Aecon Group Inc.

Thank you, Feliza. Good morning, everyone, and thanks for participating in our first quarter 2021 results conference call.

This is Adam Borgatti speaking. And presenting to you this morning are Jean-Louis Servranckx, President and CEO; and David Smales, Executive Vice President and CFO.

Our earnings announcement was released yesterday evening. And we have posted a slide presentation on the Investing section of our website, which we will refer to during this call.

Following our comments, we’ll be glad to take questions from analysts. [Operator Instructions] As noted on Slide 2 of the presentation, listeners are reminded that the information we’re 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 these expectations reflect that in these statements are reasonable, we can give no assurance that the expectations will prove to be correct.

I’ll now turn the call over to Dave.

Thanks, Adam, and good morning, everyone. I’ll briefly summarize Aecon’s consolidated results, review results by segment, and then address Aecon’s financial position, before turning the call over to Jean-Louis.

Turning to Slide 3, revenue for the first quarter of $754 million was $7 million or 1% higher compared to last year. Adjusted EBITDA for the first quarter of $21 million, a margin of 2.8%, improved by $2 million or 8% compared to adjusted EBITDA of $19 million, a margin of 2.6%, in Q1 last year.

Diluted loss per share of $0.31 in the quarter compared to a diluted loss per share of $0.19 in the same period last year, largely due to interest related to the Bermuda Airport concession that is now being expensed rather than capitalized. Reported backlog of $5.9 billion compared to backlog of $7 billion a year ago.

Now turning to results by segment, as noted on Slide 4, construction revenue of $744 million in the first quarter was $9 million or 1% higher than the same period last year, due to a higher volume of nuclear refurbishment work in Ontario and an increased volume of gas distribution and telecommunication work in the utility sector. Partially offsetting these increases was lower revenue for road building and mainline pipeline work.

Adjusted EBITDA from Construction of $22 million, a margin of 3%, increased by $5 million compared to $17 million, a margin of 2.2%, in Q1 last year, primarily from higher volume and gross profit margin in utilities and higher volume in nuclear. These increases were partially offset by lower volume and gross profit margin in industrial operations.

New contract awards of $200 million in the first quarter [Technical Difficulty]. We remain confident that Aecon’s balanced and diversified portfolio, strong financial position and agile culture will enable us to successfully respond to the unknown impacts of COVID-19 going forward.

The Construction segment is aligned to the significant infrastructure investment commitments by all levels of government across Canada as well as by the private sector, providing essential services across the market sectors in which we participate. The Concessions segment is pursuing a number of large-scale infrastructure projects and targeting innovative development and private finance opportunities in industrial power, clean tech and other related markets, as well as participating as a concessionaire on the 5 P3 projects identified on the slide.

Turning now to Slide 8, backlog recurring revenue programs and the pipeline of bidding opportunities for new work remain at strong levels across Canada, despite the challenges of a pandemic environment. Backlog at the end of the first quarter was $5.9 billion, which does not include the Eglinton Crosstown West Extension Advanced tunnel project in Toronto, where an Aecon consortium has been named as first negotiations proponent and which is expected to be awarded in the second quarter of 2021.

We expect demand for our services to remain healthy for the foreseeable future, as the federal government and provincial governments across Canada have identified investment in infrastructure as a key source of stimulus as part of economic recovery plan. Aecon is pre-qualified on a number of large project bids, due to be awarded during 2021 and 2022, and have a robust pipeline of opportunities to further add to backlog over time.

Trailing 12 months recurring revenue was up 5% versus the prior period, primarily from growth in utilities operation. Recurring revenue is expected to continue to grow based on the capital investment plans of a number of key clients, particularly the telecommunications and power sectors, as well as from the recovery of aviation traffic at the Bermuda International Airport.

Turning now to Slide 9, earlier this week, Aecon released its second annual sustainability report, Building Better Together, outlining our progress and key accomplishments in responsible ESG practices. The report includes a comprehensive greenhouse gas inventory of direct emissions from all our operation in 2020.

The best-in-class practice and a significant step is the evolution of Aecon’s sustainability program. Aecon has proudly announced that it has set a target to reach net 0 emission by 2050, with an initial interim target to achieve a 30% reduction in direct CO2 emissions by 2030 as compared to 2020.

This positions Aecon as an industry leader and underscores our commitment to harness innovation, reduce waste, boost efficiency and consistently improve business performance. The sustainability report is available on our website, and we welcome you all to view it and see why we are Aecon prouder.

Turning to Slide 10, Aecon’s overall outlook for 2021 remains positive despite the ongoing background of COVID-19, the pandemic is expected to continue to have some impact in moderating overall revenue and profitability growth expectation in 2021, either due to client decisions related to schedules or operating policies or due to broader government directives to modify work practices to meet relevant health and safety standards. In particular, in the Concessions segment, commercial operations at the Bermuda International Airport continued to be challenged by COVID-19 related travel restrictions, which have significantly impacted the aviation industry.

Global air traffic is not expected to improve meaningfully until significant portions of the global population have been vaccinating and existing travel restrictions are lifted. The bright spot for Bermuda is that the U.S.

is by far the largest source market for passenger volume, followed by the UK, both countries that are leaders in vaccine rollout. So we are optimistic, the second half of 2021, we will see meaningful improvement.

As I stated earlier, the overall outlook for 2021 remains positive as construction continues on a number of projects that ramped up in 2019 and 2020, the level of backlog in New World during 2020 and the strong demand environment for Aecon services, including recurring revenue programs. Thank you.

Stay safe. Get vaccinated.

And follow the advice of public health authorities. We will now turn the call over to analysts for questions.

Hi, good morning everyone.

Good morning.

Just wanted to dig in a little bit on the new awards, I get the tough year-on-year comp, but $200 million in new awards, I think that’s the lowest level I have seen in – looking back about 8 years or so. So, Jean-Louis, anything to call out in terms of what happened on maybe on the smaller awards, sometimes, you are quite successful in booking a number of small jobs.

And more importantly, does – is this a low for the backlog for this year? Do you see it increasing by the end of the year?

Any color would be appreciated?

Okay. Yuri, as we have already and always said, I mean, to look at backlog evolution only on a 3 months period, I mean it’s not always relevant.

I mean we – as you can see, we have $5.9 billion of backlog, plus the 0.5 of recurrent backlog. We will have some quasi backlog at the moment during the weeks to come.

It means for me that it’s not a real issue so far. I have always said that between 6 and 7, including recurring revenue, we are comfortable.

If you go to Slide 8, and you have a look at the central fixes about what is going to be burned in the next 12 months. You just realized that at the end of Q1 2019, the figure was $2.3 billion, at the end of Q1 2020, $2.5 billion, increasing, at the end of Q1 2021, $2.7 billion increase.

It just means that you can anticipate revenue growth in the year to come. For the long term, which is beyond 24 months, there’s plenty of time.

And I just remind you, Yuri, that this move the plan. The plan was about discipline on major projects and balancing our activities, especially growing utilities within our backlog.

We said it constantly during the last 20 months, and we did it. We are focused on delivering our ongoing important projects.

But of course, we have an eye on the very important pipeline. I mean you see in the following slides, $40 billion expected.

We are answering to prequalification file from owners every month. And in one year, only on one project, we have not been prequalified.

I mean it’s overwhelming. It’s successful being prequalified.

You know about it, I mean Ontario line RS OM, which is rolling stock and signaling, R3, which is a huge job, by rail maintenance facility, both in Toronto and Montreal, REM Airport Station, access tunnel. You probably had a look at the budget in BC for the first time, it’s written again bridge, which is all tunnel, which is a very important job.

I remind you that we were the preferred bidder a few years ago on this one. Laurentia Port, Quebec LRT, the prolongation of REM where obviously we are going to be prequalified.

We are executing at the moment first phase of REM. It just means that it’s not a real issue.

We have an eye on it. Quality is extremely important, and we are extremely focused on it.

Okay, that’s great color. And I will hop back in the queue.

Thanks guys.

Hi, good morning guys. I would like to get a bit more color on sort of the successes you have had on the utility side.

You do flag sort of the telecommunications sector and also power related work as sort of very encouraging. So would you mind just expanding a bit further on that?

Yes. We are extremely happy with our utility sector.

You probably realized about it. As I have just said to Yuri, this was the plan, and we did it.

Telecommunication is going extremely well. I mean TELUS and Bell have a lot of new CapEx program in place.

You have probably heard also about CIB, about all around broadband. But Enbridge in gas distribution also is extremely active, district heating within Downtown, geo terminals.

Everything is moving in the right direction in terms of electricity, we had noticed the trend just emerging in terms of transmission and distribution. This is why we did this acquisition of Voltage.

We are very happy about this activity. In addition, the contractualization of those kind of revenue is different.

It’s very much interesting. It gives a lot to loyalty with our customers, to our professionalism.

And this explains why utilities is one of our top performer today.

Thank you. And I read that, that represents about 25% of your top line.

As you continue to gain a fair amount of success there, is there a potential for that part of the business to increase further from 25%?

I would say yes and no. Yes, because we like this business.

And it’s quite a good complement to our roads and bridges works, to our heavy civil, urban transportation and nuclear. On another hand, we – you remember that I am always focused on having a balanced activity.

And each time I close the price before bidding, I am careful about it. I think our balance activity is one of the main reason of our strength and our resilience.

So, we will have a look at it. But every opportunity that we can take with profit generation in utility, we are going to make it.

Okay. Thank you.

Yes. Good morning everyone.

Jean-Louis or David, I was wondering if you could provide more color about the expectation for queues in the coming quarter. My understanding, this was not material in Q1.

And in terms of capital deployment, maybe how do you see a buyback versus M&A at the current point in time, and also the maximum financial leverage you would be willing to consider under M&A?

Okay. So, I will try to remember the different elements to that.

I will start with Suez, and if you have to remind me, Benoit, then come back to me. I think going forward, we expect Suez to be even lower than it was in Q1, in Q2 and Q3.

The program was initially meant to end on June 5. And the Federal Government on Monday announced that they were going to extend it to September 25.

But – for that extension period or at least from July to the end of September, the subsidy rates start to reduce fairly significantly over that period of time. So, that will reduce any subsidy just because the rates are lower.

But we are also comparing revenue to periods last year that were obviously heavily impacted by COVID. So, the first hurdle is, are you eligible on a revenue decline basis and given the periods we are comparing to, we are not expecting much, if any, of our business to be eligible and even to the extent we are the rates are going to be quite low.

So Suez, we expect to be pretty much a nonfactor in 2021. On the capital allocation side, obviously, we remain open to tuck-in type acquisitions.

We think there is still opportunity, going back to the previous question around utilities, we have done a number in that space, and we think there is still opportunity there, but also in other areas as well. So, that remains something that we are focused on.

Obviously, we increased our dividend last quarter for the full year. And as far as share buybacks, that’s something that we will continue to monitor, but nothing in place at this point in time.

And then I think you had a question on leverage as well, Benoit.

Just in term of M&A, assuming something more larger could come at one point in time, just wondering how do you see the financial leverage, the optimal level you would be willing to go at, David?

Yes. So I mean, obviously, we are in a nice position today where leverage is very low, in and around 1x EBITDA.

We are very comfortable anywhere up to 2x. Obviously, the focus for us is having the performance security capacity, whether that’s bonding, whether that’s LC facilities to support growth and to support the prequalification process for what we expect to be a huge pipeline of opportunities continuing to come in over the next couple of years.

So, preserving that balance sheet strength is important. In terms of a larger acquisition, we think that the 3x is certainly manageable.

Without impacting any of the capacity in terms of performance security and growth and much further than 3x, we would start to see that being something that it wasn’t sustainable for any lengthy period of time.

That’s great color. Thank you very much for that.

Thanks Benoit.

Good morning.

Good morning Jacob.

Good morning Jacob.

I am hoping you can provide an update on how much work has been pushed out due to COVID over the past 12 months. I think you said at 2020 end, you said it was on $390 million.

And then how is this reflected in backlog and as we think about kind of year-on-year costs to backlog?

Yes. It’s exactly what you say, Jacob.

I mean we consider that something like $400 million have just been pushed to the right. And it’s a sort of timing issue, and we can see it today.

What is important to note is that no project future prospects has been deleted after this COVID pandemic. So, it’s not a worry for us.

We have noticed this around Q3 last year, and it’s exactly what was expected.

Okay. Maybe just a follow-up, you have committed now to a 30% reduction in direct to 2030, net 0 by 2050.

Can you talk about ESG as a criteria in a procurement process? Is there any talk of this happening right now?

And does it differ between private sector and government?

It’s a very interesting question. For the last 10 years, I am coming from Europe.

You probably remember in September 2018, I arrived in Canada. Europe is more advanced than North America on this topic.

But for the first time within the last 10 years, I am just convinced that the way it is coming. It means that more and more of our discussions are about ESG.

With our clients, you imagine that they also are on their way to disclose their commitment for 2030 medium-term and 2050. And by contracting with Aecon, we are as committed to ambitious achievements with this.

I mean it just helps them, you probably remember that you have 3 groups when you speak about greenhouses emission. The first one is direct and the 2 other one are rather than direct.

But when an owner contracts with Aecon and Aecon’s makes a lot of effort to reducing its GHG emission, I mean it’s good, it’s just good for them. So, we are trying to have as much as we can criteria for being awarded, which are linked with our efforts related with ESG.

And it’s coming. I just can see that it’s coming.

Okay. Thank you.

Maybe I can add something else. I mean all these efforts of good is – I mean, of course, it’s good for the earth.

It’s good for the planet. But it’s good for Aecon.

I mean at the end of the day, we just realized that it’s just about working better. It’s just about eliminating waste.

It’s just about consuming less to have the same reason. So it’s just about being more efficient, and this is why we are embarking with a lot of enthusiasm in this movement.

Thank you. Good morning.

Good morning Michael.

My first question is just when I look at the construction segments, beyond the productivity challenges that have been an issue, to one extent or another, throughout the COVID-19 pandemic, based on what you know today, can you provide some commentary on the extent to which you expect any COVID-19 related restrictions, be they government directed or client directed, to affect the business in Q2 and beyond, if you have any visibility? And so specifically, I am thinking about the fact that there were some restrictions in BC in the first quarter.

I am not sure what the status is as far as those projects. And then we have had some recent announcements in Ontario.

I know that relates to nonessential work, but just looking for any commentary on all of that, please?

To make it simple, basically, we are essential services in all provinces. It means that we can go on working.

There may be some restrictions, but we are essential service. We have to work.

Second point, we are just getting better and better with this COVID-19 in terms of organizing our work, in terms of protecting our employees, in terms of screening, in terms of rapid testing. Each time we have an alert on a job, we are just becoming very good.

There is a need for vaccination, obviously, so that COVID can get out from the landscape as soon as possible. So, there will be in the future some consequences about some other restriction.

I would just say we can now hope much better about it.

Okay. No.

That’s helpful. Thank you.

Second question relates to the nuclear operations. Nuclear activity in the Construction segment appears to have picked up in the first quarter after having been slower in 2020.

And I’m just wondering if – is the nuclear work you’re carrying out, is that still ramping up further from here? Or was the level of activity you were running at in the first quarter, is that representative of what we should expect over coming quarters?

Okay. Basically, we have more activity now because we are working on two units, two reactors, I remember that during the last 2 years, we were working only on one unit in Darlington.

The work has been achieved. The reactor has been connected back to the grid.

A great success. Now we are working on the second reactor, plus the turbine generator, in Darlington.

And we are working on the first reactor of Bruce and the first steam generator replacement. This explain why we have more activity.

I remind you that we have a contract for four reactors at Darlington. And Bruce, we have a contract for one, with an option for the five remaining.

We are working on this on the remaining one with Bruce Power and discussing about the condition of execution. So this will give you a trend for the, I would say, for the year to come.

Regarding the much longer term, I would say we have three areas of great interest. The first one is about waste treatment.

All whose major component replacement on these two nuclear power plant just produce a lot of waste. Waste have to be treated and treated efficiently, and we are working on this.

Second part, I would say, a small modular reactor. This is going rather fast.

OPG has selected three technical partners. We have an association, and we are partnering with the three of them.

And it’s a very, very interesting future opportunity for us. The last one is about dismantling.

You know that Pickering will be dismantled in the year to come. We are actively working with OPG preparing this big job.

So nuclear, it’s not only a problem of short-term. It’s about medium term and longer term for us.

Okay. No.

Thanks for that. And appreciate the commentary on the longer term that’s helpful.

Thank you.

Good morning. Congratulations on results.

And thank you for taking my question.

Good morning, Mona.

Good morning, Mona.

Good morning. So in the last year has been a complete world win for you, guys.

I’m just wondering, from your perspective, and I understand these things change, but currently, what are the greatest levers that could positively impact you? Obviously, the vaccine rollout.

But is there anything else that perhaps we’re not putting enough weight on? And then conversely, what are the most significant risk factors?

I know the only way you just spoke to the productivity front and getting better and better. But is there anything else we should be cognizant of or something that’s top of mind for you?

Thank you.

So obviously, you have begun with COVID. COVID is still a risk.

I mean people are still dying from COVID. We don’t have to forget it.

And we cannot lower our guard on COVID. In terms of improvement, evidently, productivity is extremely important.

We have been speaking a lot about continuous improvement program, about how – I want to put Aecon in the position of delivering better than any other infrastructure company in this country. At the end of the day, the result of Aecon is just some of the results of its project.

And on each project, execution is a key word. We are also working a lot on our design integration capacity.

It mean being able to streamline the design at the beginning of the project, being able to optimize in terms of quantity and to optimize in terms of constructability. We’re still seeing there is a lot of improvement to obtain from there.

Opportunity, definitely, the growth of population in Canada. I mean, it’s – the standard is about 0.5 million newcomer every month.

I’ve just noticed last week, an announcement by the government of Canada about easing and streamlining some permanent resident requisite for a certain number of categories. The movement is there.

The trend is there. All these people need means of transportation.

They need power. They need clean water.

They need energy. And this is good.

This is good for Aecon. Risk, as you have noticed, COVID is a risk.

And obviously, on each job, we can always have competitors that decide to have some, I would say, reckless attitude, and we have to be careful. We are extremely disciplined.

We know what are our targets because they are the one fitting perfectly with our strength, and this is what we are looking at to prevent this risk.

Okay, that’s great. Thank you.

I will step back in queue.

Thanks. Just a question on sort of the pipeline of work and the mix of your revenues right now.

In terms of the projects that you’re sort of seeing in the pipeline, I guess, and some of the infrastructure announcements that have come through, is it more shorter terms or book-and-burn projects? Or is it longer term projects that are taking a little bit to come through?

And secondly, is there any sort of implication of that on your mix of fixed cost versus cost-plus projects? It seems like that’s run up a little bit into the 60% range over the recent quarters.

Just want to get an understanding of the type of projects that are out there in the pipeline.

Okay. First question, short-term, mid-term, long-term, I would say it’s much more about mid-term and long-term activities.

Short term is just being said, I would say, naturally. And those projects, there is always a time to bid, a time for evaluation of our bid and financial clause when it’s a design deployments or design build, finance, operates and maintain.

And then after, you just begin with from design activity, utility relocation in most of our jobs. So mid-term and long term is the – is a real answer.

Your second question was about the mix of our activities, and we are extremely focused on balancing as per our sectors, as I’ve said. But we are also interested in balancing the size of our project, the geography of our project and the mode of contractualization.

I’m not worried about the mix. It’s still under what we like.

I just remind you that it’s not as simple as to say a fixed price is difficult and unit price is easy. Just go, for example, for the normal bread and butter job with the Ministry of Transportation of Ontario, they are all unit price job.

You have 14 competitors. You have to be extremely wise and smart about your competitive advantage.

There are hard projects, and you cannot make any mistake during execution. Some lump-sum.

We have just two at the end of the process to complete. So I’m comfortable with what we have at the moment in our backpack.

Okay. And then just a quick housekeeping one.

Just looking at the expenses here and It looks like the materials line is down about 25% year-over-year from Q1 of last year to Q1 of this year. I just want to get understanding of, is that sort of like a onet-ime thing?

Or is there some sort of cost savings in there as we try to forecast this out for the rest of the year?

Yes. Hi, Sabahat.

The biggest driver of that mix is really the project profile that weren’t on in any particular quarter. Some projects in some periods have a higher content of subcontractors versus our labor.

Some projects that they are ramping up will have a higher materials component in the earlier phases. It’s really just the – a timing thing quarter-to-quarter.

And it’s very difficult to get any read through as to what that means in subsequent quarters and isn’t really a driver of our overall profitability or impacts on our cost base. It’s just one cost replacing another type of cost in any particular quarter based on the activities that are underway.

So yes, I wouldn’t read too much into that.

Okay. So I guess for the full year, it should just be normal core centers were expenses line in either direction?

In any given year, again, it can skew more to one cost category than another, depending again on the type of work. That doesn’t really play into margin profile or anything like that because these are all costs that have a job.

And whether a job has a higher material component or higher subcontract component, it’s all part of the overall price of the job. And so it doesn’t really impact anything from an overall margin perspective.

But having said that, generally, over the course of the year, yes, it kind of evens out all else being equal in terms of the kind of portfolio of projects we have underway.

Okay. Great.

Thanks so much for the color.

Thanks. I wanted to ask about your facility with Export Development Canada.

Can you provide some color on what projects that can be used for and maybe the reasons behind increasing it? I think the last time we saw Aecon increased that facility was shortly after you were awarded that contract for the Bermuda airport.

Just wondering if there is some additional international work that you’re looking at.

Yes. Hi, Devin, the EDC facility primarily is used to support larger P3 type projects within Canada or internationally.

It can also be used to support projects that have an indirect export element to them. So if it’s to support projects within Canada, that will be used to increase trade with the U.S., for example.

Go to a bridge would be a good example of that, given that it’s a P3 would be included anyway, but even if it wasn’t, that would still qualify, or a manufacturing facility that was designed to ship products overseas. So anything with really an export angle or a P3 type project.

Having said that, given the COVID issues last year, EDC did extend the applicability of the performance security guarantee that they provide so it can be applied to any project at this point in time. But at some point, that will revert back to just P3s and export related.

So not necessarily international. And the reason for the increase is really – we talked already on this call, but also in the materials on previous calls about the strength of the market we expect going forward.

And we want to build the capacity now as opposed to trying to build that capacity once we’re awarded those jobs. So this is really just about continuing to build our capacity for performance security ahead of the growth that we see coming over the next few years based on the strength of government investment programs and infrastructure.

Okay. Okay.

That’s helpful. Thanks for that.

And maybe just sneak in a quick modeling question for you, Dave. Pretty notable cash tax payments in Q1.

Just can you help us understand what drove that? And how we should be thinking about cash taxes for the balance of the year?

Yes. That’s primarily a one-off in the first quarter.

It’s really a consequence of the fact that, through 2020, obviously, we have to make installment payments through the year. And those installment payments in 2020 are based on the mix of profits from 2019, where we obviously had the significant contribution from Bermuda, which is tax exempt.

That mix changed in 2020, where Bermuda obviously was significantly impacted by COVID, but we had the benefit of the SUS program in 2020, which is fully taxable. And so those installment payments that are made during the course of the year, which is set kind of at the start of the year, were not sufficient to take into account that change in mix.

And so in the first quarter the following year, you have to kind of top up those installment payments to the extent you need to, and that’s what happened in the first quarter. Going forward, we’re just back to the regular installment payments that we have to make.

Okay, thank you. I will turn it over.

Good morning.

Good morning.

Good morning.

One of the industry disclosure is that you’re not pursuing a project in that road works. I’m just curious on is there any thinking about that particular market that made you choose that one.

Or what perhaps is pulling you into that market in the U.S. to take a look at?

The first part of your question, I could not understand. There was a problem in my audio.

Can you do it again, please?

Yes. I was just curious as to whether – what may be pulling Aecon into bidding on a project in and around the Northwest U.S., specifically Seattle.

And if there is anything, I guess, pulling you there.

Okay. Got it.

United States is ready to embark in a very ambitious program about infrastructure. So we cannot not have a look at it.

The main parameters for us to grow, I would say, would be two. The first one is that it has to be within the core competency of Aecon.

I’m not going to change country and change competency. It has to be on the scope of work that we perfectly master in Canada.

And the second parameter is about partnering, either with peers of the same category than us or with local companies, to be sure that we can make it and we can make it profitable. This is the way we are going to look at the market of infrastructure renewal in United States.

And then switching gears maybe a little bit here. I mean I think everyone is well aware of all the infrastructure spending.

When do you think some of the – that spending will translate into new project announcements that may not yet have been known by the market or – and those sorts of things?

Are you speaking about United States or Canada?

Canada specifically.

I think we have a fair knowledge of what it’s coming. It means that you probably remember that when COVID emerged, there was a lot of talk about shovel-ready projects.

And in infrastructure, this doesn’t work like this. That you can’t on Friday decide that you’re going to begin to build an infrastructure job on Monday.

This doesn’t work. You have a lot of preparation.

You have a lot of environmental assessment, right of ways, permits, utility relocation. And so we have quite a good visibility on the specific project.

And we also have visibility on the global envelope from the provincial government, from the CIB, from the federal government. So I would not expect surprises.

We just have to focus on the right projects in front of our strains, find the right partners, the right designers, the right team, and make it happen.

Okay. Thank you very much.

Thank you. Good morning.

Jean-Louis, you’ve talked a little bit about vaccinations and your workforce. And just – I guess a couple of parts to this question.

One, do you have the ability to kind of track which of your employees at the local level are actually been vaccinated? And I guess the other thing, what’s your expectation as we go later into the year?

Do you foresee there’ll be certain jobs where there’ll be restrictions that everyone on the site might have to be vaccinated in order to be able to do the work?

Okay. Just to the beginning, I’ve been vaccinated because of my age.

I’m between 59 and 60 within the last days, and I’m very happy about it. Now, no, we don’t know, and we cannot force our guys to be vaccinated, evidently.

What we can is just – it’s not only about education, but it’s about communication. It’s about promoting and just explaining through our internal channels the benefits of being vaccinated.

And then, obviously, for our activities, the quicker, the better.

Alright. But – and then I guess the other part of the question is, I know, certainly, the health regulations keep changing.

But when you start thinking about things where folks will be working maybe in remote areas and have to be working out of camps and things like that, do you foresee anything that might mandate that anyone working on those sites would have to be vaccinated?

So far, no. But for example, on FIT, the authorities of BC just provided with quite a number of vaccine and have begun some vaccination campaigns.

FIT is a camp site. So this is the trend at the moment.

And we shall see, I think, within the next week what is the evolution and how Aecon can participate as proactively as it can, depending on laws and regulation to this movement.

Alright. I will it there.

Thank you very much.

Hi, good morning.

Good morning.

Just wanted to get your thoughts on a couple of ESG-related priorities. First off, can you talk about any long-term opportunities you see from additional construction work on new decarbonization initiatives?

Just wondering how you’re thinking about your approach and positioning to capitalize on new opportunities, infrastructure-related, a new lower zero-emission projects in Canada.

Evidently, there is a trend, and I would say, sort of supplementary pipeline that we just begin to see emerging about all whose jobs, especially in energy, battery storage, for example. But also, geothermal is rising.

District heating is rising. That is a difference of temperature between some level of water or lake water and the atmosphere.

There is quite a number of very interesting and technical projects. What is also interesting is that there is a big chunk of them that go through private initiative within the public areas, and we like it.

There may be some concession schemes. There may be public-private partnership.

And it’s very, very important for us. We have a team only dedicated to track and assess all those new project coming.

And do you think that team is sort of where you want it to be? Or do you think you need to make more investments, either in capabilities or people, to be able to sort of best position yourself to capitalize on those opportunities?

We will have to recruit in addition to what we have at the moment. We have a dedicated team at the moment.

But as I was saying 20 minutes ago, the wave is coming. And I think it’s not going to be stopped.

So we have to be ready, and we are extremely proactive. You have seen with our second sustainability report, about our disclosure, about our commitment.

So we have to stay at the forefront of the construction industry in Canada. And most probably, we will add more capacity to be there.

Okay. That’s good to go.

And just a follow-up to that, to your last point. The second sustainability report, very clear.

New environmental targets clearly helps elevate your ESG profile versus your competitors in the construction sector. Just wondering if you have any thoughts on additional targets that you’re thinking about, either on the environmental side or maybe on the social or governance side.

I don’t know what I can do better than a 0 net in 2050, and 2050 is far. What is sure is that we are totally focused today on 2030 and trying to make the good decision to be able to go there.

So I think we have set up our targets now. And from this, we are relentlessly working to make it happen.

Okay. Appreciate that.

Thank you.

Thank you very much, everyone. As always, if there is any follow-up questions, feel free to reach out.

And we wish you a good rest of your day. Stay safe.

And we will speak to you on the next call. Take care.