Bird Construction Inc

TSX:BDT

Earnings Call Analysis

Robust Growth and Optimistic 2024 Outlook for Bird

In 2023, Bird saw 22% year-over-year fourth-quarter revenue growth to $792.1 million, driven by strategic project selection and cost control, elevating gross profit to 9.2% from 8.8%. Net income surged to $23.9 million, with earnings per share of $0.44, up from $0.28 the previous year. Full-year revenues grew 18.1% to $2.8 billion, with a gross profit of $240.5 million indicating an 8.6% margin. Adjusted EBITDA increased 37% year-over-year to $138.7 million, 5% of revenue. The strong balance sheet with negative net debt affirms financial health and supports a 30% dividend hike. Looking ahead, robust construction markets beckon continued organic growth and strategic acquisitions for 2024.

Bird Delivers Strong Performance and Positively Positions for Future Growth

Bird achieved a significant 18% increase in revenue, reaching $2.8 billion, with adjusted EBITDA rising by 37% to $139 million or 5% of revenue. The company also saw a substantial 26% growth in its combined backlog, ending the year with $3.4 billion in backlog and a further $3 billion in pending backlog. This is supported by over $3.6 billion in securements for 2023 and a competitive edge with collaborative and diverse contracts across multiple sectors.

Bird's Strategic Expansion Through Acquisitions

Bird's long-term revenue prospects are bolstered by Master Service Agreements (MSAs), notably with almost $1.1 billion to be performed over the next seven years. The acquisition of NorCan, a top electrical service provider, strengths Bird's electrical capabilities, setting the stage for revenue growth and margin improvements well into 2024.

Focus on Electrical and Sustainable Infrastructure

Bird stands well-positioned for the significant demand in electrical infrastructure, given its 2,500-strong electrical personnel and expertise in several sustainable building technologies. The company's current projects include hydroelectric, renewable energy, and smart building technology, demonstrating a robust service demand.

Commitment to Robust Capital Allocation and Shareholder Returns

Bird plans to continue investing over two-thirds of net income into growth while ensuring healthy returns to shareholders. This strategy is supported by a strong balance sheet, significant liquidity, and a net cash position, allowing for organic growth and strategic acquisitions.

Projected Revenue and Earnings Growth Outpacing Organic Expansion

The company anticipates continued organic revenue growth in 2024, with EBITDA and earnings per share growth expected to outperform organic revenue. The focus will remain on enhancing EBITDA margins through strategic project selection and expanding cross-selling opportunities.

Earnings Call Transcript 2023-Q4

[Operator]

Welcome, ladies and gentlemen, to the Bird Construction Fourth Quarter 2023 Results Conference Call and Webcast. We will begin with Teri McKibbon, President and Chief Executive Officer's presentation, which will be followed by a question-and-answer session. [Operator Instructions] Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward-looking information. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies.Management's formal comments and responses to any questions you might ask may include forward-looking information. Therefore, the company cautions today's participants that such forward-looking information involved known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the company to be materially different from the company's estimated future results, performance or achievements expressed or implied by the forward-looking information. Forward-looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise. In addition, our presentation today includes references to a number of financial measures, which do not have standardized meanings under IFRS and may not be comparable with similar measures presented by other companies and are therefore considered non-GAAP measures. I would now like to turn the call over to Teri McKibbon, President and CEO of Bird Construction.

[Terrance McKibbon, executive]

With me today is Wayne Gingrich, Bird's Chief Financial Officer. Before we begin, I'd like to take a moment to acknowledge that this week, we celebrate women in Construction and International Women's Day on Friday. It's an opportunity for us to recognize the remarkable women at Bird who inspire us daily. Today, we also reflect on the ongoing journey towards gender equity path that we are committed to pursuing. At Bird, we understand the value of diversity and allyship which we actively foster through initiatives like our women at Bird Employee Resource Group and meaningful external partnerships. While we have made progress, there's still more more work to do, and we are dedicated to fostering a more inclusive industry. Turning to today's presentation. This past year has been a period of significant achievement for Bird, underscored by robust revenue growth, further margin improvement, reflecting the strength of our strategic plan, the strong reputation we have built with our clients and the dedication of our teams across the country. Our diverse capabilities to deliver sophisticated work and a position as a leading collaborative construction and maintenance company remain competitive advantages, which we intend to leverage in 2024 and beyond as we continue to focus on growth and margin expansion. First fourth quarter and full year results delivered substantial organic revenue growth and continued gross profit and EBITDA margin accretion, aligned with our corporate priorities. Our 2023 results provide good momentum for the company as we enter 2024 and the final year of our current strategic plan. In 2023, we delivered 18% revenue growth with full year revenue of $2.8 billion, adjusted EBITDA improved 37% year-over-year to $139 million or 5% of revenue. The company reported $72 million of net income and earnings per share of $1.33. We grew our cash flow from operations and significantly grew our backlog reflected in the 1.29x book-to-bill ratio. We continue to see considerable opportunities for profitable improvements, including additional leverage on our cost structure in the coming years. Bird was awarded over $3.6 billion in securements for the year. At year-end, our combined backlog was up 26% over last year, posing the quarter with $3.4 billion in backlog and $3 billion in pending backlog.Our pending backlog included almost $1.1 billion of Master Service Agreements and recurring revenue work, which will be performed over the next seven years. Our portfolio of Master Service Agreements spans the energy, mining and nuclear sectors was further bolstered through the acquisition of NorCan subsequent to the year-end, which was one of Alberta's leading electrical service providers. The robust foundation of contracted and awarded work provides significant visibility into 2024, both for revenue growth and further margin improvements. It underscores our confidence in the continued demand for our services, particularly in sectors critical to the energy transition, population growth and infrastructure modernization. Our backlog is highly collaborative and diversified across many sectors, and Bird is a leader in collaborative contracting in Canada. In collaborative contracts, we work closely with clients and partners to advance the design before determining the project's price. Given the increasing complexity of projects, a key area of expertise for Bird, a collaborative approach is a better way to build.There are significant benefits for all parties involved, including decreased risk, increased stakeholder engagement, added value for the client and the delivery of an enhanced final product. Fast growth and profitability improvements to date are a testament to our team's ability to leverage self-perform capabilities and effectively cross-sell our services and solutions. With a very active bidding environment and robust demand for our comprehensive services, we remain disciplined with our project selection, ensuring strategic alignment between capabilities, project type and the delivery model. Our emphasis on collaborative project delivery and strategic investments in technology continue to enhance safety, productivity and partnerships across all projects. Over the past few years, Bird has strategically diversified its revenue sources through organic growth and strategic M&A. Throughout this transition, Bird has significantly enhanced profitability. As part of our 2023 reporting, we have realigned the annual revenue breakdown to better align with Bird's focus areas and position in the industry. Previously, Bird referred to its revenue breakdown as institutional, commercial and industrial. Today, Bird is known for delivering sophisticated projects in the industrial buildings and infrastructure markets. Due to this shift and aligned with our messaging over the past few years, the figures have been restated for 2021, 2022 and 2023. More information on what each segment includes can be found in the nature of business section of our MD&A. While great progress has been made to date advancing for our strategy, there's still a significant runway of expansion and diversification opportunities that will continue to support margin accretion and drive forward Bird's growth strategy over the coming years, especially in the underweighted infrastructure market. In 2023, Bird announced many significant project awards that underscore our expanding presence across key sectors, including energy, power, education, modular construction as well as infrastructure projects across Canada. These awards not only reflect our strategic positioning, but also the enhanced capabilities we've gained through strategic acquisitions, establishing us as a sought-after partner for sophisticated projects.Throughout the year, we were awarded several projects in the post-secondary education sector across BC, Alberta, Ontario and the East Coast. These projects capitalize on Bird's expertise in creating sustainable smart environments while highlighting our strength in lower carbon building solutions like mass timber. Our clients are increasingly committed to sustainable construction and retrofits to minimize our carbon footprint, a space where Bird's offering align with market needs. We were pleased to be awarded early works at a new LNG facility in BC as well as multiple mining contracts, showing the current strength of the commodities market, but also the strong leadership and dedication of our Heavy Civil team. Bird was awarded multiple hydroelectric related projects that aim to enhance the longevity and efficiency of existing facilities and a central component of Canada's clean energy future. We previously highlighted Bird's role and current project portfolio in supporting the energy transition and shift to a lower carbon future. The industry's overall strong demand is complemented by this exceptional outlook for investments in clean power generation, power distribution and preparations for further electrification, including battery and EV infrastructure. There is also a considerable focus on enhancing the energy efficiency of existing infrastructure and expanding public transportation. Bird's capabilities, especially our self-performed electrical expertise uniquely position us to meet this significant long-term demand. Currently, projects underway range from hydroelectric infrastructure and large-scale utility scale renewables to work on Ontario's nuclear sites, waste-to-heat recovery at Toronto Western Hospital and various wastewater and organic waste processing facilities across the country.Our commercial systems and utilities team and our industrial maintenance, repair and operations team, along with their specialized mechanical, electrical, telecommunication and data systems expertise make up over 2,500 electrical personnel. These teams are and will continue to be critical to meet the demand for electric infrastructure across Canada. With our buildings expertise, Bird employs sustainable building solutions, such as mass timber, modular construction, deep energy retrofits, net-zero buildings, innovative special projects, smart building technology, just to name a few. Our growing civil infrastructure team recently secured the East Harbor Transit Hub Alliance Development Agreement in partnership with AtkinsRéalis. With Bird's strong reputation developed by supporting many of Canada's leading energy and power clients over the years, we are well positioned as a partner of choice throughout the energy ecosystem. There's currently strong demand for Bird's services across the industry and a significant backlog of projects required for the longer cycle investment horizons in both public and private sectors. Government programs are supporting investments in transportation, energy, water and telecommunications. This includes funding through the Investing in Canada Plan, the Canadian Infrastructure Bank, Canada Growth Fund and other federal initiatives aiming to modernize critical aspects of our daily lives and enhance economic growth.Specifically, the shift towards a greener economy requires substantial investment with an estimated $125 billion–$140 billion required to achieve the federal goal of net zero emissions by 2050. This is a significant opportunity for our industry. Canada's energy sector is facing an estimate of doubling our energy's electricity supply to keep up with increasing demand as well as achieving net zero in 2050. Projected investments range from $110 billion–$270 billion to expand clean energy and improve power distribution and transmission systems. Public transportation continues to be a significant area of growth with over $70 billion in funding recently committed in Ontario as well as additional demands across the balance of provinces reflecting the commitment to enhance our public infrastructure. Lastly, the nuclear sector holds over $40 billion in new potential projects, not including general annual spending, high-profile initiatives like the Bruce Nuclear expansion, the Pickering refurbishment and the Small Modular Reactors Infrastructure Program highlight the sector's positive outlook. Together, these investments reflect a robust long-term demand for our services positioning us at the forefront of this transformative error in Canadian infrastructure development. Looking ahead to 2024 and beyond, our optimism is fueled by our strong backlog, diversified service offerings and strong commitment to our strategic priorities. As we head into the last year of Bird's current strategic plan, we remain firmly focused on profitability, discipline, diversification and growth. We expect to retain in excess of 2/3 of net income to support our growth in 2024 and beyond, while continuing to provide healthy returns to shareholders. With that, I'll hand it over to Wayne, who will provide more detailed insights into our financial performance.

[Wayne Gingrich, executive]

We're very pleased with our strong performance in 2023. The company has safely advanced our strategic priorities, and we delivered significant organic growth, continued accretion of adjusted EBITDA margins and strong operational cash flows. In the fourth quarter, the company delivered 22% year-over-year revenue growth with revenue for the quarter of $792.1 million. The company's margin profile improved in the quarter compared to the prior year, with gross profit percentage increasing to 9.2% from 8.8%. The increase in gross profit margins continued to be driven by improved margin profiles on newer work resulting from disciplined project selection and cost control, growing self-perform capabilities and cross-selling opportunities across the company and a higher proportion of industrial construction compared to Q4 2022. General and administrative expenses were $40.5 million or 5.1% of revenue compared to $34.5 million or 5.3% of revenue in 2022. One of the primary drivers of the $6 million increase in the quarter was $3.2 million in higher compensation costs, which includes the impact of increased accrued compensation costs, share-based compensation costs and related derivatives. Compensation costs in the quarter were higher compared to the prior year due in part to the significantly higher volume of work and profitability as well as the 44% increase in the company's share price for the quarter.Net income and earnings per share were $23.9 million or $0.44 compared to $14.9 million or $0.28 in 2022. Adjusted earnings and adjusted earnings per share were $24.3 million or $0.45 compared to $15.5 million or $0.29 in 2022. Adjusted EBITDA in the fourth quarter was $43.9 million compared to $30.6 million earned in the fourth quarter of 2022, increasing to 5.5% of revenue from 4.7% last year. The increase was consistent with higher gross profit and an increase in income from equity accounted investments as well as leverage gains in our cost structure. Results for the full year reflect our team's strong project execution with significant revenue growth and profitability improvements. We reported revenues of almost $2.8 billion, reflecting an 18.1% or $429 million increase compared to $2.37 billion of construction revenue recorded in 2022. Revenue growth was predominantly organic, with additional contributions from Trinity acquired on February 1, 2023. Gross profit for full year 2023 was $240.5 million, reflecting an 8.6% margin, up from 8.5% in 2022. The company's highly collaborative work program, growing backlog with enhanced margin profiles and expanded self-perform capabilities continue to drive strong gross profits on significant revenue growth. General and administrative expenses were $142.8 million or 5.1% of revenue for the year compared to $132.4 million or 5.6% of revenue in 2022. The primary drivers for the $10.4 million year-over-year increase were acquisition and integration costs and asset impairments from the rationalization of some leased office space during the second quarter. Other drivers included higher compensation costs and higher aggregate growth-related increase to other costs such as travel, business development, recruitment and pursuit costs. Full year net income and earnings per share were $71.5 million or $1.33 per share compared to $49.9 million or $0.93 per share in 2022.Adjusted earnings in 2023 also increased significantly to $74.2 million or $1.38 per share compared to $46 million or $0.86 per share in 2022. Adjusted EBITDA increased 37%–$138.7 million or 5% of revenue from $101.2 million or 4.3% in the prior year. The increase was consistent with increases in gross profit and income from equity accounted investments. We continue to focus on profitability drivers, including our disciplined project selection and risk balance mix of work. We're growing in higher-margin sectors with more complex work, increasing self-perform work and expanding cross-selling initiatives, all of which contribute to higher margin potential on projects. We're also focused on growing our portfolio of recurring revenue MSAs. To support our continued growth, Bird's highly valued team grew in 2023 to meet the needs of Bird's expanding work programs with Bird being successful in attracting, retaining and developing talent throughout the year.Our financial position remains robust with a strong balance sheet characterized by significant liquidity in a net cash position when considering just our accessible cash. This financial strength provides the flexibility to invest in growth opportunities, both organic and through strategic acquisitions. We ended the year with $178 million in total cash and cash equivalents and an additional $215 million available under the company's syndicated credit facility. When including total cash, our net debt position is negative $104.6 million. Bird recorded positive cash flows from operations while funding the working capital required to support the significant growth of our work program. At the end of the year, working capital stood at $234 million, an increase of $49.4 million over December 31, 2022. The primary driver of the increase was net income of $71.5 million exceeding dividends paid. Bird working capital ensures support for current and future contractual requirements. Our liquidity and leverage ratios and very positive return metrics remain aligned with expectations. The company's current ratio is 1.26. Our adjusted net debt to trailing 12-month adjusted EBITDA ratio stood at negative 0.05x, and our long-term debt-to-equity ratio was 20%. The company's return on equity for the year was 27%, together demonstrating our commitment to maintaining a healthy and sustainable capital structure. Bird's capital allocation strategy remains focused on balancing growth with healthy dividend returns with the company investing in excess of 2/3 of net income to support growth. Throughout 2023, we invested $31 million in capital expenditures to support our operational needs and growth initiatives. Our dividend policy reflects our strong financial performance and confidence in the business' future with over $22 million returned to shareholders as dividends in 2023. Our dividend remains well covered by our earnings and cash flows and remains an important component of our total shareholder return strategy. In December 2023, based on the strong outlook for 2024, we announced a 30% increase to the dividend, bringing it to $4.67 per share per month or $0.56 per share on an annualized basis. Bird continued to pursue accretive tuck-in acquisitions with high growth potential, notably with the acquisition of Trinity in February 2023, and NorCan, which was announced subsequent to year-end. The company has continued to experience robust performance from earlier acquisitions, upholding our reputation as a strong integrator in delivering accretive transactions for shareholders. M&A remains a key element of Bird's capital allocation and growth strategy. Our M&A strategy is targeted seeking to integrate firms with specialized offerings that complement our existing services, focusing on strategic sectors like civil infrastructure, process mechanical, electrical, MRO services, utilities and renewables. The strength of the company's balance sheet and access to financing supports our disciplined approach to investing in Bird's future growth, both organically and through opportunistic tuck-in acquisitions. We are well positioned to pursue accretive tuck-ins in key sectors and remain open to larger opportunities where it makes sense. I will now turn the call back over to Teri to comment on the outlook for the company.

[Terrance McKibbon, executive]

We're pleased with the company's performance in 2023. As we move into 2024, Bird remains position to capitalize on the opportunities presented by a robust construction market and the ongoing need for sustainable infrastructure development. Our strategic focus areas, including growing recurring revenue streams, enhancing our self-perform capabilities and expanding our service offerings through strategic acquisitions will continue to drive our growth. We were excited to welcome NorCan to our team in January. Now our focus is working together on future growth potential through cost selling and new services for our client base and working in collaboration with our indigenous partner, Infinity Métis Corporation. Top line organic growth is expected to continue in 2024 with seasonal patterns favoring the second half of the year as usual. The company remains focused on EBITDA margin accretion and expect adjusted EBITDA and earnings per share growth to outpace organic revenue in 2024 with the company continuing to drive strong and improving operational cash flow. We're excited about the future and confident in our ability to deliver on our strategic priorities, creating value for our clients, our employees and our shareholders. With that, I'll turn the call back to the operator for questions.

[Operator]

[Operator Instructions] The first question comes from Jacob Bout with CIBC.

[Jacob Bout, analyst]

Very strong revenue growth in 2023, high double digit. Given you're sitting on record backlog and the visibility you have today, what revenue growth do you see coming in 2024? I believe on the last Q3 call, you had said that a high single-digit growth rate was reasonable.

[Terrance McKibbon, executive]

Yes, I think that continues to be our view, and that would be edging towards low double-digit growth. Early days, as we're early in the year, a couple of months behind us. I think the demand certainly is unrelenting. I think that pressure is going to continue to move that top line revenue up.

[Jacob Bout, analyst]

Maybe just a question on the overall risk profile of your business today. A collaborative framework type projects are now about 75% of combined backlog. Are you happy with this level? Are you happy with the risk profile for the remaining 25% or so of backlog?

[Terrance McKibbon, executive]

Anytime you can get to a level like that in our industry is a pretty -- we targeted to try to get to a level like this, and we've achieved it, and we continue to balance that. The remaining 25% that we have are all projects that are well within our level of risk tolerance and are risk adjusted.I think it's a good spot that we're in. I don't think you could ever get to 100%. I think it's good to have this framework we have and it seems to be optimalized right now. I'm quite content with the balance that we have today. If it continues to ebb and flow between 70% and 80%, that's a good spot.

[Operator]

The next question comes from Jonathan Lamers with Laurentian Bank.

[Jonathan Lamers, analyst]

Under the progressive design build model, as you acquire tuck-ins like NorCan, -- do you see opportunities to increase the scope of work or projects that you're already in discussions with the customer on?

[Terrance McKibbon, executive]

Definitely. I think whether those projects evolving a progressive design build model or not, there's certainly a lot of traction with our combined MRO team, which NorCan fits into. A good example of that is NorCan has an existing customer and has forces on the ground in the U.S. in Denver. That's a very strategic position for us to leverage on the energy side in those markets and grow that's a well-established client there. It's a good example of some of the benefits historically. I also think there the Infinity partnership that we've inherited with an organic acquisition has got room to grow. You see tremendous traction in Canada on indigenous related projects, investments. It's just a tremendous pace of growth in that area. Obviously, having this existing partnership as well as many other partnerships we have, but this one specifically gives us a nice foundation to grow. NorCan, it's a very well-run company. It's got excellent safety record. It's just really fitting in nicely in the first month or so of its existence a month and a half with us at Bird, and integration has gone very smoothly.

[Jonathan Lamers, analyst]

It's interesting to see the major award packages to the mining sector. There seems to be increased awareness of the importance of developing some of the sources of critical minerals and metals in Canada's North. When was the last time that you would have seen work packages with multiyear commitments of this type of size for Bird? What are you seeing in this market looking forward? How significant could it be?

[Terrance McKibbon, executive]

Yes. This is pretty exciting. I don't even know if 10 years ago when we were in a better commodity cycle, whether there was this demand. I haven't seen this before with the demand that we're currently seeing coming in many different areas throughout the country. These are long-term commitments that these potential clients are looking for. There's not a long list of companies that are set up for this type of thing with the assets that you need, equipment assets and experience forces to be able to move into these sites, which are often quite remote. That's a really exciting area for us.

[Jonathan Lamers, analyst]

If I could ask one more, just on the operating margin. A number of positive comments in your outlook regarding margins continuing to trend upward and margins in the backlog and pending backlog being higher than the existing business. I know that you're still working on your next leg of strategic plan, but are you able to provide us with any comments on targets that we should be thinking of for the organic business over the next couple of years or just the appropriate cadence of margin expansion from here?

[Terrance McKibbon, executive]

Yes, I think you're going to see consistent cadence moving forward. We're still a few months away from finalizing our strategic plan. We've been meeting monthly with our Board of Directors. Our Board was very involved in this initiative, and we've been going through the various pieces that we assemble and that's gone very smoothly. I'd say we're pretty excited about this next iteration of plan and what it will mean for the company. I think you'll see consistent accretion with the opportunities that we're targeting.

[Operator]

The next question comes from Michael Tupholme with TD Securities.

[Michael Tupholme, analyst]

In the outlook commentary, you talked about acceleration, I think, in revenue growth here. Just trying to understand, I guess, as we look at the revenue growth opportunity for 2024, I understand there's the regular seasonality, but is the idea that you'd expect the rate of growth to accelerate as the year moves on? Or are you simply commenting on the fact that typically the second half is stronger than the first half.

[Terrance McKibbon, executive]

Yes, I think it's more that it's typically the second half is stronger in the quantum of revenue as opposed to the percentage will be obviously a significant factor in 2024.

[Michael Tupholme, analyst]

Then you've talked about strategic project selection, and I think that's been a part of the story for a while now. I guess with the backlog as strong as it is, strategic project selection has always been important. How does that evolve or change as you go forward, given the strength of the backlog? Are you more focused on certain projects given where things stand right now as far as the business? Are you trying to look at projects that will add work that extends further out in time because you do have such a large backlog at the moment?

[Terrance McKibbon, executive]

Yes. I think you've hit some of the highlights of what we're, as we've grown, become more diversified, we've become more attractive for companies to engage on a longer-term solution, longer-term framework. Certainly, longer-term opportunities are important to us. I think we continue to build out the foundation of the business into these three verticals that we've talked about today for the first time. There are lots of room for those to continue to expand with the foundation we've built. We've been investing significantly in our team in whether we're developing training and whatnot, the existing team, but also we've been adding -- when you have momentum, like we have it, it's certainly a bit easier to recruit because some really talented folks out there that are looking for a company with a lot of momentum with the profile that we have. That's exciting. We get a lot of interest that's unsolicited, and we continue to build out the organization on that basis.

[Michael Tupholme, analyst]

Maybe just picking up on that last point there. I mean you mentioned the ability to recruit. If you think about labor availability, again, the backlog is so strong, how are you finding it in terms of the ability to find the labor you need for the work program you have across the board, not statically recruiting, but more generally speaking, on the labor pool.

[Terrance McKibbon, executive]

I think certainly, it's a question we see a lot. No question in Canada, the labor is tight. I'll say this, we don't very rarely, if any, ever have a project that we're concerned about staffing. I think that comes from -- we've really driven into the DNA of the organization, the importance of collaboration. We move very large teams of people around the country. If we've got a project that's got a higher labor content in certain regions, we'll move labor in from other regions to help offset that. Obviously, the opportunities that we're focused on allow that and are in a position to accommodate the additional costs for that. I think that's been a real key to our overall framework of how we've been moving forward. We also acquire labor through these larger acquisitions. NorCan picks out at 500 people. When you acquire a company like NorCan you had a considerable number of long-term employees to the company and gives us more flexibility to steer in different directions in that regard. I think it's a combination of things, but I think, again, it's earlier the momentum we have. I think the other really important part of all this is we're getting to a point where we're 50% of our revenue is self-performed. We control a lot of the projects that we're entering, and that's a huge advantage when you're talking about some of the opportunities that are evolving in things like data centers and things like mining, long-term mining assignments and things like that.

[Operator]

The next question comes from Ian Gillies with Stifel.

[Ian Gillies, analyst]

Just going back to the revenue growth in 2024, maybe coming at it from a bit of a different angle. If we think about low double-digit growth for '24, that there'll be round numbers, call it, $330-ish million. You grew revenue by $420 million in '23 on a year-over-year basis. I guess, what's precluding you or why wouldn't revenue be growing at the same absolute level in '24 in the strength of the backlog?

[Terrance McKibbon, executive]

Sometimes what's difficult to predict is when you're working in a collaborative framework, you're doing a lot of advanced design and development, and then you're heading into FID with the company's Board of Directors for approval to proceed with the project. That's sometimes difficult to predict in terms of the timing of that. We've had projects where we've been at FID and the client comes back to us and says, our Board has decided to double the size of this project, and we've got to go and redevelop design and what not. Things like that happen, sometimes it's difficult to predict. We've got a lot of really exciting opportunities across the platform. Because there's so much that's in advanced development, it's harder to put your finger because you don't completely control that. It's harder to put your finger on that. There are times where things move to the right a bit, but it's more to do with the unpredictability of getting to FID with some of our larger clients that are building some of these large private and also public as well. Governments obviously, are very focused on budgets and then we're doing collaborative work in the front end, and we get to the evaluation of a project and look at where we're at. There are times where it's cresting above their budgets and we're going to go back and work on redesign, which extends the time frame before you're in the ground.

[Ian Gillies, analyst]

With respect to some of the specialty services that you've added in prior years such as electrical, is there anything out there today that you don't have that you find yourself interested in adding to your suite of services?

[Terrance McKibbon, executive]

There isn't anything that really rings a bell. I think we'd like to build out the capabilities of our existing offering. We've got certainly new growth in infrastructure, which is an emerging area for us. It's new for Bird. We'd like to continue to build that out on -- we do a considerable amount of electrical. We also offer mechanical solutions, both in industrial and commercial. We look to continue to see that growth on the mechanical side, whether that's organic or through M&A. Some areas like that. There isn't anything that's ringing the bell necessarily that we're just missing. I think we've done a nice job to have a platform that's exciting and giving us a nice base.The recent utility acquisition we did positions us extremely well, especially in the case of so much growth evolving in North America in data centers. It's a huge component of a data center just utilities and communications, let alone all the electrical mechanical that's inside these data warehouses. Those have all been very timely and they've worked out well for us.

[Ian Gillies, analyst]

You mentioned in your prior comments, but you've obviously been involved in some large project pursuits on the infrastructure side. Is there still other projects out there that are worth pursuing that you think would be of interest to Bird, they've all been awarded at this juncture?

[Terrance McKibbon, executive]

There's just a pipeline that's massive. It's evolving. The good thing is they're all evolving in a collaborate framework, almost extensively, especially in the provinces that have a lot of experience like Ontario and BC. Some of the other provinces are still dabbling with using P3s, but I think that's going to eventually fade that interest for -- again, depending on the project. If it's a clean greenfield everything is controlled, it works. If it's brownfield, it's going to have to be collaborative, they won't get anybody bidding in is just the way it is. Yes, lots of growth there, lots of demands. I think we're increasing our resume with a portfolio of work we're doing in health care, for example. A lot of demand there where previously, we wouldn't have looked at that closely because the risk transfer was too high, but now that's changing. Yes, there's just some really exciting areas. We've developed a strong resume in horizontal rail, whether that's heavy rail or light rail. That's a lot of opportunities there, they're are daunting almost.

[Operator]

The next question comes from Maxim Sytchev, National Bank Financial.

[Maxim Sytchev, analyst]

When I look at some of the data that you published in the MD&A that deals with hours worked overall. It feels like overall, it's up 6% in 2023, whereas revenue is up 18%. I'm just wondering if you don't mind maybe commenting around whether it's the efficiency on per employee basis, which is driving up greater revenue cadence or different project scopes. Maybe if you can comment on that would be helpful.

[Terrance McKibbon, executive]

Yes. I think difference in project scopes would be part of it, Max. For example, a large mining assignment where you got a heavy equipment component, your hours would be lower relative to a building site where you've got a lot of labor on the site, combine our hours plus our subcontractors. I think it's a mix. It's driving a lot of it. We are, though, investing heavily in improving technology and we're seeing considerable gains already in the investment we're making in terms of our labor efficiencies, and we're really excited about that. We're spending a lot of time on that, and that's going to be transformational for the company. As we continue to move forward, we've made very good selections of the solutions that we are using and the proven solutions. Yes, we're excited to see that evolve because we're seeing some really good sign. It's a mix of both, but I'd say the project mix would be a big contributor there.

[Maxim Sytchev, analyst]

Would that trickle down to the margin line from your perspective, do you think?

[Terrance McKibbon, executive]

Well, certainly, the mining side, margins, obviously, with the equipment investment is certainly a higher profile, higher returns in terms of EBITDA percentages. I'd say that, again, it's a tricky question because of the mix, and it depends on the sector. Sometimes we'll have a sector that's got a very high margin profile that also has a high labor component. We have employed a lot of labor in our maintenance services, which, obviously, we're quite impressed with the margin profile there, but that margin profile would not be the same as margin profile on a large mining segment that also will go seven days a week, 24 hours a day. The other thing we're finding now with these larger mining assignments, those are 12 months assignments where they just run around the clock, which is not what we've experienced in past years because they were shorter, smaller assignments that had a different framework.

[Maxim Sytchev, analyst]

Do you mind providing a bit of color in terms of the margin differential between your recurring and more ad hoc construction work, if there's any or have those buckets fully converged?

[Terrance McKibbon, executive]

It's pretty similar in terms of some of our core business areas. It's become quite similar. It was higher. Some of the recurring side was higher than some of our base business, but our base business has really improved in the way we've strategically moved it in new areas, and those are converging to be similar. In that recurring, you've got nuclear work. It's not just some of the energy or the oil and gas maintenance work we're doing. That's helping, and that's changing things. It's very specialized, obviously. That's improving it.

[Operator]

The next question comes from Sean Jack with Raymond James.

[Sean Jack, analyst]

Margin expansion has been seen over these past couple of quarters, along with a pretty substantial increase in growth, obviously. Just wondering where do you believe margins can stretch to? Then also, if you could give us any color on timing around that would be great.

[Terrance McKibbon, executive]

It's difficult to pin that with the revenue and the mix of revenue that we have. Obviously, we're very focused on consistent accretion on an annual basis. We'd like to see accretion year-over-year be similar to what it's been between 2022 and 2023. That's just our ultimate goal. Long term, obviously, there will be a settling at some point, but that's a number of years down the road with the types of things we're doing and the way we're moving the business forward. It's always a balancing act, but we're really pleased with the profile of the backlog, and that gives us a really good certainly forward-looking guidance of where we're going to be. Yes, we're pleased with the overall balance we've got today.

[Sean Jack, analyst]

We touched a couple of times on data centers and the opportunity around there on the call. There's a lot of information pertaining to the opportunity in the states. I just wanted to see if you guys had any numbers or colors or figures around the opportunity in Canada and how you guys are seeing that layout and how that's going to emerge into your revenue outlook here for the next couple of years?

[Terrance McKibbon, executive]

Well, certainly, Canada has got so much green power. It's a very attractive location. It's also got a climate that is very conducive to cooling and things that you need for data centers. We will exhaust our capacity in Canada, but we have had requests to look at projects in the U.S. At this point, we're focused on Canada. It's just the opportunities are well beyond our capacity. If that changes, I think the U.S. growth for us would be centered on acquisitional growth to be able to launch that in local markets. We're increasing our position there. It's not a big focus for us right now.

[Operator]

[Operator Instructions] The next question comes from Michael Tupholme with TD Securities.

[Michael Tupholme, analyst]

The first question is, as we think about margin improvement in 2024 and potentially beyond, are the drivers of that improvement largely the same as they've been in recent years? Or do you see certain factors playing a greater role in the potential improvement going forward?

[Terrance McKibbon, executive]

I think a lot of it is similar, but we're also seeing an acceleration of opportunities in mining. The energy side has got a lot of growth, but a lot of it is building off the platform that we've built. Like I said, it's centered in the backlog that we've got, but there's no shortage of new opportunities that will change our footprint for sure.

[Michael Tupholme, analyst]

I guess, the second one, it ties into something that was asked earlier. Just you asked about timing and margin improvement and I guess maybe magnitude as well. It sounds like you see certainly an opportunity in 2024, and it sounds potentially beyond that, you said maybe at some point it levels off, which is a reasonable expectation. Do you have a view that there is room for continued improvement in 2025 beyond 2024? Or is that potentially when this level and loss could happen?

[Terrance McKibbon, executive]

No. I see improvement well through this next iteration of our strategic plan, which will crest in '27. That's what we're focused on. We're highly confident that we'll achieve that.

[Operator]

This concludes the question-and-answer session. I would like to hand the call back over to Mr. McKibbon for any closing remarks.

[Terrance McKibbon, executive]

Thank you all for joining us this morning on our earnings call and a special thanks to the Bird team for their unwavering commitment to safety and excellence. We look forward to the opportunities that 2024 presents with a solid foundation, our position as a trusted partner with clients, our dedicated and collaborative team and culture of inclusivity are well prepared to navigate and grow in this dynamic landscape. Thank you for joining us.

[Operator]

This concludes today's conference call and webcast. You may disconnect your lines. Thank you for participating, and have a pleasant day.