Michael Doumet: Thanks, Theresa. Super helpful. And I think you talked about some of the reasons for the upside surprise in Canada. I guess the question is how sustainable do you find this incremental organic push here? Because if we were to assume Canada is, call it, a mid-single-digit organic growth type market, does this effectively represent a tougher comp for next year? Just trying to square that out as well.
Theresa Jang: Yeah, I mean, it does. Anytime you have a very good year, it makes it harder next year from a mathematical growth standpoint. And that’s — when we came into this year, that’s what we’re anticipating because the back half of last year was really strong for Canada. And so, we have been very pleased with the continued high level of demand in Canada. Some drivers around increased investment in healthcare, in our building sector, for instance, has just been greater and more sustained than we had expected, and we’re expecting that that’s going to continue into next year. There have been a couple of larger projects for both our environmental and our transportation groups that have gone faster than we expected and driven solid growth this year.
And so, how that affects our growth rates for next year is part of what we’re working on as we prepare to roll out our strategic plan targets and our guidance in early December. But we do expect that there will continue to be growth in Canada. Will it be as strong as it’s been this year? Will it moderate somewhat? That’s the piece we’re working on. But we do still expect Canada to have the capacity to grow next year.
Michael Doumet: Very helpful. Thanks a lot, and I’ll see you soon.
Gord Johnston: Thank you.
Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Chris Murray with ATB Capital Markets. Your line is open. Please go ahead.
Chris Murray: Yeah, thanks. Good morning, folks. Gord, maybe this is the second quarter in a row where you guys have seen some really good organic growth, and really your commentary is quite optimistic about the future. So, as I’m hearing you and I’m kind of putting together the pieces, it kind of sounds like there — you talked about a little bit that you haven’t really even seen much of the benefit from things like IIJA, that a lot of that what you’re seeing in organic has been good. And then you also mentioned, I think, your turnover was better maybe than you had expected. As we put that together and we think about the next couple of years, is there anything to suggest that you can’t — that you wouldn’t be above kind of the normal organic kind of mid-single-digit growth rate through ’24, probably for ’25 and ’26 as well?
Gord Johnston: We will be issuing our guidance for 2024 on — in December 5th, when we have our — rollout our strategic plan in Boston. So yeah, I won’t comment specifically on any numbers. But when you think about the industry overall, I’ve been — this is the season where there’s a number of these engineering firm CEO conferences. And so, I’ve attended two of those recently. And the general sentiment is that the market is very, very robust. We see that strong support in — certainly, in water and in transportation and energy and energy transition, like there’s just an enormous amount of opportunity there. So, there is nothing that we see on the horizon in any of our geographies that we would think would be pointing to a downturn in our overall business for us and truly for our competitors. So, we really do feel good about the next several years.
Chris Murray: Okay. That’s fair. And then, Theresa, just maybe talking and going back to project margin for a couple of seconds. Again, very good result, we saw that. You did make the comment, I think in a couple of the segments that there were some recoveries that also went into the margin. Can you give us a sense of the order of magnitude either dollars or basis points on how much that played into the margin performance in the quarter?
Theresa Jang: Sure. Yeah, I mean, the recoveries, risk releases, change order approval, those are always a dynamic within our business, of course. And what we saw this quarter was a slightly higher volume of that than typical and we felt it was important to call out as one of the drivers. It certainly wasn’t the most significant driver in terms of our outperformance, but it has an impact. And we would estimate it was around 20-ish basis points from a margin standpoint. So again, not overly significant, but enough to make an impact.
Chris Murray: Okay. That was helpful. Thanks, folks.
Operator: Thank you. And one moment for our next question. And our next question comes from the line of Michael Tupholme with TD Securities. Your line is open. Please go ahead.
Michael Tupholme: Thank you. Maybe just a follow-up on the last question about the change order impact. Theresa, the — I appreciate the color on the margin impact. Would that have had any impact in the organic growth rate you did in the quarter in terms of benefiting it?
Theresa Jang: Not really. No.
Michael Tupholme: Okay. I didn’t think so, but I just thought I’d check. And then, in terms of the margin for the fourth quarter, maybe when we’re just thinking about EBITDA margins, you talked a little bit about this earlier, but when we’re looking at project margins and the SG&A as a percentage of revenue in the fourth quarter, what is it that we should really be thinking about as sort of the area that sees sort of the biggest pull back as you go into the fourth quarter and see a bit of a step down?
Theresa Jang: So, I think as we head into the fourth quarter, again, that we’re going to expect in general that organic growth will likely moderate relative to what we’ve seen for the first nine months of this year. I think project margin, we should expect would not very dramatically in terms of the percentage of project margin because that is purely a reflection of our execution on particular projects. But we do expect that EBITDA margin, driven mostly by admin and marketing costs, will be lower than what you’ve seen for Q2 and Q3 in particular, again, as we have probably a slower or a stepdown in our utilization to reflect — consistent with the comments I made earlier. So that’s where you’re going to see it, I think. And that should be fairly broad-based across our organization.
Michael Tupholme: That’s helpful. And then, I suspect we may get some more thoughts and detail on this at the Investor Day, but maybe I’ll just ask right now, just in terms of looking forward on the margin performance and potential within the business, how do you think about the margin improvement potential from here? Again, you had a very strong quarter here in the third quarter. Are there — what would be the potential drivers to further improvement? And sort of how much room might there be to go on that front?
Theresa Jang: Yeah. So, there we — as I said earlier, there is room to continue to expand margins. And — but we will go into a bit more detail at our Investor Day when we roll out our strat plan. But there’s not going to be anything shocking in there. So, it’s all the same drivers. And I think, again, what you saw — what you’ve seen us do for the year-to-date is really successfully deploy all of these strategies to grow our margins. And so, I have every expectation that what we’ve done to this point will continue, and that will — the operating leverage that we’ll gain through our business, through our size, our scale, our ability to manage our workforce in a strategic way, all of those things will continue to give us opportunity to expand our margins.
