Q2 2024 WSP Global Inc Earnings Call

July 31, 2024

Good morning, everyone. Welcome to WSP's second quarter 2024 results conference call. I would now like to turn the meeting over to Quentin Weber, Investor Relations. Please go ahead, Mr. Weber.

24 Results Conference Call.

Quentin Weber: I would now like to turn the meeting over to Quentin Weber, investor relations.

Quentin Weber: Please go ahead, Mr. Weber. Good morning, and thank you for joining us today. We will discuss our Q2 2024 performance, followed by a Q&A session. In addition, during the call, we may refer to specific non-ISRS measures. These measures are also defined in our NDNA for the June 29, 2024, quarter. Our NDNA includes preconceived liations of non-ISRS measures to the most directly comparable ISRS measures. Management believes that these non-ISRS measures provide useful information to investors regarding the corporations' financial conditions and results of reparations, as they provide additional critical metrics of its performance. These non-ISRS measures are not recognized on the RAFRS.

Quentin Weber: Good morning, and thank you for joining us today. We will discuss our Q2 2024 performance, followed by a Q&A session. Alexandre Lerue, our President and CEO, and Alain Michaud, our CFO, are joining us this morning. Please note that this call is also accessible via webcast on our website. During the call, we will make forward-looking statements, and actual results could differ from those expressed or implied.

Quentin Weber: We undertake no obligation to update or revise any of these statements. 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 June 29th, 2024, which can be found on CDAR and on our website. In addition, during the call, we may refer to specific non-IHRCs.

Ian Brooks Gillies: Thank you very much. That's a helpful detail. I'll turn the call back. And I will now hand the conference back to the speakers for any closing remarks. Thank you.

Quentin Weber: These measures are also defined in our MD&A for the June 29th, 2024 quarter. Our MD&A includes reconciliation of non-IFRS measures to the most directly comparable IFRS. Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial condition and results of operations, as they provide additional critical metrics of its performance. These non-IFRS measures are not recognized under RFRS, do not have any standardized meaning prescribed under RFRS, and may differ from similarly named measures reported by other issuers and, accordingly, may not be compatible.

Quentin Weber: Good morning and thank you for joining us today. We will discuss our Q2 2024 performance followed by a Q&A session. Alexandre Rueux, our President and CEO , and Alain Michaud, our CFO , are joining us this morning.

Operator: Thank you for joining us today. We will discuss our Q2 2024 performance, followed by a Q&A session. Alexandre Lereux, our President and CEO, and Alain Michaud, our CFO, are joining us this morning.

Operator: Please note that this call is also accessible via webcast on our website. During the call, we will make 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.

Quentin Weber: Please note that this call is also accessible via webcast on our website.

Operator: 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 June 29th, 2024, which can be found on CDAR and on our website. In addition, during the call, we may refer to specific non-ISRCs. These measures are also defined in our MD&A for the June 29, 2024 quarter. Our MD&A includes reconciliation of non-IFRS measures to the most directly comparable IFRS. Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial condition and results of operations, as they provide additional critical metrics of exploitation.

Quentin Weber: During the call, we will make forward-looking statements. Actual results could differ from those expressed or implied. We undertake no obligation to update or revise any of these statements.

Quentin Weber: Relevant factors that could cause actual results to differ materially from those forward-looking statements are listed in RMDNA for the quarter that ended June 29, 2024, which can be found on CDAR and on our website. In addition, during the call, we may refer to specific non-ISRS measures.

Quentin Weber: These measures are also defined in our MD&A for the June 29, 2024 quarter. Our MD&A includes reconciliation of non-IFRS measures to the most directly comparable IFRS measures.

Quentin Weber: [inaudible]

Operator: These non-IFRS measures are not recognized under RFRS, do not have any standardized meaning prescribed under RFRS, and may differ from similarly named measures reported by other issuers and accordingly may not be compatible. These measures should not be considered as a substitute for the related financial information prepared by IPCC.

Do not have any standardized meaning prescribed on the RAFRS and may differ from similarly-named measures reported by other issues, and accordingly may not be comparable.

Quentin Weber: These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS, and may differ from similarly named measures reported by other issuers and accordingly may not be comparable.

These measures should not be considered as a substitute for the related financial information prepared by ISRS.

Quentin Weber: These measures should not be considered as a substitute for the related financial information prepared by IFRS. With that, I will now turn the call over to Alexandre.

Quentin Weber: With that, I will now turn the call over to Alex. Thank you Quentin and good day everyone. I'm pleased to share some exciting updates about our performance and the great momentum we are generating to keep pushing WSP forward. We delivered a strong second quarter with sustained organic growth and a significant increase in profitability, which has led us to raise our 2024 financial outlook.

Addixson: With that, I will now turn to call over to Addixson. Thank you, Katay, and good day, everyone. I'm pleased to share some exciting updates about our performance and the great momentum we are generating to keep pushing WSP forward. We delivered a strong second quarter with sustained organic growth and a significant increase in profitability, which has led us to raise our 2024 financial outlook. We continued to build on our proven track record of successful results, once again showing our ability to generate sustainable financial performance.

Alexandre He: Thank you, Quentin, and good day, everyone. I'm pleased to share some exciting updates about our performance and the great momentum we are generating to keep pushing WSP forward.

Alexandre He: We delivered a strong second quarter with sustained organic growth and a significant increase in profitability, which has led us to raise our 2024 financial outlook.

Alexandre He: We continue to build on our proven track record of successful results, once again showing our ability to generate sustainable financial performance.

This quarter was marked by several achievements, with the following three-core drivers fueling our robust results. First, we delivered a quality organic growth supported by healthy market conditions in our key regions. This quarter, we achieved notable double-digit organic growth in the Americas, with our core end-market sectors continuing to bolster our North American business. Our backlog is healthy, and overall demand for our services remains solid. We are playing an active role in developing infrastructure mega-projects. We are still capitalizing on hyper-growth and data center and health care. Our multidisciplinary team of environmental experts is supporting our clients' growing needs related to the green transition, biodiversity, and sustainable solution.

Quentin Weber: We continue to build on our proven track record of successful results, once again showing our ability to generate sustainable financial performance. This quarter was marked by several achievements, with the following three core drivers fueling a robust result.

Alexandre He: This quarter was marked by several achievements, with the following three core drivers fueling our robust results.

Alexandre Lerue: First, we delivered quality organic growth supported by healthy market conditions in our key regions. This quarter, we achieved notable double-digit organic growth in the Americas, with our core and market sectors continuing to bolster our North American business. Our backlog is healthy, and overall demand for our services remains solid.

Alexandre He: First, we delivered quality organic growth supported by healthy market conditions in our key regions. This quarter we achieved notable double-digit organic growth in the Americas, with our core and market sectors continuing to bolster our North American business.

Alexandre He: Our backlog is healthy, and overall demand for our services remains solid.

Alexandre Lerue: We are playing an active role in developing infrastructure megaprojects. We are still capitalizing on hyper growth in data centers and health care. And our multidisciplinary team of environmental experts is supporting our clients' growing needs related to the green transition, biodiversity, and sustainable solutions.

Alexandre He: We are playing an active role in developing infrastructure megaprojects. We are still capitalizing on hypergrowth and data center and healthcare, and our multidisciplinary team of environmental experts is supporting our clients' growing needs related to the green transition, biodiversity, and sustainable solution.

Second, we sustained our ability to produce industry-leading profitability. The implementation of various global initiatives such as our simplification program, rigorous project selection process, and improved productivity measures continues to bear fruit. In the last quarter, we reported a 50-basis-point margin expansion, and we continue to perform at the top quartile of our stated ambition, which targets a 30-50-basis-point increase in adjusted EBITDA margin annuals.

Alexandre Lerue: Second, we sustain our ability to produce industry-leading profitability. The implementation of various global initiatives, such as our simplification program, rigorous project selection process, and improved productivity measures, continue to bear fruit. In the last quarter, we reported a 50 basis point margin expansion, and we continue to perform at the top quartile of our stated ambition, which targets a 30 to 50 basis points increase in adjusted EBITDA margin annually. Third, our sustained progress and focus on transforming our business, and our capacity to deliver a strong cash profile are tracking positively. As of Q2 2024, our workforce is leveraging our new ERP, which has now been deployed in key regions that account for approximately 75% of our EBIT. And, of importance, we remain on plan and budget.

Alexandre He: Second, we sustain our ability to produce industry-leading profitability.

Alexandre Lerue: The implementation of various global initiatives, such as our simplification program, rigorous project selection process, and improved productivity measures, continues to bear fruit. In the last quarter, we reported a 50 basis point margin expansion, and we continue to perform at the top quartile of our stated ambition, which targets a 30 to 50 basis point increase in adjusted EBITDA margin annually. Of importance, we remain on plan and budget.

Alexandre He: The implementation of various global initiatives such as our simplification program, rigorous project selection process, and improved productivity measures continue to bear fruit.

Alexandre He: In the last quarter, we reported a 50 basis point margin expansion and we continue to perform at the top quartile of our stated ambition, which targets a 30 to 50 basis point increase in adjusted EBITDA margin annually.

Third, our sustained progress and focus on transforming our business and our capacity to deliver a strong cash profile; our tracking positively. As of Q2 2024, our workforce is leveraging our new ERP, which has now been deployed in key regions that account for approximately 75% of our EBITDA. Of importance, we remain on plan and budget. As we continue our journey of transformation, we reinforce our financial position heading into the second half and link the quarter with the superior level of free cash flow compared to the previous year.

Alexandre He: Third, our sustained progress and focus on transforming our business and our capacity to deliver a strong cash profile are tracking positively.

Alexandre He: As of Q2 2024, our workforce is leveraging our new ERP, which has now been deployed in key regions that account for approximately 75% of our EBITDA.

Alexandre Lerue: As we continue our journey of transformation, we reinforce our financial position heading into the second half, ending the quarter with a superior level of free cash flow compared to the previous. Acquisitions remain a critical part of our journey in accelerating our growth and allowing us to expand our capability. Since the start of this year, we have been active yet disciplined in executing this pillar of our strategy. Following the acquisition of Comunica and Proxen in the first quarter of the year, we completed the acquisition of 1A Engineeros in May, a 250-employee Spanish consulting firm mainly active in the power and energy sector, and the integration is progressing as planned. We also welcome 365 professionals through AKF Group, a specialized mechanical, electrical, and plumbing firm operating throughout the Eastern United States with an additional complementary presence in Mexico.

Alexandre Lerue: As we continue our journey of transformation, we reinforce our financial position heading into the second half, ending the quarter with a superior level of free cash flow compared to the previous. Following the acquisition of Comunica and Proxen in the first quarter of the year, we completed the acquisition of 1A Engineeros, a Spanish consulting firm mainly active in the power and energy sector, in May with 250 employees. The integration is progressing as planned. We also welcome 365 professionals through AKF Group, a specialized mechanical, electrical, and plumbing firm operating throughout the Eastern United States with an additional complementary presence in Mexico.

Alexandre He: Of importance, we remain on plan and budget. As we continue our journey of transformation, we reinforce our financial position, heading into the second half, ending the quarter with a superior level of free cash flow compared to the previous year.

Acquisitions remain a critical part of our journey in accelerating our growth and allowing us to expand our capabilities. Since the start of this year, we have been active, yet disciplined in executing this pillar of our strategy. Following the acquisition of Camini Khan Proxhen in the first quarter of the year, we completed the acquisition of 1A Engineers and 250 employee Spanish consulting firm, mainly active in the power and energy sector, and in the integration is progressing as planned. We also welcome 365 professionals through AKF Group, a specialized mechanical, electrical, and plumbing firm operating throughout the eastern United States, with an additional complimentary presence in Mexico.

Alexandre He: Acquisitions remain a critical part of our journey in accelerating our growth and allowing us to expand our capabilities. Since the start of this year we have been active yet disciplined in executing this pillar of our strategy.

Alexandre He: Following the acquisition of Comunica and Proxen in the first quarter of the year, we completed the acquisition of 1A Ingenieros in May, a 250-employee Spanish consulting firm mainly active in the power and energy sector and in the integration is progressing as planned.

Alexandre He: We also welcome 365 professionals through AKF Group, a specialized mechanical, electrical, and plumbing firm operating throughout the eastern United States with an additional complementary presence in Mexico.

Alexandre Lerue: In the first half of the year, we announced four acquisitions, adding critical expertise to our portfolio, and the pipeline of opportunities remains strong. Let me now give you a few examples of our most recent projects. In Canada, WSP provides engineering services for the new state-of-the-art Advanced Medical Research Centre at the University of Ottawa. The seven-story building targets LEAD goal certification and will house the Ottawa Health Innovation Hub, a new strategic initiative created by the region's health research community to connect academia, industry, regulators, the region's hospital and affiliated research and, Our team will contribute to mechanical and electrical engineering, energy modeling, sustainability and lead services, building science In the U.S., WSP will lead the design of the Seattle-Tacoma International Airport Industrial Wastewater Treatment Plant. This project will upgrade the treatment of airfield storm water associated with aircraft fueling and maintenance operations, such as de-icing.

Alexandre Lerue: In the first half of the year, we announced four acquisitions, adding critical expertise to our portfolio, and the pipeline of opportunities remains strong. Let me now give you a few examples of our most recent project. In Canada, WSP provides engineering services for the new state-of-the-art Advanced Medical Research Centre at the University of Ottawa. The seven-story building targets LEED goal certification and will house the Ottawa Health Innovation Hub, a new strategic initiative created by the region's health research community to connect academia, industry, regulators, the region's hospital, and affiliated research. Our team will contribute to mechanical and electrical engineering, energy modeling, sustainability and LEED services, building science services, landscape architecture, acoustics, and municipal planning.

In the first half of the year, we announced four acquisitions, adding critical expertise to our portfolio, and the pipeline of opportunities remains strong.

Alexandre He: In the first half of the year, we announced four acquisitions, adding critical expertise to our portfolio, and the pipeline of opportunities remains strong. Let me now give you a few examples of our most recent project wins.

Let me now give you a few examples of our most recent project wins. In Canada, WSP provide engineering services for the new state-of-the-art advanced medical research center of the University of Ottawa. The seven-story building targets leads goal certification and will house the Ottawa Health Innovation Hub, a new strategic initiative created by the region's health research community to connect to academia, industry, regulators, the region's hospital and affiliated research institutes. Our team will contribute to mechanical and electrical engineering, energy modeling, sustainability and lead services, building science services, landscape, architecture, acoustic, and municipal planning. In the US, WSP will lead the design of the Seattle Tacoma International Airport Industrial Wastewater Treatment Plant.

Alexandre Lerue: It includes a new control building, the expansion and partitioning (partitioning, I'm so sorry), of a large storage lagoon, pump stations, improved operation controls, and electrical infrastructure. We will help the project meet its sustainability goals, increase capacity and operational flexibility, and achieve permit compliance. In Europe, we are proud to be part of the Grand Paris Express project in France, where 200 kilometers of new subway lines are being built. WSP will design the tunnels, branches, and ancillary structures on line 15 of this project and work with two key partners.

Alexandre He: In Canada, WSP provides engineering services for the new state-of-the-art Advanced Medical Research Centre at the University of Ottawa.

Alexandre He: The seven-story building targets LEAD goal certification will house the Ottawa Health Innovation Hub, a new strategic initiative created by the region's health research community.

Alexandre He: to connect academia, industry, regulators, the region's hospital and affiliated research institutes.

Speaker Change: Our team will contribute to mechanical and electrical engineering, energy modeling, sustainability and LEED services, building science services, landscape architecture, acoustic and municipal planning.

Alexandre Lerue: In the U.S., WSP will lead the design of the Seattle-Tacoma International Airport Industrial Wastewater Treatment Plant. We will help the project meet its sustainability goals, increase capacity and operational flexibility, and achieve permit compliance. On ESG progress and deep expertise, Gardner and industry distinctions this quarter.

Speaker Change: In the U.S., WSP will lead the design of the Seattle-Tacoma International Airport Industrial Wastewater Treatment Plant.

This project will upgrade the treatment of air fuel storm water associated with aircraft fueling and maintenance operation, such as the icing. It includes a new control building, the expansion and partitioning, partitioning, I'm so sorry, of a large storage lagoon, pump stations, improved operation controls, and electrical infrastructure. We will help the project meet its sustainability goals, increase capacity and operational flexibility, and achieve permit compliance.

Speaker Change: This project will upgrade the treatment of airfield stormwater associated with aircraft fueling and maintenance operations, such as de-icing. It includes a new control building, the expansion and portioning.

Speaker Change: Partitioning, I'm so sorry, of a large storage lagoon, pump stations, improved operation controls, and electrical infrastructure.

Speaker Change: We will help the project meet its sustainability goals, increase capacity and operational flexibility, and achieve permit compliance.

In Europe, we are proud to be part of the Grand Prairie Express project in France, where 200 kilometers of new subway lines are being built. WSP will design the tunnels, branches and insular structures online 15 of this project and work with two key partners. This contract demonstrates our increased presence and potential in Central Europe, as well as how quickly our acquisition becomes synergistic since this contract originated from BG acquisition close in 2023.

Speaker Change: In Europe , we are proud to be part of the Grand Paris Express project in France, where 200 kilometers of new subway lines are being built.

Speaker Change: WSP will design the tunnels, branches, and ancillary structures on line 15 of this project and work with two key partners.

Alexandre Lerue: This contract demonstrates our increased presence and potential in Central Europe, as well as how quickly our acquisition has become synergistic since this contract originated from BG Acquisitions will close in 2023. While the range of projects our WSP experts consult on and deliver is very wide, they all embody our shared purpose of building a more sustainable world. We lead by example to gain our clients' trust and strive to uphold the highest CSG standards in all of our operations.

Speaker Change: This contract demonstrates our increased presence and potential in Central Europe , as well as how quickly our acquisition becomes synergistic since this contract originated from BG Acquisition close in 2023.

While the range of projects are WSP experts consult on and deliver very widely, they all embody our shared purpose of building a more sustainable world. We lead by example to gain our client's trust and strive to uphold the highest CHG standard in all of our operations.

Speaker Change: While the range of projects our WSP experts consult on and deliver vary widely, they all embody our shared purpose of building a more sustainable world. We lead by example to gain our clients' trust and strive to uphold the highest CHG standard in all of our operations.

We recently reported on our progress through our 2023 Global ESG Report, Publition May. It provides resounding examples of the extent of our efforts on that front. We proudly reported an increase in an SDG linked revenue to 63.4% of total annualized growth revenue in 2023. A great indication of our impactful contribution to advancing sustainability through our services with the latest industry best practices and global standards by conducting a double materiality assessment. We now evaluate financial and impact materiality and are working to embed it further in our business strategy. We also increase our global average employee retention rate by over 1% year and filled over three-quarter of our global leadership roles with internal candidates, meeting our targets for both objectives.

Alexandre Lerue: We recently reported on our progress in our 2023 Global ESG Report, published in May. It provides resounding examples of the extent of our efforts on that front. We proudly reported an increase in NSDG-linked revenue to 63.4% of total annualized gross revenue in 2023, a great indication of our impactful contribution to advancing sustainability through our services by conducting a double materiality assessment. We now evaluate financial and impact materiality and are working to embed it further in our business strategy.

Speaker Change: We recently reported on our progress to our 2023 Global ESG Report, published in May. It provides resounding examples of the extent of our efforts on that front.

Speaker Change: We proudly reported an increase in NSDG-linked revenue to 63.4% of total annualized gross revenue in 2023.

Speaker Change: A great indication of our impactful contribution to advancing sustainability through our services with the latest industry best practices and global standards by conducting a double materiality assessment.

Speaker Change: We now evaluate financial and impact materiality and are working to embed it further in our business strategy.

Alexandre Lerue: We also increased our global average employee retention rate by over 1% year over year and filled over three-quarters of our global leadership roles with internal candidates, meeting our targets for both objectives. I invite you to read more on WSP Impact Worldwide by downloading our report. On ESG progress and deep expertise, Gardner and industry distinctions this quarter. For a fourth year in a row, WSP was recognized as one of Canada's best 50 corporate citizens by Corporate Night.

Speaker Change: We also increased our global average employee retention rate by over 1% year-over-year and filled over three-quarter of our global leadership roles with internal candidates meeting our targets for both objectives.

I invite you to read more on WSP Impact Worldwide by downloading our report. On ESG progress and deep expertise gardener industry distinctions discorder.

Speaker Change: I invite you to read more on WSP Impact Worldwide by downloading our report.

Speaker Change: On ESG progress and deep expertise, Gardner and industry distinctions this quarter.

For a fourth year, WSP was recognized as one of Canada's Best 50 Corporate Citizens by Corporate Knights. This marks our fourth straight year on the list and our best ranking yet at number five. This accolade followed our earlier appearance on Corporate Night Global 100 Most Sustainable Corporation list last January. We also receive a record for Environment Analyst Sustainability Delivery Awards, including the Sustainability Impact Award for the second consecutive year. A recognition giving that to a company that walks the talk in advancing its climate leadership and ESG journey.

Speaker Change: For a fourth year, WSP was recognized as one of Canada's Best 50 Corporate Citizens by Corporate Knights.

Alexandre Lerue: This marked our fourth straight year on the list and our best ranking yet at number five. This accolade followed our earlier appearance on Corporate Night's Global 100 Most Sustainable Corporation list last January. We also received a record four Environment Analyst Sustainability Delivery Awards, including the Sustainability Impact Award for the second consecutive year, a recognition giving that to a company that walks the talk in advancing its climate leadership and ESG journey. Finally, WSP won four categories at the UK New Civil Engineering Annual Awards, and we were named the 2024 Consultants of the Year.

Alexandre Lerue: This marks our fourth straight year on the list and our best ranking yet at number five. This accolade followed our earlier appearance on Corporate Night's Global 100 Most Sustainable Corporation list last January. We also received a record four Environment Analyst Sustainability Delivery Awards, including the Sustainability Impact Award for the second consecutive year, a recognition giving that to a company that walks the talk in advancing its climate leadership and ESG journey. Finally, WSP won four categories at the UK New Civil Engineering Annual Awards, and we were named the 2024 Consultants of the Year.

Speaker Change: This marks our fourth straight year on the list and our best-ranked team yet at number five. This accolade followed our earlier appearance on Corporate Night Global's 100 Most Sustainable Corporation list last January .

Speaker Change: We also receive a record four Environment Analyst Sustainability Delivery Awards, including the Sustainability Impact Award for the second consecutive year, a recognition giving that to a company that walks the talk in advancing its climate leadership and ESG journey.

Finally, WSP won four categories at the UK New Civil Engineering annual awards, and we were named the 2024 Consultants of the Year. The judges commanded our commitment to excellence, innovation, and our people-first approach. These distinctions highlight our leading scores and governance, environmental metrics, diversity, and more.

Speaker Change: Finally, WSP won four categories at the UK New Civil Engineering Annual Awards, and we were named the 2024 Consultants of the Year. The judges commended our commitment to excellence, innovation, and our people-first approach.

Alexandre Lerue: The judges commended our commitment to excellence, innovation, and our people-first approach. These distinctions highlight our leading scores in governance, environmental, metrics, diversity, and more. On that note, I will ask Alain to review our financial results in greater detail. Thank you.

Alain Michaud: The judges commended our commitment to excellence, innovation, and our people-first approach. These distinctions highlight our leading scores in governance, environmental, metrics, diversity, and more. On that note, I will ask Alain to review our financial results in greater detail. Thank you, Alex, and hello everyone. I'm pleased to report on our strong second quarter results, starting with our top line. For the second quarter, revenues and net revenue reached $4 billion and $3 billion, 8.5% and 9.1%, respectively, compared to the second quarter of 2020. Organic growth and net revenue of 8% in the quarter are attributable to all reportable segments, led by the U.S. and Canada with double-digit growth, the U.K., and New Zealand.

Speaker Change: Alex Sarkissian, CEO Alphabet and Google

Elaine: On that note, I will ask I'll end to review our financial results in greater detail. Thank you, Alex, and hello everyone. I'm pleased to report on our strong second quarter result, starting with our top line. For the second quarter, revenues and net revenue reach $4 billion and $3 billion of 8.5% and 9.1%, respectively, compared to the second quarter of 2023. Organic growth and net revenue of 8% in the quarter is attributable to all reportable segments led by the US and Canada with double-digit growth, the UK and New Zealand. As of June 29, 2024, the backlog reached a record level of $14.7 billion, representing 11.9 months of revenue, following a robust organic order intake of approximately $4.3 billion in the quarter.

Alain Michaud: Thank you, Alex, and hello everyone. I'm pleased to report on our strong second quarter results, starting with our top line. For the second quarter, revenues and net revenue reached $4 billion and $3 billion, 8.5% and 9.1%, respectively, compared to the second quarter of 2020. Organic growth and net revenue of 8% in the quarter are attributable to all reportable segments, led by the U.S. and Canada with double-digit growth, the U.K., and New Zealand.

Alain Michaud: As of June 29, 2024, the backlog reached a record level of $14.7 billion, representing 11.9 months of revenue, following a robust organic order intake of approximately $4.3 billion in the quarter. Moving on to profitability, Adjusted EBITDA reached $520 million, an increase of 12.6% from the second quarter of 2023 compared to $462 million. Adjusted EBITDA margin for the quarter increased by 50 basis points to 17.4% compared to 16.9% in the second quarter of 2023.

Alain Michaud: The increase is mainly attributable to improved productivity. Our adjusted net earnings reached $236 million or $1.89 per share, both up 21% compared to the second quarter of 2020. The increase is mainly attributable to higher adjusted earnings.

Speaker Change: For the second quarter, revenues and net revenue reach $4Bn and $3Bn of 8.5% and 9.1% respectively, compared to the second quarter of 2023.

Speaker Change: Organic growth and net revenue of 8% in the quarter is attributable to all reportable segments led by the U.S. and Canada, with double-digit growth in the U.K. and New Zealand.

Alain Michaud: As of June 29, 2024, the backlog reached a record level of $14.7 billion, representing 11.9 months of revenue, following a robust organic order intake of approximately $4.3 billion in the quarter. Our adjusted net earnings reached $236 million or $1.89 per share, both up 21% compared to the second quarter of 2020. The increase is mainly attributable to higher adjusted evidence. As for our cash position, cash inflows from operating activities of $203 million in the quarter ended June 29, 2024, improved compared to $85 million in the corresponding quarter last year. Free cash inflow for the quarter and the year ending June 29-24 was $75 million, an improvement of $133 million compared to free cash outflow of $57 million in the corresponding quarter of last year. The financial outlook for 2024, issued in the Q4 2023 press

Speaker Change: As of June 29, 2024, the backlog reached a record level of $14.7 billion, representing 11.9 months of revenue, following a robust organic order intake of approximately $4.3 billion in the quarter.

Moving on to profitability, adjusted EBITDA reached $520 million and increased of 12.6% from the second quarter of 2023 compared to $462 million. Adjusted EBITDA margin for the quarter increased by 50 basis points to 17.4%, compared to 16.9% in the second quarter of 2023. The increase is mainly attributable to improved productivity. Adjusted net earning reached $236 million or $1.89 per share, both up 21% compared to the second quarter of 2023. The increase is mainly attributable to higher adjusted EBITDA. As for our cash position, cash inflows from operating activities of $203 million in the quarter and the June 29, 2024, improved compared to $85 million in the corresponding quarter last year.

Speaker Change: Moving on to profitability, adjusted EBITDA reached $520 million, an increase of 12.6% from the second quarter of 2023.

Speaker Change: compared to $462 million. Adjusted EBITDA margin for the quarter increased by 50 basis points to 17.4% compared to 16.9%.

Speaker Change: In the second quarter of 2023, the increase is mainly attributable to improved productivity.

Speaker Change: Our adjusted net earning reached $236 million, or $1.89 per share, both up 21% compared to the second quarter of 2023. The increase is mainly attributable to higher adjusted EBITDA.

Alain Michaud: As for our cash position, cash inflows from operating activities of $203 million in the quarter ended June 29, 2024, improved compared to $85 million in the corresponding quarter last year. Free cash inflow for the quarter ended June 29-24 was $75 million, an improvement of $133 million compared to free cash outflow of $57 million in the corresponding quarter last year. At the end of June, our DSO stood at 79 days, within management's Our balance sheet remains strong, with a net debt position of 1.7 times EBITDA within the management target range. The financial outlook for 2024 issued in the Q4 2023 press release has been increased. Net revenues are now expected to range between $11.4 billion and $11.8 billion.

Speaker Change: As for our cash position, cash inflows from operating activities of $203M in the quarter ended June 29, 2024, improved compared to $85M in the corresponding quarter last year.

Free cash inflow for the quarter and the June 29, 2024, was $75 million, an improvement of $133 million compared to free cash outflow of $57 million in the corresponding quarter of 2023. At the end of June, our DSO stood at 79 days within management's target range. Our balance sheet remained strong within that position of 1.7 times EBITDA within management's target range.

Speaker Change: Pre-cash inflow for the quarter ended June 29-24 was $75 million, an improvement of $133 million compared to pre-cash outflow of $57 million in the corresponding quarter of 2023.

Speaker Change: At the end of June , our DSO stood at 79 days within management's target range.

Speaker Change: Our balance sheet remains strong with a net debt position of 1.7 times EBITDA within management target range.

The financial outlook for 2024 is issued in the Q4 2023 press release has been increased. Net revenues are now expected to range between $11.4 billion and $11.8 billion, and adjusted EBITDA is expected to range between $2.1 billion and $2.14 billion, representing an EBITDA margin of 18.3% at midpoint. Organic growth calculated on a constant currency basis is now anticipated to be between 6% and 8%.

Speaker Change: The financial outlook for 2024 issued in the Q4 2023 press release has been increased. Net revenues are now expected to range between $11.4 billion and $11.8 billion, and adjusted EBITDA is expected to range between $11.4 billion and $11.8 billion.

Alain Michaud: Net revenues are now expected to range between $11.4 billion and $11.8 billion. Adjusted EBITDA is expected to range between $2.1 billion and $2.14 billion, representing an EBITDA margin of 18.3% at mid-2020. Organic growth calculated on a constant currency basis is now anticipated to be between 6% and 8%. All other key related assumptions are reiterated. On that, back to you, Alex.

Alain Michaud: An adjusted EBITDA is expected to range between $2.1 billion and $2.14 billion, representing an EBITDA margin of 18.3% at mid-2020. Organic growth calculated on a constant currency basis is now anticipated to be between 6% and 8%. All other key related assumptions are reiterated.

Speaker Change: We have a total of $2.1 billion and $2.14 billion, representing an EBITDA margin of 18.3% at midpoint.

Alex Sarkissian: Organic growth calculated on a constant currency basis is now anticipated to be between 6% and 8%. All other key related assumptions are reiterated. On that, back to you, Alex.

All other key related assumptions are reiterated on that back to you, Alex.

Alex: Thank you, Elaine. We conclude the first half of 2024 in a position of strength, with robust financial results and increased financial outlook, a dynamic pipeline of MNA opportunities, and a strong balance sheet to power our ambitions. Our path for the second half is clear; what we set, the solid foundation, and our well position to build on this momentum as the year progresses. Our key areas of focus remain largely unchanged, with efforts geared towards securing quality organic growth, seizing acquisition opportunities while enhancing our margin profile and cash position. With this approach, we are on track to realize our 2024 goals, and I'm confident in our ability to close out the current strategic cycle on a high note.

Alexandre Lerue: On that, back to you, Alain. Thank you. We conclude the first half of 2024 in a position of strength, with robust financial results, an increased financial outlook, a dynamic pipeline of M&A opportunities, and a strong balance sheet to power our ambition. Our path for the second half is clear. We have set a solid foundation and are well positioned to build on this momentum as the year progresses. Curious's focus remains largely unchanged, with efforts geared towards securing quality organic growth, seizing acquisition opportunities while enhancing our margin profile and cash position. With this approach, we're on track to realize our 2024 goals, and I'm confident in our ability to close out the current strategic cycle on a high note. Being an undisputed leader is well within our reach.

Alexandre Lerue: Thank you, Alain. We conclude the first half of 2024 in a position of strength with robust financial results, an increased financial outlook, a dynamic pipeline of M&A opportunities, and a strong balance sheet to power our ambitions. Our key areas of focus remain largely unchanged, with efforts geared towards securing quality organic growth, seizing acquisition opportunities while enhancing our margin profile and cash position. With this approach, we're on track to realize our 2024 goals, and I'm confident in our ability to close out the current strategic cycle on a high note.

Alex Sarkissian: Thank you, Alain. We conclude the first half of 2024 in a position of strength with robust financial results, an increased financial outlook, a dynamic pipeline of M&A opportunities and a strong balance sheet to power our ambitions.

Speaker Change: Our path for the second half is clear. We set a solid foundation and are well positioned to build on this momentum as the year progresses.

Speaker Change: Our key areas of focus remain largely unchanged, with efforts geared towards securing quality organic growth, seizing acquisition opportunities while enhancing our margin profile and cash position.

Speaker Change: With this approach, we're on track to realize our 2024 goals, and I'm confident in our ability to close out the current strategic cycle on a high note.

Alexandre Lerue: Being an undisputed leader is well within our reach. We have incredible people, a unique global platform, and the right strategy for it. In an industry filled with opportunities, we are just getting started, and our teams are already hard at work planning our next strategic plan. I would now like to open the line for questions. Thank you. If you wish to ask a question, you'll need to press star 1 and 1 on your telephone.

Being an undisputed leader is well within our reach. We have incredible people, a unique global platform, and the right strategy for success.

Alexandre Lerue: We have incredible people, a unique global platform, and the right strategy for. In an industry filled with opportunities, we are just getting started, and our teams are already hard at work planning our next strategic plan. I would now like to open the line for questions. Thank you. If you wish to ask a question, you'll need to press star 1 and 1 on your telephone and wait for your name to be announced.

Speaker Change: Being an undisputed leader is well within our reach. We have incredible people, a unique global platform, and the right strategy for success.

In an industry filled with opportunities, we are just getting started, and our teams are already hard at work, planning our next strategic plan.

Speaker Change: In an industry filled with opportunities, we are just getting started and our teams are already hard at work planning our next strategic plan. I would now like to open the line for questions.

I would now like to open the line for questions. Thank you. If you wish to ask a question, you'll need to press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. Thank you.

Operator: Thank you. If you wish to ask a question, you'll need to press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A list. Thank you. We'll now take our first question.

Speaker Change: Thank you. If you wish to ask a question, you'll need to press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster.

Jacob Bout: We'll now take our first question. This is from the line of Jacob Bout from CIBC. Please go ahead. Good morning. Hello Jacob. Yeah.

Operator: And to withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. Thank you. We'll now take our first question. This is from the line of Jacob Bout from CIBC. Please go ahead. Good morning. Hello, Jacob.

Speaker Change: Thank you.

Speaker Change: We'll now take our first question.

Speaker Change: This is from the line of Jacob Bout from CIBC, please go ahead.

Jacob Jonathan Bout: Um, maybe to kick it off, um, you know, seeing strong organic growth in, you know, Canada, Americas and EMEA, but, you know, APAC was, was lower, but when I look at your, your backlog quarter and quarter, um, you know, strong, strong growth there, um, You know what, maybe just talk us through, you know, how things are looking there. Is the outlook looking a little better for the second half or for the remainder of the year? Yeah.

Speaker Change: Good morning. Hello, Jacob.

Maybe to kick it off, you know, seeing strong organic growth in, you know, Canada, America's anemia, but, you know, APAC was, was lower. But when I look at your backlog, quarter and quarter, you know, strong, strong growth there. You know, maybe just talk us through, you know, how things are looking. There is the outlook of you a little better for the, for the second half or for the remainder of the year. Yeah. Well, first of all, we're extremely pleased with our performance in the first half of this year, Jacob. I mean, I think this is a testament of the diversification and resiliency of our platform, right.

Jacob Jonathan Bout: Maybe to kick it off, seeing strong organic growth in Canada Americas and EMEA, but APAC was lower, but when I look at your backlog quarter on quarter, strong growth there.

Jacob Jonathan Bout: You know what? Maybe just talk us through how things are looking there. Is the outlook looking a little better for the second half or for the remainder of the year?

Speaker Change: Maybe just talk us through how things are looking there. Is the outlook looking a little better for the second half or for the remainder of the year?

Alexandre Lerue: Well, first of all, we're extremely pleased with our performance in the first half of this year, Jacob. I mean, I think this is a testament to the diversification and resiliency of our platform, right? You know, in previous years, we have seen some of the regions perhaps not performing as well as they are now. I can only think of, for example, the Nordics.

Speaker Change: Well, first of all, we're extremely pleased with our performance in the first half of this year, Jacob. I mean, I think this is a testament of the diversification and resiliency of our platform. Right? You know, and in previous years,

Addixson: And in previous years, we have seen some of the regions, perhaps not performing as well as they are now. I cannot, I cannot only think of, for example, the Nordics. I tell you last year was, was more required here with the war on Iraq, the Iraq sorry on Ukraine and with which Russia and the cooling off of the regions at that period of time. This year, a bit like late last year, Asia is going through a rough patch. It's a very small portion of our, of our, of our business and our operation. And yes, you're right in pointing out that North America right now is doing extremely well.

Speaker Change: We have seen some of the regions perhaps not performing as well as they are now. I can only think of, for example, the Nordics.

Alexandre Lerue: Last year was more of a quiet year with the war on Ukraine and with Russia and the cooling off of the regions at that period of time. This year, a bit like late last year, Asia is going through a rough patch. It's a very small portion of our business and our operation.

Speaker Change: I'd say last year was more of a quiet year with the war in Iraq, sorry, on Ukraine and with Russia.

Alexandre Lerue: You know, in previous years, Last year was more of a quiet year with the war on Ukraine and with Russia and the cooling off of the regions at that period of time. This year, a bit like late last year, Asia is going through a rough patch. It's a very small portion of our business and our operation.

Speaker Change: and the cooling off of the regions at that period of time. This year, a bit like late last year, Asia is going through a rough patch. It's a very small portion of our business and our operation.

Alexandre Lerue: And yes, you're right in pointing out that North America right now is doing extremely well. I'm extremely pleased with our performance of our US business in the last quarter and believe that this will continue. Overall, I think it's looking good. Perhaps Asia-Pacific, a few comments on this. There was an election in New Zealand, which slowed down perhaps the tendering and the procurement of infrastructure projects, but we believe that this is temporary, and we'll get back to normal very soon.

Speaker Change: And, yes, you're right in pointing out that North America right now is...

I'm extremely pleased with our performance of our US business in the last quarter and believe that this would continue. So overall, I think it's looking good.

Speaker Change: It's doing extremely well.

Speaker Change: I'm extremely pleased with our performance of our U.S. business in the last quarter.

Speaker Change: and believe that this will continue. So overall, I think it's looking good.

Perhaps it's a specific, a few comments on this: there was an election in New Zealand, which slowed down perhaps the tendering and the procurement of infrastructure project. But we believe that this is temporary and we'll, we'll, we'll, we'll get back to normal very soon. Thank you.

Alexandre Lerue: There was an election in New Zealand, which slowed down perhaps the tendering and the procurement of infrastructure projects, but we believe that this is temporary, and we'll get back to normal very soon. Thank you. It may be my second question here. I know it gets asked every quarter about M&A, but you did a number of smaller acquisitions earlier this year, but maybe just talk through how the pipeline is looking for mid to larger-sized acquisitions. Very good question, Jacob.

Speaker Change: Perhaps, Asia-Pacific, a few comments on this, there was an election in New Zealand which slowed down, perhaps, the tendering and the procurement of infrastructure projects, but we believe that this is temporary and we'll get back to normal very soon.

Addixson: It may be my, my second question here and just, I know it gets us a recorder on MNA, but, you know, you did a number of smaller acquisitions earlier this year, but maybe just talk through how the pipeline was looking for the major size acquisitions. Very good question, Jacob. If you recall, when we started the year, the way I described 2023, I said that the last year was a year of consolidation, a year of transformation. In the last quarter, we have now our US business and our UK business on the new ERP platform. So we have now 75% of our EBITDA converted on the new platform and felt that this was a very, very important milestone to get to.

Speaker Change: I know it gets asked every quarter on M&A, but you did a number of smaller acquisitions earlier this year, but maybe just talk through how the pipeline is looking for the mid-to-larger size acquisitions.

Alexandre Lerue: Very good question, Jacob. If you recall, when we started the year, the way I described 2023, I said that last year was a year of consolidation and transformation. In the last quarter, we now have our US business and our UK business on the new ERP platform. So we have now 75% of our EBITDA converted on the new platform and feel that this was a very, very important milestone to get to. So now that I feel we have significantly de-risked our transformation and ERP conversion, I can tell you now that we're open for business.

Alexandre Lerue: If you recall, when we started the year, the way I described 2023, I said that last year was a year of consolidation, a year of transformation. In the last quarter, we now have our US business and our UK business on the new ERP platform. So we have now 75% of our EBITDA converted on the new platform and feel that this was a very, very important milestone to get to. So now that I feel we have significantly de-risked our transformation and ERP conversion, I can tell you now that we're open for business. Thank you. We'll now take our next question. This is from Benoit Poirier from Desjardins Capital Markets. Please go ahead.

Jacob Jonathan Bout: Very good question Jacob. If you recall when we started the year, the way I described 2023, I said that last year was a year of

Jacob Jonathan Bout: consolidation, a year of transformation. In the last quarter we have now our US business

Jacob Jonathan Bout: and our UK business on the new ERP platform.

Jacob Jonathan Bout: So, we have now 75% of our EBITDA converted on the new platform.

Jacob Jonathan Bout: and felt that this was a very, very important milestone to get to. So now that I feel we have significantly de-risked our transformation and ERP conversion, I can tell you now that we're open for business.

So now that I feel we have significantly de-risked our transformation and ERP conversion, I can tell you now that we're open for business.

Thank you.

Speaker Change: Thank you.

Benoit Poirier: Go now, take on next question. This is from Benoit Poirier, from Desjardins, Capital Markets. Please go ahead.

Operator: We'll now take our next question. This is from Benoit Poirier of Desjardins Capital Markets.

Speaker Change: Thank you.

Speaker Change: We'll now take our next question.

Speaker Change: This is from Benoit Poirier from Desjardins Capital Markets. Please go ahead.

Benoit Poirier: Good morning everyone. Just coming back on the margin question per region. Obviously, strong performance from Canada and America. You mentioned some details about Asia, but could you maybe provide more details also for Kenya? You mentioned that the margin performance was due to project performance.

Good morning, everyone. Just coming back on the margin question for region. Obviously, strong performance from Canada and America. You mentioned some color about Asia, but could you maybe provide more details also for AMIA? You mentioned that the margin performance was due to project performance, but I'm just curious what we should expect from AMIA and also kind of the path, the word mark and recovery, more specifically in Asia, in the second half, and kind of the key actions that you are taking in terms to adjust productivity in those two regions. Yeah, so as it relates to AMIA, margins are down 60 bits on the quarter, but flat year to date.

Benoit Poirier: Yeah, good morning, everyone. Just coming back on the margin question per region, obviously, strong performance from Canada and America, you mentioned some color about Asia, but could you maybe provide more details also for AMIA? You mentioned that the margin performance was due to project performance, but I'm just curious what we should expect from AMIA and also kind of the path toward margin recovery, more specifically in Asia, in the second half and kind of the key actions that you're taking in terms of adjusting productivity in those two regions.

Benoit Poirier: Yeah, good morning, everyone. Hello, Benoit. Yeah.

Benoit Poirier: Just coming back on the margin question per region, obviously strong performance from Canada and Americas. You mentioned some color about Asia, but could you maybe provide more details also for AMIA? You mentioned that the margin performance was due to project performance, but I'm just curious what we should expect from AMIA and also kind of the path toward margin recovery more specifically in Asia in the second half and kind of the key actions that you're taking in terms to adjust productivity in those two regions.

Alain Michaud: As it relates to AMIA, margins are down 60 bits on the quarter but flat year to date. This is project performance in one specific country where we deliver slightly lower margins on the project level. This is not a case of significant write-offs or problematic projects.

Benoit Poirier: As it relates to AMIA, margins are down 60 bits on the quarter but flat year-to-date. This is project performance in one specific country where we deliver slightly lower margins on the project level. This is not a case of significant write-offs or problematic projects.

Benoit Poirier: Yeah.

Speaker Change: So, as it relates to AMIA, margins are down 60 bits on the quarter, but flat year to date. This is project performance in one specific country.

Addixson: This is project performance. And one specific country where we deliver slightly lower margin on the project level. This, so we expect margin growth in AMIA for the full year. And this has been reflected in our revised outlook, Benoit. As it relates to Asia and APAC specifically, it's important to point out that, putting Asia aside, Australia and New Zealand are 120 basis points up in terms of margin for the quarter and about the same for a year today. So driving a lot of efficiency on productivity, so utilization, the use of our complimentary resource center. The Australian team is doing particularly well on that front, and New Zealand as well.

Speaker Change: where we deliver slightly lower margin on the project level. This is not a case of significant write-offs.

Alain Michaud: We expect margin growth in AMIA for the full year and this has been reflected in our revised Outlook Benoit. As it relates to Asia and APAC specifically, it is important to point out that, putting Asia aside, Australia and New Zealand are 120 basis points up in terms of margin for the quarter and about the same for year-to-date, so driving a lot of efficiency in productivity, utilization, and the use of our complementary resource center.

Alain Michaud: We expect margin growth in AMIA for the full year and this has been reflected in our revised outlook. As it relates to Asia and APAC specifically, it is important to point out that, putting Asia aside, Australia and New Zealand are 120 basis points up in terms of margin for the quarter and about the same for year-to-date, driving a lot of efficiency in productivity, utilisation, and the use of our complementary resource center. The Australian team is doing particularly well on that front, and New Zealand as well.

Speaker Change: for problematic projects. We expect margin growth in AMIA for the full year.

Benoit Poirier: This has been reflected in our revised Outlook, Benoit.

Benoit Poirier: As it relates to Asia and APAC specifically, it's important to point out that putting Asia aside, Australia and New Zealand are 120 basis points up.

Benoit Poirier: in terms of margin for the quarter and about the same for year-to-date.

Speaker Change: So, driving a lot of efficiency.

Speaker Change: Productivity, Utilization, Use of our Complementary Resource Center.

Alain Michaud: The Australian team is doing particularly well on that front, and New Zealand as well, so we're very pleased with the performance of our ANZ business. In Asia, we expect the situation to continue to be challenging for the remainder of the year, and this has been reflected in our outlook as well, and we are taking action as we see fit to adjust to the situation. Okay, perfect. Just in terms of headcount, you added about 2,100 people sequentially. Obviously, about half came from North America.

Speaker Change: The Australian team is doing particularly well on that front.

So we're very pleased with the performance of our ANZ business. Asia, we expect the situation to continue to be challenging for the remainder of the year. And this has been reflected in our outlook as well. And we are taking action as we see fit to adjust to the situation.

Alain Michaud: We're very pleased with the performance of our ANZ business. In Asia, we expect the situation to continue to be challenging for the remainder of the year, and this has been reflected in our outlook as well. We are taking action as we see fit to adjust to the situation.

Speaker Change: New Zealand as well. So we're very pleased with the performance of our ANZ business.

Speaker Change: Asia, we expect the situation to continue to be challenging for the remainder of the year and this has been reflected in our outlook as well and we are taking action as we see fit to adjust to the situation.

Benoit Poirier: Okay, perfect. Just in terms of headcount, you added about 2,100 people sequentially, and obviously, about half came from North America. What should we expect in terms of headcount additions for the remainder of the year in order to achieve your 2024 objective?

Benoit Poirier: Okay, perfect. Just in terms of that count, you added about 2,100 people sequentially. Obviously, about half came from North America. What should we expect in terms of the account additions for the reminder of the year in order to achieve your 2024? Benoit, I'm so pleased that you're bringing this up. I think we're ahead of plan regarding our hiring. And that combined with the significant reduction in turnover, I feel that we're extremely well positioned for the remainder of 2024. So when you look at the first half, you look at Q2: no strong organic growth, increased margin profile, significant improvement in free cash flow, growth in EBITDA, reduction in turnover, and ahead of plan on hiring.

Speaker Change: Just in terms of headcount, you added about 2,100 people sequentially, about half came from North America. What should we expect in terms of headcount additions for the reminder of the year in order to achieve your goal?

Alain Michaud: What should we expect in terms of headcount additions for the remainder of the year in order to achieve your 2024 target? Benoit, I'm so pleased that you're bringing this up. I think we're ahead of plan regarding our hiring, and that combined with the significant reduction in turnover, I feel that we're extremely well positioned for the remainder of 2024. When you look at the first half, you look at Q2, strong organic growth, increased margin profile, significant improvement in free cash flow, and a very strong North American performance, let's say that we're feeling good at the moment. Okay, that's great. And last question for me. On the free cash flow side, we achieve negative $50 million year-to-date.

Alexandre Lerue: Benoit, I'm so pleased that you're bringing this up. I think we're ahead of plan regarding our hiring, and that, combined with the significant reduction in turnover, I feel that we're extremely well positioned for the remainder of 2024. When you look at the first half, you see Q2, strong organic growth, increased margin profile, significant improvement in free cash flow, and a very strong North American performance, let's say that we're feeling good at the moment.

Speaker Change: 2024.

Speaker Change: Benoit, I'm so pleased that you're bringing this up. I think we're ahead of plan regarding our hiring.

Benoit Poirier: Okay, that's great. And last question for me.

Benoit Poirier: That, combined with a significant reduction in turnover, I feel that we're extremely well positioned for the remainder of 2024.

Speaker Change: When you look at the first half, you look at the Q2, strong organic growth, increased margin profile, significant improvement in free cash flow.

Speaker Change: Growth in EBITDA, reduction in turnover and ahead of plan on hiring, let's put it this way, and a very strong North American performance, let's say that we're feeling good at the moment.

Let's put this way in and a very strong North American performance. Let's say that we're feeling good at the okay, that's great.

Benoit Poirier: On the free cash flow side, you achieved negative $50 million year-to-date. Obviously, we know a bit about the seasonality, but while you still target, I believe, a 100% free cash flow conversion for the year. So, could you provide maybe some color, Alain, about what we should expect in Q3 and your confidence to finish the year with a strong performance on the free cash flow side?

Benoit Poirier: And last question for me on the free cash flow side, you achieve a negative $50 million year to date. Obviously, we know a bit about the season L.D., but while you still target, I believe that 100% free cash flow conversion for the year. So could you provide maybe some color, Alain, about what we should expect in Q3 and your confidence to finish the year with a strong performance on the free cash flow side? Thank you, Benoit. We're very pleased of the trend that we've posted in Q2 in terms of free cash flow. So the seasonality of our businesses, you know, Benoit.

Speaker Change: Okay, that's great. And last question for me. On the free cash flow side, you achieve negative $50 million year-to-date. Obviously, we know a bit about the seasonality, but while you still target, I believe, a 100% free cash flow conversion for the year. So, could you provide maybe some color, Alain, about what we should expect in Q3 and your confidence to finish the year with a strong performance on the free cash flow side? Thank you. Thank you.

Benoit Poirier: Obviously, we know a bit about the seasonality, but while you still target, I believe, a 100% free cash flow conversion for the year, could you please provide maybe some color, Alain, about what we should expect in Q3 and your confidence to finish the year with a strong performance on the free cash flow side? free cash flow. The seasonality of our business, as you know, Benoit, that Q2 is always ramping up, and high growth obviously puts a working cap on the balance sheet. Q3 is usually a similar-type quarter in terms of free cash flow and DSO.

Alain Michaud: Thank you, Benoit. We're very pleased of the trend that we've posted in Q2 in terms of free cash flow.

Alain Michaud: free cash flow. The seasonality of our business, as you know, Benoit, that Q2 is always ramping up, and high growth obviously puts a working cap on the balance sheet. Q3 is usually a similar-type quarter in terms of free cash flow and DSO. Historically, we've seen a sharp reduction in DSO and increase in free cash flow in Q4. We expect about the same trend for 2024.

The Q2 is always ramping up on the high growth. Obviously, puts a working cap on the balance. Q3 is usually a similar type quarter in terms of free cash flow in DSO. And we see, historically, we've seen a sharp reduction in DSO and an increase in free cash flow in Q4. So we expect about the same trend for 2024. We're pleased with the progress on the ERP and the billing and the collection. So very good trending results so far. Are DSO's increased? Yes. But if you look at the historical average, the last five years, DSO between Q4 and Q2 typically increased by about five days, and this quarter this year, we've seen a three-day increase, and that is despite going live with the new ERP in the US towards the middle of Q1 and the new ERP in the UK in the beginning of Q2.

Alain Michaud: So, the seasonality of our business, as you know, Benoit, the Q2 is always ramping up and the high growth, obviously.

Alain Michaud: Historically, we've seen a sharp reduction in DSO and an increase in free cash flow in Q4. We expect about the same trend for 2024. We're pleased with the progress on the ERP and the billing and collection. Very good trending results so far. Our DSO has increased, but if you look at the historical average, for the last five years, DSO between Q4 and Q2 typically increased by about five days.

Alain Michaud: Puts working cap on the balance sheet. Q3 is usually a similar...

Alain Michaud: Type quarter in terms of free cash flow and DSO

Alain Michaud: Historically, we've seen a sharp reduction.

Alain Michaud: there's an increase in free cash flow in Q4, so we expect about the same.

Alain Michaud: We're pleased with the progress on the ERP and the billing and the collection, so very good trending results so far.

Alain Michaud: We're pleased with the progress on the ERP and the billing and collection. Very good trending results so far. Our DSO has increased, but if you look at the historical average, for the last five years, DSO between Q4 and Q2 typically increased by about five days. And this quarter, this year, we've seen a three-day increase, and that is despite going live with a new ERP in the US towards the middle of Q1 and the new ERP in the UK at the beginning of Q2.

Speaker Change: Our DSO has increased, yes, but if you look at the historical average, the last five years, DSO between Q4 and Q2 typically increased by about five days. And this quarter, this year, we've seen a three-day increase, and that is despite

Alain Michaud: This quarter, this year, we've seen a three-day increase, and that is despite going live with a new ERP in the US towards the middle of Q1 and the new ERP in the UK at the beginning of Q2. So we're very, very pleased with the performance in those two regions as they adjust to the new system. And it's a testament to the lessons learned and improvement we were able to post on that front. And I think it bodes well for the reminder of the rollout on that front. So I'm feeling good about the progress we're making. Thank you very much for your time.

Speaker Change: going live with a new ERP in the U.S.

Speaker Change: [inaudible]

Alain Michaud: So we're very, very pleased with the performance in those two regions adapting to the new system. And it's a testament to the lessons learned and improvement we were able to post on that front. And I think it bodes well for the reminder of the rollout on that front. So I feel good about the progress we're making. Thank you very much for your time.

So we're very, very pleased with the performance in those two regions that adapt to the new system. And it's a testament of the lessons learned and improvement we were able to post on that front. And I think it both well for the reminder of the rollout on that front. So feeling good about progress we're making.

Speaker Change: And it's a testament of the lessons learned and improvement we were able to post on that front. And I think it bodes well for the reminder of the rollout on that front. So, feeling good about progress we're making.

Thank you very much.

Operator: Thank you very much.

Speaker Change: Thank you very much for your time.

Michael Tupholme: Thank you. Next question is from the line of Michael Toppom from TD Cowan. Please go ahead. Thank you. Good morning. Hello, Michael. Good morning.

Speaker Change: Thank you very much.

Michael Tupholme: The next question is from the line of Michael Tupholme from TD Cowan. Please go ahead.

Michael Tupholme: Thank you very much. Thank you. The next question is from the line of Michael Tupholme from TD Cowan. Please go ahead. Thank you. Good morning. Hello Michael. Good morning. My first question is about the U.S., and I guess specifically wondering if you can talk about what you're seeing in terms of IIJA activity levels in the U.S. and the ramp-up in IIJA investment, including whether or not you've seen any bottlenecks or slowdowns on that ramp-up. Absolutely not, Michael.

Speaker Change: Thank you.

Speaker Change: Next question is from a line of Michael Tupholme from TD Cowan. Please go ahead.

Speaker Change: Thank you. Good morning. Hello, Michael.

Michael Tupholme: Good morning. My first question is about the U.S. specifically. I'm wondering if you can talk about what you're seeing in terms of IIJA activity levels in the U.S. and the ramp up in IIJA investment, including whether or not you've seen any bottlenecks or slowdowns on that ramp-up.

Michael Tupholme: First question is about the US, and I guess specifically wondering if you can talk about what you're seeing in terms of IIA activity levels in the US and the ramp up in IIA investment, including whether or not you've seen any bottlenecks or slowdowns on that ramp up? No, absolutely not. Michael, I mean the flow is great, and we're forging ahead on all fronts. I'm not in a position to talk about certain bits that we're working on right now on the chip acts, for instance, but we're whether we are looking at the infrastructure project or chip acts project or our inflation act projects. Things are going extremely well.

Michael Tupholme: Good morning. First question is about the U.S. specifically. I'm wondering if you can talk about what you're seeing in terms of IIJA activity levels in the U.S. and the ramp-up in IIJA investment.

Speaker Change: including whether or not you've seen any bottlenecks or slowdowns on that ramp-up? No, absolutely not, Michael. I mean, the flow is great and we're forging ahead on all fronts.

Alexandre Lerue: The flow is great, and we're forging ahead on all fronts. I'm not in a position to talk about certain bids that we're working on right now for the CHIP Axe, for instance, but whether we are looking at the infrastructure project or the CHIP Axe project or the Inflation Act projects, things are going extremely well at the moment. Okay, that's great to hear. And then, maybe somewhat related, you mentioned earlier in the call that with respect to New Zealand, you had seen a bit of a slowdown around elections in that country.

Alexandre Lerue: No, absolutely not, Michael. The flow is great, and we're forging ahead on all fronts.

Speaker Change: I'm not in a position to talk about certain bits that we're working on right now.

Speaker Change: on the CHIP acts, for instance, but whether we are looking at the infrastructure project or CHIP acts project or the Inflation Act projects, things are going extremely well at this point.

at this point. Okay, that's great to hear.

Alexandre Lerue: I'm wondering, when we look at the U.S., have you seen or are you expecting to see any slowdown in activity as we approach the election? And if so, in what areas does the answer seem likely to happen? The answer is, and this is a personal opinion, Michael. I'm not a specialist in U.S. politics, but my personal opinion is that the answer is no.

Michael Tupholme: Okay, that's great to hear. And then, maybe somewhat related, you mentioned earlier in the call that, with respect to New Zealand, you had seen a bit of a slowdown around elections in that country. I'm wondering, when we look at the U.S.,

Addixson: And then maybe somewhat related. You mentioned earlier in the call that, with respect to New Zealand, you had seen a bit of a slowdown around elections in that country. I'm wondering when we look at the US, have you seen or are you expecting to see any slowdown in activity as we approach the election, and if so, in what areas do you see that likely to happen? The answer is, and this is a personal opinion, Michael. I'm not a specialist in US politics, but my personal opinion is the answer is no. Let's remember that whether the Republican or Democrat take the House in November, they're going to have two years left to deploy the capital.

Speaker Change: Okay, that's great to hear. And then maybe somewhat related, you mentioned earlier in the call that with respect to New Zealand, you had seen a bit of a slowdown around elections in that country. I'm wondering when we look at the U.S.,

Speaker Change: Have you seen or are you expecting to see any slowdown in activity as we approach the election? And if so, in what areas do you see that likely to happen?

Alexandre Lerue: The answer is, and this is a personal opinion. Michael, I'm not a specialist in U.S. politics, but my personal opinion is the answer is no. Certainly, as it relates to the Infrastructure Act. I don't believe that this will have an impact.

Speaker Change: The answer is, and this is a personal opinion Michael, I'm not a specialist in US politics, but my personal opinion is the answer is no. Let's remember that

Michael Tupholme: Let's remember that whether the Republican or the Democrat takes the House in November, they're going to have to have two years left to deploy the capital. So, I think, and that had bipartisan support. Certainly, as it relates to the Infrastructure Act, so I don't believe that this will have an impact.

Speaker Change: whether the Republican or Democrat take the House in November .

Speaker Change: They're going to have two years left to deploy the capital, and that had bipartisan support.

So I think, and that had bipartisan support, certainly as it relates to the Infrastructure Act. So I don't believe that this will have an impact. Remember that WSP; we perform well under the Trump administration, and we have performed very well also under the Biden administration. So for us, at the end of the day, I think whether it's your Republican president or Democrat president, we feel that WSP is very well positioned to take advantage of what will take place over the next few years.

Speaker Change: Certainly, as it relates to the Infrastructure Act, so I don't believe that this will have an impact. Remember that WSP, we perform well under the Trump administration.

Alexandre Lerue: Remember that WSP performs well under the Trump administration. And we have performed very well also under the Biden administration. So for us, at the end of the day, I think whether it's a Republican president or a Democratic president, we feel that WSP is very well positioned to take advantage of what will take place over the next few years.

Speaker Change: And we have performed very well also under the Biden administration. So for us, at the end of the day, I think whether it's a Republican president or a Democrat president, we feel that WSP is very well positioned.

Speaker Change: to take advantage of what will take place over the next few years.

Now it's helpful. Thank you.

Michael Tupholme: No, it's helpful. Thank you. And then maybe just one last one here. I'm wondering if you can talk about what you're seeing in terms of activity on the private sector side in your property and buildings business across key regions and, specifically, as we've seen interest rates start to come down, has that affected activity at all in that area? Last year we generated double.

Michael Tupholme: And then maybe just one last one here. I wonder if you can talk about what you're seeing in terms of activity on the private sector side, and your property and buildings business across key regions, and specifically, as we've seen interest rates start to come down, has that affected activity at all in that area? Last year we generated double-digit organic growth in our property and building sector, and this year is not any different. The demand and data centers and our work in healthcare is really fueling the growth at the moment, and indeed, we are seeing enough thick in the private sector activity.

Speaker Change: I'm wondering if you can talk about what you're seeing in terms of activity

Michael Tupholme: I'm wondering if you can talk about what you're seeing in terms of activity on the private sector side of your property and buildings business across key regions, and specifically, as we've seen interest rates start to come down, has that affected activity at all in that area? Last year, we generated double-digit organic growth in our property and building sector, and this year is not any different. The demand for data centers and our work in healthcare is really fueling the growth at the moment. Indeed, we are seeing an uptick in private sector activity.

Speaker Change: on the private sector side in your property and buildings business across key regions, and specifically, as we've seen interest rates start to come down, has that affected activity at all in that area?

Alexandre Lerue: Last year we generated double-digit organic growth in our property and building sector, and this year is not any different. The demand for data centers and our work in healthcare is really fueling the growth at the moment. Indeed, we are seeing an uptick in private sector activity. I'm feeling extremely good about this sector at the moment.

Speaker Change: Last year, we generated double-digit organic growth in our property and building sector and this year is not any different. The demand in data centres and our work in healthcare

Speaker Change: It's really fueling the growth at the moment and indeed we are seeing an uptick in the private sector activity. I'm feeling extremely good around this sector at the moment, Michael.

Alexandre Lerue: I'm feeling extremely good about this sector at the moment. Okay, I'll leave it there. Thank you.

So I'm feeling extremely good, extremely good around this sector at the moment, Michael.

Okay, I'll leave it there. Thank you. Thanks, Michael.

Speaker Change: Okay, I'll leave it there. Thank you. Thanks, Michael.

Thank you.

Chris Murray: Next question comes from Chris Murray from ATB Capital Markets. Please go ahead. Yes, thanks, guys. Good morning. I guess my first question is just thinking about the rest of the year. I think when you originally released your guidance, you talked about the fact that there probably will be a 3% increase just organically, just because of the way that days fall in the year. And so we're thinking about that and looking at historical emerging trends, kind of second half versus first half, just wondering where your guidance is. It almost feels like we're going to be called it a kind of flatish year over year, but I just wanted to get you any thoughts that you have around how the back half of the year shakes up with those additional days in there.

Operator: The next question comes from Chris Murray from ATB Capital Markets. Please go ahead.

Michael: Thank you.

Michael: Next question comes from Chris Murray from ATB Capital Markets. Please go ahead.

Christopher Allan Murray: Yeah, thanks, guys. Good morning.

Speaker Change: Just organically, just because of the way the days fall in the year. And so what I was thinking about that and looking at, you know, kind of historical emerging trends, kind of second half versus first half.

Speaker Change: I'm just wondering, you know, with where your guidance is, it almost feels like we're going to be...

Christopher Allan Murray: Um, my first question, just thinking about, you know, the rest of the year. I think when you originally released your guidance, you talked about the fact that there would probably be about a 3% increase, just organically, just because of the way the days fall in the year. And so when I was thinking about that and looking at, you know, kind of historical emerging trends, kind of second half versus first half, just wondering, you know, with where your guidance is, it almost feels like we're going to call it a, you know, kind of flattish year over year.

Speaker Change: [inaudible]

And if there's something that maybe throws a margin profile around a little bit.

Yeah, so just to recalibrate a little bit, the growth, so we're posted 8% in Q2, first asked 6.4, as highlighted, but there were more billable days in less billable days in Q1, so if you normalize that, our growth for the first 6 months is 7%, our guide is between 6 and 8 for the full year, so that's the organic growth trend. Q4 will have more billable days, so you'll see the reversal of Q1. In terms of margin, historically, at least the last 2 years, we've seen more emphasis on margin improvement in the second half of the year. We're very pleased with the first half contribution this year with 50 bits improvement in the first 6 months. That's testament to all of the hard work we've pushed on the second half of 2023 to increase productivity, and it's paying off right now. We expect this to continue to provide some good tailwind in the second half, and we were very committed to that 60 bits plus margin improvement in 2024, which would position us at the higher end of the three-year target we've posted in our strategic plan of 150 basis points. So, we're very pleased with the trajectory of our margin profile.

Christopher Allan Murray: But I just wanted to get any thoughts that you may have around how the back half of the year shapes up with that, with those additional days in there. And if there's something that maybe throws the margin profile around a little bit.

Speaker Change: Yeah, so just to recalibrate a little bit the growth, so we're posted 8% in Q2, first ask 6.4 asked as...

Alain Michaud: Yeah, so just to recalibrate a little bit the growth, so we're posting 8% in Q2, first ask 6.4, ask 6.4, highlighted, but there were fewer billable days in Q1. If you normalize that, our growth for the first six months is 7%. Our guide is between 6% and 8% for the full year. That's the organic growth trend.

Speaker Change: Highlighted but it's there was more billable days in less billable days in Q1. So if you normalize that our growth

Speaker Change: So, the first six months is 7%.

Speaker Change: Our guide is between 6 and 8 for the full year, so that's the organic growth trend. Q4 will have more billable dates, so you'll see the reversal of Q1.

Alain Michaud: Q4 will have more billable days, so you'll see the reversal of Q1. In terms of margin, historically, at least the last two years, we've seen more emphasis on margin improvement in the second half of the year. We're very pleased with the first half contribution this year, with a 50 bps improvement in the first six months. That's testament to all of the hard work we've put in during the second half of 2023 to increase productivity, and it's paying off right now.

Speaker Change: In terms of margin,

Speaker Change: Historically, at least the last two years, we've seen more emphasis on margin improvement in the second half of the year.

Speaker Change: We're very pleased with the first AFT contribution this year with 50 bits improvement.

Speaker Change: That's testament to all of the hard work we've pushed on the second half of 2023 to increase productivity. It's paying off right now and we expect this to continue.

Alain Michaud: We expect this to continue to provide some good tailwinds in the second half, and we were very committed to that 60 bps plus margin improvement in 2024, which would position us at the higher end of the three-year target we've posted in our strategic plan of 150 bps. So we're very, very pleased with the trajectory of our margin profile.

Speaker Change: to provide some good tailwind on the second half, and we were very committed to that.

Speaker Change: 60 bits plus margin improvement in 2024, which would position us at the higher end of the three-year target we've posted in our strategic plan of 150 basis points.

Michael Tupholme: So we're very, very pleased with the trajectory of our margin program. Thank you, folks. I'll leave it there. As a reminder, if you would like to ask a question, you can press star 1 and 1 on your keypad, perhaps than what you were feeling was like six months ago or 12 months ago.

Speaker Change: So we're very, very pleased with the trajectory of our margin profile.

Okay, that's awful. And then the other piece of this, you know, we're just looking at global corporate costs, and I don't know if this is tied to the ERP completion in a lot of key regions. But when we looked at the numbers, you know, they actually were, you know, again, it's a modest number, but it's still marginally below that kind of plus or minus $30 million in the quarter. Just wondering, you know, with the ERP system in place now or if there's something else going on, like how should we be thinking about global corporate costs over, you know, maybe the balance of 24 and through 2025?

Speaker Change: Okay, and so forth.

Speaker Change: And then the other piece of this, you know, just looking at global corporate costs, and I don't know if this is tied to the ERP completion.

Speaker Change: In a lot of the key regions. But when we looked at the numbers, you know, they actually were, you know, again, it's a modest number, but it's still marginally below that kind of plus or minus $30 million in the quarter.

Speaker Change: I'm just wondering, you know, with the ERP system in place now, or if there's something else going on, like, how should we be thinking about global corporate costs over, you know, maybe the balance of 24 and through 2025?

Yeah, the slight reduction that you see in the first half is really timing of projects that we've undertaken in the first half versus planning to do second half, so we're still within the range that we've provided in our outlook, Chris, so no sizable change there, although we're probably going to be, you know, midpoint is probably the right answer there. The ERP itself, I don't expect impact on that front in 24, but starting 25, I think it certainly is one more tool in our toolbox to keep driving better margin. So we're currently focusing on the rollout and implementing and refining, recalibrating, but the next stage of the journey is to capture benefit and opportunities as it relates to the system.

Speaker Change: The slight reduction that you see in the first half is really timing of projects that we've undertaken.

Speaker Change: the first half versus what we're planning to do in the second half. So we're still within the range that we've provided in our outlook, Chris, so no sizable change there, although we're probably going to be, you know,

Christopher Allan Murray: Midpoint is

Christopher Allan Murray: is probably the right answer there. The ERP itself, I don't expect impact on that front end 24, but starting 25, I think.

Christopher Allan Murray: It certainly is one more tool in our toolbox to keep driving better margin.

Christopher Allan Murray: So, we're currently focusing on the rollout and implementing and refining, recalibrating. But the next stage of the journey is to capture benefit and opportunities as it relates to the system.

Christopher Allan Murray: Thank you, folks. I'll leave it there.

All right, thank you folks. I'll leave it there. Thank you.

Christopher Allan Murray: All right. Thank you, folks. I'll leave it there. Thank you. Thank you.

Operator: As a reminder, if you would like to ask a question, you can press star, one, and one on your keypad. That's star one and one to ask a question.

Speaker Change: As a reminder, if you would like to ask a question, you can press star 1 and 1 on your keypad.

Frederic Bastien: The next question is from the line of Frederick Bastia from Raymond James; please go ahead. Thanks, good morning. Guys, I know that you constantly look at M&A opportunities, but wondering if you're more excited about what you're seeing today, perhaps than what you're feeling was like six months ago or 12 months ago. The answer is yes, Frederic, more excited now than I was six months ago. As I said, the focus last year was really geared to, we had more of an inward focus last year, consolidating the Woody and I transaction, and obviously doing tuck-in acquisition in my mind was not impacting our risk on the transformation that we were going through.

Operator: The next question is from the line of Frederic Bastien from Raymond James. Please go ahead.

Speaker Change: That's star one and one to ask a question.

Speaker Change: The next question is from the line of Frederic Bastien from Raymond James. Please go ahead.

Frederic Bastien: Thanks. Good morning, guys. I know that you constantly look at M&A opportunities, but I was wondering if you're more excited about what you're seeing today?

Frederic Bastien: Good morning, guys. I know that you constantly look at M&A opportunities, but I'm wondering if you're more excited about what you're seeing today?

Speaker Change: Perhaps then, you know, what your feeling was like six months ago or twelve months ago.

Speaker Change: The answer is yes, Frederic. More excited now than I was six months ago.

Speaker Change: As I said, the focus last year was really geared to, we had more of an inward focus last year, consolidating the Woody and I transaction.

Alexandre Lerue: And obviously, doing token acquisitions in my mind was not impacting our risk for the transformation that we were going through. But now that we have 75% of our EBITDA converted, and given the discussion that I've had in recent months, I'm feeling a lot better today than I was six months to a year ago.

Speaker Change: And obviously, doing token acquisition, in my mind, was not an option.

Speaker Change: impacting our risk on the transformation that we were going through.

But now that we have 75% of our but duck converted, and given the discussion that I've had in recent months, I'm feeling a lot better today than I was six months to a year ago.

Speaker Change: But now that we have 75% of our EBITDA converted, and given the discussion that I've had in recent months, I'm feeling a lot better today than I was six months to a year ago.

Frederic Bastien: The other question I have concerns the strong organic growth that you displayed in the Americas and the U.S.

Addixson: Awesome, thanks. The other question I have regards the strong organic growth that you displayed in the Americas and the US. Was, I assume, this coming from a number of sectors, but was transportation infrastructure the bulk of the growth that you've seen there? I wouldn't say bulk, but very strong growth, I would say, across the patch at the moment, Frederic. I feel that we are firing from all cylinders right now, and I'm glad that you're bringing up our organic growth. We have worked extremely hard over the course of the last 24 months to really raise the bar from an organic growth point of view.

Speaker Change: The other question I have regards the strong organic growth that you displayed in the Americas and in the US. Thank you.

Speaker Change: was

Speaker Change: I assume this is coming from a number of sectors, but was transportation infrastructure the bulk of the growth that you've seen there?

Alexandre Lerue: I wouldn't say bulk, but very strong growth, I would say, across the patch at the moment, Frederic. I feel that we're firing on all cylinders right now, and I'm glad that you're bringing up organic growth.

Speaker Change: I wouldn't say bulk, but very strong growth, I would say, across the patch at the moment, Frederic. I feel that we're firing from all cylinders right now. And I'm glad that you're bringing up organic growth.

Speaker Change: You know, we have worked extremely hard.

Speaker Change: over the course of the last 24 months to really raise the bar from an organic growth point of view.

As we believe we are not mutually exclusive, we believe we've been a good acquire, a great acquire in the past from an MNA point of view, but equally we wish to demonstrate to our investors that we can generate strong organic growth as well. So, with that in mind, I mean what we're aiming at is to really generate a very good inorganic growth and also very good organic growth. That's the goal that we have in mind at the moment while you're field delivering. So, on both fronts, thanks.

Speaker Change: Because we believe they are not mutually exclusive. We believe we've been a good acquirer, a great acquirer in the past.

Speaker Change: from an M&A point of view, but equally, we wish to demonstrate to our investors that we can generate strong organic growth as well.

Speaker Change: With that in mind, what we're aiming at is to really generate very good inorganic growth and also very good organic growth. That's the goal that we have in mind at the moment.

Frederic Bastien: goal that we have in mind at the moment. Well, you're sure delivering, so on both fronts. Thanks. That's all I have. Thank you, Frederic.

Michael Tupholme: Well, you're sure delivering. So on both fronts. Thanks. That's all I have.

That's all I have. Thank you, Frederic.

Speaker Change: Well, you're sure delivering. So, on both fronts, thanks. That's all I have.

Thank you. Next question is from the line of Maxine Sitchav from NBS. Please go ahead.

Frederick: Thank you, Frederic.

Operator: Next question is from the line of Maxim Sytchev from NBF. Please go ahead.

Speaker Change: Thank you.

Speaker Change: The next question is from the line of Maxim Sytchev from NBF. Please go ahead.

Maxim Sytchev: Hi, good morning, Javan. Hello Max. I just had one quick follow-up in terms of MNA and curious to see if there is a bit of multiple differential right now between what you might be seeing in the US versus continental Europe, or is it just a functional kind of, you know, size on the platform that really is going to drive the differential multiples. Thanks. Yeah, I think Max, geography is not as much. It's more you know the sector that in my personal opinion will drive the margins, not the margins, I'm sorry, the multiple differential you know and obviously this is the law of math. Obviously, in very high growth, high return sectors, you know, you can't expect to hire multiple than perhaps in other sectors, but also the size of the platform will also have an impact on this.

Operator: Hi, good morning, gentlemen. Hello, Mike. Yeah, well, the number one, uh, the number one, uh... Number two. Number three.

Maxim Sytchev: Alex, I just had one quick follow-up in terms of M&A, and I was curious to see if there is a bit of a multiple differential right now between what you might be seeing in the U.S. versus continental Europe, or is it just a function of kind of, you know, size and the platform that really is kind of driving the differential multiple? Thank you.

Maxim Sytchev: Hi, good work, gentlemen.

Matt: Hello, Matt.

Maxim Sytchev: I just had one quick follow-up in terms of M&A. I'm curious to see if there is a bit of multiple differential right now between what you might be seeing in the U.S.

Maxim Sytchev: versus continental Europe , or is it just a function of kind of, you know, size in the platform that really is going to driving the differential multiples?

Alexandre Lerue: Yes, I think geography is not as much, it's more the sector. That, in my personal opinion, will drive the multiple differential, and obviously this is Matt's love. Obviously, in very high-growth, high-return sectors, you can't expect to pay a higher multiple than perhaps in other sectors, but also, the size of the platform will also have an impact on this. So, what I would tell you is that not much has changed actually, and the formal and informal discussions that I've had with firms in continental Europe and in the Nordics and in other places have been healthy. So, I do expect us to get back to it now that we have significantly de-risked our transformation.

Maxim Sytchev: Yeah, I think, Max, geography is not as much. It's more, you know, the sector.

Maxim Sytchev: I'm sorry, the multiple differential, and obviously this is the love of Matt, obviously in very high growth.

Maxim Sytchev: high return sectors, you know, you can expect to pay a higher multiple than perhaps in other sectors.

Maxim Sytchev: But also the size of the platform will also have an impact on this. So what I would tell you is that not much has changed, actually.

So what would tell you is that not much has changed actually, and the formal and informal discussion that I've had with firms and continental Europe and in the Nordics and in other places has been healthy. So I do expect us to get back to it now that we have significant speedier risk our transformation.

Maxim Sytchev: you know, the formal and informal discussion that I've had with firms in continental Europe .

Maxim Sytchev: and then the Nordics.

Maxim Sytchev: and in other places has been healthy. So I do expect us to get back to it now that we have significantly de-risked our transformation.

Thank you so much for coming. Thank you.

Maxim Sytchev: Okay. That's great. Thank you so much.

Speaker Change: Okay, that's great. Thank you so much. That's it for me.

Operator: Thank you. We'll take our next question. This is from Sabahat Khan from RBC. Please go ahead.

Sabahat Khan: We'll take our next question. This is from Sabahat Khan from RBC. Please go ahead. Great. Thanks and good morning. Just a question, I guess, on the margin outlook here. I think some of the commentary from the team has been that 20% is much more within reach today than when you initially talked about it. Maybe just as a reminder of giving, you're at 18.3%. If you can just remind us of maybe the bigger buckets of opportunities that you have within your business that would drive the margin higher. That would be helpful. Thanks.

Speaker Change: Thank you.

Speaker Change: We'll take our next question.

Speaker Change: This is from Sabahat Khan from RBC. Please go ahead.

Sabahat Khan: Great. Thanks, and good morning.

Sabahat Khan: Just a question, I guess, on the kind of margin outlook here. You know, I think some of the commentary from the team has been that, you know, 20 percent is much more within reach today than when you initially talked about it. Maybe just as a reminder, given where you're at, 18.3 percent, if you can just remind us of maybe the bigger buckets of opportunities that you have within your business that would drive the margin higher, that would be helpful. Thanks.

Sabahat Khan: Great. Thanks and good morning. Just a question, I guess, on the kind of the margin outlook here. I think some of the commentary from the team has been that 20 percent is much more within reach today than when you initially talked about it. Maybe just as a reminder, given where you're at, 18.3 percent, if you can just remind us of maybe the bigger buckets.

Speaker Change: of opportunities that you have within your business that would drive the margin higher. That would be helpful, thanks.

Alexandre Lerue: Yeah, well, the number one, uh, the number one, Lever, obviously, Sabah, you have to operate in good markets. Number two. Number three.

Well, the number one, the number one lever, obviously, Sabah, is you have to operate in good markets. And, with the exception of Asia, which represents a very, very small portion of our book of business, we are operating in great markets. The supply, demand dynamics in Canada, in the US, and the UK, now in the Nordics, I feel better around Sweden. Same with Australia and New Zealand, we're clearly feeling good that we are operating in the right markets at the moment. Number one, number two, we've made a significant push in running a titer ship as a company over the last 12 months.

Speaker Change: Lever, obviously, Sabah, you have to operate in good markets.

Sabah: And with the exception of Asia, which represents a very, very small portion of our book of business.

Sabah: We are operating in great markets. The supply-demand dynamics in Canada, in the US, in the UK, now in the Nordics. I feel better around Sweden.

Sabah: Same with Australia and New Zealand, we're clearly feeling good that we are operating in the right markets at the moment.

Sabah: Number one. Number two, we've made a significant push in running a tighter ship as a company over the last 12-months. Not that we were not in the past, but we feel we can always improve and that has paid off.

Not that we were not in the past, but we see we can always improve, and that has paid off. Number two, number three, we are going, I believe, to benefit from the transformation that is taking place over the course of the last 24 months. And I hope I'm hopeful and I'm looking at Alain the eyes as I'm talking, that we are going to be able to generate the synergistic benefits of being on one platform globally and running a more optimal business. Number three, as well, and we'll talk more about that when we roll out our next track plan.

Sabah: Number two. Number three.

Alexandre Lerue: We are going, I believe, to benefit from the transformation that has taken place over the course of the last 24 months. And I'm hopeful, and I'm looking at Alain in the eyes as I'm talking, that we are going to be able to generate the synergistic benefits of being on one platform globally and running a more optimal business. Number three as well, and we'll talk more about that when we roll out our next draft plan.

Sabah: We are going, I believe, to benefit from the transformation that is taking place.

Sabah: over the course of the last 24 months.

Sabah: And I hope, I'm hopeful.

Alain Michaud: And I'm looking at Alain in the eyes as I'm talking, that we are going to be able to generate the synergistic benefits of being on one platform globally.

Operator: Number three as well, and we'll talk more about that when we roll out our next draft plan. I mean, also, you know we're leveraging technology in a big way right now. And we believe that in the next 3-years, there'll be a lot of formidable things that will happen to our industry, and we want to be at the forefront of that, and we want to lead from the front. So that's why I'm feeling good about the 20% margin profile, and it's certainly a goal that we have in mind and that we have not forgotten. Great. Thanks for the color.

Sabah: and running a more optimal business.

Sabah: Number three as well, and we'll talk more about that when we roll out our next draft plan. I mean, also, we're leveraging technology in a big way right now.

Alexandre Lerue: I mean, also, you know, we're leveraging technology in a big way right now, and we believe that in the next three years, there'll be a lot of formidable things that will happen in our industry. And we want to be at the forefront of that. We want to lead from the front. So that's why I'm feeling good about the 20% margin profile. And it's certainly a goal that we have in mind and that we have not forgotten that we are. 200% focus

I mean, also, you know, we're leveraging technology in a big way right now. And we believe that in the next three years, there'll be a lot of formidable things that will happen to our industry. And we want to be at the forefront of that, and we want to lead from the front. So that's why I'm feeling good about the 20% margin profile. And it's certainly a goal that we have in mind and that we have not forgotten that we're, you know, 200% focus on at the moment. Great, thanks for the color.

Sabah: We believe that in the next three years, there'll be a lot of formidable things that will happen to our industry and we want to be at the forefront of that and we want to lead from the front.

Sabah: So, that's why I'm feeling good about the 20% margin profile and it's certainly a goal that we have in mind and that we have not forgotten.

Sabah: You know, 200% focus on the moment.

Operator: And just to follow up on the comment about the right markets, I guess, you know, is this just a process where the smaller markets that you're not focused on will naturally just become de-emphasized partly through M&A? Or are there, you know, as you look across your portfolio, end markets that might be a bit, you know, just not interesting anymore, or regions like Asia where you might just de-emphasize that naturally through sort of the way projects flow?

And just to follow up on the comment around the right markets, I guess, is this just a process where the smaller markets that you're not focused on will naturally just become de-emphasized and partly through revenue? Or is there, you know, as you look across your portfolio, there are end markets that might be a bit just not interesting anymore, or regions like Asia, where you might just de-emphasize that naturally through sort of the way projects will. And just any comment on how you view the portfolio today. I like our portfolio. I feel the moments that were, and I've mentioned it in the past, and I'll mention it again.

Speaker Change: Okay, great. Thanks for the color. And just a follow-up on the comment around the right markets, I guess...

Speaker Change: Is this just a process where the smaller markets that you're not focused on will naturally just become de-emphasized and partly through M&A or is there, you know, as you look across your portfolio, is there end markets that might be a bit

Speaker Change: Just not interesting anymore, or regions like Asia where you might just de-emphasize that naturally through sort of the way projects flow. And just any comment on how you view the portfolio today.

Operator: And just any comment on how you view the portfolio today? I like our portfolio. I've mentioned it in the past, and I'll mention it again. In excess of 90% of our profits are generated in OECD countries. And our strategy hasn't changed.

Alexandre Lerue: I like our portfolio. I've mentioned it in the past, and I'll mention it again.

Sabah: I like our portfolio. I feel at the moment, Sabah, and I've mentioned it in the past and I'll mention it again.

In excess of 90% of our profit is generated in OECD countries, and our strategy hasn't changed. So if I had an opportunity to grow our presence in continental Europe, I would. This is a great place to do business. In the U.S., we are sub-scale in many parts of the U.S. and in many sectors. So you should expect us to continue to focus on our U.S. business. There's room for us to grow in Australia. There's room for us to grow in New Zealand, and even Canada, where we have, I'd like to think, the leading presence. I feel there's ample room for us to continue to grow.

Operator: So, if I had an opportunity to grow our presence in continental Europe, I would. This is a great place to do business. I would keep the same seasonality that we've highlighted in our outlook.

Sabah: In excess of 90% of our profit are generated in OECD countries and our strategy hasn't changed. So if I had an opportunity to grow our presence in continental Europe , I would. This is a great place to do business.

Alexandre Lerue: In the U.S., we are subscale in many parts of the U.S. and in many sectors, so you should expect us to continue to focus on our U.S. business. There's room for us to grow in Australia. There's room for us to grow in New Zealand and even Canada, where we have, I'd like to thank, a leading presence. I feel there's ample room for us to continue to grow, so expect us not to de-emphasize the markets that we're in.

Sabah: In the U.S., we are subscale in many parts of the U.S. and in many sectors, so you should expect us to continue to focus on our U.S. business.

Sabah: There's room for us to grow in Australia, there's room for us to grow in New Zealand, and even Canada.

Sabah: where we have, I'd like to think, the leading presence. I feel there's ample room for us to continue to grow. So expect us to not de-emphasize the markets that we're in. Obviously, when

So expect us to not emphasize the markets that we're in. Obviously, when a country or a region is going through a rougher patch, just in relative terms, obviously, the region is having a lesser presence than perhaps the others that are growing. But other than that, I think that's where we stand. We really like our footprint at the moment, and we intend to pursue in that direction.

Alexandre Lerue: Obviously, when a country or region is going through a rougher patch, just in relative terms, obviously the region is having a lesser presence than perhaps the others that are growing. But other than that, I think that's where we stand. We really like our footprint at the moment, and we intend to pursue it in that direction.

Sabah: But other than that, I think that's where we stand. We really like our footprint at the moment and we intend to pursue in that direction.

Okay, and then just one last quick one. There was some discussion earlier around just some of the season out in Q4 with an extra day. And you haven't noticed any slow run in the U.S., but I guess just in terms of Q3 versus Q4, do you typically see an election here where maybe things pause a little bit in Q3 or a little bit in Q4 along the time of the election? Just thinking if we should consider that for our models, when we think about age two in terms of shift between those two quarters at all.

Sabahat Khan: Okay, and then just one last quick one. There was some discussion earlier around just some of the seasonality in Q4 with the extra day, and I know you haven't noticed any slowdown in the U.S., but I guess just in terms of Q3 versus Q4, do you typically see an election year where maybe things pause a little bit in Q3 or a little bit in Q4 around the time of the election? Just wondering if we should consider that for our models when we think about H2 in terms of the shift between those two quarters at all. I would not.

Speaker Change: Okay, and then just one last quick one. There was some discussion earlier around just some of the seasonality in Q4 with extra day and...

Speaker Change: You know, you haven't noticed any slowdown in the U.S., but I guess just in terms of Q3 versus Q4, do you typically see an election year where maybe things pause a little bit in Q3 or a little bit in Q4 along the time of the election? Just thinking if we should consider that for our models when we think about H2 in terms of shift between those two quarters at all.

I would not. I would keep the same seasonality that we've highlighted in our outlook in February. Thanks very much. Thank you.

Alexandre Lerue: I would keep the same seasonality that we've highlighted in our outlook and preference.

Speaker Change: I would keep the same seasonality that we've highlighted in our outlook in February .

Speaker Change: Thanks very much.

Ian Gillies: We'll take on next question. And this is from Ian Gilles from Steeple; please go ahead. Morning everyone. Morning. As it pertains to the earth in environmental business, and it's obviously been what I believe to be an above average girl over the last number of years on an organic basis. Are you seeing anything coming down the pipe that would cause that narrative to change, or any headwinds in that business at the moment? No, not at this point. Obviously, you know what do I.

Operator: We'll take our next question. And this is from Ian Gillies from Speedfall. Please go ahead.

Speaker Change: Thank you.

Ian Brooks Gillies: And this is from Ian Gillies from Stifel. Please go ahead. Good morning, everyone.

Speaker Change: We'll take our next question.

Speaker Change: And this is from Ian Gillies from Stifel. Please go ahead.

Ian Brooks Gillies: Morning, everyone.

Speaker Change: Morning.

Ian Brooks Gillies: As it pertains to the earth and environmental business and it's obviously been what I believe to be an above-average grower over the last number of years on an organic basis, are you seeing

Alexandre Lerue: Now, not at this point, obviously, you know what Clearly, we're not aware of anything at this point that would change that in the immediate terms, obviously, Ian, but actually, I feel that if everything remains the same, we should do better going forward. So if any, now that we're, we're past that, uh, uh, I'm, I'm, I'm feeling, uh, assuming everything stayed the same, I'm feeling very good about that.

Speaker Change: Now, not at this point, obviously, you know, what do I do?

Clearly, we're not aware of anything at this point that would change that in the immediate terms. Obviously, Ian, but actually, I feel that if everything remains the same, we should do better going forward because you know, the integration of a firm of 6, 7,000 people like Woody and I, combined with an integration of 6, 7,000 people like Golder. In addition to all the tokens that we completed in recent years, that required a lot of work from an integration point of view. And that can oftentimes distract our operation from being outward focus and perhaps being a bit more inward focus.

Speaker Change: Actually, I feel that...

Speaker Change: our operation from being outward-focused and perhaps being a bit more inward-focused. So, if any, now that we're past that, I'm feeling, assuming everything stays the same, I'm feeling very good about the sector.

So, if any, now that you know, we're past that, I'm feeling, assuming everything stays the same, I'm feeling very good about this. The sector. No, that's helpful.

Ian Gillies: And maybe just drilling down into that division a little bit. I'm just curious of whether you've seen any step change in demand or any change in how you're trying to position for PFAS work in the US, because that seems to be topical still. It's the flavor of the day. I'm not going to lie. And we have worn many and many awards. Obviously, most of our work and that regards us with the Department of Defense. And in recent months, we have a sacred and many awards. So I think we're forging ahead on that front. And I feel we have excellent capabilities in that regard to really forge ahead and take a leadership position.

Speaker Change: I'm just curious whether you've seen any step change in demand or any change in how you're trying to position for PFAS work in the U.S. because that seems to be topical still.

Alexandre Lerue: It's the flavor of the day, I'm not going to lie, and we have won many, many awards. Obviously, most of our work in that regard is with the Department of Defense, and in recent months, we have secured many awards, so I think we're forging ahead on that front, and I feel we have excellent capabilities in that regard to really forge ahead and take a leadership position.

Alexandre Lerue: It's the flavor of the day, I'm not going to lie, and we have won many, many awards. Obviously, most of our work in that regard is with the Department of Defense, and in recent months, we have secured many awards. So, I think we're forging ahead on that front, and I feel we have excellent capabilities in that regard to really forge ahead and take a leadership position. So, Anne, I would say in the last five, six, seven years, we've grown organically in a very significant way out West.

Speaker Change: It's the flavor of the day, I'm not going to lie, and we have won many, many awards. Obviously, most of our work in that regard is with the Department of Defense.

Speaker Change: And in recent months, we have secured many awards.

Speaker Change: I think we're forging ahead on that front and I feel we have excellent capabilities in that regard to really forge ahead and take a leadership position.

That's helpful.

Ian Brooks Gillies: That's helpful. And then, if I could sneak in one last quick one, just based on the prior question. In previous calls, I think you had mentioned wanting to add capacity in the U.S. and geographically, like, I think it was specifically Texas and Florida. Would that still hold true today, or are there new regional geographies in the U.S. that we should be thinking about as well?

Ian Gillies: And then, if I could sneak in one last quick one, just based on the prior question. In previous calls, I think you had mentioned on wanting to add capacity in the US and geographically, like I think was specifically Texas and Florida. Would that still hold true today, or are there new regional geographies in the US that we should be thinking about as well? Look, we historically give in our footprint and the acquisition that we completed. We've always been perhaps had a larger presence or more important presence in the Northeast. So, and I would say in the last five, six, seven years, we've grown organically and in very significant ways out west.

Speaker Change: That's helpful. And then if I could sneak in one last quick one, just based on the prior question.

Speaker Change: In previous calls, I think you had mentioned on wanting to add capacity in the U.S. and geographically, like I think it was specifically Texas and Florida. Would that still hold true today, or is there new regional geographies in the U.S. that we should be thinking about as well?

Alexandre Lerue: Historically, given our footprint and the acquisition that we completed, we've always had a larger presence or a more important presence in the Northeast. So, Anne, I would say in the last five, six, seven years, we've grown organically in a very significant way out West. I talked about the southern states on a number of occasions; I feel we're subscale, and clearly, California on its own, it's a country, so we could double in size and not have a problem. So the reality is, I think we have a lot of room to maneuver, perhaps with the exception of the Northeast, where we have a larger presence and we're feeling good about the platform.

Speaker Change: Historically, given our footprint and the acquisition that we completed, we've always been perhaps

Speaker Change: had a larger presence or a more important presence in the Northeast.

Speaker Change: In the last 5-7 years, we've grown organically in a very significant way out West.

But if I had to guess, I think, you know, we, you know, if you look at the Midwest and the Midwest of the United States, I feel we're subscale. I talked about the southern states and the number of occasions. I feel we're subscale and clearly California on its own. It's a country. So we could double in size and not have a problem. So the reality is I think we have we have a lot of room to maneuver.

Speaker Change: But if I had to guess, I think, you know, we, you know, if you look at the Midwest and the

Speaker Change: and the Midwest of the United States, I feel we're subscale.

Alexandre Lerue: I talked about the southern states on a number of occasions; I feel we're subscale, and clearly, California on its own, it's a country, so we could double in size and not have a problem. So the reality is, I think we have a lot of room to maneuver, perhaps with the exception of the northeast, where we have a larger presence and we're feeling good about the platform that we have.

Speaker Change: I talked about the southern states in a number of occasions, I feel were subscale.

Speaker Change: And clearly, California on its own, it's a country, so we could double in size and not have a problem.

Speaker Change: So, the reality is I think we have a lot of room to maneuver, perhaps with the exception of the Northeast where we have a larger presence and we're feeling good about the platform that we have.

Perhaps with the exception of the Northeast, where we have a larger presence and we're feeling good about the platform that we have. Thank you very much. That's that's hopeful detail. I'll turn the call back over. Thank you.

Speaker Change: Thank you very much. That's helpful detail. I'll turn the call back over. Thank you. Thank you.

Operator: And I will now hand the conference back to the speaker for any closing remarks. Thank you. Well, thank you for attending the call today. Thank you for all your great questions. And I know we look forward to updating you as we embark into our second half of this year and look forward to updating you on our plans going forward. Thank you very much.

Operator: And I will now hand the conference back to the speakers for any closing remarks. Thank you.

Speaker Change: And I will now hand the conference back to the speakers for any closing remarks. Thank you.

Alexandre Lerue: Well, thank you for attending the call today. Thank you for all your great questions, and we look forward to updating you as we embark on our second half of this year and look forward to updating you on our plans going forward. Thank you very much, and I wish you a great day.

Speaker Change: Well, thank you for attending the call today. Thank you for all your great questions, and we look forward to updating you as we embark into our second half of this year, and look forward to updating you on our plans going forward. Thank you very much, and I wish you a great day.

And I wish you a great day. Thank you.

Operator: Thank you. This concludes today's conference. Thank you for participating, and you may now disconnect.

This concludes today's conference. Thank you for participating. And you may now disconnect. Thank you.

Speaker Change: Thank you. This concludes today's conference. Thank you for participating and you may now disconnect.

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