Aecon Group Inc.

Good day and thank you for standing by. Welcome to the Q2 2026 Acon Group Inc. earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Borgatti, Senior Vice President of Corporate Development and Investor Relations. Please go ahead.

Thank you, Didi. Good morning, everyone, and thanks for participating in our Q2 2026 results conference call. Joining me are Jean-Louis Servranckx, President and CEO, Jerome Julier, Executive Vice President and CFO, and Alastair McCallum, Senior Vice President, Finance. Our earnings announcement was released yesterday evening, and we posted a slide presentation on our website, which we will refer to during the call. Following our comments, we'll be happy to take questions from analysts, and we ask that you keep to one question and a follow-up if necessary before getting back into the queue. As noted on slide two of the presentation, listeners are reminded that the information we're sharing with you today includes forward-looking statements based on assumptions that are subject to significant risks and uncertainties. Although ACON believes these expectations reflected in these statements are reasonable, we can give no assurance that these expectations will prove to be correct. Turning to slide three, I'm pleased to share key highlights from the quarter. ACON delivered an all-time record for revenue in any quarter with second quarter revenue of $1.6 billion, increasing 25% over the same period last year. Adjusted EBITDA improved significantly in the quarter to $82 million compared to $41 million last year, driven by year-over-year margin improvements in the construction segment. ACON entered into an agreement to purchase the convertible preferred equity investment held by Oak Tree Capital in ACON Utilities. The $320 million purchase price implies a $1.2 billion equity value and a $1.5 billion enterprise value for ACON utilities. Backlog at June 30th was $10.5 billion, underpinned by a diversified mix of long-term projects with appropriate risk balance, and does not yet include ACON's share of significant awards, including those under collaborative and progressive models, within or post-quarter, that will be added to future backlogs. The Gordie Howe International Bridge reached substantial completion in the second quarter and opened to traffic earlier this week on July 27th, a remarkable achievement by ACON and its partners. And an amicable and mutually agreeable settlement was reached in the second quarter on one of the remaining legacy projects to resolve disputes fully and finally. ACON reinforces its positive outlook, supported by the expectation for double-digit revenue growth for the full year 2026, based on our strategic positioning in sectors with attractive demand profiles, growing recurring revenue programs, and a healthy pipeline of project opportunities. And with that, I'll hand the call over to Jerome.

Thanks, Adam, and good morning, everyone. I'll speak to ACON's consolidated results, review results by segment, and address ACON's financial position, then close with a summary of the utility's prep share purchase transaction. Turning to slide four. Revenue for the three months ended June 30, 2026 of $1.6 billion was up $329 million or 25% compared to the same period in 2025. This represents the highest recorded revenue by ACON in any quarter in its history and approximately 80% of the revenue growth in the quarter was organically generated. Adjusted EBITDA of $82 million doubled compared to $41 million last year, an operating profit of $36 million compared to an operating profit of $2 million in the same period last year. The improvement in the period was driven by higher gross profit of $78 million compared to the same period in 2025. Q2 2026 diluted loss per share of $1.58 is driven by fair value adjustment on the preferred shares of AECON utilities of approximately $128 million recorded upon reaching the agreement to purchase the shares. This adjusted the carrying value to the agreed purchase price of $320 million. Adjusted diluted earnings per share in the quarter, excluding this fair value adjustment, was $0.33, an improvement compared to the adjusted diluted loss per share of $0.10 in the second quarter of last year. Financial results in the quarter were impacted by negative gross profit of $4.5 million from the legacy projects. On an LTM or trailing 12-month basis, the negative impact from legacy projects was $36 million. Backlog of $10.5 billion at the end of the second quarter compares to backlog of $10.7 billion at the same time last year. New contract awards of $1.3 billion were booked in this quarter and $2.7 billion were booked year to date. Now looking at the results by segment. Turning to slide five, construction revenue of $1.6 billion in the second quarter was $335 million or 26% higher than the same period last year. Revenue was higher in all sectors. with the largest increase of $138 million in utility operations, driven by a higher volume of electrical, gas, and telecommunication work in Canada and the U.S., including contributions from the acquisitions of KPC and ARC, completed in the first quarter of 2026. Urban transportation solutions increased $93 million, driven by a higher volume of subway and rail system work, as well as closed-out activities on Ontario Light Rail Transit projects that achieved substantial completion in 2025 and are now fully operational. Nuclear operations increased 80 million due to a higher volume of refurbishment, decommissioning, new build, and engineering services work at nuclear generating stations across North America. In civil operations, higher revenue of 22 million was mainly from an increase in the civil component of power and rail projects, foundations work, and international major project work. Turning now to slide 6, construction segment adjusted EBITDA of $90 million compared to $40 million in the last year, with an adjusted EBITDA margin of 5.5% compared to 3.1% in 2025. The increase was primarily driven by an improvement in gross profit margin in urban transportation solutions and civil, and the gross profit impact of higher volumes in utilities. These increases were partially offset by lower gross profit margin in industrial and nuclear operations and higher MG&A to support our ongoing growth in operations. Turning to slide seven, concessions adjusted EBITDA for the quarter was 11 million compared to 60 million in the same period last year, driven by lower management and development fees on concession projects that achieved substantial completion in 2025, partially offset by improved operating results at Skyport in Bermuda. The book value of our concessions portfolio at quarter end was over a quarter billion dollars. Turning to slide eight, at June 30th, 2026, ACON held core cash and cash equivalents of $129 million, which excludes $500 million of cash representing ACON's proportionate share of cash held in joint operations. In addition, At June 30, 2026, ACON had committed revolving credit facilities of $1 billion, of which $302 million was drawn and $4 million was utilized for letters of credit. Combined with our $960 million EDC performance security guaranteed facilities, our total committed credit facilities for working capital and letters of credit requirement total $2 billion. Net debt at June 30, 2026 was $672 million. ACON has proactively opted to include the $320 million repayment agreement for the preferred shares of ACON utilities in this figure. Net debt to trailing 12-month adjusted EBITDA was 2.2 or two times, excluding the negative earnings impact from legacy projects. ACON has no debt or working capital credit facility maturities until 2029, except equipment loans and leases in the normal course. ACON generated free cash flow of $301 million in the trillion-12-month period ending June 2026, compared to negative $10 million in free cash flow in the same period last year, a significant improvement in cash generation. In the second quarter, ACON's Board approved a quarterly dividend of $0.1925 per share, or an annualized dividend level of $0.77 per share. The dividend will be paid on October 2, 2026, to shareholders of record on September 22nd, 2026. Now, before I turn the call over to Jean-Louis, I'd like to briefly comment on the announced buyout of the prep shares in Akon Utilities on slide nine. Partnering with Oak Tree in the fall of 2023, Akon Utilities has delivered significant growth through organic expansion and four strategic acquisitions, strengthening our capabilities across electrical transmission and distribution, substations, metering, telecommunications, and Utilities Infrastructure. During that time, electrical infrastructure has grown from approximately a quarter of the revenue to nearly half today. The business has expanded from almost exclusively operating in our core Canadian market to 25% of the revenues now being generated in the United States. AECON Utility now generates over $1.2 billion of pro forma annual revenue with over 70% derived from recurring long-term master service agreements and has established a platform position to benefit from long-term investments in grid modernization, electrification, digital infrastructure, and data center work. The transaction allows ACON to fully participate in the future growth of ACON utilities while significantly simplifying our ownership structure, enhancing financial flexibility, and strengthening integration across our business. Upon closing, ACON will have full economic and strategic control of a large and diverse utility infrastructure platform, supporting our comprehensive power and utility services offering across Canada and the United States. Finally, on a personal note, I'd like to thank the Oak Tree Capital team for their partnership and support over the last several years. It's been an absolute pleasure working with you, and together we've built a stronger, larger and more diversified utility services platform We're excited to continue that momentum forward. At this point, I'll turn the call over to Jean-Louis to address our business performance and outlook.