbers,
are now, our turnover is a
Speaker Change: Okay. That's very helpful. Thanks, very much I'll turn it back over.
Speaker Change: Okay.
historical low levels.
Speaker Change: Thank you.
meaning that we have a lower turnover in our last 12 months and we've had in pre-pandemic levels.
Speaker Change: And we have one more question.
Speaker Change: And last question today is from <unk> Khan from RBC. Please go ahead.
So that combined with our increased productivity and extracting the value from our platform,
Khan: Great. Thanks, and good morning, I guess.
We are obviously, this is a balancing act.
Khan: All about where you see the demand whether it's by region and market. How are you balancing demand indicators against hiring and then trying to just maintain the right level of utilization of drive margins I'm trying to understand what you know.
But recently we have chosen to work on the engagement of our people, reducing our turnover, increasing productivity rather than being out there.
Khan: The demand environment still seems like it's in a reasonable place.
Khan: Labor situation is somewhat better than our peers, but just curious how you're how you're deciding on the right number of employees to onboard.
and obviously
hire for just for the sake of hiring. You look at the fee per employees that we are generating and the curve that you are going to witness if you do the math over the last 10 years. I mean, that's something I'm really focused on.
Khan: While also considering M&A are there any color would be helpful. Yes.
Khan: Well I'm glad you bring to stop so, but I mean, if I look at our trailing 12 months numbers.
Khan: Our now are our turnover is.
I want to make sure that, and I'm saying that with all due respect to our employees that are listening to call, but I want us to do more with less. I want us to be in a position to deliver more.
Khan: Historical low levels.
Khan: Meaning that we have a lower turnover in their last 12 months than we've had in pre pandemic levels.
Khan: That combined with our increased productivity and extracting the value from our platform.
with less, so I want us to run a very, very tight ship and a very, very efficient platform. So that's the mindset right now.
Khan: We are we are obviously this isabella and balancing that.
Great. And then I guess with some of these moving parts about end market growth and the IJ, if we look particularly at the U.S. market.
Khan: But recently, we have chosen to work on the engagement of our people are reducing our turnover.
Do you expect any meaningful shift, you know, putting MNA aside any meaningful shift in your end market mix? I think you're large in transportation. That's a big part of the IAJ. Do you expect more of the same? Do you expect any evolution in where your business comes from over the next two to three years in the U.S. market?
Khan: Increasing productivity.
Khan: Rather than being out there.
Khan: And.
Khan: And and obviously high.
Khan: Higher for just for the sake of hiring.
Khan: You look at.
Khan: <unk>.
Khan: The fee per employees, we are generating.
Well, as I said, I think there are untapped territories for us.
Khan: And the curve.
Khan: You are going to witness if you do the math over the last 10 years I mean, that's something I'm really focused on.
So I mentioned power, advanced manufacturing.
Speaker Change: I want to make sure that I'm, saying that.
I feel we could do more there. We can always do more in water, which we're going to continue to grow.
But, you know, there's so much work in the property and building sector. There's so much more that we can do here. And transportation, we're subscale in many states and many part of the US.
So I do feel that we have tremendous opportunities pretty much in all sectors. But as I mentioned today, there are some sectors that I would like to grow because I feel we're two subscale at this point in time.
Okay, then one last quick one, maybe for Alain. I guess a lot of discussion on his call around MNA, what would scale of the company growing and the cash flow-based growing. Should we expect any...
Other areas of focus within capital allocation besides M&A over the next one to two years. Thanks. I think you, I will take this one up and I think and compliment, but yeah, as part of our next strategic cycle, clearly we are going to continue to invest in R&D and digital.
Definitely.
It's a mix of organic and organic priority.
Speaker Change: So much work in the property and building sector is so much more that can do here and.
Great. Thanks very much. Thank you. Thanks, about.
Speaker Change: And transportation, we're subscale in many states and many part of the U S. So I do feel that we have tremendous opportunities pretty much in all sectors.
Thank you. There are no further questions at this time so I'll hand back to the speakers for any closing comments. Thank you.
Well, thank you for attending the call today. Thank you for your support.
Speaker Change: But as I mentioned, there are some sectors that I would like to grow.
As a friendly reminder, we will be holding our annual shoulder meeting at 11 o'clock Eastern time today.
Speaker Change: Because I feel we're where we're too subscale at this point in time.
Speaker Change: Okay. Then one last quick one maybe for Larry I guess, a lot of discretion call around M&A.
So we are encouraging you to attend in person or virtually, and we look forward to updating you in Q2. On that note, I would like to wish you continued success and a great starting of the summer. Thank you very much.
Speaker Change: The scale of the company growing.
Larry: Our cash flow base growing should we expect any.
Larry: Other areas of focus within capital allocation. Besides M&A over the next one to two years. Thanks.
Larry: I think you shy I will take this one up in Lincoln complement but.
Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.
Larry: Part of our next strategic cycle clearly.
Speaker Change #105: We are going to continue to invest in R&D and digital.
Larry: Right.
Speaker Change #101: It's a mix of organic and inorganic priority.
Speaker Change #104: Great. Thanks, very much thank you.
Speaker Change #102: Thank you and I have no further questions at this time, so I'll hand back to the speakers for any closing comments. Thank you.
Speaker Change #103: Well. Thank you for attending the call today. Thank you for your support.
Speaker Change #107: As a friendly reminder, we will be holding our annual shareholder meeting at 11 o'clock Eastern time today. So we are encouraging you to attend in person or virtually and.
Speaker Change #103: And we look forward to updating you in Q2 on that note I would like to wish you can.
Speaker Change #103: <unk> success in a great starting of the summer. Thank you very much.
Speaker Change #106: Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.
Speaker Change #106: Hmm.
Speaker Change #103: [music].
Speaker Change #103: Hmm.
Speaker Change #103: Okay.
Speaker Change #103: [music].
Speaker Change #103: Yeah.
Speaker Change #103: [music].
Speaker Change #103: Yes.
Speaker Change #103: [music].
Speaker Change #103: Okay.
Speaker Change #103: [music].
Speaker Change #103: Okay.
Speaker Change #103: [music].
Speaker Change #103: Okay.
Speaker Change #103: [music].