Q4 2025 AtkinsRéalis Group Inc Earnings Call

February 27, 2026

Operator: Good day, welcome to the AtkinsRéalis Q4 2025 conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question, please press star one one on your touchtone telephone. As a reminder, this call is being recorded. I would now like to turn the call over to Denis Jasmin, Vice President, Investor Relations. Please go ahead.

Speaker #2: Good day and welcome to the AtkinsRéalis Fourth Quarter 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

Speaker #2: To ask a question, please press *11 on your touchstone telephone. As a reminder, this call is being recorded. I would like to turn the call over to Denis Jasmin, Vice President Investor Relations.

Speaker #2: Please go ahead.

Speaker #3: Thank you, Michelle. Bonjour tout le monde. Good morning, everyone, and thank you for joining us today. For those dialing in, we invite you to view the slide presentation that we have posted in the Investors section of our website, which we will refer to during this call.

Denis Jasmin: Thank you, Michelle. Bonjour, tout le monde. Good morning, everyone. Thank you for joining us today. For those dialing in, we invite you to view the slide presentation that we have posted in the Investors section of our website, which we will refer to during this call. Today's call is also webcast. With me today are Ian Edwards, Chief Executive Officer, and Jeff Bell, Chief Financial Officer. Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all analysts have an opportunity to participate. You are welcome to return to the queue for any follow-up questions. I would like to draw your attention to slide 2. Comments made on today's call may contain forward-looking information.

Speaker #3: This call is also webcast. With me today are Ian Edwards, Chief Executive Officer, and Jeff Bell, Chief Financial Officer. Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all analysts have an opportunity to participate.

Denis Jasmin: Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all analysts have an opportunity to participate. You are welcome to return to the queue for any follow-up questions. I would like to draw your attention to slide 2. Comments made on today's call may contain forward-looking information.

Speaker #3: You are welcome to return to the queue for any follow-up questions. I would like to draw your attention to slide 2, 'Comments Made on Today's Call', which may contain forward-looking information.

Speaker #3: This information, by its nature, is subject to assumption, risk, and uncertainties, and as such, actual results may differ materially from the views expressed today.

Denis Jasmin: This information, by its nature, is subject to assumption, risks, and uncertainties, and as such, actual results may differ materially from the views expressed today. For further information on these assumptions, risks, and uncertainties, please consult the company's relevant filings on SEDAR+. These documents are also available on our website. Also, during the call, we may refer to certain non-IFRS financial measures. Reconciliation of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ and our website. Now I'll pass the call over to Ian Edwards. Ian?

Speaker #3: For further information on these assumptions, risks, and uncertainties, please consult the company's relevant filings on CETL+. These documents are also available on our website.

Speaker #3: Also, during the call, we may refer to certain non-IFRS financial measures. Reconciliations of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on CETL+ and our website.

Denis Jasmin: Also, during the call, we may refer to certain non-IFRS financial measures. Reconciliation of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ and our website. Now I'll pass the call over to Ian Edwards. Ian?

Speaker #3: And now I'll pass the call over to Ian Edwards. Ian?

Speaker #4: Thank you, Denis. Good morning, everyone, and thanks for joining us today. I'm going to begin today's call by providing an overview of our performance for the fourth quarter and the full year.

Ian Edwards: Thank you, Denis. Good morning, everyone, and thanks for joining us today. I'm going to begin today's call by providing an overview of our performance for Q4 and the full year before I pass it to Jeff to provide more detail on our financial results and our 2026 outlook. We will then open it up for questions. Before getting started, I wanted to highlight just how far we have come over the last several years. We set out in 2019 to transform AtkinsRéalis into a world-class engineering services and nuclear-focused company. We have now achieved that. We did this because we fundamentally believe that our capabilities and competitive advantage in these two areas will create the most value for shareholders.

Speaker #4: Before I pass it to Jeff to provide more detail on our financial results and our 2026 outlook, we will then open it up for questions.

Speaker #4: But before getting started, I wanted to highlight just how far we have come over the last several years. We set out in 2019 to transform AtkinsRéalis into a world-class engineering services and nuclear-focused company.

Ian Edwards: Before getting started, I wanted to highlight just how far we have come over the last several years. We set out in 2019 to transform AtkinsRéalis into a world-class engineering services and nuclear-focused company. We have now achieved that. We did this because we fundamentally believe that our capabilities and competitive advantage in these two areas will create the most value for shareholders.

Speaker #4: We have now achieved that. We did this because we fundamentally believe that our capabilities and competitive advantage in these two areas will create the most value for shareholders, and just as importantly, we've built a world-class culture and have attracted and retained exceptional talent that is vital for the long-term growth of the company.

Ian Edwards: Just as importantly, we've built a world-class culture and have attracted and retained exceptional talent that is vital for the long-term growth of the company. 2025 was a pivotal year for AtkinsRéalis, and I'm proud of what we've accomplished and excited to share those highlights with you today. Let's get started on slide 3. We concluded the first year of our delivering excellence and driving growth strategy with strong results. We remain focused on delivering for our clients and expanding our foothold in key growth markets, both organically and through strategic acquisitions. This resulted in strong revenue growth, continued progress on our margin enhancement program, and a record-breaking backlog. Our diversified portfolio enables us consistent performance across our primary business segments and regions through the economic cycle.

Speaker #4: 2025 was a pivotal year for AtkinsRéalis, and I'm proud of what we've accomplished and excited to share those highlights with you today. So let's get started on slide 3.

Speaker #4: We concluded the first year of our delivering excellence and driving growth strategy with strong results. We remain focused on delivering for our clients and expanding our foothold in key growth markets.

Ian Edwards: We remain focused on delivering for our clients and expanding our foothold in key growth markets, both organically and through strategic acquisitions. This resulted in strong revenue growth, continued progress on our margin enhancement program, and a record-breaking backlog. Our diversified portfolio enables us consistent performance across our primary business segments and regions through the economic cycle.

Speaker #4: Both organically and through strategic acquisitions, this resulted in strong revenue growth, continued progress on our margin enhancement program, and a record-breaking backlog. Our diversified portfolio enables us to deliver consistent performance across our primary business segments and regions through the economic cycle.

Speaker #4: This year, for AtkinsRéalis Services, we generated a record-high revenue of $11 billion, representing 16% organic growth and close to a 10% segment-adjusted EBIT to segment revenue ratio.

Ian Edwards: This year, for AtkinsRéalis Services, we generated a record high revenue of $11 billion, representing 16% organic growth and close to 10% segment adjusted EBIT to segment revenue ratio. Our record-breaking backlog for AtkinsRéalis Services now sits at $21 billion as at the end of 2025, which represents growth of 23% versus the end of 2024. It was an excellent first year of our 3-year strategy. The progress we made in 2025 is setting us up for continued growth across our regions and end markets for the foreseeable future. On slide 4, we outlined our success against our 2025 financial outlook and related strategic accomplishments. We completed the sale of our remaining interest in Highway 407 for $2.6 billion, which enabled debt repayment and ultimately led to achieving an investment-grade credit rating.

Speaker #4: Our record-breaking backlog for AtkinsRéalis services now sits at $21 billion as at the end of 2025, which represents growth of 23% versus the end of 2024.

Ian Edwards: It was an excellent first year of our 3-year strategy. The progress we made in 2025 is setting us up for continued growth across our regions and end markets for the foreseeable future. On slide 4, we outlined our success against our 2025 financial outlook and related strategic accomplishments. We completed the sale of our remaining interest in Highway 407 for $2.6 billion, which enabled debt repayment and ultimately led to achieving an investment-grade credit rating.

Speaker #4: It was an excellent first year of our three-year strategy, and the progress we made in '25 is setting us up for continued growth across our regions and end markets for the foreseeable future.

Speaker #4: On slide 4, we outlined our success against our 2025 financial outlook, and related strategic accomplishments. We completed the sale of our remaining interest in Highway 407 for $2.6 billion, which enabled debt repayment and ultimately led to achieving an investment-grade credit rating.

Speaker #4: We generated $461 million in net cash from operating activities, well above our target, highlighting the cash-generating nature of AtkinsRéalis. We deployed our advantaged financial position to return significant capital to shareholders via accretive share repurchases, and accelerated our strategy with three acquisitions.

Ian Edwards: We generated $461 million in net cash from operating activities, well above our target, highlighting the cash-generating nature of AtkinsRéalis. We deployed our advantaged financial position to return significant capital to shareholders via accretive share repurchases and accelerated our strategy with 3 acquisitions. We won several major nuclear contracts, including the Pickering refurbishment and the Darlington SMR execution phase, leading to an end-of-year record-breaking backlog for our nuclear business. We continue to focus on building our culture. We achieved a top quartile benchmark employee engagement score of 86%, while increasing our headcount by 1,800 employees. 2025 also marks the completion of the transformation of our business, focused on being a world-class engineering services and nuclear business, and our financial reporting will be adjusted to reflect this.

Speaker #4: We won several major nuclear contracts, including the Pickering refurbishment and the Darlington SMR execution phase, leading to an end-of-year record-breaking backlog for our nuclear business.

Speaker #4: And we continue to focus on building our culture. We achieved a top-quartile benchmark employee engagement score of 86% while increasing our headcount by 1,800 employees.

Ian Edwards: We continue to focus on building our culture. We achieved a top quartile benchmark employee engagement score of 86%, while increasing our headcount by 1,800 employees. 2025 also marks the completion of the transformation of our business, focused on being a world-class engineering services and nuclear business, and our financial reporting will be adjusted to reflect this.

Speaker #4: 2025 also marks the completion of the transformation of our business, focused on being a world-class engineering services and nuclear business. And our financial reporting will be adjusted to reflect this.

Speaker #4: Our fourth-quarter performance on slide 5 highlights our ability to both grow and operate more efficiently across the business. We delivered another strong quarter of AtkinsRéalis services revenue growth, up 17% year-over-year or 11% on an organic basis.

Ian Edwards: Our Q4 performance on slide 5 highlights our ability to both grow and operate more efficiently across the business. We delivered another strong quarter of AtkinsRéalis Services revenue growth, up 17% year-over-year, or 11% on an organic basis. Engineering Services regions revenue reached a quarterly record high of approximately CAD 2 billion, while nuclear revenue organically grew 28% to a quarterly record high of CAD 600 million. We also improved our engineering services regions EBITDA margin, highlighting the work we have done across the business, including leveraging technology and innovative delivery models, such as artificial intelligence, to improve productivity, safety, quality, and predictability. These new productivity enhancement technologies enabled us to find more innovative solutions and deliver more work for our clients.

Speaker #4: Engineering Services regions revenue reached a quarterly record high of approximately $2 billion, while Nuclear revenue organically grew 28% to a quarterly record high of $600 million.

Ian Edwards: We also improved our engineering services regions EBITDA margin, highlighting the work we have done across the business, including leveraging technology and innovative delivery models, such as artificial intelligence, to improve productivity, safety, quality, and predictability. These new productivity enhancement technologies enabled us to find more innovative solutions and deliver more work for our clients.

Speaker #4: We also improved our Engineering Services regions’ EBITDA margin, highlighting the work we've done across the business, including leveraging technology and innovative delivery models such as artificial intelligence to improve productivity, safety, quality, and predictability.

Speaker #4: These new productivity enhancement technologies enabled us to find more innovative solutions and deliver more work for our clients. Our total backlog reached a new record high this quarter, as our expertise across engineering services and nuclear continues to be in demand.

Ian Edwards: Our total backlog reached a new record high this quarter, as our expertise across engineering services and nuclear continues to be in demand. We announced the acquisition of C2AE, which advances our land and expand strategy in the US and is in line with our stated capital allocation priorities. Our pipeline of potential bolt-on acquisitions remains robust, and we would expect to announce further acquisitions in the coming quarters. We did all this while maintaining a robust balance sheet, underpinned by strong and growing free cash flow. We are extremely proud of our accomplishments this quarter, generating record revenues and backlog while improving margins and utilizing our strong operating cash flow for buybacks and to invest in M&A opportunities. Our delivering excellence, driving growth strategy is creating value for our shareholders. Turning to slide 6.

Speaker #4: We announced the acquisition of C2AE, which advances our land-and-expand strategy in the US and is in line with our stated capital allocation priorities.

Speaker #4: Our pipeline of potential bolt-on acquisitions remains robust, and we would expect to announce further acquisitions in the coming quarters. We did all this while maintaining a robust balance sheet, underpinned by strong and growing free cash flow.

Ian Edwards: We did all this while maintaining a robust balance sheet, underpinned by strong and growing free cash flow. We are extremely proud of our accomplishments this quarter, generating record revenues and backlog while improving margins and utilizing our strong operating cash flow for buybacks and to invest in M&A opportunities. Our delivering excellence, driving growth strategy is creating value for our shareholders. Turning to slide 6.

Speaker #4: We are extremely proud of our accomplishments this quarter—generating record revenues and backlog, while improving margins and utilizing our strong operating cash flow for buybacks.

Speaker #4: And to invest in M&A opportunities. Our delivering excellence, driving growth strategy is creating value for our shareholders. Turning to slide 6, fourth-quarter revenue in our engineering services regions business increased 16% year-over-year.

Ian Edwards: Q4 revenue in our Engineering Services regions business increased 16% year-over-year. On an organic revenue basis, Engineering Services regions grew 9% year-over-year. Segment adjusted EBITDA over net revenue margin was strong at 17.3% for Q4, up 100 basis points versus the prior-year period. The operating margin improvement initiatives continued to bear fruit through continued cost optimization, improved backlog gross margin, and delivering projects more efficiently. Notably, backlogs in all regions have increased for a total increase of 12% to CAD 13.2 billion versus our backlog as at 31 December 2024. Beginning on Slide 7, we provide an overview of each of our four regions and their performance this quarter.

Speaker #4: On an organic revenue basis, Engineering Services regions grew 9% year-over-year. Segment-adjusted EBITDA over net revenue margin was strong at 17.3% for the fourth quarter, up 100 basis points versus the prior year period.

Speaker #4: The operating margin improvement initiatives continue to bear fruit through continued cost optimization, improved backlog gross margin, and delivering projects more efficiently. Notably, backlogs in all regions have increased, for a total increase of 12% to $13.2 billion versus our backlog as at December 31, 2024.

Ian Edwards: Notably, backlogs in all regions have increased for a total increase of 12% to CAD 13.2 billion versus our backlog as at 31 December 2024. Beginning on Slide 7, we provide an overview of each of our four regions and their performance this quarter. In Canada, revenue in Q4 increased organically 14% year-over-year, while segment-adjusted EBITDA grew CAD 35 million, with a 17.6% margin, a 410 basis points increase, highlighting our continued efforts on our margin improvement plan. Backlog grew 9% year-over-year and now stands at CAD 7.9 billion.

Speaker #4: Beginning on slide 7, we provide an overview of each of our four regions and their performance this quarter. In Canada, revenue in the fourth quarter increased organically 14% year-over-year, while segment-adjusted EBITDA grew $35 million. The 17.6% margin is a 410 basis points increase, highlighting our continued efforts on our margin improvement plan.

Ian Edwards: In Canada, revenue in Q4 increased organically 14% year-over-year, while segment-adjusted EBITDA grew CAD 35 million, with a 17.6% margin, a 410 basis points increase, highlighting our continued efforts on our margin improvement plan. Backlog grew 9% year-over-year and now stands at CAD 7.9 billion. Last quarter, we emphasized an increased focus on growing our presence in the buildings and places, transportation, industrials, power and renewables, and defense end markets, as we believe these areas offer compelling near-term opportunities for our unique capabilities. Q4 performance proves the merits of that strategy, as our revenue growth was fueled by key wins in transportation and power and renewables market. Key wins this Q4 include the selection of Hydro One Networks for a multiyear owner's engineer mandate for the expansion of their Bowmanville switching station.

Speaker #4: Backlog grew 9% year-over-year and now stands at 7.9 billion dollars. Last quarter, we emphasized an increased focus on growing our presence in the buildings and places transportation, industrials, power renewables, and defense and markets, as we believe these areas offer compelling near-term opportunities for our unique capabilities.

Ian Edwards: Last quarter, we emphasized an increased focus on growing our presence in the buildings and places, transportation, industrials, power and renewables, and defense end markets, as we believe these areas offer compelling near-term opportunities for our unique capabilities. Q4 performance proves the merits of that strategy, as our revenue growth was fueled by key wins in transportation and power and renewables market. Key wins this Q4 include the selection of Hydro One Networks for a multiyear owner's engineer mandate for the expansion of their Bowmanville switching station.

Speaker #4: Fourth-quarter performance proves the merits of that strategy. As our revenue growth was fueled by key wins in transportation, power, power and renewables market. Key wins this quarter include the selection of hydro one networks for a multi-year owners-engineer mandate for the expansion of their Bowmanville switching station, our power and renewables experts will provide engineering and project program management services for the expansion of the substation, which is situated across from the Darlington nuclear generating station.

Ian Edwards: Our power and renewables experts will provide engineering and project program management services for the expansion of the substation, which is situated across from the Darlington Nuclear Generating Station. This win comes on the back of additional contracts we've secured in several major power and renewable initiatives that are important to the future of Canada. In the UK and Ireland, Q4 revenue grew 15% and organically grew 12% year-over-year, driven primarily by continued strong demand in aviation, water, and defense projects in the UK. Segment adjusted EBITDA grew to $103 million in the quarter, representing an 18.4% EBITDA margin. Our concentration in the region enables us the flexibility to position our people in areas with the highest demand, which augments operating margin leverage.

Speaker #4: This win comes on the back of additional contracts we've secured in several major power and renewable initiatives that are important to the future of Canada.

Speaker #4: In the UK and Ireland, fourth-quarter revenue grew 15%, and organically grew 12% year-over-year. Driven primarily by continued strong demand in aviation, water, and defense projects in the UK, segment-adjusted EBITDA grew to $103 million in the quarter, representing an 18.4% EBITDA margin.

Ian Edwards: In the UK and Ireland, Q4 revenue grew 15% and organically grew 12% year-over-year, driven primarily by continued strong demand in aviation, water, and defense projects in the UK. Segment adjusted EBITDA grew to $103 million in the quarter, representing an 18.4% EBITDA margin. Our concentration in the region enables us the flexibility to position our people in areas with the highest demand, which augments operating margin leverage.

Speaker #4: Our concentration in the region enables us the flexibility to position our people in areas with the highest demand which augments operating margin leverage. Backlog grew 16% year-on-year to $2 billion driven mainly by wins in transportation, rail, water, and aviation markets.

Ian Edwards: Backlog grew 16% year-over-year to $2 billion, driven mainly by wins in transportation, rail, water, and aviation markets. Our successful history working to improve Heathrow Airport, resulting in contracts for expansion work and technology services, while we continue to obtain key wins on the Network Rail infrastructure project. As an example, we secured the Havant Resignalling contract, a major program management commission on the TransPennine route within the Network Rail infrastructure project. As mentioned on prior calls, there have been several commitments by the UK government to increase funding for defense and infrastructure spending over the next decade. Demand in power and renewables is rising, with early-stage activity in grid investments, while the established long-term UK industrial investment strategy will yield enhanced opportunities in the industrials end market. Q4, USLA revenue increased 23%.

Speaker #4: Our successful history working to improve Heathrow Airport resulting in contracts for expansion work and technology services while we continue to obtain key wins on the network rail infrastructure project.

Speaker #4: As an example, we secured the Havant resignaling ing contract, a major program management commission on the Trends Penang route within the network rail infrastructure project.

Ian Edwards: As mentioned on prior calls, there have been several commitments by the UK government to increase funding for defense and infrastructure spending over the next decade. Demand in power and renewables is rising, with early-stage activity in grid investments, while the established long-term UK industrial investment strategy will yield enhanced opportunities in the industrials end market. Q4, USLA revenue increased 23%.

Speaker #4: And as mentioned on prior calls, there have been several commitments by the UK government to increase funding for defense and infrastructure spending over the next decade.

Speaker #4: Demand in power and renewables is rising, with early-stage activity in grid investments, while the established long-term UK industrial investment strategy will yield enhanced opportunities in the industrials end market.

Speaker #4: Fourth quarter USLA revenue increased 23%. However, excluding recent acquisitions and a favorable FX impact, organic revenue growth was flat year-over-year, as softness within our global minerals and metals sector continued to weigh on the results of our fourth quarter.

Ian Edwards: However, excluding recent acquisitions and a favorable FX impact, organic revenue growth was flat year-over-year. A softness within our global minerals and metals sector continued to weigh on the results of our Q4. If we exclude minerals and metals business, the underlying engineering services business in the US grew organically in the low single-digit percentages. Segment adjusted EBITDA was $55 million, which translates to a 13.8 operating margin, an improvement of 120 basis points from the previous year. Margin improvement was driven by sustained project execution and overhead controls. The region's backlog rose 15% year-over-year to $1.8 billion, reflecting our continued focus on client engagement and the strength of our integrated end-to-end capabilities.

Speaker #4: If we exclude minerals and metals business, the underlying engineering services business in the US grew organically in the low signal digit percentages. Segment-adjusted EBITDA was 55 million dollars, which translates to a 13.8% operating margin and improvement of 120 basis points from the previous year.

Ian Edwards: Segment adjusted EBITDA was $55 million, which translates to a 13.8 operating margin, an improvement of 120 basis points from the previous year. Margin improvement was driven by sustained project execution and overhead controls. The region's backlog rose 15% year-over-year to $1.8 billion, reflecting our continued focus on client engagement and the strength of our integrated end-to-end capabilities.

Speaker #4: Margin improvement was driven by sustained project execution and overhead control. The region's backlog rose 15% year-over-year to $1.8 billion, reflecting our continued focus on client engagement and the strength of our integrated end-to-end capabilities.

Speaker #4: As we are deepening our relationship with David Evans and C2AE, we are seeing opportunities to strengthen our capabilities in transportation projects across the country, including highway and aviation work.

Ian Edwards: As we are deepening our relationship with David Evans and C2AE, we are seeing opportunities to strengthen our capabilities in transportation projects across the country, including highway and aviation work. Looking out, we anticipate continued growth across various end markets in the US, where we're expanding our presence. The federal government is funding transportation growth by increasing investment budgets of the Department of Transportation. Additionally, various water infrastructure programs are being allocated billions of dollars annually to sustain multi-year project pipelines. Our success in water infrastructure projects in other markets positions us well to capture our fair share of these projects. While the US continues to evolve, we remain focused on execution. We are strengthening our pipeline, aligning our talent and capabilities, and deliberately landing and expanding into unpenetrated, high-growth regions across the country.

Speaker #4: Looking out, we anticipate continued growth across various end markets in the US where we're expanding our presence. The federal government is funding transportation growth by increasing investment budgets of the Department of Transportation.

Speaker #4: Additionally, various water infrastructure programs are being allocated billions of dollars annually to sustain multi-year project pipelines. Our success in water infrastructure projects in other markets positions us well to capture our fair share of these projects.

Ian Edwards: Additionally, various water infrastructure programs are being allocated billions of dollars annually to sustain multi-year project pipelines. Our success in water infrastructure projects in other markets positions us well to capture our fair share of these projects. While the US continues to evolve, we remain focused on execution. We are strengthening our pipeline, aligning our talent and capabilities, and deliberately landing and expanding into unpenetrated, high-growth regions across the country.

Speaker #4: While in the US, while the US continues to evolve, we remain focused on execution. We are strengthening our pipeline, aligning our talent and capabilities, and deliberately landing and expanding into unpenetrated, high-growth regions.

Speaker #4: Across the country. In EMEA, revenue grew organically by 9%, while segment-adjusted EBITDA rose to $40 million, representing a 21% adjusted EBITDA margin over net revenue.

Ian Edwards: In EMEA, revenue organically by 9%, while segment-adjusted EBITDA rose to CAD 40 million, representing a 21% adjusted EBITDA margin over net revenue. In Q4, we acquired ADG Capital, expanding our scale in Australia by adding approximately 250 professionals to the team. This also strengthens our ability to capture major infrastructure investment opportunities and grow in end markets such as defense and power and renewables. Total backlog in EMEA was approximately CAD 1.5 billion, up 18% versus 31 December 2024, mainly driven by new bookings in the buildings and places and industrial end markets. As highlighted last quarter, while buildings and places opportunity in the Middle East continues at pace, we're seeing increased demand for our services in large-scale transportation projects.

Speaker #4: In the fourth quarter, we acquired ADG Capital, expanding our scale in Australia by adding approximately 250 professionals to the team. This also strengthens our ability to capture major infrastructure investment opportunities and grow in end markets such as defense, power, and renewables.

Speaker #4: Total backlog in EMEA was approximately $1.5 billion, up 18% versus December 31, 2024, mainly driven by new bookings in the Buildings and Places and Industrial end markets.

Ian Edwards: Total backlog in EMEA was approximately CAD 1.5 billion, up 18% versus 31 December 2024, mainly driven by new bookings in the buildings and places and industrial end markets. As highlighted last quarter, while buildings and places opportunity in the Middle East continues at pace, we're seeing increased demand for our services in large-scale transportation projects.

Speaker #4: And as highlighted last quarter, while buildings and places opportunity in the Middle East continues at pace, we're seeing increased demand for our services in large-scale transportation projects.

Speaker #4: For example, we were recently contracted to support the development of the Metro Blue Line in Dubai. In Asia, we're seeing growing opportunities for our services in the infrastructure market.

Ian Edwards: For example, we were recently contracted to support the development of the Metro Blue Line in Dubai. In Asia, we're seeing growing opportunities for our services in the infrastructure market. In Australia, we are focusing on capturing revenue synergies following our acquisition of ADG, while also continuing to pursue opportunities that arise in the defense sector and ahead of the 2032 Summer Olympics in Brisbane. I'd like to now move to slide 11 and discuss our Q4 results for our nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 28% compared to Q4 2024, this creating a new baseline for future growth. Our nuclear backlog totaled $5 billion, 56% higher than our backlog as at 31 December 2024.

Speaker #4: In Australia, we are focusing on capturing revenue synergies following our acquisition of ADG while also continuing to pursue opportunities that arise in the defense sector and ahead of the 2032 Summer Olympics in Brisbane.

Ian Edwards: I'd like to now move to slide 11 and discuss our Q4 results for our nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 28% compared to Q4 2024, this creating a new baseline for future growth. Our nuclear backlog totaled $5 billion, 56% higher than our backlog as at 31 December 2024.

Speaker #4: I'd like to now move to slide 11 and discuss our fourth quarter results for our nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 28% compared to the fourth quarter of 2024.

Speaker #4: This is creating a new baseline for future growth. On nuclear backlog, it totaled $5 billion, which is 56% higher than our backlog as of December 31, 2024.

Speaker #4: Segment-adjusted EBIT grew 17% to 66 million dollars and segment-adjusted EBIT margin was 11%. Segment-adjusted EBITDA grew 16% year-over-year with a 24% margin. On slide 12, we highlight some achievements across our nuclear can-do and services portfolios.

Ian Edwards: Segment adjusted EBIT grew 17% to CAD 66 million, and segment adjusted EBIT margin was 11%. Segment adjusted EBITDA grew 16% year-over-year, with a 24% margin. On slide 12, we highlight some achievements across our nuclear CANDU and services portfolios. In our CANDU business, our work on the final reactor at Darlington's refurbishment has been completed, and the reactor was handed back to OPG to reconnect to the grid ahead of schedule and under budget. We also have several projects ramping up in Canada and abroad, while we continue excellent progress on life extension programs that give us excitement about our near-term revenues. In Canada, Prime Minister Carney announced a major federal investment to accelerate Canada's clean energy future, with the Darlington new SMR nuclear project as a cornerstone initiatives, where we are part of the core delivery team.

Speaker #4: In our can-do business, our work on the final reactor at Darlington's refurbishment has been completed, and the reactor was handed back to OPG to reconnect to the grid ahead of schedule and under budget.

Speaker #4: We also have several projects ramping up in Canada and abroad, while we continue excellent progress on life extension programs that give us excitement about our near-term revenues.

Ian Edwards: We also have several projects ramping up in Canada and abroad, while we continue excellent progress on life extension programs that give us excitement about our near-term revenues. In Canada, Prime Minister Carney announced a major federal investment to accelerate Canada's clean energy future, with the Darlington new SMR nuclear project as a cornerstone initiatives, where we are part of the core delivery team.

Speaker #4: In Canada, Prime Minister Carney announced a major federal investment to accelerate Canada's clean energy future, with the Darlington New SMR nuclear project as a cornerstone initiative, where we are part of the core delivery team.

Speaker #4: This project will expand electricity generation, strengthen national energy security, and position Canada as a global leader in nuclear innovation. The Ontario government has approved Ontario Power's power generation plan to refurbish four CANDU nuclear reactors at Pickering.

Ian Edwards: This project will expand electricity generation, strengthen national energy security, and position Canada as a global leader in nuclear innovation. The Ontario government has approved Ontario Power Generation's plan to refurbish four CANDU nuclear reactors at Pickering, clearing the way for a start to the execution phase of the project and where our scope of work continues to expand. For services, we secured a 15-year framework at Sellafield for nuclear decommissioning and waste management. Additionally, we signed a multi-year contract with Rolls-Royce to deliver nuclear propulsion and engineering capabilities to support the UK's growing submarines program under the UK Defense Nuclear Expertise Enterprise. Turning to slide 13, you can see our pictorial reminder of these near-term CANDU revenue opportunities within our nuclear business. We've been working hard to bolster our backlog with high-quality wins, which reinforces the bright future we have ahead.

Speaker #4: Clearing the way for a start to the execution phase of the project, and where our scope of work continues to expand. For Services, we secured a 15-year framework at Sellafield for nuclear decommissioning and waste management.

Speaker #4: Additionally, we signed a multi-year contract with Rolls-Royce to deliver nuclear propulsion and engineering capabilities to support the UK's growing submarines program under the UK Defense Nuclear Expertise Enterprise.

Ian Edwards: Additionally, we signed a multi-year contract with Rolls-Royce to deliver nuclear propulsion and engineering capabilities to support the UK's growing submarines program under the UK Defense Nuclear Expertise Enterprise. Turning to slide 13, you can see our pictorial reminder of these near-term CANDU revenue opportunities within our nuclear business. We've been working hard to bolster our backlog with high-quality wins, which reinforces the bright future we have ahead.

Speaker #4: Turning to slide 13, you can see our pictorial reminder of these near-term can-do revenue opportunities within our nuclear business. We've been working hard to bolster our backlog with high-quality wins, which reinforces the bright future we have ahead.

Speaker #4: As you can see on the slide, we're seeing an increased opportunities to sign can-do Monarch or EC6 new bills across Canada and abroad and have commenced the licensing process for can-do in the US.

Ian Edwards: As you can see on the slide, we're seeing increased opportunities to sign CANDU MONARK or EC6 new builds across Canada and abroad, and have commenced the licensing process for CANDU in the US. During my time at Davos, I had highly productive conversations amid a surge of global headlines, highlighting the renewed interest in nuclear power development. These discussions reinforced the strong momentum behind nuclear as a vital, clean energy solution and underscored the significant growth opportunities ahead for our business. Moving to slide 14 and our Linxon LSTK projects and capital businesses. Moving forward, in 2026, we are combining these segments into one reporting segment, referred to as all other segments. This is a strategic, streamlining financial disclosure that will allow our financial reporting to focus on the robust engineering services and nuclear capabilities of the business, the key drivers of long-term growth for AtkinsRéalis.

Speaker #4: During my time at Davos, I had highly productive conversations amid a surge of global headlines highlighting the renewed interest in nuclear power development. These discussions reinforced the strong momentum behind nuclear as a vital clean energy solution and underscored the significant growth opportunities ahead for our business.

Ian Edwards: These discussions reinforced the strong momentum behind nuclear as a vital, clean energy solution and underscored the significant growth opportunities ahead for our business. Moving to slide 14 and our Linxon LSTK projects and capital businesses. Moving forward, in 2026, we are combining these segments into one reporting segment, referred to as all other segments.

Speaker #4: Now moving to slide 14 and our links on LSEC projects and capital businesses. Moving forward in 26, we are combining these segments into one reporting segment referred to as all other segments.

Speaker #4: This is a strategic streamlining financial disclosure that will allow our financial reporting to focus on the robust engineering services and nuclear capabilities of the business.

Ian Edwards: This is a strategic, streamlining financial disclosure that will allow our financial reporting to focus on the robust engineering services and nuclear capabilities of the business, the key drivers of long-term growth for AtkinsRéalis. In our Linxon segment, revenue in the quarter grew 2% and realized 60 basis points of EBIT margin expansion year-over-year. We generated a record adjusted EBIT. Backlog grew 33% to CAD 2.8 billion, reflecting Linxon's continued growth and strong market position.

Speaker #4: The key drivers of long-term growth for AtkinsRéalis. In our links on segment, revenue in the quarter grew 2% and realized 60 basis points of EBIT margin expansion year-over-year.

Ian Edwards: In our Linxon segment, revenue in the quarter grew 2% and realized 60 basis points of EBIT margin expansion year-over-year. We generated a record adjusted EBIT. Backlog grew 33% to CAD 2.8 billion, reflecting Linxon's continued growth and strong market position. On LSTK projects, we've now substantially completed two of the three remaining light rail transit systems. The Eglinton project was substantially completed in Q4 and then opened for operation by the client in February 2024. Our Q4 results include additional costs to close out these projects. Before turning the call over to Jeb, I'd like to touch on AI and how we think about it at AtkinsRéalis. We see AI as a strong enabler in our business. We do not see it as a disruptor.

Speaker #4: We generated a record adjusted EBIT and backlog grew 33% to 2.8 billion dollars reflecting links on continued growth and strong market position. On LSTK projects, we've now substantially completed two of the three remaining light rail transit systems, the Eglinton project was substantially completed in the fourth quarter and then opened for operation.

Ian Edwards: On LSTK projects, we've now substantially completed two of the three remaining light rail transit systems. The Eglinton project was substantially completed in Q4 and then opened for operation by the client in February 2024. Our Q4 results include additional costs to close out these projects. Before turning the call over to Jeb, I'd like to touch on AI and how we think about it at AtkinsRéalis. We see AI as a strong enabler in our business. We do not see it as a disruptor.

Speaker #4: By the client in February of this year. Our fourth quarter results include additional costs to close out these projects. So, before turning the call over to Jeff, I'd like to touch on AI and how we think about it at AtkinsRéalis.

Speaker #4: We see AI as a strong enabler in our business. We do not see it as a disruptor. The demand for engineering in infrastructure and nuclear is at an all-time high, and this will continue.

Ian Edwards: The demand for engineering in infrastructure and nuclear is at an all-time high. This will continue. Engineering is a judgment-based profession that uses data and design to apply it to the built environment. In our case, on nuclear power plants and complex structures. It is a highly regulated industry, where engineers are liable and held accountable for the safety, quality, sustainability, and performance of assets like roads, bridges, buildings, and nuclear power plants. Engineering is the creative application of math, science, and empirical evidence to design, build, and maintain infrastructure and nuclear power assets. We have a strong commitment to make our business more efficient. We think of AI as essential to meet growth demands ahead in nuclear and engineering services.

Speaker #4: Engineering is a judgment-based profession that uses data and design to apply it to the built environment and, in our case, on nuclear power plants and complex structures.

Speaker #4: It is a highly regulated industry where engineers are liable and held accountable for the safety, quality, sustainability, and performance of assets like roads, bridges, buildings, and nuclear power plants.

Speaker #4: Engineering is the creative application of math, science, and empirical evidence to design, build, and maintain infrastructure and nuclear power assets. We have a strong commitment to make our business more efficient, and we think of AI as essential to meet growth demands ahead in nuclear and engineering services.

Ian Edwards: Engineering is the creative application of math, science, and empirical evidence to design, build, and maintain infrastructure and nuclear power assets. We have a strong commitment to make our business more efficient. We think of AI as essential to meet growth demands ahead in nuclear and engineering services.

Speaker #4: For design work done at the conceptual level, we see several areas of application of AI that deliver real improvement and we are already deploying a suite of tools to aid design, modeling, surveying, and even safety.

Ian Edwards: For design work done at the conceptual level, we see several areas of application of AI that deliver real improvement, and we are already deploying a suite of tools to aid design, modeling, surveying, and even safety. In bidding and work winning, we have new tools to look for data, people, track record in order to win. Like most companies, we've also introduced AI in functional support tasks and data collection to make processes cheaper, quicker, better. We also implemented specific tools to certain tasks like HR, safety, inspections, taxes, finance, and many others. Cost savings will be made, and this will and should lead to margin expansion. We do not see AI affecting our medium and long-term growth, as demand on our engineering services and nuclear capabilities continues to grow.

Speaker #4: In bidding and work winning, we have new tools to look for data people, track record in order to win. Like most companies, we've also introduced AI in functional support tasks and data collection to make processes cheaper, quicker, better.

Speaker #4: We also implemented specific tools to certain tasks like HR, safety, inspections, taxes, finance, and many others. Cost savings will be made and this will and should lead to margin expansion.

Ian Edwards: We also implemented specific tools to certain tasks like HR, safety, inspections, taxes, finance, and many others. Cost savings will be made, and this will and should lead to margin expansion. We do not see AI affecting our medium and long-term growth, as demand on our engineering services and nuclear capabilities continues to grow. With that, I'll now turn over to Jeff to discuss the financial highlights and the 2026 outlook.

Speaker #4: We do not see AI affecting our medium- and long-term growth, as demand for our engineering services and nuclear capabilities continues to grow. So with that, I'll now turn it over to Jeff to discuss the financial highlights and the 2026 outlook.

Ian Edwards: With that, I'll now turn over to Jeff to discuss the financial highlights and the 2026 outlook.

Speaker #1: Thank you, Ian. Good morning, everyone. Turning to slide 16, total revenues in the quarter increased 13% year over year to $2.9 billion, which included revenue increases of 16% in PS and PM, comprised of increases of 16% in engineering services, 29% in nuclear, and 2% in Linxon.

Jeff Bell: Thank you, Ian. Good morning, everyone. Turning to Slide 16, total revenues in the quarter increased 13% year-over-year to $2.9 billion, which included revenue increases of 16% in PS&PM, comprised of increases of 16% in engineering services, 29% in nuclear, and 2% in Linxon. These higher revenues were the primary driver in a total segment-adjusted EBIT increase of 10% to $238 million. Total corporate SG&A expenses totaled $35 million in the quarter, a decrease of 38%. Acquisitions related and integration costs were $24 million in the quarter, mainly due to the acquisitions completed in the year and to a change in the fair value of the contingent consideration payable related to the Linxon acquisition in 2018.

Speaker #1: These higher revenues were the primary driver in a total segment adjusted EBIT increase of 10% to $238 million. Total corporate SG&A expenses totaled $35 million in the quarter, a decrease of 38%.

Jeff Bell: Total corporate SG&A expenses totaled $35 million in the quarter, a decrease of 38%. Acquisitions related and integration costs were $24 million in the quarter, mainly due to the acquisitions completed in the year and to a change in the fair value of the contingent consideration payable related to the Linxon acquisition in 2018.

Speaker #1: Acquisitions-related and integration costs were $24 million in the quarter, mainly due to the acquisitions completed in the year and to a change in the fair value of the contingent consideration payable related to the Linxon acquisition in 2018.

Speaker #1: Net financial expenses for the quarter were lower at $11 million compared to $41 million in Q4 2024, mainly due to the repayment of all outstanding borrowings under the Lacasse loan and the company's term loan in the second quarter, and higher financial income due to higher cash balances.

Jeff Bell: Net financial expenses for the quarter were lower at CAD 11 million, compared to CAD 41 million in Q4 2024, mainly due to the repayment of all outstanding borrowings under the La Caisse loan and the company's term loan in Q2, and higher financial income due to higher cash balances. The IFRS diluted EPS this quarter increased by 90% to CAD 0.57, compared to CAD 0.30 in Q4 2024, while the adjusted EPS from PS&PM increased 273% to CAD 0.97 per diluted share, compared to CAD 0.26 in Q4 last year. On Slide 17, you can see the selected financial metrics for the full year.

Speaker #1: The IFRS diluted EPS this quarter increased by 90% to $57. Compared to $0.30 in Q4 2024, while the adjusted EPS from PS and PM increased $273% to $97 per diluted share, compared to $26 in the fourth quarter last year.

Speaker #1: On slide 17, you can see the selected financial metrics for the full year. Total revenues for the year increased by 14% to $11 billion compared to 2024, while total segment adjusted EBIT increased by 15% to $973 million.

Jeff Bell: Total revenues for the year increased by 14% to $11 billion compared to 2024, while total segment-adjusted EBIT increased by 15% to $973 million, which was comprised of $1 billion for AtkinsRéalis Services, $46 million for capital, and negative $112 million for LSTK Projects. Total corporate SG&A expenses decreased to $145 million, in line with our expectations. We anticipate that these expenses will decrease again in 2026 to between $125 million and $135 million. Restructuring and transformation costs totaled $112 million, higher than last year, mainly due to efforts relating to operating margin improvement initiatives, including the rollout of the company's global ERP system and workforce optimization as part of ongoing operational improvement initiatives.

Speaker #1: This was comprised of $1 billion for AtkinsRéalis services, $46 million for capital, and negative $112 million for LSTK projects. Total corporate SG&A expenses decreased to $145 million, in line with our expectations.

Speaker #1: We anticipate that these expenses will decrease again in 2026 to between $125 million and $135 million. Restructuring and transformation costs totaled $112 million, higher than last year, mainly due to efforts relating to operating margin improvement initiatives, including the rollout of the company's global ERP system and workforce optimization as part of ongoing operational improvement initiatives.

Jeff Bell: We anticipate that these expenses will decrease again in 2026 to between $125 million and $135 million. Restructuring and transformation costs totaled $112 million, higher than last year, mainly due to efforts relating to operating margin improvement initiatives, including the rollout of the company's global ERP system and workforce optimization as part of ongoing operational improvement initiatives.

Speaker #1: Net financial expenses for the year were $110 million, compared to $163 million in 2024, mainly due to a lower level of recourse debt and lower interest rates.

Jeff Bell: Net financial expenses for the year were CAD 110 million, compared to CAD 163 million in 2024, mainly due to a lower level of recourse debt and lower interest rates. The income tax expense amount was higher than 2024, mainly due to the tax on the gain of the sale of our interest in Highway 407. The effective tax rate was approximately 13% in 2025, lower than the company's Canadian statutory income tax rate, mainly due to revised estimates on certain tax liabilities, the recognition of previously unrecognized deferred income tax assets on loss carryforwards, and geographic mix. For 2026, we would expect the company's effective tax rate to be closer to our statutory tax rate and to be between 25% and 30%.

Speaker #1: The income tax expense amount was higher than in 2024, mainly due to the tax on the gain from the sale of our interest in Highway 407.

Speaker #1: The effective tax rate was approximately 13% in 2025, lower than the company's Canadian statutory income tax rate, mainly due to revised estimates on certain tax liabilities.

Jeff Bell: The effective tax rate was approximately 13% in 2025, lower than the company's Canadian statutory income tax rate, mainly due to revised estimates on certain tax liabilities, the recognition of previously unrecognized deferred income tax assets on loss carryforwards, and geographic mix. For 2026, we would expect the company's effective tax rate to be closer to our statutory tax rate and to be between 25% and 30%.

Speaker #1: The recognition of previously unrecognized deferred income tax assets on loss carryforwards and geographic mix. For 2026, we would expect the company's effective tax rate to be closer to our statutory tax rate and to be between 25% and 30%.

Speaker #1: Net income totaled $2.6 billion, or $15.41 per diluted share, which included the gain on disposal of the company's interest in the Highway 407. But on an adjusted EPS from PS and PM, a better reflection of the company's underlying performance, EPS increased 88% to $3.36 per diluted share, compared to $1.79 last year.

Jeff Bell: Net income totaled CAD 2.6 billion, or CAD 15.41 per diluted share, which included the gain on disposal of the company's interest in the Highway 407. On an adjusted EPS from PS&PM, a better reflection of the company's underlying performance, EPS increased 88% to CAD 3.36 per diluted share, compared to CAD 1.79 last year. As Ian mentioned earlier, backlog ended the year at a record high of CAD 21.2 billion, 21% higher than the end of 2024, with strong book-to-bill ratios in all businesses, engineering services regions, nuclear, and Linxon. Let's now move on to Slide 18 in free cash flow.

Speaker #1: And as Ian mentioned earlier, backlog ended the year at a record high of $21.2 billion—21% higher than at the end of 2024—with strong book-to-bill ratios in all businesses: Engineering Services, Regions, Nuclear, and Linxon.

Speaker #1: Let's now move on to slide 18 in free cash flow. Net cash generated from operating activities was very strong in the fourth quarter, resulting in $461 million of operating cash for the year.

Jeff Bell: Net cash generated from operating activities was very strong in the Q4, resulting in $461 million of operating cash for the year, driven by stronger AtkinsRéalis Services' EBITDA delivery and tight working capital management. LSTK Projects' net cash was positive $81 million in the Q4, mainly due to the collection of money owed for a completed project, resulting in a negative net cash of $25 million for the full year. We expect LSTK Projects' cash flows to be approximately negative $100 to 150 million in 2026 as we complete the last light rail transit system legacy construction contract, settle out final accounts, and pursue claims outstanding.

Speaker #1: Driven by stronger AtkinsRéalis Services EBITDA delivery and tight working capital management. LSTK project net cash was positive $81 million in the fourth quarter, mainly due to the collection of money owed for a completed project, resulting in a negative net cash of $25 million for the full year.

Jeff Bell: We expect LSTK Projects' cash flows to be approximately negative $100 to 150 million in 2026 as we complete the last light rail transit system legacy construction contract, settle out final accounts, and pursue claims outstanding. After CapEx of CAD 177 million, which included approximately CAD 64 million for the development of MONARK and the payment of lease liabilities of CAD 86 million, our free cash flow stood at positive CAD 199 million for the year.

Speaker #1: We expect LSTK project's cash flows to be approximately negative $100 million to $150 million in 2026, as we complete the last Light Rail Transit System legacy construction contract, settle out final accounts, and pursue claims outstanding.

Speaker #1: After CapEx of $177 million, which included approximately $64 million for the development of Monarch and the payment of lease liabilities of $86 million, our free cash flow stood at a positive $199 million for the year.

Jeff Bell: After CapEx of CAD 177 million, which included approximately CAD 64 million for the development of MONARK and the payment of lease liabilities of CAD 86 million, our free cash flow stood at positive CAD 199 million for the year. We expect the CapEx to be in the range of CAD 175 to 200 million for the full year of 2026. In 2026, we expect to generate approximately CAD 500 million of net cash from operating activities. I'd like to now turn to slide 19 in our 2026 outlook.

Speaker #1: We expect CapEx to be in the range of $175 million to $200 million for the full year of 2026. In 2026, we expect to generate approximately $500 million of net cash from operating activities.

Jeff Bell: We expect the CapEx to be in the range of CAD 175 to 200 million for the full year of 2026. In 2026, we expect to generate approximately CAD 500 million of net cash from operating activities. I'd like to now turn to slide 19 in our 2026 outlook. Given our increased backlog and strong pipeline of opportunities, we are expecting an organic revenue growth rate of between 5% and 7% compared to 2025 for the engineering services regions, with an anticipated segment adjusted EBITDA to net revenue margin of between 16.5% and 17.5%.

Speaker #1: I'd like to now turn to slide 19 in our 2026 outlook. Given our increased backlog and strong pipeline of opportunities, we are expecting an organic revenue growth rate of between 5 and 7 percent, compared to 2025, for the engineering services regions, with an anticipated segment adjusted EBITDA to net revenue margin of between 16 and a half and 17 and a half percent.

Jeff Bell: Given our increased backlog and strong pipeline of opportunities, we are expecting an organic revenue growth rate of between 5% and 7% compared to 2025 for the engineering services regions, with an anticipated segment adjusted EBITDA to net revenue margin of between 16.5% and 17.5%. As for the nuclear segment, despite very strong growth in 2025, we expect revenues to continue to grow and reach approximately $2.5 billion for the full year, 2026. Adjusted EBIT to gross revenue margin is expected to be similar to 2025 and be in the range of 11% to 12%, which we expect will equate to a segment-adjusted EBITDA to net revenue margin in the mid-twenty percents.

Jeff Bell: As for the nuclear segment, despite very strong growth in 2025, we expect revenues to continue to grow and reach approximately $2.5 billion for the full year, 2026. Adjusted EBIT to gross revenue margin is expected to be similar to 2025 and be in the range of 11% to 12%, which we expect will equate to a segment-adjusted EBITDA to net revenue margin in the mid-twenty percents.

Speaker #1: As for the nuclear segment, despite very strong growth in 2025, we expect revenues to continue to grow and reach approximately $2.5 billion for the full year 2026.

Speaker #1: Adjusted EBIT to gross revenue margin is expected to be similar to 2025 and be in the range of $11 to 12 percent, which we expect will equate to a segment adjusted EBITDA to net revenue margin in the mid-20%s.

Speaker #1: As we've seen in previous years, our engineering services regions business profitability is affected by some seasonality, and we would expect the company's adjusted EBITDA to be more weighted to the second half of 2026, as shown on the bright on the bottom right-hand side of the slide.

Jeff Bell: As we've seen in previous years, our engineering services regions business profitability is affected by some seasonality, and we would expect the company's adjusted EBITDA to be more weighted to the second half of 2026, as shown on the bottom right-hand side of the slide. Turning to slide 20. Following a lower than expected organic revenue growth in the engineering services regions business in 2025, but considering the continued backlog increase and strong global demand for the company's capabilities, we are adjusting the engineering services regions organic revenue growth CAGR for 2025 to 2027 to between 5% and 7%.

Speaker #1: Turning to slide 20, following a lower-than-expected organic revenue growth in the Engineering Services regions business in 2025, but considering the continued backlog increase and strong global demand for the company's capabilities, we are adjusting the Engineering Services regions organic revenue growth CAGR for 2025 to 2027 to between 5 and 7 percent.

Jeff Bell: Turning to slide 20. Following a lower than expected organic revenue growth in the engineering services regions business in 2025, but considering the continued backlog increase and strong global demand for the company's capabilities, we are adjusting the engineering services regions organic revenue growth CAGR for 2025 to 2027 to between 5% and 7%.

Speaker #1: On the other hand, as a result of the strong financial and operating performance of the nuclear segment during 2025, the significant increase in the nuclear backlog, and the company's positive outlook regarding the global demand for our services, we are raising the nuclear annual revenue target to between $2.6 and $3 billion by 2027.

Jeff Bell: On the other hand, as a result of the strong financial and operating performance of the nuclear segment during 2025, the significant increase in the nuclear backlog and the company's positive outlook regarding the global demand for our services, we are raising the nuclear annual revenue target to between $2.6 and $3 billion by 2027. The company is also adjusting its nuclear segment adjusted EBIT to segment revenue ratio to between 11% and 13% from the previous range of between 12% and 14%, reflected of the expected business mix over the next 2 years. We continue to believe that the long-term profitability of the nuclear business will be between 12% and 14%. I'd like to now turn to my final slide 21.

Jeff Bell: The company is also adjusting its nuclear segment adjusted EBIT to segment revenue ratio to between 11% and 13% from the previous range of between 12% and 14%, reflected of the expected business mix over the next 2 years. We continue to believe that the long-term profitability of the nuclear business will be between 12% and 14%. I'd like to now turn to my final slide 21.

Speaker #1: The company is also adjusting its nuclear segment adjusted EBIT to segment revenue ratio to between 11 and 13 percent, from the previous range of between 12 and 14 percent, reflective of the expected business mix over the next two years.

Speaker #1: We continue to believe that the long-term profitability of the nuclear business will be between 12 and 14 percent. I'd like to now turn to my final slide, slide 21.

Speaker #1: As Ian mentioned, we have accomplished a lot over the last several years to transform the business, and therefore, in 2026, we will be streamlining our financial disclosure.

Jeff Bell: As Ian mentioned, we have accomplished a lot over the last several years to transform the business, therefore, in 2026, we will be streamlining our financial disclosure. The company has, effective 1 January 2026, combined its Linxon, LSTK projects and capital operating segments into a single reportable segment, referred to as All Other Segments, as Ian mentioned earlier. The reportable segments of the company that are part of the engineering services regions, Canada, the UK and Ireland, US and Latin America, and Asia, the Middle East, and Australia, and the nuclear segment, will remain unchanged. At the same time, taking into account the fact that the capital segment will no longer be presented on a standalone basis, the company will cease to report financial information separately from capital and from PS&PM activities.

Speaker #1: The company has, effective January 1st, 2026, combined its links on LSTK projects and capital operating segments into a single reportable segment referred to as all other segments, as Ian mentioned earlier.

Speaker #1: The reportable segments of the company that are part of the Engineering Services regions—Canada, the UK and Ireland, US and Latin America, and Asia, the Middle East, and Australia—and the Nuclear segment will remain unchanged.

Jeff Bell: The reportable segments of the company that are part of the engineering services regions, Canada, the UK and Ireland, US and Latin America, and Asia, the Middle East, and Australia, and the nuclear segment, will remain unchanged. At the same time, taking into account the fact that the capital segment will no longer be presented on a standalone basis, the company will cease to report financial information separately from capital and from PS&PM activities. Slide 21 has been prepared to give a view on what the 2025 quarterly comparable numbers will look like. With that, I'll now hand the presentation back to Ian.

Speaker #1: At the same time, taking into account the fact that the capital segment will no longer be presented on a standalone basis, the company will cease to report financial information separately from capital and from PS and PM activities.

Speaker #1: Slide 21 has been prepared to give a view on what the 2025 quarterly comparable numbers will look like. And with that, I'll now hand the presentation back to Ian.

Jeff Bell: Slide 21 has been prepared to give a view on what the 2025 quarterly comparable numbers will look like. With that, I'll now hand the presentation back to Ian.

Speaker #2: Okay, thank you, Jeff. Our fourth quarter performance concluded a great year. A sustained demand for our engineering services and nuclear capabilities drove strong revenue growth for the company.

Ian Edwards: Okay, thank you, Jeff. Our Q4 performance concluded a great year. A sustained demand for our engineering services and nuclear capabilities drove strong revenue growth for the company. 2025 was a pivotal year as it marked the completion of the transformation of our business. We are now very much focused on being a world-class engineering services and nuclear company, and we fundamentally believe that our capabilities and competitive advantages, focusing these areas, will create the most value for shareholders. Global energy transition and infrastructure redevelopment are fueling our growth markets. We are focusing where AtkinsRéalis has clear competitive advantages and strengthening by building on our strong foundation or landing and expanding. We are optimizing our business, accelerating value creation where demand is strongest, and exploring untapped potential through technology and innovative delivery models.

Speaker #2: 2025 was a pivotal year, as it marked the completion of the transformation of our business. We are now very much focused on being a world-class engineering services and nuclear company.

Speaker #2: And we fundamentally believe that our capabilities and competitive advantages focus in these areas will create the most value for shareholders. Global energy transition and infrastructure redevelopment are fueling our growth markets.

Ian Edwards: Global energy transition and infrastructure redevelopment are fueling our growth markets. We are focusing where AtkinsRéalis has clear competitive advantages and strengthening by building on our strong foundation or landing and expanding. We are optimizing our business, accelerating value creation where demand is strongest, and exploring untapped potential through technology and innovative delivery models.

Speaker #2: We are focusing where AtkinsRéalis has clear competitive advantages and strengthening by building on our strong foundation or landing and expanding. We are optimizing our business, accelerating value creation where demand is strongest.

Speaker #2: And exploring untapped potential through technology and innovative delivery models. In 2026, we will continue to lean in to artificial intelligence as an enabler of productivity, safety, quality, and predictability.

Ian Edwards: In 2026, we will continue to lean in to Artificial Intelligence as an enabler of productivity, safety, quality, and predictability. Our innovative tools have given us the upper hand in attracting and retaining high-quality clients and talent. While this has been successful, we can continue to develop and utilize advanced technologies to deliver products and projects and operate more efficiently to lower total costs. Our advantaged balance sheet puts us in a distinctive position to capitalize on inorganic and organic opportunities in a continuously evolving macroeconomic landscape. Finally, I want to thank our 40,000 colleagues for their hard work and dedication as we continue positioning the company to capture real revenue across our engineering services and nuclear businesses in 2026 and beyond. With that, let's open it up for your questions.

Speaker #2: Our innovative tools have given us the upper hand in attracting and retaining high-quality clients and talent. While this has been successful, we can continue to develop and utilize advanced technologies to deliver products and projects and operate more efficiently to lower total costs.

Speaker #2: Our advantaged balance sheet puts us in a distinctive position to capitalize on inorganic and organic opportunities in the landscape. Finally, I want to thank our 40,000 colleagues for their hard work and dedication as we continue positioning the company to capture real revenue across our engineering services and nuclear businesses in 2026 and beyond.

Ian Edwards: Our advantaged balance sheet puts us in a distinctive position to capitalize on inorganic and organic opportunities in a continuously evolving macroeconomic landscape. Finally, I want to thank our 40,000 colleagues for their hard work and dedication as we continue positioning the company to capture real revenue across our engineering services and nuclear businesses in 2026 and beyond. With that, let's open it up for your questions.

Speaker #2: So with that, let's open it up for your question.

Speaker #3: Thank you. As a reminder, to ask a question, please press star 11. If your question has been answered and you'd like to remove yourself from the queue, please press star 11 again.

Jeff Bell: Thank you. As a reminder, to ask a question, please press star one.

Operator: If your question hasn't been answered and you'd like to remove yourself from the queue, please press star one again. Our first question comes from Sabahat Khan with RBC Capital Markets. Your line is open.

Speaker #3: Our first question comes from Sabahat Khan, with RBC Capital Markets. Your line is open.

Speaker #4: Great. Thanks and good morning. Ian, maybe just on some of the commentary you shared around your conversations on nuclear, I was wondering if you can maybe give us an update on where the two large potential new builds in Ontario may be stand, and then maybe some of the specific opportunities outside of Canada that you think could start to materialize over the next three to five-year period.

Sabahat Khan: Great. Thanks. Good morning. Ian, maybe just on some of the commentary you shared around your conversations on nuclear, I was wondering if you can maybe give us an update on where the 2 large potential new builds in Ontario maybe stand, then maybe some of the specific opportunities outside of Canada that, you know, they could start to materialize over the next 3 to 5-year period. Thank you.

Speaker #4: Thank you.

Ian Edwards: For sure, morning. I mean, no definitive news in Ontario, but we are working very, very hard with the two generating organizations of Bruce and OPG to ensure that CANDU and our CANDU MONARK is the chosen technology for those two sites. As AtkinsRéalis and as CANDU, what we know that the right answer for Canada, for Canadian supply chain, and for the efficiency of the product, that our CANDU MONARK is the answer. When you think about jobs and economic development in Canada, over 90% of all of the CANDU MONARK that would be deployed there is Canadian content, which is Canadian jobs, Canadian companies. We are convinced that our product is the most efficient, with world-class productivity and performance ratings of the EC6 that's been built around the world.

Speaker #5: Yeah, for sure. And morning. I mean, no definitive news in Ontario. But we are working very, very hard with the two generating organizations of Bruce and OPG to ensure that can do.

Speaker #5: And our CANDU Monark is the chosen technology for those two sites. As AtkinsRéalis and as CANDU, we know that the right answer for Canada, for the Canadian supply chain, and for the efficiency of the product—that our CANDU Monark is the answer.

Ian Edwards: When you think about jobs and economic development in Canada, over 90% of all of the CANDU MONARK that would be deployed there is Canadian content, which is Canadian jobs, Canadian companies. We are convinced that our product is the most efficient, with world-class productivity and performance ratings of the EC6 that's been built around the world.

Speaker #5: When you think about jobs and economic development in Canada, over 90% of all of the can-do Monarch that would be deployed there is Canadian content, which is Canadian jobs, Canadian companies.

Speaker #5: We are convinced that our product is the most efficient, with world-class productivity and performance ratings of the EC6, that's been built around the world.

Speaker #5: And as a reminder, it uses natural uranium, which we have in abundance of in Canada. And I think the last thing that I would say, all the operating nuclear power plants in Canada are can do.

Ian Edwards: As a reminder, it uses natural uranium, which we have an abundance of in Canada. I think the last thing that I would say, all the operating nuclear power plants in Canada are CANDU. It makes an awful lot of sense to continue to deploy CANDU across Canada, and obviously, it being the indigenous technology. We are hoping for a read on the technology selection this year. I don't think it'll be before H2, but we're optimistic, and we're optimistic it's CANDU. I mean, across the rest of the world, it's been interesting. I mean, you know, I've spent an awful lot of time in 2025 and even the start of this year, marketing to energy ministers across the world, and to try and understand where the opportunities are for CANDU.

Speaker #5: So it makes an awful lot of sense to continue to deploy CANDU across Canada. And obviously, it being the indigenous technology. So we are hoping for a read on the technology selection this year.

Speaker #5: I don't think it'll be before H2, but we're optimistic and we're optimistic it's can do. I mean, across the rest of the world, it's been interesting.

Ian Edwards: I don't think it'll be before H2, but we're optimistic, and we're optimistic it's CANDU. I mean, across the rest of the world, it's been interesting. I mean, you know, I've spent an awful lot of time in 2025 and even the start of this year, marketing to energy ministers across the world, and to try and understand where the opportunities are for CANDU.

Speaker #5: I mean, I've spent an awful lot of time in 2025 and even the start of this year marketing to energy ministers across the world.

Speaker #5: And to try and understand where the opportunities are for can do. And I would say, having done that, and it's not exclusive, but having done that, I think our nearest term and most firm opportunities would be in Eastern Europe.

Ian Edwards: I would say, you know, having done that, and it's not exclusive, but having done that, I think our nearest term and most firm opportunities would be in Eastern Europe. Having a foothold there in Romania with an EC6 reactor, which has EU approval and as you know, a track record of a relationship with Romania over 50 years. When we're dealing with Eastern European countries and clients, we point to that, and specifically in Poland, you may have seen our Minister Hodgson's visit to Poland to support our efforts in Poland. They're advancing, I would say, quite well.

Speaker #5: And Romania with a EC6 reactor, which has EU approval, and as a track record, of a relationship with Romania over 50 years, when we're dealing with Eastern European countries and clients, we point to that.

Speaker #5: And specifically in Poland, you may have seen Minister Hodgson's visit to Poland to support our efforts there. They're advancing, I would say, quite well.

Speaker #5: I mean, there's nothing to announce today, but we're into a process there where we're going through a technology evaluation and then in Q2, we're into a commercial evaluation.

Ian Edwards: I mean, there's nothing to announce today, but we're into a process there, where we're going through a technology evaluation, and then in Q2, we go into a commercial evaluation, and I would hope that we'll get a read on that towards the end of this year as well. We have great support from the Canadian government. I think we have a lot to offer as Canada. Eastern Europe would be top of the pile, Asia, you know, there's numerous opportunities in Asia. Not to mention, obviously, the very significant potential opportunity in the US, which we're in early days for. A really good outlook, I think, for the long term of CANDU.

Speaker #5: And I would hope that we'll get a read on that towards the end of this year as well. We have great support from the Canadian government.

Ian Edwards: I think we have a lot to offer as Canada. Eastern Europe would be top of the pile, Asia, you know, there's numerous opportunities in Asia. Not to mention, obviously, the very significant potential opportunity in the US, which we're in early days for. A really good outlook, I think, for the long term of CANDU.

Speaker #5: I think we have a lot to offer as Canada. Eastern Europe would be top of the pile, but then Asia. There's numerous opportunities in Asia and not to mention obviously the very significant potential opportunity in the US, which we're in early days for.

Speaker #5: So a really good outlook, I think, for the long-term of can do.

Sabahat Khan: Okay, great. Just the follow-up question, I guess, you know, on the engineering side, obviously, M&A is an increasing focus. You shared a little bit of color earlier on, but maybe if you can talk about as you look into the US, you know, are you looking at maybe getting into some of medium and a bit larger transactions as sort of 26 and 27 come through? If you can just update us on, you know, as this is sort of a skill you're revisiting, where the integration team, some of the integration capabilities stand today in terms of, you know, just aligning with the M&A getting larger. Thanks. I'll pass it along.

Speaker #4: Great. And then just the follow-up question, I guess, on the engineering side, obviously, M&A is an increasing focus. You shared a little bit of color earlier on, but maybe if you can talk about as you look into the US, are you looking at maybe getting into some of medium and a bit larger transactions as sort of 26 and 27 come through?

Speaker #4: And also, if you can just update us on as this is sort of a scale you're revisiting, where the integration team, some of the integration capabilities stand today in terms of just aligning with the M&A getting larger.

Speaker #4: Thanks, and I'll pass it along.

Speaker #5: Yeah. I mean, I think that's a good that's a good question. We've always said that we're going to take a disciplined approach to M&A.

Ian Edwards: I mean, I think that's a good question. You know, we've always said that we're gonna take a disciplined approach to M&A. We actually started 18 months ago, but, you know, you only saw some acquisitions coming through last year. We are really committed to landing and expanding in the US, and there are numerous targets. And we're really prioritizing quality targets that got a cultural fit, that we can really use as platforms for revenue synergies to build out the business in the US such that we can be in the top 5. Ultimately, that's the goal, and to have scale. I think for the majority of this year, we're gonna stay within our lane of about 1,000 people. Acquisitions like David Evans. That integration is going well.

Speaker #5: We actually started 18 months ago, but you only saw some acquisitions coming through last year. We are really committed to landing and expanding in the US.

Speaker #5: And there are numerous targets. And we're really prioritizing quality targets that got a cultural fit, that we can really use as platforms for revenue synergies to build out the business in the US such that we can be in the top five, ultimately.

Ian Edwards: And we're really prioritizing quality targets that got a cultural fit, that we can really use as platforms for revenue synergies to build out the business in the US such that we can be in the top 5. Ultimately, that's the goal, and to have scale. I think for the majority of this year, we're gonna stay within our lane of about 1,000 people. Acquisitions like David Evans. That integration is going well.

Speaker #5: That's the goal—and to have scale. I think for the majority of this year we're going to stay within our lane, of about 1,000 people. Acquisitions like David Evans, that integration is going well.

Ian Edwards: We're building out a very strong team on M&A and a very strong team of integration under Louis Verreault, that joined us last year. I'm really pleased with the strength of that team and the strength both in US and here in Montreal. As we get towards the end of the year and moving into next year, we will be looking at deals potentially with 2,000 or 3,000 people. Not transformational, but certainly at a bigger scale, to get us this capacity and scale that we want in the US. That's kind of the journey, disciplined, methodical, but ambitious. Is that okay?

Speaker #5: We're building out a very strong team on M&A and a very strong team of integration under Louis Verina that joined us last year. I'm really pleased with the strength of that team and the strength both in the US and here.

Speaker #5: In Montreal. But as we get towards the end of the year and moving into next year, we will be looking at deals, potentially with two or three thousand people, not transformational, but certainly at a bigger scale to get us this capacity and scale that we want in the US.

Speaker #5: So that's kind of the journey. Disciplined, methodical, but ambitious. Is that okay?

Sabahat Khan: Is that okay?

Speaker #4: Yeah.

Jeff Bell: Yes.

Ian Edwards: Yes.

Operator: Thank you. Our next question comes from Chris Murray with ATB Cormark Capital Markets. Your line is open.

Speaker #6: Thank you. Our next question comes from Chris Murray with ATB Cormac Capital Markets, your line is open.

Speaker #4: Yeah, thanks, folks. Good morning. So turning to just the outlook for engineering services, and the revenue growth, you're talking about organic growth between 5 and 7 percent, which seems reasonable, but just think wondering about how you think that that is going to evolve over the coming year.

Chris Murray: Yeah, thanks, folks. Good morning. Maybe turning to just the outlook for engineering services and the revenue growth. You know, you're talking about organic growth between 5% and 7%, which seems reasonable, but wondering about, you know, how you think that that is gonna evolve over the coming year. I know you had some puts and takes this year, that number was well below plan. How do we see that evolving? Is it just a function of what you've got in backlog, or there are some other things that will convert? Any color on the pace of revenue growth organically would be appreciated.

Speaker #4: I know you had some puts and takes this year, so that number was well below plan. But how do we see that evolving? Is it just a function of what you've got in the backlog, or are there some other things that will convert?

Speaker #4: So, any color on the pace of revenue growth organically would be appreciated.

Speaker #5: Yeah. Yeah, for sure. I mean, and clearly, we've done a lot of analysis on this and a lot of analysis of things that happened last year.

Ian Edwards: Yeah, yeah, for sure. I mean, clearly, we've done a lot of analysis on this and a lot of analysis of things that happened last year. I mean, just to reflect on last year, I think there were two specific areas that had an effect on our business. Reprioritization in Saudi, and some headwinds seen at the, you know, the early part of the year in the US, mainly because of not a lack of funding, probably a lack of confidence, I'd say, by the states. If you remember, we also had some year-over-year issues because of 3 specific projects. When we take all that into consideration, we've obviously had a good Q4. You know, things have turned back to very strong growth, which is one of the indicators.

Speaker #5: I mean, just to reflect on last year, I think there were two specific areas that had an effect on our business: reprioritization in Saudi, and some headwinds seen at the early part of the year in the US.

Speaker #5: Mainly because of not a lack of funding—probably a lack of confidence, I'd say, by the states. And if you remember, we also had some year-over-year issues because of three specific projects.

Ian Edwards: If you remember, we also had some year-over-year issues because of 3 specific projects. When we take all that into consideration, we've obviously had a good Q4. You know, things have turned back to very strong growth, which is one of the indicators. Also, we ended the year on a very strong backlog in every region, actually, which has given us, you know, confidence that what we have in backlog and what we see in pipeline across the four regions, will enable us to deliver the 5 to 7% in every region, actually. We've got a high degree of confidence that this is the right kind of range for 2026.

Speaker #5: So when we take all that into consideration, we've obviously had a good Q4. Things have turned back to very strong growth, which is one of the indicators.

Speaker #5: But also, we ended the year on a very strong backlog in every region, actually. Which has given us confidence that what we have in backlog and what we see in pipeline across the four regions will enable us to deliver the 5 to 7 percent in every region, actually.

Ian Edwards: Also, we ended the year on a very strong backlog in every region, actually, which has given us, you know, confidence that what we have in backlog and what we see in pipeline across the four regions, will enable us to deliver the 5 to 7% in every region, actually. We've got a high degree of confidence that this is the right kind of range for 2026.

Speaker #5: So, we've got a high degree of confidence that this is the right kind of range for 2026.

Speaker #4: Okay, that's great. And then maybe turning to how you're going to, I guess, realign the other segments of the business. So, I guess, a couple of questions on this.

Chris Murray: Okay, that's great. Maybe turning to how you're gonna, I guess, realign the other segments of the business. I guess a couple questions of this. You know, one, maybe any commentary or color around LSTK? You know, you did note that this was a bit of a closeout order, but how do we think about what's left to go to wind that up? I guess the other piece of this is: Should we be thinking of this almost as a, call it, a divestiture segment or a runoff segment now, and that's part of the rationale for separating it out? Is there any sort of other interpretation we should have on how you've set this up for next year?

Speaker #4: One, maybe any commentary or color around LSTK. You did note that this was a bit of a closeout order, but how do we think about what's left to go to wind that up?

Speaker #4: And I guess the other piece of this is, should we be thinking of this almost as—call it an investiture segment or a runoff segment now?

Speaker #4: And that's part of the rationale for separating it out. Or is there any sort of other interpretation we should have on how you've set this up for next year?

Speaker #5: Yeah, sure. Jeff, do you want to take it?

Ian Edwards: Yeah, sure. Jeff, do you wanna take it?

Jeff Bell: Yeah. I mean, let me start with the last question there, Chris. I think what you've seen in us moving to this reportable segment structure is actually this continued simplification, making it easier and easier for investors in the capital markets to see the results and the performance of our engineering services, regions, and nuclear. I think, you know, that's really the driver for this. The reality is, you know, the elements of, that are in the all other segments, LSTK is obviously, you know, almost completely wrapped up. Capital is significantly smaller without the 407. As we've talked about previously, you know, ultimately, we'll see where we get to with our, you know, with our Linxon investment.

Speaker #3: Yeah, I mean, let me start with the last question there, Chris. I think what you've seen in us moving to this reportable segment structure is actually this continued simplification, making it easier and easier for investors in the capital markets to see the results and the performance of our Engineering Services regions and Nuclear.

Speaker #3: And I think that's really the driver for this. The reality is, the elements of that are in all the other segments. LSTK is obviously almost completely wrapped up.

Jeff Bell: The reality is, you know, the elements of, that are in the all other segments, LSTK is obviously, you know, almost completely wrapped up. Capital is significantly smaller without the 407. As we've talked about previously, you know, ultimately, we'll see where we get to with our, you know, with our Linxon investment.

Speaker #3: Capital is significantly smaller. Without the 407, and as we've talked about previously, ultimately, we'll see where we get to with our links on investment.

Speaker #3: And together, they're no more currently than 10 percent of our revenue, but on a kind of EBITDA basis. Virtually all of the business is in engineering services and nuclear.

Jeff Bell: You know, into, you know, together, you know, they're no more currently than, you know, 10% of our revenue, but on a kind of EBITDA basis, you know, virtually all of the business is in, you know, is in engineering services and nuclear. We think this kind of reporting segment disclosure, you know, really helps investors from that perspective.

Speaker #3: And we think this kind of reporting segment disclosure really helps investors from that perspective.

Speaker #4: Okay. And just any color on the LSTK?

Chris Murray: Okay. Just any color on the LSTK?

Speaker #3: Oh, yeah, sorry. Yeah. So, as Ian said earlier, we're really pleased now that we've got the second of the three light rail transit systems here in Canada into operation.

Jeff Bell: Oh, yeah, sorry. Yeah, as Ian said earlier, you know, really pleased now that we've got the second of the three light rail transit systems here in Canada into operation. That's great to see, you know, frankly, for the people in the city of Toronto. We've got two of the three legs of REM in operation. I think that's kind of 50 of the 67 or 69 kilometers, so well over half. You know, with La Caisse saying that they would expect to have the third one in, you know, towards the spring, middle of the year. I think we're very much in a position where, you know, in 2026, you know, we should see all three in operation and operating well.

Speaker #3: That's great to see frankly for the people in the city of Toronto. We've got two of the three legs of REM in operation. I think that's kind of 50 of the 67 or 69 kilometers, so well over half with the case saying that they would expect to have the third one in towards the spring, middle of the year.

Jeff Bell: You know, with La Caisse saying that they would expect to have the third one in, you know, towards the spring, middle of the year. I think we're very much in a position where, you know, in 2026, you know, we should see all three in operation and operating well.

Speaker #3: So, I think we're very much in a position where, in 2026, we should see all three in operation and operating well.

Speaker #4: Okay, I'll leave it there. Thank you.

Chris Murray: Okay. I'll leave it there. Thank you.

Speaker #5: Thank you.

Ian Edwards: Thank you.

Speaker #6: Thank you. Our next question comes from Christopher Freeson with CIBC, your line is open.

Operator: Thank you. Our next question comes from Krista Friesen with CIBC. Your line is open.

Speaker #7: Hi, thanks for taking my question. Maybe just to follow up on the M&A conversation, you've talked previously about getting to the bottom end of your one to two times range by the end of this year.

Krista Friesen: Hi, thanks for taking my question. Maybe just to follow up on the M&A conversation. You've talked previously about getting to the bottom end of your 1x to 2x range by the end of this year. Do you still feel confident in that trajectory based on what you're seeing in the pipeline for M&A?

Speaker #7: Do you still feel confident in that trajectory based on what you're seeing in the pipeline for M&A?

Speaker #5: Yeah. And maybe Jeff can talk to the sort of balance sheet aspect of that. But our strategy is US, London, expand as I mentioned in the other question.

Ian Edwards: Yeah, and maybe Jeff can talk to the sort of balance sheet aspect of that. Our strategy is US, London, expand, as I mentioned in the other question. In addition to that, we are very keen to continue to inorganically and organically grow Australia. We really see Australia as a market where we've, you know, historically had virtually no business, but the expertise that's really needed there now is energy power renewables and defense, and we're very strong in both of those markets. We need people on the ground, and we need capacity on the ground. Obviously, ADG was a great acquisition, but that's not the end of it. We're clearly, you know, engaged with numerous targets.

Speaker #5: But in addition to that, we are very keen to continue to inorganically and organically grow Australia. We really see Australia as a market where we historically had virtually no business.

Speaker #5: But the expertise that's really needed there now is energy, power, renewables, and defense. And we're very strong in both of those markets. So we need people on the ground, and we need capacity on the ground.

Ian Edwards: We need people on the ground, and we need capacity on the ground. Obviously, ADG was a great acquisition, but that's not the end of it. We're clearly, you know, engaged with numerous targets. In addition to that, across all engineering services regions, we're looking for capability, build-out, where we see strong end markets. I'll give you an example. For example, transmission. Obviously, we have a very strong electrical transmission distribution engineering organization built from the work that we've done in Canada.

Speaker #5: Obviously, ADG was a great acquisition, but that's not the end of it. And we're clearly engaged with numerous targets. In addition to that, across all engineering services regions, we're looking for capability build-out where we see strong end markets.

Ian Edwards: In addition to that, across all engineering services regions, we're looking for capability, build-out, where we see strong end markets. I'll give you an example. For example, transmission. Obviously, we have a very strong electrical transmission distribution engineering organization built from the work that we've done in Canada. If we can find more resources and more capability through acquisitions globally, we would do that. Another example would be water. You know, very strong water business in the UK, very strong markets around the world for water. We need more capability. There's kind of three things here, US, Australia, and end market. With all those things together and our ambition later in the year to do some larger acquisitions, not transformational, but larger, I think that's probably realistic.

Speaker #5: So, I'll give you an example. For example, transmission. Obviously, we are a very strong electrical transmission and distribution engineering organization, built from the work that we've done in Canada.

Speaker #5: But if we can find more resources and more capability through acquisitions globally, we would do that. Another example would be water. Very strong water business in the UK.

Ian Edwards: If we can find more resources and more capability through acquisitions globally, we would do that. Another example would be water. You know, very strong water business in the UK, very strong markets around the world for water. We need more capability. There's kind of three things here, US, Australia, and end market. With all those things together and our ambition later in the year to do some larger acquisitions, not transformational, but larger, I think that's probably realistic. Jeff, do you want to just add?

Speaker #5: Very strong markets around the world for water. We need more capability. So there's kind of three things here. US, Australia, and end market. With all those things together, and our ambition later in the year, to do some larger acquisitions, not transformational, but larger, I think that's probably realistic.

Speaker #5: But Jeff, do you want to just add?

Ian Edwards: Jeff, do you want to just add?

Speaker #3: Yeah. I mean, I think from a capital allocation perspective, as you've heard us say before, Krista, we have a framework that we would look at now that the balance sheet's in a really good position.

Jeff Bell: Yeah, I mean, I think from a capital allocation perspective, as you've, you know, heard us say before, Krista, you know, we have a framework that would look, now that the balance sheet's, you know, in a really good position, and in fact, you know, looking ultimately to get back to, you know, that lower end of our one to two times range over the next 12 months or so, we would look to be deploying capital into M&A, but also, you know, into returns to shareholders. You know, you saw us do that in 2025, and we would expect to continue to do that in 2026. Our demeanor is weighted towards M&A at this point.

Speaker #3: And in fact, looking ultimately to get back to that lower end of our one-to-two times range over the next 12 months or so, we would look to be deploying capital into M&A, but also into returns to shareholders.

Speaker #3: And you saw us do that in 2025. And we would expect to continue to do that in 2026. Our demeanor is weighted towards M&A at this point.

Speaker #3: We think there's a lot of opportunity as Ian has talked about, about creating long-term value and accelerating our strategy. But we also see good opportunity because of that to return funds to shareholders likely using the or continuing to use the share buyback process to do that.

Jeff Bell: We think there's a lot of opportunity, as Ian has talked about creating long-term value and accelerating our strategy. We also see good opportunity because of that to return funds to shareholders, you know, likely using or continuing to use, you know, the share buyback process to do that.

Speaker #7: Thanks. That's helpful. And then just my last one, on defense, obviously very topical. Can you speak to what you're seeing here in Canada in terms of opportunities there and what you think the timeline is sort of meaningfully show up in spending for you?

Krista Friesen: Thanks. That's helpful. Just my last one, on defense, obviously very topical. Can you speak to what you're seeing here in Canada in terms of opportunities there and what you think the timeline is before we start to see that sort of meaningfully show up in spending for you?

Speaker #5: Yeah, for sure. I mean, obviously, Prime Minister Khan's announcement last week, I think it was, is very, very good news. It's good news for the defense market.

Ian Edwards: Yeah, for sure. I mean, obviously, Prime Minister Carney's announcement last week, I think it was, is very, very good news. It's good news for the defense market, and good news for AtkinsRéalis. Where we play is obviously in the supporting infrastructure, and that supporting infrastructure both needs to be built to develop assets, whether they're, you know, air assets or sea assets, submarines, ships, aircraft, and land assets such as barracks and the like. We design and we deploy, and we maintain those assets.

Speaker #5: And good news for AtkinsRéalis. Where we play is obviously in the supporting infrastructure. And that supporting infrastructure both needs to be built to develop assets, whether they're air assets or sea assets—submarines, ships, aircraft.

Speaker #5: And land assets, such as barracks and the like. So we design, we deploy, and we maintain those assets. And, in actual fact, the capital cost of these assets and the OPEX that goes with them for the life of, say, a submarine, is actually more than the purchase price of the submarine.

Ian Edwards: In actual fact, you know, the capital cost of these assets and the OpEx that goes with them for the life of, say, a submarine, is actually more than the purchase price of the submarine. I mean, because obviously, they're multi-year programs and contracts. This is where we're very strong in the UK. This is what we've been doing for a very long time in the UK. There's two routes to market. One is directly to the government, and the second is to the OEMs, such as, you know, Rolls-Royce, BAE in the UK. Obviously, when assets are chosen, we would have a route to market directly to the OEM of that asset. Actually, some work's already being flowing through. We're seeing definitely some advanced feasibility work.

Speaker #5: I mean, because obviously, they're multi-year programs and contracts. So this is where we're very strong in the UK. This is what we've been doing for a very long time in the UK.

Speaker #5: There are two routes to market. One is directly to the government, and the second is to the OEMs, such as Rolls-Royce and BAE in the UK. Obviously, when assets are chosen, we would have a route to market directly to the OEM of that asset.

Ian Edwards: There's two routes to market. One is directly to the government, and the second is to the OEMs, such as, you know, Rolls-Royce, BAE in the UK. Obviously, when assets are chosen, we would have a route to market directly to the OEM of that asset. Actually, some work's already being flowing through. We're seeing definitely some advanced feasibility work.

Speaker #5: So, actually, some work's already been flowing through. We're definitely seeing some advanced feasibility work. We're seeing some delivery partner work. I would expect that by the end of this year, we could see quite a few revenues.

Ian Edwards: We're seeing some delivery partner work. I would expect that by the end of this year, we could see quite a few revenues. Obviously, we're looking and following the OEM technology selection or asset selection, very closely, but we're excited about the market, and I think we have a lot to offer.

Speaker #5: Obviously, we're looking and following the OEM technology selection or asset selection very closely. But we're excited about the market. And I think we have a lot to offer.

Speaker #7: Thank you. Appreciate the time.

Krista Friesen: Thank you. Appreciate the time.

Speaker #5: Thank you.

Ian Edwards: Thank you.

Speaker #8: Thank you. Our next question comes from Michael Tufum with TD Cowan. Your line is open.

Operator: Thank you. Our next question comes from Michael Tupholme with TD Cowen. Your line is open.

Speaker #9: Thank you. Good morning.

Michael Tupholme: Thank you. Good morning.

Speaker #5: Good morning.

Ian Edwards: Morning.

Speaker #9: Good morning. Just on nuclear, you're obviously looking for continued revenue growth momentum in that segment over the next few years given the new 2027 guidance or revenue guidance you provided.

Operator: Morning.

Michael Tupholme: Morning. Just on nuclear, you're obviously looking for continued revenue growth momentum in that segment over the next few years, given the new 2027 guidance or revenue guidance you provided. As we look at and think about that guidance, can you provide a bit of a refresher on what you have and haven't baked into that 2027 nuclear revenue guidance? As part of that, just trying to understand if everything that you have in there is based on work that's already under contract or in hand, and if not, what sort of prospective work has been built into that 2027 number?

Speaker #9: As we look at and think about that guidance, can you provide a bit of a refresher on what you have and haven't baked into that 2027 nuclear revenue guidance?

Speaker #9: And as part of that, just trying to understand if everything that you have in there is based on work that's already under contract or in hand, and if not, what sort of perspective work has been built into that 2027 number?

Michael Tupholme: As part of that, just trying to understand if everything that you have in there is based on work that's already under contract or in hand, and if not, what sort of prospective work has been built into that 2027 number?

Speaker #5: Yeah. No, for sure. And I think slide 13 is a good place to kind of use. For me to explain this. The 2027 outlook is really based on everything we already have secured.

Ian Edwards: Yeah. No, for sure. I think slide 13 is a good place to kind of use for me to explain this. The 2027 outlook is really based on everything we already have secured. For example, you know, the refurbishment at Bruce, the refurbishment at Pickering, Cernavoda 1, the refurbishment in Qinshan, and then Cernavoda 3 and 4 new build. The revenues providing those phase 2 elements that you see on the slide are awarded, are secure. Clearly, there's a high likelihood that those phase 2 elements will be awarded because the commitment is already made in phase 1. The way I think about it, there's a high degree of certainty around the outlook we've put there.

Speaker #5: So, for example, the refurbishment at Bruce, the refurbishment at Pickering, Cernavoda 1, the refurbishment in Qinshan, and then Cernavoda 3 and 4 new build.

Speaker #5: And the revenues providing those phase two elements that you see on the slide are awarded, are secure. And clearly, there's a high likelihood that those phase two elements will be awarded, because the commitment is already made in phase one.

Ian Edwards: The revenues providing those phase 2 elements that you see on the slide are awarded, are secure. Clearly, there's a high likelihood that those phase 2 elements will be awarded because the commitment is already made in phase 1. The way I think about it, there's a high degree of certainty around the outlook we've put there.

Speaker #5: So the way I think about it, there's a high degree of certainty around the outlook we've put there. What's not included in that outlook is anything additive to that, which would be new builds.

Ian Edwards: What's not included in that outlook is anything additive to that, which would be new builds. When you think about the new build kind of sequence of events, let's say that we were selected for the 2 sites in Ontario, and let's say we were selected for Poland. There would be a 2 to 3-year period of engineering, and that's revenue, and that is additive. Once you follow through and get towards the end of the engineering, you're into real procurement and real execution, where the revenues would significantly increase. What I see ahead of us, you know, is absolutely delivering against the 27.

Speaker #5: And when you think about the new build kind of sequence of events, let's say that we were selected for the two sites in Ontario.

Speaker #5: And let's say we were selected for Poland. There would be a two- to three-year period of engineering, and that's revenue. And that is additive.

Speaker #5: But then once you follow through and get towards the end of the engineering, you're into real procurement and real execution where the revenues would significantly increase.

Ian Edwards: Once you follow through and get towards the end of the engineering, you're into real procurement and real execution, where the revenues would significantly increase. What I see ahead of us, you know, is absolutely delivering against the 27. Potentially, if we do secure new builds, we would add to that, but as we work towards the end of the decade, we could see, you know, further revenue coming through at scale.

Speaker #5: So what I see ahead of us is absolutely delivering against the 2027, potentially if we do secure new builds, we would add to that.

Ian Edwards: Potentially, if we do secure new builds, we would add to that, but as we work towards the end of the decade, we could see, you know, further revenue coming through at scale.

Speaker #5: But as we work towards the end of the decade, we could see further revenue coming through at scale.

Michael Tupholme: That's all very helpful and appreciate all the detail. Just one sort of clarification as it relates to the new build piece in Romania, the 2 reactors.

Speaker #9: That's all very helpful and appreciate all the detail. Just one sort of clarification as it relates to the new build piece in Romania, the two reactors, to what extent is that contributing in 2027?

Michael Tupholme: That's all very helpful and appreciate all the detail. Just one sort of clarification as it relates to the new build piece in Romania, the 2 reactors.

Ian Edwards: Yeah.

Michael Tupholme: To what extent-

Ian Edwards: Yeah

Michael Tupholme: ... is that contributing in 2027? I know you mentioned it, but just is it-

Speaker #9: I know you mentioned it, but just— is it meaningful, or...?

Ian Edwards: Yeah

Michael Tupholme: is it moving forward?

Speaker #5: Yeah. Yes, it is. Yes, it is. So what we're into now is what they call a limited notice to proceed. Which is basically the feasibility making sure that all the product the project is defined and the budget is finalized and the regulatory environment is underway.

Ian Edwards: Yes, it is. Yes, it is. What we're into now is what they call a limited notice to proceed, which is basically the fee, the feasibility, making sure that all the product, the project is defined and the budget is finalized, and the regulatory environment is underway. What we would expect towards the end of this year, early next year, is the full contract. That will just continue through to 2027 and beyond towards the end of the decade. Some of, you know, some of the revenue that we're seeing in 2027 will come from that second phase 2 contract. The bulk of it, though, will be beyond 2027, actually.

Speaker #5: What we would expect towards the end of this year, early next year, is the full contract. And that will just continue through to 2027 and beyond towards the end of the decade.

Speaker #5: And some of the revenue that we're seeing in 2027 will come from that second phase two contract. The bulk of it, though, will be beyond 2027, actually.

Speaker #9: Perfect. I will leave it there. Thank you.

Michael Tupholme: Perfect. I will leave it there. Thank you.

Speaker #5: Okay. No, thanks.

Ian Edwards: Okay. No, thanks.

Speaker #8: Thank you. Our next question comes from Maxim Sachev with NVCM. Your line is open.

Operator: Thank you. Our next question comes from Maxim Sytchev with NBCM. Your line is open.

Speaker #10: Hi, good morning, gentlemen.

Maxim Sytchev: Hi, good morning, gentlemen.

Speaker #5: Good morning.

Ian Edwards: Morning.

Maxim Sytchev: Maybe the first question on EMEA, nice to see obviously that, you know, you turned the corner in the Middle East. I was just wondering in terms of what potential commercial changes you had to adopt in order to make the pivot. Can you maybe talk a little bit about that sort of handout from Saudi to other markets, etcetera? Thank you.

Speaker #10: You need the first question on EMEA. And nice to see, obviously, that you turned the corner in the Middle East. I was just wondering, in terms of what potential commercial changes you had to adopt in order to make the pivot?

Speaker #10: Can you maybe talk a little bit about that sort of handoff from Saudi to other markets, etc.? Thank you.

Speaker #5: Yeah. Yeah. Yeah. So the EMEA region is been interesting over the last year or so. And obviously, we developed a strategy for growth. I mean, we intend and formed the EMEA region so that it would grow at or better than the rest of the regions.

Ian Edwards: Yeah. The EMEA region has been interesting over the last year or so. Obviously we've developed a strategy for growth. I mean, we intend and formed the EMEA region so that it would grow at or better than the rest of the regions, because we see opportunity there. The reprioritization in Saudi, you know, did affect us. I mean, you know, projects like NEOM, some other large projects, the funding has been withdrawn. However, Riyadh-based projects and projects that are gonna support the Expo and the World Cup are still ongoing, and it's still a very good market. It's just not as good as we would have expected it to be in 2025.

Speaker #5: Because we see opportunity there. The reprioritization in Saudi did affect us. I mean, projects like NEOM, some other large projects that the funding has been withdrawn.

Ian Edwards: I mean, you know, projects like NEOM, some other large projects, the funding has been withdrawn. However, Riyadh-based projects and projects that are gonna support the Expo and the World Cup are still ongoing, and it's still a very good market. It's just not as good as we would have expected it to be in 2025.

Speaker #5: However, Riyadh-based projects and projects that are going to support the expo and the World Cup are still ongoing. And it's still a very good market.

Speaker #5: It's just not as good as we would have expected it to be in 2025. But coincident with that, the UAE is really stepping up.

Ian Edwards: Coincident with that, the UAE is really stepping up, and the UAE is providing us, you know, good buildings and property opportunities. We won The Sphere, so they're building a, you know, Sphere exactly like the Vegas Sphere. We won that. They're also investing in transport, and there's numerous transport lines that are out for bid right now that we're looking to bid. Historically, in the region, we've been really successful in transport. You know, we've designed out a lot of the Riyadh network, designed out a lot of the Dubai network. I think we're pretty well positioned for that. In addition to that, Australia, in the sort of medium term to longer term, is our growth engine of Vermeer as well.

Speaker #5: And the UAE is providing us good buildings and property opportunities. We won the SFIA. So the building a SFIA exactly like the Vegas SFIA.

Speaker #5: We won that. But they're also investing in transport. And there's numerous transport lines that are out for bid right now that we're looking to bid.

Speaker #5: And historically, in the region, we've been really successful in transport. We've designed out a lot of the Riyadh network. We've designed out a lot of the Dubai network.

Ian Edwards: Historically, in the region, we've been really successful in transport. You know, we've designed out a lot of the Riyadh network, designed out a lot of the Dubai network. I think we're pretty well positioned for that. In addition to that, Australia, in the sort of medium term to longer term, is our growth engine of Vermeer as well.

Speaker #5: So I think we're pretty well positioned for that. But in addition to that, Australia and the sort of medium-term to longer-term is our growth engine of EMEA as well.

Speaker #5: And that's why it's important for us to build out Australia and get ready for this new wave of power renewables, energy work, and defense work.

Ian Edwards: That's why it's important for us to build out Australia and get ready for this new wave of power, renewables, energy work, and defense work. When we think about our strategy now and put all of those things together, sorry, plus Hong Kong, which has obviously been through a, you know, a fairly tough time over the last decade, but now is coming back with the development of the northern metropolis, which is road, rail, and city. We think that we're feeling pretty optimistic about Vermeer, but we've had to pivot a bit, and we've had to kind of adjust our strategy a bit to develop that.

Speaker #5: So, when we think about our strategy now and put all of those things together—sorry, plus Hong Kong, which has obviously been through a fairly tough time over the last decade, but now is coming back with the development of the Northern Metropolis, which is road, rail, and city.

Speaker #5: We think we're feeling pretty optimistic about EMEA. But we've had to pivot a bit. And we've had to kind of adjust our strategy a bit to develop that.

Speaker #10: Yeah, no, absolutely. And good to see. And then maybe just one quick one for Jeff, if I may. Jeff, when we think about sort of the FCF or the Kibdat FCF conversion, can you maybe point to some of the levers that could potentially help that metric, especially as we lap LSTK, etc.?

Maxim Sytchev: Yeah, no, absolutely. Good to see. Maybe just one quick one for Jeff, if I may. Jeff, when we think about, sort of the FCF or like EBITDA to FCF conversion, can you maybe point to some of the levers that could potentially help that metric, especially as we, you know, lap, you know, LSTK, et cetera, even though LSTK was less of a drive in 2025 on kind of an absolute basis. Maybe can you talk about, you know, sort of strategies there overall that would be super helpful? Thank you.

Speaker #10: Even though LSTK was less of a drag in 2025 on kind of an absolute basis. But maybe can you talk about sort of strategies there overall that would be super helpful?

Speaker #10: Thank you.

Speaker #5: Yeah, no, good question, Max. And we're seeing further good progress here in 2026. And I think what I would say is X, the kind of LSTK cash drag that I talked about here in 2026, which we would largely see complete by the end of the year.

Jeff Bell: Yeah. No, good question, Max. You know, we're seeing further good progress here in 2026, and I think what I would say is, you know, x, the kind of, you know, LSTK cash drag that I, you know, talked about here in 2026, you know, which we would largely see complete by the end of the year. From that perspective, you know, I think that moves us into a position in 2027, where, you know, the free cash flow to net income conversion, you know, that we've laid out in our investor day, you know, we think we're very much in line with that, you know, with that conversion of 80% to 90%.

Speaker #5: From that perspective, I think that moves us into a position in 2027 where the free cash flow to net income conversion, that we've laid out in our investor day, we think we're very much in line with that conversion of 80 to 90 percent.

Jeff Bell: From that perspective, you know, I think that moves us into a position in 2027, where, you know, the free cash flow to net income conversion, you know, that we've laid out in our investor day, you know, we think we're very much in line with that, you know, with that conversion of 80% to 90%. You know, I think that's the major lever that we would see or the major change that we would see as we get to the end of this year and into next year. You know, we'll see good, you know, cash flow growth here in 2026 as well, over 2025.

Speaker #5: So I think that's the major lever that we would see or the major change that we would see as we get to the end of this year and into next year.

Jeff Bell: You know, I think that's the major lever that we would see or the major change that we would see as we get to the end of this year and into next year. You know, we'll see good, you know, cash flow growth here in 2026 as well, over 2025.

Speaker #5: But we'll see good cash flow growth here in 2026 as well over '25.

Speaker #10: Okay. Great to see. Thank you so much.

Maxim Sytchev: Okay. Great to see. Thank you so much.

Speaker #5: Thanks.

Jeff Bell: Thanks.

Speaker #8: Thank you. Our next question comes from Benoit Poirier with Desjardins. Your line is open.

Operator: Thank you. Our next question comes from Benoit Poirier with Desjardins. Your line is open.

Speaker #9: Yes. Thank you very much. Good morning, everyone. Could you maybe yeah. Could you maybe provide an update on the development of the Monarch reactor and also maybe an update on the potential to sell the CANDU technology in the US where you are right now, given the discussion that you've posed in the past?

Benoit Poirier: Yes, thank you very much. Good morning, everyone.

Ian Edwards: Morning.

Benoit Poirier: Yeah. Could you maybe provide an update on the development of the MONARK reactor and also maybe an update on the potential to sell the CANDU technology in the US, where you are right now, given the discussion that you've hosted in the past? Thanks.

Speaker #9: Thanks.

Speaker #5: Yeah. For sure. For sure. So Monarch development's going well. Very well. And we've got a great deal of help, frankly, from the utilities. We have been very careful in the Monarch development to upgrade existing technologies such that it's not first of a kind.

Ian Edwards: Yeah, for sure. For sure. MONARK development's going very well, and we've got a great deal of help, frankly, from the utilities. We have been very careful in the MONARK development to upgrade existing technologies such that it's not first of a kind. First of a kind brings, you know, inherent risks around the feasibility of regulatory approval, and it brings risk around the cost and development. We have not done that. We've taken an existing Darlington reactor, and we are upgrading that with the latest safety cases, obviously digitization and latest control systems, to make it state-of-the-art and approvable from the regulatory environment.

Speaker #5: First of a kind brings inherent risks around the feasibility of regulatory approval and it brings risk around the cost and development. We have not done that.

Ian Edwards: We've taken an existing Darlington reactor, and we are upgrading that with the latest safety cases, obviously digitization and latest control systems, to make it state-of-the-art and approvable from the regulatory environment. Now, clearly, you know, going through that regulatory process takes time. We have a high degree of confidence. This is a good product, based on, you know, really successfully operating units. It's going well.

Speaker #5: We've taken an existing Darlington reactor, and we are upgrading that with the latest safety cases obviously digitization, and latest control systems to make it state of the art.

Speaker #5: And approvable from the regulatory environment. Now, clearly, going through that regulatory process takes time, but we have a high degree of confidence this is a good product based on really successfully operating units.

Ian Edwards: Now, clearly, you know, going through that regulatory process takes time. We have a high degree of confidence. This is a good product, based on, you know, really successfully operating units. It's going well. The commitment from ourselves in terms of our investment is pretty much on track. We're very, very pleased with progress. Now, in the US, it's early days. It's obviously a market that we can't ignore. I mean, there's a strong commitment to nuclear power in the US. That commitment is both from government and utilities, but it's also from the hyperscalers to feed their AI demand, data center demand from AI.

Speaker #5: So it's going well. The commitment from ourselves in terms of our investment is pretty much on track. So we're very, very pleased with progress.

Ian Edwards: The commitment from ourselves in terms of our investment is pretty much on track. We're very, very pleased with progress. Now, in the US, it's early days. It's obviously a market that we can't ignore. I mean, there's a strong commitment to nuclear power in the US. That commitment is both from government and utilities, but it's also from the hyperscalers to feed their AI demand, data center demand from AI.

Speaker #5: Now, in the US, it's early days. It's obviously a market that we can't ignore. I mean, there's a strong commitment to nuclear power in the US.

Speaker #5: And that commitment is both from government and utilities. But it's also from the hyperscalers to feed their AI demand data center demand from AI.

Speaker #5: We are in what we would call the pre-licensing discussion phase and in Q2, we go to the formal submission stage of licensing. And we would expect to get a readout from that next year.

Ian Edwards: We are in what we would call the pre-licensing discussion phase, and in Q2, we go to the formal submission stage of licensing, and we would expect to get a readout from that next year. These things take a bit of time, but that does not stop us marketing, both the EC6, which is tried and tested technology, built 35 times around the world, or the MONARK. Like I say, it's early days, but it's a market that we don't want to miss, and it's a market that I think CANDU has the opportunity to prevail in a very strong demand market with few choices on technology that exist today.

Speaker #5: So these things take a bit of time. But that does not stop us marketing both the EC6, which is tried and tested technology built 35 times around the world, or the Monarch.

Speaker #5: So like I say, it's early days. But it's a market that we don't want to miss. And it's a market that I think can do has the opportunity to prevail in a very strong demand market with few choices on technology that exist today.

Benoit Poirier: That's great, Ian. Maybe just a follow-up question related to the LSTK. Jeff, you mentioned that it will provide a drag of about CAD 150 million in 2026. Could you maybe mention whether if it's all related to the REM project, and what about the risk of seeing greater losses from LSTK in 2026 and potentially to flow in 2027? Thank you.

Speaker #9: That's great that, Ian. And maybe to follow-up question related to the LSTK, Jeff, you mentioned that it will provide a drag of about 100, 150 million in 2026.

Speaker #9: Could you maybe mention whether if it's all related to the REM project and what about the risk of seeing a greater losses from LSTK in 2026 and potentially to flow in 2027?

Speaker #9: Thank you.

Jeff Bell: Yeah, no, the cash flow is not solely related to REM. It has to do with settling out final accounts on things like Eglinton. It has to do with a bit of kind of final cleanup, for instance, on Trillium. Yeah, it's a combination of a number of the different projects. Also doesn't include, you know, any settlements of sort of claims or anything else. You know, as ever, and we saw some benefit of that in 2025, you know, if we're able to settle out some of the claims, then that would be upside to that. As a result, you know, we would expect to resolve all, you know, virtually all of that on those three projects over the course of 2026.

Speaker #5: Yeah. No, the cash flow is not solely related to REM. It has to do with settling out final accounts on things like Eglinton. It has to do with a bit of kind of final cleanup, for instance, on Trillium.

Speaker #5: So it's a combination of a number of the different projects. Also, it doesn't include any settlements of sort of claims or anything else. So as ever, and we saw some benefit of that in 2025.

Speaker #5: If we're able to settle out some of the claims, then that would be upside to that. As a result, we would expect to resolve virtually all of that on the three projects over the course of 2026.

Speaker #5: It's possible a little into 2027, but at this point, we see very little of that. I think in terms of where we would expect to be for this year, there will clearly be some costs related to continuing to just kind of finalize out the projects, some costs related to risk management on that, and some costs related to pursuing our claims.

Jeff Bell: It's possible a little into 2027, but at this point we see very, very little of that. I think in terms of, you know, in terms of where we would expect to be, you know, for this year, there will clearly be some costs related to continuing to, you know, just kind of finalize out, the projects, some costs related to risk management on that, some costs related to pursuing our claims. Going back to the conversation around that, all other segments, you know, that will continue to reduce on LSTK, you know, in 2026, you know, versus 2025.

Speaker #5: But going back to the conversation around that, all other segments, that will continue to reduce on LSTK in 2026 versus 2025. And when you look at that segment overall with capital, with links on, we would expect, as you can kind of see on that slide outside of Q4, that the net of all of those together on a quarterly basis is going to be kind of a handful of millions of dollars so not material.

Jeff Bell: When you look at that segment overall with capital, with Linxon, you know, we would expect, as you can kind of see on that slide outside of Q4, that the net of all of those together on a quarterly basis is gonna be kind of a handful of millions of dollars. You know, so not material.

Speaker #9: Okay. Thank you very much, for the time.

Benoit Poirier: Okay. Thank you very much, for the time.

Speaker #5: Thank you.

Jeff Bell: Thank you. Thanks.

Speaker #10: Thanks.

Speaker #8: Thank you. Our next question comes from Jonathan Goldman with Scotiabank, your line is open.

Operator: Thank you. Our next question comes from Jonathan Goldman with Scotiabank. Your line is open.

Jonathan Goldman: Hey, good morning, team, and thanks for taking my questions. Maybe just looking at the 2025 to 2027 revised targets, you know, specifically in engineering services, you're calling for organic growth CAGR over the period of 5% to 7%. If we take 2025 results in the midpoint of the 2026 guide, that implies pretty significantly acceleration in 2027, probably in the double-digit percentage range. I know 2027 is a long way off, but what visibility do you have in getting to that level of growth in the outer years?

Speaker #11: Hey, good morning, team, and thanks for taking my questions. Maybe just looking at the '25 to '27 revised targets, specifically in engineering services, you're calling for organic growth, CAGR, over the period of five to seven percent.

Speaker #11: But if we take '25 results in the midpoint of the '26 guide, that implies pretty significant reacceleration in '27, probably in the double-digit percentage range.

Speaker #11: So I know '27 is a long way off, but what visibility do you have in getting to that level of growth in the other years?

Speaker #5: Yeah. I mean, obviously, with the range, we'll see where we kind of land in '26. We do see an opportunity and we do see continued growth off the back of record backlog.

Jeff Bell: Yeah, I mean, obviously with the range, you know, we'll see where we kind of land in 2026. You know, we do see an opportunity, and we do see, you know, continued growth off the back of record backlog. We see, you know, markets settling out in terms of, you know, as Ian talked about, the shift, for instance, in the Middle East, growth in Australia, you know, as well as underlying growth in, you know, the UK, the US, and Canada. You know, I think at this point, you know, we're comfortable with that range, with what we see not only in 2026, but also what we see heading into 2027.

Speaker #5: We see markets settling out in terms of, as Ian talked about, the shift, for instance, in the Middle East, growth in Australia, as well as underlying growth in the UK, the US, and Canada.

Speaker #5: So I think at this point, we're comfortable with that range, with what we see not only in '26 but also what we see heading into '27.

Speaker #11: Okay. Thanks for that. And maybe circling back to capital allocation and Ian, you did talk about kind of the M&A strategy here. But if we kind of tie it together with defense, is there any opportunity to grow that sort of vertical strategically as opposed to organically mainly?

Jonathan Goldman: Okay, thanks for that. Maybe circling back to capital allocation, and Ian, you did talk about kind of the M&A strategy here, but if we kind of tie it together with defense, is there any opportunity to grow that sort of vertical strategically as opposed to organically, mainly?

Speaker #10: Defend.

Ian Edwards: Defense?

Speaker #11: Yes.

Jonathan Goldman: Yes.

Speaker #10: Yeah, for sure. Yeah. Absolutely. And we have got some defense capability targets in view. Now, obviously, we need to go through the process. We need to make sure that they've got the right capabilities, got the right culture, got the right kind of positioning.

Ian Edwards: Yeah, for sure. Absolutely. We have got some defense capability targets in view. Now, obviously, you know, we need to go through the process. We need to make sure that they've got the right capabilities, got the right culture, and got the right kind of positioning. Yes, I mean, you know, that would be definitely part of particularly the capture of defense work in Canada and Australia, where we see us being able to get to the same sort of level that we're at in the UK. Yeah, that I would not rule that out at all.

Speaker #10: But yes, I mean, that would be definitely part of particularly the capture of defense work in Canada and Australia, where we see us being able to get to the same sort of level that we're at in the UK.

Speaker #10: Yep. I would not rule that out at all.

Speaker #11: Okay. Very interesting. Thanks for taking my questions. I'll get back. Thank you.

Jonathan Goldman: Okay. Very interesting. Thanks for taking my questions. I'll get back. Thank you.

Speaker #10: Thank you.

Ian Edwards: Thank you.

Speaker #8: Thank you. Our next question comes from Ian Gillies with Stifel. Your line is open.

Operator: Thank you. Our next question comes from Ian Gillies with Stifel. Your line is open.

Speaker #9: Good morning, everyone.

Ian Gillies: Morning, everyone.

Speaker #10: Good morning.

Ian Edwards: Morning.

Speaker #11: Good morning.

Jeff Bell: Morning.

Speaker #9: With respect to the nuclear EBIT margins and then moving down a little bit, I'm wondering if you could provide a bit of an update on the dynamic that's happening there.

Ian Gillies: With respect to the nuclear EBIT margins, moving down a little bit, I'm wondering if you could provide a bit of an update on the dynamic that's happening there. Perhaps if we look out later into the decade, and if there is a heavy procurement phase, should we be thinking about the lower end of the range while that's going on? That would be helpful.

Speaker #9: And perhaps if we look out later into the decade and if there is a heavy procurement phase, should we be thinking about the lower end of the range?

Speaker #9: Well, that's going on. That would be helpful.

Speaker #5: Yes, Jeff. Why don't I take that? As I said in my comments, with a kind of normalized business mix, which is what we would expect over the course of the life of refurbishments and indeed new builds, we very much see a 12 to 14 percent operating margin.

Jeff Bell: Yes, Jeff, why don't I take that? You know, as I said in my comments, you know, with a kind of normalized business mix, which is what we would expect, you know, over the course of the life of refurbishments and indeed new builds, we very much see a 12% to 14%, you know, operating margin. I think what we're seeing, and we saw in 2025, and we expect to see in 2026 and into 2027, is that while that heavier mix of procurement, we expect to moderate somewhat. I don't think it gets us all the way back to 12% to 14%, but we definitely think, you know, we would be in the 11% to 13% range because of that, you know, which, you know, implies some growth in that margin, you know, over the next couple of years.

Speaker #5: I think what we're seeing, and we saw in '25, and we expect to see in '26 and into '27, is that while that heavier mix of procurement, we expect to moderate somewhat.

Jeff Bell: I think what we're seeing, and we saw in 2025, and we expect to see in 2026 and into 2027, is that while that heavier mix of procurement, we expect to moderate somewhat. I don't think it gets us all the way back to 12% to 14%, but we definitely think, you know, we would be in the 11% to 13% range because of that, you know, which, you know, implies some growth in that margin, you know, over the next couple of years.

Speaker #5: I don't think it gets us all the way back to 12 to 14, but we definitely think we would be in the 11 to 13 percent range because of that.

Speaker #5: Which implies some growth in that margin over the next couple of years. I think as we move out from there, as I think we've said before, there's always—depending on that mix—there could be particular years where it moves around.

Jeff Bell: I think as we move out from there, you know, as I think we've said before, there's always, you know, depending on that mix, there could be particular years where it moves around. Frankly, you know, it could be higher than that range, as well as, you know, as we've seen now, at the lower end of that range. You know, as we move out beyond 2027, we very much see, in the medium to long term, a lot of confidence in that 12% to 14% range.

Speaker #5: And frankly, it could be higher than that range as well as we've seen now. At the lower end of that range, but as we move out beyond '27, we very much see in the medium to long term a lot of confidence in that 12 to 14 percent range.

Speaker #9: Understood. And then there's been a lot of focus on the can-do side and rightfully so. But could you maybe provide a bit of an update on what's happening on the growth side as it pertains to the services side of the nuclear business, whether it's dramatically different than the can-do side of this period of time?

Ian Gillies: Understood. Then there's been a lot of focus on the CANDU side, and rightfully so, but could you maybe provide a bit of an update on what's happening on the growth side as it pertains to the services side of the nuclear business, whether it's dramatically different than the CANDU side at this period of time?

Ian Edwards: It is, and, yeah, it is, and in some ways, it isn't because of the, just the nuclear renaissance and the amount of activity, you know, across the planet in the demand for nuclear electrical energy. I mean, our services business is also a global business, and it's probably two things I would say. One is the waste remediation business, where we just won, you know, a very significant set of mandates at Sellafield in the UK. There are opportunities globally. I mean, we have a very strong business in the US, working for the DOE in that waste remediation also. I see that as a growth market. There is, you know, from historical weapons programs, there is a lot of work to do to remediate that.

Speaker #10: It is, yeah, it is. And in some ways, it isn't because of the just a nuclear renaissance and the amount of activity. Across the planet, in the demand for nuclear electrical energy, I mean, our services business is also a global business.

Speaker #10: And it's probably two things I would say. One is the waste remediation business where we're just one very significant set of mandates at Sellafield in the UK.

Ian Edwards: One is the waste remediation business, where we just won, you know, a very significant set of mandates at Sellafield in the UK. There are opportunities globally. I mean, we have a very strong business in the US, working for the DOE in that waste remediation also. I see that as a growth market. There is, you know, from historical weapons programs, there is a lot of work to do to remediate that.

Speaker #10: And there are opportunities globally. I mean, we have a very strong business in the US working for the DOE in that waste remediation also.

Speaker #10: So I see that as a growth market. There is from historical weapons programs that there is a lot of work to do to remediate that.

Speaker #10: But very excitingly, is the assistance that we give other OEMs and if you take the French technology, EDF, where clearly in some countries we compete, in some countries, we are their key engineering supplier.

Ian Edwards: Very excitingly, is the assistance that we give other OEMs. If you take the French technology, EDF, where clearly in some countries we compete, in some countries, we are their key engineering supplier. At Hinkley and Sizewell in the UK, we would have potentially about 1,000 engineers assisting EDF in the non-nuclear deployment of integration of engineering with the conventional side of a power plant, not the reactor side of a power plant. That will grow. That will grow as Sizewell starts to really becoming, you know, developed. We also actually assist them in France, we have an office in France that helps them with the development of their business going forward in France. We support SMR technologies.

Speaker #10: At Hinckley and Sizewell in the UK, we would have potentially about 1,000 engineers assisting EDF in the non-nuclear deployment of integration of engineering with the conventional side of a power plant, not the reactor side of a power plant.

Speaker #10: And that will grow as Sizewell starts to really become developed. We also actually assist them in France, and we have an office in France that helps them with development of their business going forward in France.

Ian Edwards: That will grow. That will grow as Sizewell starts to really becoming, you know, developed. We also actually assist them in France, we have an office in France that helps them with the development of their business going forward in France. We support SMR technologies. As I said in my script, you know, the first real SMR development in North America is in Ontario at the Darlington plant, and we're the proud architect engineer on there, of a very significant role to help deliver that.

Speaker #10: We support SMR technologies. As I said in my script, the first real SMR development in North America is in Ontario, at the Darlington plant, and we're the proud architect-engineer on that, playing a very significant role to help deliver it.

Ian Edwards: As I said in my script, you know, the first real SMR development in North America is in Ontario at the Darlington plant, and we're the proud architect engineer on there, of a very significant role to help deliver that. We also are supporting SMR technologies in the UK, Rolls-Royce and X-energy and others in the US. That's a growth market because obviously, the demand on those technologies are significant. We deliberately did not develop an SMR technology. We decided to stay with large nuclear, and we're agnostic to helping on SMR technologies across the world. You're right.

Speaker #10: But we also are supporting SMR technologies in the UK, Rolls-Royce, and X Energy, and others in the US. So that's a growth market because obviously, the demand on those technologies are significant.

Ian Edwards: We also are supporting SMR technologies in the UK, Rolls-Royce and X-energy and others in the US. That's a growth market because obviously, the demand on those technologies are significant. We deliberately did not develop an SMR technology. We decided to stay with large nuclear, and we're agnostic to helping on SMR technologies across the world. You're right.

Speaker #10: And we deliberately did not develop an SMR technology. We decided to stay with large nuclear and were agnostic to helping on SMR technologies across the world.

Speaker #10: So you're right. I mean, it's something we don't talk about as much as we can do, but it is a growth market, and it is a significant part of our capability.

Ian Edwards: I mean, it's something we don't talk about as much as CANDU, but it is a growth market, and it is a significant part of our capability. Sorry, I missed one thing out, which is fusion. We're very much involved with fusion, so the long-term positioning of AtkinsRéalis as a nuclear world leader is not made irrelevant by the potential of fusion power. My own view is that's gonna be the late 2030s into the 2040s, but at least we're very relevant in that space also.

Speaker #10: And sorry, I missed one thing out, which is fusion. We're very much involved with fusion. So that the long-term positioning of AtkinsRéalis as a nuclear world leader is not made irrelevant by the potential of fusion power in my own view is that's going to be the late 30s into the 40s.

Speaker #10: But at least we're very relevant in that space also.

Speaker #9: That's very helpful. I'll turn it back over. Thanks very much, for taking my questions.

Ian Gillies: That's very helpful. I'll turn it back over. Thanks very much for taking my questions.

Speaker #10: Thank you.

Ian Edwards: Thank you.

Speaker #1: Thank you. And we have time for one last question. And that question comes from Frederick Bastian with Raymond James. Your line is

Operator: Thank you. We have time for one last question. That question comes from Frederic Bastien with Raymond James. Your line is open.

Frederic Bastien: Thanks for squeezing me in. Ian, you've got it pretty easy today. No one is asking about the elephant in the room. I'm gonna ask one: In your opinion, does AI accelerate consolidation in the engineering sector?

Speaker #8: Thanks for squeezing me in. Ian, you've got it pretty easy today. No one is asking about the elephant in the room. So I'm going to ask one.

Speaker #8: In your opinion, does AI accelerate consolidation in the engineering sector?

Ian Edwards: Consolidation in the engineering sector?

Speaker #10: Consolidation in the engineering sector?

Speaker #8: Yeah.

Frederic Bastien: Yeah.

Ian Edwards: That's a good question, and obviously, we see AI as a real advantage to enable our business to grow and to enable our business to have a lower cost base. You know, we're a clear advocate of that, and we're deploying at scale, tools that it will enable those two things. Our approach right now is we want it to win us more work, and we want it to lower our cost base. I won't go into a lot of detail, but our position and my position as an engineer is, no, it's not a disruptor. Will it help consolidation in the industry?

Speaker #10: That's a good question. And obviously, we see AI as a real advantage to enable our business to grow. And to enable our business to have a lower cost base.

Speaker #10: We're a clear advocate of that. And we're deploying at scale tools that will enable those two things. And our approach right now is we want it to win as more work.

Speaker #10: And we want it to lower our cost base. And I won't there's many questions about is it a disruptor? I won't go into a lot of detail, but our position and my position as an engineer is no.

Speaker #10: It's not a disruptor. Will it help consolidation in the industry? Yes. Because I believe that as smaller companies try to invest in AI, they will find that increasingly difficult.

Ian Edwards: Yes, because I believe that as smaller companies try to invest in AI, they will find that increasingly difficult. Companies that have scale and balance sheet like ourselves, who are able to deploy AI at scale, will clearly have an ultimate advantage from a cost-based perspective. I don't see this, you know, in the next one to two years, maybe having a significant effect, but the way this would play out would be yes. I mean, it will give an advantage to companies like ourselves, and we intend to use it to do that. You know, I think the short answer is yes.

Speaker #10: And companies that have scale and balance sheet, like ourselves, who are able to deploy AI at scale, will clearly have an ultimate advantage from a cost-based perspective.

Speaker #10: I don't see this in the next one to two years, maybe, having a significant effect. But the way this would play out would be, yes.

Speaker #10: I mean, it will, given advantage to companies like ourselves, and we intend to use it to do that. So I think the short answer is yes.

Speaker #8: That's great. Thanks, Ian. That's all I have.

Frederic Bastien: That's great. Thanks, thanks, Ian. That's all I have.

Speaker #10: Thank you.

Ian Edwards: Thank you.

Speaker #1: Thank you, that concludes the question-and-answer session. I'd like to turn the call back over to Denis Jasmin for closing remarks.

Operator: Thank you. That concludes the question and answer session. I'd like to turn the call back over to Denis Jasmin for closing remarks.

Speaker #11: Thank you very much, everyone, for joining us today. If you have any further questions, please don't hesitate to contact me directly. Thank you. Have a good day and have a good weekend.

Denis Jasmin: Thank you very much, everyone, so for joining us today. If you have any further questions, please don't hesitate to contact me directly. Thank you. Have a good day, and have a good weekend. Bye-bye.

Speaker #11: Bye-bye.

Operator: Thank you for your participation. You may now disconnect.

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