Good morning, ladies and gentlemen, and welcome to the H2O Innovation Q1 FY 2023 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we'll conduct a question-and-answer session. If at any time during the call you require immediate assistance, please press star zero for an operator. This call is being recorded on Thursday, November 10th, 2022. I would now like to turn the conference over to Frédéric Dugré and Marc Blanchet. Please go ahead. Yes, thank you, madam. Thank you and good morning, everyone. My name is Marc Blanchet, CFO of H2O Innovation. This call will be held in English, but I'll just say a brief word in French to our French audience. [Foreign language] Before we begin, I invite you to download a copy of today's presentation, which can be found on our website at h2oinnovation.com in the Investors section. Frédéric Dugré, President and CEO, is joining me today for the call, which duration is approximately 30 minutes. During this call, Frédéric will give an update on the business and present highlights of the first quarter ended September 30th, 2022, and I will be presenting the financial results. Please take a moment to read the forward-looking statements on page two and the non-IFRS measures on page three of this presentation. I now hand over the call to Frédéric. Thank you, Marc, and thank you for your joining the call today. Well, following a remarkable previous year, ended June 30th, 2022, we are starting a new fiscal year on a really good footing. Indeed, we are proud to present for the first quarter of our fiscal year 2023, record high revenues of CAD 56.1 million. This represents an increase of 46% year-over-year. What is most impressive is that 25% of this growth is supported by organic growth, and this is compared to 7.7% in Q1 of previous fiscal year. All our business lines contributed to this growth, driven by high demand of our specialty products, the startup and scope extension of operation and maintenance contracts, and the award of new capital equipment projects generating additional services and aftersales. As we proved in the past two years, our business is economically resilient, and we serve customers that require our essential products and services. We could even say that the water industry and our business is recession-proof. Indeed, our unique business model promoting customer retention throughout the three business pillars posted recurring revenues by nature of 89% at the end of this first quarter of the fiscal year 2023. This high recurring revenue level is due to our focus to grow the business first towards the services, the operation and maintenance, and the specialty products. For this quarter, the momentarily lower revenues coming from the projects contributed to inflate the percentage of recurring revenues. Looking at our sales pipeline, rich in diversified municipal and industrial opportunities, at the strength of our contract distribution network for specialty products, and at our consolidated backlog of CAD 182 million, which is up 48% compared to the Q1 of the previous fiscal year, we envision continuation of strong organic growth with a focus on margin improvement. Despite the pressure on a gross profit margin emerging from high inflation on material and wages, we believe that price increase initiatives and other measures have been implemented to improve margins in the coming quarters. For the first quarter, our Adjusted EBITDA finished at CAD 5 million. This is up 24% from the previous year. Our team will continue to strive on improving the EBITDA margin to a double-digit and even better for 2023. I remain confident to see improvements throughout this fiscal year since the new projects and the operation and maintenance contracts secured in our consolidated backlog include adjustments on current market price and material and wages. On a long-term basis, considering our LTM revenues and Adjusted EBITDA, our business continued to show strong growth momentum. Indeed, on a last 12-month basis, our revenues have reached CAD 202 million, representing an increase of 37% almost from the previous fiscal year. On a five-year basis, our compound annual growth rate stand at 14.4%, including acquisitions and organic growth. On its end, the Adjusted EBITDA and the LTM basis reached CAD 19 million, an increase of 25.5% compared to the previous fiscal year. What is remarkable is that the Adjusted EBITDA has increased by 27.5% on a CAGR basis, showing our dedication to scale up the business and grow the bottom line faster than our revenues. Now, let's move on slide five and review each of our business pillar activities, starting first with the operation and maintenance. Our O&M team is playing offense and defense at the same time. During the first quarter of our new fiscal year, not only we secured one new O&M projects in the Southwest region for an initial term of two-year period, but we also renewed two new O&M projects in the states of Georgia and New Hampshire, while we also expanded scope of work in seven projects. The acquisition of JCO and Environmental Consultants, L.L.C. in the State of New York, completed in December 2021, impacted also positively our Q1. These new O&M projects, combined with the renewal and scope expansion, have pushed the O&M backlog to a new high of CAD 135 million, representing an increase of 65.9% year-over-year. The strong backlog gives us an excellent visibility in the revenue growth expected in the coming quarters and fiscal years. On an LTM basis, the O&M revenue stood at CAD 97.2 million, representing an increase of 37% compared to fiscal year 2022. Over the same period, the EBITDA has moved from CAD 10 million - CAD 11.6 million, showing an increase of 15%. In the coming fiscal years, we'll continue to work on renewing operation and maintenance projects and capture CPI adjustments to improve our gross profit margin and the EBITDA margin as well. Moving to page six, let's have a look now at the highlights of our Water Technologies & Services business pillar. Our WTS business pillar started the new fiscal year on a strong basis. In Q1 only, WTS was able to secure 10 new projects totaling CAD 12 million. Now, four of them are for municipal applications and six others are dedicated to industrial applications. This diversification, sorry, is in line with our strategy to focus on industrial customers to further grow the business. This is allowing us to capture more recurrent revenues originating from the aftermarket service sales and consumables. Boosted by these new bookings, WTS backlog now stood at CAD 45.6 million at the end of Q1, representing an increase of 13% compared to the previous quarter in Q1. With such a backlog, we are expecting revenues continue to grow in the coming fiscal year. These new projects added to our backlog are done with prices reflecting the latest material and wages increases. For these reasons, we're confident seeing an improvement in our margins in the coming quarters. We're also proud to report for the first time the commissioning of a SILO, a membrane biological reactor for an industrial wastewater application. Moreover, we finalized two water reuse projects for the city of Santa Monica, sorry, one of which is being used for the removal of PFAS contaminants. Another important water reuse project is approaching the commissioning phase. Indeed, major equipment got delivered to the city of Escondido, also in California, in Q1 fiscal year 2022. As you can see through these pictograms, our business activity for WTS remain high as our engineering and fabrication teams are extremely busy. We are expecting the teams will remain busy for the coming quarter as well, as it's based on a robust backlog that we have. In the coming quarters, we should also observe an increase into our revenue recognition as the projects will move from the engineering phase to the fabrication phase, where usually most of the revenues are being recognized. On an LTM basis, WTS revenues reached CAD 43.4 million, representing a 31% increase compared to the last fiscal year. Pressure on margins remain our number one challenge for this business pillar. However, through recent change orders negotiated with customers and the addition of new bookings to our backlog, taking into account new material and wages prices, as I said, we're confident in being able to improve our EBITDA performance in the course of the fiscal year. Let's look at page seven on the performance of our Specialty Products business pillar. The first quarter showed an impressive growth of 62%, where three-quarters of it is generated by the organic growth and the remaining coming from the acquisition of Leader completed on June 30th, 2022. The organic growth is clearly driven by high demand we are experiencing from our specialty products, the strength of our large distribution network, and the growing interest of the end user for green chemistry and our eco-friendly water treatment solutions. To continue to fuel such growth, we will be hosting next week in Bilbao our International Distributor Summit with 150 delegates coming from around the world to learn more about our specialty products, components, and business solutions. This three-day event will also be a unique occasion to solidify business relation with each of our distributors and meet new ones that we haven't been able to meet since our last Distributor Summit in 2018, prior to the pandemic. We're also proud to announce that our laboratory in Madrid, specialized in membrane autopsy for the global water industry and precursor in the development of innovative and sustainable cleaning solutions, received the award for Research Center of the Year during the ALADYR conference in Chile two weeks ago. During this first quarter, Piedmont signed agreements with new distributors covering four countries where we had no coverage or local presence in the territory. As we're getting now into the season for the maple farming equipment, this business now is extremely busy, coping with growing demand of its products and working on the integration of Leader as well that we just acquired. This high demand is certainly responsible for the increase into our inventory, and Mark will talk about it during the financial review. However, this inventory is made of products that will be delivered to customers in Q2 and Q3, and they're all based on orders that we have in hand. For this reason, we should improve, we should see a decrease actually into our maple inventory in the coming two quarters as we're getting into the high season of the maple syrup production. The maple farming equipment business has certain seasonality. We usually build inventory in Q4 and Q1, and then recognize most of the revenue in the coming quarters. Looking at the level of inventory, I can tell you that we're now getting really busy and getting ready for the busiest maple season we ever had. Recently, we hosted our first distributor meeting, combining Leader and H2O Innovation, all the American regional dealers that we have. This event allowed us to consolidate our selling platform, our portfolio of products, and to provide a clear vision on our growth strategy. Earlier this year, as per the press release announced on Monday, we launched our unique 24/7 self-service store for our maple customer. This first of its kind is a store that is being used using state-of-the-art technology to ensure secured access to our customers, as well as flexible and simple electronic invoicing. We believe this new platform will create a new business proximity with our customers and producers isolated in remote geographies. As per the chart on the right-hand side, our LTM specialty products revenues reached CAD 61.5 million at the end of September. This presents an increase of 40% compared to our previous fiscal year in 2022. In the same fashion, the LTM EBITDA stood at CAD 16.3 million, a CAD 4.9 million increase or the equivalent of 43% compared to the previous year. As mentioned on the year-end call, our business is growing fast, and demand for green chemistry and eco-friendly solutions are gaining tremendous momentum. The expansion of our international sales team in South Pacific, Middle East, India, and Latin America is also paying off in a big way. In addition, the expansion of our distribution network is also contributing to the growth momentum that we have. I will now pass the call to Marc, our CFO, who will review and discuss the financial performance of this quarter. Thank you, Fred. Now I'd like to go to page nine and go over some of the financial highlights for Q1. The main highlight is the significant revenue growth. We're reporting revenues of CAD 56.1 million compared to CAD 38 million last year. This represents an increase of 46%. Despite the challenging macroeconomic impact, we're able to generate an important organic growth of 25%. The increased demand for water treatment solution, the strong performance of our specialty products, along with efficient marketing strategy execution, have led to higher revenue contribution from new and existing customers. Revenue coming from GCO and GCE, both acquired in December 2021, and Leader Evaporator, acquired on June 30, generated 20% growth. The gross profit margin stood at CAD 13.5 million or 24.1% compared to the first quarter last year. Sorry, during this quarter, compared to 10.9% or 28.4% last year. As explained in previous quarter, the decrease in percentage was primarily due to high inflation on material costs, pressure on salaries, and higher percentage of revenue coming from operation and maintenance business pillar, combined with a business mix factor within the specialty product business pillar. We're closely monitoring the evolution of the gross profit margin of our products and projects, and mitigation measures are implemented to overcome this situation, such as price increase, procurement strategy, escalation clause in our project, scope expansion, and CPI adjustment with our operation and maintenance custom ers. The Adjusted EBITDA also improved by 23.6% compared to Q1 last year, reaching CAD 5 million compared to CAD 4 million last year. The Adjusted EBITDA percentage decreased to 8.8% compared to 10.5% last year. This negative variation is mostly explained by the decrease in gross profit margin, which I just explained. The percentage of SG&A over sales has decreased compared to Q1 last year. Investment made in sales and business development are paying off since revenue are growing faster than the SG&A ratio. As for the gross profit margin, it is still impacted by the high inflation on material costs and the pressure on salary and business mix. We have implemented action plan to mitigate the cost pressure. On page 10, I will just quickly address the foreign exchange rate impact on our revenue, given the opposite fluctuation of certain currencies. For the first quarter, I wanna attract your attention on the right side of this slide. For the first quarter, it had a global positive impact of CAD 300,000 on revenue. The USD was very favorable, but it was offset by the pound, the British pound, and the euro. For modelization purposes, each 100-point base of US/CAD variation has an impact of CAD 1.1 million on revenue and CAD 160,000 on the EBITDA. For the pound, each 100-point has an impact of CAD 120,000 on the revenue and CAD 40,000 for the EBITDA. Now I'll go over the financial results of each of the business lines. For the operation and maintenance business pillar, revenue for Q1 stood at CAD 27.7 million compared to CAD 18 million last year. We're delivering an increase of 53%. 20% is organic growth generated from important scope extension and new projects secured in previous quarter, and 29% is acquisition growth related to the acquisition of GCE and GCO acquired last December. Operation and maintenance EBITDA reached CAD 3 million compared to CAD 2 million for the same quarter last year, representing an increase of 53%, but remains stable in percentage over revenue. Even though EBITDA percentage was stable, our gross profit margin is affected by higher pressure on labor costs, combined with additional resources hired to support the impressive growth. The gasoline price also have an effect on the margin here. Since 70% of our employees are working for this business pillar, the operation and maintenance gross profit margin and EBITDA was more impacted by factor related to workforce. As explained in previous quarter, our team is currently addressing this challenge with our customers and partners as soon as there is an opportunity to do so. In most of our operation and contract, operation and maintenance contracts, we are entitled to increase our annual fee base on CPI, Consumer Price Index. Therefore, such annual fee increases will be effective with our customer as each contract reaches its annual contractual adjustment date. A t the end of the quarter, the operation and maintenance backlogs stood at CAD 135.4, compared to CAD 81 at the same time last year. It's an increase of 65.9%. I would also like to bring to your attention that contracts in Texas and in New York State are usually evergreen and therefore are not included in the backlog. Let's move to page 12 now and look at Water Technologies & Services or WTS financial performance. The WTS revenue improved by 11.3%. Mostly the growth is essentially organic, and from service activities and capital equipment projects. WTS EBITDA stood at CAD 500,000 compared to CAD 1 million last year. It's a decrease of CAD 500,000 or a decrease of 52%. The decrease is mainly explained by the deterioration of gross profit margin, which was negatively affected by higher material costs related to capital equipment projects. As most of these projects were agreed with customers several months or even a year ago, we were impacted by a higher cost of raw material, and some of the components to manufacture projects. To mitigate the impact, our sales team included price adjustment clause based on inflation and contracts. Going forward, we should see this margin issue being resolved as we move forward into quarters. SG&A expenses were also higher, primarily due to new hirings of sales resource, higher labor costs and commissions, as well as resumption of travel and our participation to some tradeshows and conferences. The WTS backlog stood at 46.6 compared to 41, which is an increase of 13%. As Fred explained earlier, the backlog is well balanced between industrial and municipal projects and provides excellent visibility on revenue for the upcoming quarter, keeping the focus on industrial projects, which comes with better gross profit margins. Now let's look at slide 13, the specialty products business pillar. Specialty products, just to remind you, includes revenue from maple, peat moss, and chemicals. It had a very strong performance, as Fred said earlier, from all those three business lines, compared to previous quarter. Revenue stood at CAD 18.4 compared to CAD 11, which is an increase of 62%, of which 46% of that is organic growth. Leader Evaporator, which was acquired in June, generated CAD 2.6 million or 23%. The FX foreign exchange variation had a negative impact of CAD 800 thousand. EBITDA stood at CAD 4.6 million compared to CAD 3.6, which is meaning a CAD 1 million increase, but a decrease in percentage, which is mainly explained by the deterioration of the gross profit margin. The gross profit margin stood at 41.7% compared to 52.6%. The decrease is explained by the business mix within the business pillar. When we compare to last year, revenue coming from both peat moss and maple business line were higher in proportion compared to previous year. They generally have an average gross profit margin lower than the specialty chemicals. Additionally, the increased cost of material brought the gross profit margin to decrease compared to the same quarter of last fiscal year. Price increase and procurement strategy have been implemented in the recent quarter, which should remediate the gross profit margin erosion issue in the upcoming quarters. The SG&A increased by CAD 600,000. The main reason are the hiring of sales resource, pressure on salary in connection with inflation level, and resumption of travel combined with the acquisition of Leader. Slide 14. Let's move to slide 14, financial position for especially on working capital here. I'd like to bring your attention on certain variation on working cap, such as the accounts receivable. It increased by 11.6% since June 30, which is pretty much in line with revenue growth. Of that 11.6%, 3.6% of this increase is explained by the foreign exchange variation. If we look at the inventory level, it increased by 23% since June 30. The impact of FX is only 4% for that variation. The explanation is because we're responding to the continuing high customer demand, as shown by our revenue growth. We are still maintaining inventory at higher levels to mitigate the current supply chain uncertainty. Also, maple business line is currently building its inventory for the upcoming maple season. As Fred explained earlier, the inventory is made of products that will be delivered to customers in Q2 and Q3 based on order that we have in hand. For this reason, we should see a decrease into the maple inventory in the next two quarters as we will get into the high season of the maple syrup production. I'd like to mention that none of our inventory is exposed to obsolescence or sudden depreciation. Regarding the contingent consideration, the decrease is related to the partial payment related to the GCO acquisition, which was paid in July. Let's move to slide 15, the net debt. On that slide, you can see evolution of the net debt since Q1 2022. As of September 30, 2022, the net debt stood at CAD 48.3 million compared to CAD 40 million on June, representing CAD 8 million increase. This increase is explained by the payment of that contingent consideration, of the amount of CAD 4 million and cash flow used in operating activity, essentially in working capital, as I explained, mostly in inventory. This wraps up the presentation of the financial results. I will now hand the call back to Frédéric for concluding remarks. All right. Thank you, Marc. Let's have a look at slide 16 for concluding remarks. Well, after a first quarter hosting strong growth, even though impacted by the pressure on our margins, we continue to drive towards our three-year plan targets. If we had, you know, the 200 million based on an LTM basis, the growth coming from the three latest acquisitions combined to the organic growth momentum we are currently facing, supported by our CAD 182 million backlog and higher recurrent revenue that we have, we are very well- positioned to reach the upper part of the CAD 188 million-CAD 250 million bracket for 2023. Such growth positions us very favorably as well for the following fiscal year in 2024. In general, we aim to deliver every year a double digit growth on revenues while maintaining an Adjusted EBITDA superior to 10%. Looking forward, robust organic growth is expected to continue while our business mix and price initiatives should normalize our margin profile in the coming quarters. As organic growth rate has accelerated over the last two quarters, I mean, it was 25% in this quarter and 32% in the Q4 of the previous fiscal years, the company has made significant investments in working capital. H2O is a growth company in a growth sector, the water industry. While the investments we have made are having short term impact on our business and our free cash flow generation, we're very confident that these strategies are accretive to our long term business plan. On top of growing the revenues, we equally focus on improving our profit margins and generate a maximum level of cash to reduce our net debt. The water investment thesis has never, ever been so strong, supported by key fundamentals such as the population growth, increasing drought episodes, aging infrastructure, growing demand for eco-friendly and green water treatment solutions, and sustained willingness to invest more and more into water reuse solutions. Now it's time to harvest for H2O. Thank you. I will now pass it back to the operator for the Q&A session. Thank you. Ladies and gentlemen, we'll now begin the question- and- answer session. Should you have a question, please press star followed by one on your touchtone phone. You'll hear a three-tone prompt acknowledging your request. If you'd like to withdraw your request, please press star followed by two. If you're using a speakerphone, please lift your handset before pressing any keys. Your first question comes from Michael Glen from Raymond James. Your line is open. I just wanna dig into the working capital situation a bit more. Like, for accounts receivable and accounts receivable first, what should we think about, like, exiting fiscal year 2023? What should the appropriate level of accounts receivable be for the business? Y ou mean in percentage of our sales? Can you give a gross dollar figure, if possible? If I do, you know, I think I give you a bit too much information because you'll be able to figure out revenues. I mean, in terms of, you know, accounts receivable will follow revenues quarter-over-quarter. If you look at Q4 versus Q1, the AR in Q4 versus the AR at the end of Q1, they grew by about 8%. The rest is FX impact. It will follow revenues. That's kind of our metrics to model. That's what I would propose you do. Okay. Is there anything in the AR that, I mean, outside of the revenue growth, is there any parts of the AR that we should have any type of concern about from a collection standpoint? Write-offs or bad debt? Yeah. No. No, not at all. I mean, it's, you know, some have very short period of payments, such as operation and maintenance contracts. They come with payment terms that are. It's very standardized by our businesses. AR for O&M will be between, you invoice on the first, you're being paid within 30 days. AR for a project, it is more between 45-60 days, and some international project reaches 90 days. It's very in line. The trends are not changing. Right now, nothing is exposed to bad debt. Otherwise, we would take a provision right away. That's a very good point, Marc. I mean, and Glen also, just for perspective, I would say about 60% of our revenues comes from operation and maintenance. The operation and maintenance part has for the AR barely nothing beyond the 30 days because, you know, customers, most of them are paying, you know, to ensure that we keep going and operating their plants, right? This portion is extremely, I would say, quote, unquote, "secured" if we can put it this way because of the ongoing activity that we have with each of these customers. Okay. J ust similarly on the inventory, are you able to give some guidance at all for like how much we should think about inventories coming off the current level? Yeah. Inventory is really affected by, like, seasonality. Right now half of the amount of the inventory are inventory for the Maple. The Maple recognizes its revenue. Essentially, you know, 70% of its revenue is recognized between Q2 and Q3. As Fred explained a bit earlier, we're building inventory in Q4, start to building it in Q4 and in Q1. Q1 it's at its highest level. Then as we move forward in Q2 and Q3, we start to deliver these equipments to the Maple producers. That inventory is converted into revenue and then converted into receivable, which will be cashed in generally Q3, Q4. That's the cycle there for Maple. The Maple season this year is twice as big as it has ever been because we bought Leader. Leader is doubling the size of our Maple business. That seasonality effect that we used to have in the working cap or inventory and receivable and into revenues is twice the size that it was in the past. I'd like to bring your attention to that. It explains part of that inventory increase compared to our previous quarters. Just on specialty products, that segment overall continues to do quite well from a margin perspective. As we think about Leader or Maple products representing a higher share, should we think about that also pressuring the percentage margin in that segment? In that segment, slightly, because in proportion, it'll be a bit higher. In the consolidated picture, it will improve the gross profit margin overall because it comes with higher gross profit margin than O&M, for example, or even some projects. It will drive margin up on a consolidated basis. Okay. Thanks for taking the question. You're welcome. The next question comes from Frédéric Tremblay from Desjardins. Your line is open. Thanks. Good morning. Morning. Good morning, Frédéric. First question for me is on the backlog. Just, I guess, some comments on the composition of the backlog between, you know, municipal and industrial customers, how that has continued to evolve and what the implications of that would be on your margin expectations or your goals of improving margins moving forward. As I mentioned earlier in the call, based on the last projects we secured, I mean, six out of the 10 were industrial related. More and more we're weighting towards industrial opportunities that we're chasing. Now, if you look backwards on the overall backlog that we have accumulated, there's still a great proportion of them coming from municipal. However, moving forward, the strategy is to focus more towards industrial for the reasons I've just said, you know, higher margins, higher possibility to secure after sales and recurring business on the tail end of it. I think it's a good mix a nd so far we have been, you know, weighting more our efforts towards the industrial sector. Okay. Great. Maybe a couple of questions on O&M. First, on the labor environment, so many of your current labor force is at full capacity or if there is room for incremental business to be taken on in O&M, whether with, you know, your current workforce or through recruiting new employees. In the O&M, I mean, we can, I would say, quote and unquote, "make money a little bit on the edges" in a sense that we can stretch a little bit and add more scope of work on a given team. However, some municipalities and some projects are calling for specific number of full-time resources employee we need to have. If we have a given municipality, let's say for CAD 1 million, they may request us for the specific task and specific scope of work to have, let's say, 50 employees full-time. We can then expand and stretch a little bit by having, let's say, an extra CAD 50,000, an extra CAD 100,000 for scope of work extension with more or less the same team. We can do that, but there's also a limitation in what we can do. This is why the scope of work extension, as I mentioned, is strategic into our ways to also not only grow the revenue, but improve the gross margin. This is what we're currently pushing and going through, and we feel good about that. Okay. Just staying with O&M here. Just on the CPI adjustment, is there a way for you to maybe characterize where you're at in that process? You know, whether it's you know how many of your contracts or proportion of your contracts have been adjusted so far, and what's left to be done and sort of the timing of it as well, when we can expect that those adjustments to be sort of fully complete. Understanding that the inflation environment moving forward is a bit uncertain, but based on what you know today. This is happening on a monthly basis, but with it, Frédéric, I mean, as such as when we are meeting with customers, I mean, we are, you know, calling or adjusting our price when we can. There's also at every year at the anniversary date of each of our projects, we're quote-unquote, "calling for CPI or asking for CPI adjustments". If you look at the portfolio of projects we have, they are being distributed, you know, throughout the year, you know, at different periods and different moments. I would say right now we have probably, you know, went through 1/3 of adjustments, you know, on the overall backlog or overall projects we have in the portfolio. It keeps going and added, you know, and changing every month as we move in time. Perfect. Thank you. Congrats on a good quarter. Thank you. The next question comes from Gabriel Waisman from iA Capital Markets. Your line is open. Bonjour. Bonjour, Gabriel. Bonjour, sorry. Do Bonjour, sorry. Do you have any deleveraging target for fiscal year 2022? You're thinking of debt to EBITDA. I mean, it's gonna be our cash flow generating from operating activities. I think, I mean, you know, what Frédéric said like last conference call, this year is the year to harvest for us. We've invested a lot over the last year. We've invested in our U.K. facility to expand our capacity to manufacture chemicals. We did three acquisitions. We invested into scope of work. This year really is to harvest. I mean, right now a lot of our cash is invested into working cap to feed the growth. Afterwards is to harvest, is to deleverage. Is there an objective? There's nothing that has been publicly disclosed, but you know if you wanna modelize something, it will be in line with our revenue. That's what I can say. It's tough to say for- I don't wanna put any guidance here, but it will be to deleverage. You will see that ratio going down over the next quarter. Your next question comes from Andrew Wall from National Bank. Your line is open. Hey, good morning. Thanks for taking my questions. Just a couple for me. The first I have, I mean, we hear from different companies that when they talk- Hello, Andre? I think we've lost the line. Operator, do you hear him on the line or? Yes, we have lost him. If you would like to re-prompt, please press star followed by one. Seems like we might have also lost Olivier from IA previously to that. Right. I think. We have Andrew Wall. Your line is open. Hello. Can you hear me now? Yes, we hear you better, Andrew. Okay, great. Yeah, sorry about that. The question I have is that when we talk to different companies that we cover, I mean, and they are trying to increase the prices when they talk to their clients, the clients are usually receptive to these price increases. I was wondering if you can talk a little bit about kind of when you discuss with the clients, I mean, do you have to push hard or are they just generally open to you increasing prices even when it comes to, like, for example, going above CPI and is there scope to go above CPI, especially when it comes to WTS and O&M segment? Yeah. Two things. Yes, they are receptive to some extent. When we're talking about WTS, we usually have fixed price contracts, so it's projects that are won at a fixed price at a given scope of work. However, in some cases we have provision for price escalation that we can claim on, but it's different from each project or each contract. This is why sometimes we go and ask the customer for scope, you know, price increases, you know, with change orders. This is something we have done. This is something that is still happening, every day, every month, and what we do. For the other specialty products, we have been doing multiple price increases as we move in time. It happened last year, multiple times. This year we feel that now we see less pressure on the incoming and raw material coming to us. This is why, you know, we won't be as aggressive as we were in price increases. I think this is why we could see some margins improvement or expansion in the course of the year, b ecause right now the material that we're paying for is starting to either remain stable or to reduce. For example, the price of steel has started to reduce, and we have fixed, you know, higher prices than our retail price for products. This is now could play in our favor moving forward. For the operation and maintenance when it comes to adjustments or CPI, well, it is sometimes written most of it by contracts for the fixed or long-term projects we have for operation and maintenance. For the other ones that are evergreen, mostly in the area of New York and Houston, Texas. Well, we go on a month-to-month, you know, we negotiate, you know, with the customers either price increases on the operation and maintenance contract or even on schedule of values related to other material and pass-through that, you know, we're having with customers. We're playing this, I would say, this strategy on price every day in all our business segments with all our business lines. That's good color. Thank you, Fred. The last question I have for me, if you can share a bit of any kind of, you know, color and update on Leader. I mean, you said the integration is going well, but any kind of thing unexpected, either on the positive or negative side that you found with the business as you bring it together with your own Maple operations legacy ones. Well, we have done already a fairly good amount of work on the floor plans to redesign, rearrange, you know, the way the fabrication is being handled or the way it goes. This has a positive impact. Obviously, I think, though, on the negative or positive impact, it is creating additional stress for the overall organization. Our team is already, you know, thin in terms of overhead and resources. Now combined to the current growth that we're experiencing, organic growth, with higher demand for our products, it's rather a stressful time, let's say, for the team. It's all hands on deck to ensure delivery because as Marc said, we have never seen, you know, the backlog for Maple business products so high. Usually we pick up orders till, let's say, June and July, and then, you know, we see a slowdown, you know, in the course of the summer. Now we started to receive orders in our backlog back in May, continued in June, continued in July, ramped up as well in August and September. This is why this increase in inventory is not an estimate on what will we be selling. It's based on orders in hand that we need to deliver in the coming quarters. Stressful, but fun to watch. Okay. No, that's good. That's good to hear. One quick follow-up there. I mean, you said that the team, you know, it's a bit stretched. I mean, would you be looking to increase the team there and/or or you're good for the time being? No, I think it's for the time being. I think that as we implemented, you know, new business successes, we're going to gain efficiency, and this is what we hope for. Our team is pretty eager and motivated, and they were, like, looking forward to have this transaction and growth happening. So we don't expect to increase the overhead. We're expecting to gain more efficiency of the combination of the two manufacturing platform in Vermont and in Ham-Nord, and this should pay off. It's just that the growth combined with the integration phase is kind of a perfect storm. Let's say I think overall in the next 6-9 months, you know, we're going to start to really benefit from this business combination. Okay. No, it's great to hear. That's it for me. Thank you. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by one. Your next question comes from Gabriel Waisman from iA Capital Markets. Your line is open. Hi. I'm sorry. My line just disconnected. I still have another question. Is there any key initiative or priorities that you wanna advance in 2023? Well, for us, really with the current growth, organic growth that we have is one word, just harvest. It all depends on us to deliver on this huge backlog. It all depends on us to push and continue to promote the green chemistry we have, the innovative products that we developed in the last year that now we're pushing to the customers. It's really harvesting mode. I think the time is now. For us, it's, yeah, we're excited about the future. The key initiative is just like stay focused, execute, harvest, deliver backlog, and grow the business. For sure. What kind of updates, Frédéric Dugré, can we expect at the AGM in December? Usually at the AGM, we'll do an update on two elements. We'll do the update on the three-year plan. Kind of give the status of where we are. This will be the third time that we give a three-year plan update. This is more like a long-term vision, things we wanna do, how we wanna transform and grow the business. Obviously, we're going to give an update as well on how we're marching towards our 2023 objectives. Equally, we're going to give an update as well on our ESG plan, what we have achieved, the progress we're doing, and what are the key numbers and the key initiatives we're pursuing along the ESG plan. Thank you. That's all for now. Thank you. Your next question comes from Gabriel Leung from Beacon Securities. Your line is open. Good morning, and thanks for taking my questions, and congrats on all the progress. Thank you, Gabriel. Just one thing for me. Obviously a lot of organic initiatives underway right now. I'm curious. I've heard how that impacts your thought process around M&A, number one. N umber two is this gonna require you to add some additional, I guess, capacity into your business a nd what kind of impact could that potentially have on your sort of near term EBITDA margin, the sort of 11% EBITDA margin targets? Well, right now, as I said earlier, same answer. I mean, for us, it's really we're into harvesting. Our growth strategy has always been part of a combination of acquisition and organic growth. We have already completed in the last 12 months, let's look at it, I mean, three acquisitions. We're delivering on that end. For us right now, this fiscal year, I think will be more weighted towards collecting, harvesting. We believe that on the other end, things may, you know, play in our favor for future transactions in a way that will let the market slow down a little bit. You know, multiple may come down a little bit. Time in this case will be our best friend, let's put it this way. Not only because we're coping with such organic growth, that we're not forced, we're not onto a pressure to make acquisition. In the long run, if we position ourselves, let's say in 12-18 months from now, not only we'll have the leverage to balance sheet, but, you know, we may see better multiple on transactions and opportunities we're looking at right now. We're not in a hurry, but we're hurried to harvest on what we have planted, in the business. Just on in terms of expanding the capacity of your existing business, what are your thoughts around that? Do you think that might have some impact on your sort of near term 11% EBITDA margin targets? Yes. This is a very good point. I mean, if you remove for a second, let's say the inflation, the impact on wages, the impact on material and all that. If you remove that for a second, if you look at our business, there's a fairly good amount of movement on the EBITDA percentage that is linked to the business mix. Now, on the good news or bad news, but on good news, if you look at it, the growth on the operation and maintenance has been slightly more than what we anticipated. This is good on the good end. On the bad side is that this business is coming usually with lower margins than the specialty products, for example. As much as we're growing fast, the specialty products, which is the high margin business, on the other hand, you know, the O&M business is not staying still either. They're growing as well, and in dollars they're contributing a lot. This has a big influence on the overall, you know, percentage of EBITDA. However, as we said, we're going to continue to strive towards a double-digit EBITDA a nd I think I feel very confident that measures in place on mitigation on prices, mitigation on wages and all that are going to pay off and start to pay off in the coming quarters. We should regain momentum and margin expansion there. Gotcha. No, thanks for all the feedback and congrats again on all the progress. Thank you. There are no further questions at this time. I'll turn the call back to Mr. Dugré for closing remarks. Well, thank you very much and look forward to talk to you again. You're invited to join our year-end annual general meeting of shareholders, which will be December 6th, where we will give you an update on the three-year plan as well as our ESG report and plan. Thank you very much. Have a great day. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.