AtkinsRéalis Stock

Good day, and thank you for standing by. Welcome to the AtkinsRéalis Second Quarter 2026 Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Denis Jasmin. Please go ahead.

Thank you, Sarah. 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. [Operator Instructions]

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, risks and uncertainties, please consult the company's relevant filings on SEDAR+.

These documents are also available on our website. Also during the call, we may refer to certain non-IFRS financial measures. Reconciliation of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ and our website. And now I'll pass the call over to Ian Edwards. Ian?

Thank you, Denis. Good morning, everyone, and thank you for joining us today. I'm going to begin today's call by providing an overview of our performance for the second quarter before I pass it to Jeff to provide more detail on our financial results. We'll then open it up for questions. We executed another strong quarter, driven by significant nuclear growth and consistent demand for our end-to-end engineering services capabilities.

Total revenue grew 10% year-over-year or 8% on organic basis. We also grew adjusted EBITDA by 14% to a quarterly record high of $293 million, which translated into a 20% increase in adjusted EPS year-over-year. We ended the quarter with a total backlog of $20.2 billion, including a new record high in our engineering services of $13.4 billion.

It's particularly pleasing to see the momentum continuing to build for our nuclear capabilities as evidenced by the Canadian government's recently launched nuclear energy strategy, which reinforces CANDU as a world-class Canadian energy technology, applicable both at home and around the world. In the second quarter, we began the formal licensing process to bring CANDU to the U.S. market, another important step in expanding its role internationally following our success in Romania. We'll share more on our growing confidence in our nuclear outlook shortly.

Strong demand and efficient operations across the group led to a second consecutive quarter of positive operating cash flow, which we utilized to support our value-focused capital allocation priorities. In the quarter, we repurchased a significant number of shares and continued to advance our land and expand strategy through 3 announced acquisitions. In Australia, we entered into agreement to acquire WGA and Coras Solutions, these additions strengthen our local presence and technical capabilities in high-growth opportunities across defense, transportation, water and power and renewables.

Additionally, in Ireland, we recently closed our acquisition of TOBIN, which will expand our presence in the region and solidify our market-leading position in engineering and project management across the infrastructure and transportation markets. We are also continuing to invest internally to accelerate the deployment of artificial intelligence across our business. AI is enhancing how we design, deliver and manage projects, improving safety, quality and productivity and predictability while enabling our teams to develop more innovative solutions for our clients.

Across our global operations, we're embedding AI into engineering workflows and corporate functions while making AI training a core component of learning and development for our 41,000 employees. This is strengthening our competitive position, increasing the value we deliver to clients and supporting our continued focus on operational excellence and margin improvement. As part of our focus on maximizing the value of our AI investment, we recently welcomed Amy Bunszel and William Ruh to our Board of Directors, both bring extensive experience scaling technology-driven businesses and deploying AI-enabled solution in industries closely aligned with our core markets.

Their expertise will help guide AtkinsRéalis as we continue to integrate advanced technologies across our operations and service offerings. Year 2 of our delivering excellence and driving growth strategy is performing as planned, and we continue to showcase our value creation opportunities for all stakeholders. Turning to Slide 4. Second quarter revenue in our Engineering Services regions business increased 5% year-over-year. On an organic revenue basis, Engineering Services regions grew 2% year-over-year.

Excluding EMEA, which continues to be affected by project reprioritizations and the conflict in the Middle East, we would have delivered 5% organic revenue growth. Segment adjusted EBITDA over net revenues margin was 16%, a 70 basis points improvement. Margins grew year-over-year as we continue to see the benefits of our operational improvement initiatives. We achieved a record high backlog of $13.4 billion as of June 30, 2026, mainly driven by growth in UK&I, USLA and EMEA business.

Beginning on Slide 5, we provide an overview of each of our 4 regions and their performance this quarter. In Canada, revenue in the second quarter increased 13% organically year-over-year, while segment adjusted EBITDA grew to $43 million with an 18% margin, a roughly 300 basis points improvement year-over-year. Performance comes on the heels of strong margin growth during the first quarter, highlighting our initiatives in cost optimization, enhanced bid discipline and more efficient project delivery.

Backlog fell 5% year-over-year and now stands at $7.6 billion, mainly due to revenue delivery in the quarter. Across Canada, we're seeing persistent demand for our unique end-to-end capabilities across our end markets, but specifically in power and renewables and transportation. We are currently providing professional services on 2 major transportation projects, TramCité, a major public transit infrastructure project in Quebec City and Alto, the high-speed rail project between Quebec City and Toronto.

These are examples of how our global capabilities in systems integration, engineering and major project delivery support government initiatives in building complex transit infrastructure. Clients continue to view us as critical partners in supporting new infrastructure projects, and we are strategically positioned to capture this demand. From a macro perspective, our expertise in defense is setting up opportunities for us to take on work under the Canadian government's $35 billion spending forecast aimed at bolstering the country's defense positioning in the Arctic and Northern regions.

Our long-standing presence in the market, strong relationships with government entities continue to be a competitive advantage for AtkinsRéalis. In the U.K. and Ireland, second quarter revenue grew 8% and organically grew 6% year-over-year, driven primarily by sustained growth in water and transportation markets. Segment adjusted EBITDA grew to $102 million in the quarter, representing an 18% EBITDA margin. Our concentrated presence in this growing region continues to bear fruit and drives strong operating performance.

Backlog grew 8% year-on-year to a new record high of $2.1 billion, driven mainly by wins in the transportation, power and renewables, defense and buildings and places markets. We recently announced that AtkinsRéalis has been named as a supplier on a major U.K. government framework to support the design, delivery and optimization of major infrastructure and building programs. We anticipate this work will occur over the next 4 years, focused on the defense and nuclear sectors.

This selection reflects our ability to deliver complex programs and our depth of experience across multiple sectors underlining our position as a true end-to-end engineering services provider. Lastly, in Ireland, our acquisition of TOBIN, which has approximately 200 professionals is a major milestone expanding our regional business to more than 700 employees and reinforcing our position in one of Europe's fastest-growing infrastructure markets.

In the USLA region, second quarter revenue was $529 million, up 3% year-over-year, but down 2% organically. Underlying performance in the quarter reflected sustained strength in transportation, offset by client delays in awarding and executing longer-term framework agreements and reduced levels of emergency response work. Backlog increased 12% year-over-year to a new record high of $2 billion, showing continued momentum and healthy client demand across our end markets.

The timelines from procurement award to actual work order releases are improving, although timelines remain longer in prior periods. However, continued backlog growth gives us confidence in achieving our revenue growth outlook despite these challenges. Transportation continues to be a particular source of strength in the region, especially in highways, power renewables, rail and transit. Beyond these growth vectors, we're seeing opportunities to continue to develop across buildings and places, industrial, water, minerals and metals.

Our focus on growing in these markets is working as our pipeline continues to build. Segment adjusted EBITDA was $60 million, representing an operating margin of 14.5% compared with 13.7% in prior year. On a year-over-year basis, margins continue to be impacted by reduced emergency response work, which was strong in the second quarter of 2025. I'd also like to welcome Byron Bright, our new President in the U.S., who brings significant experience in engineering and construction management industry in the U.S.

I'd like to also thank Steve Morriss, who will be retiring at the end of the year. The USLA business has grown and strengthened significantly over the last 5 years under his leadership. In EMEA, revenue was $287 million in the quarter, down 7% year-over-year, 12% on an organic basis, primarily reflecting lower revenue on major buildings and places projects in the Middle East with the conflict in the region being a contributing factor. This was partially offset by higher revenue in Asia and Australia.

Segment adjusted EBITDA was $26 million, representing a 14% margin on net revenue compared with 16% in the prior period. The decline was primarily driven by a less favorable business mix in the Middle East, including the reprioritization of certain higher-margin building and places projects. Despite the recent revenue decline in the Middle East, the market is showing some signs of resilience as demonstrated by EMEA's backlog growth of 27% in the quarter to a new record high. This included key wins for projects in mainly the transportation end market.

In Asia, we continue to see higher volume in the transportation market, particularly in Hong Kong, where the Northern Metropolis development and related projects such as the Northern Link are expected to support demand into 2027. In Australia, market activity is picking up in power as evidenced by a hydro project in Queensland that recently received government funding and approval. Our global expertise in transportation and infrastructure work is leading to opportunities in other markets such as highway redevelopment work.

Additionally, the recently announced WGA and Coras acquisitions, which we expect to close this quarter, will further strengthen our platform and enhance our ability to capture opportunities across multiple sectors. I'd like to now move to Slide 9 and discuss our second quarter results for our nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 18% compared to the second quarter of 2025.

Growth this quarter was mainly driven by higher volumes from life extension projects in our CANDU business. Operating margins continue to be strong and within our 2026 outlook target range. Backlog totaled $4.2 billion, down 25% from June 30, '25, primarily reflecting continued progress on the ongoing projects, particularly the OPG Pickering life extension project. We see this reduction in backlog as only being one of timing before additional phases of projects under contract are expected to be realized over the next few quarters.

On Slide 10, we highlight some achievements across nuclear CANDU and services portfolios. In our CANDU business, we're making strong progress on the Ontario and Cernavoda life extension projects. In the U.S., we are focused on expanding our operational footprint to position CANDU as a proven large-scale nuclear solution that enhances U.S. energy security using natural uranium. In June, we formally launched the licensing process for CANDU technology, supporting our ambition to provide the U.S. with reliable, affordable, safe, large-scale nuclear power.

In services in the U.K., we signed a new 5-year framework agreement to remain the civil design works partner for Sizewell C, building on our long-standing involvement in the project and leveraging the experience gained from our work at Hinkley Point C. In the U.S., we signed a 20-year agreement for an engineering services with First American Nuclear, where we will serve as the exclusive engineering, procurement and construction management provider for their small modular reactor projects across North America.

Through it all, we continue to invest in the development of our new CANDU Monark gigawatt reactor alongside key clients. Turning to Slide 11. You can see our pictorial reminder of these near-term CANDU revenue opportunities within our nuclear business. We have now been working hard to bolster our backlog with high-quality wins, which reinforces the bright future we have ahead. Additionally, Canada's recently published National Energy Strategy highlights the focus on expanding nuclear power as a core pillar of the energy security and decarbonization.

Importantly, this strategy reinforces Canada's homegrown nuclear technology and supply chain directly supporting our core CANDU business. We anticipate this increased investment will drive a larger, more visible pipeline of domestic nuclear projects, and we are well positioned to capture that opportunity. Outside of Canada, I continue to meet with global ministers and leaders to discuss the importance of energy security for the future.

The common thread is strong momentum behind nuclear as a clean and secure energy solution. These conversations, coupled with the recent announcement by our home government makes us even more excited about the long-term growth trajectory of our nuclear business.

With that, I'll now turn it over to Jeff to discuss our financial results.

Thank you, Ian, and good morning, everyone. As Ian said, Q2 was a strong quarter, delivering year-over-year increases in revenue, adjusted EBITDA and adjusted diluted EPS. We also have a strong balance sheet with significant financial flexibility and a solid backlog. Turning to Slide 13. Total revenues in the quarter increased 10% year-over-year to $3 billion, driven by both Engineering Services and Nuclear. Total segment adjusted EBIT also increased by 10%, driven by an increase of 12% in Engineering Services and 21% in Nuclear.

Total corporate SG&A expenses totaled $28 million in the quarter, a 24% improvement compared to the second quarter of last year, mainly due to certain revised estimates on long-term employee incentives. Net financial expenses for the quarter totaled $31 million. This amount included a loss on extinguishment of debt of approximately $17 million for redeeming earlier than the maturity date 2 higher interest-bearing debenture series that were coming due in June this year and in March 2029.

Excluding this one-off charge, which we adjusted out for our adjusted EPS calculation, the net financial expenses were significantly lower, mainly due to a lower level of debt and higher cash balances. As expected, the company's effective tax rate of 28.5% this quarter was similar to Q1 and closer to the company's Canadian statutory income tax rate. The IFRS diluted EPS this quarter was $0.59 compared to $13.32 in Q2 2025, which included a $12.86 earnings per share gain on the disposal of the company's remaining interest in Highway 407.

The adjusted EPS, which we believe is a better reflection of the company's underlying performance, increased 20% to $0.97 per diluted share compared to $0.81 in the second 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 quarter compared to Q2 last year, totaling $84 million. This was mainly driven by a strong adjusted EBITDA delivery and a lower working capital position usage.

We continue to expect to generate approximately $500 million of net cash from operating activities for the full year of 2026. As you can see on the slide, we also took advantage during the quarter of a pullback in our share price and continue to deploy capital to the benefit of our shareholders, repurchasing approximately 2.8 million of our shares for more than $240 million at an average price of approximately $87.

We see significant opportunities for future value creation and believe that buying back shares will ultimately be significantly value accretive to our shareholders. With our net debt ratio well below our 1x to 2x target ratio, we would expect to continue to deploy capital going forward to both share buybacks and select bolt-on acquisitions to fill in capability and regional white space. And finally, turning to my final slide, Slide 15, and our 2026 outlook.

With the strong nuclear revenue delivered year-to-date and our increased visibility into the remaining of the year, we are raising our nuclear revenue outlook to approximately $2.7 billion for the full year 2026 from the previous amount of approximately $2.5 billion. We are maintaining our 2026 Engineering Services regions' organic growth outlook, although with the ongoing conflict in the Middle East is having some impact on our EMEA region, we believe the growth for the Engineering Services regions overall will be more towards the 5% end of our range. All our other financial outlook metrics for the full year for 2026 remain as originally stated.

With that, I'll now hand the presentation back to Ian.

Thanks, Jeff. Following a quarter of record adjusted EBITDA and Engineering Services backlog, we're clearly excited for the future. This is especially true for our nuclear program. Canada recently reaffirmed nuclear as a cornerstone of its long-term energy strategy, recognizing the importance of the homegrown CANDU technology in supporting the country's future energy security and economic growth.

At the same time, we're taking important steps to expand CANDU internationally. In the U.S., we've formally begun the licensing process to position this proven technology as a reliable large-scale solution to meet the country's growing demand for safe, secure and affordable electricity. Together with our ongoing life extension projects and our expanding service businesses, these re-developments further strengthen our confidence in the long-term growth opportunities for our nuclear business across the globe.

Beyond nuclear, we see attractive opportunities developing across our engineering services business. Demand remains strong across many of the infrastructure, transportation, power, defense and water markets we serve. This demand, combined with our integrated capabilities, value-focused capital allocation strategy and continued investment in technology, operational excellence positions us well to capture that growth. Our recent acquisitions are another example of that strategy in action.

They strengthen our local presence and client relationships, deepen our technical capabilities and expand our ability to serve clients in attractive high-growth markets while creating additional opportunities to leverage the breadth of AtkinsRéalis across our global platform. As we look ahead, we remain focused on executing our delivering excellence and driving growth strategy. Our record engineering backlog diversified portfolio and strong balance sheet provide confidence in our ability to continue delivering sustainable, profitable growth over the long term.

And finally, I'd like to thank our more than 41,000 colleagues around the world. Their commitment to our clients and dedication to delivering complex projects safely and successfully is what makes our performance possible. With that, let's open it up for questions.

[Operator Instructions] We will now begin with our first question from Tomo Sano from JPMorgan.

Congrats on the quarter. On U.S. CANDU, now that you've formally commenced the NRC license process, could you share 2 to 3 key milestones over the next 12 to 18 months that we can track and the single biggest critical path items for the extent you can disclose?

Yes. I mean the licensing process itself is under the NRC's new licensing program called Part 53, which is a new initiative for new technologies in the U.S. to try and get them through an accelerated approval process. That accelerated process aims to give licensing within 18 months. So it's a defined period, which is really good news.

The pre-approval process, which is mainly consultation was actually quite an important milestone before we formally made the application because clearly, we didn't want to do this if it's not -- if there's any sort of red flags on the approval of the technology itself. But because the regulator, NRC and our own regulator in Canada are pretty close in how they approach this, we've got a high degree of confidence there's no major red flags and the approval process should go relatively smoothly through the 18 months.

So specific milestones along that journey are pretty incremental and progressive. So I won't call out anything there. I think because we're kind of past the major one in terms of getting that formal licensing in. But what I would say, in addition to that, is that we are now engaged pretty strongly with hyperscalers across the United States, and we're starting to engage with utilities and states that have put nuclear power into their energy policies. And the opportunity and the scale of demand is incredible.

The desperate need that hyperscalers have for electrical energy is the constraint to deploying AI. The data centers that are being built right now are struggling for electrical energy to the point that they're producing electrical energy with diesel generators in some cases, and you will see deals being done behind the meter with gas-fired power plants. Our ambition is to do this through nuclear-powered data centers. And there is a strong interest in doing that.

And with the work that we're doing with NVIDIA to create an engineering solution to actually put that on the table as a solution using our EC6 reactor, which is a tried and test reactor, which we've built in a good time scale and proven out that technology and its efficiency is becoming a very attractive proposition across hyperscalers in the U.S. Now from a utility and a commercial power perspective, it's also a tried and tested product that is beginning to attract attention.

Clearly, the issue in deploying the amount of electrical energy that U.S. needs is demand and capacity to meet that demand. So I don't see any barriers as a CANDU Canadian business because the demand will outstrip the capacity of the industry by a long way. So it's a pretty exciting time for us.

Next question today is from Chris Murray from ATB Cormark Capital Markets.

I guess a couple of things about the Canadian market. You did allude to the fact that there's a fairly large group of potential defense projects that are out there. Can you maybe walk through where it is you think that you see some opportunities and perhaps if there's any magnitude or scale that you could attach to them, that would be helpful.

In defense, particularly, Chris, yes.

Yes. You're talking about that $35 billion of perhaps available market.

Yes. I'm actually fresh. From the Farnborough Airshow in the U.K., which is an aviation and defense air show, defense show, which was heavily attended by Canadian customers and the government. So in the U.K., we have almost all of our defense capability. And currently, of our revenues as a whole, defense makes up 6%. So -- but that's all that capability right now is primarily in the U.K.

What we do is all the physical infrastructure that supports assets, whether they're planes, ships, submarines, we model the design and project manage the delivery of those assets. And every time there's a new asset, the maintenance facilities, the dockyard and the facilities where they're stored have to change to suit that asset because the assets are obviously often nuclear powered or they're complex assets that have different requirements.

In addition to that, in the U.K., we're heavily involved in intelligence work and cybersecurity, which is obviously highly classified. What we see in Canada is exactly that. And positioning ourselves to do exactly that. What is -- I mean, we're talking about bases in the north, New Brunswick, New Build-out for radar systems, new shipyards across the country for submarines and the deployment of new ships. And we're also obviously for the new fighter fleet of aircraft.

So the routes to procurement are twofold. They sometimes come through the OEM, which in the case of submarines would be TKMS or they're often procured directly from the federal government. So as that evolves and those things become clear, we'll position ourselves with relevant construction companies to obviously win that work. And we see that as obviously a growth engine for the company. Because we see exactly those opportunities in Australia as well, exactly the same. And the strategy is exactly the same in Australia. And that's why we bought those 3 companies, one of which is a defense company.

Okay. That's helpful. And then just as my follow-up, just 1 quick question. I mean, can you talk a little bit about the margin improvement opportunities or what you're thinking about in the U.S. market? We've certainly seen it maybe a little bit of improvement, but still trailing in both the U.K. and Canada. Just what's left to do to maybe get that margin back up to the corporate average and more towards the longer-term targets?

Jeff, why don't you take that?

Yes. No, happy to. And there's 2 or 3 levers there, Chris, that we've been working on and continue to work on. One is around continued productivity and utilization improvements. And we see opportunities to continue to drive that forward. And that has -- that can have a material impact. I think the second thing, and it ties into our land and expand strategy and desire to continue to deploy capital in the U.S., there is a fixed element of overhead within engineering services businesses.

And the U.S. is the one business of our main markets where proportionately compared to a lot of our peers, we're significantly smaller. So continuing to grow that business will also help create leverage through the income statement and help our margins. And I think the sort of the third area is we're continuing to see good opportunities to leverage our global technology center as a way of continuing to also drive improved margins, and that continues to improve year-by-year. So we do see a real path to ultimately getting that business into our overall margin target level.

We'll now take the next question. This is from Sabahat Khan from RBC Capital Markets.

This is [indiscernible] on for Saba. My question was more towards the engineering business and how it's evolving in Europe and the Middle East. If you can just give us a little bit more color on those markets?

Yes. In particular, the Middle East. I mean, obviously, there's a couple of things that are happening there. I mean, last year, there was a fairly significant reprioritization in the KSA in Saudi Arabia by government projects. And obviously, a couple of projects that we were on, such as NEOM where we kind of significantly reduced in volume. So that's kind of affecting our business this year.

We also whilst we're prioritizing in the Middle East, the safety of our people, we're actually being able to execute. So from a combination of working at home and kind of working on the jobs, we are able to execute. So that's not having a real significant impact now. Clearly, there's been some impact. I think the story going forward is we are definitely seeing in the United Arab Emirates, a diversifying market ahead where there are a lot more transport jobs.

So traditionally, our business in the Middle East recently has been a buildings and places business. But actually, historically, going back a few years, we had a lot of transport work. So seeing more opportunities in transport, which is making us optimistic. However, we really -- we can't really say what the impact of this crisis is going to be in the short term. So whether we see a reduction in pipeline from private sector work, we'll have to monitor that and see.

I mean, right now, our backlog is up. So that gives us reason for sort of cautious optimism. It's really -- we've got to observe it. We got to look after our people. But long term, KSA is a great place to do business. The Emirates is a great place to do business. So really long term, we're pretty committed to the market still.

Next question today is from Devin Dodge from BMO Capital Markets.

Ian, just wondering if you're still expecting an update from the Canadian regulator related to Monark in Q3? And can you talk about what that update will cover and if it will be communicated publicly?

So we're working very hard with the regulator. It's an iterative process. I mean, obviously, we've done the formal application some time ago. We're working through the kind of components of the new regulations. If you remember, the Monark is really based on a tried and tested reactor from Darlington. We're uprating that, but it's not a first of a kind.

It's -- and I think that's really important both to customers and to the regulator that there's 4 reactors that have been in place for 40 years that have performed very well and have just been relicensed. So those are kind of key things that give us confidence. We have to work through several submissions of calculations, submissions of proof of safety cases. We're doing that. We've got about 350 people or so working on this, engineers and suppliers and partners in this process.

The key milestone, which is towards the end of Q3 is to get the first formal read of the acceptance of the safety case -- the base safety case of the product. We are working hard to achieve that. I see that as a very key milestone for technology selection from Ontario for the 2 power utilities in Ontario. And without that, it would be unreasonable for us to force this to a decision. But we are confident we're going to get there.

And given we get there, then we're pushing very hard to say what else do you need? Let's select this technology. And then we can make sure that the investment that is needed for the long-term deployment of the CANDU Monark in Canada can be made by us, but also by our supply chain and the universities and workers' unions and so that the whole industry can build its capacity from what is about 100,000 people today to what we believe is going to be 300,000 in Ontario to actually fuel that economic development, fuel the jobs needs. So there's a lot of compelling reasons why this needs to get done. But it really starts with us, and we're working hard to deliver that.

Okay. Good color. Just my follow-up, you -- I think you mentioned last quarter, a couple of quarters, you've been pushing for technology selection potentially by the end of 2026. We've seen some data put forth by the clients that will suggest technology selection maybe not until 2027 or even early 2028. Just wondering how we should be thinking how do we reconcile that gap?

Yes, yes. Yes. No, fully aware of that. And it's one of the customers that you're referring to, which did an investor presentation around it. I'm fully aware of that. And we have had very detailed discussions around that. Frankly, it's on us as AtkinsRéalis to make sure that, that utility has got the information they need as a company which is not a public utility. It's a privately owned utility.

It's on us to make sure they've got the information so they can make the decision. The decision is really important for Canada, Ontario in terms of economic growth. And I think that's highly understood by all the stakeholders. But we have to satisfy their needs in order that they can make that decision. And the regulatory environment is one of them and obviously, costs is the other one.

So we're working very closely with them to get into a position where I believe that's possible earlier than what they discussed. But I understand why they said it. And I understand why the perspective could be there. But I believe it's going to be sooner than that. Well, let me put it this way. I am pushing to get it sooner than that.

Next question is from Krista Friesen from CIBC.

Maybe just on the M&A front, you've obviously been active there. But previously, you've messaged that by the end of this year, you might consider looking at maybe a little bit larger acquisitions. Is that something you're still contemplating? And given the current environment, would you -- do you still feel comfortable with pursuing something a bit bigger?

Yes. I mean, so our strategy for, say, medium and long-term benefit of the business is to continue to do the land and expand tuck-in type acquisitions. They're helping to expand our footprint in high-growth regions and markets, kind of adding to what we already do or building a platform as we have done in Australia. This is really important for the U.S. as well because whilst there's been a couple of headwinds in the U.S., I mean, particularly no disaster work this year.

I mean that's a good thing because there was no disasters. But from a revenue perspective, that's hit us. And there's been some states that have had issues, should I say, in releasing work, but we're seeing, obviously, with the backlog increase that coming up. The U.S. is still a primary target for us to build out our transportation, water municipality businesses into more states. So that's a land and expand strategy.

Moving forward into the future, we still believe that a larger acquisition, particularly in the United States, would give us a larger footprint, a business with more scale, which obviously will give us more synergies from a -- not just from a revenue growth perspective, but synergies from a cost perspective across the country. And it gives us a bit more brand presence across the country as we build out from our current position of #16 into the single digits, which is our ambition and desire.

I mean, obviously, we have to be mindful of the valuation of the industry and where that's gone to. And clearly, we would expect to see that in values of acquisitions as well as values of the industry. So we're not going to sort of, if you like, invest in something that's not really accretive to the medium and long term of the business. But that's where we're at right now. So you may see something you won't see this year of any scale. You may see it towards the end of next year, but we're on land and expand until then.

I appreciate the color there. And then just a follow-up on the previous question on nuclear. How are you feeling about the supply chain that you're establishing for the Monark and any changes or issues as you think about the cost relative to what you've had previously?

Yes. I mean, to my view, in the nuclear industry, and I have a good vantage point of the nuclear industry as a Board member of the World Nuclear Association. So I can see what's happening across the globe. My own view is that the capacity of businesses like AtkinsRéalis to deploy nuclear will be the constraint to growth that the demand is going to be there. There's no doubt that the world is moving to nuclear power.

There's no doubt the hyperscalers need nuclear power to generate their AI data factories and centers. So capacity is everything. We are lucky as AtkinsRéalis because we've been on a 10-year build program to rebuild reactors. So we've built a supply chain of 100,000 people, and we've built a nuclear-specific capability of 7,000 professionals. That's going to have to double, triple significantly.

And we have got plans in place for how the investments need to be made in Canada in order to do that, not necessarily always from Canadian companies, but we are working with large organizations internationally so that when those supply chains need to increase, they will invest in Canada to increase those manufacturing capabilities. We're also working with universities across Canada and now internationally to increase nuclear professional output from the universities.

And we're into retraining. I mean we've had to retrain 3,000 to 4,000 of our engineers from our general business of 41,000 professionals into the nuclear business. And that's another point of advantage for AtkinsRéalis. We're not just a nuclear company. We're a global engineering company with 41,000 professionals. So we've got scale. Is what I'm trying to say. And obviously, we've got to bring supply chain along with us.

And obviously, supply chain are not going to invest until they've got certainty. And that's why it's so important to get these decisions in place so the industry can invest. But I see Canada having an advantage here, and I see AtkinsRéalis is having an advantage.

Next question today is from Michael Tupholme from TD Cowen.

Ian, you talked about earlier a little bit about the U.S. Latin America organic growth performance, and you did call out in your release lower emergency response work and also talked about timelines between award and work execution sort of being a bit of a factor. I guess I'm just trying to understand how you think about this USLA business from an organic growth perspective in the second half. You did mention that backlog is looking better as well. So how do you see that progressing?

Yes. I mean thanks for the question. I mean backlog is up 12%. So that's a good sign. Pipeline development through the end of this year and into next year is actually looking strong. And it's not a very clear picture across the U.S. I don't think there's a common thread. I think, obviously, funding is important and some states have good funding and are deploying as usual.

Some states are -- it's almost like a lack of confidence, not a lack of funds and whether they start larger programs, they're going to get funding all the way through to the end of those programs. Clearly, the IIJA and how that is reconstituted into another funding model is important. But that looks like it's going to be replaced by another funding model. So it's a bit of a -- and particularly for our business, where year-on-year, we've taken a lot of disaster relief work.

And as I said, there's been no disasters. So there's no disaster relief work, which is a good thing. But I think when we think about all those things together and we think about our size currently in the U.S., we have a long way to go. I mean we've got 6,500 people. Our peers are 20,000 to 30,000. And I think for AtkinsRéalis, it's a good growth market, and it's a market that we're going to see a lot of potential from an engineering services perspective.

So very committed to the market. I think we're seeing an end to some of this lack of confidence, I would call it. And I think we're seeing some projects now flowing even from the states that have kind of held back a bit. And the 12% backlog, I think, is a good sign. And Jeff, I don't know if you'd add anything.

No, I think Ian, you absolutely covered it all.

Okay. Maybe just one quick follow-on here, sort of 2 parts to it. I guess, one, I don't know if you're prepared to add on to what you just said. But just to set expectations, should we be looking for organic growth to turn back positive in Q3 or Q4 for USLA? And then just further to that, I think you mentioned earlier that for the full year, looking to be closer to the 5% lower end of your organic growth range for the full ESR segment for the year. Is that more a function of how USLA is performing? Or is that more on the EMEA side, just to understand there.

Yes. Why don't -- it's Jeff Michael. Why don't I take those two. So I think on the first question, yes, we would expect in referencing Ian's point about, for instance, the 12% backlog growth, we would expect to see the U.S. in positive growth territory in the second half of the year, maybe a bit more weighted as it sometimes is historically to Q4 than Q3, but we definitely see or would expect at this point, positive growth in the second half of the year.

I think when we look at the sort of full year, yes, the USLA plays into that. But I think we would absolutely highlight the EMEA region and the Middle East. The business, as Ian has said, is doing a fantastic job of keeping people safe and delivering work despite the conflict that's going on. But there's no question that is having some impact. And I think realistically, that probably continues to have some impact into the second half year. We'll have to see how things play out. But that's the driver of being towards that 5% end of our range, I think.

And the next question today is from Maxim Sytchev from NBCCM.

Most questions have been asked, but maybe one for Jeff, if I may, around working capital trends. I mean, obviously, you're telegraphing $500 million in OCF in 2027. But given the fact that right now, you cycle through sort of all the LSTK noise, how should we think on a prospective basis around the intensity of that line item on a prospective basis? And like I realize like you don't want to give guidance on 2027, but anything maybe you can help us frame that would be helpful.

Yes. No, I think so. I mean I think what I would say, Max, is that we're obviously trending well here in 2026. Certainly gives us a lot of confidence in year-on-year improvement in our cash flow here this year and the guidance that we've put out there. I think as we move out into 2027, I think we will, as we've signaled and commented on before, see clearly less of a drag or very little drag from the LSTK projects with Eglinton now being in operation, settling out the final accounts there.

It's great. That leaves us very little into 2027. And I think we continue to work hard on our working capital initiatives such that as we get out into 2027, very much focused on our Investor Day guidance of 80% to 90% cash flow conversion to net income. So we see ourselves very much on a trajectory for that, Max.

Okay. And there's nothing in the nuclear division that will kind of require you prefunding things, right?

No. We work very hard in that part of the business to make sure that, for instance, there's advances or other cash flow elements that, by and large, ensure that we're not working off our balance sheet for customers that we're working off theirs. Now that does move around a bit for sure.

Some quarters, we get higher advances in or years where we get more advances in and then we're working that off over subsequent periods, which can, in the short to medium term, move around our working capital and our cash flow delivery.

But I don't see anything systemic on that Max. And to the extent that any of that was going to impact us in 2027, we'd comment on that in the first quarter next year when we set our guidance for '27.

And the next question today is from Ian Gillies from Stifel.

Ian, you had mentioned earlier related to nuclear customers trying to get clarity on costs and working towards that. Can you maybe just talk a little bit more about where they may be at on getting clarity on costs and how that evolves over time just because it will have a pretty material impact on how we think about potential backlog additions and the like.

Yes. I mean, obviously, I don't want to get into specific numbers. But the way that kind of works in terms of the progressive accuracy of those costs is that we clearly have an estimate of, say, a Monark or an estimate of an EC6. And then we build that estimate based on specific site conditions and site requirements because every site is different in terms of bringing water in, taking water out for cooling, seismic requirements because of the particular geology and things like that.

So we're in the process, obviously, of building those estimates for the Ontario projects, but they're to a certain level of accuracy. And then over the FEED or the design development phase lead into an executable project, which in the case of those Ontario projects will be in the range of about 3 years, then you work through various classes of estimates. And it's -- this is a well-defined kind of definition process in the industry.

We work through different classes of estimates until you get to a financial close where you have an absolute accurate fix on the estimate. So for context, I guess, with that accuracy, we believe that both the CANDU EC6 and the Monark is a very competitive product against other nuclear technologies. And we believe it's a competitive product against renewables.

And we have one more question coming through. This is from Benoit Poirier from Desjardins.

Just to come back on nuclear. Obviously, you increased the guidance for 2026 on the back of the results so far. What does it involve in terms of 2027? How should we be thinking in terms of potential additional revenue growth that we might see for nuclear for 2027?

Yes. Maybe I'll take that, Benoit, it's Jeff. You're absolutely right. Great to see the business continuing to kind of forge ahead and grow. As we've said previously, we raised our 2027 guidance to $2.6 billion to $3 billion. I think we continue to see the business growing into 2027. Obviously, by definition, therefore, we're aiming more at the top end of that -- the top half of that $2.6 billion to $3 billion range.

But there's still a lot of projects and there's a lot of work going on across refurbishments, new builds, even the servicing business across all of nuclear. So it's a bit early to be able to give more further guidance on that in 2027. We'll do that at the beginning of next year. But what I would say is we would continue to see growth and therefore, I think we're going to be in the -- certainly in the top part or the top half of that range we've already set out.

Okay. That's great. And just in terms of M&A, could you maybe provide an update on your pipeline and share some thoughts about whether we've seen a change in sellers' expectation?

So pipeline is strong. The U.S., as I've said before, it has got a fragmented market with a lot of state scale players. So it's a good market for us to work in. Our kind of methodical approach and guidelines that we're putting in place is obviously prioritizing quality over speed. We would hope to continue this land and expand strategy with tuck-ins. There's numerous targets that I'm engaged with personally that we are very interested in.

I mean there's always the kind of competition with private equity, but I think we have a unique kind of value proposition to the businesses because we're not a business at scale coast-to-coast in the U.S. So if we acquire a business with, say, 1,000 people in it and it's in a state, it becomes our business in that state or if it's attached to a specific end market, then it becomes kind of that business. So I think our value proposition is good.

I think the pipeline is good. I do think the aspiration around multiples is coming down, yet to see that through transactions, frankly. But I think there's a recognition that the industry has been re-rated somewhat. So yes, I would expect to see in the next couple of quarters, 3 quarters, more things happening. We're very kind of fixed on this still.

Okay. That's great. And maybe just a quick one to finish up. In terms of global technology center, how many employees would you be adding right now?

Yes, it's doing well. Really pleased to say that we broke the 5,000 barrier very recently. So we're getting good traction across our businesses, always been really well utilized in the U.K. and the Middle East. But now we're getting better utilization in nuclear. We're getting better utilization in Canada and U.S. So we do see this as a competitive advantage.

I mean, obviously, our technology center is at real scale, which helps from an attraction of talent and a retention of talent. We don't think of it as like a back-office service. We think of it as an important capability that has a lot of differentiated technology capabilities that we leverage in our business across the world. But that's grown. I think a year ago, it was about 4,000, maybe a little over 4,000.

So we've got good growth from it. And the way that we're doing this, which is kind of successful is getting them involved at the very inception and bidding and then working through the whole project life cycle. So we're very pleased with it.

And there are no further questions. I will now hand the call back to Denis for any closing comments.

Thank you very much, everyone, for joining us today. As usual, if you have any further questions, please don't hesitate to contact me directly. Thank you very much, everyone, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.

Today's meeting is being translated live. Those who are online, you can choose the language of your choice by clicking at the broadcast language at the bottom right of your screen. you will see it when the time will come to vote. For proxy people, you can change your vote or vote if you have not already voted. To do that, please use the virtual platform, which is available on your device or with the tablet that was given to you at the entrance.

Finally, shareholders and duly appointed proxies may ask questions until the end of the meeting. Questions may be submitted either in person at the microphone via chat or by video conference. So we invite you to submit your questions in English or in French. [Operator Instructions] Questions that we have not answered directly at the meeting can be submitted to our Investor Relations team by e-mail at following e-mail address [email protected]. The live broadcast of the assembly will be over at the end of the question period -- Q&A period.

Now I'd like to introduce who is with me today. So we have Ms. Andree-Claude Berube, Head of Litigation; Bill Young, Chairman of the Board; Mr. Ian Edwards, President and CEO; and Geneviève Simard, VP and Corporate Secretary. Finally, Mr. Jeff Bell, our Chief Financial Officer, is also present in this room today. So without further ado, I give the floor to the Chairman of the Board, Mr. Bill Young.

Good morning, ladies and gentlemen. So good morning. Welcome. It is a privilege with me to be in Montreal for our meetings -- shareholder meetings. And so welcome, everybody here in Montreal and around the world. Andree-Claude will be out secretary. We hope that you will fully participate in today's meeting by asking questions and voting on the matters of business before us. Thank you for joining us.

Thank you. Now we can start the formal part of this assembly of shareholders. So we invite you to see what's on screen. I confirm that the notice of convocation of the shareholders' meeting at Group AtkinsRéalis Inc. and the documents related thereto were duly distributed to the shareholders registered on March 23, 2026. Ms. Martine Gauthier and Ms. Teresa DeLuca from Computershare are our scrutineers for the meeting. They have already submitted their report, so I can therefore confirm that more than 75% of the shareholders are participating in the meeting and that we, therefore, have reached the quorum.

The ballot box will remain open during the formal portion of the meeting until the last item on the agenda has been addressed on the agenda and the vote is declared closed. A simple majority of votes cast is required to approve matters submitted to a vote at this meeting. As there are several items on the agenda, we will ask Ms. Geneviève Simard, who is a shareholder of the company, to propose and second the resolutions that will be put to vote. After the formal part of this meeting, Bill and Ian will present the report for the past year.

Let's start with the first item on the agenda, namely the consolidated financial statements, the auditor's report and the management report. The financial report, consolidated ones, the independent auditor's report and the management report for the year audited ended December 31, 2025, have been sent to all the shareholders who have requested them. These documents are available under the tab, Documents Located, in the upper left corner of your screen.

I would also like to take this opportunity to introduce Mr. Pascal Lamoureux and Ms. Maha Hijazi, representatives of Deloitte, who are with us in this room today. I now invite those people in the room who have questions regarding the financial documents and the auditor's report to come forward to the microphone and to those online to please use the platform. Stephanie, do we have questions? Any questions regarding the financial statements or the auditor's report?

No, we have not received any questions.

Thank you, Stephanie. So we can now see the financial statement reports and the auditor's report for the 2025 year and then add that to the report of the assembly. Let's now go to the directors' election. This year, the Board of Directors has set the number of directors to be elected at 11. The section entitled Information on our Director Candidates in the management proxy circular provides detailed information on each candidate. Their biographies can be found starting on Page 18 of the French version of the circular and all candidates are running for a reelection.

According to the terms of the regulations respecting notice requirements for the nomination of directors of the corporation, no other nominations were received. I would therefore ask Geneviève to propose and second the resolution relating to the election of the directors.

Hello. It is with great pleasure that I propose each of the following candidates for the administrator positions: Mr. Gary Baughman, Ms. Mary-Ann Bell, Mr. Christie Clark, Mr. Ian Edwards, Ms. Nathalie Marcotte, Ms. Ms. Ruby Mcgregor-Smith, Mr. Robert Paré, Mr. Michael Pedersen, Mr. Sam Shakir, Ms. Benita Warmbold and Mr. William Young. I propose that all of these candidates be elected and remain in office until the end of the next Annual Shareholders' Meeting or until they cease to perform their duties.

Thank you, Geneviève. Stephanie, do we have any questions regarding these nominations?

No, we have not received any questions.

Since we have no questions, I declare the nomination process for candidates for the administrative positions to be complete. And now we will proceed to the vote. If you are a registered shareholder and have already voted or completed a proxy, you do not need to vote again.

Let us now proceed to the third item on the agenda, which is the appointment of the company's auditor. In the management proxy circular, the Board of Directors recommends that Deloitte be appointed as the company's auditor that they remain in office until the next Annual Shareholders' Meeting and that its compensation will be determined by the directors. I would therefore ask Geneviève to propose and second the resolution concerning the appointment of the auditor.

I propose that Deloitte be appointed as the company's auditor that he remains in office until the next Annual Shareholders' Meeting and that its remuneration will be set by the directors.

Thank you, Geneviève. Stephanie, do we have any questions regarding the auditor's appointment?

No, we have not received any questions.

All right. Since we do not have any questions, now we're going to proceed with the vote. Let's go to the vote. Fourth item on the agenda is the reconfirmation and approval of the amended and updated shareholders' rights plan that was updated that will end at the end of this Annual Meeting of Shareholders. So the corporation has implemented a subscription plan, including a convention, which provides this right that was signed on 8 March '96, a convention that was confirmed by the shareholders in 2023.

The convention creates the subscription right that can be reconfirmed by the shareholders every 3 years. And if the convention is adopted in the assembly, it will be there until the end of the next Annual Meeting of Shareholders that has to be happening in 2029, unless it ends before. The text of that resolution as well as the summary of the subscription right and the proposed modifications will be reproduced at the end of Page 15 supplement A of the end of this document. So I would like to ask Geneviève to propose and second this resolution.

I propose that the convention in relation to the rights of subscription be reconfirmed and approved for a period ending at the end of the office hours at the date when the Annual Meeting of the Shareholders of the corporation will be held in 2029.

Thank you, Geneviève. Stephanie, do we have any questions regarding this reconfirmation and approval of the -- an updated shareholders' right plan, do we have any questions?

No, we have not received any questions.

Thank you, Stephanie. Now let's proceed to the vote. #5, the consultative vote regarding the remuneration. So the text is available on Page 16 of the French version of the management proxy solicitor circular. So let's propose this resolution relating to the advisory vote on senior management compensation.

I propose on an advisory basis and without diminishing the role and responsibilities of the Board of Directors that shareholders accept the approach to compensation for senior management members as set out in the management proxy circular.

Thank you, Geneviève. Stephanie, do we have any questions about the approach to compensation for senior management members, both in the room and online?

No, we have not received any questions.

All right. Since we have not received any questions, let's go to the vote.

Item 6, 3 proposals received from MEDAC. The text of that proposal as well as the answers of the Board are in the Supplement A of our circular. I would like to invite Mr. Willie Gagnon, representative of MEDAC, to come to the microphone and to present the 3 proposals which have been submitted to shareholders. Mr. Gagnon, you have the floor.

I've been there for 20 years. I'm happy to be here in person today. Good day. I hope that everybody is fine and good. So as you just said, we've submitted 3 proposals from shareholders, and we are happy of the dialogue we've had with the corporation, which has been supported and detailed, which is not always the case. It's difficult to tap in certain corporations. But here, it was easier than elsewhere.

Three proposals, 1 proposal regarding the reinforcement of participation of shareholders at the meetings, we have sent that proposal to all of the 23 most important societies or corporations. This is something that was inspired by what we had seen last year. There was a lack of quorum where one of these open corporations that could not hold their assembly, they did not reach quorum. So we had all kinds of questions regarding the potential causes of that situation. Amongst the assumptions, certain of them which if there were systemic causes of that situation, well, we would like to be able to identify them.

So we have submitted several measures in that proposal aiming at specifying these assumptions. Amongst the measures that we have proposed 4 of them, the 3 first one are quite easy to understand. Most of these corporations do what we ask in these measures. The fourth one is about the publication of a table where we could see in a link immediately if the participation rate of shareholders is going up or down.

And according to subgroups of shareholders, we know that not all the groups behave in the same way as other individual shareholders. So their role is different. So we would like to have a very simple table, easy to do by the corporation, very difficult to obtain by a regular shareholder and every shareholder has to thus create their own table. So we hope that the corporation accept this measure, which is not expensive at all, which is simple to implement. But the corporation has not answered positively to us yet.

This is why we are here, and we will have to vote on the second proposal, which aims -- well, the question is about AI. Also regarding AI, we would hope that the corporation agrees with the federal code, which is done on a voluntary basis. We have already submitted that proposal in the past and the success was not very high. Now the corporation has not accepted to agree with that code. So we've accepted not to vote on that proposal with other corporations that also do not adhere to the code. They do not agree, but the policies have the same objectives as the one of the code.

So we would hope that here, it will also be possible to adopt that. It's not the case yet. This is why we are proposing this for the implementation of the consultative vote regarding these environmental policies of the corporation. So last year, it was 20% which is not a small amount, 20%, yes. So we would like to understand what the corporation did to consult the shareholders that voted for that proposal last year. At 20%, we are not the only ones that voted for in favor. So we are not the only ones that voted in favor.

So these are the 3 proposals. Please -- the assembly, please consider members of the assembly, please vote in favor of our proposal. Thank you so much for your attention. Thank you for welcoming us for giving us the floor, and thank you for giving us so much time this year. Thank you.

Thank you, Mr. Gagnon. Stephanie, do we have any questions regarding the items presented by MEDAC?

No, we have not received any other questions.

Thank you. Since we have not received any other questions, now we're going to proceed to the final vote before we conclude the ballot.

I declare the ballot closed for all of the items indicated in the notice of convocation. While the scrutineers compile the votes and prepare their report, I invite you to take a moment to listen Bill talking about the work done by the Board of Directors over the past year.

Over the last several years, AtkinsRéalis has become a world-class company in which engineering services and nuclear form a mutually reinforcing ecosystem. The scale and breadth of the company's engineering platform strengthens delivery across complex nuclear programs, while it's nuclear capabilities, sharpen execution discipline across the company and give it access to key infrastructure markets.

Across engineering services, AtkinsRéalis advanced and secured major work aligned with the defining investment priorities of our time. AtkinsRéalis portfolio is a real part of the world's infrastructure modernization story. And as the nuclear renaissance has become established as a long-term trend, AtkinsRéalis continued to solidify its role across the reactor life cycle and establish itself as one of the world's few major players in nuclear power.

As we look ahead, capital allocation remains central to the Board's oversight. In 2025, AtkinsRéalis took decisive steps to enhance financial strength and flexibility and become a truly focused engineering services and nuclear firm. The company sold its remaining interest in the Highway 407 ETR in Toronto. AtkinsRéalis also repaid a significant amount of debt and executed meaningful share repurchases, strengthening the balance sheet and creating the capacity to invest in attractive opportunities.

In 2025, the company capitalized on that capacity through purposeful M&A. The acquisition of David Evans and C2AE expanded AtkinsRéalis presence in the U.S. Pacific Northwest and Upper Midwest respectively, ADG expanded its footprint in the key market of Australia. Each acquisition helps fill strategic white space, strengthens regional scale and broadens what AtkinsRéalis can deliver. Also a key concern...

Thank you, Bill for this message. I am pleased to announce that the vote counters have now finished compiling the votes. See Stephanie, based on the scrutineers' tabulation of the votes cast in respect of the items on the agenda of this shareholders' meeting, I am pleased to report that all 11 director nominees named in the management proxy circular have been elected. Deloitte was reappointed as the company's auditor and the Board of Directors was authorized to fix its remuneration.

The resolution on the reconfirmation and approval of the amended and restated shareholder rights plan agreement was adopted. I also confirm that the advisory resolution on the approach to executive compensation was adopted and the 3 MEDAC shareholders' proposals were rejected. Please note that the final detailed results will be posted on the company's website and on SEDAR+.

I declare the official part to end now. And I'd like you to invite you to see the results of the year with Ian, President and CEO. Please, let's go forward with that.

Hello, everyone, and thanks for joining us today. I'm very proud of what AtkinsRéalis achieved in 2025 and confident in how well positioned we are for what lies ahead.

We share talent, digital delivery tools and project controls across the platform. So improvements made in one business quickly raise the quality, predictability and execution in the other. In Engineering Services, we advanced important work across transportation, buildings and places, power and renewables, and water, all sectors where modernization and resilience are defining priorities, and we advanced major mandates, expanded multiyear frameworks and strengthened delivery across our platforms.

Some of our many 2025 highlights included playing meaningful roles in large transit and rail programs, including the East Harbor Transit Hub in Toronto. We're also strengthening the company's presence in water, for example, through a joint venture supporting DC's waters capital improvement priorities and supporting Anglian Water AMP8 capital plan in the U.K.

In Nuclear, few, if any, professional firms can contribute across the life cycle with the capability AtkinsRéalis brings. In 2025, we demonstrated those unique capabilities and achieved exceptional growth. As a result, we developed life extension work that will deliver dependable low-carbon emission electricity for decades to come to communities and nations, including by securing a grid-scale small modular reactor execution contract at Darlington, Ontario. And in preparation for the future, we continued to develop a growing pipeline of opportunities for the CANDU MONARK and EC6 and commenced a pre-licensing process for CANDU in the United States.

For AtkinsRéalis, quality, safety and high standards are nonnegotiable. That's why we remain disciplined even as we pursue new opportunities. AtkinsRéalis' approach to innovation is a perfect example as we view rapid developments and investment in areas like AI as an enabler for our people to deliver better outcomes. And as always, we continue to invest in people and leadership depth. In our industry, it is often forgotten that capability is the main constraint.

And in the end, AtkinsRéalis' advantage comes from talent, culture and disciplined delivery. The work we do, modernizing infrastructure, strengthening resilience and supporting reliable, low-carbon power has a direct impact on long-term outcomes for communities and economies. Recently, Ethisphere named AtkinsRéalis one of the world's most ethical companies, and I'm particularly proud of this honor because it reflects a world-class culture that we have put in place, one that guides us in everything we do.

We are built for what comes next. Our strong positioning and financial flexibility will give us the latitude to keep raising our standards as we grow both organically and inorganically in the months and years to come. And I want to thank our clients for the trust they continually place in us. And of course, to our shareholders, many of whom have joined us today, and thank you for your confidence and your continued support. But I would also like to thank our Board for their guidance and support.

And I would also like to close on a personal note, as I cannot thank our people enough for your professionalism, your technical excellence and talent and your commitment to constantly achieving outcomes for customers.

Let's now move to the question period. If you have not done so yet, please ask your questions either by coming to the microphone or by using the message tab on the top of your screen. Stephanie, do we have any questions from shareholders?

I think we have a question in the room.

Shareholder, I wanted to know if there were any -- well how you see the geopolitical risk with everything happening in the world and maybe even like if there was a recession worldwide, people talking about it, how would that affect government engagements and new contracts and the backlog as well?

Thank you for your question. I'm going to translate it in French for the people in the room. So the question is about the geopolitical risk. What is the impact on our business if there is a recession? Is this going to impact the backlog or the governmental expenses? The question is for Ian.

Good question. And geopolitical risk also brings opportunity. But let me address the risk component first and then perhaps come back to the opportunity. I mean we've been really deliberate in where we've positioned the company. We always pick regions and geographies that we believe will give sustainable business and that are not exposed to as much geopolitical risk as other areas of the globe.

Now clearly, one exception to that right now is the Middle East, where we're seeing the conflict proceed there. Our priority in the Middle East right now is absolutely around the safety of our people. We have 4,000 people there. And we're pivoting from periods of time working at home to working back in the field as the risks kind of change.

Actually, in effect to the business, the impact has been quite minimal. And luckily, our people are safe and our business is proceeding. But one thing geopolitical risk has done has put energy security firmly in the policies of countries around the world. Energy security is national security. And as we've seen those conflicts in Ukraine and the current conflict in the Middle East prevail, the energy crisis that comes from those has changed energy policies.

And that's a very key opportunity for AtkinsRéalis, particularly from a nuclear perspective. And we're seeing now that 38 countries have signed up to the COP28 treaty to triple nuclear power in their countries, particularly for energy security. So we're marketing, me personally and Joe, our President for Nuclear in the room here, amongst other people in our teams, we're marketing globally, the Canadian can-do technology. And we see immense opportunity for that because of geopolitical uncertainty. So that's just one really example. I hope that answers the question.

Yes, thank you.

Good morning. I'm Daniel Gauthier, individual shareholder, founder of milliondollartfsa.ca. Thank you for your video presentation. I was wondering if you can tell us a little bit more about the nuclear opportunity as you see it and the opportunities for AtkinsRéalis to capitalize on that.

Yes, I'm delighted to answer that question. So for people in the room, I'm going to translate. Thank you, Mr. Gauthier, for your question. So the question is as follows about nuclear opportunities. And the question is for Mr. Ian. I think he looks forward to answer.

Stephanie, I was rather excited about the question. Look, I mean, we have a really privileged place as Canada actually, and as AtkinsRéalis with the CANDU technology. The CANDU technology was developed in Canada over 7 decades. It's a highly differentiated technology. It's a highly respected technology around the world.

And regardless of what you read, currently, there are only 6 technologies that are currently deployable for large-scale nuclear today. There's Russian, there's Chinese, there's South Korean, there's French, there's American and there's Canadian. So when we play in the nuclear market as AtkinsRéalis in Canada and CANDU, we play in a pool of very, very small competitors.

And as I said earlier, the needs of energy security, energy demand, but also fossil-free, low-carbon energy and affordable energy is driving energy policies across the whole world. And that's where Canada comes in. And we are lucky because over the last decade, AtkinsRéalis, CANDU has been rebuilding many reactors at Bruce and Darlington successfully. We've built them on time and on budget. And that's enhanced the reputation of Canada and CANDU also.

And we have a supply chain in Canada with about 90,000 people in the ecosystem. That's a capacity and a privilege that is not unrecognized by countries around the world. So we are marketing strong. We are traveling regularly to ensure that we capture going forward, the fair share of the nuclear renaissance.

And it's not just about that for AtkinsRéalis because we also service other technologies. And we support technologies in -- with EDF, the French technology, in the U.K., we support SMR technologies because we want exposure to the future technologies, which are SMRs, which are probably going to come within the next decade. So we're working with GE Hitachi. We're working with FANCO that we put out the other day, we work with Rolls-Royce.

And even beyond that, we are heavily involved in infusion. so that we know probably not even next decade, maybe the decade after that fusion will come to commercial power generation. And we are positioning the company today in exposure to fusion development and fusion research so that we're relevant way into the future as a nuclear powerhouse around the world. So forgive my excitement, it's -- in addition to the very exciting engineering services business that we have globally, this is a really interesting part of the business, and you'll see it prevail over the next years. But thanks for the question.

I'm Michele Gauthier, I'm a shareholder, another Gauthier. We're not all related, but -- first of all, I would like to congratulate you for all the wonderful job you did so far, not only in 2025, but even the years before. And I would like to know, excluding your nuclear energy, what are your strength with other type of contracts that you have? Why should we go with you? What is your moat?

And also at the same time, I would like to know how much of this revenue is recurring, like instead just of a contract, then it's done by -- like with the REM, for example, do you have -- are you going to have to make money with that after the -- when you finish with that contract or it's over?

Thank you, Mr. Gauthier, for the question. I'm going to translate the question. So the question really is by excluding the nuclear energy, what are the other strengths of AtkinsRéalis? Where should we invest? And what is the percentage of our business, which is recurrent, which provides recurrent benefits after the REM contract, for instance, at the end, what's going to happen? Bill or Ian.

And I know you're proud of that. So I'll bring that back to you. That's a very good question. And thank you for the compliment. But I'd also like to say that in AtkinsRéalis, we have 40,000 people around the world, all who I'm very proud of. And the teams that we have around the world is what makes us successful every day, and I'm proud of that.

We obviously have peers in the industry, and we're -- it's a fact of life that peers -- when you're investing, you compare against the peers. We are unique. AtkinsRéalis is unique. But we're unique in a few ways because of our history, because we are a strong, proud kind of 115-year-old Quebec company that has developed many projects around the world and has gained vast experience around the world. And then obviously, we acquired Atkins that also brought vast experience to the business.

But we're also unique because we have a nuclear business as well as a very strong engineering services business with 40,000 professional people around the world. Most of those people are professional engineers or scientists. And the combination of our nuclear business and our engineering service business gives this unique kind of solution for the world's energy needs. But there are very, very strong competencies of the business as well.

Transport and particularly rail across the world, we would be seen as one of the leading companies in the rail and transit space. Opportunities that are ahead of us in nonnuclear energy, where as everybody knows here, our history is about hydro and hydro power, where we've been involved in 22% of all hydro projects in the world. And transmission, where we used to own the Alberta energy -- the Alberta grid system, but we kept the engineering capability. And all of those are in high demand across the world.

Defense, we're seeing a strong defense market, as Canada, Australia and other countries around the world are now deploying more of their GDP to defense. And we have a very good base of defense capability out of the U.K., which Stephanie in Canada is now deploying in Canada. And obviously, Richard, there is deploying in Australia.

And I think one of the key differentiators is the way that we, as a company, have developed a culture that really cares for each other and cares for our customers and cares for our shareholders. And that combination together with a collaborative spirit ensures that we all work together as a team to give the best to our customers from around the globe.

And when we connect that with technologies such as AI, which we're heavily implementing into the business to enable us to deliver better outcomes and reduce our cost base, I think we're at the front. And maybe I would say that because I'm the CEO. But I think we are at the front of our peers. And I think we think about things in the very long term, and we think about success in the long term, not just for today. And Stephanie, maybe as a leader of Canada, maybe you could add to some of that.

Yes. I just add some question about the repeat business. Like we mentioned, we have a very strong backlog of $20 billion. So that means this is the business we have. Your question related to the REM, yes, we are opening a new section next Monday, but we are part of the operator. So on the example of the REM, we are part of Pulsar, would be operating the REM for the next 30 years. So we're still going to be involved in this project.

Very good question. Thank you.

I represent basically a retail investor. I've invested in the company about 5 years ago, and I'm very happy with the progress and the changes you've implemented. Looking forward, I'd like to know what would be your primary catalyst for growth in the company? I know what you do work in, but there may be some other areas that we're not aware of that you're looking at new things is what we're looking -- I'm looking to find out about.

Thank you for asking. So in French now. So he represents the investments at weekend. So he would like to understand what is going to accelerate our growth in the next few years.

Thank you. Thank you for the question. So we've talked about nuclear. So I won't repeat the nuclear story. But growth is key. And we spent, as you know, if you've been a shareholder for the last 5 years, we spent a lot of time at the beginning of this 5 years ago in really kind of fixing the fundamentals of the business through a transformation process and fixing those fundamentals and what I would call building the foundation for growth was very important so that when we move forward, we were moving forward from a very solid foundation of good governance, good execution, good capability and a strong balance sheet.

And we got to a place in 2024, where we felt we had a very, very strong balance sheet, and we divested our interest in 407 that really didn't fit with the growth plan going forward. And that's enabled us to be able to acquire businesses so that we can inorganically grow as well as organically grow. And that's a key element, which is new to the company of our future.

Now you will have seen recently, actually, we concluded an acquisition earlier this year in Australia, and we've just announced 2 other acquisitions in Australia. And that's to build a base out in Australia because we see it as a good geography with stable growth, a lot of interest in Energy and Defense and the Brisbane Olympics. So we have now 1,300 people in Australia that we can leverage growth from, which is new for us.

Our real priority of growth is the U.S. We see the U.S. as a stable, strong and resilient market for our Engineering Services business as well as our Nuclear business. Currently, we have been growing, and we've moved from #20 to #16 in the market in the U.S. But our intention is to get into the top 5, and we have a very clear plan to do that.

And we will acquire businesses and organically grow with those businesses so that we build out our footprint from coast to coast in the U.S. and become a top 5 player. So we have a very, very deliberate plan of how we're going to grow. And obviously, that plan may have to change as we see market conditions change, but we're very optimistic about our future. And I thank you for that question.

Stephanie, have we received any other questions?

We have not received any other questions, Bill.

As there are no further questions from shareholders, that completes our meeting today. Before we close, on behalf of the Board and our shareholders, I would like to thank Ian for his leadership over the last year and his senior management team for their ongoing commitment to our success. I would also like to express our appreciation to our dedicated employees whose contributions are key to the future of this great company.

Thank you very much, and have a great day, everyone. Thank you, and goodbye.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good day, and welcome to the AtkinsRealis First Quarter 2026 Conference Call. [Operator Instructions] Please note, this call is being recorded.

I would now like to turn the call over to Denis Jasmin, Vice President, Investor Relations. Please begin.

Thank you, Michelle. 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 them to 2 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, risks and uncertainties, please consult the company's relevant filings on SEDAR+. These documents are also available on our website.

Also during the call, we may refer to certain non-IFRS financial measures. Reconciliation of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ and our website.

And now I'll pass the call over to Ian Edwards. Ian?

Thank you, Denis, and good morning, everyone, and thank you for joining us today. I'm going to begin today's call by providing an overview of our performance for the first quarter before I pass it to Jeff to provide more detail on our financial results. We'll then open it up for questions.

Our focus on helping clients address long-term global energy security and aging infrastructure needs drove a strong first quarter. We began the year with continued momentum from 2025 as total revenue grew 18% year-over-year or 13% on an organic basis. Overall demand remains robust and resulted in record quarterly revenues for our nuclear business. We also grew adjusted EBITDA by 18%, which helped to translate to a 27% increase in adjusted EPS year-over-year.

We continue leveraging efficient and innovative delivery models powered by AI, which are improving safety, quality and productivity through all corporate functions and our operational business. We see AI as a strong enabler to our business. Engineering is a judgment-based profession that uses data and design to apply it to the built environment and in our case, on nuclear power plants and complex structures. An example of progress in that field this quarter is our collaboration with NVIDIA on nuclear-powered AI factories, which I will speak about shortly.

Demand for our unique capabilities remain strong as we secured numerous wins in Q1 to further strengthen our $20 billion backlog. Subsequent to quarter close, we announced 3 acquisitions, WGA and Coras, Australian engineering and project management consultancy firms. These will expand our presence in this high-growth region, we are rapidly building scale and capability. And additionally, TOBIN, an Irish engineering and project management consultancy firm, which will further strengthen our footprint in a growing and attractive Irish market.

2026 is off to a great start, and we are proud of our accomplishments this quarter. Year 2 of our delivering excellence and driving growth strategy will continue to highlight our shareholder value creation opportunities.

Turning to Slide 4. First quarter revenue in our Engineering Services Regions business increased by 12% year-over-year. On an organic revenue basis, Engineering Services regions grew 5% year-over-year within our full year 2026 outlook range. Segment adjusted EBITDA over net revenue margin was 14.2%. As a reminder, Q1 is typically the lowest margin quarter, and we expect margin to step up on a quarterly basis over the balance of 2026.

The year-over-year decline in margin was primarily due to the reprioritization and wind down of high-margin projects in the Middle East and reduced federal emergency work in the U.S. Notably, the combined backlog for all regions has increased by 3% to $13.2 billion versus our backlog as at March 31, 2025.

Beginning on Slide 5, we provide an overview of each of our 4 regions and their performance this quarter. In Canada, revenue in the first quarter increased 16% organically year-over-year, while segment adjusted EBITDA grew to $28 million with a 13% margin, a 220 basis point increase, highlighting our ongoing efforts on our margin improvement plan. Across Canada, despite a lower backlog due to strong revenue delivery in Q1, we continue to see solid demand and growth across all end markets.

In addition to opportunities in power and renewables, and industrial, we're also seeing opportunities for more defense contracts. This stems from recent announcements by the federal government that it plans to allocate approximately $35 billion to fund defense spending in the Arctic and Northern regions. We are also well equipped to capture transportation opportunities as our unique end-to-end capabilities continue to position us as a critical partner in supporting new infrastructure projects. For instance, we were through a consortium recently named preferred proponent for one of the new cities system contracts, a vital rail project in Quebec City.

And lastly, as noted by our sustained margin enhancement, we are executing on our improvement initiatives through cost optimization, enhanced bid discipline and more efficient project delivery. We anticipate this work will continue to yield consistent results.

In U.K. and Ireland, first quarter revenue grew 13% and organically grew 10% year-over-year, driven primarily by continued strong demand in water, aviation and defense projects in the U.K. Segment adjusted EBITDA grew to $105 million in the quarter, representing a 17.9% EBITDA margin. We are focused on improving the utilization of our concentrated presence in this growing region. This work, particularly in the transportation end market, drove strong margins for a second consecutive quarter.

Backlog grew 10% year-on-year to $2 billion, driven mainly by wins in transportation, rail, water and aviation markets. These end markets continue to demonstrate strong client demand, underpinned by long-term commitments and supportive regulatory drivers. In transportation, rail and transit remains positive with recent wins to support work on the Midland rail hub and Northern Powerhouse Rail. Highway work also continues to be contracted as we secured a strategic win on the National Highways commercial and project management services framework.

Overall, market conditions remain resilient with a strong pipeline of opportunities in growing customer end markets. For instance, the U.K. government highlighted in its infrastructure strategy that it expects defense spending to rise from 2.3% to 2.5% of overall economic output by 2027, including intelligent services. Our proven experience in this market is leading to increased opportunities for us, not just in the U.K. and Ireland, but across the globe.

First quarter USLA revenue was $529 million, up 22% year-over-year. Underlying performance in the quarter reflected sustained strength in transportation, while the pace of revenue conversion in other areas were more measured. Overall, the market backdrop remains constructive, and we continue to see healthy demand across our core end markets. Segment adjusted EBITDA was $47 million, representing an operating margin of 11% compared with 14% in the prior year. While the margin performance in the quarter reflected solid execution across much of the portfolio, supported by ongoing cost discipline, this was offset by market expansion and staff-related costs as well as significantly lower emerging response work.

Backlog increased 17% year-over-year to a new record high of $2 billion, showing continued momentum and healthy client demand across our end markets. The timelines from procurement award to actual work order releases are improving, although timelines remain longer than in prior periods. However, continued backlog growth gives us confidence in achieving our revenue growth outlook despite these challenges.

Transportation continues to be a particular source of strength in the business, especially in highways, where market demand is both large and resilient. Beyond transportation, we're seeing a broader set of opportunities develop across buildings and places, industrial, water and minerals and metals, which reflect the benefits of the investments we have made to land and expand. We are specifically encouraged by the momentum we are seeing in data centers, advanced manufacturing, water and power-related infrastructure. Taken together, we are confident that growth in the U.S. is becoming broader-based and creates a robust growth outlook for AtkinsRealis in the region over the long term.

In AMEA, revenue was $294 million in the quarter, down 8% year-over-year, primarily reflecting lower revenue on major buildings and places projects in the Middle East. This was partially offset by higher revenue in Australia following the acquisition of ADG in Q4 2025. Segment adjusted EBITDA was $18 million, representing a 10% margin on net revenue compared with 14% in the prior year period. The decline was primarily driven by less favorable business mix in the Middle East including the reprioritization and winding down of higher-margin buildings and places work.

In addition to these headwinds, our business in the Middle East has been affected by the ongoing conflict. Our priority remains the safety and well-being of our staff in the region, and we continue to monitor the situation closely. Although the near-term environment remains uncertain, the long-term demand fundamentals in the region remain strong, as reflected in the 15% backlog growth we've delivered this quarter.

In Australia, we are focused on capturing the benefits of our ADG acquisition and continuing to build our position in an attractive growth market. We also expect the recently announced WGA and Coras acquisitions to further strengthen our platform and enhance our ability to capture opportunities across multiple sectors, particularly power, defense and activity related to the 2032 Brisbane Olympics.

In Asia, we continue to see encouraging opportunities in both transportation and buildings in places, particularly in Hong Kong, where the Northern Metropolis development and related projects such as the Northern Link are expected to support future demand. More broadly, we expect other parts of the region to return to growth towards the end of 2026.

I'd like to now move to Slide 9 and discuss our first quarter results for our Nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 37% compared to the first quarter of 2025. Backlog totaled $4.5 billion, down 15% from March 31, '25, primarily reflecting continued progress on the ongoing projects, particularly the OPG Pickering life-extension project.

Given the timing and phasing of major contracts, we would expect backlog to fluctuate from quarter-to-quarter. But with the ongoing refurbishment projects we currently have in place, we remain confident in our ability to deliver on our revenue growth outlooks for '26 and '27. Segment adjusted EBIT grew 31% to a quarterly record high of $82 million, while segment adjusted EBIT margin was 11% and segment adjusted EBITDA margin was 27%.

On Slide 10, we highlight some achievements across our nuclear CANDU and services portfolios. In our CANDU business, we are making strong progress on OPG Pickering and the Cernavoda life-extension work. The refurbishment of the fourth and final CANDU reactor at Darlington nuclear power plant in Ontario was recently completed, ahead of schedule and under budget.

Our proven execution in Canada and Romania is creating new opportunities internationally. We recently signed a memorandum of understanding with Turkiye Nuclear Energy Company in support of potential deployment of CANDU technology as the country looks to add reactors to its existing nuclear fleet. This is another good example of how successful delivery in our core markets is helping to drive broader interest in both our nuclear technology and our ability to service the entire life cycle of an asset.

In the U.S., we are continuing to grow our nuclear business by broadening our customer base and expanding into areas where we see clear demand, including waste management, digital and robotics, alongside our existing federal work. We continue to see a more supportive backdrop for nuclear, which we believe can broaden the opportunity set across both reactor and nuclear services technologies and further enhance the strategic relevance of our CANDU technology.

In services, we are now part of the NVIDIA ecosystem as we recently announced a collaboration with them on nuclear-powered AI factories. This is an important partnership to explore the integration of NVIDIA's technologies for the development and deployment of nuclear-powered large-scale AI factories. These technologies provide AtkinsRealis with a framework to design and optimize integrated infrastructure systems in a 3D digital twin before building in the real world.

This collaboration comes at a time when global AI infrastructure demand is rapidly outpacing available power supply, prompting governments and developers to pursue scalable solutions for gigawatt class data centers. Nuclear power is emerging as a leading low-carbon baseload for AI factories. As the original equipment manufacturer and exclusive license holder of the CANDU technology, AtkinsRealis is well positioned to work alongside NVIDIA for the next-generation hub supporting dedicated AI computing workloads.

In the U.K., growth continues to be supported by our work across nuclear life cycle, including new build support at Hinkley Point C and Sizewell C and decommissioning activity in Sellafield. As we win more work and strengthen our position as a global leader in nuclear, we are advancing the development of our CANDU Monark design alongside key clients. Importantly, the growth we are seeing in nuclear is supported by real work and real revenue today, which gives us confidence in opportunities ahead.

Turning to Slide 11. You can see our pictorial reminder of these near-term CANDU revenue opportunities within our Nuclear business. We have been working hard to bolster our backlog with high-quality wins, which reinforces the bright future we have ahead. I have spent the last several weeks traveling the world, meeting with global ministers, leaders regarding investment in energy security. Amid continued tension in the Middle East, these discussions reinforce the strong momentum behind nuclear as a vital low-carbon and secure energy solution and underscored the significant growth opportunities ahead for our business.

I also met with several hyperscaler leaders in Canada and the U.S. recently to discuss how CANDU reactors can help them deliver power generation needs for data centers and AI factories. We strongly believe that CANDU reactors would be a great solution for them.

With that, I'll now turn it over to Jeff to discuss our financial highlights.

Thank you, Ian, and good morning, everyone. As Ian said, Q1 was a good start of the year, delivering strong year-over-year increases in revenue, adjusted EBITDA and diluted EPS. We also have a balance sheet with significant financial flexibility and our backlog remains strong.

On Slide 13, total revenues in the quarter increased 18% year-over-year to $3 billion, driven by both Engineering Services and Nuclear. Total segment adjusted EBIT growth was also strong with an increase of 12%, mainly due to the Nuclear segment, which increased by 31%. Total corporate SG&A expenses totaled $39 million in the quarter, a decrease of 14% compared to the first quarter last year. We expect these expenses will be between $125 million and $135 million for the full year 2026, in line with our guidance.

Net financial expenses for the quarter were 62% lower than the first quarter of 2025, mainly attributable to a lower level of recourse debt and higher cash balances. As expected, the effective tax rate of 29% this quarter was closer to the company's Canadian statutory income tax rate, resulting in an increase of $28 million compared to Q1 2025. We continue to expect that for the full year 2026, the company's effective tax rate will be between 25% and 30%.

The IFRS diluted EPS this quarter increased by 44% to $0.56 compared to $0.39 in Q1 2025, while the adjusted EPS, which we believe is a better reflection of the company's underlying performance, increased 27% to $0.80 per diluted share compared to $0.63 in the first quarter last year.

Moving on to Slide 14. I'll cover cash flow, capital resources and liquidity. Net cash generated from operating activities more than doubled to $97 million for the quarter compared to Q1 last year. This was mainly driven by a stronger EBITDA delivery and improved working capital positions. We continue to expect to generate approximately $500 million of net cash from operating activities for the full year of 2026, with the majority of this weighted to the second half of the year. As you can also see on the slide, we took advantage of a pullback in our share price and continued to deploy capital to the benefit of our shareholders through share repurchases.

At the same time, we continue to deploy capital to accelerate our strategic growth priorities through acquisitions, as Ian highlighted earlier with our recently announced transactions in Australia and Ireland. With our net debt ratio well below our 1x to 2x ratio target, we would expect to continue to deploy capital to acquisitions and share buybacks opportunistically going forward. Also in April, we took advantage of our credit rating upgrade by DBRS to BBB and the constructive interest rate environment to issue $700 million of new debentures. The net proceeds were used to redeem 2 higher interest-bearing debenture series of the same amount, which were coming due in June this year and in March 2029.

And finally, I'd like to now turn to Slide 15 and our 2026 outlook. We are maintaining all our 2026 outlook metrics as communicated during our Q4 earnings call. We believe that we are well on track to deliver our Nuclear revenue outlook for the full year 2026 of approximately $2.5 billion and deliver our Engineering Services Region's 5% to 7% organic revenue growth outlook. We continue to expect in Engineering Services that growth will be more weighted to the second half of the year with the impact of the ongoing conflict in the Middle East, resulting in low single-digit percentage growth in the second quarter for Engineering Services overall.

With that, I'll now hand the presentation back to Ian.

Thank you, Jeff. Our solid first quarter performance kickstarts another year for AtkinsRealis as sustained demand for our engineering services and nuclear capabilities continues to set us apart. We are now operating a simplified and derisked portfolio and are shifting our focus to activating the breadth and depth of our world-class engineering services and nuclear capabilities.

The global energy priorities of security and low-carbon transition as well as infrastructure development are fueling growth in our markets. We are activating our clear competitive advantages and strengthening our market position by building on a strong foundation and by landing and expanding.

We are leaning into artificial intelligence as an enabler of productivity, safety, quality and predictability. Our innovative tools are enabling more efficient delivery of our work and are winning more business as we are ideally positioned to help customers solve their most complex projects.

As proven by past strategic actions, our balance sheet puts us in a distinctive position to capitalize on inorganic and organic opportunities in a constantly evolving macroeconomic landscape.

Against the backdrop of increasing geopolitical uncertainty, including the growing importance of energy security and defense, we remained well positioned to support our clients with our differentiated expertise.

And finally, I want to thank our 40,000 colleagues whose commitment and integrity every day helped earn AtkinsRealis' recognition in March as one of the 2026 Most World Ethical Companies by Ethisphere. Their hard work and their dedication to engineering a better future for our planet and its people continue to position the company to deliver excellence and drive growth.

So with that, let's open it up to questions.

[Operator Instructions] Our first question comes from Chris Murray with ATB Cormark Capital Markets.

Just maybe starting on the margin profile in the quarter, but more importantly, thinking about the kind of how it's going to evolve over the year. So you did maintain your guidance for Engineering Services EBITDA margin. So can you just sort of walk us through some of the puts and takes for you to get there in terms of either project selection or volumes? So however you want to maybe go through it?

So let me talk about the kind of volume and outlook that we see for Engineering Services, presumably than specifically talking about, Chris. So -- and then Jeff will kind of walk through the profitability angle of that, if that's okay.

I mean, yes, clearly, top line growth, 12% in organic, 5%, we're feeling pretty good even with the kind of Q1 headwinds in the Middle East and the U.S., feeling pretty good about landing the end of the year within that revenue range. So great performance coming out of Canada and U.K. The market for ourselves remains really, really strong in aging infrastructure, maintenance, replacement, remains really strong in defense and energy.

And I think the kind of headwind that we're talking about there in the Middle East is actually not in connection with the conflict. We're seeing kind of minimal impact because of this conflict situation in the Middle East. It's mainly because of the reprioritization during last year in Saudi Arabia, where we've repositioned our business onto the projects that have got longevity leading up to things like Expo and the World Cup. We're also seeing good opportunities actually in the UAE in transport. So we're pivoting there.

So the AMEA region, together with obviously Australia, feel good about the growth there. And in the U.S., we had a really good quarter in winning work, as you'll see through the backlog. So that's given us pretty good confidence now that this sort of holdback or lack of confidence from some of the states in investing in projects is kind of coming to an end in some of those states, which will fuel our business specifically and allow us to return to growth. So that's kind of the overall picture from an ES perspective.

And Jeff, maybe walk through the margins, if you will.

Yes. Chris, as we normally see, the first quarter tends to be a slightly weaker quarter in terms of operating margins. And we would, as we typically see and would expect to see sequential improvement quarter-over-quarter and remain very much of the view and confident in delivering our overall operating margin guidance in Engineering Services of that 16.5% to 17.5% that we laid out at the end of February.

Okay. I'll leave it there. And then just one quick question on Nuclear. But a little bit of noise around the CANDU development. But at the same time, there was an announcement, I think, for Ontario talking about Bruce and starting that process. Can you just maybe update us on where we are in terms of the process with getting that fully developed?

Specifically for Ontario?

Well, just on the Monark program as a whole, please?

Yes. So I mean, the Monark development is going really well. And we are specifically developing the first iteration of the Monark for the 2 customers in Ontario. So we are working with them, and we are positioning to get that technology selection in place. Now clearly, that's not 100% guarantee. But obviously, with the amount of supply chain, the amount of ecosystem around the CANDU's technology in Ontario with 90,000 workers dependent on it and a whole bunch of companies in supply chain, you wouldn't be surprised to hear that we remain confident, although not guaranteed.

The development of the reactor itself is going really well. So we are in with the regulator. We have a commitment for a readout of the licensability of the Monark, which is not -- it's not a sudden kind of death situation. It's an iterative process. But we would get in Q3 a very good readout of the quantities, the scale, the kind of technology acceptance.

And from that, I have said repeatedly that I need then a decision on technology selection so that we can move forward and allow all of our supply chain to make the investments that are necessary to get ready for that build-out to scale up their people and their factories and for ourselves to continue to commit. So all in all, the development of reactor is going really well. And whilst we haven't got absolute clarity now, we are pushing to get that this year.

Our next question comes from Tomo Sano with JPMorgan.

So Nuclear has shown strong growth in Q1 and backlog was down 15% due to good conversions. Could you talk about the confidence in the sustainability of this momentum in 2027? And if you could talk about the backlog outlook for the remaining year, please?

Yes. Let me give a bit of an overview of how we're thinking about our nuclear business first, and then I'll come to the specific question around backlog and '27 outlook, if that's okay. Because I think it's important that I share how we're feeling about this. I mean our nuclear business is becoming a very significant part of AtkinsRealis. The revenues are now 25% of the company. And only 2 years ago, they were 15%. So as we move forward, we will see the nuclear part of AtkinsRealis become a larger part of the whole of the company.

We're seeing very, very significant opportunities in Canada, overseas because of energy demand, energy security, net zero and affordability. But what's been really interesting in my recent activity with hyperscalers is that there clearly significant demand from hyperscalers. But what's relevant or becoming relevant about our own nuclear tried and tested EC6 reactor is that from a time to inception to electricity on the grid, it's becoming very close to combined cycle gas power plants because the wait list of gas turbines is becoming very, very significant, in some cases, up to 2032. So that is a very exciting prospect for our business.

And as you know, we operate as the OEM of CANDU. It's owned by Canada, but we have the sole rights to deploy it. And we have a very large capacity that we've built, which differentiates our nuclear business because we've been rebuilding reactors for a decade. So we've got a supply chain of 90,000 people. We've got 6,000 nuclear specialists, and we've got 40,000 primarily engineers in the business. And CANDU is only 1 of 6 technologies that can be deployed today with proven technology. There's plenty of SMRs being developed, but there are only 6 technologies that today can be deployed.

And as we look around the world, you can see that we're getting opportunity to compete in Poland, Turkey, Asia, obviously, domestically now, where other provinces than Ontario have made announcements that they would like to develop nuclear power assets. And our reactors, both EC6 and the MONARK are full gen 3 plus updated reactors. So the market is strong.

The guidance that we've got on the table, as you can see on the bar chart slide, which is Slide 11, it actually shows that all of that opportunity is additive and additional to the almost secured backlog that we have to get to the 2027 guidance of $2.6 billion to $3 billion. And the reason I say that is because all we need to get to that $3 billion or $2.6 billion to $3 billion is the next phases of those projects that we're already working on. So everything I said at the beginning will be additional to what's on that slide and what's in our outlook. So I hope that -- I know it's a long answer, but I wanted to frame out how we're really thinking about nuclear. And I hope that answers the specific as well.

That's helpful. Just one follow-up. You recently announced an SMR alliance with Franco. So what is the strategic significance of this partnership? And what impact do you expect on the revenue and backlog over the next 5 years, please?

Yes. I mean the way -- again, going back to my point, today, there are 6 large nuclear technologies, which have proven and tested and deployable today. But at AtkinsRealis, we think about our nuclear business as a very, very long-term sustainable nuclear business. So we want to be part of the SMR industry that clearly, in the future, will have proven technologies that can be deployed in specific circumstances to complement large nuclear. So we're heavily involved in the GE Hitachi project in Ontario.

With Franco, we've developed this relationship with them where they're developing a unique type of reactor, which is an advanced technology. We want to be part of that. We want to be in that learning more about that type of technology. It isn't going to bring significant revenues in the next 2 to 3 years. But ultimately, it will be a deployable technology that will, in partnership, bring revenues into the business. And it's like our fusion approach. We're involved in fusion projects around the world. And that's, again, part of our involvement in evolving our nuclear business into full service ready for the next decade and the decade after that. So that's what that partnership is all about.

Our next question comes from Devin Dodge with BMO Capital Markets.

I wanted to start with maybe another question on a recent partnership that you announced is with HanmiGlobal. I'm just targeting some opportunities in the U.S. there. Just wondering if you can provide a bit more color on the strategy for that JV and what each company brings to that partnership.

Yes. I mean, defense, clearly in many parts of the world because of the commitments that have been made to increase the percent of GDP investment in defense is a really exciting sector for AtkinsRealis. We have a really strong defense business in the U.K. And where we have been successful in the U.K. is twofold. Firstly, working directly for the Ministry of Defense on infrastructure assets that support Army, support Navy, support Air Force, but also by partnering with OEMs such as Rolls-Royce, BAE or Babcock. So the Hanwha partnership is following that same strategy here in Canada as we see the increased commitment from the federal government to build out defense assets. And Hanwha specifically is under consideration for the submarine procurement.

And the supporting infrastructure in dockyards and in maintenance facilities will either be procured through Hanwha or they'll be procured directly through the federal government. So we're trying to get ahead and cover all the bases such that when the infrastructure assets are procured, we're in pole position for the design, project management and consulting of those assets. So it's quite an exciting market for our Canadian business. And it's the same in Australia. That's why we've built out our capability in Australia because we're actually seeing significant investment, particularly in submarine and ship assets where we have this specific capability in marine docks and in housing, military assets that are for the Navy.

Okay. That was great color. So second question, look, most of your divisions actually performed really well in the quarter. But the U.S. divisions maybe stood out there on the other side. It seems a bit sluggish. It sounded like there were some expansion-related costs may have played a role there. So just trying to -- I know you touched on this in your prepared remarks, but just what is your near-term outlook for that business? I'm just trying to get a sense if we should expect the earnings contribution to shift higher in the next quarter or 2? Or should it take a little bit more time, maybe more of a 2027 story?

So I mean -- so I've actually just been on a tour around the U.S. for the last few weeks. So I'm pretty fresh from visiting customers, clients and government. And we remain very confident in the U.S. market. I mean we're currently -- or last year on the ENR rankings, we were 20. We've moved up to 16. But our goal is to be in the top 5. I mean that's the strategy through land and expand, through organic growth and through acquisitions. And we see a very strong market, a sustainable strong market, driven by investment in transport, the need to replace aging infrastructure in transport and water and obviously, clearly, energy demand and industrials, not least of which are data centers and the like, very, very strong market for us. So we're relatively small compared to our peers. So we see we have a long runway to grow, and our commitment is unwavered in that.

What happened in '25, and I think most of the industry saw this is not a lack of funding for infrastructure through the states, but certainly a lack of confidence as to if they embark on major programs, will that get funded throughout the period of the current administration. And I think there's proof that it will. I mean the IIJA, for example, isn't fully deployed by a long way. And we're actually seeing in the wins that we've achieved in Q1 and the backlog increase that we've achieved in Q1, what we're actually seeing is the forward-looking kind of picture is looking a lot better. And clearly, disappointing Q1 in terms of growth, but absolutely confident we're going to end up with an overall range in the U.S. that's within the 5% on the year. So you'll expect in the next quarters an uptick in that. And that's because we can see some visibility around that. And Jeff, I don't know if you want to talk to the margin kind of situation...

Yes. So you're right. One of the bigger impacts was just the lack of emergency response work. I mean I think that's true in the industry as well as for us. But that's clearly just a timing thing more than anything else. From a year-over-year perspective, a little bit more cost in terms of, as Ian said, our land and expand and associated staff costs. But again, we expect an improved margin profile as we move throughout the year as well.

Our next question comes from Krista Friesen with CIBC.

Maybe just one on the M&A front. You've been active doing these small tuck-ins, but just wondering what you're seeing in the private market in terms of valuations given where we've seen some of the public engineers trading recently.

Yes. I mean, good question. I mean, obviously, maybe talk about our strategy first and then come back to the specific evaluation second. I mean we're in a disciplined process. I mean we're looking for quality. We're specifically prioritizing the U.S. We did want to build a platform in Australia to capture the energy and defense, Brisbane Olympics and transport market, but we're happy with those 3 acquisitions that we've done. We need to obviously close on the last 2, and that will give us what we need there going forward with about 1,300 people.

The priority really is in the U.S. That's not to say that we wouldn't do other acquisitions like Tobin, fairly small, but it's a strong market in Ireland that we needed more capacity to meet the transport. In the U.S., as I've said in the past, there are -- it's a very fragmented market state by state. There are numerous targets, numerous opportunities for a company like ourselves that has a limited geographical footprint in the U.S. right now, and it's very attractive for companies to join a journey that we explained and a journey where rather than just get absorbed into a large kind of machine, they're going to become the AtkinsRealis presence in a certain state.

So specifically for ourselves, I think it's less in our conversations around paying the multiple. It's more about paying the right market rate multiple and making sure that we're culturally aligned and that we can get revenue synergies out of those acquisitions going forward that we select. As far as overall multiples, I don't think it's changed that much. It's just -- I think there's probably less ambition or less realization that people are going to pay a premium multiple. I think that's the way I see it. I mean, I think if you go back a year or so, multiples were around the 13, 14 and probably there was an aspiration they might get 16 or more. And that's kind of gone. So it's more market rate. That's the way we see it. I mean, obviously, we're talking to specific targets with a specific reason. But yes, thanks for the question.

I appreciate that color. And then maybe just lastly, it feels like we're hearing more maybe positivity around nuclear just in Canada, given we're going to be coming out with a nuclear plan by the end of this year and it sounds like a national electricity agenda later today. Just wondering your thoughts on those and if you've been consulted on that.

Well, obviously, we own the Canadian technology or we own the rights to deploy the Canadian technology. I mean the government -- federal government owns the technology because -- so because of that relationship, yes, clearly, we deal with the federal government. Specifically, what's in the strategy? I don't know what that is. But I know it's going to be good news for CANDU because any expansion of the electricity grid and any desire of provinces to move to a larger nuclear energy mix has got to be a really good opportunity for CANDU and AtkinsRealis.

I mean there's no guarantee. Of course, we have to have the right technology. We have to have the right approach, and we have to have the right solutions for those specific customers. But we're working with them all. I mean we're working with Saskatchewan. We're working with Alberta. We're working with New Brunswick. And clearly, we're working very closely in Ontario. And this is a really, really exciting time for AtkinsRealis with all of that opportunity. And again, I'll go back to this specific niche of available nuclear technologies today. There's only Russian, Chinese, South Korean, French, American, which is Westinghouse and ourselves, which is Canadian.

Our next question comes from Benoit Poirier with Desjardins.

Yes. Just to come back on the U.S., you called out the lower emergency response work. Could you maybe quantify the impact that we've seen on organic growth and margin in the quarter and whether you're going to still be facing a tough compare going into Q2 and the second half?

Yes. Why don't I take that, Benoit. So in terms of -- so it has -- the emergency response work has definitely had an impact. For instance, in the quarter, our USLA business was, from a growth perspective, relatively flat. If it hadn't been for that emergency response work, we would have seen it up in the mid-single digits from a percentage perspective, so very much in line with our overall guidance. And as you heard Ian say earlier, as kind of quarters progress here in 2026, the impact of that year-over-year lessens as we go forward in addition to the fact that the significant backlog position we have and what we're seeing in terms of work being released, we think that also bodes well for continued progress and growth in the U.S. business.

Okay. That's very good color, Jeff. And maybe you mentioned the assumption of about low single digit in Q2. Could you maybe provide some assumptions behind this low single digit that you would expect, whether EMEA is still expected to be negative, USLA, whether it becomes in a positive territory and whether the strong performance that we've seen in Canada and the U.K. is sustainable in the double-digit territory. Just overall direction would be looking for.

Sorry, can you hear me, Benoit? Operator, can you hear me?

Yes. I can.

No problem. Listen, I'll summarize it really quickly. We expect continued stronger growth in Canada and the U.K. I think we'll see an improving perspective and result in the U.S. We do expect the Middle East to be weaker, and that would be not at a material level, but that will hold back growth a bit in the second quarter, as Ian said, it's largely related to the conflict. So we would expect kind of low single-digit growth, we think, in Q2. But overall, very confident in getting to our 5% to 7% for the full year.

That's great. And very quick one for me. Could you talk about the defense opportunities you pursue in Canada among the $35 billion spending by the federal government and whether you've already seen some impact in the quarter inside the strong organic growth that you've been pulling from Canada?

No, I don't think we're seeing anything yet. We're seeing a lot of opportunities come into the pipeline. And as I kind of said before, they're going to come in 2 ways. It's going to be direct procurement from the federal government. And we're definitely seeing a pipeline of opportunities in the North in building out facilities, barracks and military facilities in the North directly from the federal government.

And secondly, we'll see it come through the OEMs, whether it's a marine asset or an air asset, often the enabling infrastructure, the maintenance, the hangars, the dockyards, where the assets are housed are often procured by the OEM who manufactures those assets. So we're yet to see how that's going to play out. But clearly, as AtkinsRealis having done all of this in the U.K., we feel that we are really well positioned to capture our fair share of that market in the future. So it's a forward opportunity.

Our next question comes from Michael Tupholme with TD Cowen.

I wanted to circle back on the discussion about expectations for adjusted EBIT and EBITDA margin progression at ESR. You talked about expecting margins to step up on a quarterly basis over the balance of the year. I'm just hoping you can clarify, are you looking for year-over-year margin improvement beginning in Q2 and carrying on through the second half of the year? Or is this more of a sequential comment? I guess just thinking about the full year guidance and the expectation of seeing some year-over-year margin improvement, will that year-over-year improvement kick in, in the second quarter and carry on?

Yes. My comment when I made it, Michael, was about sequential from here, which maybe is obvious in terms of moving from kind of 14.2% here in Q1 to being in a range of 16.5% to 17.5% overall for the full year. That overall yearly guidance would imply, as we said back at Q4, an improvement over 2025. So fundamentally, we would expect in the remaining quarters, if not all of them, most of them to also be higher year-over-year compared to last year. Otherwise, the math wouldn't work. So -- but yes, we would expect generally that to be the case.

Okay. So it sounds like it's not 100% certain that could happen in Q2, but it's obviously got to happen here sooner rather...

Yes. Yes, I'm not going to give guidance by quarter per se. But yes, absolutely could happen in Q2. But fundamentally, regardless of the quarters themselves, we remain confident in terms of getting to that improved year-over-year profile, which will mean year-over-year guidance improvement as well as obviously sequentially.

Yes, okay. Perfect. And then just on the nuclear guidance, obviously, you've reiterated all of your 2026 financial targets. So nuclear revenue guidance is $2.5 billion still. Looking at what you did in the first quarter, obviously, very strong growth, up 37% year-over-year. But if you simply have flat nuclear revenues the rest of the year, you get to that $2.5 billion level. So I guess, is there some conservatism here? Or what is it that would cause nuclear growth to drop off so dramatically in the rest of the year?

Yes. Maybe I'll continue on. I mean the guidance was around $2.5 billion. So obviously, we're not being completely specific on exactly $2.5 billion, but you're right. And I think our view would be we did see very strong, for instance, procurement work at the Pickering refurbishment. Client OPG continues to be very keen to move that at pace. And we saw some procurement that we were expecting to have later in the year actually being pulled forward into the first quarter and potentially the first half here. So it is possible that we won't see exactly that level of revenue for the full year. But on the other hand, we may see some revenue continuing to accelerate into the back half of 2026. A much better view on that come the middle of the year. But at the moment, clearly very confident that we'll be around the $2.5 billion for sure.

Our next question comes from Frederic Bastien with Raymond James.

I wanted to dig a little deeper into your partnership with NVIDIA to develop nuclear power data centers. Obviously, given that it's based on the CANDU technology, does that limit you in terms of territory or region where you can entertain those -- the development of these data centers?

No is the short answer on that relationship. The relationship with NVIDIA is, in the first instance, it's around collaboration to develop their own AI technologies in the engineering context, specifically in the first stages for what you said, for the development of a CANDU nuclear-powered AI factory. So that's exciting in itself because we're at the kind of forefront of the development of technologies and tools to design and simulate and obviously enable smarter delivery of those assets. It's not specific only to that, the relationship will then move to doing the same on other complex type of assets so that they have a capability in a product. And then we obviously learn how to use that product and that capability for all customers in the industry.

But what's been interesting in that relationship is it's opened the door to meetings with other hyperscalers. And I personally met some of those and my team have met others. And I'll go back to the point I made before that the issue is clearly electrical energy for data centers. And the data center capacity needs for energy and the way it was described to me, need to increase tenfold. And with specifically our EC6 reactor having been built once in under 5 years and say you add a planning period to that of a couple of years, specifically, 7 years is looking like it's getting comparable to combined cycle gas. That, for me, is a moment, and that's a big opportunity for us that we are looking to clearly exploit.

And the licensing of the product in the U.S. is going well. We have been through the pre-licensing phase of our own analysis of acceptability and consultation with the NRC, and we are looking to make a formal application to the NRC in Q2 so that we can progress that licensing in parallel with marketing our EC6 product to hyperscalers. So I see this as an important kind of move forward in the opportunities ahead for CANDU and nuclear.

Our next question comes from Maxim Sytchev with NBCM.

Most questions were asked, but just in terms of priorities between NCIB and M&A, I don't know if Ian or Jeff want to kind of tackle this one. But do you mind maybe walking perhaps through your frame of kind of reference and what is more accretive right now from your perspective?

Yes. Why don't I take that, Max, it's Jeff. I think as we've always said about our capital allocation framework, what we like about it now that we've got the balance sheet clearly in a great position is that we see the opportunity to deploy capital in both areas. And I think what you've seen here in the first 4 or 5 months is exactly that. We've opportunistically looked at where the share price is and have a view clearly that the long-term value of the company is significant and significantly higher than today and therefore, have been happy to deploy capital through share buybacks.

At the same time, very conscious that there is real opportunity for us and there is great opportunity, particularly on the engineering services side of the business in the U.S. as well as some of the other markets we've seen like Australia to grab capability and use that as a platform to continue to drive our organic growth capability. And we think that creates significant value over a period of time as well. So I think we're in a position where both create significant value for shareholders. And therefore, we will expect to deploy capital that way. And frankly, we'll be a bit opportunistic about the relative weight of that depending on the opportunity set in front of us.

Our next question comes from Jonathan Goldman with Scotiabank.

Just one for me. Just want to make sure I got this right. You did EBITDA $254 million in the quarter. It looks like you didn't change the EBITDA seasonality guidance for the year. If we use the rate that you have for Q1, it implies you would do like $1.3 billion plus of EBITDA this year. That's materially above the Street, like 13% above. And I know you've done some acquisitions, some tuck-ins, maybe that are not reflected there. But am I thinking about that the right way?

Yes. I mean I think what I'd say is the first quarter was clearly at or above what has historically been our guidance. I don't think I would just sort of straight line that from here. So I think we would expect to move back towards that guidance. And so I think that's the way I think about modeling it, Jonathan, not to just sort of straight line it off the first quarter, which has been particularly strong, which we're really pleased about.

So would it be fair to say that Q1 was probably at the higher end of that 18% to 20% range...

Yes. Yes. Yes, for sure.

I'm showing no further questions at this time. I'd like to turn the call back over to Denis Jasmin for closing remarks.

Thank you very much, everyone, for joining us this morning. Hope you have a nice rest of the day. If you have any further questions, please do not hesitate to contact me. Thank you very much, everyone. Bye-bye.

Thank you for your participation. You may now disconnect. Good day.

Good day, and welcome to the AtkinsRealis Fourth Quarter 2025 Conference Call [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Denis Jasmin, Vice President, Investor Relations. Please go ahead.

Thank you, Michele. 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 1 or 2 questions to ensure that all analysts have an opportunity to participate. You are welcome to return to the queue for any followup 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, risks and uncertainties, please consult the company's relevant filings on SEDAR+. These documents are also available on our website.

Also during the call, we may refer to certain non-IFRS financial measures. Reconciliation of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ 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 fourth quarter and the full year before I pass it to Jeff to provide more detail on our financial results and our 2026 outlook. We will then open it up for questions. But before getting started, I wanted to highlight just how far we have come over the last several years.

We set out in 2019 to transform AtkinsRealis into a world-class engineering services and nuclear-focused company. We have now achieved that. We did this because we fundamentally believe that our capabilities and competitive advantage in these 2 areas will create the most value for shareholders. And just as importantly, we've built a world-class culture and have attracted and retained exceptional talent that is vital for the long-term growth of the company.

2025 was a pivotal year for AtkinsRealis, and I'm proud of what we've accomplished and excited to share those highlights with you today. So let's get started on Slide 3. We concluded the first year of our delivering excellence and driving growth strategy with strong results. We remain focused on delivering for our clients and expanding our foothold in key growth markets, both organically and through strategic acquisitions. This resulted in strong revenue growth, continued progress on our margin enhancement program and a record-breaking backlog.

Our diversified portfolio enables us consistent performance across our primary business segments and regions through the economic cycle. This year, for AtkinsRealis Services, we generated a record high revenue of $11 billion, representing 16% organic growth and close to 10% segment adjusted EBIT to segment revenue ratio. Our record-breaking backlog for AtkinsRealis Services now sits at $21 billion as at the end of 2025, which represents growth of 23% versus the end of 2024. It was an excellent first year of our 3-year strategy and the progress we made in '25 is setting us up for continued growth across our regions and end markets for the foreseeable future.

On Slide 4, we outlined our success against our 2025 financial outlook and related strategic accomplishments. We completed the sale of our remaining interest in Highway 407 for $2.6 billion, which enabled debt repayment and ultimately led to achieving an investment-grade credit rating. We generated $461 million in net cash from operating activities, well above our target, highlighting the cash-generating nature of AtkinsRealis. We deployed our advantaged financial position to return significant capital to shareholders via accretive share repurchases and accelerated our strategy with 3 acquisitions.

We won several major nuclear contracts, including the Pickering refurbishment and the Darlington SMR execution phase, leading to an end-of-year record-breaking backlog for our nuclear business. And we continue to focus on building our culture. We achieved a top quartile benchmark employee engagement score of 86%, while increasing our headcount by 1,800 employees. 2025 also marks the completion of the transformation of our business, focused on being a world-class engineering services and nuclear business, and our financial reporting will be adjusted to reflect this.

Our fourth quarter performance on Slide 5 highlights our ability to both grow and operate more efficiently across the business. We delivered another strong quarter of AtkinsRealis Services revenue growth, up 17% year-over-year or 11% on an organic basis. Engineering Services regions revenue reached a quarterly record high of approximately $2 billion, while Nuclear revenue organically grew 28% to a quarterly record high of $600 million. We also improved our Engineering Services regions EBITDA margin, highlighting the work we have done across the business, including leveraging technology and innovative delivery models such as artificial intelligence to improve productivity, safety, quality and predictability.

These new productivity enhancement technologies enabled us to find more innovative solutions and deliver more work for our clients. Our total backlog reached a new record high this quarter as our expertise across engineering services and nuclear continues to be in demand. We announced the acquisition of C2AE, which advances our land and expand strategy in the U.S. and is in line with our stated capital allocation priorities. Our pipeline of potential bolt-on acquisitions remains robust, and we would expect to announce further acquisitions in the coming quarters. We did all this while maintaining a robust balance sheet, underpinned by strong and growing free cash flow.

We are extremely proud of our accomplishments this quarter, generating record revenues and backlog while improving margins and utilizing our strong operating cash flow for buybacks and to invest in M&A opportunities. Our Delivering Excellence driving growth strategy is creating value for our shareholders. Turning to Slide 6. Fourth quarter revenue in our Engineering Services regions business increased 16% year-over-year. On an organic revenue basis, Engineering Services regions grew 9% year-over-year.

Segment adjusted EBITDA over net revenue margin was strong at 17.3% for the fourth quarter, up 100 basis points versus the prior year period. The operating margin improvement initiatives continue to bear fruit through continued cost optimization improved backlog gross margin and delivering projects more efficiently. Notably, backlogs in all regions have increased for a total increase of 12% to $13.2 billion versus our backlog as at December 31, 2024.

Beginning on Slide 7, we provide an overview of each of our 4 regions and their performance this quarter. In Canada, revenue in the fourth quarter increased organically 14% year-over-year, while segment adjusted EBITDA grew $35 million with a 17.6% margin, a 410 basis points increase, highlighting our continued efforts on our margin improvement plan. Backlog grew 9% year-over-year and now stands at $7.9 billion. Last quarter, we emphasized an increased focus on growing our presence in the buildings and places, transportation, industrials, power and renewables and defense end markets as we believe these areas offer compelling near-term opportunities for our unique capabilities.

Fourth quarter performance proves the merits of that strategy as our revenue growth was fueled by key wins in transportation and power and renewables market. Key wins this quarter include the selection of Hydro One Networks for a multiyear owner's engineer mandate for the expansion of their Bowmanville switching station. Our power and renewables experts will provide engineering and project program management services for the expansion of the substation, which is situated across from the Darlington Nuclear Generating Station.

This win comes on the back of additional contracts we've secured in several major power and renewable initiatives that are important to the future of Canada. In the U.K. and Ireland, fourth quarter revenue grew 15% and organically grew 12% year-over-year, driven primarily by continued strong demand in aviation, water and defense projects in the U.K. Segment adjusted EBITDA grew to $103 million in the quarter, representing an 18.4% EBITDA margin.

Our concentration in the region enables us the flexibility to position our people in areas with the highest demand, which augments operating margin leverage. Backlog grew 16% year-on-year to $2 billion, driven mainly by wins in transportation, rail, water and aviation markets. Our successful history working to improve Heathrow Airport resulted in contracts for expansion work and technology services, while we continue to obtain key wins on the network rail infrastructure project.

As an example, we secured the Havant resignalling contract, a major program management commission on the TransPennine route within the Network Rail infrastructure project. And as mentioned on prior calls, there have been several commitments by the U.K. government to increase funding for defense and infrastructure spending over the next decade. Demand in Power and Renewables is rising with early-stage activity in grid investments, while the established long-term U.K. industrial investment strategy will yield enhanced opportunities in the industrials end market.

Fourth quarter USLA revenue increased 23%. However, excluding recent acquisitions and a favorable FX impact, organic revenue growth was flat year-over-year as softness within our global minerals and metals sector continued to weigh on the results of our fourth quarter. If we exclude Minerals and Metals business, the underlying engineering services business in the U.S. grew organically in the low single-digit percentages. Segment adjusted EBITDA was $55 million, which translates to a 13.8% operating margin, an improvement of 120 basis points from the previous year.

Margin improvement was driven by sustained project execution and overhead control. The region's backlog rose 15% year-over-year to $1.8 billion, reflecting our continued focus on client engagement and the strength of our integrated end-to-end capabilities. As we are deepening our relationship with David Evans and C2AE, we are seeing opportunities to strengthen our capabilities in transportation projects across the country, including highway and aviation work.

Looking out, we anticipate continued growth across various end markets in the U.S. where we're expanding our presence. The federal government is funding transportation growth by increasing investment budgets of the Department of Transportation. Additionally, various water infrastructure programs are being allocated billions of dollars annually to sustain multiyear project pipelines. Our success in water infrastructure projects in other markets positions us well to capture our fair share of these projects.

While in the U.S. -- while the U.S. continues to evolve, we remain focused on execution. We are strengthening our pipeline, aligning our talent and capabilities and deliberately landing and expanding into unpenetrated high-growth regions across the country. In EMEA, revenue organically by 9%, while segment adjusted EBITDA rose to $40 million, representing a 21% adjusted EBITDA margin over net revenue. In the fourth quarter, we acquired ADG Capital, expanding our scale in Australia by adding approximately 250 professionals to the team. This also strengthens our ability to capture major infrastructure investment opportunities and grow in end markets such as defense and power and renewables. Total backlog in EMEA was approximately $1.5 billion, up 18% versus December 31, 2024, mainly driven by new bookings in the Buildings and places and industrial end markets.

And as highlighted last quarter, while Buildings and places opportunity in the Middle East continues at pace, we're seeing increased demand for our services in large-scale transportation projects. For example, we were recently contracted to support the development of the Metro Blue Line in Dubai. In Asia, we're seeing growing opportunities for our services in the infrastructure market. In Australia, we are focusing on capturing revenue synergies following our acquisition of ADG, while also continuing to pursue opportunities that arise in the defense sector and ahead of the 2032 Summer Olympics in Brisbane.

I'd like to now move to Slide 11 and discuss our fourth quarter results for our Nuclear business. The business continues to demonstrate exceptional growth, achieving an organic revenue increase of 28% compared to the fourth quarter of 2024. This creating a new baseline for future growth. Our nuclear backlog totaled $5 billion, 56% higher than our backlog as at December 31, 2024. Segment adjusted EBIT grew 17% to $66 million and segment adjusted EBIT margin was 11%. Segment adjusted EBITDA grew 16% year-over-year with a 24% margin.

On Slide 12, we highlight some achievements across our nuclear CANDU and services portfolios. In our CANDU business, our work on the final reactor at Darlington's refurbishment has been completed, and the reactor was handed back to OPG to reconnect to the grid ahead of schedule and under budget. We also have several projects ramping up in Canada and abroad, while we continue excellent progress on life extension programs that give us excitement about our near-term revenues.

In Canada, Prime Minister Carney announced a major federal investment to accelerate Canada's clean energy future with the Darlington new SMR nuclear project as a cornerstone initiatives where we are part of the core delivery team. This project will expand electricity generation, strengthen national energy security and position Canada as a global leader in nuclear innovation. The Ontario government has approved Ontario Power Generation's plan to refurbish 4 CANDU nuclear reactors at Pickering, clearing the way for a start to the execution phase of the project and where our scope of work continues to expand.

For services, we secured a 15-year framework at Sellafield for nuclear decommissioning and waste management. Additionally, we signed a multiyear contract with Rolls-Royce to deliver nuclear propulsion and engineering capabilities to support the U.K.'s growing submarines program under the U.K. Defense Nuclear Expertise Enterprise. Turning to Slide 13. You can see our pictorial reminder of these near-term CANDU revenue opportunities within our nuclear business. We've been working hard to bolster our backlog with high-quality wins, which reinforces the bright future we have ahead.

As you can see on the slide, we're seeing increased opportunities to sign CANDU MONARK or EC6 newbuilds across Canada and abroad and have commenced the licensing process for CANDU in the U.S. During my time at Davos, I had highly productive conversations amid a surge of global headlines, highlighting the renewed interest in nuclear power development. These discussions reinforce the strong momentum behind nuclear as a vital clean energy solution and underscored the significant growth opportunities ahead for our business.

Now moving to Slide 14 and our Linxon, LSTK projects and capital businesses. Moving forward in '26, we are combining these segments into one reporting segment referred to as all other segments. This is a strategic streamlining financial disclosure that will allow our financial reporting to focus on the robust engineering services and nuclear capabilities of the business, the key drivers of long-term growth for AtkinsRealis.

In our Linxon segment, revenue in the quarter grew 2% and realized 60 basis points of EBIT margin expansion year-over-year. We generated a record adjusted EBIT and backlog grew 33% to $2.8 billion, reflecting Linxon's continued growth and strong market position. On LSTK projects, we've now substantially completed 2 of the 3 remaining light rail transit systems. The Eglinton project was substantially completed in the fourth quarter and then opened for operation by the client in February this year. Our fourth quarter results include additional costs to close out these projects.

So before turning the call over to Jeff, I'd like to touch on AI and how we think about it at AtkinsRealis. We see AI as a strong enabler in our business. We do not see it as a disruptor. The demand for engineering in infrastructure and nuclear is at an all-time high, and this will continue. Engineering is a judgment-based profession that uses data and design to apply it to the built environment and in our case, on nuclear power plants and complex structures.

It is a highly regulated industry where engineers are liable and held accountable for the safety, quality, sustainability and performance of assets like roads, bridges, buildings and nuclear power plants. Engineering is the creative application of math, science and empirical evidence to design, build and maintain infrastructure and nuclear power assets. We have a strong commitment to make our business more efficient, and we think of AI as essential to meet growth demands ahead in nuclear and engineering services.

For design work done at the conceptual level, we see several areas of application of AI that deliver real improvement, and we are already deploying a suite of tools to aid design, modeling, surveying and even safety. In bidding and work winning, we have new tools to look for data, people, track record in order to win. Like most companies, we've also introduced AI in functional support test and data collection to make processes cheaper, quicker, better.

We also implemented specific tools to certain tasks like HR, safety, inspections, taxes, finance and many others. Cost savings will be made, and this will and should lead to margin expansion. We do not see AI affecting our medium- and long-term growth as demand on our engineering services and nuclear capabilities continues to grow. So with that, I'll now turn over to Jeff to discuss the financial highlights and the 2026 outlook.

Thank you, Ian, and good morning, everyone. Turning to Slide 16. Total revenues in the quarter increased 13% year-over-year to $2.9 billion, which included revenue increases of 16% in PS&PM, comprised of increases of 16% in Engineering Services, 29% in Nuclear and 2% in Linxon. These higher revenues were the primary driver in a total segment adjusted EBIT increase of 10% to $238 million. Total corporate SG&A expenses totaled $35 million in the quarter, a decrease of 38%. Acquisitions-related and integration costs were $24 million in the quarter, mainly due to the acquisitions completed in the year and to a change in the fair value of the contingent consideration payable related to the Linxon acquisition in 2018.

Net financial expenses for the quarter were lower at $11 million compared to $41 million in Q4 2024, mainly due to the repayment of all outstanding borrowings under the La Caisse loan and the company's term loan in the second quarter and higher financial income due to higher cash balances. The IFRS diluted EPS this quarter increased by 90% to $0.57 compared to $0.30 in Q4 2024, while the adjusted EPS from PS&PM increased 273% to $0.97 per diluted share compared to $0.26 in the fourth quarter last year.

On Slide 17, you can see the selected financial metrics for the full year. Total revenues for the year increased by 14% to $11 billion compared to 2024, while total segment adjusted EBIT increased by 15% to $973 million, which was comprised of $1 billion for AtkinsRealis Services, $46 million for capital and negative $112 million for LSTK projects. Total corporate SG&A expenses decreased to $145 million, in line with our expectations. We anticipate that these expenses will decrease again in 2026 to between $125 million and $135 million.

Restructuring and transformation costs totaled $112 million, higher than last year, mainly due to efforts relating to operating margin improvement initiatives, including the rollout of the company's global ERP system and workforce optimization as part of ongoing operational improvement initiatives. Net financial expenses for the year were $110 million compared to $163 million in 2024, mainly due to a lower level of recourse debt and lower interest rates. The income tax expense amount was higher than 2024, mainly due to the tax on the gain of the sale of our interest in Highway 407.

The effective tax rate was approximately 13% in 2025, lower than the company's Canadian statutory income tax rate, mainly due to revised estimates on certain tax liabilities, the recognition of previously unrecognized deferred income tax assets on loss carryforwards and geographic mix. For 2026, we would expect the company's effective tax rate to be closer to our statutory tax rate and to be between 25% and 30%. Net income totaled $2.6 billion or $15.41 per diluted share, which included the gain on disposal of the company's interest in the Highway 407.

But on an adjusted EPS from PS&PM, a better reflection of the company's underlying performance, EPS increased 88% to $3.36 per diluted share compared to $1.79 last year. And as Ian mentioned earlier, backlog ended the year at a record high of $21.2 billion, 21% higher than at the end of 2024 with strong book-to-bill ratios in all businesses, Engineering Services regions, Nuclear and Linxon. Let's now move on to Slide 18 and free cash flow. Net cash generated from operating activities was very strong in the fourth quarter, resulting in $461 million of operating cash for the year, driven by stronger AtkinsRealis Services EBITDA delivery and tight working capital management. LSTK Projects net cash was positive $81 million in the fourth quarter, mainly due to the collection of money owed for a completed project, resulting in a negative net cash of $25 million for the full year.

We expect LSTK projects cash flows to be approximately negative $100 million to $150 million in 2026 as we complete the last light rail transit system legacy construction contract, settle out final accounts and pursue claims outstanding. After CapEx of $177 million, which included approximately $64 million for the development of MONARK and the payment of lease liabilities of $86 million, our free cash flow stood at positive $199 million for the year. We expect the CapEx to be in the range of $175 million to $200 million for the full year of 2026. In 2026, we expect to generate approximately $500 million of net cash from operating activities.

I'd like to now turn to Slide 19 and our 2026 outlook. Given our increased backlog and strong pipeline of opportunities, we are expecting an organic revenue growth rate of between 5% and 7% compared to 2025 for the Engineering Services regions with an anticipated segment adjusted EBITDA to net revenue margin of between 16.5% and 17.5%. As for the Nuclear segment, despite very strong growth in 2025, we expect revenues to continue to grow and reach approximately $2.5 billion for the full year 2026. Adjusted EBIT to gross revenue margin is expected to be similar to 2025 and be in the range of 11% to 12%, which we expect will equate to a segment adjusted EBITDA to net revenue margin in the mid-20%.

As we've seen in previous years, our Engineering Services regions business profitability is affected by some seasonality, and we would expect the company's adjusted EBITDA to be more weighted to the second half of 2026, as shown on the right -- on the bottom right-hand side of the slide. Turning to Slide 20. Following a lower-than-expected organic revenue growth in the Engineering Services regions business in 2025, but considering the continued backlog increase and strong global demand for the company's capabilities, we are adjusting the Engineering Services region's organic revenue growth CAGR for 2025 to 2027 to between 5% and 7%.

On the other hand, as a result of the strong financial and operating performance of the Nuclear segment during 2025, the significant increase in the nuclear backlog and the company's positive outlook regarding the global demand for our services, we are raising the nuclear annual revenue target to between $2.6 billion and $3 billion by 2027. The company is also adjusting its Nuclear segment adjusted EBIT to segment revenue ratio to between 11% and 13% from the previous range of between 12% and 14%, reflective of the expected business mix over the next 2 years. We continue to believe that the long-term profitability of the nuclear business will be between 12% and 14%.

I'd like to now turn to my final slide, Slide 21. As Ian mentioned, we have accomplished a lot over the last several years to transform the business. And therefore, in 2026, we will be streamlining our financial disclosure. The company has, effective January 1, 2026, combined its Linxon, LSTK projects and Capital operating segments into a single reportable segment referred to as -- all Other segments, as Ian mentioned earlier. The reportable segments of the company that are part of the Engineering Services regions, Canada, the U.K. and Ireland, U.S. and Latin America and Asia, the Middle East and Australia and the Nuclear segment will remain unchanged.

At the same time, taking into account the fact that the Capital segment will no longer be presented on a stand-alone basis, the company will cease to report financial information separately from capital and from PS&PM activities. Slide 21 has been prepared to give a view on what the 2025 quarterly comparable numbers will look like. And with that, I'll now hand the presentation back to Ian.

Okay. Thank you, Jeff. Our fourth quarter performance concluded a great year as sustained demand for our Engineering Services and Nuclear capabilities drove strong revenue growth for the company. 2025 was a pivotal year as it marked the completion of the transformation of our business. We are now very much focused on being a world-class engineering services and nuclear company, and we fundamentally believe that our capabilities and competitive advantages, focus in these areas will create the most value for shareholders.

Global energy transition and infrastructure redevelopment are fueling our growth markets. We are focusing where AtkinsRealis has clear competitive advantages and strengthening by building on our strong foundation or landing and expanding. We are optimizing our business, accelerating value creation where demand is strongest and exploring untapped potential through technology and innovative delivery models. In 2026, we will continue to lean into artificial intelligence as an enabler of productivity, safety, quality and predictability.

Our innovative tools have given us the upper hand in attracting and retaining high-quality clients and talent. While this has been successful, we can continue to develop and utilize advanced technologies to deliver products and projects and operate more efficiently to lower total costs. Our advantaged balance sheet puts us in a distinctive position to capitalize on inorganic and organic opportunities in a continuously evolving macroeconomic landscape. Finally, I want to thank our 40,000 colleagues for their hard work and dedication as we continue positioning the company to capture real revenue across our engineering services and nuclear businesses in 2026 and beyond. So with that, let's open it up for your questions.

[Operator Instructions] Our first question comes from Sabahat Khan with RBC Capital Markets.

Ian, maybe just on some of the commentary you shared around your conversations on nuclear. I was wondering if you can maybe give us an update on where the 2 large potential newbuilds in Ontario maybe stand? And then maybe some of the specific opportunities outside of Canada that you think could start to materialize over the next 3- to 5-year period.

Yes, for sure. I mean no definitive news in Ontario. But we are working very, very hard with the 2 generating organizations of Bruce and OPG to ensure that CANDU and our CANDU MONARK is the chosen technology for those 2 sites. As AtkinsRealis and as CANDU, we know that the right answer for Canada, for Canadian supply chain and for the efficiency of the product that our CANDU MONARK is the answer. When you think about jobs and economic development in Canada, over 90% of all of the CANDU MONARK that would be deployed there is Canadian content, which is Canadian jobs, Canadian companies.

We are convinced that our product is the most efficient with world-class productivity and performance ratings of the EC6 that's been built around the world. And as a reminder, it uses natural uranium, which we have an abundance of in Canada. And I think the last thing that I would say, all the operating nuclear power plants in Canada are CANDU. So it makes an awful lot of sense to continue to deploy CANDU across Canada and obviously, being the indigenous technology. So we are hoping for a read on the technology selection this year. I don't think it will be before H2, but we're optimistic and we're optimistic it's CANDU.

I mean across the rest of the world, it's been interesting. I mean, I've spent an awful lot of time in 2025 and even the start of this year, marketing to energy ministers across the world and to try and understand where the opportunities are for CANDU. And I would say having done that, and it's not exclusive, but having done that, I think our nearest term and most firm opportunities would be in Eastern Europe. And having a foothold there in Romania with an EC6 reactor, which has EU approval and has a track record of a relationship with Romania over 50 years.

When we're dealing with Eastern European countries and clients, we point to that. And specifically in Poland, you may have seen our -- the Minister Hodgson's visit to Poland to support our efforts in Poland. They're advancing, I would say, quite well. I mean there's nothing to announce today, but we're into a process there where we're going through a technology evaluation. And then in Q2, we're into a commercial evaluation.

And I would hope that we'll get a read on that towards the end of this year as well. We have great support from the Canadian government. I think we have a lot to offer is Canada. Eastern Europe would be top of the pile, but then Asia, there's numerous opportunities in Asia. And not to mention, obviously, the very significant potential opportunity in the U.S., which we're in early days for. So a really good outlook, I think, for the long term of CANDU.

Okay. Great. And then just the follow-up question, I guess, on the engineering side, obviously, M&A is an increasing focus. You shared a little bit of color earlier on it. But maybe if you can talk about, as you look into the U.S., are you looking at maybe getting into some medium and a bit larger transactions as sort of '26 and '27 come through? And also, if you can just update us on -- as this is sort of a scale you're revisiting, where the integration team, some of the integration capabilities stand today in terms of just aligning with the M&A getting larger.

Yes. I mean I think that's a good question. We've always said that we're going to take a disciplined approach to M&A. We actually started 18 months ago, but you only saw some acquisitions coming through last year. We are really committed to landing and expanding in the U.S., and there are numerous targets. And we're really prioritizing quality targets that got a cultural fit that we can really use as platforms for revenue synergies to build out the business in the U.S. such that we can be in the top 5 ultimately. That's the goal and to have scale.

I think for the majority of this year, we're going to stay within our lane of about 1,000 people, acquisitions like David Evans. That integration is going well. We're building out a very strong team on M&A and a very strong team of integration under Louis Veronneau that joined us last year. I'm really pleased with the strength of that team and the strength both in the U.S. and here in Montreal. But as we get towards the end of the year and moving into next year, we will be looking at deals potentially with 2,000 or 3,000 people, not transformational, but certainly at a bigger scale to get us this capacity and scale that we want in the U.S. So that's kind of the journey, disciplined, methodical, but ambitious. Is that okay?

Our next question comes from Chris Murray with ATB Cormark Capital Markets.

So maybe turning to just the outlook for Engineering Services and the revenue growth. You're talking about organic growth between 5% and 7%, which seems reasonable. But just wondering about how you think that, that is going to evolve over the coming year. I know you had some puts and takes this year, so that number was well below plan. But how do we see that evolving? Is it just a function of what you've got in backlog? Or there are some other things that will convert? So any color on the pace of revenue growth organically would be appreciated.

Yes. Yes, for sure. I mean -- and clearly, we've done a lot of analysis on this and a lot of analysis of things that happened last year. I mean, just to reflect on last year, I think there were 2 specific areas that had an effect on our business, reprioritization in Saudi and some headwinds seen at the early part of the year in the U.S., mainly because of not a lack of funding, probably a lack of confidence, I'd say, by the states. And if you remember, we also had some year-over-year issues because of 3 specific projects.

So when we take all that into consideration, we've obviously had a good Q4. Things have turned back to very strong growth. which is one of the indicators. But also, we ended the year on a very strong backlog in every region actually, which has given us confidence that what we have in backlog and what we see in pipeline across the 4 regions will enable us to deliver the 5% to 7% in every region actually. So we've got a high degree of confidence that this is the right kind of range for 2026.

Okay. That's great. And then maybe turning to how you're going to I guess, realign the other segments of the business. So I guess a couple of questions of this. One, maybe any commentary or color around LSTK. You did note that this was a bit of a closeout quarter, but how do we think about what's left to go to wind that up? And I guess the other piece of this is, should we be thinking of this almost as a, call it, a divestiture segment or a runoff segment now, and that's part of the rationale for separating it out? Or is there any sort of other interpretation we should have on how you've set this up for next year?

Yes. Sure. Jeff, do you want to take that?

Yes. I mean let me start with the last question there, Chris. I think what you've seen in us moving to this reportable segment structure is actually this continued simplification, making it easier and easier for investors in the capital markets to see the results and the performance of our Engineering Services regions and nuclear. And I think that's really the driver for this. The reality is the elements of -- that are in the all other segments. LSTK is obviously almost completely wrapped up. Capital is significantly smaller without the 407.

And as we've talked about previously, ultimately, we'll see where we get to with our links on investment. And together, there are no more currently than 10% of our revenue, but on a kind of EBITDA basis, virtually all of the business is in Engineering Services and nuclear. And we think this kind of reporting segment disclosure really helps investors from that perspective.

Okay. And just any color on the LSTK?

Oh yes, sorry. Yes. So as Ian said earlier, really pleased now that we've got the second of the 3 light rail transit systems here in Canada into operation. That's great to see, frankly, for the people in the city of Toronto. We've got 2 of the 3 legs of REM in operation. I think that's kind of 50 of the 67 or 69 kilometers, so well over half with the case saying that they would expect to have the third one in towards the spring, middle of the year. So I think we're very much in a position where in 2026, we should see all 3 in operation and operating well.

Our next question comes from Krista Friesen with CIBC.

Maybe just a follow-up on the M&A conversation. You've talked previously about getting to the bottom end of your 1 to 2x range by the end of this year. Do you still feel confident in that trajectory based on what you're seeing in the pipeline for M&A?

Yes. And maybe Jeff can talk to the sort of balance sheet aspect of that. But we -- our strategy is U.S. land and expand, as I mentioned in the other question. But in addition to that, we are very keen to continue to inorganically and organically grow Australia. We really see Australia as a market where we've historically had virtually no business. But the expertise that's really needed there now is energy, power and renewables and defense. And we're very strong in both of those markets.

So we need people on the ground, and we need capacity on the ground. Obviously, ADG was a great acquisition, but that's not the end of it. And we're clearly engaged with numerous targets. In addition to that, across all engineering services regions, we're looking for capability build-out where we see strong end markets. So I'll give you an example. For example, transmission. Obviously, we are a very strong electrical transmission distribution engineering organization built from the work that we've done in Canada.

But if we can find more resources and more capability through acquisitions globally, we would do that. Another example would be water, very strong water business in the U.K., very strong markets around the world for water. We need more capability. So there's kind of 3 things here: U.S., Australia and end market. With all those things together and our ambition later in the year to do some larger acquisitions, not transformational, but larger, I think that's probably realistic. But Jeff, do you want to just add?

Yes. I mean I think from a capital allocation perspective, as you've heard us say before, Krista, we have a framework that would look now that the balance sheet is in a really good position and in fact, looking ultimately to get back to that lower end of our 1 to 2x range over the next 12 months or so, we would look to be deploying capital into M&A but also into returns to shareholders.

And you saw us do that in 2025. And we would expect to continue to do that in 2026. Our demeanor is weighted towards M&A at this point. We think there's a lot of opportunity, as Ian has talked about, about creating long-term value and accelerating our strategy. But we also see good opportunity because of that to return funds to shareholders, likely using the -- or continuing to use the share buyback process to do that.

That's helpful. And then just my last one on defense, obviously, very topical. Can you speak to what you're seeing here in Canada in terms of opportunities there and what you think the time line is before we start to see that sort of meaningfully show up in spending for you?

Yes, for sure. I mean, obviously, Prime Minister Carney's announcement last week, I think it was, is very, very good news. It's good news for the defense market and good news for AtkinsRealis. Where we play is obviously in the supporting infrastructure and that supporting infrastructure both needs to be built to develop assets, whether they're air assets or sea assets, submarines, ships, aircraft and land assets such as barracks and the like. So we design and we deploy and we maintain those assets.

And in actual fact, the capital cost of these assets and the OpEx that goes with them for the life of, say, a submarine is actually more than the purchase price of the submarine. I mean, because obviously, they're multiyear programs and contracts. So this is where we're very strong in the U.K. This is what we've been doing for a very long time in the U.K. There's 2 routes to market. One is directly to the government. And the second is to the OEMs, such as Rolls-Royce, BAE in the U.K. And obviously, when assets are chosen, we would have a route to market directly to the OEM of that asset. So actually, some work has already been flowing through. We're seeing definitely some advanced feasibility work. We're seeing some delivery partner work. I would expect that by the end of this year, we could see quite a few revenues. Obviously, we're looking and following the OEM technology selection or asset selection very closely. But we're excited about the market. And I think we have a lot to offer.

Our next question comes from Michael Tupholme with TD Cowen.

Just on nuclear, you're obviously looking for continued revenue growth momentum in that segment over the next few years, given the new 2027 guidance or revenue guidance you provided. As we look at and think about that guidance, can you provide a bit of a refresher on what you have and haven't baked into that 2027 nuclear revenue guidance? And as part of that, just trying to understand if everything that you have in there is based on work that's already under contract or in hand? And if not, what sort of prospective work has been built into that 2027 number?

Yes. No, for sure. And I think Slide 13 is a good place to kind of use for me to explain this. The 2027 outlook is really based on everything we already have secured. So for example, the refurbishment at Bruce, the refurbishment at Pickering, Cernavoda 1, the refurbishment in Qinshan and then Cernavoda 3 and 4 newbuild. And the revenues providing those Phase 2 elements that you see on the slide are awarded are secure.

And clearly, there's a high likelihood that those Phase 2 elements will be awarded because the commitment is already made in Phase 1. So the way I think about it, there's a high degree of certainty around the outlook we've put there. What's not included in that outlook is anything additive to that, which would be new builds. And when you think about the new build kind of sequence of events, let's say that we were selected for the 2 sites in Ontario and let's say, we were selected for Poland. There would be a 2- to 3-year period of engineering.

And that's revenue, and that is additive. But then once you follow through and get towards the end of the engineering, you're into real procurement and real execution where the revenues would significantly increase. So what I see ahead of us is absolutely delivering against the '27. Potentially, if we do secure new builds, we would add to that. But as we work towards the end of the decade, we could see further revenue coming through at scale.

That's all very helpful, and I appreciate all the detail. Just one sort of clarification as it relates to the new build piece in Romania, the 2 reactors. To what extent is that contributing in 2027? I know you mentioned it, but just is it meaningful?

Yes, it is. Yes, it is. So what we're into now is what they call a limited notice to proceed, which is basically the feed, the feasibility, making sure that all the product the project is defined and the budget is finalized and the regulatory environment is underway. What we would expect towards the end of this year, early next year is the full contract. And that will just continue through to '27 and beyond towards the end of the decade. And some of the revenue that we're seeing in '27 will come from that second Phase II contract. The bulk of it, though, will be beyond '27 actually.

Our next question comes from Maxim Sytchev with NBCM.

Maybe the first question on EMEA. Nice to see, obviously that you turned the corner in the Middle East. I was just wondering in terms of what potential commercial changes you had to adopt in order to make the pivot. Can you maybe talk a little bit about that sort of handoff from Saudi to other markets, et cetera?

Yes, yes. So the EMEA region has been interesting over the last year or so. And obviously, we've developed a strategy for growth. I mean we intend and formed the EMEA region so that it would grow at or better than the rest of the regions because we see opportunity there. The reprioritization in Saudi did affect us. I mean, projects like NEOM, some other large projects, the funding has been withdrawn. However, Riyadh-based projects and projects that are going to support the Expo and the World Cup are still ongoing, and it's still a very good market. It's just not as good as we would have expected it to be in 2025.

But coincident with that, the UAE is really stepping up. And the UAE is providing us good buildings and property opportunities. We won the Sphere. So they're building a Sophia exactly like the Vegas Sphere, we won that. But they're also investing in transport. And there's numerous transport lines that are out for bid right now that we're looking to bid. And historically, in the region, we've been really successful in transport. We've designed out a lot of the Riyadh network, designed out a lot of the Dubai network. So I think we're pretty well positioned for that.

But in addition to that, Australia in the sort of medium term to longer term is our growth engine of EMEA as well. And that's why it's important for us to build out Australia and get ready for this new wave of power, renewables, energy work and defense work. So when we think about our strategy now and put all of those things together -- sorry, plus Hong Kong, which has obviously been through a fairly tough time over the last decade, but now it's coming back with the development of the Northern Metropolis, which is road, rail and city. We think that we're feeling pretty optimistic about EMEA. But we've had to pivot a bit, and we've had to kind of adjust our strategy a bit to develop that.

Yes. No, absolutely and good to see. And then maybe just one quick one for Jeff, if I may. Jeff, when we think about sort of the FCF or EBITDA to FCF conversion, can you maybe point to some of the levers that could potentially help that metric, especially as we lap LSTK, et cetera, even though LSTK was less of a drag in 2025 on kind of an absolute basis. But maybe can you talk about sort of strategies there overall, that would be super helpful.

Yes. No, good question, Max. And we're seeing further good progress here in 2026. And I think what I would say is ex the kind of LSTK cash drag that I talked about here in 2026, which we would largely see complete by the end of the year from that perspective, I think that moves us into a position in 2027 where the free cash flow to net income conversion that we've laid out in our Investor Day, we think we're very much in line with that conversion of 80% to 90%. So I think that's the major lever that we would see or the major change that we would see as we get to the end of this year and into next year. But we'll see good cash flow growth here in 2026 as well over '25.

Our next question comes from Benoit Poirier with Desjardins.

Could you maybe provide an update on the development of the MONARK reactor and also maybe an update on the potential to sell the CANDU technology in the U.S. where you are right now given the discussion that you've hosted in the past?

Yes, for sure, for sure. So MONARK development is going well, very well. And we've got a great deal of help, frankly, from the utilities. We have been very careful in the MONARK development to upgrade existing technologies such that it's not first of a kind, first of a kind brings inherent risks around the feasibility of regulatory approval, and it brings risk around the cost and development. We have not done that.

We've taken an existing Darlington reactor, and we are upgrading that with the latest safety cases, obviously, digitization and latest control systems to make it state-of-the-art and approvable from the regulatory environment. Now clearly, going through that regulatory process takes time, but we have a high degree of confidence. This is a good product based on really successfully operating units. So it's going well.

The commitment from ourselves in terms of our investment is pretty much on track. So we're very, very pleased with progress. Now in the U.S., it's early days. It's obviously a market that we can't ignore. I mean there's a strong commitment to nuclear power in the U.S. And that commitment is both from government and utilities, but it's also from the hyperscalers to feed their AI demand -- data center demand from AI. We are in what we would call the pre-licensing discussion phase and in Q2, we go to the formal submission stage of licensing, and we would expect to get a readout from that next year. So these things take a bit of time.

But that does not stop us marketing both the EC6, which is tried and tested technology built 35 times around the world or the MONARK. So like I say, it's early days, but it's a market that we don't want to miss, and it's a market that I think CANDU has the opportunity to prevail in a very strong demand market with few choices on technology that exists today.

That's great, Ian. And maybe the follow-up question related to the LSTK. Jeff, you mentioned that it will provide a drag of about $100 million to $150 million in 2026. Could you maybe mention whether if it's all related to the REM project? And what about the risk of seeing greater losses from LSTK in 2026 and potentially to flow in 2027?

Yes. No, the cash flow is not solely related to REM. It has to do with settling out final accounts on things like Eglinton. It has to do with a bit of kind of final cleanup, for instance, on Trillium. So it's a combination of a number of the different projects. Also doesn't include any settlements of sort of claims or anything else. So as ever, and we saw some benefit of that in 2025. If we're able to settle out some of the claims, then that would be upside to that.

As a result, we would expect to resolve all -- virtually all of that on those 3 projects over the course of 2026. It's possible a little into 2027. But at this point, we see very little of that. I think in terms of where we would expect to be for this year, there will clearly be some costs related to continuing to just kind of finalize out the projects, some costs related to risk management on that, some costs related to pursuing our claims.

But going back to the conversation around that all other segment, that will continue to reduce on LSTK in 2026 versus 2025. And when you look at that segment overall with capital, with Linxon, we would expect, as you can kind of see on that slide outside of Q4 that the net of all of those together on a quarterly basis is going to be kind of a handful of millions of dollars. So not material.

Our next question comes from Jonathan Goldman with Scotiabank.

Maybe just looking at the '25 to '27 revised targets, specifically in Engineering Services, you're calling for organic growth CAGR over the period of 5% to 7%. But if we take '25 results in the midpoint of the '26 guide, that implies a pretty significant reacceleration in '27, probably in the double-digit percentage range. So I know '27 is a long way off, but what visibility do you have in getting to that level of growth in the other years?

Yes. I mean, obviously, with the range, we'll see where we kind of land in '26. We do see an opportunity, and we do see continued growth off the back of record backlog. We see markets [indiscernible] in terms of, as Ian talked about, the shift, for instance, in the Middle East, growth in Australia as well as underlying growth in the U.K., the U.S. and Canada. So I think at this point, we're comfortable with that range with what we see not only in '26, but also what we see heading into '27.

Okay. And maybe circling back to capital allocation. Ian, you did talk about kind of the M&A strategy here. But if we kind of tie it together with defense, is there any opportunity to grow that sort of vertical strategically as opposed to organically mainly?

Defense?

Yes.

Yes, for sure. Yes, absolutely. And we have got some defense capability targets in view. Now obviously, we need to go through the process. We need to make sure that they've got the right capabilities, got the right culture, got the right kind of positioning. But yes, I mean, that would be definitely part of particularly the capture of defense work in Canada and Australia, where we see us being able to get to the same sort of level that we're at in the U.K. Yes, I would not rule that out at all.

Our next question comes from Ian Gillies with Stifel.

With respect to the nuclear EBIT margins and then moving down a little bit, I'm wondering if you could provide a bit of an update on the dynamic that's happening there. And perhaps if we look out later into the decade and if there is a heavy procurement phase, should we be thinking about the lower end of the range while that's going on, that would be helpful.

Yes, Jeff, why don't I take that? As I said in my comments, with a kind of normalized business mix, which is what we would expect over the course of the life of refurbishments and indeed new builds, we very much see a 12% to 14% operating margin. I think what we're seeing as we saw in '25, and we expect to see in '26 and into '27 is that while that heavier mix of procurement, we expect to moderate somewhat.

I don't think it gets us all the way back to 12% to 14%, but we definitely think we would be in the 11% to 13% range because of that, which implies some growth in that margin over the next couple of years. I think as we move out from there, as I think we've said before, there's always -- depending on that mix, there could be particular years where it moves around. And frankly, it could be higher than that range as well as we've seen now at the lower end of that range. But as we move out beyond '27, we very much see in the medium to long term, a lot of confidence in that 12% to 14% range.

Understood. And then there's been a lot of focus on the CANDU side and rightfully so. But -- could you maybe provide a bit of an update on what's happening on the growth side as it pertains to the services side of the nuclear business, whether it's dramatically different than the CANDU side at this period of time?

It is, it is. And in some ways, it isn't because of the just the nuclear renaissance and the amount of activity across the planet in the demand for nuclear for electrical energy. I mean our services business is also a global business. And it's probably 2 things, I would say. One is the waste remediation business where we just won a very significant set of mandates at Sellafield in the U.K. And there are opportunities globally. I mean, we have a very strong business in the U.S. working for the DOE in that waste remediation also. So I see that as a growth market.

There is -- from historical weapons programs that there is a lot of work to do to remediate that. But very excitingly is the assistance that we give other OEMs. And if you take the French technology, EDF, where clearly, in some countries we compete, in some countries, we are their key engineering supplier at Hinkley and Sizewell in the U.K. We would have potentially about 1,000 engineers assisting EDF in the nonnuclear deployment of integration of engineering with the conventional side of a power plant, not the reactor side of a power plant. And that will grow as Sizewell starts to really becoming developed.

We also actually assist them in France, and we have an office in France that helps them with the development of their business going forward in France. We support SMR technologies. As I said in my script, we're the first real SMR development in North America is in Ontario at the Darlington plant, and we're the proud architect engineer on there of a very significant role to help deliver that. But we also are supporting SMR technologies in the U.K., Rolls-Royce and X-energy and others in the U.S. So that's a growth market because, obviously, the demand on those technologies are significant.

And we deliberately did not develop an SMR technology. We decided to stay with large nuclear, and we're agnostic to helping on SMR technologies across the world. So you're right. I mean it's something we don't talk about as much as can do, but it is a growth market, and it is a significant part of our capability. And sorry, I missed one thing out, which is Fusion. We're very much involved with Fusion so that the long-term positioning of AtkinsRealis as a nuclear world leader is not made irrelevant by the potential of Fusion Power. My own view is that's going to be the late 30s into the 40s. But at least we're very relevant in that space also.

And we have time for one last question, and that question comes from Frederic Bastien with Raymond James.

Ian, you've got it pretty easy today. No one is asking about the elephant in the room. So I'm going to ask one. In your opinion, does AI accelerate consolidation in the engineering sector?

Consolidation in the engineering sector. That's a good question. And obviously, we see AI as a real advantage to enable our business to grow and to enable our business to have a lower cost base. We're a clear advocate of that, and we're deploying at scale tools that will enable those 2 things. And our approach right now is we want it to win us more work, and we want it to lower our cost base. And I won't -- there's many questions about is it a disruptor? I won't go into a lot of detail, but our position and my position as an engineer is no, it's not a disruptor.

Will it help consolidation in the industry? Yes, because I believe that as smaller companies try to invest in AI, they will find that increasingly difficult. And companies that have scale and balance sheet like ourselves who are able to deploy AI at scale will clearly have an ultimate advantage from a cost base perspective. I don't see this in the next 1 to 2 years, maybe having a significant effect. But the way this would play out would be, yes. I mean, it will give an advantage to companies like ourselves, and we intend to use it to do that. So I think the short answer is yes.

That concludes the question-and-answer session. I'd like to turn the call back over to Denis Jasmin for closing remarks.

Thank you very much, everyone, for joining us today. If you have any further questions, please don't hesitate to contact me directly. Thank you. Have a good day, and have a good weekend. Bye-bye.

Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to the AtkinsRéalis Third Quarter 2025 Conference Call.

[Operator Instructions] Please be advised today's conference is being recorded.

I would now like to turn the conference over to your speaker today, Denis Jasmin. Please go ahead.

Thank you, Kevin. 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 1 or 2 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, risks and uncertainties, please consult the company's relevant filings on SEDAR+. These documents are also available on our website. Also during the call, we may refer to certain non-IFRS financial measures. Reconciliation of these amounts to the corresponding IFRS financial measures are reflected in our earnings release and MD&A, which can be found on SEDAR+ and our website.

And now I'll pass the call over to Ian Edwards. Ian?

Thank you, Denis. Good morning, everyone, and thank you for joining us today. I'm going to begin today's call by providing an overview of our company performance in the third quarter, including our record backlog and margin as well as performance highlights across the Engineering Services regions and Nuclear businesses. I'll then pass it back to Jeff to provide more detail on our financial results and our updated 2025 outlook before we open it up for questions.

Let's get started on Slide 3. Our third quarter performance highlights our ability to both grow and operate more efficiently across the business. We delivered another strong quarter of services revenue growth, up 17% year-over-year or 11% on an organic basis. Engineering Services regions revenue reached a record high of $1.9 billion, while nuclear revenue organically grew 60% to a quarterly record high of $596 million.

Linxon continues to perform well and organically grew 15% -- we also had a strong increase in adjusted EBITDA from PS&PM of 21%, a record high adjusted EBITDA from PS&PM margin of 10%, highlighting the work that we have done across the business to improve margins. Our total backlog reached a new record high this quarter as our expertise across Engineering Services and Nuclear continues to be in demand.

AtkinsRéalis Services backlog recorded a 24% growth versus the backlog as at September 30, 2024. The continued revenue growth and increasing backlog in our Nuclear business has led us to increase our Nuclear revenue outlook to $2.2 billion to $2.3 billion for 2025. On the other hand, due to lower year-to-date revenue growth in our USLA and EMEA regions, we've decreased our 2025 organic revenue growth outlook in our Engineering Services regions business to a low single-digit year-over-year percentage increase.

We expect the full year impact of these changes on profitability to be neutral. Jeff will provide more details of this later. Subsequent to quarter close, we announced the acquisition of C2AE, which advances our land and expand strategy in the U.S. and is in line with our stated capital allocation priorities. Our pipeline of potential bolt-on acquisitions remains robust, and we would expect to announce further acquisitions in the coming quarters.

We're extremely proud of our accomplishments this quarter, generating record revenues, backlog and margins while utilizing strong operating cash flow to invest in M&A opportunities to expand our footprint in geographical white spaces. Our Delivering Excellence, Driving Growth strategy is creating value for shareholders. Turning to Slide 4. Revenue in our Engineering Services regions business increased 8% year-over-year.

But if we exclude David Evans, revenues and positive FX impacts, organic revenue was basically flat. Segment adjusted EBITDA over net revenue margin was 17% for the third quarter, up 30 basis points versus the prior year period as operating margin improvement initiatives are bearing fruit. specifically through optimized cost, enhanced bidding discipline, artificial intelligence and continued leveraging of digital tools for more efficient project delivery.

Notably, we continue to increase our backlog, which now stands at a new record high of $13 billion, representing an 8% increase versus our backlog as at September 30, 2024. Beginning on Slide 5, we provide an overview of each of our 4 regions and their performance this quarter. In Canada, revenue organically grew 1%, while segment adjusted EBITDA grew $36 million with a 17% margin, 180 basis points increase, highlighting our continued efforts on our margin improvement plan.

Backlog grew 5% year-over-year and now stands at $7.8 billion. Given market dynamics, we are focusing on growing our presence in the buildings and places, transportation, industrials, power renewables and defense end markets as we believe these areas offer good opportunities in the near future. We saw growth this quarter in Transportation and Power and Renewables, while softness in the Industrial end markets remain.

Separately, recent NATO commitments by the Canadian government are likely to yield further opportunities for our defense expertise. And looking out, the opportunities that will come from Building Canada Act are set to have a positive impact on AtkinsRéalis. The government's focus on accelerating domestic funding for large-scale projects is exciting and due to our well-established foothold in the market and our historical success across the entire infrastructure life cycle, we remain bullish about the near-term opportunities that may present themselves from this bill.

In U.K. and Ireland, revenue grew 10% and organically grew 5% year-over-year, primarily driven by strong demand in aviation, water and defense. Segment adjusted EBITDA grew $102 million in the quarter, representing an 18.6% EBITDA margin as the business continues to improve the efficiency of project delivery. Our concentration and flexibility in the region enable us to consistently position our people in areas with the highest demand, which helps underpin strong operating margin delivery.

Backlog grew 15% year-on-year to approximately $1.9 billion, driven mainly by wins in the defense and transportation markets. Our expertise in water is creating significant opportunities with the AMP8 investment program as evidenced by our recent win with the Anglian Water Services, representing a more than $1.5 billion opportunity over the next 15 years.

As mentioned on prior calls, there have been several commitments by the U.K. government to increase funding for defense and infrastructure spending over the next decade. Demand in power and renewables is rising with early-stage activity in grid investments, while the established long-term U.K. industrial investment strategy will yield enhanced opportunities in the industrial end market.

We have a strong and growing presence in U.K. and Ireland, and we are focusing our efforts on enhancing our capabilities across the transportation, defense, buildings and places, water, power and renewables and industrial end markets as they present the most opportunity over the next several years.

Turning to Slide 7. Our U.S. Land and Expand strategy continues to make strides, and we recently announced the acquisition of C2AE, which strengthens our presence in the Upper Midwest and expands capabilities in key growth end markets such as water. During the third quarter, revenue increased 36%.

However, excluding David Evans acquisition and favorable FX impacts, organic revenue was flat year-over-year as softness within our global Minerals & Metals sector weighed on the results. If we exclude that, our global -- if we exclude our global Minerals & Metals business, our underlying engineering services business in the U.S. organically grew about 4%.

We experienced slower framework agreement conversion to projects and procurement disruptions which were primary growth detractors in the quarter. But that being said, we believe these headwinds are temporary, and we remain confident in the near-term and long-term growth opportunities in the U.S. for our services. Segment adjusted EBITDA was $66 million, which translates to a 15.8% operating margin, an improvement of 30 basis points on the previous year.

Margin improvement was driven by sustained project execution and overhead control. The backlog increased 11% year-over-year to nearly $1.8 billion as we continue to prioritize client engagement and leverage our unique end-to-end capabilities. We continue to build our backlog in the U.S., particularly with the departments of transportation.

We have continued to deepen our collaboration with David Evans team to win incremental new work, which the pipeline of opportunities continues to increase. Financially and operationally, the business is performing in line or ahead of our expectations. While we are not directly affected by the recent U.S. government shutdown, federal funding to states has slowed, impacting some of our client at state level.

As a result, we're experiencing some delays in receiving contract awards and commencing projects. In the meantime, our pipeline is growing, and we are actively investing organically and inorganically to expand our position in the marketplace. And regardless of the macro dynamics, our conviction in the long-term growth of our USLA business in end markets remain strong.

We are strategically positioning ourselves to win new business in the Transportation, Buildings & Places, Industrials, Minerals & Metals and Water end markets given the new opportunities we see. In EMEA, revenue declined 9%, while segment adjusted EBITDA declined to $34 million, representing a 16% EBITDA margin over net revenue. Revenue declined primarily due to lower volumes on large-scale Building & Places projects in the Middle East, where our involvement has reduced compared to this time last year.

The total backlog in EMEA was approximately $1.5 billion, up 15% versus the third quarter of 2024, mainly driven by new bookings in the Buildings & Places and Industrials end market. In the Middle East, while opportunities still present themselves in Buildings & Places, we're seeing increased demand for our services in large-scale transportation projects, such as our focus is on transportation projects in the near term, but we will continue to closely monitor substantial building opportunities, such as preparing for the 2034 World Cup in Saudi Arabia.

In Asia, we're seeing sustained investments in infrastructure and transportation, mainly fueled by Hong Kong's Northern Metropolis. In Australia, we are focused on expanding our presence through opportunities that leverage our global expertise in transportation, power and defense. I'd like to now move to Slide 9 and discuss our third quarter results for our nuclear business.

The business continues to demonstrate exceptional growth, achieving organic revenue increase of 60% compared to the third quarter of 2024. Our Nuclear backlog totaled $5.4 billion, 68% higher than our backlog as at September 30, 2024. Segment adjusted EBIT grew 44% to $66 million and segment adjusted EBIT margin was approximately 11%. Segment adjusted EBITDA grew 40% year-over-year, and the margin now stands at 26%, almost 300 basis points higher than this time last year.

On Slide 10, we highlight the achievements across our nuclear CANDU and services portfolios. In our CANDU business, we have several projects ramping up that give us excitement about the near-term revenues. We renewed a 10-year master service agreement with Bruce Power. We are continuing to work on C3, C4 at Cernavoda in Romania, and we're making excellent progress on the Pickering life extension.

Our optimism in the continued advancement of CANDU projects is further underpinned by the recent issuance of more than $2 billion in purchase orders by AtkinsRéalis to over 548 companies in the CANDU supply chain during the last 18 months, with 90% of these orders to Canadian suppliers. CANDU is a world-class homegrown nuclear technology, fueling high-paying jobs and economic growth for Canadian workers and businesses.

We are in ongoing discussions with several countries across the globe regarding potential new builds. While they are taking place, we remain focused on the development of the CANDU Monark. For services, we continue to offer new build support at Hinkley Point C and Sizewell C. Also in the U.K., we're driving growth in the region through our decommissioning waste management services at Sellafield, for which we've just recently renewed our framework agreement.

Lastly, we extended our global strategic partnership with robotic developer, Kinova, for 3 years. Our collaboration is showcasing cutting-edge robotic innovation to perform high-performance remote operations at nuclear facilities. This technology will enable cost-effective operations at reactors and more importantly, enhance the safety of this work.

2025 has been an exceptional year for our Nuclear business. The revised revenue guidance for the year I mentioned earlier, exceeds our original estimate at the beginning of the year by more than 30%, further highlighting the opportunities in front of us to generate real revenue today across the Nuclear sector.

Turning to Slide 11. You can see our pictorial reminder of these near-term CANDU revenue opportunities within our nuclear business. The potential CANDU contracts you see on this slide showcase a massive opportunity for AtkinsRéalis and could deliver significant growth for the foreseeable future. Our $5.4 billion nuclear backlog achievement is just the start as customers are continuing to recognize our nuclear expertise.

We've been working hard to bolster our backlog with high-quality wins. Total backlog does not include follow-on phases for our recent wins and a very small amount of CANDU new builds. We cannot overstate the massive opportunity in front of AtkinsRéalis in the Nuclear sector.

Now moving to Slide 12 and our Linxon LSTK projects and capital businesses. In our Linxon segment, revenue organically grew 15% year-over-year. Linxon realized 230 basis points of EBIT margin expansion year-over-year as operational improvements continue to positively flow through the business. Backlog increased 50% to a record $2.4 billion at the end of the quarter. We are seeing backlog improvement across the Americas, Europe and Middle East. On LSTK Projects segment adjusted EBIT was in line with expectations.

And with that, I'll now turn it over to Jeff to discuss our financial results and our 2025 outlook.

Thank you, Ian, and good morning, everyone. Turning to Slide 14. Total IFRS revenues increased 15% year-over-year, totaling $2.8 billion, which included revenue increases of 8% in Engineering Services, 62% in Nuclear and 19% in Linxon. Total segment adjusted EBIT for the quarter increased 9% to $269 million as the decrease in Capital segment adjusted EBIT was more than offset by a $41 million increase in AtkinsRéalis Services.

Corporate SG&A expenses from PS&PM totaled $26 million in the quarter, in line with the previous year. We continue to anticipate these expenses should be between $120 million and $130 million for the full year 2025. Note that following the sale of our interest in the Highway 407 ETR, corporate SG&A expenses from capital decreased to $1.5 million this quarter and are expected to remain at this level.

Net financial expenses for the quarter were $22 million compared to $41 million in Q3 2024, mainly due to the repayment of all outstanding borrowings under the La Caisse loan and the company's term loan in the second quarter. We believe Q4 will be a similar amount. The income tax expense was lower than Q3 2024, mainly due to revised estimates on certain tax liabilities and geographic mix.

The tax rate for adjusted PS&PM net income was approximately 16% in the quarter and 17% year-to-date. And therefore, we now expect the tax rate for the full year 2025 on our adjusted PS&PM net income to be approximately 20%. The IFRS diluted EPS this quarter increased by 49% to $0.88 compared to $0.59 in Q3 2024, while the adjusted EPS from PS&PM increased 68% to $1.06 per diluted share compared to $0.63 in the third quarter last year.

And as Ian mentioned, our backlog ended the quarter at a record high of $21 billion, 23% higher than at the end of September 2024, with strong increases across all our businesses, Engineering Services, Nuclear and Linxon. Let's now move on to Slide 15 and free cash flow. Net cash generated from operating activities totaled $123 million for the quarter.

This was mainly driven by a stronger AtkinsRéalis Services EBITDA delivery, partially offset by the timing of working capital usage and an LSTK project's cash usage. We continue to expect operating cash flow to be in excess of $300 million for the full year 2025. After CapEx of $45 million, which included $15 million for the development of MONARK and the payment of lease liabilities of $22 million, our free cash flow stood at $56 million for the quarter.

I'd like to now turn to my final slide, Slide 16. As you've heard Ian say on Nuclear, the demand for our services continues to grow, and our backlog is at a new record high. Therefore, we are again increasing our Nuclear revenue outlook to between $2.2 billion and $2.3 billion for the full year 2025 from the previous range of $2 billion and $2.1 billion that we outlined last quarter.

On the other hand, we are decreasing the Engineering Services region's 2025 organic revenue growth outlook over 2024 to a low single-digit percentage from the previous range of mid-single-digit percentage, reflecting lower-than-expected revenue growth in the USA and EMEA segments. Note that we continue to expect David Evans revenues, which is excluded from this organic revenue growth to be around $300 million for 2025.

We remain confident in our medium-term target of 8% plus revenue growth for Engineering Services as outlined in our Delivering Excellence, Driving Growth strategy and see the lower growth rate in 2025 as temporary in nature. All other financial outlook metrics for full year 2025 are maintained.

And with that, I'll now hand the presentation back to Ian.

Yes. Thank you, Jeff. We're extremely proud of our success in the third quarter, achieving several record results on the top line and on the margin front across our Engineering Services and Nuclear businesses. The combination of these 2 businesses provides us with a unique competitive mix. Also, the improvement on margin stems from the operational plan we put in place at our June [indiscernible] real tangible results.

No matter the geopolitical tension that may exist or arise in the future, global energy transition and infrastructure redevelopment are fueling growth in our markets, where we have built a strong foundation or are landing and expanding. Our balance sheet and appetite for growth puts us in a distinct position to capitalize on M&A opportunities that may arise in this current macroeconomic landscape.

Our team is working tirelessly to continue executing our delivering excellence and driving growth strategy. And I want to thank our 40,000 employees for their hard work and dedication. We are proud of our performance to date in 2025 and are actively positioning the company to capture real revenue across our engineering services business in '26 and beyond.

So with that, let's open it up for questions.

[Operator Instructions] Our first question comes from Chris Murray with ATB Capital Markets.

Maybe starting with the organic growth profile. So a couple of questions around this. One, you talked about it slowing a little bit in Q3. And I'm just wondering a couple of things. So one, as we go into Q4, you called out a couple of different spaces. But just kind of curious to see, are you seeing in Q4 an extension of the same trends? Or is there something different?

Just wondering maybe if there's anything around the U.S. government shutdown that's maybe slowing things and leading to your view? And then more importantly, I think you described this as sort of a temporary slowdown. Can you maybe give us some more color on why you have the confidence that as we enter 2026 that you think it should maybe revert back to what we've talked about kind of those historic mid-single-digit levels for the Engineering Services business?

Yes, for sure. And this is presumably the questions relate to Engineering Services, right?

It does, yes, please.

Yes. So look, I mean, obviously, through the kind of journey of 2025, we've had some challenges to overcome. But they are specific challenges. They're not underlying issues that are going to take us through into the future. And those specific regions, as we've said in previous quarters, we've had some pretty hard year-over-year comps because of really 3 large projects in our Canada region, in our Middle East region and in our Mining and Metals.

But we've worked our way through that. So those are behind us now. And then there's clearly been some kind of disruption to the U.S. market, which I'll come back with. So the quarter, we've actually seen a continuation in Q3 of disruptions in the U.S. And as we think about those disruptions going forward, which have really been about states sitting on project releases and sitting on project awards. It's the volatility connected to tariffs that shut down The Big Beautiful Bill.

But what we're seeing now is that actually being overcome. And we're seeing definitely in Q4, a return to wins, a return to orders coming through. And you got to remember that the fundamentals in the U.S. that drive our markets in energy and in replacement of infrastructure resilience work are all really good. And also, we've got to remember the IIJA is only actually about 40% expended so far.

So -- and that bill has still got support. So that's specifically in the USLA region. And in EMEA, we've actually kind of started reprioritizing the way we look at EMEA because we were heavily dependent on some very big jobs in KSA in Saudi Arabia. And one of those jobs, we've closed out Phase 1, and we're seeing a lot more diversified opportunity, both in the UAE and both in transportation.

So we're pretty confident going forward in that region as well. So looking at our backlog and particularly looking at the backlog, I won't counter through each region because I'm sure there'll be another kind of question on that. But if you look at our backlog, it's 8% up. That's a leading indicator for me. And as we look at performance in Q4, we're getting back to growth.

And obviously, our revised guidance isn't 0, but we are -- we will end with positive growth. And that will take quite a bounce back in Q4 to get there, which we're confident we're going to do. And then moving into '26, obviously, we're looking at development of pipeline and our kind of preparation for the Q4 outlook already. And we're seeing pretty good growth, and we're fairly confident going forward that we're going to return to some good growth numbers. So it's a few specific challenges this year, but very confident going forward that we're going to return to growth in ES.

All right. That's helpful. And then maybe turning to nuclear. A couple of pieces of this question. So first of all, I wonder if you can maybe add your take. There's been a lot of discussion around nuclear services more broadly, particularly in the U.S. with some of the SMRs. But you've also got, I think, lots of opportunity even with the CANDU technology and other things that you've been able to work on.

Can you maybe walk through maybe high level, your thoughts around the nuclear industry and penetration of nuclear and how you think Atkins maybe fits into this whole ecosystem from the perspective of either supporting some of these newer proponents with smaller technologies or having the Monark able to address different segments of the market. So just thoughts about like how we should think about where Atkins can go in the Nuclear business over and above where it is today would be helpful. So I'll leave it there.

All right. This is probably going to be a fairly long answer, but that's fine. It's a good start. Look, I mean, we're in a super cycle. The two world conferences were in Q3 in Nuclear. Where one in London called the Symposium and one in Paris called the Exhibition. And what's really clear to me, having attended and spoke at those conferences is AtkinsRéalis and the CANDU technology operates on the world stage as a leader. And I think that's the first thing I would say.

And when we look at our business, as I've said before, we're not just a nuclear OEM of CANDU. We are a full-service nuclear business in addition to being an OEM in CANDU. And this puts us at a very differentiated place in the nuclear market. And I'll call out a couple of our differentiators because these are really important. And I'm not sure that they're fully understood by everybody.

The first thing is that capacity for nuclear companies is going to be everything. There's clearly a strong demand. All countries that signed up to the tripling are looking for new nuclear. Hyperscalers are looking for nuclear -- it's very, very real. We have got 40,000 professional people in our company, 6,000 to 7,000 of those are nuclear professionals because we build capacity through the life extension program here in Canada.

That's not unique because the French and the Chinese clearly have a big nuclear program, too, but it puts us up there at the top with capacity. We have a supply chain in Canada. There's got 90,000 people in it doing manufacturing and actually professional skilled labor in the nuclear industry. That, again, it's not unique, but it's up there with some of the best countries in the world that can deploy nuclear technology.

We have a world-class technology in CANDU. And it's differentiated because it uses natural uranium, which gives countries energy security because an abundance of natural uranium. There is not an abundance of processed uranium. In fact, there's a shortage.

And we can produce medical isotopes, which countries and customers are very interested in. And Canada has a unique advantage in the way that it operates with countries around the world because where we've built CANDU in India, Korea, China, Romania, Argentina, we've left behind decades of relationships between Canada and those countries and decades of relationships between AtkinsRéalis and the utilities, which is well renowned and it's recognized by new countries that are coming into the technology.

So I guess the last point, I would say, I mean -- and just to remind everybody on Slide 11, this growth that we're experiencing right now is no new build in it. And we're all over the map now trying to sell the CANDU technology. And we're getting very good traction. Clearly, there's nothing to announce, but in the coming years, there will be. And our services business is a full services business that supports SMRs in U.K., in U.S. and here in Canada.

We have a business in services, which supports EDF, Hinkley and Sizewell with hundreds and hundreds of engineers deployed on those jobs. We do processing of waste and we're even in infusion. So all in all, what I'm trying to explain here is we've got a really differentiated business here. And I'm glad you asked the question at the beginning. I know that was a long answer, but that is what is the reality of where we're at.

Our next question. Our next question comes from Krista Friesen with CIBC.

Maybe just going back to the first question and looking at EMEA. Can you provide a little bit more color just on the margins in that segment and how you're expecting those to trend over the next year and maybe what you've put in place to kind of help those margins?

Yes. So let me do the market and how we're repositioning the business. And Jeff will comment on the margin front and how we see that kind of in our margin expansion program. So I mean, basically, our EMEA business historically has been heavily focused on Saudi Arabia. Now Saudi Arabia itself has done some reprioritization of spend and of projects they're going to focus on. They want to focus on Riyadh.

They're focusing on the World Cup '34 and Expo '30. So it's not that the place has gone flat from a market potential. It's actually just reprioritized. And we're really well positioned. But we have finished out a huge project that has given us the kind of decline in that KSA business this year. Now the UAE is also really interesting because they are actually seeing themselves compete with Saudi Arabia, and they're putting investment back into the UAE, both in buildings and places, but interestingly in transportation.

And we're bidding numerous kind of rail jobs there right now. And obviously, we've got that global capability. So it's easy for us to be agile and kind of exploit those opportunities as the market kind of pivots and the opportunities change. But as far as the EMEA region is concerned and its growth plan in the future, we're really opening up Australia and the Asia region.

And Australia is really important to us in terms of our energy capability and our defense capability, where a lot of the funds are going now from government, where historically it was all about transportation. So we feel we've got a really good opportunity there. And then in Asia, Hong Kong, we've always had a good business. They are developing a new city on the border with China called the Northern Metropolis, and we're winning work there now.

So we're pretty optimistic about the region of EMEA -- but obviously, we've had a bit of a reprioritization and challenges to work through this year. So we're pretty confident going forward. And Jeff, maybe you could just talk to the kind of margin expansion.

Yes. So I think what we'll see, and as Ian has said, we're transitioning the business, particularly in the Middle East. There have been some very large, very profitable projects there. And so as we head into next year, we'll have to see the business transition away from those. So we may see a bit of headwind margin-wise in the Middle East.

But as Ian said, as we grow other parts of the EMEA region in Australia, in Asia, those are good margin geographies. And as they start to take a larger proportion of that region, that will help underpin margin delivery in EMEA there. So over the longer term, we don't see any reason why EMEA wouldn't be part of our 17% to 18% target in the long term.

Okay. That's great color. And then maybe just -- just one last one for me, maybe a higher level one on nuclear. Obviously, you've increased your guidance significantly throughout the year, I think roughly 36% from what you started with. Has the mix evolved as you have expected it to evolve for your nuclear business? And does it change how you think about the margins at all over the medium term?

Yes, that's a very good question. I mean I think as the year has evolved, what we've been awarded in terms of life extension and services businesses is not different from what we expected, but it has come sooner. And even the progress on the Pickering life extension, we're getting better progress than we thought.

And also at the beginning of these life extension projects or any kind of nuclear power project, there's a lot of procurement you've got to put in place for long lead items where the margins on that work are not as good as the actual engineering and execution work that we do ourselves. So I think that's probably where we've evolved through the year, and you're seeing that in our results. But that's good news. I mean things are happening quicker than we thought they would happen.

Our next question comes from Yuri Lynk with Canaccord Genuity.

Maybe one for Jeff. It looks like to get to the midpoint of your Engineering Services region's EBITDA margin guidance for the year, 16%, 17%, it's going to require 80-ish basis point step-up in margin in the fourth quarter, which is not the typical seasonal pattern that we've seen in the past. So just wondering if there's anything unique in play in the fourth quarter that would drive the margin sequentially higher?

Yes. Thanks. As you say, I'll take that, Yuri. So we do typically see stronger margins in the second half of the year than the first half of the year. You saw that in Q3. And we are -- we remain very confident in delivering that 16% to 17% for the full year. And as you say, that does mean strong fourth quarter operating margins.

But with all the work we've done on our initiatives through the year and that you've seen coming through in Q3, we see an absolute continuation of that in the fourth quarter. And that's everything from continued better and more sophisticated pricing with our clients. It's better productivity and utilization.

It's higher utilization of our global technology center in India and the continued work on our overhead cost base. So the work that we've delivered through the year and in the third quarter, we see that absolutely continuing in the fourth quarter and remain very confident in delivering that uplift in Q4.

Okay. Second one is just on the U.S. region within Engineering Services, USLA. Can you talk about -- a little bit about when you've done your portfolio reviews, including Linxon and Capital and stuff like that, why the mining business, the mining and minerals business never didn't come up in those -- I'm sure they did, but you decided to keep it.

And I guess, why keep that business? Is it scaled properly to compete with the bigger mining-focused engineering houses? And is having it in the U.S. segment appropriate, I guess?

Yes. All our businesses, we review regularly. I mean we review the whole mix of portfolio to make sure that the long-term strategy of the company has got the right portfolio of businesses going forward. And absolutely, the Minerals and Metals business, we've reviewed a couple of times, and we will continue to do that to make sure that it can get to the profitability and the growth that makes it meaningful and at scale.

It was a business that we had to repurposed from an EPC business a long time ago into a pure-play services business. And that's taken time, frankly. But I think we're getting some good traction now, and I think we're getting some better profitability. We are winning some work. In actual fact, we've been picking work up recently in the sector. Whether it belongs in USA, it's just a question of putting it with one of the presidents.

And it is a global business because the business has to be client focused. There are a handful of large mining operators around the world. So you can't really regionalize the business. It's got to be a global business that follows clients basically. So -- we're happy with it right now. It's in the business right now. We do see this need around the world for critical minerals. We don't really do coal. We do the specialized critical mineral kind of mining projects supporting customers. And we're happy with it where it is right now.

Our next question comes from Sabahat Khan with RBC Capital Markets.

Just, I guess, looking ahead to '26 a little bit just on the broader setup. You obviously indicated that the IIJA, a good chunk of it hasn't been spent and/or even allocated. Can you maybe just talk about the outlook for rest of that larger infrastructure bill to be rolled out and sort of your early thoughts on that region on a potential new infrastructure bill at some point? Just trying to gauge the demand drivers for the U.S. market for next year.

Yes, yes. So look, there's a couple of things that are specific to ourselves, which I'll probably say at the beginning. Our business has got 6,500 people in it. Some of our peers have got over 20,000 people in their businesses. So the way I think about our strategy in the U.S. is that we've got a long way to go and a long runway to go.

Our ambition in the near term once 2 years is to get the business in the top 10, which would require us to have 10,000 people or more. And obviously, beyond that, in the longer term, we want to be in the top 5. We want to be a serious player in the U.S. The fundamentals of the U.S. market are really, really strong.

The need for energy security, they've got an aging infrastructure problem in the U.S. with actually a $3.7 trillion gap in infrastructure investment, which ultimately will play through to a deterioration of roads, water, rail infrastructure, which they will have to spend on to bring it back to operable state. resilience work in the U.S. for flooding, flood defense and hurricanes, unfortunately, present an opportunity, obviously, at the expense of disasters, which is not great, but it's an opportunity for us.

So the IIJA is 40% allocated and spend. That will continue to fund states. For ourselves, I don't think The One Big Beautiful Bill will have a specific impact on us. I mean I think it will have an impact on industrials perhaps and maybe the energy sector, which will have less impact for us, I think. But we're really confident in our strategy, and we will continue to invest in M&A, and we'll continue to land and expand across the states.

As I said before, the issues, we really do see them as temporary, and we are actually seeing an increase of flow-through now, particularly as we're getting into the fourth quarter, and we're picking up work. So all in all, it's probably been a bit of a disruptive time this last year, but I think we're going to get back to some good growth opportunities.

Great. And then just on the sort of the last comment around M&A, just given where the balance sheet is, you were active on the buyback this year. How do you think about potentially reactivating that buyback just given the number of M&A opportunities out there? Just how are you going to balance the two at this point in cycle?

Yes. It's Jeff. Why don't I take that? I think as we've said earlier and to what you've referenced, we have taken advantage of that share buyback significantly over the course of the year. And as we said in the last quarter, our focus really from a capital allocation perspective is around growing and investing in the business, primarily through M&A and inorganic activity.

And as Ian has said, we see real opportunity to continue to land and expand in the U.S. We see opportunity in other geographies or areas of capability where we have white space. And the pipeline of opportunities is really strong. We're seeing lots of good potential organizations that we're in discussions with, we're in processes with.

And therefore, we're very confident in our ability to continue to deploy capital in a value-creating way and a strongly value-creating way like that going forward. So that will continue to be our area of focus.

Our next question comes from Benoit Porier with Desjardins.

Just on the nuclear, it seems like your main Canadian nuclear reactor competitor has signed an MOU agreement with 4 potential large-scale Alberta nuclear project you were previously involved in. So can you give us an update on the current competitive dynamics in the Canadian nuclear market?

I actually thought that announcement that came out was American. But -- so I understand exactly what you mean. You're talking about our competitors' announcement to partner with the U.S. government to deploy reactors in the U.S. And I think this is a good thing. I mean I think it just shows the momentum in the nuclear industry. I mean, clearly, the U.S. government is highly committed to new nuclear.

There are executive orders that are signed. And I think that partnership is a really smart partnership for the deployment of new nuclear in the U.S. And as I've said in the past, I mean, capacity is everything and initiatives like that to enable capacity to be built and meet the demands of the new nuclear market is very good. But for ourselves, we are Canadian.

Our business is Canadian supply chain, Canadian jobs. and the technology is Canadian. It's actually owned by the Canadian government, but we have the sole rights to deploy it. And all the reactors in Canada right now are Canadian and CANDU. So the way that I would see this from a competitive perspective in Canada is I would hope that our utilities and our provinces here in Canada choose a technology, which is Canadian, which will supply jobs to Canadians because no other technology will do that. The jobs will go down south with the company that you're referring to for manufacturing and for engineering. So from a competitive edge, we kind of hope that sense will prevail and we'll support our own technology here in Canada, if that's at the heart of the question.

Yes. Okay. That's great color, Jeff. And obviously, you have ongoing discussion with several countries on new builds with CANDU. There's a big potential, obviously. I'm just wondering if the -- is it dependent on your ability to secure first the MONARK in Canada? Or any color about the potential timing for new builds, what we should expect in terms of timing for announcing new builds?

Yes. So outside of Canada, I mean, obviously, we're working hard in Canada. We are in competition. I mean that's a fact. But we're working hard in Canada for deployment of the MONARK. Outside of Canada, we're seeing numerous opportunities in Eastern Europe and potentially Asia. Actually, the technology that is wanted is actually our EC6 existing technology, which is a 700-megawatt reactor.

And the grids in the countries that we're discussing are more suited to a small reactor, which is a different situation than it is in Canada. And the other advantage of the EC6 is deployable now. It's existing technology. It's the technology that we're delivering in Romania for the 2 new builds in Romania. So I mean, there's nothing to announce today. We're working very hard.

We've got very detailed technical and commercial meetings ongoing with several countries. The first stage of anything would be an MOU announcement, and then there would be a development through to what we would call a feed contract or an initial contract, which, again, it would probably be certainly back end of next year, if that was to happen, but we're working hard on these things. And there are numerous opportunities to be clear, for the EC6 out there.

Our next question comes from Michael Tupholme with TD Cowen.

Ian, you spoke earlier in the call on several occasions about your capabilities in the defense arena and some of the opportunities you see there. I'm wondering if you can add on to that and speak in a little bit more detail about exactly where you see AtkinsRéalis as having strong capabilities in defense. And to what extent you think we could see defense be a growth area that really contributes in 2026 and beyond?

Yes. Yes. No, for sure. I mean our current real strength in defense is in the U.K. And where we play is in the facilities to operate, maintain and house assets. So assets being aircraft, submarines, ships, even people, barracks and the like. And what we've experienced in the U.K. over the last few years is a fairly significant upgrade of existing dockyards, existing air fields to take on the new evolution of assets.

A good example of that and how we will move from the U.K. to other countries would be the AUKUS submarine program, where we are the engineer of physical infrastructure assets to support that program in the U.K. And having got that experience, we are in a very good place, I think, in Australia, where the AUKUS submarine is being deployed also. And they're going through a big program to build ports actually to support ours and maintain their first nuclear submarine in Australia. And the same in Canada.

I mean, new aircraft in Canada, new ships in Canada, new potential submarines in Canada, all of the physical infrastructure will need upgrading to be able to operate and maintain those assets. And probably the fact that really isn't well known is that when you buy a bunch of assets in the capital -- sorry, in the overall cost of deploying those assets, well over half of it is in the physical infrastructure and the operations and OpEx to operate that over its life.

So there is quite an investment that goes into the kind of non-equipment asset when defense programs are being put through. So clearly, with the U.K., Australia and Canada having increased commitments, those are the countries that we see the best opportunity for ourselves.

Okay. That's perfect. And then as a follow-up, you had a number of questions earlier about the organic growth in the ESR segment. Wondering if you can talk a little bit about David Evans. I know at the moment, it's contributing to acquisition growth. But within its underlying operations, what have you seen in the third quarter in terms of its own underlying organic growth?

Yes. I mean, good growth. They continue to perform in line with our expectations. the integration piece and the cooperation between our U.S. business and David Evans is going well. And probably going forward, the most important thing is that we've developed a pipeline of opportunities that actually David Evans wouldn't have been able to bid them because of scale, and we wouldn't have been able to bid them because of a lack of local connectivity and presence and people.

So that pipeline now goes well into 2026 and it's being executed together. So we're actually putting teams on those bids. -- which are joint teams at this stage. And we would hope to start winning work, which is beyond kind of the ability that David Evans would have had on their own. And those revenue synergies were part of the whole thesis of buying David Evans in the first place.

Our next question comes from Jonathan Goldman with Scotiabank.

You revised the organic growth guidance in Engineering Services to low single digit. That does seem to imply a pretty significant growth in Q4, double-digit growth. I know part of that is just an easy comp last year. But what visibility do you have as we sit here today on getting to that sort of level of growth in Q4?

Yes, Jeff, why don't I take that? We have really good visibility, Jonathan. And you are right. We are lapping a less strong quarter in the previous year. So that clearly underpins some of that growth increase quarter-over-quarter that we'd expect in Q4. But as you heard from Ian earlier, we are finished off some of the projects that were creating some of that headwind.

But we are seeing real increase in activity in the markets that we're in. We're seeing higher levels of backlog. We are seeing contracts and framework agreements that we've now won -- that we have won that had some delay is particularly true in the U.S., now actually turning into revenue. So now that we're the better part of 6 weeks halfway through the quarter, we are definitely seeing an uptick in contracts into revenue, higher utilization and productivity.

And so we, therefore, are very confident in that return to that underpins our overall full year guidance of growth.

Okay. That's helpful. And maybe, I guess, talking about the backlog, Engineering services kind of flat quarter-on-quarter. Is some of that maybe timing related and kind of near the cadence that you're seeing on the top line organic growth guide, but on the backlog side as well?

Yes, a bit of that. But I think it's fine we've seen this over the last 2 or 3 quarters, just this lengthening of clients taking pieces of work that we've won and just taking disproportionately longer to turn that into actual purchase orders or statements of work that we execute against. Now we're seeing that starting to flow a lot more like we had seen previously.

Okay. That's really helpful. Makes a lot of sense. And I guess maybe a higher level one for you, Ian. The 40% of IIJA money that's only been spent so far does seem to set up well for the next few years. But is there a risk that the balance of the money does not get deployed given all the uncertainty in the market and kind of things that are happening with the U.S. administration?

Well, there's always a risk. But what we're hearing and what we understand is that the bill has got support and that the bill is necessary to try and fill this infrastructure investment gap that is across the country.

Our next question comes from Devin Dodge with BMO Capital Markets.

I was going to ask a question on Nuclear. So the 2027 revenue target, $2.2 billion, $2.5 billion, and you're in the low end of that range in 2025. So I'm just wondering if we should be expecting revenue growth to be, we'll say, relatively more muted in '26 and '27 off of a pretty high pace in 2025? Or should we be assuming there's some conservatism still baked into the 2027 target?

So obviously, we've seen phenomenal growth year-over-year, '24, '25. And we will continue to grow revenues even with the backlog we already have. And on Slide 11, you can see that sort of visibility of the follow-on phases that will fuel our revenues and backlog into -- through to 2027. But we're not going to see the kind of growth that we've seen year-over-year '24 to '25 because we're obviously comparing next year against very good growth in '25.

You will see growth, but it will be very different than you've seen this year. I mean -- and also, I would say that repeat what I said before that on the Slide 11, the backlog and the near-term revenues are really about the new build that and about the life extension projects.

If and when we start winning further new builds, the revenues at the beginning will be quite low because the engineering phase and the feasibility phase of these projects are not going to bring significant revenues until towards the end of this decade, where they really will bring significant revenues. So the way we see it is we've got great growth potential for the medium term in this business through into the next decade, but it's not going to be what you've seen recently.

Yes. I mean, fair enough. I mean -- but do you see maybe a mix shift more towards, we'll say, services versus procurement as you think about '26 and '27.

Well, I see both actually. I mean the CANDU technology, obviously, as I said, we're in discussions in Canada, we're in discussions around the world for new builds. But the services business, which supports other technologies and decommissioning and waste management and even fusion programs is also winning work.

And so the whole industry is really going through this super cycle, and we're seeing good opportunities all around. And our U.S. business is relatively small right now, but with a very strong commitment in the U.S., we're taking the CANDU technology through the licensing process to ensure that we are able, if utilities and clients want the Canadian CANDU technology in the U.S., we're able to deploy it there as well. So I think it's the whole industry is pretty buoyant.

Okay. Fair enough. And then switching over to maybe Engineering Services. Obviously, it seems like a pretty active M&A market there. What do you see as the drivers for sellers coming to the market now? And what's your pitch to them to select Atkins to be the buyer of choice?

Yes. I mean at the scale of deals that we're doing at the moment, I think owners of privately owned companies at the 1,000-ish size, they get to a point where they've got to do something different to continue to grow, either get investment from private equity or join a strategic such as ourselves. And I think the advantage, particularly in the U.S. for ourselves is that we've got a lot of white space geographically.

So they're not going to get absorbed into a machine that gives them no unity and gives them no kind of identification of what they have become and what they are. So for our strategy, it's a matter of stitching together geographic targets to give us a complete picture across the U.S. And something like David Evans, there was high competition for that acquisition, but we managed to work together to ensure that what they wanted for their future and what we wanted for our future became aligned.

Now it doesn't always work. I mean -- but the good news in the U.S. is there's numerous targets that are in that situation like numerous and that are continually coming on to the market. And then, of course, you've got the recycled assets from private equity that come on to the market at the end of that investment cycle. So it's a very buoyant and quite exciting market for us at the moment, but that's our strategy.

Okay. Good color. And then maybe just one quick clarification, and apologies if I missed it, but are you still expecting to reach the targeted 1 to 2 turns for net debt to EBITDA by the end of 2026?

Yes. We didn't comment on it, but I would say our comments remain the same that we laid out at Q2 and that I commented to then is that largely, we expect to be -- to deploy capital in line with the capital allocation framework we laid out such that by the end of 2026, we at least be at the -- around the bottom end of the range of our 1 to 2x leverage.

I'm not showing any further questions at this time. I'd like to turn the call back to Denis Jasmin for any further remarks.

Thank you very much, everybody, for joining us today. If you have further questions, please do not hesitate to contact me. Thank you very much, very. Bye-bye.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.