ACM - Earnings call transcript Q2 2024

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Operator

Good morning and welcome to the AECOM Second Quarter 2024 Conference Call. I would like to inform all participants that this call is being recorded at the request of AECOM. This broadcast is the copyright 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 and Vice would to conference Investor I Gabrielski, Will President, Instructions] like the to over Relations. [Operator Finance, Treasury may you begin conference. Will, your

Will Gabrielski

various the to Thank from today's of those differ financial discussion filed about risks in in the your you, and including expectations. would statements forward-looking Today's projected statement like forward-looking due today's business operator. attention required Page described reports I statements statements. the presentation. undertake to to as our Except significantly future to safe contains X periodic Actual we harbor no with on forward-looking SEC. may risks law, direct update uncertainties, by obligation and our results

appropriate posted are which to segment a Any use the basis margins our materials, segment our into to Americas and year-over-year net When GAAP noted. backlog or reconciliations are are a We financial we NSR, revenue basis NSR presentation. segments. performance non-GAAP revenue certain presented are incorporated references margins Growth measures will website. rates in otherwise on pass-through for reflect and which operating unless The currency adjusted noted. revenue. presented will to or revenue, rates excluding service constant and the defined discussing unless growth, as refer otherwise growth revenue is on our International

operations. on remarks continuing focus Today's will

investment of investments team we the support results completion. AECOM business. end vehicles existing to Capital the ensuring platform, excludes the transaction the new through while continue a team closed quarter, discussion that and to AECOM the a Our second AECOM's After the will transitioned of Capital

and XXXX. at loss receivables today's incurred operations call, Rudd, a the to to Chief time the business sale discontinued our Troy During in of recognized of estimated in Officer, construction related contingent civil we noncash Executive performance $XXX outlook priorities; accomplishments, On and will President, our revisions also million Chief consideration the our quarter, discuss and our detail. successes Financial our our greater outlook our Gaurav Poloni, Operations strategy will and the financial key in business. review Lara operational Kapoor, and key Officer, will for review

with We question-and-answer will session. conclude a

turn With that, the to I Troy. call over will

W. Rudd

leader and Will pleased professionals you EBITDA first year. on our the we adjusted joining second The are based our a full in report we as expertise strong around our who half have continue on clients expertise professional distinguished are our I'm markets. all AECOM and With the in focus the and us to the market. expertise midpoint and XX,XXX our investments technical that of highly today. recognized of unrivaled our we bring world. the quarter key operational to you, the best of Thank development that for guidance our thank performance, TechEx all our consistently strength results rest we our initiative, make to culture, of Through the increasing of and people, of collaborative for technical ensuring in our

our industry, level were the by in emerging of rate. scale to climate key existing issues in reflects which accomplishment and water point, in adding winning at when unprecedented pleased the time this to the water to our creating have at change, growth, work a also transportation, funding. contaminants April, that scarcity high in investments contributed comes and To demand recognized consulting facilities of opportune and report are positions ENR markets. us record recognition environment late an our including record leadership This as #X impact and we This firm I'm

second example. clients The nearly quarter. increased where our is during than This as we XX% backlog recent for final by stands rules supported market EPA have and X establishing contaminant PFAS levels more the great for maximum decades a a

Net detail. performance service as Turning X% to more every Notably, as in our included adjusted by well workdays. year-on-year key revenue results X% markets. transportation in in this and when growth strong fluctuations by increased environment, and second water end geography for quarter in the

records of by XX%. our and opportunities adjusted delivered backlog EPS EBITDA, increased adjusted pipeline We margins, and for also

a Cash the flow was higher professional also our characteristics lower strong, risk which and services testament is to of business. returning

cash supports repurchases strong organic consistently and returns Our policy, our flow investments returns-focused shareholders built allocation capital is through dividends. and growth on generation which to

A the our confidence. business few underpin across themes key

that XX%. a quarter win we is with bid, are we our organic nearly we First, quarter, large and the which $X win near greater, even share XXth market the competitive pursuits, gains. of delivering XX% advantages our or competitive at our is clear higher. level it every advantage are second at won rate On winning marks record is consecutive In $X.XX our where rate approximately

Second, EBITDA basis adjusted XX by new increased our XX.X%, to a all-time margin points high.

digital our reinvest of share enable our time. capture organic to initiatives growth. business our are Importantly, in greater levels record us record and margins compound advantage and a over in strong investing we to development at pipeline Today,

Third, investments long-term firmly the of transition global megatrends are energy infrastructure, and sustainability resilience and intact. in

activity in profitable our a strong of is all result, markets. As most largest and

the funding example, Jobs Infrastructure trends quarter. Investment and For U.S., local and from Act a book-to-burn supported federal, state X.X the ratio the and in strong in

the U.K., of investment billion has prior near-term is plan. In In which the on uncertainty transportation $XX XX-year government program, the Canada, the that double clouded projects. picture election larger released a infrastructure multiyear

experience the water set opportunities. doubling is our the and every an near where includes diverse for of program, expected involved. record over nearly at the This funding have AMPX However, water backlog utility X years levels of large increasingly next reflects existing with we

and ongoing working opportunities program are market, And investment billion through Australia, new have energy transition. advancing in support infrastructure frameworks projects U.K. the that ongoing this the and $XXX key we transportation on we pipeline. around is several investments also In already

our importantly, a has to changer. most program global advisory business game been and build management Finally decision a

through why delivering we set have program longer-term advisory case I the management of ambition services. and revenue want expand of why upon been our this to a has XX%

program need Our the from emerging a trends. the in born market, management from investment resulting we identified few accelerating was

over tenfold past alone. in projects to increase First, number and including U.S. increase, years multibillion-dollar the project size the in of complexity XX a continue the

same the has facing ambitious capacity created internal to our At on expertise are services and demand constraints time, capability their their in-house more management technical for objectives, to and deliver which augment increasingly clients program consulting capabilities.

expertise which program benefits several this to global Lastly, expanding of project plenty management a culture combined share companies and Program while elements collaboration the more the risk the deep offer of that of that and margin, larger organization, to of none opportunities we higher a void with saw role financial also including wins capability, in management with technical market time. multiyear include elevating infrastructure capability our technical an value of lower the our over program, more expertise, have. creating or addressable services through leads clients, advisory we elevating our visibility

a redefine best out to resources digital management result, on focused net report resources program initial the to that biggest As opportunities. in invested management X management I'm the we service And goal within program on and pleased of we represents how double set bring today, we our our and management on have industry program over global XX% the years. truly We is revenue program to delivered. revenue. to delivered our

further the last wins. which In AECOM These large pursuits, XX including work. a PATAC several XX FEMA's our defining fact, we include on this FEMA have for won as quarter, establishes disaster win of response leader

environmental the are On contracts. High-Speed the for for We its underway Navy. largest California rail also program investment largest high-speed management U.S. the Rail, And globally.

and by energized are we and by pipeline our trends the our the together, Taken markets, across created performance, strength our execution clear of the advantages our record strategy. backlog of

With that, Lara. to will over I call turn the

Lara Maria Poloni

strong strategy not winning several are larger I at are and culmination higher-value winning but are Troy. our we accomplishments rate ever we Thanks, a before. performance. proud pursuits our the am of bearing of are higher elements fruit. that consistently of These only than Today, continued

the First, our growth and where To strategy largest allocating capitalize, opportunities. have of built industry we at resources opportunity to volume see our levels. on and clients we time greatest across the fully unprecedented is our investment our

Reflective of top business the who of past revenue more XX% has times years. grown several with represent multiple XXX our the of our revenue, over faster rest the this effort, clients than than

with clients confidence growing we is in faster even underscores growth these the our which our outlook. have backlog Importantly,

expertise our program through Second, our #X facilities the technical transportation, value within business, ranked businesses. water, management environment and our of we are elevating

before. As ever a result, projects we are also winning more larger than

have Our share valued than and and earnings of past industry-leading technical capitalize expertise. wins few the and scale global has wins our than over wins million tripled at enhance $XX doubled years. company's Large valued million $XXX visibility on at greater more

career Third, is our and dividends. technical focus development on excellence paying

strategy networks designed programs elevate culture key collaboration and what to development for build to business. reinvesting about our we academies intentional very the been TechEx, to of to our global and technical are practice technical have is which programs through support across teams. as These technical part a refer our We drive

These to prior attrition, lows the employee pandemic. our that investments even low the are which at experienced is to we contributing levels rival

revenue our on we focus net for markets nearly quarter recent revenue This our EPA accelerate is PFAS-related Finally, and water and high-growth this final service end strong growth rules. trends. includes to XX% expect work contributing growth the following to backlog backlog

civilian of strength vehicles every selection agencies many all recent hold million Defense, the was further award solidified $XXX our already multiple work by we key government. Department PFAS-related This including the the environmental and for vehicle, a contract for Importantly, for other U.S. U.S. major of of Army NASA contract. the with

in and consulting capitalize. infrastructure deep practice position us turning This to automation has to to are #X assets digitization in their continue where environment water of drive well and digital growth capabilities our nearly Our opportunities. our our also help to knowledge includes and clients XX% positioned

in renewable opportunities pipeline record investments growth. and addition, is energy In continued of and driving electrification a

we and The In utilities selected for been Upgrade. power the consultancy SCAPE marquee including framework Grid alone, have Great the U.K. programs, for recently for

design key of latter, in particular, into the shortage provided global offering integration the a our centers advantage grid for design our addressing in electrical a local experts. On

the our including business us during some the realized We landmark in key data also a center for win quarter, milestones in U.S.

well look are markets accelerate. positioned as we to these ahead, As continue we

With over will that, Gaur. turn the I call to

Gaurav Kapoor

Lara. Thanks,

second our half financial new margin strong delivered results net revenue highs. We strategic and track EBITDA another our and quarter our with to quarter delivering extended expanded of first objectives. and Our record growth adjusted service on

$XXX in EPS adjusted to XX% by increased by million EBITDA adjusted the result, $X.XX. increased and quarter XX% a to As

Americas to segment. by increased revenue Net Turning XX%. the services

of profitability also be XX%, of operating top margin at the to which with We continues adjusting delivered strong our industry. an

a take revenue organic markets Our of with business in was than prioritize was longer-term net we a how to investments higher This that most of record robust record we objectives. points in near- a greater built as our example the and confidence of give environment all can of contributed end transportation drive our ROI what backlog largest, plan, in us increased markets, point, expansion to continue our percentage ratio. To great that than more profitable in our high into businesses. win so wins is our pipelines water, quarter advantage to a development in XX% and investment book-to-burn basis a XX our for rates X.X and end margin

Notably, including we active, most and and for assistance recovery area. the York zone public disaster contract FEMA's our New the won Caribbean is amongst

strength We also were new wins including San Frederick X, program rail significance replacement Improvement Terminal for of expansion our and the Capital provide for selected the these Douglass tunnel replacement scale landmark of won Program, Amtrak's Diego underscores and the management capabilities. a airport's and tunnel the of services contract to

note segment. our we growth by fewer as Turning International to year I working year, to this revenue approximately last should increased that the XXX services which by X%. days had Net points. impacted basis compared

to commitment segment. reflects by points operating basis adjusted high on new and to expanded deliver margins margin is progress in Importantly, XX.X%, our the best-in-class XXX a which substantial this

largest continued In geographies, all strong visibility. for our backlog increased addition, our of provides across which

Looking programs. trends strong. markets are our undertaking Middle clients all our unprecedented across the demand ahead, In remain infrastructure East,

While been impact we for our there to X not reports have do NEOM, trajectory. expect of this element of lines extended time

be will client future. our headcount all-time for into well maintained which we high, fact, at NEOM the an In expect is

uncertainty an the we and built of high will that that not In impacted backlog energy continue is political and increased positions substantial and Troy the investments U.K., frameworks is our periods all-time transition considerations. by at accelerating benefit revenue to near-term mentioned and us on water have key through

extend to allocation lock This we million debt. the was million Turning flow enabling of and a and and first policy, to pricing of maturity cash Further amendment $XXX half $XXX us credit the flow. cash year completed through in the our our extension in successfully repurchases the Free facilities attractive returns-focused strategic of of and allowed enabled shareholders capital historically the dividends. return quarter transaction to after ended. our

capped of of As our fixed a our debt. are outperformance are XXXX. cost on date, to our adjusted refinance, and EBITDA or and this debt of of fiscal result position we financial is for strong certainty we operating the a strength from XX% Reflecting increasing guidance

to to X% We share adjusted and net expect XX%, continue year. strong revenue a earnings operating margin XX.X% per the full segment adjusted for XX% of record services growth of growth

our expectations free cash reaffirmed a convert net or rate to also adjusted of greater. income to flow XXX% We at

Our is tax rate in expected again high the in third XXs. quarter be to the

for questions. ready we're operator, that, With

Operator

Your the with line of from Bank of Instructions] first question Feniger [Operator comes America. Michael

Michael Feniger

on Like investments you this informing cycle. little second about your pipeline? the does the coming into we business? It's expect incremental should And kind with that want the just are in really seeing to maybe It's Is the that's bit. in something half. what AECOM QX? that's came the XXXX? business of at investment Obviously, growth see in development time Americas, off seeing this just start guys to also of we outlook suggest bracketed there. part be thoughts should down How I investment the interesting in this frame a it what's margins making thinking the the

to growth-wise there you to in expecting what front guys helpful. are of Just helping maybe XXXX? see help would Any get be in

W. Rudd

Thank you, Michael.

believe view of And by to what that different cycle. beginning is, late we're as where cycle. the in we're saying in we're are the infrastructure. around the question long-term is start We people about not in fact, belief it in finding me this late there this let really the we're So indicates maybe cycle. in some a We maybe and the seem trends get we investment

there's and traditional funding see resilience time. in it are see infrastructure a investments infrastructure And so we you investments for for that's the and you see the available. just of certainly, improving of period the happening that infrastructure, that appetite also, the sustainability long that in But and the

that large U.K. transition but detail And a like point energy a won't out of taking into that get about that that, being a then beyond we energy project been investment in Great now that, to is Grid is it making made is there will actually win there in the I actually something it long-term have large I the can The And will place. lot renewables. in U.K. benefit. where there's And a very sure investment a that transmit it communities

this don't in we early cycle. So really view late this in are worked the We our give the as we're addressable we've share. we're that expand fact that other to And confidence the market then cycle. things believe us

spend program investing winning that exposing So of we're outsized an And us. actually ourselves in by and a we building at on significantly customers' think long-term our are rate. advisory has management more to we impact a and then business,

so And market taking believe we we're share. that

that confidence in long us together things up all line really give really the term. those it's So of X great

you March. term, to and put the look that's it And is of the short been or in budget want there U.S., if particularly midterm at the place in a in sort

through funding. funding that's the long-term because say just in is the So that of it's state Canada say the don't packages is well those that's governments in is lot you in and there the But put look benefit us the to in those there business the have the put When and a at to -- look money we And there's IRA, this, there's when remind we there's the at by and place great we that Australia, midterm the everybody, world level, And U.S. and U.K. at There want XX% of there's are the we been midterm. in local then invest to to been infrastructure. where give look did and impression generated place funding our will markets. at X that at also I continue certainly place in of sort set up for IIJA -- only you the look so and year.

investment we're early believe again, cycle. in a that the So infrastructure we long-term in

Michael Feniger

to Is positive free And $XX Or flow something is just flow to I think ask you on the the in there there? of million. actually see was out to starting anything AECOM where onetime smooth this about quarter, is cash going it that cash free kind profile?

just And follow-up that. with a

on growth I'm I think there guys cash management the advisory, conversion if above the is the rate. the that that free conversion half take we your some actually consistently based just step first seeing first of flow anything of in a your free away where maybe if should on change is target are cash XXX% tracking performance. flow you there's and curious can end program of above track half structure, rate markets kind capital-light function from

Gaurav Kapoor

that this is take I'll Michael, Gaurav. question.

culture seeing percolate So over. results, cash it facet that. cap continuous half also of there's we've that to first the there's nothing -- foremost, our part and with DNA, this in took of of we've team what the that is when now improvement communicated generated. every flow cash management It's first The and consistent phasing tried and you're we've unusual flow, in our including second in is

is, plus we've we delivered. have remember, consistent The what that's expect what with on also flow. terms in And is second committed I historically thing we and would XXX% of free our to, what been say cash guidance

Operator

comes Truist Securities. question line of from next with Cook the Your Jamie

Jamie Cook

over think operating towards can projects? more move for you moving to these time, if of backlog? business model there's guess you're of greater margin to about projects talk that some winning the in in you're Nice seeing the in you larger more management, technical wondering as the quarter. larger or what terms leverage an like just just as you projects seeing X I program I'm and questions. opportunity One, gross business

didn't answer lot to for quarters. grid then XX underappreciates your winning It you've is incremental And you last, a was talk Can some Or the your investment. distribution. utility been you bps just see the with that opportunity market same my sounds I last share the you And you transmission Was if pull and incremental? just question. a that out one guidance investment. was I'm that follow-up about in question. the kept like guys sorry, I trying second The the know but on X maybe wait, in capability T&D. then there, for forward?

gave I one. an myself So extra

W. Rudd

the you Jamie, we'll give the benefit of question. extra

the the Lara take will So I'll one. take will first one. the Gaurav take one second and third

we'll distribute equally So the load.

and say made one So that program program first when found very have years. of rest over you design we because point leverage margin about also what the large with business, see time management we is has the business, time. all, leverage, that expand. the the it, to actually what undertake certainly management, that had in is have you the similar the similar we it -- the which you business guess, to management over will project that think that reference to I'll margins a respect see the there business of the I I described various is, one reasons, improving The workload for design to program business over But

those in change very projects, typically size. would would significant And orders in that we large see be

them conclusion -- are you they're and outcomes, had really, larger much anticipated. projects of the those you when reach And so deliver those than

that the on up those leverage projects. better much have and originally you certainly made capture you and so to investment And deliver set

would over typically than end see up much business. of design they So having better our long margins in we a can time, period

Lara Maria Poloni

#X with respect table capabilities certainly, with was Jamie, position Great a the brought factor. the Grid win, we big in environment And that to our the to

U.K. energy labor-constrained we're the a environmental grid and is seeing, submarket So particularly design, in

capabilities the environmental there was we the position globally. bring look transition, not the that factor bring So a energy just that we significant credentials local that broader in we But the are but when fact leading global many win. at

water a with of component distribution, then, we're course, generation, these we're is for services. the supporting Transmission firm leading work. with of planning broader and and So projects permitting considerable. design consulting and And

position water market-leading that's required in any the disciplines is another contributor for energy key the aspect all And infrastructure for across so our to transition. pumping, of

Gaurav Kapoor

to question again. Jamie, to this from Good you you Gaurav. margin respond hear asked. I'll the is

planned Our we XX% was, healthy than that margins your group, in what and at specific very delivered at group. quarter, and [ we and BD top what on delivered peer robust. question XX%, in Even they're remark peer my margin. ] to Americas public of spent But still had are the more the the we

consistent let So our I plan you little to we And ] and our growth. bit those level. give also, enterprise set do When we're what [ with BD to a by include at we plans, that. consolidated targets, NSR just set on to always color, plan, we when mean according we the deliver commit more margin that they're growth our going and revenue me spend

to organic half investments really those margin. on than assess we they we investments. and is thing prioritize had So we want is, why the how as more a investments make we of organic And we organic perfect This delivering always our margins about out, the first we've point saw key because do International in our ROI play talked example that here through them -- XX% deliver make that and we're the and segments luxury I and strong out Americas X of margins.

of America, half our coming those also through percent. saw, pursuits high rates when Americas, to in than pipeline XX-plus all record International strong point margins markets, largest for that in of end in our largest our Troy's win the critical the it's XX-plus where So projects, market at that, and year we in saw our percent, in we are first enterprise earlier, more

on provides delivery. have strength robust can and even of what change than of advantage year-to-date just FY second for in bps more to more no there's we terms quarter XX we planned to 'XX decided only so and to on in our we decided Americas, confidence not pipeline, future. deliver us -- we spend FY this that It Also to deliver bps of the take second spend the sorry, but in margin XX in Jamie, we guidance continue So half to growth margin more expect growth as beyond we the the clarify, business to operate in 'XX. into

commitments. our delivering be on will We margin

Operator

Your Saba Khan the next Markets. from comes question from RBC of line Capital

Sabahat Khan

more kind obviously side. Just I few sizable change, lot of could on an international been progress there of double lot just There's the for any bit pruned outside a just your wanted next now side, a trying of new end margin what to quarters to you there. the of color obviously get international with the markets maybe sort now. a you markets, of I of international are improvement on be, the pursue? leg get guess steady, on improvement in might digits is international having a little side of idea margins

understand to mature there's a on any trying Just now? that look Or like business possible it more if will strategy front? new

W. Rudd

margin our Saba. as that and we Gaur. about opportunities opportunities. realized then robust in to U.K. quarter, I'll was look just to opportunities But international the give see across international you markets sense just this talk X.Xx. And over of in to the the going that to the we -- I'm our a Thanks, take going and book-to-burn markets, we first question turn I'm

X.Xx. Australia book-to-burn X.Xx Our in and was book-to-burn was in Canada our

pipeline, global our improve. markets healthy said in continue that, prepared to And pipeline as seen again, And our and comments, we opportunities. healthy our have have so we actually we we indicates have that

working we how improvement In are that design continuing we terms transform drive for see us, or an more we deliver still an of to market to create to work. share. opportunity take next And what's our

We're focus the particular, a advisory. in have going to and markets. in and to energy And management continue on invest we program expand

new and than few the that opportunity other advisory program being to the equally business, continue continuing a share. very to our out take in And we design strategy competitive there's management [indiscernible] and of and is just grow a doing being sort set we to create nothing which see that equal advantage that around expand business then to And to our the market ourselves continue advance ago, distributed as to really so world. we're years differentiate

Gaurav Kapoor

in want very Saba, question just to To clarify, international, your we is And this the as But on they're Gaurav. have before. I done margins healthy.

expectations Our quarter will on our over of we've experienced not are year-over-year, over the Americas be quarter quo. that's to like delivering just international we to status we growth best-in-class, in expectations and to. what bps marching this is ambitions are the Yes, year. XXX year what of -- be and margin past But we're

So level, as significant and near-term margins. those digital things XX%-plus to that going a enterprise said laid the at international to that margins consolidated XX% growth then at be of margin level. going we to look the all to when technologies we've is are target going are delivery, combine with beyond incorporate International Those important. in And our to contributor deliver including you clearly that will continue that out. enterprise that and of very you be opportunities we initiatives, growth a various how the the enterprise through expand use our capability our into how centers, Troy

Sabahat Khan

packages. the then one And just funding guess, on, Great. I Okay. larger

growth, near-term expectations how through in next bit directionally to the perspective to funding how near to your well? money to line X hearing longer maybe And coming us the as XX expecting talk to You longer-term years. So X XX maybe growth term on term, some Is the medium the the over from support your IIJA. maybe with just for Can money just we the of from a probably end call talked months XX XX of on maybe see, you you're and the flows markets about more that months? the that some plateaus it, comes. of next, medium-term and near accelerates the to IIJA about over which are

W. Rudd

Yes.

strong strong remained the markets, for quarter this So end driven see environment been business. the we terms and have and last particularly water end just and in strong, remaining few markets of our transportation, quarters again, the have by

really importantly, in project see see good the long-term out years, spends we expanded opportunity optimistic are said, most on as our next significant. the funding client opportunities X up, continued we exposure because very lining program We in trends. we some midterm through energy. And as this see earlier, But said while we in we've then to grow look our through our and advisory to increase that also about is I we've management

continuing based are market taking And don't that win we share we change. and our on rates, see to

our I comments, on almost in -- As overall, this we've is at of terms quarter X winning or X higher or where projects, the rates. programs we're times. larger of said And the win in won the XX% prepared out for capture rates every XXth or

indicates I taking we're for we've an And replicate, think that they to So created take market lot that time will a can. of share. if advantage that others

Operator

Your the Jain line from Sangita next of question Markets. KeyBanc Capital with comes

Sangita Jain

So back the an earlier want to to I in momentum asked was on question the that go business.

the With expense, strong growth should development X% rulings, all rate these point revenue think should How the sustainable about the to you've we business higher outlined? U.S. PFAS the higher a that? book-to-bill, than that

W. Rudd

sustainable good this year. this wouldn't that guidance is Well, a we said we've we What for previously year, very about that this year as a think growth the beyond again, think long-term growth. I given is

commented haven't the on We future.

say the the XX%. our investment reflection to We long X% we infrastructure. over and think remains year, years in and talking and we're still that's X% of this our opportunity has that so between long And I a when the term And guidance and believe X%. guidance term, been multiple

and to Our share. clients' it's market exposure taking budgets frankly,

we And term, long sit. where the that's in so

because we to about part of this expand margin to other the this continue the heavily in also we value think, will in the same the important X invest margins. we the of time, improvement and to at as business and a because But it's think that as continue future combination grow, really, is, create our

And growth so we X the can it of makes don't certainly declining lot it think really should at about because again, that business sense. we think combination you And is you any the this think can think in that a like have a should you do but I margins. -- of

Sangita Jain

us backlog map and you're PFAS build it technology how rules out can -- you that, came size? out talked destruction And the recognition about want revenue and also terms average help in your project That's to And Great. of about that? on that in I marketing helpful. you ask maybe recently you your and

Lara Maria Poloni

you, course, coverage government market-leading come Sangita. of going forward there. peers PFAS. contract. from still mean at believe what separates important us from U.S. And the with take optimistic we're Thank we the the most that. very we I'll And that I we complete opportunities have position about moment of is, the the

legislative hazardous at for quite obviously, maximum we've level and and some us. substance technical both sort global the for catalysts of for mobilize But X scale be new there. the potential growth But it's containment got designation, be to the the positioning been revenue we've today, capability about changes over NSR time and meaningful the So but has growth that our we're to of for next there's substantial to years bigger And going Xx optimistic few X% acceleration. us. it the to

Gaurav Kapoor

size Sangita, this average Gaurav. is sub disciplines. We provide the don't into contract

Operator

Citigroup. with line the of from comes Bystricky question Vlad next Your

Vladimir Bystricky

PFAS just the maybe following you seeing question about and around beyond PFAS on America, evolve you're So PFAS for how just wins. you're North that regulations U.S. of about the up sort or the potential thinking Can how globally? talk opportunities last

Lara Maria Poloni

scale I'll last -- certainly seen European global operations, years that take international other terms the also but in our And of in the there in very credentials for well. example, the works of a #X as seen Vlad, And in ahead I and position minimum just the it's not water. than -- few They U.S. advanced is, regs parts at the maximum in this well the scale. certainly opportunities mean, levels. containment what that. is global moved that for probably that we've globally. rigs of over Sure. environmental Australia pace team us faster quite And we've fact, were are We containment

scale sector see So we opportunities global the both much government for clients, we as private markets as end us. as And see with substantial opportunities at for those well. substantial

is contracts robust clients a complete with together private So starting point of the very the that we have the fact on that coverage in the focus key sector. the government all

global going for public forward. at scale private opportunities and are sectors both there So across us

Vladimir Bystricky

and And the Great. years, the highlighted large million separately, number the range. Laura. few $XXX the above million That's helpful, over past above then in the maybe projects increase just $XX of Appreciate you it.

these a backlog management, a about are how on so big few years? talk over program few overall go your you So as there to to And -- your way can to focus think just compared the obviously, projects a about portion and larger as next you what is of -- today years ago? that think can

W. Rudd

Yes.

XXXX is and think the years So size the substantially. of that our a it have go If of million over we over teens this in we might back I low talked mean the of I wins were were in been call of increased million. wins low And about we about past I $XX may number improved. and quarter, I'll improving. it's our have -- -- be overall a -- it the X/X $XX wins. What given statistic as That's percentage

increase to say terms of to the are on over clients, large. they're we the see and projects a likely years. -- our projects of and of the forward, size that's of So that of market advance substantial consistent taking And continuing the and ambitions in I'll programs last X the and improve. continue the that very the course as most are remaining very in nature the that we that size

I projects comments billion. prepared in Again, well $X a are reference made number that or the we our the in to increase of programs think over

on are built complex really infrastructure like a at projects expertise so the unrivaled look those terms management, and in deliver us, you our sort we in of firm our expertise when of ability given large program And scientific to us XX in behalf position position. them. the and that is that which best market-leading in XX $XX last said, are we market-leading of our million, of our won And puts that bids, large over clients a we evidence we of

advantage So again, projects in that's have to and scale and where ability large as no our when we the the have we where someone with we else. the one opportunity marketplace that, complex to clients those like size to think go of you opportunities, that the take help that about the the we have

Operator

line of comes next from UBS. Your Fisher Steven with question the

Steven Fisher

that in business margin think said specifically And the should development you a the Just Americas up we this will follow I think on on grow about trajectory costs? again targets you How costs. hit those wanted to to we starting Gaur, business of margins, about when the the know, should year. development year-over-year basis.

Gaurav Kapoor

the I at historically So Steven, as percent ROI. to deliver for our and enterprise us we which should confidence is, year, have guys it, half, if historical of phasing, conclusion full organic to apply look margin phasing XX.X% terms lead these the will you the And just we of what International historical and as second delivering target delivery. commitment to in the look same Americas investments level have, commented of to the year the XX-plus you XX.X% and you is at that delivered the look including how at our was it segment trajectory in on to it margin

Steven Fisher

be the And does the Americas the that second that imply within half? growing margins will year-over-year in

Gaurav Kapoor

what the Again, at point that, margin exist opportunities that all are enterprise. to best in different to the to And we're that right? consolidated the targets, we make at evaluate manage to going investments time decide

promises for strength So as our future. but to move only the strength do continue deliver deliver we today into to we not to we continue

this the So of we're growth focused XX if past quarters, overall that. you're may that we're segment, in each yes, the at backlog within think in market. said to of seeing the state, health Troy too, models margins whatever strong with the Again, XX business, I bps, our are comfortable

U.K., growth in in are the they're investments [indiscernible]. market great to that our X.X made leading NSR past in X.X to the X.X we're very, we in results healthy very These ones book-to-burn businesses. Americas, in continuing back the delivering make, and our on in of have These that biggest we're

kind from to overall segment margin into vision from being tunneled then focus XX% some going and we're fixed and on. on very XX-plus expectations away would healthy the there I forward of particular growth just again, sway really the percent And delivering. but target So deliver

Steven Fisher

a then you Is couple it typical relative incur these there time of any lag the be And terms correlation that scale on translate within expenditures quarters? for organic just business longer is to be time given enough. should Or when particular the development it growth, just will the into these Fair that in organic growth? of there? when might of seeing What it opportunities? translate frame into than between

W. Rudd

then take we quarters. the it So a does a longer see wins period of for to would But Steve, up as it time become ramp number of them to to and into larger translate typically, start larger, scale. and

longer of is give few and long some what But past. than been benefit had of a very so time the large in quarters that programs have of certainty the in these period And and last is a larger projects visibility projects, that we the bit us business that. little a typically would in haven't and course, for

Operator

next Vertical the comes from Your of with question line Dudas Michael Research.

Michael Dudas

only to margins generating for future? work? here secondly, engineering in management you and you maybe done prepared of centers how on system have your and customers project capacity shift growth do about and it such, the yours going not anticipating the how couple past remarks, than guys -- A secondly, in the And your firms less more. are that enterprise like aid the those X impacts maybe in to that the having work one towards And your have relying dynamics the and relative clients to are

W. Rudd

just in complexity the the the customers management the programs with really help business manage program So where getting years of and investments of ago point is, infrastructure and significant actually need saw to size would the that, a that. starting it's when terms project we in projects that to this clear opportunity of was the

position then scientific for us person engineering created drive And again, I'll again, coupled those services. ability, And owner be to a with, put best our design in those, and market a say, our so to the that us. expertise, opportunity side

there the industry go around retiring to a COVID, The different. were And that that back were leaving the happening, client choosing as, do and base, were people other that's trend whether or of of lot to side. They thing kind was industry. our on customer the our within was happening something that leaving

was those a the So that declining management our scientific for on us. supply clients opportunity increasing, ability created ability projects and to the help provide for it demand perfect while the and of was the effectively

services because as They has advantage. the the moment at do puts we bring, we a technology so And robust think oversight opportunity this that expertise the program us that the we we unique and certainly believe construction so but not that it opportunity, expertise management they offer we provide in something supervision but again, go that There we that right? because as also that competitive very the a we in of engineering built this see forward, and and others market position. marketplace have bring are long-term around

Operator

next Thompson, the Thalhimer with question from Adam comes Davis. of Your line

Adam Thalhimer

opportunities curious on you infrastructure timing for Two Canadian win. you on you both can which the Lara. outlook questions, give data that? if centers. like could I and the you then from a also had was color particular And you -- additional size, said on landmark expand the mentioned, guys The program probably are data you that for and center focused then

Lara Maria Poloni

Adam. question, the for Thanks Sure.

that and has our over the talking Canadian government strong their doubling next been our markets of We business. now funding been infrastructure federal us, years. the international it we all of segments one Canada of few we've key for for XX about the talking about for So core across a quarters very capability is have know where

a for robust projects, So water. long-term very for pipeline infrastructure for rail,

in been of water. Our signature have wins also over in transit years the last and couple

we've And book-to-burn this of particular. very of I X.X. quarter mentioned in a coverage Troy got strong long-term those segments So think

and -- very from as position view a of a long-term strong backlog good So visibility point well.

the in With all and win client hyperscalers. major data well. of think segment quarter key U.S. respect one I our of the here again, that the it as includes And about the global long-term expect clients with data the in centers, program, was positioning, of business in And to those scale infrastructure we have coverage strong. a the relationship long-term the win outlook we remain Canada your with long-term So to question very facilities center a

just parts engineering, in in all data it of for the environmental here data know a across We hungry world. are built opportunities, for due but these to the the business and there's building more of diligence the sites not So centers. be centers doing engaged the the of that appetite those be teams U.S.

segment a certainly have a it's that of optimism So lot we about.

Adam Thalhimer

you limiting are centers? or I growth, a you -- -- that -- sense is seeing kinds like and growth a of the, get years questions data limiting from a for like of and are that get your guys data a you X maybe Or factors for what do do then And lot those as factor, have center about in power now? for permitting

Lara Maria Poloni

creates We we of have, massive see service all coverage be -- that puts mean, opportunity, -- us the I frank. to

So beginning, the clients we it's can often, the very factor of mean, access -- I and come to planning our the power but well. they the the and electrical supporting to with it's as the not logistics terms the and infrastructure selection many supply just limiting for that our that's from I that lot through centers us. mean, in supply, site why work license is fulfillment permitting a do, of of giving for transportation and teams options them a

again, I segment why and well in the factor is we're matters well. scale, as So our we're this again, placed global winning think other what

clients global capability are reach. these service global full they that So and and want

our plays really So and it's us to opportunity strength. a significant for

Operator

Executive question-and-answer I remarks. That over concludes the now Rudd, will Chief Troy session. turn closing to conference our Officer, for

W. Rudd

Thank a you, thanking operator. by our very end teams for start And to strong the like I'd call the year. to

our recognized positions our and and much. And would the we're Thank ENR to Well transportation, margins continue #X in before environment more leader very we as water adding like winning our done. at very growing and congratulate facilities. won work high than again are to as for ever teams you and rate. again, being We consulting by have the to firm a I expand

Operator

Thank disconnect. concludes today's conference you your for This call. participation and may you now

AECOM (ACM) 7 May 242024 Q2 Earnings call transcript