Aecon Group Inc.

Thank you, Gigi. Good morning, everyone, and thanks for participating in our second quarter 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 this call. Following our comments, we'll be glad to take questions from analysts, and we ask that the analysts keep to one question and a follow-up before getting back into the queue.

As noted on Slide 2 of the presentation, listeners are reminded that the information we're sharing with you today includes forward- looking statements and that these statements are based on assumptions, subject to significant risks and uncertainties. Although Aecon believes the expectations reflected in these statements are reasonable, we can give no assurance that the expectations will prove to be correct.

And with that, I'll hand the call over to Jerome.

Good morning, everyone. I'll now speak to Aecon's consolidated results, review results by segment and address Aecon's financial position before turning the call over to Jean-Louis.

Additional information has been provided to help clarify the underlying results, excluding impacts from the fixed price legacy projects and divestitures. Detailed reconciliation tables are included on Slides 13 through 15 in the conference call presentation.

Turning to Slide 3. On a reported basis, revenue for the 3 months ended June 30, 2025, of $1.3 billion was $448 million or 52% higher compared to the same period in 2024.

Revenue grew across all operating sectors with strong performances in industrial, nuclear and civil operations. Revenue growth also benefited from the impact of the acquisitions of Xtreme Powerline Construction, Ainsworth Power Construction and United Engineers & Constructors that occurred in the second half of 2024.

Adjusted EBITDA of $41 million compared to a negative $154 million last year. And operating profit of $2 million in the quarter compared to an operating loss of $166 million last year.

Adjusted EBITDA and operating profit in the second quarter of 2024 were negatively impacted by $237 million and legacy project losses versus $39 million in losses on legacy projects in the second quarter of 2025. Excluding the impacts from the legacy projects and divestitures, as adjusted revenue for the 3 months ended June 30, 2025, of $1.3 billion compared to $975 million in the same period in 2024.

Adjusted EBITDA as adjusted of $80 million compared to $78 million last year, driven by stronger contribution from core construction activities, which more than offset the anticipated normalization in Concessions EBITDA, which benefited from incremental proceeds from the partial sale of Skyport and additional management and development fees in the prior period. Adjusted diluted loss per share in the quarter of $0.09 compared to a loss of $2.03 last year.

Aecon's reported backlog of $10.7 billion at the end of the second quarter was the highest reported backlog in its history, surpassing the previous record of $9.7 billion set in the last quarter. The increase in backlog is a result of significant efforts through collaborative models with our clients and Aecon anticipated a moderation in backlog growth given current levels.

New contract rewards of $2.4 billion were booked in the quarter, primarily from alliance contract awarded for the execution phase of the Darlington New Nuclear Project in Ontario, where Aecon is leading the construction of North America's first commercial grid- scale small module reactor or SMR for Ontario Power Generation. Now looking at results by segment.

Turning to Slide 4. Construction revenue of $1.3 billion in the second quarter was $447 million or 52% higher than in the same period last year.

Revenues higher in industrial operations, driven primarily by an increased volume of field construction work in western Canada and the impact on revenue of the Coastal Gaslink Pipeline Project settlement agreement in 2024. And nuclear operations from an increased volume of refurbishment and engineering services work at nuclear-generating stations in Ontario and the United States.

Revenue was also higher in civil operations from a higher volume of major projects, roadbuilding construction and foundation work. In urban transportation solutions, primarily from an increase in mass transit project work in Ontario, and utility operations from a higher volume of gas distribution work in Canada and electrical transmission work in the U.S.

following the acquisition of Xtreme in the second half of 2024, partially offset by a lower volume of telecommunication work. On an as-adjusted basis, construction revenue was $1.3 billion compared to $973 million in the same period last year, representing a 31% increase.

New contract awards of $2.3 billion in the second quarter of 2025, more than doubled the $764 million in new awards booked in the same period last year. Turning now to Slide 5.

Adjusted EBITDA of $40 million compared to a negative $173 million last year, and operating profit of $15 million compared to an operating loss of $185 million last year. On an as-adjusted basis, adjusted EBITDA for the 3 months ended June 30, 2025, of $79 million compared to $64 million in the same period in 2024, with improved performance driven by higher volume and gross profit margin in nuclear and utility operations and higher volume in industrial operations, offset in part by lower operating profit in civil from western operations.

And urban transportation solutions from lower gross profit on mass transit projects that are now nearing completion. Turning to Slide 6.

Concessions revenue for the second quarter was $2 million compared to $2 million in the same period last year. Adjusted EBITDA in the Concessions segment of $16 million in the quarter compared to $30 million last year.

And operating profit of $3 million compared to $17 million last year. Lower adjusted EBITDA and operating profit in the quarter were primarily driven by last year's gain on sale related to incremental proceeds from the partial sale of Skyport and last year's onetime recovery in Skyport.

Otherwise, the adjusted EBITDA of the Concession segment was aligned with expectations. On Slide 7, we brought together the as-adjusted information to exclude impacts of the legacy projects and divestitures to provide insight into the underlying performance of the business.

On an as-adjusted basis, revenue for the 12-month period ending June 30, 2025, was $4.7 billion compared to $3.8 billion for the same period last year. Adjusted EBITDA was $351 million in the trailing 12- month period compared to $337 million in the prior period.

For the Construction segment, on an as-adjusted basis, adjusted EBITDA was $321 million for the trailing 12-month period, representing a 6.8% margin. As adjusted EBITDA margin was impacted by weaker gross profit in western civil projects and in urban transportation solutions from lower gross profit on mass transit projects that are nearing completion.

Over 3 quarters of Aecon's record backlog at June 30 is non-fixed price. This compares to 50% nonfixed price last year and just 30% nonfixed price in the second quarter back in 2021.

Aecon has continued to shift the nature of our backlog and our business over time, including to more collaborative and progressive procurement models, while seeking to reduce risk in our performance and target greater profitability and margin predictability. Turning to Slide 8.

At the end of the second quarter, Aecon held core cash and equivalents of $123 million, which excludes $339 million of cash, representing Aecon's proportionate share held in joint operations. In the second quarter of 2025, Aecon renewed both its committed revolving credit and performance security guarantee facilities.

At June 30, 2025, Aecon had a committed revolving credit facility of $600 million, an increase of $150 million from its previous credit facility and a separate committed credit facility for Aecon Utilities of $400 million. $336 million was strong across both facilities and $8 million was utilized for letters of credit.

Both revolving facilities now mature in June 2029. Aecon has no debt or working capital credit facility maturities until 2029, except equipment loans and leases in the normal course.

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 resiliency through a balanced and diversified work portfolio. Over the trailing 12-month period, 46% of Aecon's Construction revenue was generated from the Utilities and Nuclear sectors compared to 41% for the comparative period in 2024.

In the second quarter, the Oneida Energy Storage Project officially commenced commercial operations, becoming the largest grid scale battery energy storage facility in operation in Canada and one of the largest globally. Balancing growth and opportunity with proper risk management is key to Aecon's future success.

We continue to maintain balance in our Construction and Concession segments as we embrace new opportunities to grow in areas linked to the energy and power sectors and in U.S. and international markets.

Turning to Slide 10. Demand for Aecon services across our markets continues to be strong with record backlog of $10.7 billion at June 30, 2025, recurring revenue programs continuing to see robust demand and a strong bid pipeline.

Aecon believe it's positioned to achieve further revenue growth in 2025. And over the next few years, we focused on achieving improved profitability and margin predictability.

76% of our backlog was nonfixed price at June 30, 2025, compared to 50% at the same time last year. Additionally, our trailing 12 months revenue at June 30, 2025, was 65% nonfixed price, up from 58% in the same period last year.

Trailing 12 months recurring revenue of $1 billion was comparable to the previous period. Recurring revenues are typically executed on a non-fixed price basis with the majority being over and above our reported backlog figures.

Turning to outlook on Slide 11. Development phase work is ongoing in consortiums, in which Aecon is a participant to deliver several significant long-term Progressive Design-Build projects of various sizes.

These projects are being delivered using collaborative, Progressive Design-Build models with the majority expected to move into the construction phase in 2025 and 2026. Aecon is focused on achieving solid execution on its projects and selectively adding to its record 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 a record backlog of $10.7 billion. The impact of business acquisitions completed in the second half of 2024, solid recurring revenue and a strong bid pipeline.

Revenue growth is expected in most of the Construction sectors. In the Concessions segment, there are several opportunities to add to the existing portfolio of Canadian and international Concessions in the next 12 to 24 months.

The 3 remaining legacy projects are expected to reach substantial completion by the end of 2025. And this is anticipated to lead to improved profitability and margin predictability.

The remaining backlog to be worked off on the 3 remaining legacy project was $76 million or less than 1% of total backlog at June 30, 2025. We are now very close and are dedicating all necessary resources to drive the remaining legacy projects to completion.

While pursuing fair and reasonable settlement agreements with the respective clients in each case. Until the 3 remaining projects are complete and the related claims have been resolved, there is a risk that profitability could also be negatively impacted in future periods.

As such, as a completion and satisfactory resolution of claims on this project with the respective clients remains a critical focus for Aecon and its partners. We are excited about the momentum we have built and remain focused on executing our strategy to drive long-term shareholder value.

We thank our dedicated team members for their contributions and for reflecting our safety always culture. Thank you.

We'll now turn the call over to analysts for questions.

When we think about next year with respect to the legacy projects, are there any lingering costs associated with these projects like I'm thinking associated overhead and not so much asking if there's going to be any cost reforecast in '26 because we don't know that? But any overhead costs that we should be including in our model as we think about how these things finally roll off?

Okay. I'm going to take this one, Yuri, and describe where we are with our 3 legacy projects.

As you know, Eglinton, Finch and Gordie Howe are P3 project, and the way they are structured is that construction as it lies that finish with substantial completion. From this moment, we go to another phase, which is maintenance of the assets that we have been building.

So the issue for us at the moment is getting to substantial completion. As you have noticed, I mean, $76 million of backlog on those 3 jobs, which is less than 0.7% of our cumulative backlog is of the essence.

If I want to be a little more specific, on Eglinton and Finch, we are now working hand-in-hand with Metrolinx, TTC and all our partners to begin what we call revenue service demonstration, which is the last phase before substantial completion. It's a period contractually fixed at 30 days with a high number of trains running 21 hours per day, 7 days a week.

We have been trading, testing and commissioning all our systems for the last 2 to 3 years to go there. This should begin between August and September and last for 1 month.

Once this is achieved, which is a final exam, the owner had a few weeks to declare substantial completion. For Gordie Howe, the Canadian point of entry is over.

The main bridge is over I-75, I mean, is practically over the just a pedestrian bridge that remain to be finished. The U.S.

point of entry is a little more complex. We are putting all our efforts on it.

And we are also expecting to have substantial completion before the end of the year. What does it mean?

It means that from the moment we are at substantial completion, the construction part of those teams is over. And the consequence for us is that an eventual variance on cost at completion is now extremely limited on those projects.

This being said, as you have noticed from what I've been saying a few minutes ago. The way we are going to settle our disputes, our claims, the way we are going to negotiate with our clients is our critical focus for the 5 to 6 months to come.

This is a problem of revenue. What I can also add is that those 3 projects really represent an astonishing technical performance for Aecon and our clients know it perfectly.

I hope I've answered your question, Yuri.

Yes. Maybe just a quick follow-up.

I mean in terms of pursuing the claims and stuff like that, like is that going to be a noticeable overhead cost next year or...

Not that much. Not that much.

I mean most of our claims are on the table now. There is just a few adjustments because of the few weeks remaining.

The idea is to find a fair and reasonable resolution and not to go to lengthy procedures. So there's no real overhead affected by this resolution.

And then after a substantial completion, we'll go to maintenance. You probably remember that none of those P3 has a risk of traffic.

I mean it's just a pure maintenance and availability issue on which we have been working now for the last 2 to 3 years on all projects.

Okay. So that's my last one, not to belabor the point.

But the underlying margins that you've been reporting the last couple of quarters, excluding the legacy charges, that's a -- would you say that's a good proxy for what your margins might look like in construction in 2026?

Yuri, it's Jerome speaking. Yes.

Look, there's a couple of things that are informing the evolution of the margin profile. So I'll touch on those briefly because I'm sure it's a question that others probably are in the queue going to ask as well.

So number one, I'm on Page 7 of the conference call presentation, we note there the trailing 12-month June 30 EBITDA margin for the -- and I'm focused on the Construction business, was 8% last year. And this year, it's 6.8%.

And so informing that shift is a number of items. One was last year, the teams were fiercely at work on progressive elements of some of our PDB projects, working on design implementations, and we have several other relatively strong margin projects that were being executed and closed out at that point, which were positive.

So the absence of those has an impact on the margins today. Number two is we've called out that the performance in some of the western areas of our civil practice are just not up to standards today.

That's being addressed. Our expectation that will close down roughly by the end of the year.

This isn't kind of like a massive piece, but just an explanatory factor that ties into it. And then the final piece is a lot of the work that we're executing today has a much more appropriate risk balance in terms of conditions that are more aligned with Aecon's risk appetite.

And I remind everyone that the counterparties that we procure -- that procure from us are very sophisticated, very capable and very intelligent. So there's no free lunch in the world where we operate in kind of massive project delivery landscape, right?

Like we're talking about OPG, Metrolinx, major global mining corporations. They're smart partners.

They know how this works, and they also understand that there needs to be an appropriate balance between profitability and risk. And that's also informing an element of the decline in that margin profile.

So we're -- we always want to see more. But like, for instance, the 6.2% that we posted in this quarter specifically is acceptable, but nothing to kind of be excited about.

But that being said, it just helps inform where the margin profile is going. We're very happy at Aecon to trade a little bit of margin, right?

Like I think in the quarter, we're down 46 basis points in order to take off the table some of the risks that we've historically seen with regards to legacy projects. Hopefully, that gives a little bit of context.

Yes. Along those lines, I was wondering if you could talk a little bit about the Concessions business and maybe some of the expectations that we should think of over the next little while.

Jerome, I know you alluded to the fact that there's some interesting project pursuits. But also just trying to maybe have an idea on how some of those pursuits might flow through, either include suit costs or anything like that as we go through the next year.

Chris, it's Jerome. I'll tackle that one.

On the Concessions business, I mean, look, we're very much focused on the value that, that portfolio represents, right? So in broad numbers, there's a $0.25 billion of equity invested in that portfolio today.

These are high-value, long-term cash flowing assets that are generally untied to certain economic profiles, and we see a lot of benefit from that perspective. In the comparative periods and in the historical periods, one of the things that's benefited the accounting EBITDA associated with our Concessions business is really just management fees and some of the kind of success fees tied to certain projects that have strengthened those results.

As we close out the legacy projects, those management fees will fall off. And I promise you, economically for Aecon, this is a good thing.

But when that falls away, I think we'll see a more normalized, levelized level of performance from an accounting EBITDA standpoint. Our perspective is economic value is certainly maintained and preserved and probably augmented as Jean-Louis mentioned, these legacy projects will move from the Construction phase, where they're paying a management fee into the Concessions business to effectively a maintenance phase where it's a little bit more solidly performing.

The next part is we have mentioned in the past a number of pursuits that are quite interesting and uniquely aligned to our capability set, one of them being the USVI airports, the 2 airports that we're currently in negotiations with to finalize that output. The thing that's interesting on that one and like we're trying to caution people not to kind of assume that the accounting EBITDA we'll have an uplift when those deals close, the economic values preserve like the DCF is unchanged, but the way that the airport concessions practice works in different markets, whether it's Caribbean state or a U.S.

territory or a different region, the way that the concession fees kick in very depending on when the project is delivered. So in some instances, it might be a project signing, some instances would be during construction, some instances would be when the airports are actually delivered.

And so on that basis, we're just taking a little more of a cautious stance on the accounting EBITDA, the economic output of the business remains consistent and strong.

Okay. That's helpful.

My other question was just sort of thinking about kind of the revenue stack all in as we go into next year. I mean certainly, your -- the bookings have been remarkable and whether or not they can maintain at this stage.

I mean we're now at backlog levels. And even when I think I start looking at the next 12 months of revenue, you think about recurring revenue and everything you're there.

Any thoughts on -- and I want to be careful about making sure that we get the backlog duration kind of in the right place. But is there anything to believe that you wouldn't see some pretty substantial revenue growth as we go into next year?

Or is there something that maybe is longer duration in the mix? So any color you can give us on how to think about next year's revenue stack would be probably appreciated.

Yes, Chris. So as you can see, there is a mass calculation on all this.

We -- our backlog is around $11 billion. Our recurring revenues are stable.

Our big pipeline, and we may come back to this after, we think that the turbulences that we can see between U.S. and Canada will create quite a number of opportunities, quite interesting for Aecon.

Just making that we are on a growing path, which is more important for us and what is totally in line with our strategy, and this is why we are very happy about it, is that 76% of this backlog is under collaborative contracting mode. It's variable pricing.

You probably remember that 5 to 6 years ago, we were a little below 30%. We have totally inversed the situation.

So this gives us, obviously, a much better margin predictability. And I know some questions that have been asked for the last few months is, yes, those job gives probably less capacity of write-ups, but evidently, there's much less capacity of write-downs.

And this is what was our strategy about. In this $11 billion, we still do not have handled a few other Progressive Design-Build, quite nice, like the Port of contractor or all the elements of the GO Transit area project that is going to be safe.

But that will happen. I mean you probably have seen that 1.5 months ago was inaugurated by the Government of Ontario, they would buy further bundle of work under own core.

So yes, it's a path for growth, and it's perfectly aligned with our strategy. And for us, it's a path towards much better margin predictability.

So my first question is around your margins. So you have talked about that your western Canada operations has bid on your margins and -- so -- and you have also talked about some of your urban transport solutions from mass transit projects that has also impacted the margins.

Can you please talk about this what these mass transit projects are?

Sure. Yes.

It's Jerome. Western civil projects, I mean there are several projects.

We don't call out at Aecon specific projects for a variety of commercial reasons. But what I'll say is the projects in question have similar themes to them.

They are ones that were entered into several years ago. They're fixed price in nature and then the execution associated with them just isn't up to the standards to which we want to hold ourselves to.

So it has a negative impact on the overall margin pool associated with our civil practice, which is a strong practice. And so we just think it's prudent to call it out.

The projects in question, we anticipate to be finalized by the end of the year. Again, we don't think it's like particularly constructive to put too much of a spotlight on it, just one of a couple of factors that inform the overall profitability of the business.

For everything that we want to talk about western civil, when you talk about strong performance of nuclear across markets, not just in Ontario, we can talk about utilities practice continuing to grow. So we try to be balanced with that.

And then finally, on the UTS side, look, we're executing projects in a couple of jurisdictions. Today, the big ones on the road map are the 2 LRTs in Ontario, we're doing -- we're working on the REM project in Montreal, and Scarborough is the other one, which was signed in February, and we've already begun operations on it.

That's a pretty significant one. And so just the nature of those projects just have a more attenuated margin profile.

And then also, it's probably worth noting, we actually have one in western Canada as well that we were out visiting not long ago, which was The Surrey Langley stations project, which is an extension of the SkyTrain in Vancouver. So long way of saying, we're really proud of our urban transportation solution practice area.

I think the teams are doing a really good job. The projects that are closer to the very end or very start tend to have slightly different margin profile than those who are in kind of the middle of the belly.

I have another question on your capital allocation priorities. So you get 3 acquisitions last year, and we are yet to hear any acquisitions for this year.

So are you -- do you have any plans to get active on the M&A market again? And also your NCIB is expiring at the end of this month.

So do you have any plans to renew your NCIB?

Yes. Maybe -- yes, I'll take a step back and answer that question.

Maybe with kind of a first principles approach, which is in the normal course, our business is quite cash generative. Where we stand today is when you're taking project losses like what we're taking on the legacy projects, that actually involves us cash financing the projects to completion.

So it's -- that's a drain on capital resource as it stands today. Normalizing for that, i.e., when the projects close out, we won't have that train.

We quite think about it in this way. So number one is our business is growing.

So if you think about LTM revenue last year on an as-adjusted basis, so excluding legacy and divestitures, we did about $3.8 billion of revenue, and we're currently sitting at around $4.7 billion. So there's been significant growth, roughly 25% growth in the business.

That growth involves investment in working capital, people, processes, efficiency, systems all tied towards increasing the resiliency of how we do our work. The next thing we look at is making sure that we have a really strong balance sheet.

And in this case, I have to put the portal on it. So we have a balance sheet for Aecon, and then we have the balance sheet for Aecon Utilities.

Part of that focus was evidenced in the quarter where we increased the Aecon side of the house from $450 million credit facility to $600 million credit facility just to reflect the overall increase in the size of the enterprise and work programs that we have in front of us. So feed the machine, keep the balance sheet strong, support the dividend program.

Clearly, that's an important part of our capital allocation process. And then we actually have effectively a competition for capital between 3 growth streams.

One of them are just general growth capital investments in equipment, opening up new regions. The next one will be growth capital with regards to M&A, which was your question.

And then the third one is growth capital, which is really kind of like value per share growth from the NCIB program. So I'll say NCIB program expires back half of the month here in August.

Our expectation is that we would look for a renewal through the TSX, and we'll look to kind of continue to tactically approach that program based on capital availability. And then from an M&A front, look, we remain active, but we're also -- we're very particular like we're classy purchasers.

We really care about the teams that we're onboarding into the Aecon ecosystem. There needs to be an appropriate value for the businesses that we're looking to.

We need to have the right type of operating ethos for those teams, and you have the same focus on safety, they need to care for their clients. They need to be additive to our overall profile.

And so that's end up being quite tactical. And so you got to kiss a lot of frauds before you find a prince.

And so that's a bit of the reason why we haven't seen a ton of activity from an M&A perspective. And then the other part, [ Ashul ], is M&A can be -- there's integration that's required afterwards.

You have to be thoughtful about how these teams are onboarded and brought on to kind of like the Aecon systems and how their approach and processes are recognized. And that just takes a little bit of time.

You don't want to kind of rush and swamp the entire environment and then find yourself not expecting the value and benefits from the onboarding of these teams that you thought you were going to get. Hopefully, that gives you a little bit more context.

Yes. And yes, first question, obviously, when we look on the nuclear side, strong expertise with a lot of excitement around the globe.

Could you maybe provide an update on the discussions you're having and what you're seeing in terms of bidding pipeline for nuclear work?

Yes, Benoit, I'm going to do it on nuclear. We are very happy with our nuclear sector.

As you have noticed, I mean, we are now refurbishing 100% of the Canadian feet. Maybe at Darlington with the last unit, at Bruce, and we have begun now at Pickering.

In addition at Pickering, we have entered into the turbine rehabilitation which is very interesting for us. It's going to be an add in our competency, and we are here in partnership with Siemens.

Regarding new build, you have noticed, we have added a little more than $1 billion. It was $1.3 billion for our share of the small modular reactor in Darlington.

This is the first of a series of 4. We just have to be good with the first one, and we are extremely focused with this job that fit perfectly with our capacity.

But obviously, for OPG, for the province of Ontario and for us, what we want to do is just for SMRs. There's also a lot of movement and preparation on the 1,000 size reactor in Ontario.

It's going to be with Bruce Power, and it's going to be with OPG. So at this stage, we are working with both our clients in predefinition, preconstructibility, very close.

As I tend to say, we are totally technology-agnostic, and we can work with any technology. SMR is a GE Hitachi technology.

The actual reactors in Canada, CANDU technology. It's not a problem for us.

In U.S., we are growing extremely nicely. You probably remember a few years ago, we acquired a very small, specialized welding company, which name was Wachs, which is now ramping up in terms of activity, profitability, knowledge, quality of the team quite nicely.

We worked for the Federal Department of Energy. We worked for Dominion on a major component replacement.

We have now opened and strengthened our offices in Charlotte, the future of nuclear in United States, you have probably followed during the last 2 months, everything that has happened on the other side of the border. The future of nuclear in United States is extremely interesting.

And we are ideally positioned with Aecon at this stage.

That's great color, Jean-Louis. And maybe quickly on the financial front.

Obviously, with the strong backlog, upcoming growth, how should we be looking at 2026 in terms of working capital movement?

So Benoit, it's Alistair. You'd see through the first half of the year, we've increased our working capital because of higher revenue.

The expectation for the back half of the year is, that will continue with the back half of working capital being up slightly. And then 2026, it's hard to view it at this stage.

I mean you know in Construction; the working capital can be kind of lumpy. I would say it tends to follow our typical path where we build working capital in the first half of the year and then unwind working capital in Q4.

I think the expectation now is kind of hard to predict because it will also depend on how some of these settlements go. So at this stage, I think we'll hold off on giving any guidance on it, and we can talk about it later in the year as things unfold.

I was wondering if it's possible to get a bit of an update around the power business in the U.S. and the transmission opportunity.

So anything you can provide color on that, that would be great.

Yes. I mean the -- what's happening in power is extremely interesting.

In Canada but also in the U.S., it's now obvious that the electricity demand is expected to double by 2050. I mean it's -- there's a lot of parameters there, but it's about population growth, it's about electrification of systems.

I mean more electrical vehicle, more mass transit and transportation going to electricity, heat terms and also industry growth. I mean this is one of the biggest part in Ontario.

Energy intensive, I would say, industrial activity, IA, and data centers, but also a lot of advanced manufacturing that requires more and more electricity. So new generation capacity that is important, new transmission capacity, not only within a province in Canada, but also between provinces.

It's evident that at the national level, we need more consistency in our grid. It's also about storage.

We told you about Oneida, a 250 megawatt, but we have also finalized during the quarter 2 other battery storage, each one around 100 megawatts. Aecon is ideally positioned.

When we speak more specifically about United States, energy, I mean we are growing nicely with our nuclear activity. You remember that utilities 2 years ago, began to work in United States.

It's a mix of acquisition and of organic growth with partners. There's a lot to do.

To finish with United States, you can -- I mean, hear some noises and -- about what is going to happen. But at the end of the day, the vocabulary can change.

I mean we speak less about climate change and more about extreme weather events. We speak less about renewable energy, but more about energy security and resiliency.

But at the end of the day, the works remain, and it's a very high load. Once again, I mean, we have been preparing the Aecon during the last 3 years about it.

It's coming, and we are ideally positioned.

Okay. That's great color.

And you're not seeing any slippage in terms of kind of contract allocations as there is some pushback around the ability to pass on rate base increases to sort of the ultimate consumers. Like what is your, I guess, sense around how quickly these projects actually do ramp up in the U.S.?

And what we can see obviously, the last decision of the presidential level in the U.S. have created some uncertainty, but there's not one single week where you don't have a deal or an agreement that is getting signed.

It means that I think it's coming, I would say, surely back to a kind of new normal. Yes, we have seen during last year some of our projects that we are under per suite being pushed to the right.

My opinion is that it's going to quieten down. And in front of, I mean, a question about our eventual vulnerability, in front of all this, I mean, I'd just remind you that our backlog is 76% flexible price.

So we are covered about tariffs and all those kind of stuff. Aecon is more and more American.

We are extremely prudent, but we have more boots on the ground, more capacity to produce, more capacity to execute. Our works are essential in nature.

So I just think that it's going to settle down and come back to the reality, which is that there is a huge need for power infrastructure in the U.S. and in Canada.

Yes. That's great color.

And then one quick follow-up for Jerome, if I may. And I realize, obviously, you cannot talk about the commercial terms, et cetera.

But can you remind us the contract structure or the risk profile on the new kind of nuclear builds, et cetera, that you are underwriting right now?

Yes. Generally speaking, variable target price stock contracts with incentives associated with them, right?

And we've been working with the clients on these for quite a while. And so we have a pretty good handle on schedule performance required.

These things are huge, right, Max, like it's not just like a couple of what men and women were just kind of touching around in Darlington. Like it's a full mobilization effort.

There's a lot of white-collar work that's happening, design, off-site fabrication happening at Aecon facilities that are in Southwestern Ontario. So overall, yes, target price contract style, not fixed price.

Jean-Louis, you gave a lot of very good detail earlier in the call about the status of your 3 legacy projects in terms of the stage you're at with those 3. I guess the question I have is with your having pushed out the expected date for substantial completion for all 3 of these to year-end from September 30, can you just speak to your level of confidence that all of these projects will, in fact, be done by year-end?

I mean it sounds the way you laid it out as though there's a very sort of organized fashion here in which this work will be completed, and it frankly didn't sound like there is much risk of further slippage, but just trying to get a sense from you as to how we should think about that risk?

Okay. What is important to know is that we are not the only party in this story, especially on Eglinton and Finch.

I mean you probably remember, we build it, then we maintain, but we don't operate. I mean TTC is operating and the fleet, for example, has been bought directly by Metrolinx, I mean, the train.

So we are not alone, but there is -- there has been, from the last few months, an absolute alignment between all parties to get it done now. And to have the parameters of substantial completion being much clearer the way we are going to betting the -- all the operation period the way we are going to transition between construction, testing and commissioning and operation and maintenance is much, much clearer.

So I would tend to say, yes, it may fluctuate by a few weeks. And what you have seen on our write-down, I mean, on those 2 projects, Eglinton and Finch, it's just a consequence of this, I mean, of this fluctuation.

But I really think we are now at the end of the game, I mean, on this one. Gordie Howe is a little different.

We are not yet I would say, completed on the U.S. point of entry.

The relation with the U.S. Border Agency, as you may imagine, is not extremely easy.

And it's also -- I mean, it's a wonderful tool for trade between U.S. and Canada, but it's probably not the best moment so this bridge to be open.

So there may be some fluctuation, I mean, during the weeks to come. This being said, I do not see any reason -- I mean, for Aecon and for the construction and capacity to maintain this infrastructure tool.

I do not see any reason that this may be pushed after the end of the year.

That's very good color. Second question is around some opportunities, specifically in the defense area.

I mean you have an incredibly strong backlog. A lot of strength in a variety of end markets you're targeting, but we've heard a lot about increased defense spending.

Just wanted to get your sense as to how you see Aecon is potentially positioned for any work in that particular area.

Yes. This is what we call sovereignty and defense future business.

We think it's not going to come from Friday night to Monday morning. But what is going to come, I mean, probably very quickly is a lot of rehabilitation of existing bases and a lot of additional allocation for people and education of people, preparation of people.

This being said, we are getting ready for the step further, the step further are new bases in the North, new way of interception. I mean it may be the Golden Dome part for Canada or some different systems.

But they will be -- we are convinced in terms of defense. And also in terms of sovereignty with special metals, special mineral, capacity to trade better horizontally than vertically, we can see quite a number of interesting work to come.

It will be in a few years, but that's not a problem. I mean, as I said, we have prepared ourselves for the power wave that we are seeing at the moment 3 years ago.

We are just repairing Aecon for what is going to happen in defense in 2, 3, 4 years ago. And with the backlog that we have at the moment on the table, I'm not worried at all about the top line for Aecon.

Would you mind sharing maybe presenting somewhat of a report card on the Xtreme and United deals? And just wondering whether these acquisitions are meeting your expectations.

Yes. I'll take that one, Fred.

I've been told I have really long answers, so I'll try to keep it short. So the answer is yes.

We're really pleased with the operational performance of Xtreme the team there the level of integration that we've pursued is appropriate for the structure. We have mixed teams.

We've kind of cross-deployed resources for things like storm response. They continue to have very strong position with their primary client, DTE was expanded capital budgets.

And so we're really happy with what that team has done. We're really happy with what the Utilities team has done on our side and Canadian side of the border to support them as well, like it's worked quite cohesively.

United, we're kind of in month 7 of kind of the partnership. And it's going well.

Like the -- it's clear that, that was a carve-out of a carve-out, so that team now being part of a focused enterprise, then being core to the execution that we undertake. And obviously, the privileged position that we have within the nuclear space, just affords the entire nuclear envelope that we have within Aecon to leverage revenue and capability synergies.

So overall, like we're really happy. Again, all of these things were softly sought out.

They are both part of noncompetitive processes where we spend a lot of time really getting to understand their teams. And so far, it's kind of -- it's worked really well.

So overall, we're pleased with it. Like with anything, we hold ourselves to account.

There are certain areas where we could probably refine some of the approaches that we have from an integration standpoint and continue to make sure that we're cross-selling and maximizing revenue opportunities. But that's kind of like at the margin, I'd say, overall, we create ourselves relatively well from that standpoint.

We also had the Ainsworth Power Construction acquisition that was folded in very quickly, and I think the teams are very happy to be part of a business that's uniquely focused on that outdoor electrical. And so yes, I'll try to stop there.

I could talk about other stuff.

Okay. I appreciate it.

And then just building on this, are you actively pursuing other deals right now? Or just pausing and just trying to really get to focus on the legacy projects and get them past completion?

Just wondering what your mindset is on M&A.

Yes. I mean, look, the focus on the legacy projects is a critical A1 priority for the entire Aecon team.

But that doesn't excuse us from being able to operate the business in the normal course, right? So if the focus was uniquely on trying to close out the legacy projects, we would have expanded our backlog by $5 billion on that basis, right?

So I think we're -- we can -- this is one where we're walking and chewing gum, no problem. Adam Borgatti, who's here and the Head of IR, also Head of Corporate Development, remains very active.

We've got pretty particular parameters when it comes to acquisitions. It needs to tie into our overall strategy.

They need to be aligned from a whole bunch of operational safety cultural factors. And then valuation is a huge focus for us.

What we've seen is in some areas, we've had to waive off just because the level of froth in the market and private equity involvement has just made it kind of uneconomic to pursue transactions in those spaces. And then another spot, people see maybe a little bit of a longer-term partnership with Aecon and our teams and the ability to really expand their business, usually private companies, and that's where we're currently focused.

So when we think about that, we think about things that are aligned with our expertise. We think about businesses that allow us to expand services within existing markets.

And we think about businesses that allow us to expand existing services in new markets, which is our main and expand approach. So from that front, we're spending time in across North America on exactly those 2 verses.

And not big stock, right? Like again, we're -- we can get more kind of like appropriately sized acquisitions and then expand them afterwards.

So we don't need to pay big multiples to buy businesses that we're really quite good at.

I just wanted to sneak in here quickly at the end, and fully acknowledge revenue growth is going to be pretty robust given the backlog. But are you seeing any signs of slippage with your private customers on the industrial side?

Or -- and any other facets just given some of the tariff-related headaches they're probably having in and around project costing?

Yes. I will take this one.

As I've told you, we think that the tariffs, it's not a distraction. I mean the tariff turbulences will just settle down in the weeks or months to come.

And the reality of the strength of the power business and the need for new infrastructure is going to be a main driver. In terms of industrial profit, yes, you probably have heard, for example, that Dow Chemical is just pushing to the right part of its investment.

So this may happen when there is uncertainty about the market price and the quantity for those products that can be sold in the near future. On another hand, you have also heard that LNG Canada Phase 2 is now coming into a much more active phase.

You have seen that the energy in Bruce Power is going full speed ahead to be able to generate more power. So all in all, I'm not that much worried about the top line in terms of civil works.

You probably have imagined that -- and you can see the trends for the last year. We are decreasing our exposure to civil work and increasing the one to pure power as I've explained.

So all in all, I would say, the balance of activity of Aecon, the balance of our kind of clients, the balance of the type of contract we can take with our different business center, just makes that we are extremely resilient, and the global trend is good.

Great. Just apologies, if it was discussed earlier, but I just wanted to get a bit of perspective on with the backlog being materially higher than it's been over the last few years.

Can you just walk us through the kind of the cadence of the burn down versus what we may have seen historically? Obviously, there's some very large projects in there.

I just want to understand, should the burn rate color not just '26, but just call it '26, '27, would that differ? And then do these larger projects change the quarterly cadence at all versus what we may have seen in the past years?

I would tend to say not really. The reason at which you develop those Progressive Design-Build and collaborative model is slower at the beginning.

But at the end of the day, -- those are big amounts, and you just have to execute and to build them. So rather than having an ultra-sophisticated model, I think what has happened in the past is still valid.

We have $11 billion of backlog. You know more or less the maturity.

And with this, you can have quite an interesting view of what our activity is going to be in the next 2 years.

And how are you thinking about, I guess, both on this segment, just given the scale of this backlog, the nuclear commentary you shared earlier? How are you just thinking about staffing on both fronts?

Nuclear, I think it sounds like one of the refurbishments ends and the next one begins. But just walk us through how you're starting to ensure that you're meeting some of this demand that's in the backlog?

Obviously, there is a competition for talent at every level. But I have to say that at the trade and team leader, supervisor, I mean, we have -- I would tend to say we have an extremely loyal group of people very happy to work with Aecon.

Aecon is a Canadian company. It's strong.

It has been living for the last 100 years, and we all think that it will be better and better and grow during the next 100 years. So yes, there is competition.

We are extremely careful. I also remind you that what I was telling a few minutes ago about our balance of activity, I mean, you don't use the same people to build a concrete wall and to well pipeline on a steam generator in nuclear or to lay power overhead lines.

I mean these are not the same kind of people. We don't have $11 billion of backlog in the same activity.

It's quite balanced. And this is the way we can go through this increase of backlog.

And then maybe just as you were talking kind of just thinking through this out loud, maybe there isn't a right answer to this, but was the macro backdrop being as uncertain as it is, you've got the big backlog. Is it possible to get a bit of labor arbitrage maybe get staff in at lower rates than you might have thought maybe 6, 12 months ago?

Or are the wages more structured among the workforce or there might be some element of unionization? Just curious if there's an ability to maybe get a bit arbitrage on labor in this environment.

Yes. First of all, remember that 76% of the backlog is flexible price.

It means we are covered if there are high fluctuating. On the other hand, most of our agreement with the trade unions is our multiple years agreement.

So we have a very interesting discussion and negotiation with our trade union partners, not only about the cost, but about the quantity and about the quality depending on our backlog. And we don't go on every job, I would say, with the same appetite, taking care of this issue of labor availability.

We are extremely careful with this. For the moment, I do not see any real complicated issue, I'd say, for the moment.

Thank you, Gigi, and thank you all for participating. Enjoy the rest of the summer.

And as always, feel free to reach out with further questions to the Investor Relations team here. Thanks.