BP (NYSE:BP) Q4 2025 Earnings call February 10, 2026 08:00 AM ET Speaker3Good afternoon and good morning, everyone, and thank you for your interest in BP's full-year 2025 results. I'm delighted to welcome our guests in the room and those on the webcast. I'm joined today by Carol Howle, Interim Chief Executive Officer; Kate Thomson, Chief Financial Officer; and Gordon Birrell, Executive Vice President, Production and Operations. Before I hand over to Carol, let me draw your attention to our cautionary statem ...

Summary of Conference Call Company and Industry - **Company**: dsm-firmenich - **Industry**: Nutrition, Health, and Beauty Key Points and Arguments Divestment Announcement - dsm-firmenich announced the divestment of Animal Nutrition & Health (ANH) to CVC Capital Partners for a total enterprise value of **$2.2 billion**. The proceeds at closing are expected to be **$1.2 billion**, with a **20% retained stake** in the company and an earn-out possibility of **$0.5 billion** [2][3] Transaction Structure - The transaction will split ANH into two standalone entities: one focused on solutions and the other on essential products, primarily vitamins. The target completion date for this separation is around the end of **2026** [3][4] Financial Metrics - The valuation of **$2.2 billion** represents approximately **7x EV over Adjusted EBITDA** multiple. The earlier announced feed enzyme sale last year had a **10x multiple**, bringing the total to **$3.7 billion** [3][12] Capital Allocation - dsm-firmenich will maintain a stable dividend of **€2.50** and initiate a share buyback program of **$500 million** in addition to a previously announced **€1 billion** buyback by **2025** [4][13] Future Financial Reporting - The company plans to launch restated financials reflecting the consumer part of the business post-ANH divestment. Full-year results are expected on **February 12, 2026** [5][10] Impairment and Financial Adjustments - The transaction resulted in a non-cash impairment of approximately **€1.9 billion**, primarily linked to goodwill and intangibles from the merger. This impairment will be processed in the **2025** full-year results [11][12] Earnings and Dividend Policy - The dividend policy has been adjusted to a stable to preferably rising approach, moving away from the previous distribution range of **40%-60%** of earnings. The company aims to return to a comfortable coverage range for dividends within a relatively short period [31][32] Supply Agreement - A long-term vitamin supply agreement has been secured under favorable conditions, which will help mitigate volatility in the vitamin market. The pricing structure is more aligned with a cost-plus model [40][41] Separation Costs and Financial Health - Expected separation costs are around **€150 million**, which will not be included in the net cash proceeds of **€600 million**. The company has plans to mitigate stranded costs associated with the separation [79][80] Strategic Focus - The divestment allows dsm-firmenich to focus on its core consumer business, entering what is termed the "accelerate phase." The company aims to grow its existing business and deliver on midterm targets of **5%-7%** growth [95][96] Future Outlook - The company is committed to its midterm strategic targets and will provide further insights during the investor event scheduled for **March 12, 2026** [91][92] Additional Important Information - CVC Capital Partners will contribute a few hundred million euros to ensure sufficient liquidity for both entities post-transaction [43] - The separation of the two companies will allow for independent growth paths, with no requirement to exit the retained stake in a combined manner [25][39]

Financial Data and Key Metrics Changes - Fiscal 2026 started strong with Q1 adjusted EBITDA significantly above expectations, leading to an increase in guidance [4] - Continued aggressive share repurchases have helped maintain net leverage flat despite operational performance [4] Business Line Data and Key Metrics Changes - The foodservice normalized run rate has been updated positively, reflecting strong operational performance [4] - The egg segment saw volume growth, particularly in higher value-added eggs, with expectations of a 3%-4% growth rate moving forward [23][45] Market Data and Key Metrics Changes - The cereal category has recently returned to historical low single-digit growth rates after significant declines, attributed to changes in consumer behavior and SNAP adjustments [11][12] - The pet category, particularly dog food, has been softer compared to cat food, with expectations of stabilization in volumes as brands are relaunched [76] Company Strategy and Development Direction - The company remains opportunistic regarding M&A, with no specific category focus but is open to investments that show potential returns [31] - Adjustments in promotional spending and assortment strategies are being made to enhance efficiency in promotional-driven channels [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that market valuations for small-cap growth-oriented food companies are changing, making M&A more interesting as multiples decrease [10] - The company is confident in the stickiness of the foodservice normalized run rate and expects continued growth driven by value propositions [45] Other Important Information - The company has successfully closed two cereal facilities, with cost savings expected to impact the P&L starting in Q3 [78] - The company is focused on balancing attention between the foodservice segment and the RTD shakes plan, ensuring profitability before expansion [39] Q&A Session Summary Question: Market valuations and M&A activity - Management noted that changing multiples are making M&A more interesting, but it is still uncertain if valuations are attractive enough for smaller public entities [10] Question: Cereal category performance - Management indicated that recent improvements in the cereal category are linked to SNAP changes and a shift in consumer preferences towards more affordable options [12] Question: Guidance for the rest of the year - The balance of the portfolio is expected to remain similar to initial outlooks, with no material changes anticipated [21] Question: Foodservice volume growth - Management highlighted that year-over-year growth in foodservice is influenced by previous avian influenza impacts and customer inventory reloads [23] Question: Competitor behavior in the cereal market - Management stated that their strategy remains unchanged despite competitor investments in price and promotion, focusing instead on efficiency [28] Question: Pet category trends - Management expects stabilization in pet volumes, particularly with the relaunch of brands like Nutrish and Gravy Train [76] Question: Cost savings from facility closures - Cost savings from the closure of cereal facilities are expected to start impacting the P&L in Q3 [78]

Financial Data and Key Metrics Changes - The company achieved a free cash flow from operations of $1.4 billion in 2025, with a conversion rate of 46% after adjusting for one-off items [5][9] - Net income increased by 2% for the full year, with a significant impact from goodwill impairment and asset write-downs [29] - EBITDA for the fourth quarter increased by 20% year-over-year, with a margin expansion of 5 percentage points [15] Business Line Data and Key Metrics Changes - Consolidated cement and aggregates volumes in the fourth quarter grew by 1% and 2%, respectively, with notable growth in EMEA cement volumes [10] - The aggregates business contributed 39% to U.S. EBITDA, nearly equal to that of cement, reflecting strong performance driven by Project Cutting Edge [20] - The Urbanization Solutions portfolio saw higher EBITDA in the admixtures business in EMEA, partially offsetting soft performance in Mexico and the U.S. [12] Market Data and Key Metrics Changes - In Mexico, average daily cement sales increased by 8% sequentially, indicating improved demand conditions [15] - U.S. operations posted record fourth quarter EBITDA, with margins near record highs, driven by higher operating efficiency and the consolidation of Couch Aggregates [17] - EMEA region achieved record EBITDA and EBITDA margin in 2025, supported by higher volumes and prices [22] Company Strategy and Development Direction - The company is focused on enhancing shareholder returns through improved free cash flow conversion and disciplined capital allocation, prioritizing aggregates and adjacent businesses [6][31] - Project Cutting Edge aims for recurring savings of $400 million by 2027, with $125 million expected in 2026 [13][34] - The company plans to continue seeking divestments in non-core markets to expand its presence in the U.S. [5][6] Management's Comments on Operating Environment and Future Outlook - Management expects a more favorable demand environment in 2026, particularly from Mexico and EMEA, with guidance for high single-digit EBITDA growth [34] - The company anticipates incremental savings of $165 million under Project Cutting Edge, contributing to improved free cash flow [34] - Management remains focused on operational excellence and shareholder return, emphasizing the importance of self-help measures for growth [36] Other Important Information - The board of directors will propose an annual cash dividend of $180 million, representing a nearly 40% increase compared to the previous year [31] - The company recognized a goodwill impairment of $538 million in 2025, which significantly impacted net income [10][29] - Energy costs per ton of cement declined by 12% for the full year, driven by lower fuel and power prices [29] Q&A Session Summary Question: Impact of potential EU ETS target changes on pricing and profitability - Management indicated that potential changes to EU ETS targets would not alter the pricing strategy in Europe, maintaining mid-single digit price increase targets for the coming years [38][39] Question: Clarification on high single-digit EBITDA growth guidance - Management expressed confidence in the guidance, highlighting more upside than downside risks, particularly from currency fluctuations and ongoing operational efficiencies [45][46] Question: Future capital allocation and divestments - Management confirmed plans for divestments, with proceeds aimed at reinvestment in the U.S. aggregates market, emphasizing a disciplined approach to acquisitions [81][83]

Financial Data and Key Metrics Changes - In Q4 2025, adjusted earnings were approximately $3.3 billion, lower due to non-cash tax impacts and lower oil prices, but offset by strong operational performance [11] - Full year adjusted earnings for 2025 reached $18.5 billion, with cash flow from operations close to $43 billion and free cash flow exceeding $26 billion [12] - The average Brent prices in 2025 were over $10 per barrel lower than the previous year, yet operational performance remained strong [12] Business Line Data and Key Metrics Changes - Upstream operations showed strong performance, particularly in the Gulf of Mexico and Brazil, contributing to increased production and higher margin volumes [12][13] - The Chemicals and Products segment faced challenges due to low chemical margins and lower operational performance, which is a key priority for repositioning in 2026 [11][12] - Mobility and lubricants achieved their best-ever results in 2025, with mobility ROACE increasing to over 15% and lubricants to over 21% [13] Market Data and Key Metrics Changes - LNG sales grew by 11% in 2025, surpassing the target of 4%-5% annual growth set for 2030, supported by the highest number of cargoes delivered in a single year [5][6] - The company expanded its exploration footprint by acquiring acreage in Angola, South Africa, and the Gulf of Mexico [6] - The company is well-positioned to capitalize on new opportunities in Iraq, Libya, and Venezuela, with ongoing discussions and MOUs in these regions [62] Company Strategy and Development Direction - The company aims to deliver structural cost reductions of $5-$7 billion by the end of 2028, having already achieved $5.1 billion by the end of 2025 [3][4] - Focus on disciplined capital allocation with a cash CapEx range of $20-$22 billion, maintaining a strong balance sheet with gearing at 21% [14] - The strategy includes a commitment to shareholder distributions of 40%-50% of cash flow from operations through the cycle, with a 4% increase in dividends announced [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate a rapidly changing world, emphasizing a focus on value creation and operational performance [16][17] - The company is committed to reducing emissions and has made significant progress towards its emissions targets, including a 100% elimination of routine flaring in upstream operations [10] - Management acknowledged the challenges in the chemicals sector but emphasized ongoing efforts to achieve free cash flow neutrality and improve performance [46] Other Important Information - The company completed the divestment of SPDC in Nigeria and repositioned its chemicals portfolio by divesting loss-making assets [5][6] - The company is focused on high-grading its portfolio, divesting lower-performing assets while investing in high-margin opportunities [7][8] - The company has committed to investing between $10 billion-$15 billion in low-carbon energy solutions from 2023 to 2025 [8][9] Q&A Session Summary Question: Concerns about reserve life falling 15% and plans to address it - Management acknowledged the decline in reserve life but emphasized intrinsic value creation and ongoing efforts to improve capital efficiency and returns [22][24] Question: Thoughts on buybacks and capital allocation - Management confirmed that buybacks are a conscious decision, maintaining a distribution range of 40%-50% of cash flow from operations [34][36] Question: Key financial impacts of the Adura joint venture - The Adura joint venture is expected to provide considerable dividends, although it is a standalone entity affecting upstream production outlook [40][42] Question: Progress on chemicals restructuring and capacity shutdowns - Management is exploring unit-by-unit shutdowns in chemicals and has identified cost reductions to achieve free cash flow neutrality [72][76] Question: Opportunities in Iraq, Libya, and Venezuela - Management sees potential in these markets and is well-positioned to capitalize on new production opportunities while being cautious about capital allocation [62] Question: Impact of LNG market oversupply on the portfolio - Management remains optimistic about long-term LNG demand and believes the company is well-positioned to navigate market volatility [67][70]

Financial Data and Key Metrics Changes - In 2025, consolidated service revenue increased by 0.6%, with adjusted EBITDA rising by 0.7%, leading to a 20 basis point improvement in adjusted EBITDA margin to 43.6%, the strongest annual margin in over 30 years [18] - Adjusted EPS declined by 7.9% in 2025, primarily due to higher depreciation and amortization from network investments and increased interest expense [18] - Free cash flow increased by 10% to CAD 3.2 billion, driven by higher EBITDA, lower capital expenditures, and improved working capital [19] Business Line Data and Key Metrics Changes - Wireless service revenue declined by 0.2% in Q4, an improvement from previous quarters, with consumer wireless service revenue stable year-over-year [20][22] - Fiber-to-the-Home internet net additions reached 43,000 in Q4, contributing to a year-over-year internet revenue growth of 8% [7][21] - AI-powered solutions revenue grew by 31% in the enterprise segment, driven by strong performance from Ateco and Bell Cyber [21] Market Data and Key Metrics Changes - The acquisition of Ziply Fiber contributed positively to revenue, with total revenue for Bell CTS US reaching CAD 232 million in Q4, supported by strong customer penetration [23] - Ziply added over 6,000 net new fiber customers in Q4, with a focus on expanding its fiber footprint [24] Company Strategy and Development Direction - The company has aligned its organization around four strategic priorities: enhancing customer experience, strengthening fiber and wireless network leadership, accelerating enterprise and digital media growth, and positioning for sustainable free cash flow growth [3][4] - The strategy includes a focus on disciplined capital allocation, with a target of approximately CAD 1.5 billion in AI-powered solutions revenue by 2028 [11][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of core segments while managing declines in legacy services, indicating a focus on maintaining momentum in AI-powered solutions and digital media [36] - The company anticipates consolidated revenue growth of 1%-5% and adjusted EBITDA growth of 0%-4% for 2026, reflecting continued momentum in growth engines [26][27] Other Important Information - The company reported a net debt leverage ratio of approximately 3.8 times adjusted EBITDA at the end of 2025, unchanged from the previous year, despite the Ziply Fiber acquisition [30][31] - The company is focused on maintaining a dividend payout ratio within the target range of 40%-55% while generating strong free cash flow [29] Q&A Session Summary Question: Guidance ranges for revenue and EBITDA - Management indicated that the guidance reflects growth in core segments while managing legacy declines, with potential swings from wireless penetration gains and overall market growth [36][38] Question: Wireless pricing environment - Management noted that they are focused on disciplined execution and are not participating in aggressive promotions, aiming for profitable transactions [39][40] Question: Growth and margins for Ziply - Management confirmed that Ziply's performance is in line with expectations, with strong demand for fiber and plans to expand beyond the existing footprint [45][46] Question: Impact of recent wireless discounts - Management stated that recent pricing activity does not change their execution strategy, emphasizing a disciplined approach to subscriber loading [57][58] Question: Convergence opportunities - Management acknowledged the potential for increased wireless market share through their fiber footprint and indicated a belief in significant upside from disciplined execution [60][61]

Financial Data and Key Metrics Changes - For Q4 2025, consolidated revenues were $1.38 billion, up 1% year-over-year, with adjusted EBITDA of $138 million, yielding a margin of 9.9%, slightly down from 10.1% in the prior year [13] - Adjusted EPS for Q4 was $1.37, up from $1.34 in the previous year, while for the full year, consolidated revenues increased 5% to $5.5 billion, and adjusted EBITDA rose 10% to $563 million, delivering a margin of 10.2%, up 40 basis points compared to 9.8% in 2024 [12][14] Business Line Data and Key Metrics Changes - FirstService Residential revenues for Q4 were $563 million, up 8%, with EBITDA of $51.5 million, a 12% increase year-over-year, and a margin of 9.1%, up from 8.8% in Q4 2024 [14] - FirstService Brands revenues for Q4 were $820 million, down 3% year-over-year, with EBITDA of $88.5 million, down 12%, and a margin of 10.8%, down from 11.9% in the prior year [16] Market Data and Key Metrics Changes - The demand environment in roofing remains muted, with new commercial construction down significantly, while reroofing is expected to stabilize with a focus on backlog and bidding activity [8][42] - Restoration revenues were down 4% for the year, relative to an industry decline of over 20%, but the company expects growth in 2026 assuming a return to historic weather patterns [6][7] Company Strategy and Development Direction - The company aims to focus on tuck-under acquisitions and consolidating underperforming franchises, particularly in markets like California Closets and Paul Davis [24][25] - The management is being patient in the current environment, focusing on finding the right partners and opportunities while maintaining a cautious approach to capital allocation [25][49] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic indicators do not suggest an improved environment through 2026, with expectations for low to mid-single digit revenue growth in Q1 and 2026 [10][19] - The company anticipates a modest uptick in activity due to recent winter storms, but it remains too early to quantify the impact on revenues [31] Other Important Information - The company announced an 11% dividend increase to $1.22 per share annually, reflecting strong free cash flow and a strengthened balance sheet [18] - Operating cash flow for Q4 was $155 million, a 33% increase year-over-year, contributing to annual cash flow from operations of over $445 million, up 56% versus 2024 [17] Q&A Session Summary Question: Discussion on M&A and market conditions - Management noted that the market is slower than 12 months ago, particularly in roofing, with no significant changes in competitive landscape or multiples observed [22] Question: Future capital deployment strategies - The company plans to focus on acquiring underperforming franchises and tuck-under acquisitions, while being patient in the current high-valuation environment [25] Question: Margin outlook for both segments - Management expects margins to remain flattish year-over-year, with some headwinds in Q1 for the brands segment [28][29] Question: Impact of recent weather events on revenue - Management indicated that while it is early to quantify the impact, they expect modest revenue growth due to increased activity from recent winter storms [31] Question: Competition in the roofing segment - Competition has intensified, leading to compressed gross margins, and management does not expect this to alleviate until there is an uptick in the new construction market [48]

Core Insights - The mining industry in Africa is facing the most severe cost environment changes in the past five years, shifting focus from commodity market prospects to how companies can maintain competitiveness amid rising input costs [1] - Despite strong performance in some mineral prices, internal operational pressures are increasing, leading to reduced profit margins, shorter decision-making cycles, and lower tolerance for errors [1] - Rising energy prices, logistical constraints, overlapping equipment replacement cycles, increasing labor costs, and stricter regulatory requirements have transformed cost increases from a "cyclical phenomenon" to a "structural reality" [1] Group 1 - Companies are now more cautious in distinguishing between long-term structural cost pressures and those that may ease over time, reassessing capital investments to restore competitiveness [2] - The focus is shifting towards whether capital allocation can enhance resilience, with companies demanding higher returns on investment projects linked to quantifiable outcomes such as reduced unit costs and improved recovery rates [2] - Projects lacking clear productivity benefits are viewed as risks rather than opportunities, and technology investments are under strict scrutiny to ensure they can effectively reduce downtime and energy consumption [2] Group 2 - Companies are strengthening internal collaboration by forming cross-departmental cost teams that integrate finance, engineering, business, and operations to identify risks and clarify value loss areas [2] - As the 2026 Africa Mining Conference approaches, there is a growing consensus that strong prices alone are insufficient for sustainable value creation; operational reliability and disciplined capital allocation are crucial for navigating price cycles [2] - Companies that deeply understand their cost structures, invest prudently, maintain technological capabilities, and make rational decisions during high-price cycles are more likely to stand out in the next cycle [2]

Financial Data and Key Metrics Changes - Order bookings for Q3 were $821 million, up almost 12% sequentially and down 7% compared to Q3 last year [10][16] - Q3 revenues reached $761 million, representing a 16.7% increase year-over-year, driven by organic growth of 12.6% and a 4.1% benefit from foreign exchange [10][17] - Adjusted earnings from operations in Q3 were $80 million, a 21.6% increase from Q3 last year [10][17] - Gross margin for Q3 was 29.6%, a decrease of 111 basis points from the previous year due to program mix [17] - The company ended the quarter with an order backlog of approximately $2.1 billion [11][18] Business Line Data and Key Metrics Changes - In life sciences, order backlog was $1.1 billion, with revenues for the quarter at $391 million, the second highest in ATS's history [11][12] - In food and beverage, Q3 order backlog was CAD 203 million, with strong funnel activity driven by brand recognition [12] - Energy sector order backlog reached a record CAD 296 million, up 87% over Q3 last year, driven by refurbishment and life extension projects for nuclear reactors [12][13] - Consumer products backlog hit a record CAD 321 million, supported by a large enterprise warehouse packaging automation program [14] Market Data and Key Metrics Changes - The company reported strong demand in life sciences, particularly in radiopharmaceuticals and GLP-1 auto-injectors [11][12] - The energy sector is experiencing growth due to refurbishment projects and new build programs, including both large-scale reactors and small modular reactors (SMRs) [12][13] - The transportation segment continues to reflect smaller-scale opportunities, with a cautious approach to pursuing larger projects [68] Company Strategy and Development Direction - The company is focused on margin expansion, capital allocation, and leveraging its strong lean operating system [5][8] - Recent leadership appointments aim to strengthen operational capabilities in key end markets [6][7] - The strategy includes embedding the growing services business within operating units to enhance accountability and customer alignment [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute and deliver long-term value, despite a dynamic macro environment [20] - The company has not been materially impacted by tariffs and continues to adapt to customer needs across different geographies [20] - Management remains optimistic about the outlook for ATS, emphasizing the potential for margin expansion and capital efficiency [29] Other Important Information - The company incurred CAD 5.5 million in restructuring costs during the quarter, with total costs expected to be approximately CAD 20 million [19] - Cash flows from operating activities were CAD 115 million, with non-cash working capital as a percentage of revenues improving to 16.4% [21] - Capital expenditures for the quarter were $16.6 million, with expectations for fiscal 2026 CapEx between $70 million and $90 million [21] Q&A Session Summary Question: Doug's priorities in the first 90 days - Doug highlighted a focus on core end markets, margin expansion potential, and disciplined capital deployment [28][29] Question: Connection between margin improvement and gross margin change - Anne explained that gross margin changes reflect program execution and backlog dynamics, with ongoing opportunities for improvement [34][35] Question: Outlook for nuclear and life sciences segments - Anne discussed strong backlog in nuclear and ongoing growth in life sciences, with new orders contributing to the positive outlook [39][40] Question: Capital allocation and working capital targets - Doug indicated that while it's premature to set new targets, the company is focused on improving working capital efficiency and considering M&A opportunities [44][46] Question: Impact of reshoring and tariffs on business - Doug noted that while reshoring discussions are prevalent, the primary driver for capacity expansion is the increased demand for therapeutics [65] Question: Transportation segment outlook - Doug mentioned a cautious approach to the transportation segment, focusing on targeted niches rather than large-scale projects [68]

Financial Data and Key Metrics Changes - Order bookings for Q3 were $821 million, up almost 12% sequentially, and revenues were $761 million, up almost 17% from Q3 last year, driven primarily by organic growth [10][11] - Adjusted earnings from operations in Q3 were $80 million, in line with expectations, with earnings per share at $0.48 on an adjusted basis [11][18] - The trailing-twelve-month book-to-bill ratio at the end of Q3 remained healthy at 1.06 to 1 [16] Business Line Data and Key Metrics Changes - In life sciences, order backlog was $1.1 billion, with revenues for the quarter at $391 million, the second highest in ATS's history [11][12] - In food and beverage, Q3 order backlog was CAD 203 million, with strong funnel activity driven by brand recognition [12] - In energy, order backlog reached a record CAD 296 million, up 87% over Q3 last year, driven by refurbishment and life extension projects for nuclear reactors [12][13] - Consumer products backlog reached a record CAD 321 million, supported by a large enterprise warehouse packaging automation program [14] Market Data and Key Metrics Changes - Demand remains constructive in end markets, with ATS's global scale supporting consistent execution in multiple regions [11] - The nuclear segment is seeing significant activity in life extension projects and new builds, with ongoing engagement in modular fabrication and fuel handling [42] - The life sciences segment is expanding with new innovations in radiopharma and medical technology applications [44] Company Strategy and Development Direction - The company is focused on margin expansion, capital allocation discipline, and leveraging its strong lean operating system to drive sustained results [4][8] - Recent leadership appointments aim to strengthen operational capabilities in key end markets, including life sciences and packaging [7] - The strategy includes embedding the growing services business within operating units to enhance accountability and customer alignment [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the depth and capability of the organization, emphasizing a commitment to operational excellence and disciplined execution [15] - The macro environment remains dynamic amid geopolitical and trade uncertainty, but the company has not been materially impacted by tariffs [20] - The outlook for Q4 revenues is expected to be in the range of $710 million to $750 million, with a healthy and diversified order funnel [18] Other Important Information - The company incurred CAD 5.5 million of restructuring costs, with total costs under the program now expected to be approximately CAD 20 million [19] - Cash flows from operating activities were CAD 115 million, with non-cash working capital as a percentage of revenues improving to 16.4% [21] Q&A Session Summary Question: Doug's 90-day and 6-month priorities - Doug highlighted the focus on core end markets, margin expansion potential, and disciplined capital deployment [28][30] Question: Correlation between margin improvement and gross margin change - Anne explained that gross margin dynamics are reflective of backlog execution and program timing, with ongoing opportunities for improvement [34][35] Question: Insights on nuclear and life sciences segments - Anne noted that the energy backlog is focused on life extension projects, while Doug emphasized the strong pipeline in life sciences with new applications [39][44] Question: Working capital targets and M&A plans - Doug mentioned that it's premature to set new financial targets but emphasized the importance of improving working capital and being thoughtful about M&A capital deployment [46][48] Question: Updates on GLP-1 and other therapies - Doug discussed the ongoing demand for GLP-1 therapies and the need to diversify the pipeline with new technologies [55] Question: Margin expansion initiatives from prior roles - Doug categorized margin improvement opportunities into three areas: ABM tool deployment, R&D focus on advanced applications, and increasing aftermarket mix [98][100]