Aecon Group Inc
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Aecon Group Inc
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Ladies and gentlemen, thank you for standing by, and welcome to Aecon's Conference Call. [Operator Instructions] As a reminder, this conference is recorded on Friday, July 27, 2018. I would now like to turn the conference over to David Smales, Chief Financial Officer. Please proceed.
Thank you, Pamela, and good morning, everyone, and thanks for participating in our second quarter 2018 results conference call. With me this morning is John Beck, Aecon's President and CEO. Our earnings announcement was released yesterday evening, and we have posted a slide presentation on the Investing section on our website, which we will refer to during this call. As noted on Slide 2 of the presentation, listeners are reminded that the information we are sharing with you today, includes forward-looking statements. These statements are based on assumptions that are subject to significant risks and uncertainties. Although Aecon believes that the expectations reflected in these statements are reasonable, we can give no assurance that these expectations will prove to be correct. I'll touch briefly on Aecon's consolidated results and then review results by segment before turning the call over to John. Turning to Slide 3. As previously disclosed, commencing in 2018, Aecon's former Energy and Mining segments were combined into a single industrial segment to align with Aecon's new operating management structure and to capitalize on and combine the strengths and synergies of our capabilities across the industrial sector. We believe this will create greater operating efficiency and contribute to margin performance in this segment as we move forward. Turning to Slide 4. Revenue of $755 million for the second quarter of 2018 was $69 million or 10% higher than the same period last year, driven by strong volume in the Infrastructure segment. Adjusted EBITDA of $41.4 million and a margin of 5.5% for the quarter compared to $33 million and a margin of 4.8% in the same period last year. And likewise, operating profit of $12.8 million and diluted earnings per share of $0.13 both showed considerable growth compared to the second quarter of 2017 on the back of higher volume and improved margins. Reported backlog as of June 30 of $6.4 billion is 48% higher than backlog of $4.4 billion at the same time last year, but also represents a 52% increase since the beginning of 2018. This backlog position is a new record level for Aecon, significantly exceeding the previous record of $4.9 billion reported in the second quarter of 2016. Driving this record backlog were new contract awards of $2.6 billion booked in the second quarter of 2018 compared to $687 million in the same period last year. Turning to Slide 5. Results are presented with adjustments for onetime expenses incurred during the quarter, which includes severance cost of $1.5 million and $0.8 million of expenses incurred as a result of the now terminated sale process. Turning to Slide 6. The impact of these onetime adjustments on adjusted EBITDA and adjusted EBITDA margin for the quarter in the last 12 months is illustrated. On a pro forma basis, reflecting these adjustments, diluted earnings per share would have improved from $0.13 to $0.16 in the second quarter of 2018 and from $0.56 to $0.81 over the last 12 months. Now turning to results by segment. As noted on Slide 7, Infrastructure revenue of $320 million was $83 million or 35% higher than the same period last year. This increase in Infrastructure revenue is broken down further on Slide 8 and includes $47 million in major projects east due to increased activity in LRT projects and the Bermuda Airport redevelopment; $25 million in major projects west due to increased activity in hydroelectric and wastewater projects; and $11 million in transportation due to increased roadbuilding activity in Western Canada. Adjusted EBITDA in the Infrastructure segment of $18.1 million, a margin of 5.7%, was up by $9.5 million compared to $8.6 million, a margin of 3.6%, in the same period last year. New contract awards in Infrastructure of $1.9 billion in the second quarter were $1.7 billion higher compared to the same period in 2017 as 2 major projects were booked in the quarter, a Montréal REM Light Rail project and the Finch West Light Rail project in Toronto. As a result of new contract awards, Infrastructure segment backlog of $4 billion as of June 30, 2018, was $1.9 billion higher than the same time last year. Turning to Slide 9. In the Industrial segment, revenue in the quarter of $420 million was $22 million lower than the same period last year. Higher revenue from utilities work was offset by a lower volume in nuclear operations and from construction projects in Western Canada. Adjusted EBITDA of $14.1 million, a margin of 3.3%, was $4.8 million lower than the prior year of $18.9 million, a margin of 4.3%. This was driven by the decrease in volume from nuclear, a decrease in conventional industrial operations due to lower volume and gross profit margin and the lower gross profit margin for utilities work in the quarter. New contract awards in the Industrial segment of $695 million in the second quarter were $175 million higher than the same period in 2017. Turning to Slide 10. In the Concessions segment, increased activity at the Bermuda Airport project was the primary reason for growth in both revenue and adjusted EBITDA in the period. At this point, I'll turn the call over to John.
Thank you, David, and good morning, everybody. Turning to Slide 11. As David mentioned earlier, Aecon ended the second quarter of 2018 with record backlog of $6.4 billion. As shown, not only has backlog to be worked off in the next 12 months increased at 40%, but 69% of backlog is for work-off beyond the next 12 months, providing significant visibility and stability to Aecon's longer-term outlook. This is especially so when combined with Aecon's annual recurring revenue, which, as noted on Slide 12, has grown by 27% in the last 12 months and consists primarily of utilities work in telecommunications, gas and hydro distribution as well as contract mining in the oil sands. Referencing Slides 13 and 14, the company's balance sheet, financial capacity and cash generation remain key advantages for Aecon and its ability to grow and take advantage of increased infrastructure investments by Canadian federal, provincial and municipal governments in the coming years, including public-private partnerships as well as select international projects. Aecon is well positioned to respond to gradually improving oil and commodity markets and continues to be disciplined in all segments, responding to request for our services, becoming prequalified, bidding the work, negotiating the work and successfully carrying out the work. Turning to Slide 15. Aecon's overall outlook for 2018 and 2019 is increasingly strong with record backlog of $6.4 billion expected to drive both top and bottom line growth, and we continue to see a strong pipeline of opportunities ahead of us. Now I'd like to take a moment to address the recently initiated legal claim with K+S laid out in our MD&A and the financial statements. While the numbers are laid out in those documents, I want to talk to about what is essentially a fairly unique situation, and I say that with the benefit of over 50 years in the industry where I thought I'd seen everything. Aecon successfully completed what is essentially a cost reimbursable project on schedule in a professional and skillful manner, notwithstanding major issues and delays caused by the client, too numerous to detail here, but where they clearly negatively impacted just about every aspect of what we had to do to perform this job. Then having requested that we accelerate our work to address these impacts and in full recognition of the cost of acceleration, they're now refusing to pay for work that was done despite clear contract terms and having received and enjoyed the full benefit of that work. We believe they're in breach not just of the contractual terms, but also their duty of honesty and good faith. We're very confident in our position and have not seen anything from K+S to undermine that level of confidence, and we fully expect at the end of this process to be paid in full. I'd like to end by noting that earlier this week, Aecon was pleased to announce that its Board of Directors has appointed Jean-Louis Servranckx as President and Chief Executive Officer, effective September 4, 2018. This was the culmination of an extensive global search process. The Board and I are exceptionally pleased that we found a leader with Jean-Louis' capabilities and long and successful track record in the construction industry around the world. As I revert back to my previous role as Executive Chair on Jean-Louis' arrival, I look forward to working with him and the rest of the management team to drive ongoing success for all of Aecon's stakeholders. Thank you. I will now turn the call over to analysts for questions.
[Operator Instructions] Our first question comes from the line of Yuri Lynk with Canaccord Genuity.
Just in the Infrastructure segment, very strong numbers obviously, curious how much the REM and the Finch projects may or may not have contributed to quarterly revenue and margin.
It's only started to get underway in the second quarter, Montreal a little bit ahead of Finch, but not really huge drivers in the quarter. We're talking about early stages, so ramp up where you're nowhere near full run rate and not full quarter either on -- either of those. So they helped a little bit on top line, but they weren't -- they weren't the biggest drivers in the growth quarter-over-quarter.
So then begs the question, what was -- was it just increased burn on Eglinton and some of the other large jobs in the backlog?
Yes. So you've effectively got projects like Eglinton, projects like Bermuda and the Transportation business all seeing high volume in Q2 versus a year ago. And then some projects in the West as well, with Site C just getting underway. We have a large wastewater project that was in Q2 this year that is relatively new, the Annacis wastewater project. So just a number of projects, of which Finch and Montréal contributed, but it was a lot wider than just those two.
Okay. So fair to say Q3 and Q4 will -- the same thing will hold with those existing projects and we'll get the new ones layered in. How do we think about the first quarter of the year for Aecon now that these large projects, are they likely to carry on for the most part through the seasonally weak first quarter where I know most of your smaller roadbuilding stuff would typically come into almost a complete halt? But how do we think about any change in seasonality given the -- this new, entirely new backlog?
Yes, good question. There will still be some of that seasonality, but it'll be more muted. We'll still have the impact on our roadbuilding and our utilities business, but they won't be as big a proportion of the total business, and some of these larger projects do have the ability to continue on to some extent through the winter. But also some of the work in the nuclear space and things like that, now that we're into the long-term execution, is all indoors. And so this -- the different elements of work that can continue through the winter more so than in the past. There will still be seasonality, but it should be a bit more muted than it has been.
Okay. Just last one for me, and I'll turn it over. But talking to investors recently, there's still a perception that the consensus estimates through this year are a little bit stale given the sale process. Dave, are you able to express your level of comfort, one way or the other, with the current 2018 EBITDA consensus of about $185 million? I mean, do you view it as aggressive, conservative? Just how should we think about that number?
Well, obviously we don't give guidance, and so we don't really comment on the consensus numbers. I would point you to the fact that we are talking about strong growth in the second half of this year and increasingly confident in that view. I think that consensus number certainly contains an element of growth in the second half year-over-year, whether it's in line with our latest outlook, which I say is increasingly strong. I think people will probably go back and look at their models and look at that, but I think our outlook has improved and our certainty around that outlook over the last 3 months or so.
All right. But you're trailing EBITDA number is about $185 million, right? Through Q2?
Yes, if you exclude one-times.
If you exclude one-times, yes, which -- and these one-times, the outlook for those is that they'll be lower going forward?
It will be. I mean, a lot of those onetime items that relate to the sale process and some restructuring we did back in almost 9 or 12 months ago primarily in the Mining sector as we restructured Energy and Mining and combined those businesses.
Our next question comes from the line of Jacob Bout with CIBC.
Given this record backlog that you just reported, can you talk a bit about capacity utilization and the ability to take on new projects?
Sure. It's John, Jacob. So the new work that we have picked up, generally speaking, has been in joint ventures and so the capacity needs are diluted because our partners also contribute when we talk about the human capacity, so we're very comfortable. The Montréal project is being supported by our Montréal organizations, been there for years. The Finch project is being supported a lot by the team that was on Waterloo, so we are able to rotate existing team to the new projects. We have been, and I think I was clear more than a year ago, we've been building up our resources significantly over the last 18 months to 2 years in expectation of the wins that we're now experiencing. And so we have increased bench strength of what we had. On the financial side, there's lots of capacity and so no concerns about that. David can talk about it some more. So capacity for us today is not an issue, but we'll, as we possibly win more projects over the next few months, we'll be looking at that. We will not enter into any projects where we are not fully confident that we have the right human resources and the financial resources for that.
Okay. And maybe talk about your appetite to take on work outside of Canada. I know the outlook here for the next couple of years in Canada, within Canada, is obviously quite robust. But how are you thinking of taking on work or growth outside of Canada currently?
We've always had some international work ongoing, mostly Concessions. As you know, we're full speed ahead now on Bermuda, which is going very well, and we are definitely thinking about what would follow on Bermuda. I'm not sure that we would layer on another one on top of Bermuda. Bermuda will be finished in less than 2 years, and we are looking at other international opportunities now.
Our next question comes from the line of Michael Tupholme from TD Securities.
First question, in spite of being very successful in winning a number of larger projects in recent months and seeing the backlog up to a level never experienced before, you still sound quite positive on the outlook for further new awards. And I just wanted to ask if you can provide a little bit more information about the kinds of additional project opportunities you see in front of the company right now.
We're bidding on projects all the time. And I can actually tell you right now that there's a project in BC called Pattullo Bridge, we'll be bidding on that. The Surrey light rail project. We're looking at the Green Line project and then Calgary, which is a big new LRT projects. We have bid on the Second Narrows Water Supply Tunnel in Vancouver, Metrolinx has planned a series of RER projects. We'll see how quickly they move. We expect further pipeline opportunities, depending on whether that coastal project with the LNG plant with Shell goes ahead or not. We would get a piece of that. On the Highway 401, there is more work to be done. There's work in Montréal as well. Just a lot of work across the country. And so we have the capacity for more and we are bidding on more, and we expect that flow to continue. And I should add that the Canada Infrastructure Bank is just getting their act together now. They got their CEO in place, and I would expect to see things come out in addition to the provincial and municipal projects that I just listed.
Okay. That's very helpful. Secondly, I just wanted to ask about the contract Mining business and how we should think about the ramp-up of work in that particular area, especially with the new operating site coming online this year?
Yes, so contract Mining, we're expecting a strong second half of this year. Q2 is always the seasonally slowest quarter and no difference in that this year. We really expect to be adding additional volume at the Fort Hills site in the second half of this year, and we already have good visibility into the work programs that we'll be performing there through the balance of the year and into Q1, Q1 being typically a very strong quarter. So we have kind of good visibility now for the next 9 to 12 months and expect volume to step up quite nicely in that business relative to where it's been for the last kind of 9 to 12 months. And obviously that should help margins in our Industrial segment given that, that is typically a higher-margin area of the business.
And Dave, is there any way to, maybe not quantify precisely, but provide some context for the extent to which that business will increase in terms of a revenue contribution due to this additional work? I mean, perhaps just sort of the percentage increase due to the new site in particular?
Yes, so contract mining is a business that typically does a couple of hundred million dollars a year. I think over the last little while, it's been running a little bit below that level, and I think over the next 12 months, we expect it to be more into the kind of the mid-200s type of range in terms of run rate.
Okay. That's very helpful. And then finally for me, the -- we saw the working capital act -- or working capital act as a significant source of cash this quarter, driven by a very significant increase in deferred revenue. Dave, just wondering how we should think about changes in noncash working capital in the second half of the year and where you think sort of that sits by the end of the year.
Yes, so you're right. The build-up in cash is -- and cash inflow for working capital is, to a large extent, tied to that deferred revenue build-up, which reflects the nature of these larger infrastructure projects that we just got going on in Q2, where you get advanced payments at the start of the job and then work flows down to some extent before the next milestone payment. So it's kind of a little bit up and down through those projects. But you do kind of maintain a cash balance throughout on those large projects. So we are working capital-friendly. In terms of the overall profile, as we go through the year, Q3 is usually the quarter where we effectively invest more in working capital, it's kind of the peak of the season and that kind of extends through into much of Q4 and then starts to unwind a little bit in Q1 and Q2. So we would expect working capital to be a use of cash in the second half and then start to unwind again in Q1 and Q2 next year. So the normal kind of seasonality. You just get a little bit of distortion every now and again if you're ramping up on a couple of large projects at the same time in the Infrastructure space.
And so that makes a lot of sense. Just to follow on from that, the -- would you expect that by year-end, on a full-year basis, you are into a position where changes in working capital is actually a -- still a source of cash? Or do you think you can get right back ...
No, no, I mean, we still expect it to be a source of cash in the year. We are generating good cash flow overall. If you take out the seasonality from quarter-to-quarter and you look at expectations for EBITDA, where we are in terms of our normal CapEx spend and then cash interest and cash taxes, we do expect overall positive cash flow. And I think from a working capital perspective, as I said, most of the growth is coming from areas where we are cash positive on those jobs. And so we expect working capital to be an overall positive in the year. It's one of those where, because we're growing, working capital is going to be a drag. The areas we're growing in are actually working capital positive for us.
We now have a question from the line of Derek Spronck with RBC Capital Markets.
Just around cost inflation. I mean, you're -- you have a lot of work ahead of you and, arguably there's a lot of work in general in Canada, are you seeing any sort of cost inflation with regards to labor or equipment sourcing?
So we have not had any issue with respect to labor or equipment at all. We have a very close relationship with the unions across the country. We have a preferred relationship, I would even think, and so that has been very helpful in terms of sourcing the labor force. So no issue there. The entire industry will have to be careful as the workforce ages and make sure that there are training programs and apprenticeships and the encouraging of high school graduates to consider working in the construction industry. So those kinds of macro issues are, for sure, exist, but we are not sensing any difficulties or pressures on those labor and the equipment problems at all.
Okay, great. And do steel tariffs impact you at all in terms of some of your fixed-priced contracts that you won? And just in terms of the sourcing material and the cost of steel with the steel tariffs?
So minimal effect so far. There are -- we have provisions in some of our contracts that allow us to claim for some of those differences. Very specific clauses that address those things. But it's really here and there and very small, so I would say overall, no.
Okay. And just one last one for myself. How would you qualify the quality of your backlog? You know it's gone up -- it looks like the -- most of the recent contract wins or your fixed-price backlog has grown quarter-over-quarter. Just in terms of that aspect, are you looking to do more reimbursable or it doesn't matter, it's just the opportunities in front of you? And then in terms of the quality, how competitive was the bidding process? Or has there been a little bit more of rational bidding due to all the demand and as you look at your backlog, you're seeing a pretty good contract wins there?
Yes. So, Derek, I'll talk to the first piece of the question in terms of that fixed price cost reimbursable piece, and I'll let John talk to the bidding environment. And you're right. As you look at our backlog breakdown at the end of Q2, with that growth in Infrastructure backlog in particular, the amount of fixed price backlog versus cost reimbursable backlog has grown. Typically, we've been running at kind of very -- close to 50-50 between the two. You're now talking more like 60-40, 65-35 between fixed price and cost plus. The thing to bear in mind there, though, is that doesn't necessarily reflect our annual revenue split because a lot of that backlog that we've just added is backlog that goes down many years and so will get worked off over many years, but we'll be continuing to pick up cost plus work as we go too. So the best way to kind of assess that is, if you look at the back of our financial statements, there's actually a breakdown of our revenue between cost-plus and fixed-price. And even though the backlog is being split 50-50 historically, 2/3 of our revenue has come from cost reimbursable work and 1/3 from fixed-price work and that's when you layer in things like recurring revenue, which is running at around $700 million a year. That's all cost-reimbursable work. So backlog is a little bit misleading just because of the length of the work off on those fixed-price contracts, but our revenue mix we're pretty comfortable with. The majority of work that we do in a 12-month period is still cost-reimbursable. Now that 2/3, 1/3 revenue split may move a little bit closer to 50-50, but we don't think it really gets out of balance and there'll still be that nice split between the 2 kinds of work.
I see, okay.
And in terms of the competitive environment, this has definitely become a seller's market. And just take the REM project as the latest big win as an example. There were only 2 bidders on that project. Usually we have 3. And we just have so much more horsepower in terms of the -- our consortium, the local content that we have to significant Québec contractors, in addition to essence [ Androgados ]. It was really a sort of very balanced approach. We were able to build in all of the things, lessons learned from many other transit projects we've been involved with. And we're very comfortable, obviously the client got a fair deal, but the competitive environment is definitely kinder now than it has been in the past. There's more demand than there is supply.
[Operator Instructions] Our next question comes from the line of Frederic Bastien from Raymond James.
I was wondering if you could provide additional color on how the Bermuda Airport Project is progressing from both a, not just from a construction standpoint, but also just wondering how the actual operations are performing. I know that the country has made tourism a key priority. I was just wondering if it's translating into traffic growth at the airport.
So, thanks, Frederic. So both the construction and the concession side, things are progressing very well as I think John referenced earlier. On the construction side, completions tied to -- for 2020, which was the date at the outset and we're still well on track for that time line, so construction is going well and on schedule. In terms of operations at the airport, we're pretty encouraged by the way that's developing. So total passenger growth this year is up 5.5%, total air capacity is growing at the same time and that's up year-over-year by about 12%. So there's lots of initiatives underway and getting traction in Bermuda to develop tourism and that's all helping. As is the strength of U.S. economy, I mean, one of the big driver for tourism in Bermuda is typically the U.S. economy. And obviously with strength there, that's having a positive impact on Bermuda. So all in all, a very encouraging situation so far.
The beauty of the Bermuda project is, for the first time, on an international project, international concession, we are 100% owner and things are going well.
Great. I only have one other question and it's for John. John, is this as bullish as you've been on Aecon's outlook?
I've never been more bullish on Aecon's outlook than I am today.
Our next question comes from Maxim Sytchev.
I have a question on the Industrial sector. Because correct me if I'm wrong, I think last year, EBITDA run rate is 115.6 and I would assume that there is some one-offs, some restructuring and so forth. So how should we think about the margin profile in 2018, especially as we have some tougher comps on nuclear in Q2?
Yes, so I think overall margin profile year-over-year should be, quarter-by-quarter, should be similar; i.e. Q2 is usually the lowest margin quarter in Industrial, in large part, because contract Mining is very seasonally soft quarter in Q2. So that has an impact on the overall average margin for Industrial. But outside of that seasonal slowdown in Q2, we expect Industrial margins to follow a same overall pattern as last year and to be improving not as -- maybe not as significantly as infrastructure, but still to be improving over the next 6 to 12 months based on the backlog we have there right now. So yes, we feel pretty bullish about both in Industrial and Infrastructure moving forward from a margin perspective.
Okay. So on the Industrial, so it's really nuclear midstream and oil sands mining which is going to be driving the margin expansion in the back half, right?
Correct. Yes, I talked earlier about contract mining being stronger in the second half and that will help, from a margin perspective, nuclear obviously. And then obviously pipeline activity as well is good margin work. So yes, those are the 3 primary areas.
Okay, that's helpful. And then more of a, I guess, a philosophical question on Bermuda. You know, in the past, whenever you had the concession assets, you tried to flip them once construction is completed and [ they act as the risk ]. What is your thought process? I mean, I know it's early days obviously, but in terms of the duration of owning the Bermuda Airport on a going-forward basis, any initial thoughts there?
Yes, so it's John. On the Israel Highway project we sold because we were in a minority position and the project had reached steady state and it really was going to be difficult for us to protect our position comfortably on the long term. In Ecuador, there were political risks that I think were such that we felt, again, when it reached steady state, it was better to monetize our asset. Bermuda's very different. It has very stable political environment. It is a steadily growing asset. We own 100% of it, so there's no partnership issues. So this is one that I think given the size of our equity investment and the expected success of the project, this could be one we hold onto for the longer term.
Yes -- no, I guess it makes sense especially given the very strong EBITDA generation, right, John?
Yes.
Continuing on, our next question comes from the line of Neil Linsdell with Industrial Alliance Securities.
Just a question on Jean-Louis. When he takes over on September 4, obviously he's coming in right after you guys have accomplished a great amount of work building up the backlog. Can you give us any kind of teasers as to what we might be able to expect as far as his incremental contribution?
Yes, in all the interviews that I had with Jean-Louis, he always started, when he was describing himself, the words he used were, I am a builder. And I think that, that is the significant additional strength and depth that he will bring to this organization. The table is set in terms of backlog, as you said. Now it doesn't mean we won't be winning more work, but certainly significant of work ahead -- amount of work ahead. But he is someone who comes to us with significant international experience on construction projects, both industrial and infrastructure, and is -- has done work at levels higher than what we operate at. So he comes from a company that does the EUR 16 billion a year and his share of that was CAD 6 billion, part of that which is double what we do today. For all those reasons, I think, he will add a perspective and a depth of experience that will be value added on the construction side of things.
Yes. And I think when you look at his background, with his international experience as you cited, I know you were asked the question before, but would you expect to see more international work coming out of his relationships?
There's so much work in Canada today that I don't want to really overreach. We need all the resources we have to execute. We've got Bermuda going now. And as I said, we'll be looking at other opportunities internationally. To follow up on Bermuda, that doesn't exclude, in the long term, his relationships and his experience will allow us to think more about international, but not in the short term.
Okay, understood.
Immediate significance, Neil, is that international experience is obviously his pretty broad experience in joint ventures with large international partners and that's the way the market has evolved in Canada today. So he comes in with already having proven his capability around putting together those kind of value-add partnerships with large international companies and then executing on those, and that fits perfectly with how the Canadian market has evolved. So that international experience is hugely relevant in terms of working with our JV partners.
Okay, excellent point. And just on the political side, with the federal cabinet, we saw new Infrastructure Minister coming in, do you think that might change any of your opportunities, bring any new work to market faster?
So the new Minister of Infrastructure was the International Trade Minister previously, so we know him from the Bermuda project. He comes from a construction engineering background. He used to work at Amec and so he will definitely understand file and that probably will help him to move some projects forward. As I said earlier, some for sure through the Canada Infrastructure Bank. But just generally, he is a very positive additional contribution to what the federal government will do.
Our next question comes from the line of Ben Jekic from GMP Securities.
I do have one question. I think in the last couple of quarters, you -- there were some questions or you were alluding to potential for acquisitions in the future. I just wanted to see if there's any kind of activity where you feel like you might look at something, especially now with the new CEO, or are you leaving that for him to decide? Or where's the thought process right now?
Ben. I'm not sure what you're referencing given that, the last few quarters, we've been going through the CCCI process and so we haven't really been talking about acquisitions. We've been focused -- we were focused on that process. But on the thought process around that, I think today we have a huge organic growth opportunity ahead of us. We're very focused on that, so M&A isn't necessarily top of mind right now. And I think, obviously Jean-Louis will come in and we'll spend some time working with him and moving our path forward. But as John said earlier, the focus really is on Canada and what we're doing here. And to be honest with you, we have -- we've built the capability to perform across Canada in the way the market has evolved into these larger projects and a pretty diverse range of capability, and there's not much that we would add to that in the Canadian context. So it's really about maximizing this organic growth opportunity ahead of us.
Mr. Smales and Mr. Beck, there appears to be no further question from our audience. I'll return the presentation back to you once again to continue or for your concluding remarks.
Thank you, Pamela. And I'd just like to thank everybody for joining us today and wish you all a great day. Thank you very much.
Thank you.
Thank you. Ladies and gentlemen, that does conclude the conference call for today. We thank you all for your participation and ask that you please disconnect your lines. Thank you once again. Have a great day.