Dexterra Group Inc. (DXT) Earnings Call Transcript & Summary

Good morning, and welcome to the Annual and Special Meeting of Dexterra Group. My name is Bill McFarland, and I'm the Chair of the Board of Dexterra Group. This meeting is being held in a webcast format only. I'm joined today by Mark Becker, CEO; and Denise Achonu, CFO; Christos Gazeas, Corporate Secretary of the company. We will start by conducting the formal part of the meeting, and afterwards, Mark Becker will provide a business update, followed by a question period. Mark's presentation will appear on the screen, so you may easily follow along and it is posted on the Dexterra website. I have a few administrative details to cover before we get started. Registered shareholders and duly appointed proxy holders may vote online during the meeting by clicking the voting icon. If you cannot see the full text of the resolution, please scroll down on your device in order to see the resolution as well as the voting options. If you have already voted by proxy, there is no need to vote again during the meeting since your vote has been recorded in accordance with your proxy instructions. Given the virtual format of the meeting, we have appointed certain individuals to motion and second items of business in advance. In order for us to efficiently address any online questions on the matters to be voted upon, we encourage shareholders who are attending online and have specific questions on an item of business to submit their questions now. [Operator Instructions] All questions will be addressed before voting closes. I now request that the meeting come to order. With the consent of the meeting, I, Bill McFarland will act as Chair of the meeting, and Christos Gazeas shall act as Secretary of the meeting. I appoint Emma McKenzie of TSX Trust Company to act as scrutineers to report on the number of shareholders and common shares represented at this meeting. The scrutineers will compute the votes on each item of business and report the results to me as Chair. The Secretary has advised that he has received a declaration from the scrutineer stating that the shareholders have been given notice of this meeting and that the notice, information circular and form of proxy were mailed to shareholders of record on March 18, 2025, in advance of the time required for such notice. The secretary has also advised that a quorum is present. I further direct that the formal report of the scrutineer be annexed to the minutes of this meeting as a schedule. I now declare that this meeting has been regularly called and is properly constituted for the transaction of business. Voting at today's meeting for those that are entitled to vote and have not already submitted a proxy will be conducted by online ballot for each matter. I now declare the polls open on all items of business. If you submitted a completed proxy in advance of the meeting, you have already voted and are not required to vote again online unless you want to change your vote. The voting panel on your screen should now display the voting options for registered shareholders and duly appointed proxy holders. The voting panel will remain open until discussion, if any, has concluded on all items of business. I will then declare voting on all items of business closed. A copy of the minutes of the last Annual Meeting of the shareholders of the corporation held on June 20, 2024, has been signed and filed in the corporate records of the corporation and is available from the Secretary. The first item of business is the presentation of the audited consolidated financial statements of the corporation for the year ended December 31, 2024, and reported thereon by PricewaterhouseCoopers LLP. A copy of such financial statements and the report of the auditors thereon has been mailed to each registered shareholder of record at the close of business on March 18, 2025, who elected to receive the financial statements and report of the auditors. No vote by the shareholders is required or proposed to be taken with respect to the financial statements. The next item of business is the election of directors of Dexterra Group. In accordance with Dexterra Group's advanced notice bylaw, the only individuals entitled to be nominated as directors at this meeting are the persons named as nominees in the management information circular and proxy statement prepared for this meeting as there were no other individuals nominated prior to this meeting. Those 9 nominees are Mark Becker, Tabatha Bull, Mary Garden, David Johnston, Simon Landy, R. William McFarland, Kevin D. Nabholz, Russell Newmark and Antonia Rossi. May I have a motion regarding the election of directors?

Mr. Chairman, my name is Denise Achonu, and I am a duly appointed proxy holder. I move that each of the following nominees Mark Becker, Tabatha Bull, Mary Garden, David Johnston, Simon Landy, R. William McFarland; Kevin D. Nabholz, Russell Newmark and Antonia Rossi, be hereby separately elected as directors of Dexterra Group, Inc. for the period commencing as of the date hereof and ending at the close of the next Annual Meeting of Shareholders of the corporation or until their successor is elected or appointed.

Thank you. Ms. Achonu. Will someone second the motion?

Mr. Chairman, my name is Christos Gazeas, and I am a duly appointed proxy holder. I second the motion.

Thank you, Mr. Gazeas. You have now heard the motion. Mr. Gazeas, are there any online questions on this motion?

There are no questions on this motion, Mr. Chairman.

The next item of business is the appointment of the auditor of Dexterra Group. It is proposed that PricewaterhouseCoopers LLP, chartered accountants, be appointed the auditor of Dexterra Group until the next Annual Meeting of Shareholders of Dexterra Group or until a successor is appointed. Will someone so move?

Mr. Chairman, my name is Denise Achonu. I move that PricewaterhouseCoopers LLP, chartered professional accountants be appointed auditor of Dexterra Group until the next Annual Meeting of Shareholders or until a successor is appointed at such remuneration as may be fixed by the Board of Directors and the Board of Directors are hereby authorized to fix such remuneration.

Thank you, Ms. Achonu. Will someone second the motion?

Mr. Chairman, my name is Christos Gazeas, and I second the motion.

Thank you, Mr. Gazeas. You have now heard the motion. Mr. Gazeas, are there any online questions on this motion?

There are no questions on this motion.

The next item of business is the preapproval of Dexterra's 10% rolling stock option plan as required by the TSX and approval of the proposed amendment permitting a net cashless exercise of stock options as outlined in the management information circular and Schedule B therein. Will someone move that the option plan resolution set forth in the management information circular be approved?

Mr. Chairman, my name is Denise Achonu. I move that the Dexterra stock option plan resolution be approved.

Mr. Chairman, my name is Christos Gazeas, and I second the motion.

Thank you, Mr. Gazeas. You have now heard the motion. Mr. Gazeas, are there any online questions on this motion?

There are no questions on this motion.

Thank you. If you are a registered shareholder or duly appointed proxy holder and have not yet submitted your votes, you can do so now online by selecting the applicable voting option on the voting panel. As a reminder, if you have previously submitted a completed proxy, you have already voted, and it is not necessary to vote again online. We will pause briefly before closing the polls. [Voting]

The polls are now closed, and I will ask the Secretary to provide the report from the scrutineer.

Mr. Chairman, I have received a report from the scrutineer. The shareholders have voted in favor of each of the items of business to be voted on at this meeting.

Thank you, Mr. Gazeas. Accordingly, I declare the election of each of the nominees to the Board of Directors, the appointment of PricewaterhouseCoopers LLP as auditor of the corporation and the approval of the Dexterra stock option plan, including the amendment, the full text of which are set forth in the information circular of Dexterra Group dated March 18, 2025, to be passed. Following this meeting, a report disclosing the final voting results of this meeting will be filed on SEDAR, and we will also issue a press release with such results. This now concludes the formal portion of the meeting. And accordingly, I declare this meeting terminated. As the formal portion of the meeting has now been completed, I will ask Mark Becker to provide an update on the business. Mark and Denise Achonu, CFO, will answer shareholder questions following the presentation. A copy of management's presentation is on Dexterra Group's website. Please enter your questions during Mark's presentation via the online platform. This will assist in making the Q&A period efficient. [Operator Instructions] I would like to make a few introductory comments before passing things over to Mark. 2024 was a very busy and successful year for Dexterra. And we continue to make great progress, which was evident with our Q1 2025 results. Our streamlined business, strong and experienced management team, including our 9,000 employees and our strong balance sheet position us well to continue to provide exceptional value to a growing customer base. Our goal with the support of Fairfax, our major shareholder, is to build a strong, sustainable business for the long term that delivers superior shareholder returns. In closing, I would like to thank my fellow Board members for their guidance over the past year, and we'll now hand it over to Mark for the business update.

Great. Thanks very much, Bill, and thank you to everyone who has taken the time to join us today, and I'll be providing some remarks and following -- you can follow along on the application with our slides. I'm getting my teleconference workout today with our investor call this morning. And as Bill mentioned, our AGM is intended to be a bit more about our strategy and more strategic in nature. So I'm going to try to live up to that expectation. So I guess starting off, we accomplished a lot in 2024 and continuing to make progress across the company. And I'll take you through a brief presentation, highlighting where we are today on executing our business strategy and where we are headed for the future. Before we begin, I would refer you to the forward-looking information slide in the presentation. You will find cautionary notes in that regard. We do claim their protection for any forward-looking information that we might disclose today. So I encourage you to read these. I don't think there'll be an exam at the end, but at least that I'm not aware of anyway. As Bill mentioned as well, a copy of our presentation is already posted on the Dexterra website for future reference as well. And starting about our business over the last 1.5 years, we've made meaningful progress on delivering profitable, predictable, reliable results and growth. A major step forward that we implemented at the year-end of 2024 was realigning our businesses into 2 new segments, which is Support Services and Asset Based services. This change has helped investors better understand our business and provides an efficient operating model for us to set us up for long-term sustainable success. Our support services offerings are broad and integrated from soft services like janitorial, hospitality and food service to hard services like facility maintenance and repairs like mechanical, electrical and HVAC to fully integrated solutions that span asset management, building automation and energy optimization. Our comprehensive service portfolio allows us to deliver value and improve business results for our clients and to meet their needs whatever they might be efficiently and effectively. We deliver these services across a diverse range of market segments, extending from government, institutional, aviation, natural resources, commercial and industrial sectors, both in urban and remote locations. In asset-based services, we provide quality market-leading workforce accommodations from coast to coast to coast across Canada, including remote locations as far north as Baffin Island. Our workforce accommodations as well as our access matting solutions, relocatable structures business provide invaluable support to our clients across the natural resources development and remote infrastructure segments. We're also active in forestry in Canada planting about 35 million trees per year. Service is at the center of everything we do. Service is everything is more than just our mantra. It's embedded in our business, our culture and reflected in how we deliver our value to our clients. Client satisfaction and relationship longevity are core measures of our success. We regularly seek client feedback and continuously look to improve our services. We empower our people to be client-centric in all they do. Our teams are on the ground -- our teams on the ground are trusted to act quickly, make decisions that are in best interest of our clients. That autonomy makes us agile, responsive and ultimately provide our best value to our clients. This empowerment also helps our people retention rates as well. As we continue to expand our operating footprint across Canada and accelerate our growth in the U.S., both through organic growth and accretive acquisitions that build scale, capability, market access and technology that is in line with our strategic focus. We see very strong trends in outsourced services and the North American addressable market is both substantial and growing. This creates a significant opportunity that aligns directly with our business strategy. While we continue to deliver single services to clients, a key focus of our growth strategy is building out our scale and portfolio of integrated facility management services in North America that I mentioned previously. Integrated services require a broader skill set of capabilities, a higher technical proficiency, benefit from resources -- from resource leveraging across many services, support sticky long-term client relationships as well as deliver higher margins to the business. We also believe that there will be M&A opportunities to increase our integrated facility management footprint and capabilities. It's about finding the right ones that are a great fit for us from a cultural profitability and capability perspective. Our capital-light model also makes our expansion readily scalable. Our support services platform is well positioned to grow efficiently across North America with the depth to deliver fully integrated end-to-end solutions wherever our clients need us. We continue to invest in technology and innovation across the business, both in how we serve our clients and how we operate. From client-facing performance dashboards, advanced asset life cycle management systems and processes, autonomous cleaning equipment as well as internal systems like labor optimization and workforce management, we're leveraging technology to drive performance. Our technical experts and engineers are part of what we call i-Lab, whose sole focus is driving innovation and operational excellence across our facility management services. i-Lab is a pivotal resource that is helping us to deliver data-enabled smart solutions. We're working to leverage the latest advancements in equipment, field systems, data analytics and machine learning. These technologies allow us to unlock real-time data-driven insights that are essential for optimizing our clients' operations, reducing unplanned disruptions, reducing costs and customizing services to align with our clients' evolving needs, including their energy and sustainability goals. What makes this effective is that i-Lab is fully integrated with our operations and business development teams. This close collaboration ensures our technology is being embedded where it has real impact, both in the field and how we deliver value to our clients every day. The depth and experience and continuity of our executive leadership team is also a key to our success at Dexterra. Together, we bring over 150 years of collective industry experience and that depth of experience is critical as we grow and evolve. We built a management team that blends deep sector knowledge with significant experience and understanding of our business. Many of our leaders have been with the company for over a decade, and that continuity gives us stability and perspective to make confident long-term decisions, and we enjoy working together. This is a team that is aligned on our deep experience in solving problems and committed to execution. We're building for the long term, and we have that leadership in place to get us there. Two new slides that I haven't included before, but I feel are important to highlight and talk about this year are our culture -- are our values and culture. They're critically important to our recent achievements and our success story going forward. Our values are the foundational pillars of how we make decisions to create best outcomes for employees, clients, customers and shareholders. Accountability, diversity, trust and partnership are not just principles, they are how we deliver with purpose. We measure exceptional performance through this lens, reinforcing a culture where purpose and results go hand in hand. These are the values which we deliver our services everything purpose and core belief to our clients and is very much our client-facing foundations for how we deliver service and value to our clients. Internally, we bring our values to life through our culture that keeps us grounded and shapes how we work together, make decisions and hold each other accountable. I won't go through these in detail, but suffice it to say these clear and simple behavioral expectations we take to heart as a leadership team. We hold each other to account to exemplify every day and set a strong and visible example to the entire organization. They really summarize what it's like to work at Dexterra. They support our entrepreneurial spirit, keep us agile and results focused, collaborative and balanced with a pragmatic mindset and a long-term perspective. I encourage you to take a look at them in the deck as they provide a real window into our culture as a company. And this culture, which isn't built overnight, will enable us to be successful over the long term. As I've said previously, at Dexterra, we take a long-term view, one that focuses on creating value for our shareholders and clients, but one that also serves our broader stakeholders, employees, suppliers, communities, including our indigenous partners. Our partnerships with indigenous communities and businesses remain a vital part of our success. Today, we're proud to have over 80 indigenous partnerships Canada-wide with mutually beneficial engagements involving employment and significant business activity. In 2024, our commitment was recognized by the Indigenous Reconciliation Award from the Government of Canada, celebrating our work in outreach, recruitment, reconciliation focused training and community partnerships. Dexterra's Stronger Community supports the organization in ways -- support organizations in ways that matter most to them in the communities which we live and work. It provides structure to our community engagement while allowing the flexibility to act locally and meaningfully. Our direct funding contributions are currently 1% of net earnings, and we expect to grow this contribution level as we grow the company in the future. So far, Dexterra Stronger Communities has provided funding for 97 projects across 86 charitable organizations, supporting food security, shelter, mental health and education across the country. Last year, we had our first employer matching donation program supporting the Canadian Red Cross wildfire relief. Our Outland Youth Employment Program or OYEP, is our national network that provides education, training and employment opportunities for indigenous youth. It combines year-round support with a unique land-based summer experience that builds confidence, skills and long-term opportunity. All of this reflects who we are as a company. At the end of the day, we believe that what we do matters. It matters to the communities where we work and live to our employees, our shareholders and the partnerships we build. To learn more, I'll refer you to the sustainability report on our website under Investor Documents. We're incredibly proud of the impact we're creating working together. From an investment thesis perspective, we remain focused on delivering long-term value for shareholders. And this slide is really what I call our my set slide or our set slide that Denise and I use in our conversations with shareholders and Investor Relations and really describes why invest in Dexterra. Post divestiture of the modular business in 2024, our repositioned and streamlined business model provides focus and aligns our operations and reporting structures to better support our strategic priorities. While we've seen recent positive response from the market in our share price, including some resilience during the recent market turbulence, our shares remain undervalued in the market. We're trading less than 6x EBITDA, well below many of our peers. Our low capital operating business model provides recurring revenue from long-term client relationships across a diversified client base. The strength of our balance sheet, coupled with strong free cash flow provides the ability and flexibility to invest in growth and provides meaningful returns to shareholders. And finally, we are committed to strong shareholder returns, targeting a 15% return on equity, which we recently achieved in Q1 with returns realized through a combination of dividends and share price appreciation. 2024 was a transformative year for Dexterra, one where we delivered record results, sharpened our strategic focus and further strengthened our financial position. We achieved consolidated revenue of over $1 billion driven by organic growth, strong activity in the natural resources sector and the successful acquisition of CMI Management, which is expanding our IFM footprint in the U.S. This was a significant step to building a stronger U.S. platform. Adjusted EBITDA was $107 million with Support Services contributing a record $74 million of that, which was up nearly 37% year-over-year, reflecting our emphasis on scaling this high-margin capital-light segment. Free cash flow generation was also a record $75 million or over 70% conversion rate from EBITDA. Our financial strength enabled us to return value to shareholders through the repurchase program of approximately 1.2 million shares under our normal course issuer bid and the payment of $0.35 a share annual dividend. We closed the year in the first quarter of 2025 with a robust balance sheet, including low leverage and significant capacity under our credit agreement, positioning us well for continued growth and value creation in 2025 and beyond. As mentioned earlier, Dexterra's strong financial position provides the flexibility to execute our strategic initiatives, manage uncertainty and deliver value to our stakeholders. As part of our -- part of this foundation, our debt-to-EBITDA ratio under 1x times EBITDA provides financial flexibility. Our operational effectiveness and efficiency is evident in our disciplined management of working capital and strong free cash flow generation. We expect to maintain free cash flow conversion at greater than 50% of adjusted EBITDA going forward. Our capital allocation priorities remain focused on maintaining our dividend. We continue to reward our shareholders with a consistent dividend, reflecting our confidence in the business' ongoing profitability. Two, sustaining capital, we expect to maintain sustaining capital at 1% to 1.5% revenue plus focused and opportunistic investment in growth capital and high-return opportunities. Three, opportunistic share buybacks. We will continue to buy back shares opportunistically to enhance shareholder value. And finally, four, pursuing accretive acquisitions. We look to expand our integrated facility management footprint across North America and are identifying accretive opportunities to improve our scale, capability, build market access and technology that is in line with our strategic focus. In summary, our strong balance sheet and disciplined capital allocation provides a solid platform for sustainable growth and long-term value creation. As we look ahead, we have a clear vision for Dexterra's evolution, one that builds on our strength and delivers scalable, sustainable and profitable growth and strong cash flow. Our strategy is centered around the capital-light profitable growth of our Support Services segment and specifically, as mentioned, building the scale of higher-margin integrated facility management services. We complement this strategic focus through the continuing to support our strong market position in our remote and ABS businesses in Canada, where we are a market leader. Our overarching measure of financial success is profitable growth and robust shareholder returns, first and foremost, including our 15% ROE target. As we project out our business plan, including both organic growth and contributions from acquisition, our aspirational goal in the medium term is to build a strong business with greater scale in the range of $1.6 billion in revenue and $150 million in EBITDA. This plan is ambitious and will be subject to finding the right M&A partners and a resilient North American economy as we build the next phase of Dexterra's growth story. Our primary near-term focus is to continue on operating discipline and continue to deliver reliable, predictable and sustainable business results while making smart investments in our future. Secondly, the elephant in the room for everyone these days is the potential impact of trade disruptions as well as the overall market and economic uncertainties. Dexterra as a service provider is, to a large degree, naturally insulated from the direct impact of trade tariffs as our labor and large majority of our supply commodities are domestically sourced. For food, chemicals and other commodities that have historically been sourced cross-border, we've been active over the last few months addressing our supply chain with an aim to mitigate the potential impacts of trade tariffs. We expect to be able to substantially mitigate the direct impact of tariffs on our business. Potential broader implications of the current economic uncertainties is unknown at this point. However, we continue to monitor industry and client conditions very closely. Of interest to us is the potential implications, positive or negative of labor costs. Generally, our new sales pipeline is robust and our strike rates are achieving expectations. Our dedicated pursuit team on IFM is active, although we are seeing some evidence of the economic uncertainties delaying some decisions on awards of new contracts. Third, our acquisition strategy remains selective and disciplined. We continue to evaluate opportunities that fit our target model with a clear focus on strategic cultural fit, value creation and risk mitigation. Fourth, our commitment to sustainability remains central to our strategy and winning new business. This includes our continued focus on safety and performance, community engagement and indigenous partnerships, as I mentioned, workforce development as well as our progress towards meeting expected emissions reporting requirements. Finally, we remain firmly focused on delivering shareholder value. That includes maintaining our regular dividend, executing opportunistic share repurchases under the NCIB and pursuing growth in a disciplined, value-orientated manner. Together, these short-term priorities support our long-term vision and position Dexterra for continued growth and strong financial performance. With that, we will move now to the Q&A portion of the meeting.

Thank you, Mark. We'd now be pleased to entertain any questions. [Operator Instructions] Christos, are there any online questions?

Yes, we've received a few questions. First question, within the current geopolitical climate, we hear about the potential for a resurgence in things like energy security, infrastructure and market diversification as well as critical metals mining in Canada. Will we see or how will Dexterra take advantage of this opportunity?

Thanks, Christos. That's a good and timely question given everything that we're hearing these days. I'd say definitely, Dexterra is well positioned -- we are -- our market leadership in providing support services in remote locations in Canada, building and maintaining workforce accommodations for customers and our relationships with indigenous communities and government will be helpful in this regard, depending on what we see. I think being a key player in energy, obviously, will help. Some of this may manifest in terms of energy security. I'd probably also say the significant diversification of our business that we've built up over the last few years into mining and infrastructure, such as things like power transmission projects should set us up very well to participate on this front. The only thing I would mention on this topic is whether or not we see projects manifest is kind of one topic. And probably the other as important or more topic is these are often very long-cycle investments and how much we see in terms of regulatory streamlining for these projects or not kind of remains to be seen. As we always do around prosecuting the markets and segments that we go after, we're going to closely monitor these developments. And I think all our relationships that we've established with clients as well as our market segments should set us up well for this.

Thank you, Mark. Again, any other questions?

Yes. Next question. With such strong free cash flow conversion, at what point will you consider raising the dividend?

Denise, that's probably a good question for you.

Well, as Mark covered in his presentation, we're very clear on our capital allocation priorities. Now having said that, we will continue to assess the allocation of our funds between sustaining and growth investments in our business, accretive acquisitions and being opportunistic with our share buybacks as well as dividends. Those are the key pillars of our capital allocation priorities. We are comfortable, though, in continuing to support our current level of dividend that continues to contribute meaningfully to our shareholder returns. As well, our Board reviews the dividend strategy regularly. We have no plans to raise the dividend.

Thank you, Denise. Christos, any more questions?

Next question, is your approach to sustainability changing with the changing business environment?

Maybe I'll take that one. And probably another good question along the lines of the one I just answered. But I would say simple question or simple answer really is our approach to sustainability is unchanged. Everything I talked about in my presentation, really, we are continuing on with irrespective of the uncertainty and geopolitical environment that we see going on. We're really proud of our initiatives in programming. And you can see a lot more detail in that around our sustainability report, which we're pretty proud of. And really collaborating with our clients, investing in communities and really just our long history of productive partnerships and indigenous communities. And even internally as well, our success in creating a safe and inclusive work environment for employees. We're keeping momentum going on all these fronts. And quite frankly, it is good for business. Many, many of our clients, our market segments, clients are focused on that. We're focused on that. Part of our long-term relationship with clients is contributing to that. So we expect to continue really on all those fronts. And then as I mentioned in my presentation, I think things around the rules of sustainability disclosures are a bit in flux, but we're staying very proactive on that front and making sure we're well prepared to support that as it develops.

We have another question. Why do you believe the share price continues to be so undervalued?

Mark, why don't you take that one? I know it's near and dear to all of our hearts.

Yes. There's probably lots of analysts on the call that can probably answer this better than I can. But I guess the recent environment would remind us again that markets can act emotionally, and we're seeing plenty of that. And we really can't control that, but we can control our results. And as I mentioned, I think our shares have been pretty resilient just given everything that's going on relative to others in the market. The primary key for us is continuing to produce predictable and sustainable results from our business that really meets or exceeds our market expectations that we've kind of set out in terms of our strategy. And having said that, I think just in general, our market multiple has lots of room to expand. And again, you could look at any of our market analyst coverage and they all describe that quite well. We're currently trading less than 6x. We would see at least a couple of turns here even as we stand kind of pre-growth to where we would be kind of a competitive market position is what I would say about that.

Thank you, Mark.

Next question. You mentioned your acquisition program. How do you plan to finance future acquisitions?

Denise, why don't you take that one?

Sounds good. As we've mentioned, we do have a strong balance sheet and significant credit capacity, and we're very proud of our strong free cash flow. All these things give us good flexibility around acquisitions. Our debt continues to be less than 1x EBITDA, and this is at the end of Q1. We would continue to see using this flexibility for the right acquisition opportunities while maintaining our debt leverage in the range of 2.5x on an annualized basis. We have no intention at the current time of issuing shares as our shares are undervalued, which Mark covered in the market right now.

Thank you. Looks like we have a couple more questions. Next question, what percentage of growth is expected to come from M&A in the future?

Maybe I'll take that one. I think -- and I covered this in the presentation, I think our primary focus is on profitable growth. And as we described, we have -- if we lay out our business plan with kind of what we've talked about in terms of organic growth rates and a nominal kind of allocation related to acquisitions kind of gets us into that $1.6 billion top line and $150 million EBITDA in the future. And obviously, the organic growth rates are easy to kind of plug in and model. The acquisition front is not quite as easy, but because we know the acquisitions are lumpy and they won't be straight-line additions in the plan. So I guess the answer is really it depends. However, as I mentioned, we've kind of modeled something in our business plan of notionally what we could expect and around our balance sheet, affordability, how we could support that in the near term. And I think what's in our business plan kind of supporting that aspirational objective would kind of assume about a 25% contribution would come from M&A in terms of our growth profile to probably answer the question pretty directly.

And we got one final question at the moment, it's a 2-parter. What is your average tenure of clients? And what is your win rate today on bids won?

Yes. Good question. And I like the question about tenure because for me, it's a lot more -- a lot less about the contract cycles. It's more about the long-term relationships and tenure that we have with our clients. And that can be a wide range. Like we have clients that we've been with and locations that we've been working on greater than 40 years. But if you look at it, of our 400 clients about that across North America, across all the sectors, our average client tenure is about 8 years or more, and we see that continuing to build as well. And then win rates, our pipeline of opportunities across all the market segments that we're pursuing is good, and we're happy with what we see in terms of the size of our pipeline and the opportunities in front of us. I'd say our kind of strike rates, win rates, we target greater than 30%. And in all areas, all segments, we're pretty much hitting those win rates. And so we're really quite happy with that. So the math works out in terms of our organic profile going forward. In terms of exactly what lands in year and what might carry over year-end, that could kind of go up and down. But generally, we are hitting win rates that are supporting our organic -- our growth profile.

Thank you, Mark. Christos, are there any more online questions?

No further questions, Mr. Chairman.

Thank you very much. So in closing, I'd like to thank everyone for attending the Annual and Special Meeting. As Mark noted, we're excited about the future of Dexterra Group and look forward to staying connected and having the continued support of all of our stakeholders over the coming year. Thank you, and have a great day.