ACM - Earnings call transcript Q4 2021

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Operator

Good morning, and welcome to the AECOM Fourth Quarter 2021 Conference Call. I would like to inform all participants that this call is being recorded at the request of AECOM. This broadcast is the copyrighted property of AECOM. Any rebroadcast of this information in whole or part without the prior written permission of AECOM is prohibited.

As a reminder, AECOM is also simulcasting this presentation with slides at the Investors section at www.aecom.com. now Senior turn Investor Vice would to call Relations. I Gabrielski, Will President, Instructions] like the to over [Operator Finance and Please go ahead.

Will Gabrielski

as the to and expectations. Today's available, the in to segment. discussion no described financial I in direct periodic GAAP forward-looking those Except We statements is performance risks International on website. operator. projected our like business contains which reflect uncertainties, may our X our the and margins the SEC. use reports required to differ statements. future and where attention appropriate The reconciliations from the financial Page presentation. posted adjusted for by on you, are law, statements statement results our undertake forward-looking safe various operating to today's with today's Thank of measures Americas margins including presentation. References obligation incorporated we certain forward-looking about risks into harbor Actual the and would financial non-GAAP presentation in update your filed to significantly our

net revenue, refer to defined revenue. service excluding will or is NSR, as We revenue which pass-through

discussion the and year benefit fourth adjusted growth NSR full prior the of week of to quarter. quarter exclude to extra year-over-year is the the Our fourth for year

operations respectively. Lara our and On statements. outlook Management our priorities; continuing on businesses review and Executive performance our XXXX, in with will detail. the operational a in our Financial our President, Kapoor, As and review January operations Civil Power the key accomplishments. will financial Professional business discuss Today's Officer, noted. are strategy a today's in Troy we in Chief call, Rudd, XXXX classified we greater Services comments Poloni, focus the sold will and Chief of unless sale of Services results closed discontinued Construction Gaur reminder, financial will the January business, on begin Officer, of key our otherwise and financial of our as XXXX, and October The businesses these

question-and-answer turn We that, over with will With Troy? to will a I conclude call session. the Troy.

Troy Rudd

joining globe a you, thank begin the made Thank and today. fiscal whose across by all I success. to contributions our acknowledging us teams XXXX you want tremendous Will, for

assets, Our their because people see that in remain beyond. I'm our the success I'm well it's proud to opportunity are the our accomplishments, energized of positioned team's of greatest and so our and future. commitment we by for and XXXX we

double-digit NSR our results. our operating record on year. every margins, and a strong expectations cash It very flow. growth, by key to earnings We successful accelerating Turning exceeded growth was organic metric, highlighted really

XX.X% marked margin Our a the expectations quarter full increased year. third adjusted our the delivered which X.X%, and growth of fourth strong International quarter included results XX.X% Americas in businesses. NSR Both and directly performance platform. and accelerating our best basis This quarter lead performance the we margin than put than provide industry. XXX in fourth have value industry the our over delivery to the the in high create we higher a We contributions the fourth from quarter fiscal reflects in this by organic the context, is both exceed actions taken for clients consecutive operating and points extend To to and segment for the more XXXX.

schedule achievable view we than and which very targets ahead ambitious. as of at Today, on back plans, we we our have margin even conviction greater our we XX% set are February that at Day, rather Looking aspirational. now time the longer-term to Investor in our goal, were

growth will Importantly, AECOM into a and margins detail moment. capabilities, our opportunity to greater the teams drive I in digital afford which our to strong us in in investments discuss organic our accelerate

adjusted continued flow year and high $XXX Free both $XXX for high We respectively. and cash our cash at EPS. XX% increase, Turning $X.XX, adjusted by XX% an delivered end of ranges Full strong adjusted guidance EPS million a was was flow earnings. EBITDA earnings EBITDA and conversion. marked which million and was the our driven to and was

flow on efficiently focus is result business. converting well cash our a mix high-quality, to testament to low-risk our the cash Our of the as earnings as

which growth. million is $X have stock use authorization. of have best the our stock our We to and the repurchasing and remain in cash highest investments repurchased or after than Company, more current with since cash billion last and we We September of XX% committed of we under flow, believe returning capital our $XXX available remaining

our wins backlog. to and Turning

we and of remains We $X.X X.X share. high the business. book-to-burn design a including delivered market the Our in fourth win continue quarter, to billion gain rate in wins ratio

a which increased the indicator by backlog, included in X% XX% growth, revenue and is contracted Our key business. design of growth

our the is double our performance pipeline that are the Our There industry infrastructure market to the and clients' in our highlight Overall, U.S., areas our grow. to funding expect demonstrates of strengthening design showcase benefits opportunities in on from and the particular Americas we based continue value in business. up to the digits clients. we success backlog $X.X we to two trillion including that organically And bill share. capturing outgrowing are deliver backdrop,

is program in to support grow design more transportation This recent This we have transformational had are East, and Middle we objective business in from the and employees Qatar, includes apparent program and First, a delivering. incumbent this thinking joined Saudi where instrumental Al-'Ula significantly such several XXX in combination and management winning AECOM leadership, larger the projects management were a management high-priority our as expertise expanded program substantially success. on set Arabia than especially work. global of large key for technical programs our we where in a successes and where to and as roles project City

leadership ESG. on Second, we demonstrating are our

more of the drive imaging. leveraging with element at Capital critical U.K. We in biodiversity to investment by the great the and in is intelligence, the agenda this and data precision Our study project of sequestration. carbon and global XXXX a artificial exactly to Natural change decarbonization established example. GIS the decarbonization is drones, a The impacts Laboratory ability to environmental thermal impact measure

at the Our sustainability NCL measure our leading creating of investment markets to in which important methods for our are the in reliable how AECOM will development for professionals and decarbonization, be standards underscores and investments. work especially

in turn and investments knowledge-based to into our break the people, created investments next advantages. that Let's people. best has industry. talent advantage. We and attract fiscal flexible optimal the model work this, slide. To to we've the in earlier have that our expand critical implemented Therefore, strong designed performance is diverse We're right retain Beginning I do in accelerate our serve the in mentioned work-life professionals our we categories: with it business greatest these and as facilitate opportunity programs balance. three clients culture digital. and XXXX to a to place a our the and

programs in Most enhanced technical development. and and are we've our benefit most increased professional addition, the the our winning people iconic importantly, delivering and projects. and investment In challenging

culminates in engagement, this low of and of satisfaction culture attrition. high high a All

Turning deliver for clients. to how we

on of certain expertise our workforce. our with expertise, capabilities ensure program accelerates elements vast are and leading clients are technology capitalizes to the and designs, We pre-populate design extends account our across our automate from developing advisory benefiting our process higher-margin We're our of our key also which globally. best management our and capacity to programs and investing

advance for all year more digitized. a AECOM, informed today, of our projects by integrating of information years Finally, of now we of simplifies Digital this which a launch than capabilities. is formally to solution focused our engagement quickly. management. a all platform a see in the the competition to out process step solutions, becoming reinvents digital more into investment together which and but is our more PlanEngage, our community engagement this allows industry innovative the an brings the clients products. key unveiled ahead many digital certainty is process standard. infrastructure creating time we greater process project stakeholder After of critical Successful rolling make digital great of digital digital are we and a The and the project, our tool, that on example PlanEngage capture A rarely elements public estimation, and by this project is by PlanEngage cost, decisions

tool the is Across constant. these in theme areas, this of even passage one be more Infrastructure focus Act valuable. the the U.S., With will

and slide. next expand Our as challenge constraints advantage Please the will investment grows some demand labor in our to our turn industry.

provides XXXX trillion fiscal and transit climate brighter. been on beyond, end to the and Infrastructure long-term a our bill strongest markets needed certainty infrastructure generational Looking as funding $X.X marks environmental much has resilience. never America's and remediation the electrification, This such modernization, spotlight the infrastructure. Act U.S., investment in across Jobs In

profitable most anticipate coming we positioned and increase business are we over this most nearly digits in in our addressable double this XXXX the to fiscal benefit We item years, every meaningful will beyond. our and market Importantly, line bill. benefits by and expect the funding from

federal our are above the clients local DOT Today, environment, are are stronger. state prior strong the outlooks budgets to footing. equally addition funding strengthened projections of In significantly and state fiscal all on and

in the funding we will double U.S. anticipate in up with pipeline accelerate the sector backdrop well. is now And public Our strong digits. as the decisions pace place, of

improved international markets strong. quarter. equally the Conditions markets largest in our markets all international we're strong Our growth have in are major across fourth delivering

like on regaining contributing the larger with in especially we to I'm priority. where U.K., management transportation a Middle East market the been addition, has strategy places the pleased success our backlog growth to In share strong each geographies. and wins our that of key focus in in had see a key program in

and positioned to the as the are ranked we facilities As water ranked transportation, as well environmental firm, benefit. design firm uniquely #X engineering #X

growth this We've respective guidance to and EBITDA midpoint. margins adjusted of $XXX least Turning at record reflects XX% our organic year growth at of to high between basis an point and expectation and and increase million for million Underpinning another X% NSR $X.XX of growth This the guidance. another $X.XX. our XX.X%. and in $XXX accelerating XX is and between financial initiated EPS adjusted

digital and XXXX I'll on our all incorporates our more XXXX in a investments, Day also in expect XXXX. our doubling from long-term delivery our over earnings at planned comment Based Investor to to we to people, nearly we least the in our XXXX investments I call the we guidance fiscal XX% client development, to the With $X.XX raising on CAGR and Our represents capabilities. performance returns at on turn want shared our projections adjusted fiscal This EPS to strong February. and Lara. that, than XXXX. are the growth we business of date financial making a are guidance

Lara Poloni

East our Thanks, Troy. XXXX. like I and to In some I'd our Middle have capabilities, many leadership, as accomplishments am global great larger particular, on the A pleased and with management strategy our growth highlight technical where investments example a prioritize multiyear responded new their advisory program we is teams to approach, opportunity. of of long-term pursuits, our this how fruit. success bearing in well fiscal expertise our are key in

Al-'Ula megacities, truly We distinguished have gained every culture and Key with of as has successes market of that of multi-decade global require sector, from from particularly these including share from clients capabilities, Arabia. work market to expertise collaboration investment programs our in Saudi the competitors, to including more and wins thinking. us our integration region NEON address holistic

the where in program selected criteria PFAS is a pursuit. our in wasn't leadership the in many for based were including main example U.S. the for great us expertise as a PFAS selected large capabilities even client recently in on we verticals, who Another

over in time confidence We our best instrumental our continued prioritize share past and the year the on are capital and rate our market in been gains. continuing which opportunities, high win to has

Global journey clients, to our progress is front investments demonstrating commitment earlier communicating our are Summit aligned the and COPXX Report includes and week, our well which an ahead, spoke legacy to as positioned continue ESG disclosures the this this sustainable last private month, our alongside capitalize our center important in TCFD This with with in in the how clients frameworks. our underscores on our leading we the Looking unity sector was on ESG challenge strategies. and most At In we and trend. ESG are this we report ESG, prominent on and public regularly SASB step and published opportunity. commitment the prioritize to voices

to in majority we and discuss about High a are including September outlook brightest. Troy deliver as we satisfaction now another from best focus are a employee engagement that To With call that fiscal leading highest pleased industry's point, on I'm vast ensuring revealed an turn is to company's detail. also employee we Finally, spoke momentum, we our very over performance strong in to history strong our report in our position. scores financial levels and survey the the XXXX. AECOM Gar fiscal our work. With to attract place from of client to position And to a I operating conducted strong enviable great which global the engagement, in retain the greater XXXX. in in will that, year and recommending

Gaur Kapoor

Thanks, Lara. slide. next Please turn to the

guidance year and our NSR year another focused full double-digit of the strength business than benefit accelerating EBITDA growth Our fourth of at growth, serve seventh company's of history, adjusted more results adjusted consecutive and clear cash quarter margins range. highest or growth, year a as EPS of free the delivered in strategy. We and the our above our our evidence of XX% flow

financial and also creating our is to confidence performance bolstering on in financial strong Our opportunities long-term growth organic in growth while delivering our increased goals. organic invest

people, digital will turn the design to and In increased advancing X% first in $X.X backlog at large achieved both the and of This this growth of slide. was time. in awarded backlog contracted for into this as increased project NSR the a construction Americas, firmed construction that in record. of note our the year. management a in up teams to our the backlog next and business moved our result billion the all only that Please phase growth should Importantly, including sustain by XX% and reduced fiscal advantages included I by set a investments this Contracted client project management this XXXX making that critical new quarter, and capabilities businesses. outlook fourth beyond. in while by was design

of than business it our earnings in management in impact confidence material has shift However, and outlook growth is outlook ever economic is the the the not to our been the construction higher strong prior all-time years. basis was the new operating high Please adjusted next to slide. from a the many point reflects turn XXX XX.X%, The fourth execution. to a increase margin quarter for year and

a segment. our the including largest International our market the NSR improving is increased share gains, investments, increased all regions, XX%. of in market result growth by X% by to conditions. of growth Turning across and steadily backlog fourth This quarter, organic

the operating from margin was basis point the an improvement adjusted prior quarter XX X.X%, in Our year. third

margin We improvement next of confident Please continue our to make progress remain initiatives goal in margins. turn and double-digit achieving slide. on International our the to

free of of contributed cash liquidity year $XXX capital allocation. flow, free and full cash Fourth to Turning quarter flow million. million flow $XXX to cash

cash Our the allowed phasing repurchases. throughout us benefit year, performance reflects our the to which improved our of stock accelerate

approximately We have $XX. now of an at share repurchased of nearly XX.X approximately price million shares since our September average XXXX, XX% or count starting

As we ahead, build industry-leading on critical continue to will organic growth. look our we make investments to

XXXX. in our to work cash our primarily the in and to digital as our to impact a to will as investment As expenditures free strategy estate include earnings real expect fiscal of our relating investments conversion These result, flow we ongoing investments XXXX fiscal the reconfigure advancement flexible our of well capital support footprint programs.

underlying million of intact. million that generation flow between firmly XXXX. $XXX in within the cash To and expect we free point, is $XXX cash However, the fiscal business

will investments our turn us from Importantly, in innovation next to slide. are XX% continue our we progressing our growth peers, margin to Please and target. and towards longer-term separate the

us materially XX% in market growth and clear, the expected For million we beyond. midpoint. guiding which, does To and midpoint at $X.XX our from conditions or any be are contemplates more of experiencing adjusted backlog legislation expected to XXXX X% million the fiscal or $X.XX benefit fiscal This at $XXX today, our XXXX, of as people, growth and pipeline benefit passed guidance this EPS to recently a digital guidance $XXX of adjusted benefits and between and not and the substantial improved EBITDA client in mentioned, and Troy U.S., our is the in investment the reflect capabilities. we're

to accelerate We in approximately is expect organic MSR fiscal growth all growth. XXXX. our to X% This

to our to share allocation continue lead to our to Also date, our we clients is addition, expect the benefit while of guidance points also fiscal back into to and of rate. XXXX continue emphasize people, In in as industry margin further in innovation. expand program. incorporates capital though I a we as guidance project of we our repurchases a XX% XX.X% to effective part completed adjusted our stock buy XX EPS that expansion on investing tax want the only incorporated basis

We expect to our rate changes this and maintain going structure. operating in forward, reflecting mix

fiscal Finally, XXXX. our our I expect track with should phasing note in that we EBITDA

also a prior growth for expectation seasonal nearly in XXXX XXXX. rate at adjusted our the and outperformance weighted in rate than our first XX% expectation XX% quarter, least strong we annual is tax as platform, for our targets EPS lower financial may are fiscal achieve our from operator, the are XXXX. launch successful fiscal of fiscal phasing $X.XX Our compounded With projection XXXX, we This increasing again our to our ready may be be questions. first includes which With XXXX, fiscal pattern. of and now in digital long-term is more that, result, in XXXX EPS to our for growth our and above half

Operator

[Operator Instructions] KeyBanc. today Our Sean from question open. line first your Eastman is Sean, from comes

Sean Eastman

international on fiscal for I target? maybe to Great organic by at revised how NSR for flavor versus into looks fiscal 'XX just versus of 'XX, built guidance next what's design year. CAGR updated you here. that give start if X% update we're a us wanted Could domestic? X% construction the the And management, the

Troy Rudd

question. Sean, it's for Troy. the you Thank

of work part we together. all, think and design across construction to first our to we our management being of working all actually U.S. we've and growth been we ease have forward, accomplish our what businesses. them relatively business, is When about when of look organic So see that

or But significant project is we the increasingly to construction So deliver increasingly business material market we momentum look backdrop again, element is and a design it. when and it management, at a the positive, there's positive.

the we it Americas. So across see

And internationally. driven that we're the accelerated -- renaissance, various time. think we about by infrastructure, been right. Gaur investment all year. global entire being business ambitions, in large improved really really see in it's investment improving term, that we U.S. opportunities as private seeing for of model, across is markets. made actually question. see the infrastructure also the infrastructure something Again, we term, the it's the momentum we're we we catalyst about We unusual and guide the If is this Again, built over investment it's I'll as a this by think we and then long-term being terms also the in that see business, look of And If in next infrastructure the so made in significant the And our answer positive globally we and for made long business. public a momentum similar the the ESG course seeing in by portfolio a a it in here on longer almost investment of again, in but based let giving lasting. then the increasingly we're that IJAA. very that the And what's 'XX longer in the

Gaur Kapoor

X% guidance is in We have do this as Gaur. our for CAGR Sean, well. long-term built a

target 'XX. we're lot provides the comp is Act of in Act. now, baked haven't for the off Jobs any for very Jobs keep not include mind, but it our in year start very And actually of Now really strong a regards fully projections fiscal a to material to a that win long-term certainty XXXX impact it either. confidence as XXXX does in 'XX what well, in confident and we in of strong

to clarity, possible more will growth upside more get we be there target. that As it's incremental

Sean Eastman

sure obvious in tailwinds the And the could there, growth Middle in talked International are share there. in guys business. in expand prepared the helpful. pretty make right the element strength U.K. an the guess East. we're in Maybe the the unseated like takeaway the incumbent super Okay, market wins want on Jobs you the It But Act. about big remarks, you some some just I to getting just you highlighted I around U.S. PM sounds

Gaur Kapoor

Sure.

are making I So I across significant tend share business the making that lot and customers that those International, U.K. really opportunities see is they're market with don't again, their very investments. gaining programs. across infrastructure. seeing program driven then out. our also viewpoint is Australia their again, The those our on We is making We've client a East. own they the making and think the said, again, investments private infrastructure. driving in But We top specifically to International. as we their on that set see social got environmental this in to around in, the that investments in And layer larger ambitions business. management isolated Canada in that But are investments. that's Middle of of

see portfolio. work that So opportunities, this has bringing how clients clients, entire those we to have around accelerant the been across globe for and the the again, the the that focus for particular us delivering clients we on manage that our those if again, CapEx you it broadly eight that have advice infrastructure, how on And we services. that projects need best because we're focused program management let's front-end about we're and think say, so investments the way, being our accelerated next, in to years between help When the there's in over CapEx. and five invested of this much to providing

larger in doing CapEx being in they've building there far work management So it's investing the our participate not to a years. which and actually had doing construction to than but program programs, them the for that. these work are help way us, past business just the And large design manage is in

longer having program frankly, business. projects a So meaningful management way in by our we view in as we're this participating those more sooner and,

Sean Eastman

sneak in. one excellent. last Okay, one I'll

in kind kind you're the highlighting are say points tail What there we margin 'XX, also expansion the HR, investment we here the of for you on accelerating. basis fiscal would expansion saying digital for And 'XX? underlying business expect BD, that what in investments? level XX of you're fiscal if of should So investments neutralize of is those

Gaur Kapoor

this that Gaur question. I'll again. is Sean, take

achievable, seeing all renaissance our their of 'XX in professionals to, our industry, this strategy, taking what's of value just coming and were even and continue second those. 'XX of in XX,XXX on we're rates, those just months keep mind, schedule into And ideas regards, our sit where which now we've focused the long-term of way we're at in we've being it's XX.X%, in our And of So we that taking and ahead business accomplished, us. a in building look our over-delivered was we that we're And schedule. fiscal year delivering to. for your today, when and ahead tailwind, making will brightest 'XX. operate as what what to alluded ambitious, ceiling, the this providing to the 'XX our experienced XX% the is nine blocks in the Global being where dominate in part of question, to we're place taking this you ago, geographies And guidance made beyond, Act simplification at geographies. half the infrastructure clients we are we capture before key when have of off expectations into in of and you're where is which floor the Think investments XX% we that provided Simply lines on certain ever XX%, business that put, we where in spoke it's really strategy, we Troy history. them, our Troy highest

Operator

from Citigroup. please comes proceed. Andy, Kaplowitz from next Andy question Our

Andy Kaplowitz

more So Troy, you're can core maybe us Americas design. little you seeing color into in give what a

still mentioned although of pipeline that You of contracted is XX%, up digits, management. a lot is double XX%, construction backlog your opportunities Americas up

your U.S. who, they any about the start acceleration, relatively state, especially you think, last bill infrastructure some with quarter So not, if today? do still did for I And to instance, could seem forward be when move customers signed you of careful think see forward, local from to moving contracts? considering

Troy Rudd

the the decision-making. at Andy, York, importantly, -- terms infrastructure example local of I for and see state saw put a client large transportation even plans we and in New And broader New an next to a five was happens, was that towards Yes, passage Obviously, agencies. $XXX years, level. I'll and capital and it we Jersey certainly the the provides that, And invest, some area programs, of New agendas government the when over provides more to But in to provides Jersey. the the the this in again, to in of billion transit of clear assumption use the but support so just New just Americas support again, But done and are it almost investment IIJA. working of an York broadly long-term the before for this it bill. more those even improvement that some today willingness There infrastructure did agencies p.m. more at very business we're overall federal programs But lot support being the signed will in without it be X:XX infrastructure, place. now support

saw an in pipeline. acceleration the we So,

beyond of first opportunities. what and the but into So seeing And we've wins expanded the of terms XXXX. in see being terms then, we were all, seen of what we then also already accelerated, pipeline in this of

Lara Poloni

a of as these strongly going well. near-term a I opportunities lot is the robust expand of coming of that's a seeing IIJA, in that mean, item design build. line just see we're thing, we're other I pipeline program of is balance lot the we agencies as Troy's of robust that for work well very think, our on Andy, in was I And And investment terms to to very very federal a a good up positioned as of planning infrastructure capabilities portfolio that. all work, point. every where being long-term of of brought single

think great of a in that. attack we're So to position all I

Andy Kaplowitz

acceleration you be That's you it's it's about, think think going to bit color. say seems of think 'XX? of to much I Anything QX. then And more could on because up NSR all helpful else that X% you're in difficult. X.X% it underlying levels. QX have I up even a forecasting get like would in conservatism comps don't your

Troy Rudd

Yes.

aside I on we what created the we we've the we we view clients again, the as business. made. what our the the They're our comments increased date, in again, tried business prepared people saw point as that investments based to -- their our having the performance momentum being longer-term and have with that also, success of been So think that in to into

exactly a we're will that out now. And so, doing started IIJA in We're we while haven't through process But really for of our will that ago. mean that sorted what mean. business. the the what exactly We working

I say our provides is we try point We upside of recently, -- some something of to absolutely of can you've least we but it's our the results. statements sense gotten at where business. kind out want making think and don't in back we to maybe we So them don't don't somewhat this a be conservative But it up. be can think views we just

Andy Kaplowitz

just and cash making? for just down a conversion midpoint. the your else 'XX? at free think of flow you're Like that quick that in versus guide, investments to And CapEx Is terms one the in versus just the terms Anything of Gaur. about obviously XX% 'XX

Gaur Kapoor

XX%, expansion blocks we in support what We're like see business, the exactly XX%. really for Yes, longer, our coming to again, also Andy, said, of the margins putting building you investments conscious no I and it's growth paces making stated. the in but

fiscal of investments. underlying said the the the in conversion, you investment be CapEx. business remains it's that's when at flow cash 'XX, free for see of in And it strong. cash our in flow always lower you our conversion and what mid-XXs will year because We've look digital, IT the So

Operator

Baird. question comes Wittmann next from Our please from ahead. Andy, go Andy

Andy Wittmann

a to there, just little the on I free question flow Gaur, bit. going cash want keep

So of that full should year-over-year. CapEx a little like up refresh of mean, for added guess, in to $XX this us to want half flow I quarter. think are headwind for think back are. or just a it anything that to have in you cash of noncash? get what you you mean, that collections the sounds better I other any you year. you've as I mean, of I underlying just guess, Could pay Act -- CapEx looks fiscal wanted It if comment, costs. there's are of And could we $XX address there is a lot capture headwinds, maybe guidance I it's sense also cash us, but for Sorry, should identifiable I was the got restructuring of those. And your there flow that think million And well? unusual if in $XX first in like your million Are some if that delta there guidance the that year. unusual? to you, there's those will like bit free the I remind we positive free million here to this -- cash be you aware as this I CARES there's of pieces year

Gaur Kapoor

them. Hopefully, Andy. I respond No if all problem, Please know to of let don't. I me

our XXXX one at we but puts duplicative so cash to 'XX. going in hard the and to and all regards I takes, in point of -- related Andy. We've of are workplace CapEx, to in item proper it future. about predominantly restructuring, incurred million, making business to or It's which, Those either a we the unusual the well. to have year, investment will expecting, the Troy in IT nothing So think infrastructure or year, to as CARES incur are Act the it real $XX estate to we reasons restructuring the $XX And the had million relates predominantly is way, in for million the by costs current flexible that as the we're progress unusual earlier. just into stated there and what in flow be to temporary in we're as many the cash 'XX restructuring. There's $XX a

have We of thousands tens a in on of time. projects point at going given

So it's hard be to precise. that

Andy Wittmann

the to of where of Fair Company enough. handle the much recruiting in you understand this looks what just work to we'd thought more the and for about utilization overall capacity your that with heading inflation and you that currently means here. staffing Troy, the flexibility have, in the think on I talk have compensation, you guess, people characteristics? the work. I you organization, currently I kind the of And your and of have people do Could organization we're then how labor just more you your check kind that environment of what that like

Troy Rudd

same big if I'll Gaur. I'll don't, Hopefully, all was That like and I'll question, the so broad I a very Yes. do them be hit thing. remind me.

just we more becomes on So else. industry. that, people talented the of the question in absolutely, retaining organization. And level, constraints very growing, bring unlike there's a we're people There the certainly to no and at high -- that terms see important, not attracting as business in we're to our anyone unlike even ability is

year, place people In terms year, to forward, move creating are again, far for of But a so this we great have we to as focused people career. about added a this the we've organization. on X,XXX

things professional they for creating people at the workplace want a that, flexible technical it's investing comfortable an be doing, them and important to environment of element where It's be. in to their and that great development. we're actually an place So looking are that is right? their We're

evaluate benefits that We our lot costs But of labor all business the making is that at for some you along also in create market customers. things compensation are which does, inflation. again, sure that, can and said, a certainly of nature the we're our those to our like passed contracts that and as

But passed get customers. those into cost-plus as If something they rates costs our importantly, through of materials forward they you you work, element we're to projects, contracts, into this digital and there's our people which this, then delivering the of and important have than investments move their transformation, time can't and always digital more are how is bid as And escalations ask get investments our that. people we doing or is on which there's we harder built in to on built our we an work that refer think certainly to element more are.

in to creates we're can it looking extending what environment environment, time, what -- they're what terms to we're better and they your challenging the by frankly, a able in day. capacity and And these people's digital creates extend making investments more is So more career. of it at doing an accomplish fun work with same work their

we of take are continuing capability. projects we this the then, globally a who element market have. and around concern ask or have capability addressing in that so globe can on important participating being great to that extraordinary build these by excellence believe and excellence centers we're people to from of the participate of that So a And concern is that that's really last centers we we thing members

be look So because we that's at We we've something think think position that that's we not issue. how -- customers. so a industry that as some can sort impact would us what to been has deal things passes it an of have, to very that done had not decade. a we problem with our through something that margins manage well for industry going it's to our along our And to great

Operator

next Our Fisher ahead. comes go please Steven, Steven from question from UBS.

Steven Fisher

then kind line confident of that's is drag making. to are it Just mean maybe examples wanted going through investments CapEx or what you're some to give visible just will I digital fiscal sense us IT, they a through it's less margin could you but sounds some all like just if item? come the that back there you're are that how And there -- 'XX? just the some be of again of we examples after investments some making, And of,

Troy Rudd

Sure.

We're XX% cutting But answer the that see -- the this we this the deliver is Gaur answer business as costs. improving is customers we again us, to not second drag How how just being an what's in of deliver it We important moving beyond target half value see path actually the for question. going the into range. I'm XX% and or we margins. let Steve, first, our the margins. question, So a don't to that let me which margin

And money But It's investment. a invest of in -- an deliver there the get the so investing to to just onetime that. continue journey. invest continue that and part work. going is to way ongoing that's there to be to we'll change we we're believe business some certainly we're how that not we That's will

this to The unveil investing not and this new. XX in months. on announcing point that doing we're with. having success things already starting We've we're working been we're here other about important is that we're the for something What actually is

tool up made their environmental this I improve engagement PlanEngage permitting their using speed working PlanEngage we've to comments. something digital they've in so reference especially my year. COVID. community And the that And globe tool in that call with past customers And the and process, for been is during a we to been throughout to as

And we the even think across and -- so believe get transportation customers it agencies it. to will investment the projects we've with is We've approved. transit really -- for with around success communities is as this become we to our industry will it agencies PlanEngage large It world, their and valuable, large not become how with I platform something engage to product And and going we're this unveiling a product. is said, use this world. been their already the that unique had actually more already in

the an talking of we're are about. -- those example things that that's So

Gaur Kapoor

developing it's monetized versus and go CapEx, it'll Initially, the through OpEx. that once Yes. it if OpEx goes focused internally alluded at to to, both. of in it, what our CapEx through marketplace through to Troy time, specific or And efficiency being the Steven, expand we're workforce, we'll when to it's go

Steven Fisher

helpful. of to be Okay, like is then just potentially this any approach the of And force that, activities given to that's and Is related what for? stimulus triggers this Company, a just you going sort So a wait-and-see? today's the anything. see prepared internal task it's more actually to this stimulus, inside does the curious you signed Like type action being any said, what very or have do now be if how to going inside you're to this particular trigger Company? -- afternoon, it like of

Troy Rudd

guess them period has to it had it. line any them And activity in clients obviously impact that because we've of how understand sights talking I how necessarily long of trigger a activity of it's been doesn't Well, for time. new take advantage going out can our to figure they to the and Company helping

on for while. something as been going has been a been getting planning So getting and accelerating. Obviously, to we've activity closer that has that that signed, dialogue

going as just more continuing think importantly, CapEx got to take to and plans them through or it's And our once ongoing a advantage it? XX they're or increasing about Again, do clients agencies of signed, But it, they they so of how going helping discussion by it clients how with that. be is you've this. think take advantage through than are could their whose more

that so And so say, investment program we them is and we've why management through making. important, that's help the to team been a having that's

not doing more thinking over with clients of our anything time. been a this afternoon. we're all so long period a of We've as about sudden of And this

Lara Poloni

agencies of the very infrastructure strong for looking critical of these that it's going here. global I we're we're a positioned different growing, of scale all forward. opportunity. One areas And infrastructure Lara no to that advisory, world. capabilities outlook. management to Troy's pipeline that And And we the our programs significant to that strongly program of comments, earlier all mean, infrastructure are see and Steven, front-end to approach sort at back around they similar it's the of There's we're applying very address our very are key AECOM support a the where

Operator

Our Michael, Michael from from of ahead. America. Bank Feniger please go next comes question

Michael Feniger

We're the right seeing engineering a lot private equity. of M&A now in including space,

balancing view at maybe multiples business versus where the stage are with you the are Just reinvest acquisition today? this to how in

Troy Rudd

this. There a again, question, there viewing points two of good are obviously are -- It's Mike.

in believe, all have for of we think We same of XX% growth, we're of but I capital closed is you very CAGR growth are to to a shareholders again, time, So that in stated long-term and that look view. that organic said, at of we're if this returning capital at earnings. we invest CAGR as free our the view, And stated kinds looking of is it at investing in invest And -- cash believe at long-term look we the ways range. cash point and point there organic [indiscernible] earnings, a the we shareholders our mean,

deployed, the lower some around you through capital M&A, is that. which than analysis how that is do you'll find you look long-term perhaps when alternative, that If at the is CAGR

importantly, thing also which cultures, out a comes integrate Now integrate it with to and do businesses whether to you're successful. this be difficult find to ability can and years takes more the actually

the now our business the the So have that to our opportunity view industry have believe with in per is best CAGR the highest-performing we long-term that have in to we earnings continuing our produces share highest business earnings margins. And investors, do cash just which for believe result we highest turned or into that the invest point we and the it of CAGR. cash

Michael Feniger

Xx another just that, we has follow levered. your year guess and growth I think, free moved good up you're, a with of I But considerably I leverage assume mean, quo. your to if cash of EBITDA flow, the midpoint status down just

the this any about stability range year? business? of with we of us the Is there well curious Just what leverage about business see the dividend, a and into we're growth instituting the the right range over that next how think leverage as moving net of to think for view this given to So period. stability is as this like runway

Troy Rudd

Yes.

on with that Board, you're we answer How I of important is And capital we're question evaluate an have I'll right. the say have today, we right? So clear -- allocate dialogue just guess, very what to that But answer. this, an that's first simply and all, we ongoing continued is.

nature Xx around we're we have, leverage. cost is business, be look of long-term certainly And we elements of the the different capacity. the right. our you're spot have When the -- place good along decline, will leverage backlog very look this. meaning some right if If one the capital leverage think the the the in our that think leverage but to We more we our again, As we business leverage our of business, net for with our be, business. at at grows, current that the -- to net of that have is we net look position, certainty that -- you at a we comes just which

dialogue is on larger Board right we to to we're question we our capital. other have an dividends, very opportunity about forward, an clear allocating that today, we described just way even But is. about you've that ongoing create will As move the what about invest. with what that's answer And think what

Operator

Our ahead. go next Jamie Cook from Suisse. question from please Credit Jamie, comes

Jamie Cook

Nice quarter. quick I two questions. guess

progress made the flow. associated good free You or cash the guys cyclicality the on with seasonality reducing have

So line wondering question. or ahead in of schedule just committed think double-digit of And I'm then still time if should International we sort in you there. but there's just business, any to the sort the opportunities you you're second get the Are my I margins guess, be? I of XXXX. where there know just more to

Gaur Kapoor

was both in In Gaur. we very focus very questions. is And take all is of those strong. of XXXX. of across flow improvement. the operational our cash quality this But Phasing a was continuous metrics of XX-plus key Jamie, conversion strong percent regards good. cash, had I'll to the

terms, the on, in for maximum management. is the market towards and in opening amount of So said we them that march I capture International, there's supported that double-digit phasing working and by better always to better able international all we rates margin growth my market we're go continue basis going that had to to the It's international our comments, profitably. as we XXXX, be to possible. expect to in upon margins extracting And and the opportunities in conversions margin make as be negotiate strong dynamics, growth optimal capital to XX get opportunities executing business. points that's In fantastic sure what we're to we're in focused being going regards

International So, in hindrance ambitions to see our no margins. we

Operator

final go Dudas Partners. please Michael, Vertical our question from And Research Michael today comes from ahead.

Michael Dudas

Two thoughts.

on award First, maybe your on business, funding abroad bit the work on energy at a sure some infrastructure. and here that some some XX elaborate the transportation focused and But certainly opportunities farm project some little water visibility opportunity some in a a of been more think an can would you going that there's accelerant but XX, I there's and infrastructure opportunities very lot COPXX private nice sector of the thereabouts. forward share months? next in global your business prepared and quarter, public And this last mentioned Maybe excitement see your I'm efforts, plan be certainly, some see say, for balancing? is to that, thoughts next, remarks, then supportive. conference, advice with wind design quite -- you that that that we How obviously, could the on prior and that. that the in in transition let's you'll the is follow-up is the

Troy Rudd

I'll Mike, second and Okay. it's take then one with Yes, Mike. the the one Troy. first share I'll Laura.

Jobs So opportunity of that infrastructure a items they're all, And go there's There and dedicated large Investment the think $XX emerging billion first eliminating Again, amount, the you're money level. will is is water including I help improving baked some right, significant is to is Act. a that line there billion that Infrastructure business substantial $XX PFAS focused over and quality into and it's at contaminants. improving projects. then, on also state drinking and that in the there's water water

line $XX then, There's of and so super in aviation, bill environmental money certainly, going we'll into remediation significant environmental infrastructure in amount on focus money significant this is just being transportation that's to And again, But that we just you're right, in. there work included and containments, fund sites. terms lot going of participate there. So are the water, of a items which remediation dedicated there's for element. billion into other a

we line almost Lara COP bill. line said, just we of participate as So to are there meaningful scattered items way I'll item that And question. believe every that let your these we've in budget. single are that all And in that that a in are in answer

Lara Poloni

the sure. Yes, very for thanks And It's question. timely.

April, launched legacy you As we, know, our sustainable strategy. in

as sustainability week, Troy last our we report. released Just said, also

to of all comp bringing of which platform us nations such we're very and the have for like us talk tremendous it to showing coming but that. strongly. had are going strong talk required And climate was the about to So a it about challenges to such I timely for financial our that serious and capabilities, showcase that years, to number great very ESG a cost of and we've commitments achieve to together together so to many great sort see is a see really change be for presence and and feel

take how opportunity that For our talk it that to fantastic of all just us, showcase partners of to to and forward. we and about a was many clients

a in to So, strategy And one element we're core the strategies make I position going in our it's key forward. forward. of going of -- we're our that ESG strongest think the industry growth

Troy Rudd

right, capital change it of Until are away how Lara Yes. that very last and for quick allocate today, six so still institutions, And points that's And positioned comp is sequestration of we're happens to been measuring insurance participating us think fact, going support. other the that determining is, towards what certainty their actually to markets, has a they're into seen it, undetermined. and the socially a for think about different going fantastic you we've thinking projects, measured in measurement in unusual environmentally add there's where said, you're banks, which private is yet go infrastructures have come important going months companies provide difficult we carbon thing and because providers from where the decarbonization be credits. how, private standards to it, is that projects is around and that ESG-related two to other what's and and selling just financial happening other we're projects is on little to actually about again, we has that return which, to types makes been is it that because

we've in an that. And investment doing been so,

capital a of again -- through that project natural our that decarbonization can working mentioned group during actually we the of the so call. standardizing setting is markets. we also terms the measuring So we're support terms But

provides great us a leadership that really I that, So opportunity. think

Operator

have any no back for will further to now currently Troy closing hand Rudd, We remarks. CEO, questions. I

Troy Rudd

want and delivering to past want remind in for big and you time a everybody, today in I participating momentum to people your in the such I doing you our year call. thank a job this to thank for the business. fantastic Again, give just creating

you in that -- forward period that and walked on I to we front there in of of look term are opportunities to you. seen have earnings hope us We up haven't we with long talking a call. next that Thank our understanding time. long you are away catching And tremendous

Operator

This disconnect for now call. you, your lines. Please Thank joining conference everyone, today. our concludes

AECOM (ACM) 15 Nov 212021 Q4 Earnings call transcript