AtkinsRéalis Third Quarter 2026 Conference Call - DEFI TECHNOLOGIES INC

Hello and welcome to Atkins Realist's third quarter 2026 conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Dennis Jasmine, Vice President of Investor Relations. Please go ahead. Thank you. Bonjour. Good morning, everyone, and thank you for joining us today. For those dialing in, we invite you to view the slide presentation that we have posted in the Investors section of our website, which we will refer to during this call. Today's call is also webcast. With me today are Ian Edwards, Chief Executive Officer, and Jeff Bell, Chief Financial Officer. Before we begin, I would like to ask everyone to limit themselves to one or two questions to ensure that all analysts have an opportunity to participate. You are welcome to return to the queue for any follow-up questions. I would like to draw your attention to slide 2. Comments made on today's call may contain forward-looking information. This information, by its nature, is subject to assumptions, risks, and uncertainties, and as such, actual results may differ materially from the views expressed today. For further information on these assumptions, risk, and uncertainty, please consult the company's relevant filings on CEDAW+. These documents are also available on our website. Also during the call, we may refer to certain non-RFRS financial measures. Recountiation of these amounts to the corresponding RFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR Plus and our website. And now I'll pass the call over to Ian Edwards. Ian? Thank you, Denis. Good morning, everyone, and thanks for joining us today. I'm going to begin today's call by providing an overview of our performance for the third quarter before I pass it to Jeff to provide more detail on our financial results. We will then open it up for questions. We delivered another strong quarter, making the third consecutive quarter of sequential improvement in adjusted EBITDA and adjusted EPS. This performance reflects the continued demand for our differentiated engineering services and nuclear capabilities, together with the benefits of our ongoing operational improvement initiatives. Total revenue was a quarterly record high of $3.1 billion, representing a 10.7% growth year-over-year or an 8.7% on an organic basis. We also grew adjusted EBITDA by 14% to a quarterly record high of $331 million, which translated into a 9% increase in adjusted EPS year over year. We ended the quarter with a total backlog of $20.5 billion. Operational efficiencies and sustained demand across the company led to a third consecutive quarter of positive operating cash flow this year, which we utilized to support our value-focused capital allocation priorities. We continued our discipline share repurchase program and closed on our recent acquisitions in Australia. WGA and Chorus strengthen our local presence and technical capabilities in high growth opportunities across defense transportation water and power additionally we are applying ai enabled processes and capabilities across the business to reduce costs improve project execution and create more value for our customers these are exciting times to use AI to operate more efficiently. We're in the early stages, but we're learning from these experiences. Simultaneously, the broader AI build-out is creating additional engineering opportunities across power, particularly nuclear, data centers, water, and cooling. Taken together with our global technology center, we're setting up Atkins Realis to pursue new opportunities and larger, more complex engagements. Additionally, we've entered into an agreement to purchase the remaining 30% interest in David Evans as planned. We acquired a majority stake in the business in the first quarter of 2025, and it's contributed to our growth in the United States West Coast. This purchase enables us to accelerate collaboration and integration activities. Over the past 18 months of ownership, the organizations have leveraged complementary geographic reach with engineering and project management capabilities to better support large, complex infrastructure programs. Lastly, due to our lower-than-expected revenue growth in the Middle East, primarily resulting from the ongoing conflict, we have revised our Engineering Services Region's Organic Revenue Growth Outlook for the full year 2026. Engineering Services delivered another quarter of profitable growth, with revenue increasing 6% and organic growth of 3%. Excluding EMEA, where the prolonged Middle East conflict continues to affect performance, organic revenue growth was 6%, highlighting the strength of our underlying business. Importantly, our margin improvement initiatives continue to deliver results, with segment-adjusted EBITDA margin increasing 80 basis points to 18%. Backlog remains strong at $13.1 billion as of September 30, 2026, mainly driven by growth in UK and Ireland, USLA and EMEA. Beginning on slide 5, we provide an overview of each of our four regions and their performance this quarter. In Canada, revenue in the third quarter increased 19% organically year-over-year, while segment-adjusted EBITDA grew to $45 million with an 18% margin. Our strong performance reflects our deliberate focus on high-value projects that support revenue growth and margin expansion. We're also seeing the benefits of continued cost optimization, disciplined bidding, and more efficient project delivery. Backlog was $7.4 billion, down 6% year over year, primarily reflecting strong revenue delivery. Demand remains strong across our key end markets, particularly in transportation and power renewables. During the quarter, we continued to work on the Calgary's Green Line project and saw accelerated activity on the East Harbour Transit Hub and Surrey-Langley SkyTrain projects, all of which leverage our end-to-end capabilities to deliver complex transportation infrastructure mandates. Looking ahead, we see significant opportunities from Canada's continued investment in infrastructure, including projects expected to advance under the federal government's Build Canada initiatives. Our established presence, technical expertise and track record of delivering complex projects positions us well to capture these opportunities. In the UK and Ireland, third quarter revenue grew 5% and organically grew 3% year over year, driven primarily by continued growth in water, power and industrials markets. Segment-adjusted EBITDA grew to $113 million in the quarter, representing a 19% EBITDAR margin. Our concentrated presence in this growing region continues to bear fruit and drive strong operating performance. Backlock grew 9% year-over-year to $2.1 billion, driven mainly by wins in rail, aviation and water markets. We're also seeing opportunities in transportation, defence and power. This is supported by the UK government's 10-year infrastructure strategy and its £300 billion defence investment plan and continued investment in energy infrastructure. Demand also remains strong in the water market, where we have recently been appointed to the Yorkshire Water and Paid Framework to support delivery of strategic water infrastructure. Additionally, the integration of our newly acquired engineering and project management consultancy, Tobin, is strengthening our presence in Ireland. Our outlook for the UK and Ireland remains positive for the foreseeable future, as demand for our unique end-to-end capabilities remains strong, supporting the energy transition and the grid infrastructure development. In the US and LA region, third quarter revenue was $565 million, up 5% and organically grew 2% year over year. The main drivers of growth this quarter were in the transportation and power markets, along with stronger volume in aviation. Segment-adjusted EBITDA was $80 million, representing an operating margin of 18.6% compared with 15.8% in the prior year. Backlog increased 6% year-over-year to $1.9 billion, showing continued momentum and healthy client demand across our end markets. We continue to see attractive long-term growth opportunities, particularly in transportation and power. Our land and expand strategy is already creating tangible benefits. For example, our combined Atkins Realis and David Evans teams recently secured work supporting sound transit in Seattle, bringing together David Evans' local client relationships with our technical expertise in complex rail systems. This is exactly the type of opportunity we envisioned when we invested in David Evans, and it reinforces our confidence in expanding our U.S. presence through our most recent transaction and future targeted investments and acquisitions. While funding uncertainty and extended project timelines in certain transportation markets continue to affect near-term activity, we remain optimistic about the long-term growth opportunities in the U.S. Investment is shifting towards infrastructure-intensive, technically complex programs supported by long-term funding, regulatory drivers, and mission-critical asset needs. We are very well positioned to capitalize on these investment opportunities with our unique capabilities. in EMEA revenue was 320 million dollars in the quarter down four percent year over year and 12 percent when excluding our recent acquisitions and foreign exchange impact performance continues to continues to be pressured by the prolonged conflict in the middle east however higher revenue in Asia and Australia is helping to offset some of this headwind. Segment-adjusted EBITDA was $26 million, representing a 13% margin on net revenue, compared with 16% in the prior year period. The decline was primarily driven by a less favourable business mix in the Middle East, including the reprioritisation and cancellation of certain higher-margin building and places projects. While the near-term environment remains uncertain, we continue to see opportunities in transportation and other infrastructure markets with backlog increasing 14%. We are also building a more diversified EMEA business supported by recent acquisitions in Australia and a growing pipeline across Asia, particularly in Hong Kong. We recently secured a key win in Hong where we have been awarded a design and construction consultancy contract for new development work at the northern metropolis. We were also awarded key contracts in support of infrastructure work within the Shenzhen Innovation and Technology Park, expanding our footprint in this high growth region. In Australia, the Queensland government is investing in infrastructure development across water, transportation, in those end markets while long-term growth opportunities remain in defense and power. I'd like to now move to slide 9 and discuss our third quarter results for our nuclear business. The business continues to demonstrate impressive growth, achieving an organic revenue increase of 10%, which comes on the heels of 60% revenue growth in the third quarter of 2025. Performance this quarter continues to be mainly driven by higher volumes from life extension projects in our can-do business. Backlog totaled $4.3 billion, down 20% from September 30, 2025, primarily reflecting higher revenues and continued progress on ongoing projects, particularly on the OPG Pickering Life Extension Project. Segment-adjusted EBIT grew 12% to $74 million, and segment-adrasted EBIDAR margin was 11.3%, while segment-addrasted EBITDAR margin was 25%. Operating margins continue to be strong and delivered within our target ranges. On slide 10, we highlight some of our achievements across the nuclear can-do and services portfolios. In our can-Do business, through a joint venture with our construction partner, we recently signed a three-year, $1.7 billion contract with Ontario Power Generation to begin refurbishment work on Unit 5 of the Pickering Can-Do nuclear generating station. This is an exciting opportunity for Atkins Realis to apply its expertise in complex life extension work to help ensure Ontario continues to benefit from reliable, affordable, and low-carbon electricity for decades to come. As Canada continues to roll out its nuclear energy strategy, we anticipate more opportunities to arise utilizing Can-Do technology. We also continue to progress development of the Monarch gigawatt reactor alongside discussions with several countries exploring large nuclear projects. In the US, the CANDU EC6 licensing process is progressing well. We initiated pre-application engagement with the US Nuclear Regulatory Commission, building on the company's June 26 letter of intent submission to begin the US licensing process. The first public NRC meeting associated with the licensing process was held in august and the first of seven planned topical reports covering the quality assurance program has now been submitted notwithstanding the ongoing licensing process we have been actively positioning can do technology as a proven path in support of the broader energy objectives of the us for example we've recently signed an mou with the the state of Indiana and Hoosier Energy to explore the potential development of a campus of up to eight CANDU EC6 nuclear reactors. This could provide up to six gigawatt of new nuclear baseload power to help meet Indiana's growing electricity needs while delivering a dependable, cost-effective and sustainable energy supply. In services, we continue to progress on our collaboration with NVIDIA, bringing together AI compute with our expertise in data centers, power, cooling, and nuclear infrastructure. We also continued in the quarter to professionally support and progress several other projects in the US and the UK. Turning to slide 11, you can see our pictorial reminder of these near-term CanDo revenue opportunities within our nuclear business. Our can-do business continues to benefit from strong demand for life extensions, refurbishments and new builds. As we deliver on major projects, backlog naturally declines until the next phases are awarded. Looking beyond 26, we're confident that our backlog will return to levels we saw in 2025, as we enter follow-on phases in several existing projects and continue to build a pipeline of new build opportunities in Canada and internationally. In fact, international opportunities are progressing well. I recently returned from Turkey, where, with the support of the Canadian government's trade mission with the Prime Minister, we advanced discussions with Turquia's Ministry of Energy. While in Poland, New Build Opportunity is following a defined procurement process. So with that, I'll now turn it over to Jeff to discuss our financial results. Thank you, Ian, and good morning, everyone. As Ian has said, Q3 was a strong quarter, delivering year-over-year increases in revenue, adjusted EBITDA, and adjusted diluted EPS. We also continue to have a strong balance sheet with significant financial flexibility and a solid backlog. If we turn now to slide 13, total revenues in the quarter increased 11% year-ever-year to a quarterly record high of $3.1 billion, driven by all sectors, engineering services, nuclear, and all other segments, which largely consists of links on. Total segment adjusted EBIT increased by 12%, driven primarily by increases in engineering services and nuclear. Total corporate SG&A expenses totaled $20 million in the quarter, a 26% improvement compared to the third quarter of last year, mainly due to certain revised estimates on long-term employee incentives. Net financial expenses for the quarter totaled $11 million, representing a 49% improvement year-over-year. The reduction was mainly due to net foreign exchange gains and lower interest rates than in Q3 2025. As expected, the company's effective tax rate of 25.7% this quarter was higher than the third quarter of 2025, as last year included some revised estimates on certain tax liabilities. This year's effective tax rate is closer to the company's Canadian statutory income tax rate, and we would expect it to be at least as high in the fourth quarter. The IFRS diluted EPS this quarter was $0.83, compared to $0,88 last year. The adjusted EPS, which we believe is a better reflection of the company, underlying performance, increased 9% to $1.20 per diluted share, compared to $0.10 in the third quarter last year. Let's now move to slide 14, and cash flow, capital resources, and liquidity. Net cash generated from operating activities significantly improved this year, compared to the first nine months of last year, totaling $228 million. This improvement was mainly driven by a stronger adjusted EBITDA delivery, Similar to last year, we anticipate having strong positive cash flows for the fourth quarter and continue to expect to generate at least $500 million of net cash from operating activities for the full year of 2026. As you can see on the slide, we continued during the quarter to execute on our value-focused capital allocation strategy and deployed $395 million to the benefit of our shareholders. We took advantage of a softer share price to repurchase approximately $2.7 million of our shares for $236 million, representing an average price of approximately $87, and completed two acquisitions, Tobin in Ireland and WGA in Australia, for a total of $156 million. Year-to-date, we have repurchased approximately $6.4 million of our shares for $561 million, representing about 4% of our outstanding shares. With our net debt ratio well below our 1-2x target, we expect to continue to deploy capital going forward both to share buybacks and to select bolt-on acquisitions, both of which should create significant value for our shareholders in the future. And finally, turning to my final slide, slide 15 in our 2026 outlook, as the ongoing conflict in the Middle East is having some impact on our EMEA region, we are revising our 2027 engineering services region's revenue organic growth outlook. We now anticipate full year 2026 revenue over 2025 to organically grow by a low single digit percentage. All our other financial outlook measures for full year 2026 are maintained. And with that, I'll now hand the presentation back to Ian. Thank you, Jeff. Our third quarter performance demonstrates the strength of our engineering services and nuclear businesses and the progress we continue to make in improving profitability. While we are navigating challenges in certain markets, particularly the Middle East, demand for our capabilities remains strong, and we are taking the actions necessary to position the EMEA business for continued growth. At the same time, our expanded ownership of David Evans will enable us to capture more of the significant opportunities we see in the U.S. Together with our focused deployment of artificial intelligence processes and our global technology center, we are strengthening our capabilities to deliver projects more efficiently and win larger, more complex engagements. Our positive cash flow and strong balance sheet provide the financial flexibility to continue investing in our business, pursuing disciplined acquisitions and returning capital to shareholders. We remain confident in our delivering excellence and driving growth strategy and our ability to create sustainable long-term value. And finally, I want to thank our 43,000 colleagues around the world for their hard work and dedication. Their commitment to delivering for our clients is what makes our progress possible as we continue engineering a better future for the planet and its people. With that, let's open for questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Sabahat Khan from RBC Capital Markets. Your line is now open. Thanks, and good morning. Maybe if you could just start with some of the outlook commentary and the results that you noted for the engineering segment. Quite a bit of divergence, obviously different trends in Canada versus the U.S. Can you just talk a bit more about the pipeline, the opportunities that you're looking at into 2027? Do you expect growth to be maybe a bit even throughout 2027 and maybe some of puts and takes to get some of regions that are lagging into maybe middle of that range of things? yeah sure i mean let me kind of take this from a high level and then if there are follow-on questions region by region we can we can do that so look i think the way we think about our the where we've positioned the the business in engineering services is generally on the portfolio basis a good place to be and we believe the underlying business is a five to seven percent growth business across the globe. Now, clearly, the Middle East has been unpredictable through the conflict. And as you can see from the results, we have lost revenue in the Middle East. There's a couple of things, actually, that happened even before the conflict and reprioritization in Saudi. And obviously, the conflict is building some uncertainty into it. We actually see the Middle East, though, as a region that bounces back very quickly. And we've seen that previously. We've been in the region a long time. We're there to stay. So the EMEA region as a whole, when we think about that, particularly with our renewed growth in Asia, plus our growth platform we've built in Australia, from a long-term perspective, we're not concerned about the EMA region, maybe leaving less dependency on the Middle least. And then when we look at the rest of the portfolio around the US, Canada, LATAM, and UK and Ireland, we think all those businesses in the collective perform in the 5% to 7% range. So obviously, you know, we're not giving guidance today for 2027. We're looking at that intensely, but we believe the underlying business will deliver that 5%-7%. Great. And then I guess just on the nuclear side, you detailed some of the opportunities you're pursuing and some of those stuff in the pipeline. I guess when we think ahead over the next kind of one to two years, what are some of more tangible things that might materialize and potentially get added to the backlog while we await kind of the larger two bills here in Ontario? And even on those, can you maybe share a little bit more color on where exactly your discussions are with the with the parties on the two larger one thanks again let me take that kind of from a high level to the way we think about it and and obviously can can go into specifics and other questions so the business currently today is a life extension business with one new build uh project in romania the backlog that we expect from follow-on phases from that those awards we already have, and the awards that we know are going to happen, such as career and follow on stages of pickering, follow on stages of Romania, will take us through to the end of this decade at a good growth level. I mean, obviously, we've got Outlook out there for 27, and then next year we'll be given Outlook and our investor day through tothe end of the decade. So the business is already in great shape. Then with this list of international and domestic opportunities that we've got in new build, they will gradually, through feed studies and design studies, they will add incrementally some revenue, not significant, but they will build very significant revenues into the 30s. So that's how we see the business kind of prevailing from here on in. And any color on sort of the timeline, maybe initial works related to the larger two bills or anything else your counterparties are sharing with you on that? Well, I mean, as we've always said, I'm in Ontario, we're pushing to try and get an answer by the end of this year or early next year. It's not our call. That's the utilities in Ontario's call. But obviously, that's really important. It's important to Canada. It is important to our supply chain. But it's important for us, too, so that we can all make investments and be ready and build the talent to do that. So the pressure is on to get that decision. Internationally, I would hope that we could force out a couple of decisions next year, through the course of next year. Our next question comes from the line of Krista Friesen from CIBC. Your line is now open. Hey, thanks for taking my question. Maybe just on the U.S., can you comment, have you had any customers removing projects from the backlog? And then just my follow-up being, which specific end markets are you seeing maybe more of the hesitation in within the US? Thank you. No, no, thanks for the question. I mean, we've got a new president that's taken over six months ago in the US, and I've been spending quite a lot of time with him also trying to understand the market and the market in our view can present and is presenting great opportunities for growth however there are parts of the market that are struggling for funding or confidence in funding and have been an impact in our business so we have a land and expand strategy that we've talked about many times which is a combination of organic growth and M&A. And we've been refining that strategy basically to position us where we see strong markets. And there's kind of three focus areas for that in the way that we think about it. Firstly, focusing on states where we know there's funding and confidence that funding will continue. What we're seeing in some states is perhaps it's not a lack of funding, it's a lack of confidence that there will be supported by federal governments to continue funding multi-year projects. So it's focused on where we know the money is. Secondly, to increase our exposure to power and the industrial sector from utilities and from the private sector. We have a business that feeds into those, and we are growing that business now because we see that as a very sustainable and buoyant part of the U.S. business. And then lastly, using our global capability in transportation, both aviation and rail, we're focusing on large customers that we know are fully funded and we know need to continue, both on the CapEx and the OpEx side, to maintain their assets. those are organizations such as sounds transit that we've we've won work from the mta in new york california high-speed rail la metro and another airport project so this this kind of tweaking to our strategy we we really think that it's going to position as well to get back into the range um that clearly we've not been in that range for for the the several last quarters so we're comfortable with our revised strategy sorry that was a long answer but well i i appreciate the color there on that um and then maybe just just one on m&a for me you've uh you've obviously gotten back into the m&A market here for for over a year now any comments on just how you're thinking about larger acquisitions. I think last quarter you said you were maybe pausing on that, but is that just availability or maybe waiting just on your end? Yeah, no, no. We have a clear kind of disciplined and focused approach to M&A. I mean, our priority is the U.S., But it's not exclusive, as you've seen, with acquisitions coming into Australia and Ireland. But our focus is the U.S., to build out our footprint in the U。S. I mean, we are, I think I've said before, I'm thinking in our ranking, we're around 16. And we need to be playing in the top end of that as a global organization such as ourselves. And the strategy is organic and M&A. So we're very committed to M&As in the US. Now, our approach, though, is to find quality and not quantity. And we need also to make sure that we have geographic and end market fit for our growth kind of plan and our strategy for growth. We're looking for revenue synergies out of these opportunities. There are numerous targets out there that we're constantly in touch with. and you know for the short term we'll stay at the the kind of david evans size you know around about a thousand people but ultimately of course we want to get to some bigger acquisitions to move the needle more but that's not transformational that's that's just larger size acquisitions in the u.s we're not there yet i mean i i couldn't see us doing anything certainly this year and maybe even H1 next year. And I just add at the end, you know, our whole capital allocation strategy right now is a mixture of M&A and returns to shareholders through buybacks, as I think you've seen. For sure. Thank you. Thank you, our next question comes from the line of Chris Murray from atb cormac capital markets your line is now open yeah thanks folks um you know i was wondering if you talk a little bit about some of the um opportunities you see in canada um which we're expecting to see the budget tonight and certainly there's been some discussion around you know being able to um incent companies in terms of private investment in terms development wondering if that started any conversations um with you folks about projects that were maybe on the sidelines um and how you're thinking about how that market evolved over the next little while yeah are you thinking chris is that on the engineering services side you think yeah very definitely yeah yeah so look i mean our canadian business is doing really well i mean you know we've pulled it through a transformation with now high growth and uh you know good profitability so we're excited and pleased about that but the market we see ahead of us is also very significant and exciting i mean the investment that is proposed around new projects and i was at the investment summit where there was 167 projects now look all of those are not going to come in the next year or two but you know if 10 or 20 of those come in the nextyear or two that's an awful lot of projects to deliver um strong opportunities in transportation power projects across the country industrials um hopefully investing in on the back of a very strong energy policy defense um we're positioned now with partners for both the build out in the north and on the dockyards to support new shipbuilding and new submarine building and maintenance and housing. The hydro across the country is impressive, and as you know, we've got probably the strongest hydro business in the globe. So all of these nation-building projects, Build C5, is fueling all this market, and we're focused on building capacity. and strengthening the business. So really bullish on Canada as a whole. Okay, that's helpful. Thank you. And then, you know, back to the capital allocation discussion a little bit. You know, it's interesting. We talk a lot about M&A. We talk about buybacks. Can we just talk a littlebit about the dividend for a moment? How are you thinking about the dividen? You know it's fairly, it is at the minimum level now. but is it something that, you know, maybe becomes more stable, especially given the outlook on, and I guess what I'd call the more, the stabilization of the business over the last few years, being more engineering services focused with the nuclear addition to it. You know, historically you've always had kind of a, what I call a market level of a dividend, but just how do we think about that? And is there any particular timing that you actually start reviewing the dividend and how it fits into the capital structure? It's Jeff, Chris, why don't I take this one? I mean, I think the first thing I'd say is that, you know, we revisit, you know, the level of the dividend and the level and how we think about capital allocation very regularly with the board and also, you know, with our shareholders. And, you know, I think what we've seen so far is in the feedback, you know, has very been, and I, you know, in our sort of assessment of the organization is that the flexibility we get currently by being able to both pursue, you Know, value accretive acquisitions, as Ian was talking about, but also the value we get from the flexibility of being able to dial up and dial down our, you know, our share buyback program as a way of returning funds to shareholders is of, you know, is of value to us and a value to, you know, to our shareholders. And that's the feedback we've got. And, you know, you just look at 2026 here. It's meant that, you know, we've been able to, you know buy back, you know, a significant amount of shares, you know, probably more so than we had expected at the beginning of the year to take advantage of, you know what we think is a, you know, is a temporary period where, you know, the share price is, you know, lower than where we think it, you know, will be in the value creation opportunity we see in the longer term. However, we are, you know, we are mindful that the dividend is at a very de minimis, you know, level, and, you know, we would expect to revisit that, you know, over time, you know, and we'll continue to revisit that, as I said, with the board. At the moment, you know, no change, but, you know, we do look at that. All right. Fair enough. All right, Thanks, folks. I'll leave it there. Thank you. Thank you Our next question comes from the line of Tomohiko Sano from J.P. Morgan. Your line is now open. Hi, good morning, everyone. Good morning. Thank you for taking my questions. Maybe just on a high level, with the U.S. midterm elections now behind us, although the policy environment remains fluid, has your outlook for the nuclear business or defense related business in the u.s uh in 2027 and changed uh since q2 any any thoughts appreciated thank you yeah i mean i mean we're not we're not we don't we're so exposed to the the defense sector in in the us i mean we have strong defense businesses in other countries um but historically it's not been a a strong end market for us now nuclear a very very different story and clearly the the demand for energy particularly with the ai data center build out but also just for uh domestic use of energy as um advanced manufacturing moves to electrical and obviously the nation moves to electrical is very, very high demand. And I think a great kind of example of where we positioned the can-do technology is the announcement we made in Indiana. I mean, this is a state that has high ambitions for energy to attract industry. It is a very pro-nuclear state. um i signed uh an mou with uh with the governor of indiana and uh we brought a utility in who's your energy for that it's a very potentially large campus of uh of candor ec6s and we will follow that through and uh and hopefully uh work and facilitate on on how that um kind of comes to fruition with hyperscalers and data center deployment. And hopefully we can make this into a real opportunity. What I would say is for our overall strategy of nuclear in the US, this is a perfect timing in terms of the regulatory environment. I mean, as you know, we put our technology in June into the NRC, the regulator in the US, and that's about an 18-month process to regulate the product. So by the end of 27, we expect to have the product regulated. Now, the great thing about this MOU is that we now will find a site. That's the next stage of And once we have a site, then there's a specific project regulatory parallel process that we can run. And that would then make CANDU a very, very viable proposition across the United States. So it's a very exciting prospect for us as we see it. And thanks for the question. Thank you, Dan. That is actually exciting. And then if I may follow up the Indiana MOU, could you, if we step back and could you give us more color on what strengths made Atkins a compelling partner with this project? I'm actually just wanting to know better understanding about the, this opportunity and U.S. license serve as the springboard for the other new built project. Thank you. Yeah, I mean, look, the competition for large nuclear across the globe is very small. I mean there are six technologies globally, Chinese, Russian, South Korean, French, American and Canadian. So when you look at the ambition of the U.S. to build out nuclear power in what has been reported to be 300 power plants, you know, no one technology could ever do that. So clearly, the U.S. needs other technologies to meet the demands of that build-out. And the Canadian technology, actually, because the regulators are close in their approach and close between the CNSC, which is the Canadian regulator, and the NRC, which is the American regulator, the process is quite easy to get that done. I mean, clearly, you know, we still have to go through a process. It's still going to take 18 months and potentially, you know, a little bit longer to get the project specific. But we think our product is a really good product for the U.S. I mean, uses natural uranium. There's a byproduct of medical isotopes and can be deployed fairly readily and is a proven technology. The EC6 reactor is the 36 of those things that have been built around the world, 27 in operation today. So it's not a startup. It's not anew technology. So I think we've got a really good competitive advantage. Great. Thank you, Ian. I appreciate it. Thank you. Our next question comes from the line of Michael Tufom from TD Cohen. Your line is now open. Thank you! Good morning. I was hoping to pick up on some of the questions that were just asked there. So specifically for the Indiana opportunity, Ian, you talked about potentially identifying a site. Apart from that, can you talk about some of the other milestones over the next 12 months that you and your partners in that MOU are looking to achieve? Yeah, I mean, funding. I mean nothing gets built without a funding framework that can work. Now, I think the way that we are approaching this with both the utility and the state is with a base of demand that is hyperscaler-driven, data center-driven. And from that base of demand, you know, run that through to a power purchase agreement for the development of the first two reactors and with tax incentives and federal kind of support that that looks like a doable kind of proposition. There is a lot of work to do to bring that to fruition, but we have the expertise and we have the people and we got close relationships with the state of Indiana and Hoosier Energy. So we will work this. It's going to take some time. It is going to kind of take effort from all part is. But the MOU was the first kind of point of doing that. I think I've spoken to the regulatory side of it, which I think will progress well. So I don't see a barrier from the technical and the regulatory side. It's really getting this funding framework in place. Okay, that's definitely helpful thank you um if we flip over to uh monarch and and canada specifically um on the last conference call it was suggested that you were targeting to get the the first formal read on monarch space safety case by the end of the third quarter i wonder if you can provide an update on that front uh next steps going forward from here in terms of that canadian safety and licensing process yeah yeah so as i said i mean you know we we we are pushing to try and get a technology selection in ontario um end of this year early next year and many reasons as i said before why that's important you know from a supply chain investment from an academic institution build out to train professionals and trades from our own case of building talent and investing into the company it's it's it's important that we can get on on you know some certainty around this and it's important I think for the province in Canada so we're focused it's not our decision and I want to kind of say that again so you know whilst we can push for it we can't determine that that's going to happen so our job is to make sure that we do everything that we said we would do in terms of the development of monarch and the read from the regulator and and we are basically on track um the the report is is around uh in a in a format but the final final kind of formal report for for that is actually imminent in two or three weeks so but that's not that that that's an issue the issue is to make sure everything's in place such that the decision can be made and i believe that that is the case Okay, that's helpful. I will leave it there. Thank you. Thank you Thank you, our final question that comes from Ian Gillis from Stiefel. Your line is now open. Morning, everyone. Morning. Sticking with Canada, but switching gears maybe a little bit. When you look at the nation building projects announced today, a lot of them have been focused in Western Canada, or at least it seems that way um i know that's been an area of your business that you've been focused on growing and building out can you maybe give an update on how that's going organically and whether that's still a potential area that you may look to fill through m&a yeah i mean for sure we've always had a strong business in alberta and bc um we we've got numerous projects there we do a lot of work for for bc hydro we're obviously doing a lot of rail work uh in um in calgary and historically we've done a lot of energy work uh around um alberta as well we do see we actually do see opportunity across the country though i mean and and i know maybe the recent announcements are more energy related in in the west but there there are numerous kind of transport defense and other projects across the whole country um but for sure because we of our confidence in Canada and because we can actually see you know a fairly positive market we absolutely wouldn't rule out M&A in Canada I mean uh we're actively kind of looking nothing to kind of announce today but we we've been actively looking to build capacity in every way that we can and then switching gears maybe a bit more of a housekeeping item but i was encouraged by the usc but dumb margins in the quarter and i just wanted to confirm whether there was anything unusual there and perhaps what's continuing to drive some of the much improved performance in the u.s yeah it's jeff why don't i take that one um we did see you know strong margins there And indeed, you know, our margin improvement initiatives, you know, are pulling through in the US as they are in the other regions. At the same time, we did have some positive settlement out on some emergency management contracts in the US in the quarter. So that did help the margins in the quarter. And so I wouldn't necessarily use that as a jumping off point, you know, going forward in the immediate future. So, they were a little stronger because of that than they would have been on an underlying basis. Understood. Thanks very much. That's helpful. I'll turn it back over. Thank you. All right. Thank you. This concludes the question and answer session for today's conference call. I would now like to turn it over to Dennis for closing remarks. Thank you very much, everyone, for joining us today. If you have any further questions, please do not this day to contact me directly. Thank you very much and have a good day, everyone. Bye-bye. Thank you, Owen, for today's participation for today'S conference call. This does conclude the program. You may now disconnect.