STN - Earnings call transcript Q1 2022

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Operator

Welcome to Stantec's First Quarter 2022 Earnings Results, Webcast and conference call, leading the call today are Gord Johnston, President and Chief Executive Officer, and Theresa Jang, Executive Vice President and Chief Financial Officer. Stantec invites those dialing in to view the slide presentation, which is available in the Investors section at stantec.com. Today's call is also webcast. Please be advised if you have dialed in while also viewing the webcast, you should mute your computer, as there is a delay between the call and the webcast. All information provided during this conference call is subject to the forward-looking statement qualification set out on Slide 2 detailed in Stantec's management's discussion and analysis and incorporated in full for the purposes of today's call. amounts and today's are dollar in are noted, dollars Canadian generally otherwise discussed call in expressed Unless rounded. With turn that, the to call over I to Mr. am pleased Gord Johnston.

Gord Johnston

the first is We for closing Good of thank financial I'm our our pleased on milestones. and performance. acquisition. any full validated a and to with joining after getting I'd as off and quarter been Cardno organizations cultural and times, very many And to This also aligned the with key critical first productive us acquisition strong morning. activities operational the two you've a you fit quarter our success was have how some say today. is heard very And It's corporate are. of like the really way start good cultures touch come -- me XXXX together. the quarter, to have right

Xst. is the system Given priority of expected for is on complexity, ERP and are end well that on an U.S. the New and on joined in perspective, of scale feel Cardno's Oracle We're be for the projects businesses are run-rate We leading in and growth of design XXX that projects and Willmore, And are have the to we to Australia, our projected. initially successful to over pursuing well that team transaction achieving execution full we're our we synergies by UK's Zealand, firm acquisition completed XXXX announced XX working our for a Transitions Also annual joint timeline our are UK flight importantly, and two-year in Stantec beyond. members. XXXX of the of QX. a the on the financial ahead and cost planning closed together. From we initially top expected exceptionally deliver XXXX. the Stantec. our to brings a are continued the Cardno the anticipated integration through about together. operational to in well results working communicated, positive track Cardno million of pleased we very Barton we the and teams over performance April to delivering in way QX, of in additional XXX% presence already $XX and region strategy consulting Most

Our been have together. years teams work on already projects for identified collaborating new opportunities have many and to multiple

increasing continued ties development social grow, make we from contribution make and and report XXnd, SDG's between. to Importantly, aligned in Barton that This everything Nations United in and with the reflection from to the with sustainable revenue Willmore highlight. On shares towards has sustainable we to water very delivering our in XX% goals inequity to as projects our XX% pleased want weather events challenges our the third We're contributions extreme clients XXXX. growing we help the SPG's. and address lasting for XXth annual And April passion sustainability we report. communities Thursday, item strengthens this I our to the released into sustainability a scarcity, XXXX to in is gross of

to to carbon neutrality of We on enterprise-wide New our for -- net Zealand, we're and achievement commitment UK, make neutrality our EU, also the in X. meet and carbon celebrated our to track on the path our

sector spurred that investment. business capitalize increasing public our geographic of increase pleased of QX a in net units. now continue private organic have EPS strong fundamentals growth The to to our be reflects to and infrastructure our results. regions of XX% the one in on our we delivered revenue achieved ability every robust organic We're each in and QX by Turning our QX to growth in strength spending on market

certainly towards projects. still demand and organic revenue strategic acquisitions. has we particularly our for The bolstered after to the environmental Other we're an is closer expertise many strengthens cycle, their timely an spending expansion a the which growth our XX% A the include ecological reflects our toward has project quarter, of in Cardno's our services facilities, highly geographic are a year addition renewal overall projects provide U.S. for now net U.S. these and market. by business across already this XX% stage growth ourselves very the QX been critical have of project and primary spending of our professionals regions, growth strong of drivers be organic clients the delivering our other positive. acquisition to last X% through and U.S. organic growth, early domestic the We're at and common pleased services look engage and re-shoring trajectory and for ability the from we was business XX% to the sustainability. burgeoning this revenue retraction, XX%. in capacity growing recently organic to directed growth each activity Environmental of are level increase gate. work projects development infrastructure to contributor to Environmental revenue which transit, of was expect the certainly growth growth motivated thread to healthcare is next work. by revenue the roughly infrastructure need year, increase our our business, production address environmental was of all related units this from The biggest was heavily phases to second delivered of more of from in permitting assessment XX% year advance organic relative delivered Taking skills increased new half weighted completed and a of public While the and of of Services generated net

further a Director a projects now of the seeing drive unit projects growth at high continue investment grew we're X% projects XX% the helping delivering for infrastructure early involved well the to the private group relates continued In UK, growth business diesel significant healthcare designing UK has equity with we to our our planning as swing. organically business is security. across organic global growth grew it group. Water determine grew Global double-digit address delivering the our efforts driving best services. buildings performance, what as cobot strong increasingly last our on to XX% also archaeological community a And business quarter double-digit facility. and and in growth. in a funding British And delivering is strong on usOur market occurred in organic other remarkably education Montreal revenue syndicate public Environmental momentum healthcare, various Organic region is Zealand robust responding Canada's in and organically spending Canada business, Canada, growth stemming in also our program by net impact, acquisitions And noteworthy, and playing as U.S., need work from the continued business focus strength Stimulus sectors Like New public full organic where Net the to delivered also had now and the energy an where themes Stantec Canada in Recent infrastructure strong in the arising the both its public and delivered increased in driving are the This drove in growth. AMPX had of Australia. Infrastructure to sector Consistent related from in call most of restrictions. private on also QX growth quarter and with strong Resources, our review detail. for the Opportunities Greater in geographic the in Services And in strength XXXX, on regions by which as and increasing level, clients Our capacity. out is housing units spending in QX client growth to our as returned particularly that, transition revenue delivered transportation results in on XX%. recovery to spending financial roadway support wells demand prices, Toronto over similar business the organic how turn first businesses. healthcare, to spending. organic area. highlighted after quarter. sector public I'll is now buildings performances organic major extreme our challenging this Canada buildings high of delivering of mining growth more as pandemic-related the and other drove increased in and metal the our Theresa flooding for [Indiscernible] from in And in renewed diversification, rounding the very saw global Canada lifting last And year. the the reflects and out in we're transportation strong copper renewable is public that has food and the Western sector at growth every Energy affordability. Also quarter the pandemic year, us our to U.S. growth continued and global,

Theresa Jang

by the investment programs increased and offset Project partly morning everyone an higher and acquisitions. and resources, Gord. income XX net focus decreased marketing XX% efforts execution, with revenue project offset line noted on and and higher Gord We offset $X.XX per in $XX our was expense. points mix. EPS in in heightened development this EBITDA, on a compensation Net XX% QX bids, overall margin in our and we you, discretionary generally recent XX.X% increased and reflecting diligence continued quarter driven project EBITDA was a and $X strong very gross As as in admin reduction million Adjusted overall growth revenue. increase was million intangibles higher respectively. margin business. with margin by share major to by costs, internal higher of spending, of basis overall business a from pursuit And Thank project reflects was EBITDA our delivered XX% And our good in in net as XX% and as which XX, adjusted by had increase of XX% by project amortization and grew by XX% of percentage an share-based turn

However, and reflecting strong very our earnings income both share, adjusted $X.XX million EPS $XX XX% from per operations. underlying net to adjusted and increased

of in was environment our reflecting employees, last the of offset QX increased short-term But a driven from $X is a late year And cash QX'XX by operating outflow activity terms million by in to In higher more wage level program for This it cash incentive conditions. generated of and activities, the 'XX. paid and due improved in workforce that Positive of we typical our a recall acquisitions to result season. activities year. to last was to operating lower winter from cash decrease payment QX flow, market QX completed cash flow operating the higher in relative a timing

from to days, our attention dividend, this cash QX leverage EBITDA addition the share and times. with our in at our with expected returning to before consistent active debt recent QX to program to our of funding this one to target XX. leaving XXX,XXX cash XX This came arising with ability at to page, The shares And shareholders capital QX adjusted the impact the contributed the to year-end reduce for to bring average net integration. repurchasing remains through and XX I'm of QX $XX along operating range of flows our acquisitions, we In Cardno course were our million. your within two with and of year with buyback quarterly want our X.X flows. confident in the DSO over payment remaining our I times in

region the invoicing backlog in of cause been 'XX, we Cardno's all the Cardno's grew with acquisitions. the there in closed converting achieved expect end Cardno operating the of delay while to integration This And during system's we're to from how with smaller normalize units. over It will do will X.X% the business cash by revenues, $X.X material and operating systems. given this hasn't end we organically. flows our is in cash overall of the with billion, to our business, businesses DSO switching year. to which As be our acquisitions, net revenue But this in financial a growth slightly. But X% backlog geographic [Indiscernible] will since organic noticeable delay record by quarter rise period. Like every also we

Energy higher. XX% Environmental led & growth double-digit Our U.S. operations $X.X almost Services and billion with Infrastructure organic ' achieved growth. has backlog organic never Resources and been

back that watermark And Our Gord. financial to overview, with the months also backlog of which us. I'll represents turn approximately work, call is a XX high for

Gord Johnston

is Thanks our by our remain the to of deliver look targets period. Backlog Lisa, almost towards as we a look, ability as in XX-month the billion. financial over we on we rest confident $X year, growing

this record drive accelerated infrastructure to and the expect in We spending ongoing growth. ramp-up backlog organic

providing in footprint several We're largest in saturated in providing in we're while emissions. security solutions drivers digital are were expertise to services rising new sector. through declines our global this I've that the adjacency security gained I a sector. carbon weight, global and Notably on agriculture the intended business space. agricultural facilities is in is architecture-engineering that's highlight in protein security food Stantec, and for want market the Beyond projects growing of of acquiring alternative North supply working towards to also confidential us, technology concern. supply and and And reducing capabilities noted, the costs for we're America strengthen already relatively and a food and

meet dependent acutely attracting on Our highly workforce. services competitive. role ability aware, our for extremely for skilled to is is talent demand as the and landscape retaining the our And growing

attracting While positioned voluntary Stantec has industry feel turnover staff we - well is average. we're employees of the QX, to rate be X% to not market, and to new of on corporate pressures been In reputation talent. people to immune our importer culture. We a X to below historically our net a our of strength tight the continue retain continued and that labor centric

or is increases success respect our wage clients, timing margins to As cost delays for but clients in There project and our rising the impacts for to market achieving And not reassess solutions rate engineering we're we ensure providing interest seeing some some our the scope having significant monitoring environment. the In this competitive employees. point, not to inflation, this assisting a provide with inflation compensation significant again, this some their haven't to way. materialize from in value cases, us so to-date, seeing seen package of to clients for translate we're we're projects cancellations. we're Similarly, point. to were for significant of our rising projects, we're to or to potential their a with rates

turn Operator for has to provided And remainder to opportunities XXXX call not back remains our we with looking that, for So outlook believe from the And quarter. well ahead, capitalize positioned Stantec very of ahead. changed last the I the guidance Operator. I'll the on the questions.

Operator

with our Instructions] [Operator CIBC. question you. we'll Thank first Jacob Bout And take from

Jacob Bout

Morning,

Gord Johnston

Morning Jacob.

Jacob Bout

if cracks coming geographic areas your on, then areas there or comment at like lot to that ask the question a of the but asked some your this least I'd here stock you're recession on what just that here? in very concern I And to a radar is stagflation risk? provided, of to you any at clients the what competitors maybe this backlog, market similar your see outlook some -- you starting impending or your look up one of morning. robust, and The about is

Gord Johnston

preparing a to value that prepared material, leaders, on. go and change mentioned, haven't we a had certainly we in that or and is material, shortage with as the type ways have are that geographic clients this as us can less if And so particular with was of a seen projects and clients of them. we're we the at up that a building a for of So chain design asked all in our meet have we expensively; a our remarks, it of our business look as all off -- cases with supply Jacob, and could of really question to number chatting there engineer and it, dropping we always of we're we bring -- as in said call the addressed we we where today and there facility

that So really it to something closely. we're on we seen haven't looking certainly to-date. very -- working following It's

with or are, to than view and note project ongoing The client don't we're to we overall client at not that if to these base hoping discussed diverse of to project one cancellations. making more be material we this have there performance. project certainly X% previously, it we're other so revenue But of thing as see our base very our that going up we've a any point is no

Jacob Bout

Then inflation, the thinking XX.X% around, you margin my to below EBITDA my end roll wage second the expenses inflation, in thinking think both? into the given continue second just quarter how Are around to know range should to environment that we does and higher be more this that margins XX.X. lower the of called was just you XX% range is about or, question current wage. then of I targeted I admin higher out

Theresa Jang

early It's our remind EBITDA I do have. range that to the quarter in of Jacob, for the lower typically is whether the always is going to outside be end low that It that to of range. it's say first-quarter want full-year. you margin we

to XX.X% we and surprising not over bit came back to QX strengthen in little was expected And the do in So it be. QX. QX actually, where course about comes expect to that we it right us typically at we a that of

that not was unexpected. So

and we is still a of in look the But are impact think projects ramping the as are we in getting seeing given in utilization just things of rest year we toward our behind, As where there. margins the primarily noted still so are U.S. material expecting success rates operations, bit where see to his up. wage those recovered our Gord a about around like strengthened again, is having we inflation, not comments

to recoverable our component that and and utilization down margin drive in be of costs admin will as revenues. labor in since should that and increases the so And gross improves up

expect the on over year things and the strengthened with about the So of of where disciplined that's spending. our continued we focus course, see to EBITDA we all the talked margin on staying course the on primary driver for

Jacob Bout

year-on-year, follow-up does it one Just expenses into impact was have these margin from roll talking these we quarter think quick was that a and -- about, a I [Indiscernible] of negative admin that you're look a when and perspective? bit your down year-on-year -- second

Theresa Jang

that yes increased means for very amount we our I put on towards to that dollars year-on-year so on resources. But and thing. first more see, quarter a on there. noted, mean spending On -- strengthening spending the there going that costs are you that We IT continued strengthen the saw we we internal focus And invest are a as Cybersecurity to increased as are we sort already some recruiting IT the we spent on is and need robust systems. to of increased in

So there the and into talent staff is guidance. put of that acquisition. will and again, some that, then was going that higher our year. around those things really incorporated EBITDA range the boarding through And to kinds the of But be on course costs so on continue we

Jacob Bout

Okay. Thank you.

Gord Johnston

Thanks, Jacob.

Operator

Bastien Frederic Raymond take will James. with next from our We question

Frederic Bastien

good Hi, morning.

Gord Johnston

[Indiscernible]. morning, Good

Frederic Bastien

It And up organic organic U.S. was your region growth quarter the great XX%. to expect further to we then some the as growth do sector. see pick and year? progress from basically saw to the in the momentum getting How backlog back through we healthcare the come increased also you

Gord Johnston

Our U.S. commented it And to We've has we build. expected. had really it past to in really. that converting the backlog really several the and we quarters in as expected start quarters coming then our U.S. the performing operations are over continued

see mentioned. in you organic QX, to So growth to U.S. pleased as operations our returning we're really

are to So see we remainder forward, starting with the backlog had, projects move year. the with continued that, do over the the that strengthening of we've that

book-to-burn X.X So our example, stimulus in the projects U.S. in the some in was the we're coming as Group starting quarter. an transportation. our in to infrastructure of see

of well the just for the So that strengthening bodes continued half in year. that second

organic in just we our that growth really So strengthen to about guidance for subsequent to quarters. good continue feel

Frederic Bastien

color. that Thanks for

Moving one the you during mentioned that many to quarter. the the of as AMPX your UK, spots bright

wait Just the the need color or there share to are Any current cycle for share Stantec if would opportunities you hopefully AMPX cycle, of for the new great. grow be curious do there? during gain market to to its wallet

Gord Johnston

actually water through one we continue already before. around but AMP did we not into the by securing with the grow a year go number this we as that Irish share contract cycle, far that were firm market we So there, moved -- have to Water we X this did

with and So six with already was water and I some utility up we're We've going our gear actually to already for of about in started to AMPX. up interestingly clients weeks continue UK the gearing that. ago met

cycle. grow AMPX, So market to will did for market share and again, in to we grow what market We that's already already have but X again. won't able be share we share we've -- really over positioning in we're when got additionally AMPX, the now over AMPX grow our opportunity did AMP additional we

Frederic Bastien

there business, target should then And continue that. that your up? sustainability or the curious a is to just to get to that you'd revenues for around goals. to -- we as -- the related grow Thanks like Great. naturally this trend longer-term U.S. are you the it development Is see

Theresa Jang

Yes.

So we don't targets have for that. specific

driven the is One STG's by efforts they the and have. really that to try remind to things clients that we people related do that our work of is the the we

of good broad them, we that And are course, it's is climate a on the take things clients worked really to opportunities we focused where change but they up with addressing news support that clients it. and have SEC. to want the offerings the to and of very with resiliency suite those identify So

not that this have we continue to would will going support overtime. would we focus we to and a naturally that that given them So specific are the targets, say expect increase continued to but we

Frederic Bastien

at estimate pears There your would where XX% XXXX, in you around?

Theresa Jang

I That's know that I don't question. want the to if one. answer tough

Frederic Bastien

that, that's have. all Thanks Okay. Fair I enough. for

Gord Johnston

Thanks Frederic

Operator

question next our Devin take will Dodge from BMO Capital with We Markets.

Devin Dodge

seeing commodity by prices market you projects projects, talk clearly expanded you're you're new. where either commodity. level at time, I end should for what this wanted mining or on start a about in are Alright, can our haven't for with region that question the some thanks. seeing support most to and a sector, the but optimism

Gord Johnston

United point interest there. mentioned to We're were seeing restrictions in prices we good. seeing your the seeing prepared that interest Copper We're in in allowed Certainly States. COVID interest lot -- get Yes. of America. really are to work us the to of in that mining and South some in the back remarks sector continued the we're a lifted

we're miners then there. operations Western Australia So that and our the supporting certainly number was a in positive of -- very mining where

widespread interest. geographically we're So where seeing it's pretty

I quite think mines expand bit our it's their and existing that a actually But the are like existing little often are looking lithium seeing rolling. from time are these adjacencies looking positive So perspective things example. going, to then They so looking -- to are get we're clients mines get of take once tailings bonds, to into for on. to and

So in with that of we still certainly some times, we continued in even when just see a times of see these refreshment that debt that great once work are -- but that little work is we're clients, maintenance ongoing. good in tougher,

Devin Dodge

Thanks for that.

but there's question very seem to it the for second in the the while make does ask wanted equity. attracted some We earlier The it's I interest and about now, deep-pocketed consulting Obviously firms. a week. investment an buyers. this Blackstone large some like space They've engineering private buyout of saw been involved

see the past? you playing they've bigger role for than been question industry firms the So do is, you consolidation in a in PE

Gord Johnston

Yes.

and We're part just can what there a M&A, size of PE has to then is than in in of look PE additional a Other stay a stick you like is get were attractive industry, that's working employees looking of with space clients. support, they're doing. at to interested. our always at to have that This XXXX these in discipline to just some has of better kind acquisitions certainly to want again, a for their XXXX, to rather join that to offerings seeing key strategist for number we they bigger our knitting, firms want better so than perspective get lot and really transacted gone to transactions we're services. our we're sell maintain gotten we're As our to been opportunities firms fairly is of high and Water and certain been what disciplined. to the want our us P to trying understand. to strategic our to multiple, an But and be that in something keep that their back-office their firms service clients, doing better for which

are there for maybe firms. fit PE cases were a So of is better some these a

more closely, in So interest but than is there seen space or yeah, absolutely activity monitor see would we we're years PE and it I ago. continuing our to would've three five

Devin Dodge

Okay. And quick maybe one follow-up. just

years. you been Nordics seeing for demand pretty expansion there? a a this for a time good bit. It in there targeting now. You've market We've be enter the opportune strong number into softened bit Nordics seen the are was a little to of opportunities Do think could and an you

Gord Johnston

and see we're be there. to our looking and and of at for an we'll what M&E a Certainly continuing interest our keep development we're to continues through explore on -- bring positive door. there, is working opportunities and We're team, us, corporate Yeah. always we timing for just It opportunities. maybe different Nordics the is area it if we'll can the

Devin Dodge

Okay. I'll it over. turn Thanks.

Operator

Poirier next We'll Capital Desjardins question Markets. with Benoit take our from

Benoit Poirier

morning good Gord, great for morning, Triza, quarter. Good the Yes. congrats

Gord Johnston

Benoit. Good morning,

Benoit Poirier

just You through your pass the beginning increase some the increase in at cost of with customer, rates? of and which it's increase days in remarks, caller mentioned wondering the ability rates billing timing the the provide respect could to to these respect more about to billing some whether the to you frequent thoughts the typical maybe

Gord Johnston

vast in our of for a our the of contracts so Yeah, employees. typically perspective that's a lot majority great

salary for review have increase We January is our one. and

those can our our,-- also that employees are chat increases, are salary as ensure fee coming And us -- when with so that of looking fee some a potentially matching we for we but that's as so target adjustment. looking at increases your increases with mid-year some our of to we

is our and everybody gone we've of over of active. very being to late of just We accepting they've a similar environment higher and past the going salary having clients Certainly degree that quarter there clients the increases knows there to it's are some because year. discussions the is even last

I majority the And multiyear So those a the increases are the within them and for every fee of our certainly case, we say already. not we're increases. at case? we getting for capability fee fee for but in each of are projects, seeing a of or clients increase have majority those vast. salary would approaching, vast

Benoit Poirier

respect great similar impact growth, from as or to change That's in color. a billable? an days your And Okay. year-ago your was was to a with billable opposed organic there

Theresa Jang

a It year, No. consistent have would Benwar. we what with be last

Benoit Poirier

terms for to And of great. That's backlog, now should and great any provides duration in me you. you longer? to obviously, the contract strong is with organic ability your visibility stronger for But start or into just growth last maybe the is uncomfortable more visibility is where would deliver Okay. level one feel respect to months XX there obviously translate reaching

Gord Johnston

good have That's of we of these lot Yes. multiyear point. receiving; awards. a were the -- that been contracts are a number for A that large

So full when of be is the value contracted, backlog but will over years. entered the into award the several work delivered

in into accepted met States of a we talked now. an previous other that we're that for in still those though. work some -- to truly, So us but of we're I feel that think so increasing, in have could geographies think capacity We've of utilization about before the couple fruit I seeing turning United saw the and -- positive us about coming we our how helps of some increasing revenue, that. things Backlogs on in businesses in so XXXX a deliver in staff -- place are interesting, like bit we particular. we bear have that wave utilization the decrease the rates we and have that helps seeing number in A are

is upwards, trending we don't talk run. we're our it to because positive day not because deliver we're in ability this and we about point, if So long concerned our -- we something to take the not with that's while our for backlog work deliver with clients can't that's or us every groups the at want

Benoit Poirier

That's great.

time. your for Thanks Okay.

Gord Johnston

Benoit. Great. Thanks,

Operator

with take Wellington. our question we'll Goolgasian next And from Chris

Chris Goolgasian

you you said time. some s appreciate insects for I the AG on meetings, seeing I from a Hey you if right of this the can on interest AG and climate what I'm touch change towards guys, comment something where solutions. kept side, climate confidential, bullish on side, super And maybe pest But made thanks on at touch on the could of high section just being level, to just just the is lots of I to you're end on that. on wanted come think you agriculture. I

So I you those was interested points. made when

Gord Johnston

alternative particular as that particular we space growing really that we So but sorts in Yes, relates generation the wake. these client seat through this of to as, years on of protein things others have we're a are acquired so grasshoppers, ago that and a firm area and one working couple in protein of into crickets, a

be we'll things group beginning proteins is, We with and move Whales this to of in this is area the some the also into think got growing now and future. the generating really the I and we're into these and increased and sorts for Canola about is one and rapidly so us. of talking seeds of more seeing P things Chris that

Chris Goolgasian

we've in level. Massive the know amount then Can And at on a seeing lane be there? we're be retrofit here secular about buildings. you there. in quickly, to to guys cycle in the Thanks. I net have building of [Indiscernible] you just money zero past going going is what the retrofit to you're talked spent

Gord Johnston

in of lot in that all interest some in all the well. retrofit bit this for further the a little be going -- perspective. Yeah. very Certainly us I net from general. But way going a existing. And in for robust a we efficiency, a zero going the net a more discussions are new to build way way some lot about certainly going for cases, energy We're seeing with very, at we point to take with think to in zero all net years are more efficiency zero. interest than to that's But a clients the several as it energy next over and area in

Chris Goolgasian

it. Got Thanks, guys.

Gord Johnston

Chris. Thanks,

Operator

Securities. TD our will Tupholme to go question we And with Michael next from

Michael Tupholme

morning. Good you. Thank

Gord Johnston

Morning, Michael.

Michael Tupholme

growth down is project and the margin about the you relatively States on or flat see in Canada was was basis global, year-over-year. the but an a margin United actually percentage. the did touch. overall My It up question in nicely good And

the seeing same about Just kind differences Canada the can not what in of you wondering other the you're if regions? terms improvement seeing of talk

Theresa Jang

come often have sectors We a bit does that the mix it to we did decrease to projects a and the in -- that related It's where of we see down of Sure. have. the that -- some Canada -- of margins. lower slightly

margins Our that really Environmental to often be development Resources have margins. lot we on which in the Community transportation of we're really the high a to Environmental have generate lower end. about Canada. talked continues highest I tends Energy Services, and Services development in but tends It's tends really community sector to does growth slightly to saw in Canada, strong Canada, the think in also very margins. lower we pleased. But strong overall, be

So a and I broad that opportunities be pricing the focus gross we're through to sorry, with to discipline mix it heightened expect think we're around still the how we're drove and that margin not maintain I will available margin, through just that call higher-margin able at it. does where sits quite on that work we're it really level pleased us I pursuing delivering a and continued then on where

Michael Tupholme

Okay, thank you. that's great,

Gord Johnston

Michael. Thanks,

Operator

[Operator from Markets. question next Khan Instruction] Sabahat our Capital RBC take with We'll

Sabahat Khan

Thanks good Great. morning. and

on top-line. I Just the guess

taken weighted. the into regions? was further can rates; regions. a looking also, to is of been the you on Just bit going timing call of back-end quarter. there talk U.S. if variability bit those bit much about your maybe Just [Indiscernible] has how been variance. of to bit a there this it be geographic curious growth X.X% And that and each a you on organic more probably in pricing wondering -- little is is contributed good Can said of projects I'll versus There's how is the It's -- rate? But global it -- double-digit a through XX.X%. it much to organic passed some pricing just the little

Gord Johnston

No questions.

for coming the the we this look of work wave kind like of you even translate. was it talked to about we well at when So us, somewhere when in. We're for ready

a We have fees we've get a number of expansion preserve see some with long-term to beginning we've been bit ability increase as using little margins a market to fee well. bit in our been clients the we're to and in the disciplined that been pricing projects

backlog see from Zealand, is the water year good a So the New right robust. into But here Global very particularly our we up fee the feeling perspective. for I just growth bit a exactly of beginning in strengthening XXXX, of I you're the in for seeing wave renewables. and QX and we're really continued think margin a Global positively of the what's think for and in about but from U.S. that end is working transportation very to year. slower seeing UK group the gate in we're in rest of this lot come Australia, us, We're was little us down a strong,

pumps, and in Some work, on. storage but seeing Scotland we're so

So think just good our a our organic overall for year. guidance we're -- and I rates, I the and boat, but where feeling growth pretty for overall think

Sabahat Khan

of year, conversations of end the as you look this are into the And one you as year. your just is having the I guess backlog the the growth coming to last that up back backlog, it just just of of along some the Great. firming are other through a or quick some organic really some stop projects more lines back there up follow-up, and

the you that bit think they I a back half indicated there. in more probably get going

the a contributors through better get to want of this Just understanding HX year.

Gord Johnston

second of more that I the it year, quarter. our in projects most half U.S. business in the coming high already are we're And that the existing to funnel? projects that's transportation that book-to-burn see have for we this you think our begin I those X.X to backlog, strengthened there in start projects that as in part deliver seeing just going of Absolutely. the that so really mentioned is Yeah, had committed. a

So that's infrastructure come the that -- to door. in really starting work

So further second think in the of half I supporting additional just year. strengthening the

Sabahat Khan

Okay.

a last me are of one who allocation, over quick do integrating how bought side, over how rest the thinking you capital the about back this on just while, capital think still shares from you carvel, Let of allocation obviously it year? little

Theresa Jang

Savla, couple with much with consistent It's We has EBITDA now, the to balance the still with sheet find strong one. debt to the years of right X.X rooms there net we strategy of make acquisitions the is last pretty still if times. have been let for the

we're We So we that our the know returns we capital disciplined if to primary for be can our in that target acquisitions. solid continues allocation. find pricing, generate right

the while volatile an it a and to pretty buy been grow of given has opportunity price last share the has and us shares. course, Of

NCIB, NCIB And order. It that continue still remain as kind And first our that where so opportunistic of opportunities. there to will is use are acquisitions in appropriate. is there and that

Sabahat Khan

Thanks very much.

Operator

We with question next will from go our Ian Stifel. to Gillies

Ian Gillies

morning, Good everyone.

Gord Johnston

Good morning, Ian.

Ian Gillies

and that domestic that regardless leading you talk commentary a was of I transpired do that bit happen. if a geopolitical possible, have And they're the they curious on of talking about sensitivities are price to to whether it things some perhaps standpoint. going you're needs with some shoring, having could the given little about your maybe this around of edge clients from costs

Gord Johnston

regards semiconductors. don't know price. on on we've and facilities But radioactive think there certainly in of medical that we're quarters of working California. doing because We we're to isotopes, as we continuing at We've that are well. in discussions And onshore the onshore and like we clients it it move see there of the vaccines. lot shortages in I of to some the field, was sales on will having And past bill for wanting continued people there their production with we with support work and things talked those any forward to with a lot our client So any do semiconductors. see that previous

sensitivity. see is anyone completely -- do a self-reliance back some into So the price don't they think discussion of what about will that bringing supply we to lot North just of And immune chain. American

to about can people continue things moving can keep how how value with work we we we these So but forward. engineer,

some ground these already. plans we've broken on And of them

One of week. even them, this just

moving are into moving construction. forward things we're So and

Ian Gillies

Okay. That's helpful.

over your and business community how the The bit us that On development that's here. little is housing time? you rolling is side. evolved over clearly pretty remind market what U.S. exposure to a Can

Gord Johnston

Yes.

it's look land we financial our were XX% timeframe, of XXXX, from, when come look at development overall in 'XX when development. about is revenue. we crisis, about our we our the at the business XX% -- overall current before our community in corporately, back just So where But

we're de So we've our that in -risked bit really of a locations. industry, that cyclic be but a it different exposure different because seeing to can

UK stock still Barton in little we a Greenfield. Willmore, UK. a were places shortage even the there less, is more When -- Western huge seeing where with certainly Greenfield urban bit we're redevelopment. the housing there's in And of but Canada in the in U.S., are Some some look we the still we at before, strengthened

very and and for very, there. come robust So be years to that's will busy

but development land have cyclic lessen was urban to in that think their less locations than still to to like UK redevelopment some objective on this just stock cyclic, be business in that I will past it overall of crisis. a So maybe continue bring housing because of stated the housing the stock

Ian Gillies

per in it's active employee, appreciate I perfect And I one metrics last year-over-year, you project a there could incrementally were at them what utilization get you this or perhaps know standpoint? do but was that. think context. margin, revenue the really That's point is nicely the of that out much me, happen up of not employees can helpful embedded for kind for and efficiency metric else the which quarter from there that in a --

Gord Johnston

rates a perspectives. bit to particular. we the have opportunities upside We little I in some So to increase have utilization in our think continue do both from us

have which we we be we're revenue innovation our going capacity that's the the good generate net So continue employees. for also to because wave to going our bit group that coming, can to extra we're expand a using it. we're there, be to -- But work using is with little of

you doing system an for the that electrical that some when we so we're system, the for developed have example, design there we've ruling have design is, to systems of the And electrical the together. doing conduit would things internal conduit that we of examples put electrical you're design

just We detail Florist labs. efficient. more out design in parametric system steel finalizing have make a to design pump for station design using We're a to design parameters parametric system that

to things those will efficiencies drive of additional all generating revenue with continue net in us going So per employee forward. and assist

Ian Gillies

over. the turn call for all me. back That's I will

Gord Johnston

Great. Thanks.

Operator

Bank We'll Sytchev National Maxim to go Financial. next with

Maxim Sytchev

Hi, good morning.

Gord Johnston

Morning, Max.

Maxim Sytchev

synergies, wondering [Indiscernible] update geographies wins, of a be the was if progressing, And how so of Thanks it would correct And the maybe I me possible end on some Gord, forth? maybe entity. there. Cardno the profile some and bit to low early is an discuss I'm relative progress had get overall to you wrong, that if margin integration if can

Gord Johnston

benefits, proceeding terms as we terms in contracts employee done sort would the hygiene So integration is of anticipated. working, of is work office in done. ongoing. getting work is of The put back harmonizing overall that all have We're we've the together, integrated

just that of Reisbord, do perspective, a and meeting weeks create stronger. leads Cardno Susan we was something our with we've Cardno, optimize leader strength perspective environmental interface meeting, Services how process a the our Environmental the haven't of then We making A retirement yet leadership, on. who the Environmental strengths a we're ago, that couple will mentioned more I to Services Stantec networks sure CEO, of the starting our from to even the the over group. because everything's in course, services leadership Cardno who importantly Stantec current But And of attended leadership up same even of join of the of take Vancouver. that's leadership that from so and standards our

a in leadership coming the from together that's So Australia, we're same thing working well, perspective. on

Cardinal these are Stantec us harmonizing strengthens Looking us Australia. stronger Cardinal make there. of adding transportation, number of things all the even of a Water, in in to areas. leadership leadership, at sort

proceeding through working Oracle should wrapped well. is think QX. And end up be by of all the I that, So integration the

based had we So than we sit. that get a stated quarter on that currently be we so perhaps should to even year, we wanted this hoped sooner we we,-- done had where

things always those EBITDA, So fluid. are

the we're about good it. talk U.S.. and things both Australia. if you maybe want some Maxim, treats margin, So that pretty I that to about in think the we're of Overall, seeing feeling

Theresa Jang

perspective. that as had Services in is margin margins strong we Yeah. The project It's acquisition. a areas strong Environmental really expected. the really are on unfolding from we talked about

been there questions all just Australia were expected. they on line really really know where really some in Maybe completed except acquisition we about that's have So with what positive for and I their turnaround, Australia say going bit I where been positive improvement better are we performance standpoint. in pretty expected that see that would margin that little than we to so a from and has

Maxim Sytchev

that. things working wanted Okay. And can actually the comment like clarify. That's -- I made just around to -- remarks your capital you helpful. you in super prepared just a and

and inflection we're of should bit time? it QX, So by year-end point shorter an we see normalization about QX, a then going in or think how in to

Theresa Jang

That's right. Yeah.

movement we have we when generate in revenue. what because are, call we're changing so the to course. that can't of period And financial But a systems. continuing we invoices systems, where enter of blackout generate financial to we

the So then to Australia and those out QX U.S. door. the is going invoices in getting and cause some QX lag

-- by a as the to Stantec for a result And so slippage we up couple of the do migrations end for the integrations a get caught DSO of we're maybe expect of expect year. that day are of and year. big the of impact we or once done that those push Stantec, will two more to And get caught overall well. end QX we'll thinking all by put or days those broader are as up a in But

Maxim Sytchev

just Gord, one question. then And last helpful. Super

very of oil and healthy terms obviously [Indiscernible], In levels. gas,

from hearing current clients, what Thanks. you're see your Just -- curious to what [Indiscernible].

Gord Johnston

Yeah.

and is business. a really oil midstream gas And so our business pipelining

seemed of in over. we point. that flow industry capital in through. think in have of new And into space lot We're flowing seen with pipelining the continuing ongoing the [Indiscernible] seeing of than projects, so inflow most -- to of continue. new the are with have terms a hearing come the part, not of the These for the a funds projects earnings high. capital there capital of a ways of firms Not prices ongoing that But different but opportunities stock, for I expanding lot you've rather their the that the projects we at dealing we're be with new to lot us some have this

Maxim Sytchev

me. for much. so all That's you Okay. Thank

Gord Johnston

man. Thanks,

Theresa Jang

from with question Sun Laurentian Troy next Our Bank.

Troy Sun

the just some Maybe just you here, in of quick have experienced with success early question the very Max's terms integration. on morning. of that Good Cardno follow-up

experience so strategy. Just small to trying recent maybe your about to to focused transactions M&A your just of you Have started think get a quite on larger or medium-sized deals. potentially given ongoing sense

Gord Johnston

larger -- our that we that would of as these and for easily, can us, doing look so goes of is but know if And still don't to other long-term sense opportunities look from very continuing has good based arrive. us it. that hits continue successful sort from Cardno a they and stated for and been Certainly perspective. we're integrate it We some have get strategy and a we it would think strategic shy last something made we I always away to thousand-person at was we at

Troy Sun

that's super you, Thank helpful from me. it that's

Gord Johnston

Thanks Troy.

Operator

turn back or closing there are questions at additional further the I It no any time. appears call this for will remarks.

Gord Johnston

hoped, as to we unfolding the the is you The further I of just year with you in on. as we quickly had all morning and Great. this will we goes wrap joining appreciate up. forward chatting in look us quarter year

everyone. very much, thanks So

Operator

call. This your concludes today's you Thank participation. for

You now disconnect. may

Stantec (STN) 12 May 222022 Q1 Earnings call transcript