Aecon Group Inc.

Thank you, Lisa. Good morning, everyone, and thanks for participating in our year-end 2024 results conference call.

This is Adam Borgatti speaking. Joining me today are Jean-Louis Servranckx, President and CEO, Jerome Julier, Executive Vice President and CFO; and Alistair MacCallum, Senior Vice President, Finance.

Our earnings announcement was released yesterday evening and we posted a slide presentation on our website, which we’ll refer to during the call. Following our call, we’ll be glad to take questions from analysts and ask that the analysts keep to one question and a follow up before getting back into the queue.

As noted on Slide 2, listeners are reminded that the information we’re sharing with you today includes forward-looking statements. And these statements are based on assumptions that are subject to significant risks and uncertainties.

Although Aecon believes the expectations reflected in these statements are reasonable, we can give no assurance that these expectations will prove to be correct. And with that, I’ll hand the call over to Jerome

I'll now speak to our consolidated results, review the results by segment and address Aecon's financial position, before turning the call over to Jean-Louis. Consistent with prior quarters, we provide additional information to help clarify the underlying results, excluding impacts from fixed price legacy projects and divestitures.

We have detailed reconciliation tables included on Slide 15, 16 and 17 in the conference call presentation. Turning now to Slide 3.

On a reported basis, revenue for the year of $4.2 billion was $401 million or 9% lower compared to 2023. Adjusted EBITDA of $83 million compared to $143 million last year.

Consolidated adjusted EBITDA in 2024 was negatively impacted by $273 million in legacy project losses compared to $215 million in 2023 Operating loss of $60 million compared to an operating profit of $241 million in 2023. In addition to the items just noted, lower year-over-year operating profit was driven by a decrease in other income of $186 million, primarily due to a lower year-over-year gain related to the sale of 49.9% interest in Skyport of $133 million and the lower gain on the sale of Aecon Transportation East or ATE, of $28 million.

Excluding the impact of legacy projects and divestitures on an as-adjusted basis, revenue for the year was $4.2 billion compared to $3.8 billion in 2023 and adjusted EBITDA of $349 million compared to $355 million last year. Diluted loss per share for the year was $0.95 compared to diluted earnings per share of $2.10 in 2023.

Reported backlog of $6.7 billion at the end of 2024 compared to backlog of $6.2 billion a year ago. New contract awards of $4.7 billion were booked in the year compared to $4.5 billion in the previous year.

The reported 2024 awards include $275 million of backlog acquired at the time of acquisition of United, Ainsworth Power Construction and Xtreme closed. Now looking at results by segment.

And turning to Slide 4, Construction, revenue of $4.2 billion in 2024 was $352 million or 8% lower than the previous year. The largest decrease in revenue occurred in industrial operations, driven by decreased activity on mainline pipeline work following the achievement of substantial completion on a large project in the third quarter of 2023, partially offset by a higher volume of field construction work at wastewater treatment and industrial facilities in 2024.

Revenue also decreased in Urban Transportation Solutions as three LRT projects near completion and in civil operations largely from a decrease in road building construction work after the sale of ATE in the second quarter of 2023. Partially offsetting these decreases were higher revenue in nuclear, driven by an increased volume of refurbishment work in Ontario and in the United States and in utility operations, primarily from an increased volume of electrical transmission work in the US and an increase in battery energy storage system work, partially offset by a decreased volume of telecommunication and gas distribution work.

On an as-adjusted basis, construction revenue was $4.1 billion in 2024 compared to $3.8 billion last year. New contract awards of $4.7 billion in 2024 compared to $4.4 billion in the previous year.

Backlog at the end of 2024 was $6.6 billion compared to $6.1 billion at the end of 2023. Turning to Slide 5.

Adjusted EBITDA of $34 million compared to $99 million last year. The largest driver of the decrease was negative gross profit on the four fixed price legacy projects of $273 million in 2024 compared to negative gross profit of $215 million in 2023.

Other than the impact of fixed price legacy projects in 2024, lower operating profit in the balance of the Construction segment was largely driven by lower gross profit margin in civil operations and Urban Transportation Solutions and partially offset by higher operating profit in nuclear operations from higher volume and gross profit margin and Industrial due to higher gross profit margin. Other items contributing to the reduction in operating profit include an increase in acquisition-related transaction costs that were expensed in the year, an increase in amortization expense related to acquisition-related intangible assets from the Xtreme Ainsworth Power Construction and United transactions in 2024 and a decrease in other income driven by lower gains on the sale of property, buildings and equipment, primarily utility operations.

On an as-adjusted basis, adjusted EBITDA was $307 million in 2024 compared to $326 million in 2023. Turning now to Slide 6.

Concessions adjusted EBITDA for the year was $87 million compared to $90 million last year and operating profit of $24 million compared to $174 million last year. 2024 adjusted EBITDA in the Concessions segment benefited from greater activity on certain progressive and collaborative projects as well as higher fees on major transit and transportation projects nearing construction completion.

Adjusted EBITDA is anticipated to be impacted in 2025 as these projects begin to shift to early stages of their respective operations and maintenance and concession phases and as new projects start to ramp up. Lower operating profit in the quarter was primarily due to the Skyport transaction, as previously mentioned, which resulted in gains on sale of $133 million.

On Slide 7, we've brought together the as-adjusted information to exclude the impact of legacy projects and divestitures to provide insight into this underlying performance we've been discussing. As previously mentioned, on an as-adjusted basis, revenue in 2024 was $4.2 billion compared to $3.8 billion in 2023.

Adjusted EBITDA was $349 million in 2024 compared to $355 million in the previous year. For the Construction segment on an as-adjusted basis, adjusted EBITDA was $307 million in 2024, representing a 7.4% margin.

Turning to Slide 8. At the end of 2024, Aecon held cash and cash equivalents of $123 million, excluding the cash held in joint operations.

In addition, at December 31, 2024, Aecon had committed revolving credit facilities of $850 million, of which $153 million was drawn and $4 million was utilized for letters of credit. Drawn credit is entirely at the Aecon utilities level.

Aecon has no debt or working capital at maturities until 2027, except for equivalent loans and leases in the normal course. Aecon's ex-quarterly dividend of $19 per share will be paid on April 2, 2025 to shareholders of record on March 21, 2025.

At this point, I'll turn the call over to Jean-Louis to address our business performance and outlook.

Thank you, Jerome. Turning to slide 9, Aecon continues to build resiliencies through a balanced and diversified work portfolio, while enhancing execution capabilities and project selection to play to our strengths.

In 2024, roughly 45% of Aecon's construction revenue was generated from the utilities and nuclear sectors compared to 39% in 2023. Our self-performed capabilities and one Aecon approach helped to maximize value for clients through improved cost certainty and schedule, while offering a broad range of services from development, engineering, investment and construction to longer-term operations and maintenance to cover the full infrastructure value chain.

We are embracing new opportunities to grow in areas linked to the energy sector and in US and international markets. These opportunities are intended to diversify Aecon's geographic presence, provide new growth vectors and deliver more consistent earnings through economic items.

Turning now to slide 10, demand for Aecon services across our markets continues to be strong with backlog of $6.7 billion at the end of 2024 recurring revenue programs continuing to see robust demand and a strong bid pipeline, Aecon believes it is positioned to achieve further revenue growth in 2025 and over the next few years, and is focused on achieving improved profitability and margin predictability. Of note, year-end backlog excludes the recently announced award for the Scarborough Subway Extension transit project and the design phase of the refurbishment of four units and the Pickering Nuclear Generating Station comprising $3.3 billion in total, which will be added to our backlog in the first quarter of 2025.

Remaining backlog to be worked off -- of the three remaining legacy project was $121 million, or 2% of total backlog at December 31, 2024. We remain focused on driving this project to substantial completion with two currently expected to be substantially complete in midyear 2025 and the final project by the end of the third quarter of 2025.

Trailing 12 months recurring revenue was $1 billion in 2024 comparable to the previous year and up over 30% versus two years ago. Taking into account the divestitures of ATE and a 49.9% interest in Skyport in prior periods on a like-for-like basis.

Recurring revenues are typically executed on a non-fixed price basis with the majority being over and above our reported backlog figures. Turning to slide 11.

Development phase work is underway on a number of major projects in which Aecon is a participant, including the GO expansion on Corridor Works project, the Darlington New Nuclear project, the Contrecoeur Terminal Expansion, the US Virgin Island Airport Redevelopment Project, the Winnipegs North End Treatment Plant projects and the Howard A. Hanson Dam project.

These projects are being delivered using collaborative, progressive design build models with the majority expected to move into construction phase in 2025. As a reminder, none of the anticipated work from this progressive design build project is yet reflected in backlog.

Turning to slide 12. Aecon is focused on achieving solid execution on its projects and selectively adding to backlog through a disciplined bidding approach that supports long-term margin improvement in the Construction segment.

Revenue in 2025 is expected to be stronger than 2024 due to an operating backlog of €6.7 billion combined with recent new awards in the first quarter. The impact of business acquisitions completed in the second half of 2024, solid recurring revenue and a strong big pipeline.

Revenue growth is expected in most of the construction sectors as progressive design build projects move into the construction phase in 2025 and 2026. In addition, capital expenditure in 2025 are expected to be modestly higher than in 2024.

In the Concessions segment, there are a number of opportunities to add to the existing portfolio of Canadian and international concessions in the next 12 months to 24 months. Results in recent years were negatively impacted by the four legacy projects.

However, the recent Coastal GasLink pipeline settlement along with the additional write-down of the fixed price legacy project in 2024 are anticipated to lead to improve profitability and margin predictability, especially as the remaining three projects move closer to substantial completion. Until the remaining three projects are complete as the related claims have been resolved there is a risk that this could also occur in future periods.

As such, the completion and satisfactory resolution of claims on the remaining three legacy projects with the respective clients remains a critical focus for Aecon and its partners. Finally, turning to slide 13.

The year 2024 was a period of significant progress for Aecon, marked by several positive developments. As previously mentioned, we successfully reached a settlement for Coastal GasLink Pipeline project, while continuing to make steady progress in completing and satisfactorily resolving claims on the three remaining legacy projects.

At the same time, we further derisked our business by adding new collaborative projects into our development pipeline, while transitioning the Scarborough Subway Extension project from the development phase into the implementation phase and the target price contract. We also strengthened our operation through three key strategic acquisitions, Xtreme Powerline, Ainsworth Power Construction and United Engineers & Constructor, allowing us to capitalize on significant opportunities in the utilities, nuclear and conventional power sectors across North America.

With that, we are pleased to once again welcome the team from Xtreme, Ainsworth Power Construction and United as we work together to safely drive future growth. We are excited about the momentum we have built and remain focused on executing our strategy to drive long-term shareholder value.

Thank you. We will now turn the call over to analysts for questions.

Good morning guys. It's Kyle on for Chris.

Your EBITDA from concession came in a bit lighter than we had been expecting. If you look into 2025, how should we be thinking about the expected EBITDA contribution from the segment, particularly as the portfolio evolves in the second half?

Hey Kyle, it's Jerome here. Thanks for the question.

I think we previously talked about that 2024 had a lot of benefit in the Concessions segment with regards to development and construction fees earned as projects were in flight on the construction side. As those projects move into completion, there will be a natural headwind against that, right?

So our perspective remains consistent, which is going into 2025, we won't see that pickup on the Concession side. The item that's going to help offset it, but not to a significant degree, we'll continue to work on the USVI projects, which we're targeting to hopefully move into the second half of 2025.

But beyond that, look, it is clearly a headwind on the concession front from 2025, but as expected, just given the amount of revenue that was generated with the development fees and then the Concession revenue associated with the construction projects.

Thanks. That's very helpful.

And then shifting to the legacy projects with the $36 million reforecast in the quarter and the completion of the LRT’s moving a bit to the right, do you still feel good about the $125 million loss bucket. Any color there would be appreciated.

Thanks.

Yes. I would take this one.

Yes, we do is the answer. I mean, we are in line with the information we gave at the end of Q2 2024.

Mainly speaking, I mean, on our three remaining legacy project, Gordie Howe International Bridge is perfectly on schedule and perfectly under control for a substantial completion still forecasted for September 2025. At Eglinton Finch, our two LRTs in Toronto, we are now very happy to see that all stakeholders are working towards the same direction.

And we are getting ready to have revenue service demonstration around May and June and to get Zoo’s [ph] project substantially completion -- completed around mid-year 2025. So, so far, in front of the information that we gave you, we are in line.

Hi. Thanks for taking my question.

I was just wondering if you can speak to how we should be thinking about margins in the Construction segment in 2025, And if there's any puts and takes there that we should be considering?

Hey, Krista, a good question. So from a margin perspective, on the Construction side and given the seasonality of the business, we do try to think of things on effectively a rolling basis.

So, 2024 overall margins, adjusting out legacy projects and adjusting out divestiture impacts roughly 7.5%. This is kind of good margin profile, not an exceptional one.

So it's one that we're going to try to continue to work on from an overall perspective. But that being said I think we just need to be cognizant.

That is a pretty good result to put up. And so I think for us, it's about maintaining it in this range and trying to really push the teams to operate efficiently to try to kind of inch that upwards, right?

But I think right now, in 2023, we had really good results supported by some very strong project close outs. 2024, we're in flight and transitioning.

2025, we're just going to try to push that number up a little bit more.

Great. Thank you.

And then maybe just a higher-level question. How you're thinking about capital allocation and M&A this year?

And any kind of difference between the Canadian market and U.S. market, and kind of just what you're seeing there?

Sure. So capital allocation perspective remains consistent.

First priority is the strength of the balance sheet. We think about it in two ways.

One is at the Aecon Group level, where we've got the effectively undrawn revolver at the top of the house, and then one at the Aecon utility level, where the smaller ticket shorter cycle mature the work in its own credit facility where we have the majority of our drawings to support the M&A program. So, we've maintained a strong balance sheet.

And then the next flow is to ensure that operationally, the business has what it needs to execute the work programs that we have in front of it. Our outlook noted that our capital expenditures are just slightly higher in 2025 versus 2024.

This is largely around building resiliency for the overall business across the various sectors where we operate and spread across all operating regions where we execute programs. The dividend program, we called the dividend flat this quarter and this year, and the perspective there being we got a pretty robust dividend as it stands today.

We have our NCIB to execute tactically as we see appropriate. And then finally, from an M&A standpoint, we continue to have a lot of active discussions across both utility side of the house and then the balance of the Aecon business.

Within Canada, we have very strong operations. We have the market relatively well covered.

We continue to tactically look to infill, where I think the APC transaction in December was a great example of that. Again, just strengthening an area where we already have a good presence.

But like look in 2024, the teams were quite active, both on the utility side and on the balance of the Aecon side with Extreme and United. And I think building out our capability and filling in our geographies will continue to be a priority from that perspective.

Great. Thank you.

I’ll get jump in the queue.

Thanks, Krista.

Yes. Thanks for taking my question.

Good morning. Maybe going back to CapEx.

You mentioned that it's expected to be modestly higher versus last year. Can you maybe explain some of the ongoing dynamics with equipment now that the loonie has fallen so much versus the U.S.

dollar? And if you're facing any increased costs on that front?

Yes, lots to unpack there. Potential for impact there exists.

I'd say that we manage our programs pretty thoughtfully. We already have a base.

And so part of this is effectively parts and repairs and some of the equipment that we're purchasing comes from geographies where it's not tied to USD as well. So I think overall, I'd say the volume of equipment that were expected to be onboarding is likely a little bit higher.

And also, we do have a refresh program. And so as we onboard new equipment, we off-board older equipment and that shares the same dynamic.

So on a net basis, maybe a marginal headwind but overall mouthing that we're overly concerned about. And Jean-Louis, go ahead.

Yes, maybe I can jump in a little more generally. I mean your question was about ForEx.

And what we can say now is that we have a natural way of hedging because we have more and more revenue in U.S. dollar.

So it helps us. And on a broader view, I mean, I imagine your question is also a little linked with tariffs.

So to be clear about it, don't expect Aecon to react every day due to the flow of information less than right and up and down, but basically, Aecon is not a manufacturer. Aecon is not an exporter of goods.

Aecon is a builder. So most probably as a consequence of all these tariff issues is going to be quite limited for us and maybe reduce to what we call the changing loan for which we are protected in our contract.

You remember that following COVID. We have been extremely careful on those kind of close on our contract.

I mean the protection of our revenue following change in loans. So I'm not particularly worried.

But as I said in my introduction to this answer, I mean, we are much more American today. I mean, we are in the United States.

Aecon walks, you probably remember, it's a company that we acquired in early 2019. The revenue was US$4 million or US$5 million, it's now going to deliver between CAD 150 million and CAD 200 million.

Extreme is behaving extremely well. We are extremely happy with this acquisition.

United the last one is also a very important acquisition for us. All this just means that we are in United States, we are producing, we have our workshop, we have our engineer.

We have our people. And this is important in front of what is happening at the moment between the 2 countries.

So my instruction to the team is very clear, no politics, no emotion, do your work and everything is going to be found.

That's very helpful Jean-Louis. I appreciate it.

Thank you. Good morning.

You have several collaborative projects that have been moving through the development phase. You've talked about some more of these hitting the construction phase in 2025, 2026.

Are you able to provide a little bit more detail about how we think about those moving into the construction phase and begin to contribute to revenues?

Yes. I mean, those collaborative contracts and what we call progressive design build, I mean, it's a very interesting developing part of our business.

Very interesting because, it's straight on to our strategy of giving more predictability about our margin. You probably remember when I arrived at Aecon, the share of fixed price contract was something like 72% within our activity.

And in line with our strategy, it has now decreased. We are between 35% and 38%.

We have totally inverted the trend between variable price and fixed price. PDBs and collaborative contracts, I mean, is part of this strategy.

So what happened with Scarborough is very important because it's a major one that is now closed commercially. We finalized the development phase, and we reached an agreement toward a target price with our clients.

It's a big one for Aecon. It's probably a little over $2.8 billion in terms of activity.

So the model works. And this is why it's so important, but it's not the only one.

I mean, Pickering and we have disclosed information about it, is a collaborative contract. I mean we have in our backlog, something like $1 billion for the development phase of Pickering.

We are working on other progressive design build, I mean, DNNP, the SMR is a collaborative contract. It's a 6-year alliance, and we expect during the first part of the year 2025, to also go from development phase to construction phase, go to an expansion, although it's a phased progressive design build due to the fact that it's a brownfield environment.

I mean, we are working and the operation of the rail network. So it's going to be failed, but we have also closed the development phase and are progressively going to implementation and construction.

We have others. I mean the Winnipeg wastewater treatment plant is also a collaborative one.

Over Hansen [ph], I mean, with the US Corp of Engineers in the United States, there is something like $260 million for Aecon ultimately in construction is a collaborative one. Contractor in Quebec is a collaborative one.

So, very important, very good, and perfectly in line with our strategy. As I used to say, there's not a universal contractual mode for every project.

Each kind of project at its own tailored and optimal way of contracting. We can see, for example, now that our clients from time-to-time are ready to come back to lump sum job, but taking out from the lump sum, everything that depends on stakeholders that is not under our control and putting it on the time and materials or targets.

So, those are hybrid models that are also very, very interesting. All this is developing quite well and perfectly in line with what we have announced.

Perfect. Thank you.

I apologize if I missed this earlier if there was any discussion about this, but just on the subject of tariffs, it doesn't seem as though there's any real direct exposure, but obviously, people are concerned about potential indirect impacts. Can you just talk a little bit about whether or not you've seen any impact so far as it relates to work you're pursuing?

And I'm thinking more specifically about sort of any customers' comments they may have made or sentiment from the customers' side? Just trying to get a sense if there -- from an indirect impact perspective, what may come from this?

Yes. I'll tackle that one.

Look, it's a good question. I think the best way we can answer is that we're just -- we're monitoring the situation pretty closely.

As noted, it's the measures and the countermeasures, non-tariff impacts, changes in procurement, changes in policies of national, subnational regional governments. All of this is playing out in real-time, and we're just watching where it's going to land.

In general, the uncertainty that this is causing potential inflationary impacts could have impacts on our labor force. So, the way that this impacts operations is kind of multifaceted.

And so we're being kind of cautious from that perspective. And client behavior, you may or may not change in association with this.

And I'd just say that it's something that we're very live to. That's probably all we can really share at this point.

Fair enough. It's obviously early days and very complex.

So, I appreciate that. And then just lastly, in terms of nuclear-related work, obviously, there's some part of the Pickering award, on the latest refurbishment awards got at in the fourth quarter and more to come in the first quarter.

But can you just speak a little bit about nuclear in general. Obviously, there was a lot of excitement, and I think continues to be around the opportunities in that area.

But just wondering what you're seeing now in terms of sort of future opportunities, if the level of discussion and opportunity set continues to expand, and I'm thinking specifically both about U.S. and Canada, if you can comment on sort of new build as well, which may be a little further out, but just what the thinking there is.

Yes, I will take this one. Lot of excitement and enthusiasm.

Although at Aecon, we are extremely happy with our nuclear activity and the way it's growing. So, as you say, let's split into Canada and U.S.

So, Canada, basically, we have two vectors of growth. The first one is what we call the major component replacement.

We are, at the moment, working on the fourth and last unit of Darlington that should be ready for 2026. I just remind you that the third unit, we completed it five months ahead of schedule, perfectly within the budget.

And Bruce, you probably saw that we have added the four last reactors. We are at the moment working on the second one that should be ready next year.

Bruce will go up to 2032 now in terms of major component refurbishment. Pickering is a very nice add up because it comes exactly at the right moment that we were needing after Darlington.

It means that all our teams coming from Darlington, all the lessons learned, I mean, will be directly applicable to Pickering, and we are very happy about it. We are also working on preparing our offers on a collaborative model for the turbine refurbishment.

This is for the refurbishment programs. In addition to this, you have the new build.

And the main one at the moment, the one on the table is a small modular reactor at Darlington, Unit 1. We are expecting that OPG will get licensing authorization from the regulators around mid-2025.

We are ready to shift from development phase to construction phase. I remind you that it's a four-unit program of 300 megawatts, where Aecon is in charge of all the construction services.

After this, we are also getting ready for the new build of 1,000 megawatts that will arrive for OPG and for Bruce, getting ready, I mean, for those big jobs. In US, it's also quite interesting.

As I said a few minutes earlier, I mean, we acquired Walks early 2019, a very small company with a very specialized welders that we used on our Canadian refurbishment program. Now this company that has been restructured, that has been nurtured with a lot of processes from Aecon, a lot of knowledge from our nuclear project is growing and is growing quite well.

I mean we are expecting that our activity in US for nuclear will be between $150 million and $200 million in 2025. We are working for the federal government, Department of Energy on Savannah River.

We are working for Dominion. We have added a few days ago a very interesting purchase order for Energy Northwest.

So this is going quite well. In conclusion, always remember that the resiliency and the strength of Aecon is due to the balance of its activity.

I mean I don't want to become an 80% nuclear company. All this has to be balanced, but we are perfectly on our way and very happy with the nuclear activities.

Thank you very much for all that.

Hey, Frederic.

Good morning, everybody. I don't know, if this question has been asked before, I suppose it has, but might have not come from me.

But just wondering, if data center is an opportunity for you guys from maybe a power transmission perspective.

No, Fredrik, I mean, this question has not yet come on the table. Basically, in the data centers, there are two parts.

One is a sort of huge workshop where the clients just insert all their equipment that are directly procured by them, plus a lot of AC air conditioning, we are not going to this we are late in this market and Aecon is not really a building or commercial building company. As you say, what is quite interesting is the power that is related with those data centers and two kinds of power.

The first one is to get autonomy of power generation. So we are looking at this.

And the second one is to have a backup. So to be perfectly connected to the grid to the existing greens, and it just means that there is a full market linked with what we call balance of plant and energy.

And yes, we are looking at it. It's a little similar to battery storage, you probably remember.

I mean, we didn't want to go in the pure battery aspect of it, but we are usually extremely -- I mean, extremely interested, and we are getting very strong in what we call the balance of plan, everything related with energy.

Okay. And are you seeing -- I mean, the market is really vibrant in the US, are you seeing the potential for Canada to become a major player in data centers?

Not sure in US is very much in advantage, but there are needs in Canada, and we are getting stronger and stronger in US, as I was explaining, I mean, through our acquisition United is a very interesting acquisition. So first of all, you have noticed, it's engineers and constructed.

Construction is because United has a joint venture with Framatome with a worldwide leader in steam generation. And it's quite important because most of the major component refurbishment of existing nuclear power plant, we'll have to deal with steam generation.

But United is also an engineering company preconstruction, feasibility, detailed engineering, everything related with power. And of course, we want to leverage their capacities with the Canadian capacity that we have to be stronger in United States.

Okay. Thanks.

That's helpful. I have a question regarding the Construction segment's result.

There was -- it was highlighted that the gross margins on the Civil side were part of responsible for some of the pressure you experience. Are you able to comment further on that and provide additional color?

Yeah. Hey, Fred, it's Jerome here.

So Jean-Louis previously mentioned, one of the benefits of Aecon's platform is the diversification across the various sectors. And so on occasionally, we have a broad portfolio of civil projects, spanning the continent, constructions in outdoor sport and in some instances, some of these projects just don't perform at the same level as others.

And this has just been a quarter where some of the project performance on some of the civil works that we're doing, I think partly in kind of the western part of the continent just didn't perform to the same level as our aspirations, balanced out by other high performance in other areas of the business, right? So as Jean-Louis mentioned, nuclear did very, very well.

We had strong margin profile out of our Industrial business. But effectively, this is core civil works just managing through challenging and the projects we execute on are not simplistic things, right?

Like they are meaningful critical infrastructure projects that are absolutely required. But there -- it's not easy stop, right?

And at times, some of the projects get tough, and that was what we saw manifest in the margin profile in Q4.

Okay. Thanks for your answers.

Thanks, Frederic.

Thanks, Lisa, and thanks, everyone, for joining us today. As always, feel free to reach out with comments and questions to us after.

Happy to reengage as you continue to work through the models and things like that, but we've conclude the call today, and look forward to chatting next quarter.