ATCO Ltd.

Thank you. Good morning, everyone. We're pleased you could join us for ACCO's second quarter 2024 conference call. With me today is Executive Vice President and Chief Financial and Investment Officer Katie Patrick. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today we're speaking to you from our Ackle Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, the Kainai, and the Pagani Nations, the Tsitsinu Nation, and the Stony Dakota Nations, which includes the Chikniki, Bearspaw, and Good Stony First Nations. I also want to recognize that the City of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During our second quarter, we proudly celebrated National Indigenous History Month, a time to honor the stories, achievements, and the resilience of Indigenous peoples. We carry this message beyond the month of June in respect to the diverse language, history, ceremonies, and cultures of the Indigenous peoples who call these areas home. In terms of today's call, we'll hear from Katie, who will deliver comments on our financial results and recent company developments. Following today's remarks, we will take questions from the investment community. Please note that a replay of the conference call, a short supplementary presentation, and today's transcripts will be available on our website at adco.com following the call. The materials can be found in the Investors section under Events and Presentations. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian Securities Regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, such as total segment measures, adjusted earnings, adjusted earnings per share, and capital investments. adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, for ACCO structures and ACCO end power. These non-GAAP measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. And now, I'll turn the call over to Katie for her opening remarks.

Thanks, Colin, and good morning, everyone. Thank you all very much for joining us today. I'm pleased to report that AXA achieved adjusted earnings of $96 million in the second quarter this year. This is $9 million or 10% higher than the second quarter of last year. This $9 million of growth came primarily from the strong performance of our structures and Alberta utility businesses. During the quarter, and as part of our ongoing drive for operational efficiencies, we took steps to streamline our cost structure. We took a hard look at our corporate overheads and business units to ensure our teams are fit for purpose and aligned to our renewed growth ambitions. Heading into the second half of the year, our teams are refreshed, nimble, and laser-focused on executing our project pipeline. Moving to Canadian utilities, where I won't go into too much detail as we spoke about their performance on this morning's CU call. I want to reiterate that we continue to focus on delivering growth in 2024 and beyond. Our confidence to deliver growth within the utilities was reinforced in early May as we increased our Canadian rate-based compound annual growth rate to 3.5 to 4.3 through 2026. We continue to see very strong fundamentals in our core Alberta markets and opportunities to deliver even higher rate-based growth over the long term. In June, we announced our decision to move forward with Phase 1 of the Atlas Carbon Storage Hub, alongside our partner Shell. This multi-phase, open-access carbon storage hub is a major milestone in our commitment to advancing products and services which may contribute positively to society's goal of reducing emissions. This is the first step in AtoN Power's work to create a full value chain for hydrogen development. from production and carbon abatement to transport and export. The Atlas Carbon Storage Hub is integral to ADCO's long-term strategy and sustainability aspirations. For those who were unable to make this morning's CU call, the replay will be available on our website shortly. ADCO structures continue to deliver strong results, with adjusted earnings of $30 million per quarter, or 15% higher than the prior year. Structures continues to deliver growth for the expansion of our base business and the optimization of our fleet, with major projects being a supplement to these earnings. Continued investment in our base business, particularly in our space rentals business, has allowed us to expand both our footprint of operating locations and our customer base. This has increased the number of units we have on rent while improving our average rental rate by 10%. In Q2, Structures announced the strategic acquisition of NRV Modular Solutions. NRV is a leading manufacturer of modular multifamily residential, industrial, education, and commercial buildings. Structures will integrate NRV into an existing modular business operation, allowing us to service an extended market with additional manufacturing capacity in Ontario and British Columbia. This transaction increases our capacity in growing markets complementing our strategy for continuous fleet expansion. Further, the acquisition provides access to a large existing customer base and skilled employees, which NRV has built in these markets over decades of operation. Structure's proven history as a leading innovator and highly competitive global modular manufacturer will create invaluable synergies for NRV's future performance. The purchase price of $40 million represents the book value of NRB and includes the normalized working capital. Synergies will be created through ATCO's existing manufacturing expertise, enhanced sales from our retail grass networks of growing fleet assets, and our proven ability to improve operational processes. Operational improvements can include strategic sourcing, automation, process improvement, and economies of scale. We expect the transaction to close in the third quarter of 2024, and we're excited for the opportunity to maximize the value and synergy that NRB brings to our structures business as a market leader in modular construction across Canada. We have a proven track record in our structures business of successfully integrating acquisitions into the ACO portfolio. Modular manufacturing is a core competitive advantage, that structures have expanded over decades of continuous improvement. A recent example of this is our strategic expansion into the residential housing sector through our Triple M housing acquisition in 2023. The residential housing segment has been a valuable strategic addition to our business growth. Triple M housing continues to deliver strong results year over year. and it's developed a large pipeline of new opportunities, and it continues to provide synergy and value positioning us for future growth. Complementary additions like NRV will work conjunctively to build our industry-leading expertise across all of our modular platforms. As we look to the second half of 2024, we continue to focus on delivering sustainable earnings, driven by the growth of our base business and structures, While we anticipate a small dip in activity in Q3, we have line of sight to new projects in Australia that are expected to drive growth in Q4. We remain confident that there continues to be a solid pipeline of projects in Australia, Canada, and the United States that we believe will drive additional opportunities and support further growth for structures in 2024 and beyond. Overall, ASTHO had a great second quarter and first half of 2024. Across our portfolio of investments, we continue to focus on executing our growth plans. We believe that the unique combination of investments in our portfolio and the work we've done to expand the earnings from these investments create the foundation to support our growth aspirations going forward. We look forward to keeping you updated as we progress on our growth initiatives throughout the year. That concludes my prepared remarks. I will now turn the call back to Gollum.

Thank you, Katie. In the interest of time, we ask that you limit yourself to two questions. If you have additional questions, you're welcome to rejoin the queue. I will now turn it over to the conference coordinator for questions.