Q3 2025 WSP Global Inc Earnings Call
Speaker #2: Good day and thank you for standing by . Welcome to the WSP Global Inc. . Third quarter 2020 results conference Call and Webcast .
Speaker #2: At this time , all participants are in a listen only mode . After the speakers presentation , there will be a question and answer session .
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Speaker #2: Please press star one, and one again. Please note that this conference is being recorded. I would now like to turn the conference over to your first speaker.
Speaker #2: Quentin Weber from Investor Relations. Please go ahead.
Speaker #3: Thank you. And thank you for joining our call today. We will discuss our Q3 2025 performance, followed by a Q&A session.
Speaker #3: Alexandre L'Heureux , 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 .
Speaker #3: 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 .
Speaker #3: Relevant factors that could cause actual results to differ materially from those forward looking statements are listed in the mDNA for the quarter ended September 27th , 2025 , which can be found on Kdr+ and on our website .
Speaker #3: In addition , during the call , we may refer to specific non IFRS measures . These measures are also defined defined in the mDNA for the year ending December 31st , 2024 .
Speaker #3: Our mDNA includes reconciliations of non-IFRS measures to the most directly comparable IFRS measures . 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 .
Speaker #3: 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 .
Speaker #3: These measures should not be considered as a substitute for the related financial information prepared by US . With that , I will now turn the call over to Alexandra .
Speaker #4: Thank you and thank you all for joining us today . Let me start by saying that WSP underlying performance was strong in the quarter .
Speaker #4: Net revenues . Adjusted EBITDA and adjusted net earnings increased by approximately 16% , 20% and 32% , respectively . Despite continued fluid market dynamics .
Speaker #4: Among other things , our results highlight very robust margin improvement , strong free cash flow generation , and exceptional performance from power engineers .
Speaker #4: As we celebrate the first year of the closing of the acquisition . Let me now expand on three key highlights . First , a few comments on our top line performance .
Speaker #4: If you turn to page five in today's investor presentation , we highlight a healthy underlying business performance with mid-single digit organic growth for the quarter .
Speaker #4: In fact , across our three largest segments , Canada , the Americas , and Emia , we delivered mid to high single digit organic growth when isolating the impact of a significant project upside in Canada in Q3 2024 and the historical high level of storm related assignment in the US in Q3 2024 versus the historical low level of such assignments in Q3 2025 .
Speaker #4: In Asia-Pacific , we are observing early signals of improvement , including healthy growth in backlog and in New Zealand , delivering modest organic growth in net revenue , a first in the last five quarters .
Speaker #4: Second , on profitability , adjusted EBITDA increased by almost 20% in dollar terms during the quarter . We reached a record high margin at 20.2% , representing an improvement of 70 basis points for the quarter and 50 basis points over the nine month period , supported by continued focus on productivity .
Speaker #4: In addition , our solid results reflect the absorption of optimization and rightsizing costs , which impacted margin by 30 basis points in the third quarter and 40 basis points year to date .
Speaker #4: Third , I am very pleased with our cash performance . A continuation of our first two quarters free cash flow reached almost 900 million for the nine month period , an increase of 645 million compared to last year .
Speaker #4: DSO stood at 71 days within our targeted range at historical low level for third quarter . We are well on track to exceed our 100% conversion target of annual free cash flow to net earnings .
Speaker #4: Let's now review our regional operations , starting with Canada . Net revenue organic growth reached 6% for the quarter when adjusted to exclude the impact of a favorable project in Q3 2024 .
Speaker #4: Looking at the next at the year to date performance , the region delivered a healthy net revenue , organic growth of 7% . Canada delivered an impressive margin of 27.8% , representing a 100 basis point increase compared to Q3 2020 .
Speaker #4: Four and leading margins across our global platform . Lastly , Canada's backlog grew 15% organically since the beginning of the year in the Americas .
Speaker #4: Net revenue , organic growth stood at 6.6% when adjusting for the lower level of emergency response services in the United States . A standout contributor to our performance in the US and not included in the 6.6% just stated , has been power engineers , which posted net revenue , organic growth in the mid-teens in both the third quarter and the first nine months of 2025 .
Speaker #4: Moving to ischaemia performance exceeded expectations in the UK , with 11% net revenue . Organic growth driven by strong positioning as a tier one player in the country .
Speaker #4: The Nordics showed encouraging signs of improvement , supported by growing backlog , specifically in Sweden . Overall , EMEA delivered 6.4% net revenue .
Speaker #4: Organic growth for the quarter and 4.8% year to date . Turning to APAC , New Zealand posted modest growth in the quarter and the backlog has increased significantly year to date .
Speaker #4: In Australia , we are seeing the trending upward , although some clients decisions are affecting its accessibility . Now let's move to M&A .
Speaker #4: On October 9th , we closed the acquisition of Ricardo , a milestone that marks an important step that moves us closer to a strategic ambitions .
Speaker #4: On backlog transition air quality , water solutions and rail strengthening . Our position in the UK , Australia and the Netherlands . Our teams are actively engaged in integration activities , including setting up different work streams of importance .
Speaker #4: Our clients , teams are coming together to assess net revenue opportunities . Moving on to . Power engineers , Q3 marked the first anniversary of our firms coming together , a milestone defined by exceptional results , strong execution and accelerating demand for power and energy services .
Speaker #4: Over the past year , power Engineers has delivered organic growth in net revenue in the mid-teens and is now contributing to WSP margins expansion .
Speaker #4: From the outset , we recognized a significant potential for revenue synergies since the acquisition that potentials has translated in in action . Together , we have built a robust pipeline exceeding 1.4 billion , actively tracking synergies across more than 300 opportunities .
Speaker #4: One year later , we are proud of the remarkable progress we have made together . Now , let's briefly discuss our end markets , our overall power and energy business is performing very well and our backlog has grown steadily over the past two years , reflecting strong market demand for power and energy related services .
Speaker #4: This momentum extends to our property and buildings business , which delivered strong results in the AI and the cloud infrastructure sectors in Q3 2025 , we secured data center project wins across the USA , Canada , Chile , Sweden , Norway , Thailand , Australia and Singapore .
Speaker #4: Underscoring our leadership in the global data center market . At the same time , in the commercial real estate market , we are gaining traction in refurbishment and retrofit projects driven by rising office occupancy and the urgent need to upgrade assets at risk of becoming stranded further reinforcing our premier position in this space .
Speaker #4: Meanwhile , our Earth environment business continues to see strong demand globally for permitting new energy assets , including power lines , nuclear facilities and hydrogen .
Speaker #4: Hydrogen pipelines . In contrast , some clients have chosen to defer capital projects which influenced the pace of our field season , specifically in Canada and in the US .
Speaker #4: On the transportation and infrastructure front , aviation continues to experience a strong post-pandemic recovery , with airports worldwide investing heavily in expansion program , and we recently secured a single mandate to expand each row .
Speaker #4: Airport , which is operating at capacity and undertaking an extensive improvement to meet the mid 21st century air transport demand . Another key win during the quarter was WSP confirmed participation in the Toronto Pearson Airports Accelerator Program , which delivers vital upgrades and and airport assets .
Speaker #4: I'm sorry , rail and transit remain in demand and we celebrate two major wins this quarter . The crosstown West Extension Station rail and System contract in Canada and the Uppsala Light Rail project in Sweden .
Speaker #4: A 17 kilometer new line valued at 1 billion that supports the city climate neutral initiative in the United States , investment in asset renewal continues , highlighted by our recent mandate to modernize the Briarcliff , Peekskill Parkway in Westchester County , New York .
Speaker #4: This environmental assessment aims to enhance safety and resilience for this 13 kilometer corridor amid evolving climate requirements . Overall , we see continued momentum and positive momentum .
Speaker #4: But let me state the obvious we are currently evolving in fluid market dynamics , including , amongst other things , shifting client priorities and evolving geopolitical contexts .
Speaker #4: Despite this reality, our key markets are performing well. Industry trends remain current, and our performance underscores the resilience of our diversified platform and the strength of our execution.
Speaker #4: Now over to you , Alan .
Speaker #3: Thanks , Alex .
Speaker #5: And hello , everyone . I'm very pleased with our results this quarter . For the third quarter , revenue and net revenues increased by approximately 14 and 16% , respectively , displaying solid performance and healthy underlying fundamentals .
Speaker #5: The increase was attributable to acquisition growth of 10.1% and organic revenue growth of 3.7% . Power engineers continued to demonstrate strong growth , with a mid-teens organic growth rate compared to Q3 2024 , and as a reminder , starting in Q4 , our engineers will contribute to our organic growth backlog reached $16.4 billion , up 10.6% in the 12 month period , representing approximately 11 months of revenue and a book to burn ratio above one .
Speaker #5: Moving on to profitability , adjusted EBITDA in the quarter amounted to $700 million , compared to $585 million in the third quarter of 2024 .
Speaker #5: An increase of approximately 20% of interest . We are very proud of the significant milestone reached this quarter , with adjusted EBITDA margin reaching a record high of 20.2% compared to 19.5% in Q3 2024 , an increase of 70 basis points , mainly due to our continued focus on productivity and excluding optimization and restructuring .
Speaker #5: Costs are margin increased 100 basis points in the quarter , adjusted net earnings for the quarter reached approximately $370 million , or $2.82 per share , up 32% and 26% , respectively , compared to the third quarter of 2024 .
Speaker #5: The increase was mainly attributable to higher adjusted EBITDA and upside in tax expenses and financing costs . As for our cash position , I'm particularly pleased with our continued performance in cash flow generation .
Speaker #5: Free cash flow was approximately $890 million for the nine month period ended September 27th , 2025 , representing an improvement of $645 million compared to the corresponding period in 24 .
Speaker #5: The trailing 12 months of free cash flow totaled $1.5 billion , representing 1.7 times net earnings attributable to shareholders . This strong outcome reflects our ongoing focus on working capital management and optimization under our new ERP platform .
Speaker #5: DSO stood at 71 days on September 27th , 2025 , compared to 80 days last year . A record for a third quarter net debt to adjusted EBITDA ratio stood at 1.4 times , which is within our target range of 1 to 2 times , and allow us to appropriate with the appropriate flexibility to deploy capital on our ERP program .
Speaker #5: The 2025 deployment proceeded as planned and we are now preparing for 2026 , which will result in 95% of our platform under the new ERP .
Speaker #5: With key regions and entities , including power engineers Ricardo Australia , New Zealand and Sweden set to come on board this milestone represents a critical step in the evolution of our support function and once fully implemented , these changes will enable us to unlock further efficiencies across the organization and serve as an additional lever for margin expansion over time .
Speaker #5: Regarding our financial expectations for the year , we have revised and increased our 2025 financial outlook with net revenue now expected to range between $13.8 billion and $14 billion , and adjusted EBITDA between $2.54 billion to $2.56 billion .
Speaker #5: We are therefore well aligned to reach or exceed the higher end of our initial financial outlook issued in February 2025 . As a reminder , our 25 financial outlook reflects the expected contribution for Ricardo plc in the fourth quarter .
Speaker #5: The acquisition closed two weeks after the start of Q4 , which means we will not capture a full quarter of net revenue . Finally , with the Atlantic hurricane season now essentially behind us , we expect the condition observed this quarter in the US to extend into Q4 2025 .
Speaker #5: For context , these services contributed to approximately $70 million in net revenue in Q4 2020 for one of the highest volume recorded in the past three decades .
Speaker #5: As a result , our year over year comparison for the Americas segment in Q4 2025 will be influenced by this exceptionally strong prior year baseline .
Speaker #5: We're also closely monitoring the current US government shutdown , which which adds another layer of uncertainty to the operating environment . On that , back to you , Alex .
Speaker #4: Thank you . Alain . As we close the third quarter , I want to emphasize that what truly stands out the resilience of our diversified platform despite evolving market dynamics , WSP adapted and delivered a strong performance underpinned by disciplined execution , operational excellence and a clear focus on long term value creation .
Speaker #4: The recent acquisition of Ricardo further strengthens our capabilities and advisory and energy transition . Air quality and rail , positioning us to capture opportunities in high growth sectors globally .
Speaker #4: We have the financial strength and flexibility to deploy capital for strategic acquisitions in a fragmented market , supported by robust balance sheet and disciplined approach to M&A .
Speaker #4: Our pipelines remain healthy with opportunities aligned to our core markets and grow priorities . As 2025 draws to a close , we look ahead to 2026 with measured optimism and confidence in our ability to adapt to evolving market conditions and continue delivering value to our clients and our shareholders .
Speaker #4: Our diversified platform , a strategic focus and our operational discipline positioned us well to navigate what lies ahead . Thank you for your continued trust and support .
Speaker #4: With that , we can open the lines to questions or for questions .
Speaker #2: Thank you. As a reminder, to ask a question, please press star one and one on your telephone and wait for your name to be announced.
Speaker #2: To withdraw your question , please press star one and one again . Once again , please press star one and one on your telephone and wait for your name to be announced .
Speaker #2: To withdraw your question , please press star one . And once again , thank you . We are now going to proceed with our first question and the questions come from the line of Steven Fisher from UBS .
Speaker #2: Please ask a question .
Speaker #6: Thanks . Good morning . So on power engineers , congrats on the one year anniversary . And so now that you're into the second year of your ownership , just curious what you see as being different during this second year of ownership versus the first year .
Speaker #6: Is it kind of the main focus of capturing that $1.4 billion pipeline that you said ? Is that your main priority , or is it anything else ?
Speaker #6: And do you think you can maintain this mid-teens growth rate from here ?
Speaker #4: Hi . Good morning . Very , very good question . I mean , in times where there's a lot of of noise and things are , are fluid , actually consistency is , is often something very , very positive .
Speaker #4: And welcome . And frankly , what I expect in 2026 is hopefully something very similar to 2025 for power engineer . You know , we have a great , great backlog .
Speaker #4: We have we work for a great blue chip list of clients . And with what we know today , I don't see why the growth profile of Power Engineer would change in 2026 versus 2025 .
Speaker #5: And if you look at the the overall activity in 25 with power , we we've done a large part of the integration process .
Speaker #5: The last milestone is the ERP on Jan first 26 . Is that for most of 2026 will be a year where we're fully combined and harmonized together and our ways of working .
Speaker #5: So it makes us feel positive . About 2026 for power engineers .
Speaker #6: That's helpful . And then I guess a bigger picture here . When you adjust the growth in the quarter for the 2024 project and emergency work , you still seeing maybe a little slowdown in organic growth this quarter overall .
Speaker #6: So as you look forward to next year , just curious in your confidence and any reacceleration . And if you think you can accelerate your organic growth , which markets do you think could become more positive versus those that might see a little bit of deceleration ?
Speaker #6: And thinking about mostly regionally , but curious if there's any end market color that would make a different .
Speaker #7: Well , I would I would respectfully .
Speaker #4: Disagree with you . I think , you know , when , when when you adjust for emergency responses . And again , let me , let me remind everyone , I mean , last year we've been tracking the fee revenue that we've been delivering with the during emergency responses in the fall for the last two years , all the way back to the Parsons Brinckerhoff acquisition .
Speaker #4: And last year was the fourth highest in 30 years . Level of response and services that we delivered in Q3 and Q4 in our history .
Speaker #4: And this year will be the fourth lowest in 30 years . So we felt that we needed to highlight that to you , because once you adjust for this , I mean , I'm quite pleased , given all of the noise that we hear in the marketplace right now .
Speaker #4: People don't talk much about the government shutdown, but we're past a month now, and it's becoming impossible to issue permits and get anything done.
Speaker #4: And despite all of that , I mean , we continue to to we continue to perform and and in mid and mid single digit high single digits .
Speaker #4: So I'm quite , quite pleased with that . Going into 2026 , the pipeline of opportunities is still very strong . You look at the our win rate , which actually in 2025 has increased as opposed to decrease .
Speaker #4: I mean , if we can get the noise aside for a second and gain more stability in the marketplace , I think we'll have clients a lot more in the better position to , to to deploy capital .
Speaker #4: So , so going into 2026 , I actually believe that should be a good year for , for WSP .
Speaker #6: Helpful color . Thanks so much .
Speaker #8: Thank you .
Speaker #2: Thank you . We are now going to proceed with our next question . And the questions come from the line of Chris Murray from ATB Capital Markets .
Speaker #2: Please ask your question .
Speaker #9: Yeah , thanks folks . Good morning . You know , looking at the market profile , you know , first of all congratulations on getting over 20 .
Speaker #9: It's been a bit of a bit of a target for a while . But one of the things that sort of stuck out to me is when I looked at the kind of the difference between organic growth and change in headcount , it almost all the region's organic growth has outstripped the change in headcount .
Speaker #9: And I'm just starting to wonder , you know , if there's something that I could , you know , a structural change in the business .
Speaker #9: I know you referenced some productivity , but just how do we think about , you know , the relationship between your ability to generate organic growth and your headcount as we go into the next couple of years ?
Speaker #4: That's a that's a great question . I'm pleased that you highlighting that . I think this is more of a long term trend than , than than a yearly trend or a change over the course of this year .
Speaker #4: If you go back the last ten years, you'll see that the fee per employee that we have been generating over the course of the last decade has consistently increased.
Speaker #4: So , in other words , we're doing more with less and that is that is the result of many levers that we are pulling as an organization .
Speaker #4: One being more productive . WSP we you look at the margin profile and what we have been able to achieve in the last five years .
Speaker #4: The resulting effect of all this is obviously us being more productive , running a tighter ship . I think we cannot exclude also technology .
Speaker #4: We have we are using technology and also we have entered sectors and markets where we are able to charge a higher rate for the work that we do .
Speaker #4: You know , in recent years , you know , we've entered in a big way in mining , consulting . We are the largest mining consultant in the world .
Speaker #4: There's not one large mine in the world that WSP is not involved in . And we are able to to have a higher charge out rate for this same thing in the power sector .
Speaker #4: More recently . So I could go on like this and on for , for , for , for a long time . But over the years we've changed our project mix .
Speaker #4: But more importantly with the use of technology . And that will continue to accelerate . And also how productive we have been , we have been able to do a lot more with less .
Speaker #9: Okay . And then to that point , you know , I think I hear talk about like the ERP systems almost ready to go .
Speaker #9: We're seeing this sort of these trends in productivity and the fair to think that the year over year growth just should drive margins .
Speaker #9: Like usually there's a there's a there's a fairly standard kind of spread on margins . You know , call it 50 , 60 , 70 basis points .
Speaker #9: That comes as a natural absorption . Is there is there an ability to change that , to accelerate that margin improvement ?
Speaker #4: I'm not sure I understand your question , but I think over the last few years , if I look back at our track record , I mean , over the years we have been able to increase our margin profile .
Speaker #4: Good year , bad year , around 50 basis points . I think something like that . Yeah . Which has been consistent to move a global organization of our size by by half a point by , by 50 basis points every year to me , is great improvement .
Speaker #4: And I think would be would be leading our peer group . I would argue . And the average peer group . So so I'm quite pleased with that .
Speaker #4: Do I see ways to continue to accelerate that ? I can tell you that's what we do every day . We're trying to work every very hard to to continue to make those improvements .
Speaker #4: And as a friendly reminder , you know , this year we've absorbed a lot of redundancy and structural cost that would have increased by 40 basis points are already increased .
Speaker #4: Margin profiles . So so if you strip that out , I think the margin improvement this year has been just extraordinary .
Speaker #9: Okay . And then just one last one for me . The Canadian budget came down . Lots of talk about infrastructure and infrastructure spend .
Speaker #9: But a lot of those announcements have already been tied to projects that have been made . How are you seeing the change in the Canadian environment with respect to federal stimulus for infrastructure spending ?
Speaker #4: Well , I think the focus on infrastructure spending in Canada has always been there . I think where I felt the past governments and current governments is it's one thing to be focused on infrastructure .
Speaker #4: It's another to deploy the capital and accelerate the spent on infrastructure . Hopefully , this government is very focused on deploying rapidly the funding .
Speaker #4: So I think the focus infrastructure is not the issue is to make sure that we deploy the capital rapidly , but certainly I saw this budget very positively when it was announced .
Speaker #9: All right . Thanks . I'll leave it there . Thank you folks .
Speaker #8: Thank you .
Speaker #2: We are now going to proceed with our next question . And the questions come from the line of Michael Supple from TD Cowen .
Speaker #2: Please ask a question .
Speaker #10: Yes , thanks . Good morning .
Speaker #5: Hey , Michael .
Speaker #8: Oh , Michael .
Speaker #10: Just wanted to ask you about the APAC region . See if you can talk a little bit more about the the improvements that you're seeing in that segment and how we should think about organic growth in APAC .
Speaker #10: Overcoming quarters .
Speaker #4: I first and foremost , we see strong growth in the backlog at this point in time , increased growth in the backlog at this point in both New Zealand and Australia , which is an early but positive signal .
Speaker #4: We also see our win rate increasing , and we also see the proposal activity level to slightly , slowly increasing as well . So , so these are early signs as I mentioned earlier on this morning , New Zealand recorded positive organic growth for the first time in five quarters .
Speaker #4: So hopefully this will both bodes well for for the future . I think Australia is a few quarters behind New Zealand . How many will will assess that as , as as we are entering 2026 ?
Speaker #4: To me . Australia and I've mentioned it during the last quarter . We are totally committed to to the region . But if you look back at the the type of organic growth that we generated in the last 5 or 6 years in Australia , I think it's absolutely normal that a country goes through a period of pause after such a big spent in , in , in infrastructure .
Speaker #4: But longer term , I'm quite positive about about the country . So , so long story short , Michael , you know , if I'm being asked to look into my crystal ball , I think it's it's going to take a few quarters in Australia to to see better results .
Speaker #10: Thank you . That's that's definitely helpful . And then just somewhat related . But on the right .
Speaker #4: Side sorry Michael . And by the way I want to be crystal clear on this . This is not a self-inflicted to WSP .
Speaker #4: This is more structural for the country . So what's true for us . It's true for everyone . Everyone else I can tell you that .
Speaker #10: Okay . No , that makes sense . Thank you . Yeah . And then just secondly , just as it relates to the right sizing costs in the quarter and the corresponding margin impact , was that entirely in the APAC segment or did some other segments also experience some right sizing costs and margin impact ?
Speaker #10: And I guess , are we or are you through those right sizing costs , or do you expect there to be more over coming quarters in any regions ?
Speaker #4: There there is obviously Australia , New Zealand , there . Has there have been some , but there's been some others elsewhere . I mean , in the Nordics as well in recent years we've , you know , with , with , you know , the cooling off of , of , of infrastructure spend , especially in the private sector with the war Russia , which is next door neighbor to , to the Nordics , I think there's been a slowdown .
Speaker #4: The good news again , is we're seeing a strong backlog growth now . And I talked about a large projects that was awarded to us in Sweden .
Speaker #4: So I'm feeling good again around the country . And the region . And for the first time in many quarters now , I feel things are picking up .
Speaker #4: So so that's positive . But to be specific about your questions , I mean , we've been rightsizing pretty much everywhere . I mentioned .
Speaker #4: Also , the field season this summer , which was probably not as good as expected in Canada and in the US because of the fluid market conditions .
Speaker #4: I think people are more on the in a wait and see approach . So so we had to rightsize our field employees over the course of the summer .
Speaker #4: But again , we absorb all of that and we're able to deliver . Actually , I think you would agree . Fantastic . EBITDA margin in Canada , for instance .
Speaker #10: That's great . Thank you very much for the time .
Speaker #8: Thanks , Michael .
Speaker #2: We are now going to proceed with our next question . And the questions come from the line of Frederick Bastiat from Raymond James .
Speaker #2: Please ask your question .
Speaker #6: Good morning guys .
Speaker #11: Super pleased with the margins . That's hats off . That's excellent . I looking back ten years ago , I would have never imagined you could get there .
Speaker #11: But it's amazing . And the fact that you're still going for more is even more encouraging .
Speaker #8: Thank you .
Speaker #11: This question on the M&A side , are you seeing the competitive backdrop for M&A showing signs of improvement in your in today's fluid environment ?
Speaker #11: I would suspect so . But I want to make conclusions on my own . So I would would would love to get your opinion .
Speaker #4: Yeah .
Speaker #8: The the Frederic . .
Speaker #4: Very good question . Look we less than 12 months ago we we completed power engineer . This was our largest acquisition in our history .
Speaker #4: So as you can imagine , I wanted us to do a good job at the delivering the value of this acquisition . Earlier this year , we completed and announced the acquisition of Ricardo , which will contribute to the bottom line starting next quarter .
Speaker #4: And as I said , the pipeline is healthy . If if my memory is not failing me , we finished the quarter with a leverage of 1.4 times EBITDA .
Speaker #4: So as you can imagine , we are in a very solid position and I would like obviously to continue to to use our balance sheet and use the position of strength that we're in , given our diversified platform to be opportunistic and continue to grow platform .
Speaker #11: It seems like there's not a week that goes by that there's rumors about WSP buying a at company X , company Y , company Z , would you care to comment on on that ?
Speaker #8: But .
Speaker #4: I don't think anyone should be surprised because I'm probably the biggest supporter and avid supporter of consolidation in our industry . So I'm not surprised that our name is being thrown around with with possible rumors .
Speaker #4: Obviously , I'm not going to comment on on those rumors , but I was I was a big proponent of our model ten years ago , and I continue to be .
Speaker #4: And as I said , if we have an opportunity to use our our balance sheet , we will .
Speaker #11: So no more closer . Sorry . Normal course of business for you guys . Basically .
Speaker #8: Thank you . Yes . Thank you .
Speaker #11: That's all I have . Thanks guys .
Speaker #8: Appreciate it . Thanks .
Speaker #2: Thank you . As a reminder to ask a question , please press star one and one on your telephone and wait for your name to be announced .
Speaker #2: To withdraw your question , please press star one and one again . Once again , it's star one and one on your telephone and wait for your name to be announced .
Speaker #2: We are now going to proceed with our next question and the questions come from the line of Anjo Agarwal from CIBC . Please ask your question .
Speaker #12: Hi , thanks for taking my question . So I just have one question on your APAC region . So this quarter , WSP reported a strong EBITDA margin improvement in APAC .
Speaker #12: So could you just please provide some color on what is driving these margins specifically in APAC ?
Speaker #8: Look , we you know .
Speaker #4: We have been busy since the beginning of the year to set up the business for future success . That that's the way I would describe it .
Speaker #4: We want our Australian business and our New Zealand business to be as fit as possible , to be in a position to take advantage when the market picks up again .
Speaker #4: And as I said , we see early signs of that with the backlog growing in the mid to high single digits this year , that the business is fit to take advantage of that .
Speaker #12: Thank you . I'll get back in the queue .
Speaker #8: Thank you . Thank you .
Speaker #2: Thank you once again , as a reminder to ask a question , please press star one and one on your telephone and wait for your name to be announced .
Speaker #2: To withdraw your question , please press star one and one again . We have no further questions at this time , so I'll hand back to you for closing remarks .
Speaker #8: Well , thank you .
Speaker #4: I think there's one additional question .
Speaker #2: Yes. We just have a question that just arrived.
Speaker #8: Okay . We'll take it .
Speaker #2: Thank you . The questions come from the line of Jonathan Goldman from Scotiabank . Please ask your question .
Speaker #13: Hey , good morning guys . Thanks for squeezing me in . Just wanted to echo the comments about the phenomenal margin performance that was despite the restructuring , but when do you anticipate completing all the restructuring activities ?
Speaker #8: Well , we .
Speaker #4: Can't you know , we always , always streamline our business . But this year , the reason why we mention it , Jonathan , is because obviously it's been more predominant than perhaps other years .
Speaker #4: We had to do it . As I said in the Asia Pacific region , we've done it in our Asia region . We've done it in our Nordics region .
Speaker #4: We've done it in the field for our field workers in Canada and in the U.S. this summer. So because of the size of it, we highlighted it.
Speaker #4: We did highlight it . Do I think it's going to slow down ? I think we've done a lot of that work already .
Speaker #4: It's been done already . But but we should expect to continue to have some .
Speaker #13: Okay . That's good color . And then Alex , you kind of alluded to this a bit , I think in an earlier question , but have the government shutdowns in the US impacted the business significantly or at all ?
Speaker #13: I guess in Q4 and , you know , if we're not looking at organic growth , are there other metrics we can track or maybe ask for color about win rate for activity ?
Speaker #13: That might be a better marker of underlying demand in the US .
Speaker #4: I would say that so far , the shutdown has had a minimal impact , but I would I would then finish my sentence by saying , but so the point I'm making here is that it cannot go on forever .
Speaker #4: At some point in time , I'll give you an example . The Environmental Protection Agency that are issuing permits , 90% of the staff has been furloughed .
Speaker #4: So nothing is being done right now . So so for us right now . No , no or minimal impact . But if it was to go on for another month or two , I mean clearly the entire industry will suffer from this .
Speaker #4: So , so .
Speaker #8: You know .
Speaker #4: For now , good . But you know , more color to be provided in Q4 at the end when , when and if we are not seeing any further improvement in that regard .
Speaker #13: Okay . That makes sense . And maybe one more for me on M&A . And you talked about this earlier . And clearly you guys are always open for business .
Speaker #13: But is there any area or region vertical that you're looking at specifically or anyone now that you find more attractive versus other sort of sectors , whether it's power , nuclear or anything that you're looking at specifically ?
Speaker #8: Yeah .
Speaker #4: We are focused on at this moment on North America . So , so certainly despite all the noise that we hear in the tension between our two countries , Canada , US , WSP , we believe that one , if not the best place to to do work and business in our space is North America .
Speaker #4: So , so we continue to be focused on , on North America and obviously , if I had an opportunity to continue to grow our platform and and the sectors that we're trying to build at the moment , power , water , project management services .
Speaker #4: Transportation , even , I mean that obviously is something that I would like to to be in a position to do .
Speaker #13: Okay . We certainly have the platform to do it . Thanks for taking my questions .
Speaker #4: Thank you so much .
Speaker #5: Thanks , Jonathan .
Speaker #2: We are now going to proceed with our next question . And the questions come from the line of Maxime from National Bank of Canada capital Markets .
Speaker #2: Please ask a question .
Speaker #9: Hi . Good morning gentlemen .
Speaker #4: Hello , Max .
Speaker #9: Just just a .
Speaker #14: Quick one for me as most questions have been already asked in terms of UK growth acceleration , do you mind maybe providing a bit more color in terms of what's happening there ?
Speaker #14: Because , you know , the headlines overall seem to be less ebullient , but clearly you are finding ways to grow there . So we'd love to hear some comments .
Speaker #14: Thank you .
Speaker #4: Well , I think you're absolutely right . You know , we are the leading firm in the UK . And I'm saying that very humbly and respectfully to to our peer group .
Speaker #4: And you are right in saying that we're finding ways to grow at a very high rate this year . We have an incredible leadership team in the UK and our win rate is is outstanding .
Speaker #4: And , you know , we're going into 2026 with the same ambitions . So , so we'll see and more to come when we we we discuss our outlook for for 2026 .
Speaker #4: But I feel we're in a good position in the UK okay .
Speaker #14: That's great . So that's it for me . Thank you so much .
Speaker #5: Thanks , Max .
Speaker #15: Thanks , Max .
Speaker #2: We have no further questions . I will now hand back to you for closing remarks . Thank you .
Speaker #4: Well , thank you again for attending this call . And we look forward to updating you on our outlook in 2026 . During the next conference call .
Speaker #4: In the meantime , I'd like to wish you a great day . Thank you very much .
Speaker #2: This concludes today's conference call . Thank you all for participating . You may now disconnect your lines . Thank you and have a good rest of your day .