The video discusses the growth trajectory of WSP Global and the recent strategic acquisition of Power Engineers. Alexandre, a key figure in WSP, explains how the organization has expanded both through acquisitions and organic growth over the past decade. He also outlines WSP's focus on different sectors such as property, transportation infrastructure, and Earth environment, emphasizing their commitment to becoming a leader in the green transition. Alexandre highlights the importance of aligning company culture with acquisition partners and the need for due diligence in integrating new organizations to preserve shareholder value.

In terms of industry trends and challenges, Alexandre points out the significant catalysts such as demographic changes, climate change, and geopolitical factors that impact their sector. Despite these challenges, the demand for the company's consultancy services remains strong, with a focus on sustainability and supporting clients in achieving their 2030 climate goals. He further discusses the challenges of digitalization, emphasizing the necessity of balancing energy demands from data centers with sustainability initiatives.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. invigorating [ɪnˈvɪɡəˌreɪtɪŋ] - (adjective) - Causing one to feel full of energy; energizing. - Synonyms: (refreshing, enlivening, exhilarating)

Thank you so much for joining us for this invigorating, invigorating day of conversations.

2. culmination [ˌkʌlmɪˈneɪʃən] - (noun) - The final stage of something, especially something that has been developing for a long time. - Synonyms: (climax, conclusion, peak)

I know that's a culmination of a lot of growth lately.

3. opportunistic [ˌɒpərtjuːˈnɪstɪk] - (adjective) - Taking immediate advantage, often without considering consequences or ethics. - Synonyms: (advantageous, strategic, expedient)

Historically we have found ways to be opportunistic and I want to continue that to be the case.

4. resilient [rɪˈzɪljənt] - (adjective) - Able to withstand or recover quickly from difficult conditions. - Synonyms: (tough, hardy, robust)

So we have a very resilient platform given the sectors that we're in.

5. catalysts [ˈkatəlɪsts] - (noun) - Things that cause a reaction or change without being affected themselves. - Synonyms: (stimulus, spur, incentive)

So all those catalysts are fueling our industry and are fueling our company.

6. geopolitical [ˌdʒiːəʊpəˈlɪtɪkəl] - (adjective) - Relating to world politics, particularly the geographic influences on political relations. - Synonyms: (international, global, diplomatic)

The concern obviously is geopolitical right now, hard to ignore.

7. agnostic [æɡˈnɒstɪk] - (adjective) - Having a neutral or open position instead of a strong viewpoint. - Synonyms: (indifferent, neutral, unconcerned)

We're agnostic, frankly, where we're feeling comfortable with our position in the marketplace.

8. hyperscalers [ˈhaɪpərˌskeɪlərz] - (noun) - Large cloud computing service providers that can scale computing resources quickly and extensively. - Synonyms: (cloud giants, large-scale providers, cloud services)

So again, what the flavor of the day right now is the hyperscalers and the data centers, I don't think five, six, seven, eight years ago, when they put their climate change strategy together, they really understood what they were up to

9. decarbonize [diːˈkɑːbənaɪz] - (verb) - To reduce the carbon emissions of something, often as part of climate change mitigation efforts. - Synonyms: (reduce emissions, limit carbon, decrease CO2)

They're laser focus on ways to decarbonize the industry.

10. electrification [ɪˌlektrɪfɪˈkeɪʃən] - (noun) - The process of powering by electricity, often replacing older power sources like diesel or coal. - Synonyms: (electrifying, power conversion, electrical transition)

And you also mentioned electrification of mining

WSP CEO Alexandre L’Heureux on Sustainable Modernization @340p

Thank you so much for joining us for this invigorating, invigorating day of conversations. And I'm so pleased to be here with Alexandre. Welcome. Thank you so much. Pleasure to be here. Great. And I know congratulations are in order. On October 1st, you just closed the acquisition of Power Engineers. And I know that's a culmination of a lot of growth lately. So maybe tell me a bit about WSP's story in growth. Yeah, indeed. It's been the last decade has been quite busy on the growth front for us.

We IPO the firm in 2006, and really in 2010, after we had really built our national platform in Canada and had a presence in each and every province, we said, look, it's now time to spread our wings and go abroad. So since then, we've been busy building our platform globally. So today, WSP is a firm of close to 80,000 employees in excess of $10 billion of net revenue. 14, I should say, in gross, we're in 50 countries.

We have a leading position in property and building globally. We designed a Freedom Tower here in New York, the Shard in London. We have a leading presence also in transportation infrastructure, California High Speed Rail, HS2 in London, hopefully one day, the HFR in Canada. And then More recently in 2000, we decided to build our pillar in Earth environment. So we announced that we wanted to become the leading firm in the green transition. So Today we have 20,000 strong professionals in that sector.

And more recently, as of last week, we had announced two years ago that we really wanted to build that power and energy sector. So we completed the acquisition of Power Engineer, which is a leading brand in the energy transition US based firm. And we're extremely pleased about that. It's very exciting. And a lot of big names that you just named there. You know, you've done a lot by this acquisition, but there's also organic growth. So when you're thinking about growth, how do you balance both of those types of growth?

Well, organic growth is the heart and blood of an organization. So yes, I started with merger and acquisition, but the reality is, since our ipo, we've never had a down year in organic growth with the exception of 2020, when all construction sites worldwide shut down. And yet I think we generated negative 2% organic growth. So we have a very resilient platform given the sectors that we're in, but also the project mix, public, private sector, and also the project sizes as well. So Today we have 200,000 live projects around the world. So if you want to have exposure to the infrastructure space, but you do not want necessarily to have exposure to one project and have the diversification, I mean, WSP is a good mean for that.

Okay, that's good to know. And in terms of continuing to perhaps grow by acquisition, do you have anything in the works? Is there a genre that you would be looking at for what's next? Look, we have a very strong capital structure, a very good balance sheet, and it's always the goal on the back of an acquisition to come out with a strong balance sheet position because historically we have found ways to be opportunistic and I want to continue that to be the case. So, yeah, we're clearly open for business. Obviously we just completed one two weeks ago and I think I want to be busy in the next few months generating shareholder value for investors. And it starts with a good integration. So we're busy already doing that. But clearly I think the next few years should be very exciting for us.

Fair enough, fair enough. And when you think about that sort of integration with a new organization, one that's US based, what are some of the cautions and concerns that you might have and how are you mitigating those? Well, for us, every time we complete an acquisition and we've completed north of 100 in the last decade is really four very simple criteria. Obviously, number one, the price has to be right if we're not creating shoulder value where we're not going to do it. But close second is the culture. Very quickly we want to make sure that our culture, our line, the respective organization cultures are aligned. We want to make sure that we have a shared vision of what the industry should look like, where we want to go as a company. And lastly, and that's often time that criteria that people omit or forget is can you integrate it? You on paper may be the best deal ever.

It may make all the strategic sense in the world, but oftentimes the operating models are different, the views are different, and even though you tick all the boxes, you just know that you're going to destroy value. So we're quite mindful of that and we're quite careful. So obviously a lot of the work with power engineers has been done upstream. I've known the firm for more than 10 years. I've spoke to three CEOs prior to completing this transaction. This was my third CEO, the realm of Power Engineers. So every time you have to rebuild the relationship. But I know the firm extremely well, so I was highly confident and have the strong conviction that this would be a good deal for us.

That sounds like a lot of due diligence, but well done. Yeah, thank you. Great. And then of course you mentioned the growth trajectory and the success that you've had. What headwinds do you see in the future? Look, right now you look at the trends supporting our industry. I've never seen that in my career. In the sense that you look at demographic changes, growth in population, climate change, social concerns as well, what the population is looking for or a resident of various countries where we operate.

So all those catalysts are fueling our industry and are fueling our company. I always like to say that you're never going to call your advisor or your consultant if there are no catalysts in the marketplace. When things are steady, you don't tend to pick up the phone and call your consultant, your lawyer. So it's the same thing for us. So there are many catalysts happening in the world right now. So I think it's on one end, very positive, on the other, climate change, it's hard to ignore. And you see what happened last week in Florida and that is only going to continue. And that brings unfortunately in that case a lot of work to us. Sure.

And then I mean the concern obviously is geopolitical right now, hard to ignore, lots of political, I wouldn't say instability, but a lot of concerns in many developed countries right now. And this year more than half of the world population has been or will be voting. So that brings sometimes some delays, concerns, change of government, want to do things differently. So it's difficult to ignore. But for us, I mean, if I take just where we're sitting here today, WSP Global has done extremely well under the Trump administration and we've done equally well under the Biden administration. So, so I'm not. We're agnostic, frankly, where we're feeling comfortable with our position in the marketplace. But nevertheless, it's something that you need to watch for.

Yeah, yeah, that makes a lot of sense. Okay, talking now a bit about your clients priorities. So it's 2024, which means we're very close to 2030, which is the deadline for a lot of, shall we say, aspirational climate goals. A lot of folks talked about 2030 Sustainable Development Goals. And so when you look at your client base, what are you seeing in terms of readiness for 2030? Challenging. Yeah, to say the least. I mean, without naming names, but I was with the client on the west coast last week, one of the hyperscaler, let's put it this way, and had plans for 2025.

And they said, Alex, we're, we're not going to make it. It's too difficult. We had not planned that we would need so much energy with the AI and everything that is happening. So, so it's clearly a challenge. But it's not because it's a challenge that I think people are giving up. I think the boardrooms are still committed to it and are quite concerned and it's not because the goal is difficult to achieve that people are giving up. Some, some are revisiting their position but, but for the most part our clients are quite focused on it, I must say.

Okay, yes. I mean what you said is not surprising. What are some of the concrete steps that you see or are advising some of your clients to take to get closer? Maybe not 2030, but something else. Let's just take the mining industry. I mean you take again without naming names, take all the large players, Rio Tinto, bhp, they're laser focus on ways to decarbonize the industry and ways to extract resources in a cleaner way. And again back to my earlier point 10 minutes ago, that's a real catalyst for this industry. Water resources also is a big catalyst for this industry.

So we are supporting them, next to them to really think about how we can electrify the transportation of those resources from the mining pit to the ports. And not so long ago those companies were not thinking about this. So it's changing and it's changing rapidly and, and that's why I think it's a good period for us. Okay. Okay. And you mentioned earlier the vast energy needs of AI. And you also mentioned electrification of mining. And you know, there's been a lot of headlines about how people may not realize how much electricity is eaten up by this digital transformation. And I know that WSP is also a priority for you with your clients, is helping them through their digital transition.

So yeah, tell me about how you're kind of reconciling that challenge with also everyone's sustainability goals, including yours. Well, it's extremely hard. It's extremely hard to. Because we're at a crossroad. Right. I mean with AI today a data center is essentially consuming the consumption of data center in terms of energy is that's 50 times more than a normal building. So huge energy consumption. We talked about EV and electric vehicle, but the reality is this is a drop in the ocean compared to what we're talking about here. Just the data center consumption in the next two, three years will amount to or equal Japan. So the amount of electricity and Energy that is going to be needed is going to be going to be great.

And right now what we're seeing also is this competition for energy, the old industries or the existing industries and this new industry and the clash that this is happening. So we're obviously here, we're not taking side and we're here to support our clients. And really at the end of the day, WSP and the acquisition of power engineered thesis behind this is to be in a position to connect new sources of energy or connect existing grid to new demands essentially. So that's our role in the society and if we can do it in a clean way, I mean that's obviously our goal and that's why we have a big service offering obviously on the renewable side. Got it, got it.

You know, sort of on that idea of perhaps fragility, you mentioned Florida and we've just seen in the past decade and longer, but very acute issues with the fragility of infrastructure. You know, what are you seeing as sort of the low hanging fruit in terms of shoring up our infrastructure system to be more resilient? There are many, I haven't discussed that today, but cybersecurity is one of them. We always talk about cybersecurity in the context of companies, but we also need to think about them in the context of the assets that is fueling our societies, whether it be electricity, dams, utilities. That's to me is probably one of the number one priority right now in the world is we really need to protect our assets. And now today obviously is very different than 10 years ago.

When we design assets, we do that with this in mind and we want them to be future ready. The resiliency as well around climate change is equally important. And again today, and I look at some of the skyscraper that we've designed here in recent years and you compare the way they were designed now compared to a few years back is extremely different because we know what's coming at some point. I don't mean to be the party pooper here, but could be at some point part of New York could be underwater, Florida could be underwater. And, and we have to take that into consideration when we design assets now. Sure.

What are some examples of the improvements and things that you're doing to keep buildings safer? Geotechnical work would first come to mind. It's no longer just raising a high rise on the soil. I mean often time all of the work that is going underground now is immensely different than what we used to see 20, 25 years ago. So that would be an Example of that. Okay. Okay, great. Going back to the discussion of the 2030 readiness and that sort of thing.

Obviously no company wants to go out, make a big exciting statement and then have to retract it and hope no one notices. And so knowing what you know now about where things have evolved over the last several years, when clients are coming to you to talk about sustainability, how are you recommending that they think about creating goals? Really it's to have a long term view on things and really to sit down and think about your strategy..

I think sometimes you don't know what you don't know. So again, what the flavor of the day right now is the hyperscalers and the data centers, I don't think five, six, seven, eight years ago, when they put their climate change strategy together, they really understood what they were up to. So that is very difficult to control. But where possible is really to have a long term view, have a sit down with your team members, your clients, and really have a real understanding of where your company is going and the impact that you'll have as a corporate citizen and the world around you.

And I would say that 80% of the clients that we're working with, they're doing a fantastic job, phenomenal job. There's another 10% that perhaps have been able to foresee exactly what was about to happen. And the hyperscaler is an example of that. And the other 10, it's like everything in life, some are performing and some are not. So. So I'd say that. That's what I'd say.

Okay, yeah, that makes sense. And in terms of ESG and you know, your own house, essentially, how does your approach to ESG differ or does it compared to what you would advise your clients? Actually, we want to lead from the front. It'd be very hard to be credible when you advise a Microsoft or you advise if you're not leading from the front. So we're making every effort at WSP to really meet our goal, meet our criteria, and every year for those who are interested, because I think it's a very good document, we publish this every year on an annual basis. Our ESG goals and achievement and what we intend to do. And actually we're using this, actually what we do internally is a very good proxy to really lead and be able to advise our clients. Sure.

And what do you think it is about your methodology that resonates with your clients? Pragmatic, I would say, and practical. I think there's a lot of confusion and has been, I think now less so I think we're getting somewhere at this point. But a few years back, there was a lot of confusion, and we needed to take a baby step approach with our clients, really, to get from one goal to the other. And I would say that the marketplace now is a whole lot more sophisticated than people know what's greenwashing versus what is not. And for us, it's a good thing, because I feel now that we can talk serious business and really get going with this.

Very good. Well, thank you so much, Alexandre. Really appreciate your time and also your frankness about where we are. Thank you so much. Thank you.

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