Ladies and gentlemen, thank you for standing by. Welcome to the IBI Group Fourth Quarter and Year End 2021 Results Conference Call. Please note that IBI's complete financial statements and management's discussion and analysis for the three- and 12-month periods ended December 31, 2021 were filed on SEDAR and have been posted on IBI's website at www.ibigroup.com. During the formal remarks, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. To ask a question, please press * followed by 1. As a reminder, this conference call is being recorded. Some of the statements on today's call might contain forward-looking information. Listeners are cautioned not to place undue reliance on these forward-looking statements. Since a number of factors could cause the actual future results to differ materially from the targets and expectations expressed, the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise unless expressly required by applicable securities law. For further information on risk factors, please view the company's annual information form filed with the Canadian Securities Regulatory Authorities and available on the company's website, SEDAR, or by contacting IBI directly. All amounts discussed today are in Canadian dollars unless otherwise stated. I would now like to turn the call over to Mr. Scott Stewart, Chief Executive Officer for IBI Group. Please go ahead, Mr. Stewart. Good morning, everyone, and thank you for joining us today. IBI's Chief Financial Officer, Stephen Taylor, is with me on today's call. We are pleased to share an update of IBI's Q4 and full year 2021 performance and provide an overview of the contributions from each of our business sectors. Please note that throughout the call, references to adjusted EBITDA refer to adjusted EBITDA net of IFRS, unless otherwise stated. Stephen will provide some additional context on our financial performance later in the call. To set the stage, I am extremely proud of IBI's 7.5% organic growth, which is achieved while continuing to improve our leverage metrics. IBI exited the year with a net debt multiple of 0.4x adjusted EBITDA. Our achievements didn't stop there, though. During 2021, IBI grew net revenue by 13%, grew diluted EPS by 40%, increased our backlog by 8% to a total of CAD 623 million or 17 months, grew 2021 adjusted EBITDA by 11%. Adjusted EBITDA margins would have been approximately 1% higher in both Q4 and full year 2021 had we not incurred costs in continuing projects for which revenue was not recognized in the year. We achieved this while continuing to generate cash flow, reduce debt and buybacks on 52,728 common shares, demonstrating our strong belief in the underlying value of IBI. An instrumental part of IBI's success can be attributed to our unwavering commitment to the environment, strong social constructs, and sound governance principles. Since our inception, ESG has been woven into the fabric of our culture as we strive to design and develop sustainable cities for the future. On Monday of this week, IBI announced that we have taken an equity position in privately held Ecosystem Informatics Inc, or ESI, a company providing innovative pollution mitigating technology, data modeling and reporting tools to help clients protect the environment while enhancing business performance. The ESI relationship strategically aligns with our earlier investments in EV charging company, SWTCH, as we continue directing the investments into products and tools which help IBI and our clients take action on climate change and lead the way for sustainable, innovative developments. IBI's Green IQ product also continues to gain traction. In 2021, we had more than 700 projects who were actively reporting data, up from 180 in 2020. Some of these 700 projects will be eligible for reporting to the American Institute of Architects Commitment Program, also called AIA 2030, offering architects a way to publicly show their dedication to track progress towards a carbon neutral future. A few of our notable Green IQ projects include the City of L.A.'s North Hollywood Sewage and Maintenance Yard, which is our best performing building on Green IQ, anticipated to be carbon neutral. In Utah, the Club Med Snowbasin is expected to be one of the first dream projects in the U.S. We also co-designed 1075 Nelson, a 178-meter skyscraper in Vancouver that is set to be the world's tallest Passive House building. Prioritizing ESG principles and commitments will take center stage within our new strategic plan as we lay out our goals for improving efficiency and increasing recurring revenue while leveraging technology and data to create superior urban environments. We look forward to unveiling details of our plan at our AGM on May 6. Under the leadership of Kevin Bebenek, we continue to advance our intelligence sector, for IBI Intelligence is a clear differentiator for us from peers. It will be the cornerstone of our ability to accelerate growth, expand margins, and increase annual recurring revenue, or ARR, by applying software systems and support, particularly in the area of mobility, including tolling, containment systems, traffic management, and traveler information. Late in 2021, IBI and joint venture partner, Egis, was awarded a 5-year contract to operate the Traffic Scotland National Control Center and manage the Scottish trunk road network, which is comprised of some 3,500 kilometers of roads. This contract builds on IBI's 25-year relationship with Traffic Scotland and will improve the safety and efficiency of the road network while providing a source of meaningful recurring revenue for IBI. Our team in India successfully implemented IBI's cloud-hosted integrated traffic management system, an evolution of IBI's platform. We implemented this on 4 of 7 toll roads in approximately 4 months, a project that would have taken 18 months to complete if the installation was done in a traditional way with systems on-prem. We anticipate the remaining two quarters will be live and operational by the end of this month, providing recurring revenue over the 8-year period of the contract. We are awarded a contract by Halifax Harbour Bridges, the first application of our next generation toll system back office, which features an all-encompassing functionality to support free flow toll operations, as well as web browser-based platform with enriched security features that adhere to the latest industry protocols. In addition, IBI's service contract for the Southern California 511 interactive voice response system was recently renewed for another 4 years. Both of these will contribute to the recurring revenue. Our building sector, led by Mansoor Kazerouni, continued to lead the GTA residential market as we have more than 200 mid-rise and high-rise buildings currently under design and construction, representing over 50,000 residential units. Our Canada West Living+ practice has similar market share, and we are seeing further growth in our Living+ footprint in the U.S. Many of these projects are large multi-tower developments and being developed, drawing on IBI's array of skills, including urban planning and design, landscape architecture, and transportation and civil engineering. IBI is providing architectural and master planning services for Mississauga's Exchange District. This is a mixed-use, pedestrian-friendly community that will house retail, residential, and an entertainment space. This project is also aligned with ESG principles as it will feature Ontario's tallest residential building to be powered by geothermal at 66 stories. Also in Mississauga, our building sector secured the design for the M3 condos at M City, along with over 20 other towers in Mississauga and permanent infrastructure work on the Ontario LRT project. Our industrial practice continues to be a key driver of our success in the U.S. as a repatriation of manufacturing coming back to North America, along with increased activity in warehousing and logistics. Not only are we working for the Ford Research and Engineering Campus in Dearborn, Michigan, some of our other automotive clients in the U.S. have started to take us global, particularly in the area of electric vehicle assembly plants. IBI's healthcare practice has experienced some of the highest activity levels in the U.K. and remains strong with ongoing work across numerous hospital projects and the major refurbishing of one of Egypt's largest public sector hospitals in Cairo. In the U.S., IBI's education practice remained robust with several new commissions for post-secondary and elementary schools in Texas. In Irvine, California, we are leading a collaborative design team transforming a 110-acre section of the former Marine Corps Air Base, El Toro, into a multifaceted cultural complex and positioned as Southern California's answer to Central Park in New York. The integration of our business segments truly sets us apart as our building sector secures new work from ongoing infrastructure and transit projects. Both of these sectors provide channels to market for intelligence. On the Yonge North Subway Extension, IBI is designing numerous buildings, stations, and bus terminals, as well as station modifications and accommodations for special track work. We have a number of similar projects, including mixed-use buildings along transit lines in Vancouver and Burnaby, BC. In our infrastructure sector, led by Carl Clayton, we see further collaboration across multiple projects, which represent joint efforts between numerous sectors and offices. I'm very proud of IBI's ongoing progress towards together over the past few years to leverage the solutions available through our intelligence sector. Notable recent project wins for infrastructure include the Toronto Basement Flooding Protection Program, which came over as a result of our acquisition of Cole Engineering. Our transit electrification practice provides a great example of how the convergence of intelligence, buildings, and infrastructure can benefit clients, the environment, and IBI. In Florida, we are designing an operations and maintenance campus to support a fleet of 250 electric buses. We have numerous bus and other vehicle electrification projects underway in both Canada and across the U.S., which cover the planning and design of facilities as well as the application of technology. We continue to advance significant design build projects where we have major roles, such as Hurontario LRT in Mississauga, Broadway Subway project in Vancouver, as well as the Scarborough and Yonge Subway extension projects in Toronto, where we are the technical advisors for the clients. Our offices in Greece and India have realized success in their local markets, where our commitment to the use of advanced technology and techniques helps to differentiate us from local competitors. I will now hand the call over to Stephen Taylor to share some additional context regarding IBI's financial results for Q4 and year-end 2021. Stephen? Thanks, Scott. My comments today are designed to provide context around our financial performance rather than to just reiterate figures that you can get from our press release, MD&A, and statements. As you've just heard, IBI's results reflect continued positive momentum and strong financial performance, highlighted by strong organic growth of 7.5% in 2021, and 9.6% in Q4. We grew annual net income by 43% and diluted EPS by 40% over 2020, and generated free cash flow, which was allocated to the purchase of 52,728 common shares under our NCIB. We reduced DSOs to 54 days. By year-end 2021, we'd also reduced net debt by CAD 35 million to exit the year with CAD 22.2 million in net debt, leading to a net debt to adjusted EBITDA multiple of 0.4x, 69% lower than in 2020. All of this was achieved while navigating an economy facing continued COVID challenges, inflationary pressures, and supply chain bottlenecks. While IBI has been largely shielded from supply chain issues given the nature of our business, we have experienced inflation in the labor market. The increase in salaries, fees, and employee benefits for 2021 have not yet been reflected in incremental revenue from our project rate changes, although some of these costs will get passed through. More importantly, however, are the competitive advantages that IBI gains due to our continued investment in productivity tools which enhance efficiencies. IBI's Q4 and full year 2021 adjusted EBITDA continued to be robust year-over-year, increasing 9% and 11% respectively over the same periods in 2020. However, both margins in both periods reflect the impact of work being performed and costs incurred during the year on projects where the corresponding revenue was not recognized during the year. As a result of this disconnect, our adjusted EBITDA margins were reduced by approximately 1% for both periods. Going forward, we anticipate our adjusted EBITDA margins will see the benefit of synergies stemming from acquisitions completed in the latter part of 2021. Growth in our intelligence sector also was affected by several factors last year, including the ongoing impact of COVID, particularly in the tech-heavy centers such as India, transition of large projects in our Greek office, and the effects of foreign exchange. Our billings from recurring software support and maintenance remained stable relative to 2020, but would have been nearly $1 million higher in the absence of the FX impact caused by the strengthening Canadian dollar against the US dollar. We continue to direct resources and activity towards expansion of our SaaS products and opportunities to enhance recurring revenue, particularly from data collection. As we move past the 2021 headwinds, IBI anticipates returning to a normal pattern of growth and performance from Intelligence exiting Q1 of 2022. From a capital allocation perspective, IBI has significant flexibility given our strong balance sheet. Our acquisition of Telenium represents a solid growth avenue for Intelligence and is expected to contribute an additional CAD 600,000-CAD 700,000 of recurring revenue over our baseline run rate. We're also very excited about the equity position in ESI that Scott spoke about earlier, which contributes to our growth and aligns with our ESG principles. Complementing these ongoing acquisition activities is our focus on new product development and technologies designed to improve the overall efficiency of IBI and our clients. Collaboration across offices to help level out workloads and meet client deadlines continues to increase as teams in different locations are increasingly more comfortable sharing work and undertaking work for clients where the standards and expectations are less familiar. With a healthy backlog at year-end of CAD 623 million or 17 months, which reflects some major long life design projects and infrastructure and longer-term technology contracts, coupled with steady staffing at record levels, we are positioned for execution. Just this past week, we bolstered our U.S. expertise with the appointment of Todd Hoisington as Director, United States, along with several other key U.S. appointments. We made strategic hires in areas such as connected autonomous vehicles, climate change resiliency, and rail systems which enhance our existing capabilities in these areas. Our results in 2021 demonstrate IBI's capabilities and our longer-term growth potential. We remain focused on generating free cash flow that can be directed to prudent and accretive acquisitions, further organic growth, strategic investments in technology and efficiency improvements, or allocating capital to the NCIB, which demonstrates our belief in the underlying value of IBI. Consistent with our investments into companies such as SWTCH and ESI or our acquisitions of Taranis and Telenium, we will continue to seek growth opportunities that leverage our growing intelligence capabilities while also supporting IBI's commitment to financial and environmental sustainability. Looking ahead to 2022, we're pleased to provide net revenue guidance of approximately CAD 457 million, and we are excited about the opportunity to potentially generate increased revenue outside of North America. Thank you. Scott and I will now take questions. Operator? Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. If you'd like to ask a question, please press *, then the number 1 on your telephone keypad. If you'd like to withdraw your question, press *2. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Benoit Poirier with Desjardins. Please go ahead. Hey, good morning, everyone. Good morning, Benoit. Could you provide additional details on the issues that impacted margin on large project in the quarter? Is this just a timing issue, and will it be recovered in Q1? Benoit, we think that business will return back to normal as we get out the back half of Q1 of this year. Occasionally, we run into situations like this where we're in a position where we have to either start or continue on work where we haven't yet finalized the paperwork on things. It really is just a timing issue. Okay. Okay, that's great. In terms of outlook for 2022, you mentioned about net revenue being close to CAD 457 million. What about the margin direction for each segment and your ability to improve billing rates to mitigate the inflation and wage costs? You know, as we both stated in our comments, there is pressure in the industry at the moment on wage costs. We are continuing to push forward with automations in all sectors of the business to ensure that we're sheltered as much as we can be. We are exploring the collaboration of work across offices, so utilizing resources in places like Greece and Mexico, where they have great technical capability, but their cost base is lower. We will continue to do so. As I say, I think we'll be at more of a normal operating rate on margins as we move through 2022. Okay. and Okay, go. Sorry. I was just gonna say that, I mean, for absolute clarity also, many of our contracts have wage rate adjustments included in the contract. We feel fairly comfortable or quite comfortable that we're able to manage the inflation pressures that we're experiencing. Okay. For intelligence, obviously, you made some incremental investments. You mentioned some color about the growth expectation for Telenium and ESI. What type of growth should we expect for intelligence in 2022? We have traditionally experienced Intelligence overall growth of between 6%-8%, which is typically above what we have incurred, about twice the rate of what we've incurred elsewhere in the firm in more conventional professional services. We do have a number of opportunities that we are in negotiation stage on final selection, and it is actually looking quite robust for Intelligence overall in 2022. I would say as well that we're really also focused on margin improvements. The investments that we're making in either new products or adapting traditional products to the cloud are paying dividends for us. I cited the project in India, where, you know, traditionally there would have been seven separate projects. The way it is, we have one project with seven instances, if you will. There's no additional software development involved in with them bringing on those extra projects. The margin, as you might appreciate with the one common platform, is very high. Same can also be said for Telenium, where they had in the acquisition there their own systems, well, we were deploying it to our cloud-based platform. Once we're past the integration stage on that, marginal cost to us is de minimis. Again, we would look to see that the revenue would go to the bottom line. Okay. That's great color. Last one for me in terms of M&A. Could you talk maybe a bit about the bidding pipeline, the valuation expectation from potential sellers? Also given your very strong balance sheet, just wondering if you would be willing to look at a larger deal as opposed to some tuck-in acquisition that typically tends to be the focus. We have, at the moment, a long list of firms that we are in various stages of discussions with. They do range from tuck-ins that can be accommodated very easily, through to firms of the scale of Cole and larger. We have an M&A team that is now very diligent in dealing with brokers, outreach focused in particular areas. I would see that we'll see through 2022 a significant expansion in our M&A activities. As for multipliers, we're always looking for something that is naturally accretive. We wouldn't do anything that we didn't feel would be accretive. We would be looking at margins that would be anywhere from the 4x EBITDA for the smaller firms to 5 or 6 or more for larger companies. That's great, caller. Thanks for the time. Thank you. Your next question comes from Ian Gillies with Stifel. Please go ahead. Morning, everyone. Good morning. Morning. With respect to some of the changes in the U.S. team that were announced recently, can you maybe just provide a bit of additional detail on maybe what sort of markets you're trying to penetrate or what sort of change you're trying to affect for that business moving ahead, given it seems to be a pretty key growth area? You're right. The U.S. is a very key growth area, and certainly a strategic direction for us, in the plan that we'll be announcing. There are a few different areas that are already strong, and certainly education has been a very strong area for us in the K-12. What we have seen that has grown very rapidly in the last year and a half, two years, is the industrial sector. We have a long history of working for the automotive sector of Detroit. We explained before that we are designing a global design headquarters for Ford in Dearborn, in Michigan. We're also heavily involved in the electrification plans. We're doing a major plant in Arizona, and there is discussions underway about working with that same company then internationally. We see what we have referred to as the onshoring of manufacturing into the United States and North America as being a key area of growth for us, and building off of our industrial practice in Southfield as well as here in Ontario. The organization that we put together, Todd Hoisington has been the head of the industrial practice in the U.S., and has been very active in the leadership of our U.S. East business. We have also put together a structure, though, that with Todd having overall responsibility for the U.S. also has other sector leads. We have another individual who's heading up buildings across the United States, another individual that's heading up infrastructure, and then also intelligence. We feel that by the bringing together of the disciplines across the United States in this way, that it'll allow us to take, as we've seen in Canada, better advantage of our presence locally, and our diversity of skills. For example, I mentioned the electric vehicle electrification and our maintenance and operations facilities. We have, at the moment, eight projects that are in the planning or design phase. I had mentioned the one in Florida, but there's a number of those underway, and they couple buildings, infrastructure, as well as intelligence. Those are some key areas. In terms of the growth, we're certainly looking to the South, southern part of the United States, the Sun Belt, where there is more natural organic growth. We're also looking at acquisitions in other areas that would be able to, where we'd be able to add in services in water, power, green energy, communications, that we can also then take more widely across the United States or, and for that matter, globally. And there are certainly good companies in the more established market areas of the Midwest and such that we are looking at. Okay. That's very helpful. With respect to the other operational costs in the quarter, you noted higher computer vendor costs. Sometimes these can be one-time in nature or they're subscription services. Are you able to provide any outlook on whether that reverts back to a number that we would have seen in prior quarters or whether it kinda hangs out around that CAD 13.5 million mark? Scott, I think Ian, on the question of computer costs, those appear to be with us for the future. I think this is something that has definitely occurred during COVID when work from home. All of the vendors that we deal with in our industry have seen that businesses have become very dependent on their software tools and have adjusted their rates accordingly. I think that we will see continuing costs in the computer area. We did reduce our overall cash costs on real estate, our footprint, by just short of 10%, during the last year. You know, Scott has spoken in past about our plan of reducing our real estate footprint. We are still paying in excess of CAD 21 million-CAD 22 million in real estate costs. As and when those leases come up for renewal, we will be working on reducing that cost. I think you will see us at least being able to hold the line and perhaps show some improvement in the other operating costs in the business as we move forward. Okay. That's helpful. I appreciate that. Last one for me. With rising interest rates on the come and a housing shortage, it's a bit confusing to understand. I guess, are you seeing any slowdown in demand from any of your Buildings customers on the residential side, or is that continuing apace? That is gaining momentum as it would seem. We are still seeing, certainly in Canada, the amount of immigration that we're seeing with some expected 400,000+ people coming into Canada, most of them are destined to Toronto, Vancouver, Calgary, Montreal, for a whole host of reasons. There's no shortage of demand, and there's no shortage of activity. One of the possibilities, though, that we are seeing more of this, is a movement, especially for pension funds that are very active in the housing market in Canada, that there's a movement away from or maybe I should say, but more in the way of rental construction that is occurring. with the expectation that is more affordable for a wide array of people, and it provides for a longer term, steady return for the pension funds making investments in those. We're not seeing any lessening of demand. Okay. That's really helpful to know. I'll turn it back over. Thanks very much. Okay. Thank you. Your next question comes from Maxim Sytchev with National Bank. Please go ahead. Hi, good morning, gentlemen. Hi, Max. Hi, Max. Scott, just maybe wanted to touch on upon the intelligence vertical again. Because I think you have, you know, Kevin, who's been leading the practice since May 2021, and I'm just wondering if there's been any, you know, sort of operational changes since obviously new leadership. Again, any thoughts in terms of, you know, revenue acceleration, go-to-market strategy, sort of maybe any updates on those sides, please. Thanks. Well, what we've experienced in the past year, and it started preceding Kevin taking over, was a bit of slowing down on the pace of new opportunities we thought being somewhat limited by COVID. We're certainly now seeing much stronger activity. Right now we're looking at and involved in discussions, negotiations, submittals around some 10 very significant projects in North America. What we have been doing, though, that has been significant is in addition to building the new platforms, such as Nspace and Curb IQ, we have been rebuilding our traffic management systems and toll systems. That's involved a significant investment, and will continue for the next year or so in both of those areas. That's to make those platforms one more contemporary, and two more aligned with the objective of delivering services from the cloud. We anticipate there would be and we go through a process constantly of looking at the market for these products, looking at the competitive situation, and looking at the margins that we are looking for. We're anticipating that and are experiencing. But certainly as we make investments in the new platforms and more in the cloud, that we're gonna be moving the margins up even higher than what has been the case in the past. That being said, we still have a very large installed base of on-prem platforms. As they come up for renewal and replacement, we will be in an extremely competitive situation to be able to then continue the relationship with the client. We're making investments. There was a slowdown, but there is now a very long tail of, if you will, demand for these services and platforms. Okay. That's helpful. Thank you so much. Is it possible to quantify the amount of investments that you're making right now on the digital side? I don't know if you want to talk about, you know, from like a, an annual perspective on how we should be thinking about this as time progresses. Stephen? Max, we're currently and have been for the last couple of years, and this is just items hitting the profit and loss, not the amount that has been going into intangible assets. We're spending about between CAD 3 million and CAD 4 million a year in investment in technology capability and products looking to build for the future. Okay. In terms of, I mean, can you get, like, you know, credits? Can you capitalize sort of more of that stuff or that's not how it works? We're capitalizing as much as the accounting rules will allow. We're also doing a very thorough job of building business cases and assessing as we go along the spend that we're making at the moment, whether that's in fact generating a return now. If not, what is the short and medium term outlook for us being able to realize a good return on those investments we're making? It's a constant process of assessing what we're spending against what we expect to get back. Okay. I also wanna Sorry, go ahead. I was just gonna add a bit of color on the investment in some of these platforms. For example, in Curb IQ, which is really it's looking out 3 or 4 or 5 years as to how we might manage ever more limited curb space around buildings and in urban areas. We invest in that, and what it does is to put us into a really unique position then as cities now start to understand the value and importance of their curb space. What we're getting is more now the studies and the professional services that go along with that because of the Curb IQ platform. However, and now we're now doing work across North America and in other parts of the world, including Latin America, because of that. We're getting the fees from that, and then we're able to leave behind, if you will, the continuing platform for the ongoing use or the service on it for ongoing use. It's really helping us on the software or on the soft services side, the consulting design side. That's also the case with the Ford building. It was because of their relatively small percentage of fees that went into the building related to technology of the building. It really was a differentiator that allowed us to take over the architecture as the lead designer then on that project as we completed and did the issue for construction design work. There's a symbiotic relationship there that they help each other. One allows us to be able to take on more of that design work, but because we have that relationship with the client, we're then also able to leave in many cases, or establish a continuing, recurring revenue relationship with the platforms that we have. It may be a little slower in terms of growth, but it's we see it as being very strategic for the resilience of the firm. For sure. Makes sense. Then, quick question in terms of the outlook. Obviously, I think backlog was up 6%-7% year-over-year. Your revenue forecast is for plus 3%. Do you mind maybe just talking through, is it the duration of the projects that has extended somewhat, so the backlog doesn't necessarily translate into the same projected revenue increase? How should we think about it? Or is the 3% you viewed as relatively conservative? Obviously, I appreciate that you had very strong growth in 2021 as well. I'll start on that. We have a history, Max, of being conservative in terms of what we forecast. I would say that we do have the benefit of some very long term projects, and that certainly sets up the 17 months of overall backlog. That includes many of the projects on the intelligence side that have 5, 6, 7+-year contract terms. Okay. That's helpful. Thank you. Just last question, Steve. Sorry, I don't wanna be sort of the dead horse on the margin side of things. Can you maybe provide a bit more color? Was it sort of contractually that you could not collect the revenue while you had to do the work? Just, I'm trying to better understand that because it doesn't seem like it's an execution issue. It's more so the billing. How should we think about this, and how can we sort of, you know, mitigate this on a going-forward basis? Thanks. No, Ian and Max, the way you need to look at it is that there are situations where, as architects in particular, and engineers as well, when you either get a notice to proceed on work or you're in the middle of work, and in particular, when you're in the middle of work and the steel has been ordered and the concrete is being poured, there are changes in scope to the work that clients need you to undertake. Under the accounting rules, until you get the paperwork all signed up, you can't actually start to re-recognize revenue on that stuff. You have an obligation to continue on working away on the project. You know, you need to get the signed contractual paperwork before you can actually recognize the revenue. That's why it's a timing issue, and we expect it to revert to a more normal course over the balance of this year. Okay. Super helpful. That's it for me. Thank you so much. Thank you. Your next question comes from Michael Tupholme with TD. Please go ahead. Thank you. Good morning. Good morning, Mike. Maybe just to pick up again on the question of the margins and the impact of the issue you just described, Stephen. I guess first off, was this concentrated in the buildings segment? No, both buildings and infrastructure. It affects both of those sectors, not so much intelligence. Okay. I mean, not to get too specific, but is it sort of equal impact roughly to both of those areas, or is one more, is it more pronounced in one versus the other? No, I would assume that it impacted both pretty well equally. Okay. You had noted that it's about a 1% drag on margins in the quarter and also for the full year. The quarter is easy to understand. As far as which other quarters in 2021 felt this impact if it had a full 1% on the entire year's margins as well? Less so in Q1, more so spread over the remaining three quarters of the year. Okay. Then it sounded like earlier in the call you mentioned that you sort of expect this situation to sort of normalize and be overcome during the latter part of the first quarter of 2022. Then just a moment ago, maybe it sounded like in response to Max's question, like this could persist a little longer throughout the year. I guess I'm just trying to get some clarity on first off, when would you expect that the, you know, the revenues and the billings catch up with this and sort of get back to more of a normalized regular margin performance? I think we're by the time we get into next month, it should be largely resolved. Okay. If I think about, there wasn't much impact in Q1 2021, but there's gonna be some impact in the first quarter of 2022. Should we be thinking about margins in Q1 2022 being down versus the 15% you did in the first quarter of last year? Is that directionally right? I would say that we'll be pretty close to the 15% that we did last year. Okay. Helpful. Maybe just the last- Revenue will be up, understandably. We think revenue will be up in order to achieve our guidance that we've given for the year. Margin percentage will improve as we move along month-to-month. Okay. That makes sense. I guess, yeah, just to wrap up, it's kind of along the lines of that improving margin. I think Scott mentioned that certainly you strive to improve the margins. If there was a 1% drag on the full year margin in 2021, I guess I'm just trying to understand. You reported a 15.3% margin, EBITDA margin. With a 1% drag, you would have been at 16.3%. When you talk about trying to or striving to improve the margins in 2022, should we be thinking about improvement versus what you actually did in 2021 or you know, improvement over and above what would be kind of a normalized margin in 2021 of 16.3%? Just trying to get a sense for, you know, which one we should be keying in on there. No, I think whatever we did last year, we would be looking to improve and get that to a more. Like, we're not saying we're gonna do 17%. 16% is where we're striving to get closer to. Okay, that makes sense. On the net revenue side and the guidance, you did 7.5% organic growth for full year 2021. The 2.8% growth that's implied by the revenue guidance you've given, 2.8% growth for 2022, how would that break down between volume gains, pricing gains, and also the benefit of the acquisitions you did in 2021 that weren't in there for the full year? Well, Mike, I think that the reason for our being cautious in terms of giving guidance is that it is a competitive labor marketplace. We have a healthy backlog, but at this point in time, we're not gonna over-commit in terms of whether we can actually increase the number of professional staff that we have on board to accelerate the pace at which we are delivering the work. I think our assumption at this point in time is that most of what we would be achieving would be through increased rates as it stands now. However, depending on what the hiring approach is or our success over the year, that may move more towards volume increase as well. As Scott has said, we've got a lot of candidates we're talking to about acquisitions, so non-organic growth is very likely to happen this year also. Okay. No, that's helpful. Thank you. Maybe just lastly, on the subject of labor inflationary pressure, I guess two-part question. Number one, can you provide some sort of a sense for what sort of level of pressure you're actually experiencing right now? We can look at general CPI numbers. I don't know how relevant those are. What kind of a rate increase in terms of pressures are you actually seeing? Scott, can you speak to that? The compensation pressure that we are seeing at the moment is in the 4%-5% range. Okay. Thanks for that. Then I guess just the last one relates to that is, so Scott, you mentioned the ability to pass on, I think you said, you know, at least a part of those increases. Like, so contractually, how is it actually structured? Or, you know, can you simply sort of say like, "Look, these are the rate increases we're experiencing, and therefore you should be able to pass on most of those and get close to that?" Or are these contracts tied to some other metric which may not necessarily in the current environment, some other indicator or metric, not necessarily currently aligned with the 4%-5% you just mentioned. It's complex to answer. Let me give you a sense of the kinds of contracts that we have. We have fixed price contracts to deliver a product solution, whatever. We have the ability within that then to increase the rates on the project because it's against that fixed price. It's our decision how we then deal with it. We have other contracts that are based on rate multipliers. So if a salary goes up, the multiplier is constant, but the ultimate billing rate goes up because it's against the base of what the compensation is. In other contracts, we have built-in CPI adjustments against certain limits. It's quite a mix of responses about how we deal with it. I would say that we were probably covered somewhere between 70%-80% in terms of the ability to capture the adjustments, the wage rate adjustments. There are other situations, though, that even take an entirely different perspective, where we're paid on the basis of the capital cost of the buildings or the asset that's being constructed. I would still say on balance, it would be somewhere in that 70%-80% that would be fully recoverable, and then the rest would be sort of somewhat recoverable. Okay. That's really helpful. Then I guess, yeah, you'd rely on productivity gains to try to make up the balance. Make up the balance. Those contracts come to an end, and then you start new work with the new rate base. Right. Okay. No, that's all very, very helpful. Thank you. Thank you. We have the following question from Benoit Poirier. Please go ahead. Yes. Good morning again. Steve, could you provide some color about the expectation for DSOs, CapEx, and free cash flow movement for 2022? I don't think, Benoit, and I know I say this every year, and then we do better. Honestly, at mid-50 days at the moment, I don't see us dramatically improving on that. I think in the CapEx, we will spend between CAD 3 million and CAD 3.5 million on intangibles, the development of software products that'll go on the balance sheet. We're planning for about CAD 6.5 million of other expenses. Although that's in the plan, I think we can probably come in at a lower number than that. If you went overall range CAD 9 million-CAD 10 million on CapEx for the year, I think that would be a sensible number. Sorry, what was the third part of your question again? Can you repeat? Movements in the free cash flow, kind of, is there a movement in terms of working cap or some key elements aside that we should take into account? I think that our generation of free cash flow will be. I don't think it'll be quite as robust as last year. We had a very good year in terms of cash collections. I think free cash flow in the business will be CAD 25-ish million. Basically, I think if we didn't invest in new businesses, which isn't part of our plan, but if we didn't invest in new businesses, we would basically be pretty well at a net debt number that's at or below CAD 0 by the end of the year. Okay. The generation of cash, and you can see this pattern in prior years, is that we tend to use cash in the first half of the year, and we tend to generate cash more significantly in the back half of the year. When you're looking at it quarter by quarter, you should make reference to what we've been able to do in prior years in terms of quarterly cash generation. Okay. Last question, with respect to the upcoming strategic plan, any color about what kind of metrics we should be expecting, going forward, in terms of focus? It's going to be a redoubling on technology, I mean, generally, and with a much stronger emphasis on climate and being able to not only provide advisory service, but to create and deliver solutions into the climate matrix, if you will. You know, that's the investment in SWTCH and the investment in ESI. It's about being able to take those products and integrate them into other kinds of services, as an illustration, that we provide. There will be other areas that we will elaborate on that are gonna be more focused on establishing that continuing relationship with the clients and the recurring revenue theme. Okay. That's great, caller. Thank you very much for the time. Pleasure. Thank you. Your next question comes from Frederic Bastien with Raymond James. Please go ahead. Good morning, Scott. Hi, Frederic. How are you? Good. Good. Scott or Stephen, can you spend more time on your M&A strategy and perhaps highlight the things you are doing differently today than you might have been in your early days as a public company? In the early days, Frederic. Oh, those early days. Sorry. The difference between then and now. When we did acquisitions back starting in 2004 through 2012, it was always about the acquisition. It was really never about the integration. It was never about common reporting. It was never about common reward and compensation mechanisms. It was acquisitions because it would seem to be accretive. And now, the focus since I took over and Stephen joined, it's always been about putting the platforms in place that allow us to have immediate or daily access, updated information on the firm as a whole. Doesn't matter what office, what company, what entity, we have this comprehensive access to information about our financial performance, our marketing initiatives, as well as HR. We have a very impressive, if you will, presentation information access from everything that you could imagine about running a company. When we, as an example, acquired Cole, they were on our systems and had their billings out at the end of the first month. That's been a really significant direction. We were monitoring Cole's performance within the IBI structure immediately. They did their time sheets on our platforms, et cetera. One, common platforms. Two is about the due diligence on the firms and how they add value. We certainly are much more aware of where there is growth that is driving our sector. Certainly in Canada, we've been very blessed with a lot of immigration that really plays nicely into the kinds of services that we provide. Growth that's related to infrastructure investments, and certainly that is the case in various parts of Canada and Quebec, Ontario, Alberta, and BC, but also now in the United States. Also, as we looked in the United States, looking for more fundamental growth, that is organic growth, like population growth and immigration, and that is really more in the southern states and along the coasts. That has a priority for us because when you have population growth through whatever means, typically immigration, you have a need for all the services that we provide. Where people live, where they work, where they heal, where they learn. We're able to provide all of these services that go with it, of course, the infrastructure. The other dimension to the acquisition strategy is around being able to provide those kinds of fundamental services that support urban environments. It's water and wastewater, it's power, it's communications, and it's mobility. Where there may be firms, as I mentioned earlier, in the Midwest, where there may not be the same or Pennsylvania or other places like that, where there may not be strong indigenous growth or local growth, those are skill sets that we can take into the growth areas. That's another dimension to sort of the infrastructure and building sector. On the technology side, we're first and foremost gonna be looking for smaller acquisitions where we can get a lot more leverage, and where they would come into a firm like our investment in and acquisition of Aspyre and what that did for us in Ford and hospital work. There may be other bigger investments that we might make, but it would really depend on the particular circumstances. That's sort of a broad overview. We have a team now of people within the firm that are dealing with M&A, and Steve and I are have weekly reviews on where we're at, in the outreach, their contact with us, the putting together of a business case, in, as we do the assessment of these firms before we get into the extensive due diligence. That then becomes a decision point about how we go forward, how we organize. The other key thing is that we have all of the other administrative functions organized to then support that integration, from IT to design technology to HR, finance and accounting, and then of course, the professional practices. The theme that used to be the case back in 2004 to 2012 was, we'll buy you, and don't worry, nothing will change. Now, you'll be part of IBI. Scott, I think there's a couple of comments I'd like to make on the people part of the acquisitions as well. Frederic, one of the things that we're paying a lot of attention to is rather than just focusing on the shareholders of the business that we might be acquiring, we're also looking, before we pull the trigger on an acquisition, at the next level of business leaders in the business. Because understandably, in three or four years' time, the person you just gave a big payday is likely to go off and play golf somewhere, and you wanna make sure that the people that are there in the business are going to be able to sustain and grow what you've bought. We're paying a lot of attention to that. We're also looking to leverage our own internal management talent. This was particularly evident on the Cole acquisition, where before we go ahead with an acquisition, we look for who's the right person or persons within IBI to take responsibility and be accountable for ensuring this business comes on as part of IBI and makes the transition smoothly and that, you know, we ensure that the acquisition is gonna be a success. The whole people part of doing acquisitions is a very important aspect at the moment. Thank you so much. This is exactly the answer I was looking for. Thanks. That's all I have. All right. Thank you. There are no further questions. Mr. Stewart, you may proceed. Well, thank you, everybody, for joining the call today. We're certainly very pleased with the results of the quarter and the year, and we look forward to continued progress and improvement as we go forward. Everybody, have a very good weekend. Thank you. Ladies and gentlemen, this concludes your conference call for today. 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