Mattr Corp. (MATR) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining us today. This is our first Investor Day as Mattr, and we're really pleased to have you all here. For those of you that don't know me, my name is Meghan MacEachern, and I lead Investor Relations, External Communications and ESG for Mattr. Before we begin, just a few housekeeping items. In the event of an emergency, we'll exit out the doors behind us, go to the left, and then there'll be a stairwell at the end of the hall on your left that we can exit through. I'd also like to take a moment to remind all of you that today's presentation includes forward-looking statements that involve estimates, judgments, risks and uncertainties that may cause actual results to differ materially from those projected. The complete text of Mattr's statement on forward-looking information is included in Section 4.0 of our third quarter 2023 earnings press release and any MD&A that's available on SEDAR and on the company's website at mattr.com. Our agenda this afternoon has about 2.5 hours of prepared presentations. If you have questions for our Mattr management team, we will have a 30-minute Q&A session at the very end. So we ask that you hold your questions until the end. We will also have 2 of our most important customers here with us today, giving brief presentation, and we'll leave a little bit of time at the end of their individual presentations for you to ask them questions as well. Once the presentations and the Q&A concludes, we invite you to grab some refreshments and join us next door where we have trade show booths set up to give you a little bit more insight on our businesses. So with that, I'll now bring our President and CEO, Mike Reeves, to the stage to kick us off.

Good afternoon, everybody. Quick check. Can you hear me in the back? Yes? Okay. Thank you. As Meghan said, welcome to Mattr's First Investor Day. It's been 4 years since this company put an Investor Day together. The last time we did it, it seems to kick off a global pandemic. So we're going to hope that we do better this time. Enormous amount has changed in 4 years. The company is a totally different organization, completely transformed. And our goal here today is to make sure that we provide you with as much information as we can about not who we were, but who we are and who we will be. So what is it that we are doing? We have created a high growth, high margin, much lower volatility, infrastructure product organization. And we believe firmly that any organization worth its salt can execute on its business plan and return capital to shareholders at the same time, and we are doing that. When we think about what really drives this organization, you see there the phrase that we use internally, engineering a better future. What does it mean? It means that we take our core competencies. We are experts in materials technology. We are experts in complex manufacturing, and we focus on those along with our culture of engagement, innovation and creation to deliver high-quality, high-reliability products that support global expansion and renewal of critical infrastructure. You will find our products in the really most demanding applications where the cost of failure is at its highest, and we pride ourselves on enabling Canada, North America, the world to move closer to its objectives and a wide range of critical infrastructure applications. I mentioned it earlier, we are a totally different organization than we were 4 years ago. Then, we were primarily a pipeline product and pipe coating-oriented business. Very volatile, quite complicated with a challenged balance sheet. The organization you see in front of me today is none of those things. We have moved through an aggressive strategic review and the execution of a simplification of our portfolio. We are focused on 4 businesses. We play through our core competencies, and we believe have an enormous opportunities for the future. So what we've done in parallel is drive growth. I often get the question. Well, transformation is the easy part. What about driving growth? Well, the first thing I'd point you to is the fact that while we've been transforming the organization, and generating hundreds of millions of dollars in available capital to drive future growth, we have also been driving substantial growth, not just in revenue, but in margin profile. And you will hear more from Martin and Frank later in the day on exactly what's happening inside their respective businesses to continue this trend. Speaking of the businesses, just to orient ourselves, the company is now organized into 2 reporting segments: Composite Technologies, where we focus on using composite materials to deliver high reliability, high quality products that can replace concrete or steel in a wide variety of critical infrastructure applications, extending lifespan, lowering risk and doing so with a smaller carbon footprint. And Connection Technologies, where we are focused on delivering premium wire and cable and heat shrink technology that broadly serve the global electrification markets. Again, you will find these products where the applications are the harshest, where the cost of failure is highest. We kept those businesses having been through such a dramatic portfolio rationalization, not just because they play to our core competence, not just because they are high margin, high growth, low volatility, low maintenance capital, but because they are absolutely positioned for long-term favorable macro trends. When we think about what drives our business into the future, and I don't mean 3 to 5 years, I mean multiple decades, it is these trends. None of them will be going away anytime soon, and all of them demand. The critical infrastructure is expanded and removed at an ever-accelerating pace. And all of them are being funded today. So we're not betting on a future deployment of capital from governments and private organizations. We're betting on a continued deployment of capital on a massive scale around the world, and we believe we are uniquely positioned to take advantage of the opportunities that this presents. It's a crowded field, infrastructure products, industrial products, where there are a lot of organizations that deliver those things. What makes us different? I've said it before, we focus on the harshest of applications. If the temperatures are extreme, if the pressures are extreme, if the place's environment is extreme, if the mechanical loads are extreme, if the radiation is extreme, that's where you will find us. You will find our products where the cost of failure is highest and the challenge to the product is at its most extreme. And every place that we deliver is a true fraction of the cost of the project but crucial to its success. And lastly, and perhaps one of the most important aspects of this organization is the culture around customer engagement and the understanding that customers have a hard enough life as it is. Our job is to make their interaction with our organization as frictionless as possible. So whether that's listening and acting to address their challenges, making sure that our systems can provide seamless interaction and data flow and making sure that our people understand that customer focus is what matters above all else. This is what makes us different. This is what's enabled us to grow at an aggressive pace in the last several years and will do so as we go forward. So we've accomplished a great many things in the last 4 years, and Tom will speak at length on a number of the items that are on this page. But I would just say transformation is behind us. In that transformation process, we have generated north of $400 million. So we have -- we moved from a very net debt-heavy position to a net cash position. And we positioned the organization to play offense, and we've started to play offense. So starting in '23 and continuing to '24, we have a very aggressive expansion program in place. Martin and Frank will both speak about what's happening within their segments. So we are in the process of deploying a little north of $150 million in growth CapEx, that will modernize, expand and optimize our North American manufacturing footprint in businesses that in most cases, have been capital starved for a decade and beyond. And those investments will ensure that we are positioned to achieve our objectives: 10% annual growth rate at a minimum, 20% EBITDA margin at a minimum, 70% free cash flow conversion at a minimum, moving us to better our revenue by 2030 and do so organically. Everything we do in the M&A space will be incremental to that. Our pathway to grow to double the size of this business by 2030 is not built on hope. It's built from very clear pathways where we already have momentum. Again, we'll hear more from our 2 segment presidents here, but when you think about Flexpipe, it's about expanding from the small diameters to the big diameters which will double or triple the addressable markets, and we have momentum there. It's about expanding to international markets, where historically, we've had limited presence. We have momentum there. On the tank side, the [indiscernible] side of the business clearly, there's a wonderful business out there for fuel tanks. We will hear some more from one of our customers on that country momentarily. But on the [ royalty ] side, we now have the vast majority of the components we need to be a serious player in the stormwater quality and management marketplace. And we see that business building to and beyond the scale of our flow business over the course of the next several years. On the Connection side, ShawFlex, our wire and cable business is one of the market leaders in Canada. Extraordinary engineers delivering extraordinary products across a wide array of very harsh environment niches. We barely touch the U.S., and we really don't touch anywhere else in the world. So our end markets were perfectly suited to support, but we've never had the capital to invest and grow into. That's what we will see from ShawFlex and from DSG over the coming years. And on both sides of the business, we need more capacity on the production front. That's where we're making the investments we are right now. When you look at us compared to reasonable peers, we have some opportunities here too, a high-growth, high-margin business with a bulletproof balance sheet, clear pathway to grow at an invested pace going forward. Trading on the order of half the multiple of any reasonable bout of differentiated product manufacturing peers. So when we think about our future, it's not just about growing the business, it's about ensuring we get fair value in the market and expanding our multiple. Those 2 combined are a powerful combination. So my last slide, and we'll circle back at the end of the session to ensure we've given you the visibility we intended on this. We're now clear about what we are committed to delivering. In terms of growth rate, EBITDA margin, cash conversion and scale, all of which we are confident we can deliver organically. But we have the capacity to seek out execute M&A that is very highly strategically aligned to the businesses we own today that will accelerate that pathway. And we'll talk some more about where we're focused there. So with no further ado, we will move on to the first of our segments, and let me introduce Frank Cistrone, the President of Connection Technologies.

Thank you, Mike. Good afternoon, everyone, and welcome. My name is Frank Cistrone, Group President for Connection Technologies. I've been with Mattr for 14 years. And for the last 7 years, I've run our Connection Technologies segment. Interesting fact, 35 years ago, I took on a 1-year engineering assignment with the Shaw family. And I was asked to take a look at our Rexel facility. I understand the capacity of their extrusion and if required, acquire some extrusion capacity. I'm happy to say that that capacity is still operating today, a real testament to the culture, care and attention our employees have for our critical assets. So something that certainly is that we're very proud of. Just going to get this deck aligned. So we're I'm saying slide, and we'll get started. I'll begin with an overview of the Connection Technology. Connection Technology -- sorry, is made up of 2 primary brands, ShawFlex and DSG-Canusa. What they share in common is Connection Technology is directly addressing the global electrification megatrend. We have a massive global electrification transition and our 2 brands are in the center of this trend. Our financial performance demonstrates the strengthening tailwinds and why it is critically important for continued investments in this trend. Our investments to date have resulted in adjusted EBITDA performance of 24% over the last 3 years. Our road to 2030, as Mike indicated, is built on strong financial organization, technology and culture with a growth ambition to double our revenue while enhancing our EBITDA margins. So what do we do? ShawFlex's long-standing brand has established a reputation in the marketplace of highly engineered wire and cable, designed to function with extreme capability and reliability in the harshest of environments. And DSG, with a similar long-standing brand in the marketplace of premium heat shrink and cold applied product providing customer confidence where the cost of failure is the highest. Let me provide you a deeper understanding of our brands. Let's begin with ShawFlex. Over the last 60 years, ShawFlex is known throughout North America as a leader of high quality and service, focused on designing and manufacturing wire and cable. We have an extensive base of technical, operational and engineering capabilities, delivering greater than 10% new product development revenue. Our flexible manufacturing operations support more than 167 billion possible cable combinations across instrumentation, control, power and cable assembly applications. And in 2022, we acquired a cable assembly manufacturing company, Kanata, a leading manufacturer of custom cable assemblies across the nuclear, aerospace and space markets. Our wire and cable products are everywhere in our lives. They connect our world. We provide us -- they provide us with power, heating, lighting, transit and so much more. Moving on to DSG-Canusa. Similar benefits with same tailwinds as ShawFlex, but a differentiated portfolio of heat shrink, cold applied and application equipment. For more than 50 years, we have serviced our customers to an industry of leading application and product designing capabilities. DSG has a global footprint, with leading industry technology capabilities, generating more than 20 new products annually, and we have a fully integrated internal engineering team that designs and builds our own state-of-the-art production equipment and also customer application equipment. Our competitive advantage is that we are a diverse product portfolio using proprietary polymers and adhesives that form an extensive product offering to seal, insulate, protect and identify our customer applications. A common differentiator for both ShawFlex and DSG is our core competency of material technology and complex manufacturing expertise. Let me share with you why. We are the market leaders in differentiated product design using material technology and complex manufacturing. At our core, we are material science experts, developing differentiated products our customers require. And these investments continue to increase our product revenue, enhancing our EBITDA margin performance. The customer value, differentiated product and competitive advantage to this core competency is multifaceted. First, it enables us to develop innovative and superior quality products by optimizing the material selection and ensuring that we provide a product that is leading in terms of enhancement, reliability and functionality. Additionally, it aids in cost reduction through efficient material usage, streamlined manufacturing and methods to increase our gross profit performance. Ultimately, this proprietary information serves as a corner stone for our business. Markets that we participate in focus on what is the outlook and future drivers. Our infrastructure, industrial and transportation market verticals are built on long cycle themes, including climate change, population growth and movement and aging infrastructure. We have a relentless focus on the markets and drivers that these trends enable. I'll call out a few examples for you. For infrastructure, key drivers such as power generation, power distribution and communication buildouts are core to our current and planned offerings. For industrial, key drivers in our industrial and construction spending, and we are seeing the impact of these already with our ShawFlex and DSG-Canusa demands. And transportation is driven by electrification and population growth and movement, which favorably impacts all our transportation segments. Our marketing and product management teams remain tightly engaged with the markets we serve to understand the addressable markets, both size and growth and the customer values and competitive landscapes within them. We use these data points to build our growth clients. Our targeted markets are critical -- serve critical industries that connect our world. We have a massive opportunity represented by a service flow of available market that is larger than $10 billion. You can see a snapshot of the vast industries we serve. I will go through all of these, but there are 2 common points that I'd like to call out. Firstly, they all operate in extreme environments, and secondly, they all demand uncompromising reliability. Let me illustrate a few examples of extreme environments and uncompromising reliability applications. Take, for example, nuclear. Nuclear refurbishments -- for nuclear refurbishment, the cost of downtime and failure is extremely high. Equipment doing work in these environments need to last for decades. We have been servicing this market for 4 decades because of our reliability and durability of our products. A few other examples. Extreme weather environment for communication, space where our cables are on the launch pads and transit where smoke and fire-retardant specifications are required in order to participate in this market. With decades of materials technology and complex manufacturing expertise, our products are built with high performance and reliability. Let me provide you an overview of our customers and end users. Summarized by market and by business, you can see a listing of our top customers and end users. Both ShawFlex and DSG have established long-standing relationships with each. These close relationships allow us to listen to the voice of the customers, understand the key customer values and develop technologies that our customers value. The channels to market are complex and require close working technical relationship with both the end user and our customers. Within each established aim and approvals position since years. And these approvals must be maintained. Within our highly regulated markets, we maintain strong end user and customer approvals representing a high barrier to entry and a competitive advantage for us. Having provided you an overview of our brands, markets, customer base, I will now share with you why we are excited and confident about our growth plans. As I mentioned earlier, our road to 2030 is to double our revenue while enhancing EBITDA margins. This is built on several focused growth themes: electrification megatrend, global nuclear renaissance, global auto scale mix and material technology, organic investments to elevate capacity and enhance efficiency, acquisitions focused on enhancing existing capabilities; and finally, ShawFlex's U.S. geographic expansion. Let me walk you through each. The electrification megatrend is an overarching tailwind for Connection Technologies. To meet our net zero and support population growth movement, globally, we must double the global electric capacity by 2050. This massive expansion of capacity will require $21 trillion of investment in electrical infrastructure to refurbish, expand and digitize. In Canada alone, this represents $400 billion in investments to meet our 2035 goals. Our 3 primary markets of infrastructure, industrial and transportation will all benefit from these significant investments needed by the electrification megatrend. An extension of the electrification megatrend and another growth driver is the global nuclear power renaissance. Nuclear reactors produce substantial electricity without generating greenhouse gases, making them critical to the transition to cleaner energy sources. The expanding demand for nuclear reactors stem from the imperative to achieve net zero emissions by 2050. 2 weeks ago, 22 countries at the UN Climate Change Conference in Dubai, including the U.S., Canada, Japan, France, U.K. and UAE pledged to triple nuclear generation capacity by 2050. With a base of 412 global nuclear reactors in the world today, the global map here illustrates the significant number of reactors planned for refurbishment, currently under construction, new planned, new proposed, and these numbers are expected to grow given the recent COP28 signed pledge. What does this mean for us? What it means for us is that the global nuclear represents significant addressable markets for us near term and long term. We are investing to become the world leader in nuclear interconnect technologies. With over 40 years of servicing CANDU reactor customers, including Bruce Power and OPG, our CANDU portfolio provides us opportunities to grow and serve within a $700 million total addressable market, both nationally and internationally. Our road to 2030 investment expands our current CANDU offering to include light water reactors, small modular reactors and microreactors, to serve a large -- a total addressable market of greater than $10 billion. Our proven track record in nuclear space aligns us extremely well with our technical and manufacturing expertise. We are confident in our investments and growth plans to continue to grow this market segment by expanding technology and geographies within these large addressable markets. Moving to global automotive production and the opportunities associated with scale, mix and leveraging our materials technologies expertise. First, I want to point out that by leveraging our diverse markets over the last 3 years, we have been able to backfill the lower level of activities with more industrial and infrastructure share gains. So you could see on the graph, between 2020 and today, there's been that dip. We've been able to fill that dip with industrial infrastructure market share. This is a strong tribute to our continued strategy to maintain and strengthen diversity. Returning to normal automotive production levels means we get volume and mass. Already, this trend is favorable with '23 representing 93% of the 2017 levels. On top of that, we continue to offer differentiated solutions for both ICE and EV vehicles. Finally, as we transition into more electric vehicles, the solutions require higher temperatures, higher voltages and uncompromising reliability. To position us for this, we have been investing in the new technology required for EV vehicles. With that, we could potentially increase revenue per vehicle by approximately 50%. What is also important is that the technology we are developing for the automotive segment is transferable and scalable to the other transportation segments, which I highlighted earlier. As we have communicated since late 2022, we have initiated a significant organic investment to relocate our existing Rexel site to 2 new sites. Fairfield, Ohio, will be our new home for the heat shrink tubing manufacturing, and Vaughan, Ontario, will be our new home for wire and cable. The investments in the expanded facility will position Connection Technologies to increase incremental capacity by 25% by 2026, and by over 100% by 2030. These modernized, optimized and efficient facilities represent healthy margin improvements for us by 2026. These investments provide Connection Technologies a return of greater than 20% internal rate of return, and I'm happy to inform you that both projects today are currently being constructed on time and on budget. As shown, our new DSG-Canusa facility is planned to open in late 2024 and our new ShawFlex facility is planned to open in late 2025. Stay tuned for more updates as we near the completion and commissioning dates of these investments. Our next expansion opportunity is a ShawFlex U.S. footprint. Mike highlighted this in his opening words. Today in Canada, we are a leading provider, and we're proud of it. However, in the U.S., we're only getting started. So with 70% of the U.S. electrical grid and over being over 25% old and the U.S. consumption forecast to increase by greater than 25% by 2030. How are we positioning ourselves to leverage this U.S. market that is 9x the size of the Canadian market, and today, the total construction spending is now close to $200 billion? Well, we're positioning ourselves by we're already investing and developing products in the U.S. and currently serving the growing U.S. utility segment from the Canadian site. Our strong service and short competitive lead times differentiate us here and allows us to grow this market segment. And we continue to bid, win and execute large special projects. Our space project this year is an example of that. And finally, to leverage this large U.S. addressable market, we have prioritized and are carefully assessing inorganic opportunities for a U.S. wire and cable footprint. Sharing with you some insights to our M&A activity. We are very active in assessing acquisitions targeted to enhance our capabilities and grow our markets. As I mentioned earlier, in December of '22, we acquired Kanata, and we are very proud of this. Kanata has added to our portfolio new and complementary technology and has diversified ShawFlex from a discrete wire and cable supplier to a full-service interconnect cable supplier. Kanata's international business brought us cross-selling opportunities that both ShawFlex and Kanata are leveraging today. And the acquisition of this investment was done extremely well with both integration and synergy plans all executed on time and on plan. Driving growth through acquisition is a priority for Mattr and Connection Technologies. Our dedicated development team and with the collaboration of our business teams have been identifying and assessing over 100 targets over the last 12 months, and I'm happy to say that we have multiple opportunities to explore for transactions in 2024. The highest priority for M&A is the ShawFlex U.S. footprint, to access new geographies and end markets. In closing, the Connection Technologies' proven track record and growth drivers represent a significant part of Mattr achieving its 2030 organic ambition of doubling revenue and enhancing EBITDA margins. Our organic growth investments in '23 and '24 are positioning us with expansion capacity both near term and long term. And lastly, we are very excited about our inorganic growth drivers with opportunities to explore in 2024. Our global employees are extremely proud of what they have accomplished at this point, and we are passionate and excited to continue to work through and deliver our growth plan commitments. After our presentation and Q&A today, please take some time to visit our booths on -- besides where we're located here. Meet with our people and take the opportunity to touch and feel our products and really gain appreciation of the engineering and the technology that the products represent. Thank you all, and I look forward to meeting with you later this afternoon. And at this time, I would like to call up Mike Rencheck, President, Chief Executive Officer of Bruce Power.

Hello. How is everybody doing? Just switching hours right after lunch, everybody is getting kind of comfortable here, and it's a bad spot. I told Frank, I said, look, at 1:30, if somebody goes asleep, I'm going to feel really bad, fairly bad, but not that bad. So I'm going to talk a little bit about Bruce Power before we get started, if that's okay with everyone, but I agree with what Frank's saying in terms of where the energy markets are going. When you look at the Inflation Reduction Act, as an example in the U.S. and the Investment Tax Credit here in Canada and a push towards a clean energy transition, electrification is really in front of us and the growth opportunities are quite significant. So first, a little bit about Bruce Power. So Bruce Power is located in Ontario, about 3 hours forth west at Toronto, here, up on Lake Huron. We effectively operate the world's largest nuclear operating facility in the world. It has 8 operating reactors. We also have a wind farm and a battery, but it's dominated by the 8 reactors at our site. And what we do with those reactors is we make 30% of Ontario's electricity at 30% less than the average cost. So we're a low-cost producer in the province. We're holding electric rates low. But there's something you may not know, we also make medical isotopes. Yes, life-saving medical isotopes. We make a Cobalt-60 that's used to sterilize about 40% of the once used medical devices around the world. So what that means, if you go to the doctors or dentist office anywhere in the world, they take something out of the plastic bag and it says sterile, chances are they're sterilized by an isotope made in Tiverton, Ontario. We also make cancer treatments. We make -- bring tumor treatments. We power the Gamma Knife. We also make breast cancer treatments. And about a year ago, we put a brand-new isotope production system in our reactors. And we make an isotope called lutetium-177 that you may or may not have heard about yet, but it is a prostate cancer treatment. How many men in the room? Yes, quite a few. If we are live long enough, we're going to end up with prostate cancer or at the beginning of it. So having an isotope like litetium-177 available is good news, because it is effective on Stage III and IV cancers. It's also being advanced broadly as an isotope, especially by Dr. Rebecca Wang here at Princess Margaret Hospital. She's advancing an area of cancer treatment called theranostics, where she does diagnosis and treatment at the same time, and what she'll show you is a torso full of cancer cells and after treatment with litetium-177, it's effectively gone. So she's had this under study for a number of years, and you're starting to see startups spin off around Toronto now looking at how to use this isotope for other treatments. But that's not the crown of our isotope production system. It's that we can make it at a scale like it's never been seen before, like cobalt, we sterilize 40% of once used medical isotopes. Our new production system when it went into service with the very first production run, we made more litetium-177 that was made everywhere else in the world up to that point in the year, and now we can do that about every 1.5 weeks. So what it means is no more waiting for cancer treatment. And on our first isotope as litetium-177, we're now advancing into other isotopes and other isotope production. The third thing that we're working on in this space is the renewal of 6 of our reactors. You see, at one point, the Bruce facility was stated for a shutdown. Bruce A was actually shut down in the 1990s and the Bruce B facility which is the other 4 reactors was slated the shutdown in 2010. And somewhere along the way, Bruce Power was formed to begin renewing and restarting those units. So much so that in 2003 and '04, the Bruce A-3 and 4 units were started. And then in 2012, 2013, Bruce A units 1 and 2 were refurbished. What that led to was actually the shutdown of coal generation in Ontario. Ontario today has one of the cleanest electric rigs in the world, or roughly 92% to 94% clean on any given day. And what that means is the deep decarbonization on an electric system is believed to be below 50 grams equivalent of CO2 per kilowatt hour. While here in Ontario, we're at about 35 grams. And the generation mix is roughly 60% nuclear, 25% hydro, about 8% wind and solar backed up by natural gas and some biomass. And what that looks like in terms of the cost of that, you have hydroelectric at around $0.06 to $0.07. Bruce Nuclear, we're at about $0.09 and -- you have then gas around $0.12, wind's about $0.15 and so we're sitting at about $0.50. So it's a low-cost decarbonized grid, when you look around the world. You can compare that to Germany or California, and they're looking at $0.30 a kilowatt hour or north of that on any given day. So we are in a process of renewing our assets for the long term. What that means is we're investing about $15 billion starting in 2016 running through 2033 and the renewal of 6 of our reactor plants that will run all the way up to 2064, and that's because of a taxation and a lease arrangement. Actually, the units will go well out into the 2070s, probably like 2075-ish, and we will just keep renewing the lease over and over again as we get closer or outside that 50-year taxation window. What we're also doing is running one of Canada's largest economic development projects at the same time. You see we have a CANDU reactor technology, and it's a Canadian technology. It's made in Canada. So 90% of all the investment that we make stays here at Ontario and about 95% to 98% of it in Canada. And what that meant is during the pandemic, when others had issues with supply chain, we didn't. So our first unit came out of service for refurbishment in 2020. That was unit 6, we just returned it to service this year with one of the best safety records of any major project. Quality, all the testing was completed the first time on time and on budget, actually was ahead of schedule and on budget. So a big nuclear project done on time and on budget, and our partners at OPG completing their refurbishment, they've also completed their second unit on time and on budget during the pandemic. In this reliable source of energy, then we're able to power the economy here in Ontario, but the economic development platform of our work enables reinvestment here. So when we look at GDP in Ontario, we're supplying roughly $3 billion to $4 billion per year here for Ontario GDP. And across Canada, it's around $8 billion to $11 billion. It's around 21,000 incremental jobs being created through the refurbishment program. But we're not stopping there. You can see the time line it goes out over a period of a decade for Bruce Power and as we're doing this, we're also starting to look at the renewal of the assets and the implementation of newer technologies in this process which means that we're also looking at how we'll upgrade our reactors in terms of their power outlets. Two ways to update the reactor. One is to run it so that it never comes off-line and we've been improving that steadily. Our partners at Ontario Power Generation set a world record with one of their reactors running over 1,000 days continuously. Our plants now at Bruce Power are routinely running over 500 days which, I think, our longest run close to 800 days. And our Unit 7 sits here today, it's at 515 days and continuously in operation. So running it better with a better capacity factor through the reliability improvements, through our asset management program of replacing components and parts but also as we're doing that to gain the efficiencies of modern technologies. So with that, we started our refurbishment. The site was really at roughly 6,300 megawatts. And through that process today, we're roughly 6,550 megawatts and we have a project 2030 we call. So sometime after 2030 when the last unit is renewed, we'll be over 7,000 megawatts. I keep looking at 7,300 because I think 1,000 megawatts is a nice round number for our engineers to target, and it's well within the capability, but we save roughly 7,000. What does that mean? So every 100 megawatts is a 100,000 homes. So that's now 1 million homes worth of energy from the same investment going into the facilities to renew it. That's also another 1,000 megawatts of clean electricity being added to the grid that runs all the time. You see intermittent sources, they run 20% to 30% at a time. So if you build a 1,000 megawatt of renewable facility, you're really only getting about 300 megawatts out of it. I mean it only runs when the sun shining or the wind is blowing, it's nuclear, you get that 24 hours a day, 7 days a week, 365 days a year until we have to shut down for an inspection. Think about that steady-state power for the long term. As we've looked at our refurbishment projects, we've had been allowed to finance the $15 billion. So in 2017, we started down a process that would allow us to look at clean energy differently and be able to work with the investment community along those lines. So when we went out to CICERO at the time now at S&P to be able to get qualified and graded. We were graded as a medium green. We still hold that rating. And then also off to Sustainalytics, for a similar rating. And as a result of that, we've been able to issue the very first green bond for nuclear energy a few years ago. We went off for $500 million, it was 6x oversubscribed with about 50 to 50 investment halves. We since went off for another one for another $500 million. It had similar results and since that time frame now, we've seen Europe adopt a framework allowing nuclear to be treated as a green energy. And you see EDF going off for a green bond. OPG has followed a suit. And most recently, you've seen Canada now structure their green bond framework to include nuclear. And I think it's this recognition as a clean energy really started to permeate its way into COP28. As you see, as we move towards the clean energy transition, nuclear is going to be part of that solution. It's power and density alone is needed. When you talk about electrification of an economy especially as we look to electrify transportation and industrial processes or make alternative fuels like hydrogen. That's full-time full capacity power density will be needed to power industry. It will be needed to power economies. It will be needed to be able to provide that sense of reliability and security but also affordability for the long term. So much so that here in Ontario, the independent electric system operator under direction of the Energy Ministry did a study to say what would it take to decarbonize our economy by 2050. In terms of the electricity production, the IESO came back and projected that we would need to double the amount of electricity that we make today by 2050. So another 44,000 total megawatts, those additions, which certainly include storage, wind, solar, hydro, conservation, demand side management, but also it will include nuclear. And we can all debate how fast that will occur, whether it will happen in 10 years, 20 years or 50 years. But that transition over time will take more electricity to occur and more alternative fuels to be produced. And this was recognized in COP28, our 22 leading countries that adopted policies or supported policies that would see the tripling of nuclear energy by 2050 at the same time seen tripling of renewable energy by 2050 in order to facilitate a transition. So much so that you've seen that with Canada having investment tax credits now for the clean energy transition. Nuclear entities will get 15% nuclear suppliers 30%, renewables 30%, investment tax credit and suppliers likewise 30%. And those regulations are being closed now and formulate. But we look at that as those power and say how can we participate in that. So our initial first bet is to renew our plants and extend the life of them, but also to go out and then do the power upgrades. So those two things have to happen, and they're well underway. So to be able to look to the future, we knew we needed to be able to start planning for new additions into our site and into the province. And we work hand-in-hand with the province and this summer announced with the Energy Ministry to begin a process to evaluate the Bruce Power site for an expansion of another 4,800 megawatts of nuclear energy. That means we'll start the preplanning work that will ultimately lead into an impact assessment that will be done over the coming years to determine if we can permit the property for effectively another 5 or 6 large units are probably -- and when you look at the smaller ones, another 20. But I think when you look long term, you're going to see the real need for a mix and this is in addition to what our partners at OPG also had announced with the Energy Ministry this summer. They are building one small modular reactor at the Darlington site and at the same time this summer, they now announced that they will be building another 3 small modular reactors at the site for a total of 1,200 megawatts. As part of this process, we'll begin looking to determine what types of technologies will be feasible. We've issued an expression of interest. We had about 30 responses back from different technology providers, and now we'll move into the next step where we call it a request for information to gain more technology information for those providers that we think could participate in the near-term advancement of this 4,800 megawatts. So in essence, nuclear is advancing here in Canada not only in Ontario but other provinces like New Brunswick and Saskatchewan, New Brunswick is proceeding with small modular reactors at their sites at Point Lepreau. You also see Saskatchewan moving forward with a micro reactor, investing $80 million into it with Westinghouse recently and then planning for the advancement of small modular reactors. We see this trend happening around the world. France has announced the addition of 6 new reactors, plus another 8 to follow that, and they are building out their supply chain now to build at least 1 to 1.5 reactors a year in the coming years. They are completing Hinkley Point, which is 2 reactors and are on the verge of sizing -- or on the verge of signing for size now, which would be another 2 reactors. We've just seen the United Arab Emirates complete 4 reactors. We've also seen Plant Vogtle in the U.S. come online with their first Unit 3 and Unit 4. We've seen Okamoto in Finland come online. We see the Chinese continue to put reactors online every year, most recently a Gen IV reactor last week. We also see the Russians advancing new reactors around the world with reactors under construction in places like Egypt and the Eastern Bloc countries. One aspect, though, we've always been about nuclear is large nuclear projects haven't been done potentially on time and on budget. And I always get the question of why is that so? Well, the last round tended to started construction before the engineering was done and before the supply chain was established. So as you get into construction, without engineering done and without supply chain established, the project kind of takes the course of its own. What we've been able to prove here in Canada with our refurbishments that our engineering is done, our parts were bought and delivered. And we were talking at the table a little while ago, we have abandoned furniture factory. It's about 400,000 square feet under roof. It's an indoor laydown area, so all of our parts are built -- bought, built and stored there before we begin construction. And we just simply transport them to the site to install. So this methodology is continuing through our life extension program, and this is where Mattr participates with us. In that $15 billion investment we're buying roughly about $1 billion to $2 billion worth of parts every year for our ongoing operations as well as the renewal aspects. And when you think of the refurbishment, think of it this way, we're pretty much taking out everything inside the buildings and replacing it. We keep what we can and reuse some of the piping and the cabling, but we also are re-pooling new cabling and putting in new components throughout the facilities. So when they come back, they're effectively brand-new facilities set to run for the next 40 years. We've had great support from Mattr. When we need a part or we need an interval solution, they step up and help us find that solution. They've reliably delivered all of the cable that we needed throughout the pandemic and they're an active participant here in Ontario's economy and our local communities. You see one of the things we talked about was economic development and we were effectively rebuilding 3 counties that were destroyed after the 2000, 2008, 2009 recession to the point where we have buildings that were once abandoned for upwards of 10 to 15 years now and use doing light manufacturing. We don't have vacant storefronts and small -- and falling down small communities. The storefronts are being bought and put into businesses. Properties are now being toured down with facilities being rebuilt on them. You can go to a little town of Paisley. And you'll see in Paisley in 2016, you couldn't sell a house. And today, you can't buy house in Paisley. And Mattr has been a part of that process through our community rebuilding, helping with the hospitals throughout the pandemic being able to provide PPE to the hospital facilities when they ran out after 2 weeks. Bruce Power will be able to support that and our supply base supported all of that. But it's not just being reliable and capable. They are also a quality provider that provides a product at a good price, and that's hard to find. In the age of supply chains being stretched we have to often send our people to go into supply houses to make sure that the quality is what we expect. When we work with Mattr, we don't have to do that. You simply issue a purchase order with the terms of the quality provided and we get a product delivered that we can use. And I think that speaks volumes for everything that Frank said and Mike said this morning, and as a large customer of Mattr, that's something that we expect, but it's also something that we appreciate very much as we do business day in and day out. So whether you are nuclear energy, support it or not, you're being powered by nuclear energy here in Ontario. We're seeing that growth throughout the world now. I think as a clean energy transition takes hold, it's that bulk power and power density that will be needed to be able to drive economies to be able to drive reliability and affordability. I think for the long term, we're in the beginning stages of this. And I think Canada is leading the way with our refurbishments. And you're hearing more and more now about other countries starting to refurbish their reactors as well now to extend them on another 20 and another 40 years. The U.S. is doing that. France is doing that, Switzerland's doing that, Belgium is doing that and on and on and on. So with that, I'll be happy to take any questions.

I did such a great job with that. Or you want to get all of the Mattr discussion. I'm just going now on a break, too. So that's always a dangerous spot. There's one. Very good.

Yuri Lynk with Canaccord Genuity. Just on the new builds that you're contemplating, you mentioned technology agnostic, but does that mean -- would you go with a Gen III? Or would you consider an older technology?

Yes. No, we're likely going to look at things that have been recently built and designed. So the things we know we have a supply chain for and we have a design for, like I said, the secret to large projects is getting the engineering done and having supply chain to make the parts. If you have the parts and the engineering, you can go in the field and do construction. We've proven that with our refurbishments. Large projects really get distorted when they get out in the field, doing construction and they don't have a design down or the parts. In my history, I worked for Areva at one point. I have resigned to go look at that [ Ocado ] in 2014 as Deputy Chief Operating Officer of Areva. Well, at that point, that plant had been under construction in 8 years. So you would expect the engineering have been done. We got there, it wasn't done, but still didn't have the parts. So what do we have to do? We had to actually stop the project, de-staff it. We finished the engineering. We bought the rest of the parts. About a year later, we went back to work. We finished the piping systems at 8 months. So when we look going forward at the technologies, we're going to be looking at that ability to finish the engineering and get the supply chain and get the parts. And once that's done, then we'll make decisions about the technology and the application of it. But I think there's a lot of high-quality designs there now. For example, like in our units today with modern technology, we put in something called containment filtered vents. If we ever have an accident, we don't release anything past the site boundary, just a little bit off of it. So it's these types of technologies that are coming forward now, more robotics sweep program, we plan most of our maintenance work now with artificial intelligence language programming. About 30% of all the maintenance works planned by machine and it enables us to get more work done. We're getting about 300% more work than every day now because of it. So these efficiencies and modernization are coming into the newer facilities. There's a question in the back.

Ian Gillies from Stifel. I'm just curious how challenging it is to get into the Bruce Power supply chain and once in, I suppose, how long would it typically take or how challenging is it to find a replacement product if you wanted to do so?

Yes. So one thing you have to do is call a fellow by the name of [ David Fur ], who's the VP of our supply chain. So about 4x a year, we hold events where we invite suppliers to come and introduce themselves. We also have a supplier day on our campus. We typically get about 80 people -- 80 different suppliers within the buildings. They actually come on site have about 1,000 people or 1,500 people go through their booths. And then we look for those solutions. Just because we're a nuclear plant doesn't mean you have to have all nuclear qualified components. Many of the components we use are commercial off-the-shelf products, and we buy lots and lots of those. So getting all the supply chain for a non-nuclear piece, so you go through that process with [ David Fur's ] organization and you're able to begin supplying. If you want to do the nuclear components, you have to have a quality assurance program. It has to be done in the Canadian nuclear Standard, N299 and then once you're in that realm and you have an applicable quality program, then we can look at you for supply after an audit. It's an industry audit that would then enable you to supply any nuclear plant within Canada and it's not the world. And this is an advantage, I keep on let's say, Shawcor. Mattr has, sorry about that. It's an advantage that Mattr has, as they are qualified already to the highest standards, not only here in Canada, but that is applicable throughout the world, and they are audited under an international organization called NUPIC, which then that NUPIC audit can be transferred around nuclear plants throughout North America and Europe. With that, thank you so much for your attention. And I very much appreciate it.

Thank you very much, Mike. I think Frank has a small token of appreciation for you over there. For everyone else, we'll have a short break. We have about 8 minutes. We'll start again at 2:00 p.m. So feel free to stretch your legs, if you like. [Break]

I can just get everyone to set all back in, and we'll get started here on the next presentation. Thanks, everyone. I'm really pleased to invite our next speaker to the stage. We've got our President of our Composite Technologies segment, Martin Perez.

Good afternoon, everybody. Just to touch here like for a few seconds. My name is Martin Perez, I'm Group President of Composite Technologies. I have the pleasure of leading a fantastic team in the composite technologies since 2021. We are a case of a successful M&A concept. We acquired Flexpipe in 2008 and sources in 2019. As you are very well aware M&A is not something easy to do, and more importantly, not easy to execute, integrate and eventually be successful. Composite Technologies is a very successful case of acquiring 2 companies scaling them and delivering fantastic results. We are going to very briefly talk about composite technologies today, our segment, what we do, the market we serve the potential, and we are going to be very happy along with the secretive team of Composite Technology. We are going to be answering questions later and also add the booth. Something important here that I want to mention is that we have delivered 50% adjusted EBITDA CAGR since 2021 to 2023. So this is an impressive result. And before I say anything about our business, the markets we serve, and all that, I want to take the opportunity to congratulate a fantastic theme that makes me look good because these numbers are really impressive. We are going to talk about what we did how we improve those margins and why we are growing the revenue in such a way. While this segment is comprised by 2 business, we operate within 3 primary market verticals. The Flexpipe business predominantly serves the onshore oil and gas market. Xerxes, we have 2 long-standing -- have a long-standing reputation in the storage of liquid fuel and have leveraged our know-how encompasses to expand into various markets that were described. We strongly believe that Composites are a superior technology to steel and concrete. Corrosion free longer-lasting, easier and faster to install and lower maintenance requirements. As we see there, we have a services a SAM of $4 billion, and this is growing. As Mike said at the very beginning, we are good at material science, we are very good at manufacturing, but we are going to see that we have also built at developing new technologies that expands the horizon of our revenue generating not only an increase in revenue, but in particular, a significant increase in profitability. Across all 3 verticals, our market drivers are supported by long-term renewal and expansion across a variety of critical infrastructure market but we believe we will benefit from for years to come. Flexpipe, new technology, steady growth and also benefiting of customers that have been investing for years in new technologies so they now can produce more, better, quicker and then with our products that are better prepared and can also transport from A to B more oil, more gas and more water we are able to allow them to produce more as well to be able to transport more. This is something that our customers recognize and we are going to talk today later. In Xerxes fuel, we have 2 different doors of growth. We have new convenience stores all our customers, and we are going to see today, one of our most important customers and also a long-standing one. We are going to see that they are growing even faster than in the last few years. The projection for new convenience stores for all of them are everything between 20 to 75 new convenience stores per year in the next decade. That's a significant increase just compared to 20 years a barrel. And finally, water. We are creating a new business following all regulations that are tightening in everywhere, not just the U.S. but also Canada, Europe and some particular market New Zealand, Australia, we have opportunities everywhere with these regulations that are really -- we are really benefiting from those at this stage but also, we are allowing our customers to have a better real estate footprint by using the solution that we are providing. We are going to talk about the HydroChain concept, why this concept is very well received by our customers and why, in particular, we were able to double the revenue we had in this particular business unit in 2019 in the last few months. Diving a little bit deeper in the composite business, our Flexpipe business delivered scalable composite pipe that can be used for a variety of market applications. While the primary application is for using the oil and gas gathering lines, our pipe is commonly used to handle produced water, carbon diox, carbon capture and storage applications. With our technical know-how, we are also very involved in discussions for innovative applications in new markets such as HydroChain. We're going to be very happy to discuss about these potential new uses of our pipe, what we are doing and the investments we are considering to do so. We pride ourselves on our products that are quicker and easier to install than steel pipe. I mentioned earlier how efficient our customers the oil and gas industries are becoming. So to provide a product that is easy to install that is quicker than the other solutions and also that allow our customers to be more reliable quicker and to save money that's very important for them, and we are really proud to do that. Whereas steel pipeline is made of 45 ft joints that have to be welded in the field, thousands feet of our pipe are tooled on [ rail ], easily transported to the project site and can then be un-spooled in place with only 2 fittings to be installed at the end of the full pipe. In other words, seeing through process, quicker process. Flexpipe also much higher resistance to corrosion and a lower overall environmental footprint when compared to legacy materials. We are going to see later that in the entire world are currently conversation on how to replace material -- legacy materials and nonmetallic is a discussion not just in the U.S. and Canada, but in particular, worldwide. We're going to talk about -- the world is discussing and the investments they are doing to be able to benefit for this technology. While Flexpipe is exposed to the dynamics of the energy sector, there are a number of underlying trends that make us excited about this business over the longer term. There are a number of fundamentals for oil and natural gas that will determine the ultimate performance of this business. But we believe that production will be necessary for years to come. Particularly as energy security comes to the fore. We have seen Europe decoupling for Russian energy dependent, we're working towards emission reduction targets. And Asia Pacific, Africa and the Middle East are increasing consumption to meet economic growth target. We're going to briefly touch about what we're doing internationally and how fast we are growing. There is also a correlation between oil and gas price and general wholesale activity. Historically, sustained high oil and gas prices translated to greater E&P activity driving demand for products. But what we have seen in particular over the last few years, is that the E&P companies have been more disciplined with their CapEx plans, decreasing overall volatility in production levels. Just a few years ago, for those who are familiar with the energy industry, when there was a significant change in the WTI, what's happening is that the rig count was declining by 30%, 40%, even 50% almost overnight, and we are seeing now that when this happens, it's just 10%, 8%, 11% no more than that. So this is a very good sign for an industry that traditionally has been really cyclical. One last thing I will point out, this business is extremely efficient and even in the worst of times have been profitable. Even in 2 or 3 patients in the past, where the drop in rig count was almost overnight. This business has proven to be really profitable. We have been a global leader in the smaller diameter space in North America for years and have a mature market position in this space. We recently announced 5- and 6-inch solution, which has effectively doubled our addressable market. Our position in this space is still at its infancy and we expect to continue to take share. We also have an opportunity to further expand with commercialization of even larger diameters. Operators have increased the efficiency of their wells extracting larger volumes from the wells. Flexpipe is installation means fluid can be easily transported over longer distances. These factors have contributed to more dollars per well. When we say that our segment is, it has technology in our veins is this. We were able to increase significantly our new revenue with new products, talking with our customers, creating larger diameters, tougher -- as Mike said at the very beginning, in very tough applications, we were able to provide 5- and 6-inch that is what our customers want, and we are going to be working in the next 3 years to also continue increasing and we have some internal targets to really continue delivering new revenue in the next few years. That's the key of Flexpipe. New revenue, new technology that is what our customers need as they are really transitioning to be extremely efficient, in particular, in the Permian Basin. Another opportunity for Flexpipe is in international markets. A number of NOCs have committed to a future of nonmetallic, with the goal of decarbonizing faster together. That's exactly what we discussed recently in Abu Dhabi ADIPEC and also is currently being discussed at COP 23 that is also happening in the U.A.E. A nonmetallic solution would facilitate that goal. All the NOCs that we are talking that are internationally based are trying to shift everything they use from metallic to nonmetallic. We are particularly well positioned to offer our customers a fantastic solution that is exactly what they need. And there are not so many providers that can offer a reliable track of activity. And this is what I'm talking about. Recently, in fact, only 10 days ago, we were able to install our kilometer number, 50,000, and we are extremely proud of that, not just North America, U.S., particularly Permian Basin, but also Canada with decades of experience doing that, but also internationally. All the countries that you can see here are countries where we install pipe, have track record and have a relationship with end customers of a quality product that they want. This was Flexpipe. Now I want to briefly introduce Xerxes. Our Xerxes business began manufacturing tanks over 40 years ago -- in case if you guys have any question about 40 years ago, I'm sure there is somebody else that could help us later -- predominantly to serve the fuel retail storage markets. Since then, we have established a strong position in the North American market with roughly 60% of the market share. This is because we offer a composite tank that are lightweight, easy to install and free of corrosion. We have also built and maintained very strong relationships with our customers. And you're going to see -- because more importantly, instead of hearing from me, it's better to be hearing from our customers and what they do, what they think, in particular, what they think about the future. This tank that you are seeing in this picture is tank that we delivered to Alaska. And in this particular case, of course, was transported using an airplane. We have a strong reputation for providing quality tanks. Many of the gas stations that you visit every day will have a certain tank storing their fuel. Today, about 75% of the tanks that we sell going to the new fuel stations, that stations have evolved over the years from the poorly lit, visit-in-the-daytime pit stop for fuel to a one-stop shop for grocery, fuel and other retail needs. Their design have also changed. The stores are larger with larger forecourts, meaning more fuel tanks, meaning more and larger tanks. We're going to talk about the footprint a little later, and we are going to see that at the new facility that we are building, we will be capable of delivering larger tanks because that's the trend that our customers are telling us in the next few years. Most tank operators will have trouble getting insurance if their tanks have exceeded their warranty period, thus creating more demand for our tanks. This is something that I want to mention. Our tanks have a 30-year guarantee. And then for the small retailers, it's very difficult to renew their insurance policies if they don't replace their tank. So on top of the new convenience stores that I explained earlier, we have also a solid market of approximately 16,000 tanks that every year should be replaced across U.S.A. And this is a solid market, so most of our customers have an aggressive tank replacement plan once those tanks reach 30 years old. We expect to see a continued tail for replacement tanks as well with many of the underground storage tanks in service across North America. And I think that perhaps we can ask later how aggressive our customers are going to be in the next few years. Everything that they are telling -- we have more than 90 customers. Everything that they are telling us is that their plans to replace tanks are aggressive and will remain so for at least the next 10 years. We are working with our customers to map out delivery schedules to meet their long-cycle expansion plans. These projects are complex and the tank is just the last piece to build a new convenience store. So we'll work with our customers for the next 12 to 24 months to be able to plan when they will need their tank and be ready and prepared as they need more than, in some cases, 10 to 15 different contractors to be ready when they receive our tank and install them. On top of these new builds, as I mentioned, with many tanks coming to the end of their useful life, the replacement cycle will only get stronger. Driven by strong fuel retail margins, the large convenience store chains will continue to consolidate the sector by buying out small operators and refurbishing their locations, which will support more demand of our tanks. We satisfy -- we really help most of the largest retailers in the country. You can see here some of their names, and they are purchasing smaller. 55% of the convenience stores in the U.S. are single-owner gas stations. So there is an opportunity of acquisitions in the future of our customers, and we are very well positioned to satisfy the biggest players in the market when they need to go buy the service and really adapt those gas stations to their standards. Convenience stores are also getting larger, offering a greater variety of fuels, for example, larger and more complex tanks. But I just said, when we talk about our new facility in South Carolina, we are going to talk about that: larger tanks mean better product for our customers and, of course, better profitability as a company. Okay. This is a map, a good map, just to show the demand of tanks. We have demand in the entire country. And of course, we have demand in Canada as well. But we wanted to show U.S.A. in this case. And 70% of our demand or more is eastern of the seaboard. That's why when we spend, when we think how to support our customers, it's definitely the east of the U.S. where we need to be. As you can imagine, tanks are large and then logistic costs are meaningful, so we try to build facilities that can satisfy demand for the next 10 to 20 years, closer to our customers, to minimize the impact of logistics that, in this case, is meaningful. When we go to stormwater management, we see a massive opportunity to leverage our existing technologies to expand into the water space. We believe the market is around [ $1 billion ] for HydroChain including conveyance, pipe, infiltration and storage, chamber, [ crates] and tanks; and also water quality products, pretreatment and infiltration. This is a product that is growing everywhere. And now we're going to talk about why we're extremely excited about this particular possibility. We have been selling tanks into this market for more than 15 years now. And the reason why we have added this is because our own field customers were talking with us and telling us about how important the tank -- the water tank would be for their plant. So then we said, "Well, if we do tanks for fuel, following quite high standards, we could also manufacture water tanks." That was the intention probably around 15 years ago. This started when our convenience store customers came forward with request for water tanks, as I had just mentioned. We built a small and steady niche, selling tanks for various wastewater and stormwater customers. In 2019, we looked a little more closely at how to scale up the business. We restructured our channels to market to sell more water tanks and started to assemble the pieces to be able to deliver a complete stormwater solution. In 2021, we officially launched HydroChain to our stormwater management system. We solidified this package by acquiring Triton Stormwater Solutions, a provider of stormwater infiltration products, earlier this year. Supported by the increasing sales of water tanks and the penetration of the stormwater market, with our hydrogen systems, we have doubled our water market since 2019. This is another example of talking with our customers, really relying on our own expertise to material science and offering something that our customers are proud of. Today, you will find our tanks in a variety of water, wastewater and stormwater applications, including septic, fire protection, rainwater harvesting, onsite septic treatment and various interceptor and separator tanks. This slide provides a bit of an overview of what we do. But anywhere you might find a large parking lot anywhere -- sorry, anywhere you might find a large parking lot is where our stormwater solution can be applied. Our customers, convenience stores, if they want to expand, they need to buy a quite big piece of land, lots of land, in order to build a new convenience store because also, they need to follow a lot of internal regulations. By using our stormwater solutions that is installed underground on a parking lot then, they could acquire a smaller real estate footprint. And this really creates an opportunity. So right now, we are not only talking with the technical guys in our customers but also talking with the real estate counterparts in our customers to allow them to think about their future projects, which is very important for them as well. So why we win, why a tank manufacturer that has more than 30 years in the market and a Flexpipe -- a flexible pipe manufacturer could be helpful in the market. We work directly with our customers from the design phase of the project to develop the most efficient solutions. Mike mentioned earlier, we are used to working with our customers to provide products that are prepared for very difficult atmospheres, so we are very capable of doing that in our 2 other verticals. So we can offer a solution to our customers when they can trust our engineering team, our applications team, to build the sites that they have in their mind. So now we are talking with convenience stores, we are talking with engineering teams, we are talking with a variety of new actors but with the same type of high-quality level when supporting them. Our organization prides itself of being customer oriented, nimble and responsible. Our water-focused composite products are longer lasting, it's properly installed and free of corrosion and are easier and faster to install versus alternative thermoplastics for concrete products. We are a relatively small drop in the puddle today, in a massive and growing market, and we continue to grow faster than the market, with the goal of the business rivaling our fuel business within the next 5 years. We talked about commitments earlier. This is our commitment. We are going to be in water rivaling our fuel revenue in the next 5 years. This is the map that I really like because it's our entire manufacturing footprint. We have made substantial organic investment with a focus on modernization and efficiency of just growing revenue, also being more efficient, so we can provide a better price for our customer and also we can improve our margins. We are adding a second Flexpipe facility to our network as we do not have redundancy in Flexpipe today. So we are going to have 1 facility in Canada and the other one in the U.S., particularly in Texas, very close to our main markets. More importantly, a large concentration of our customer base, as I just said, are based in the Permian Basin. That will be -- that means we are going to be able to provide our customers the same product with a better price and a better margin for us considering how expensive are the transport from Canada to -- in particular, to Texas. We have been -- we have seen increases. Just to give an example, just maybe a year ago, it was more expensive to send something from Alberta to Oman than from Alberta to Texas. This is the level of how tricky the logistics sector has been over the last 12 to 18 months. That's why that facility will allow us to satisfy better our customers. Our legacy Xerxes tank manufacturing sites are all more than 20 and 30 years old. Our new tank manufacturing facility that I just mentioned recently, located in South Carolina, will allow us to establish a much more efficient manufacturing footprint for the business. We are also making a small investment in our existing facilities to unlock efficiency. For example, we are converting our current fiberglass mold to steel mold, which are longer lasting and have lower maintenance requirements, allowing us to increase the uptime in our tank manufacturing facilities, not just selling more but being more efficient. This is the future of Xerxes: a better manufacturing footprint, closer to our customers, applying the latest technologies. Some of them are still developing, but we are going to be able to manufacture more tanks, better times, cheaper tanks but larger tanks, so we are extremely satisfied on our plans, on innovation. The same that we are doing with Flexpipe, we are doing it in Xerxes, and there is a great future there. To recap and to finish this quick presentation, I know it's difficult in just 30 minutes to try and talk about an entire segment with everything that has to do with our business, so I really hope that in the questions in M&A and also later, I can talk about everything we are doing here. But still, I want to mention about the EBITDA expansion that we are seeing in our business, in particular, '21-'23. I want to talk about the organic growth investment that we are doing in order to be more efficient in order to capture this continued demand from our customers. Both in Xerxes and Flexpipe, we are investing significantly in high-return opportunities with revenue and margin expansion. So in 2025, we can unlock not just more revenue but, again, more gross margin that is what we saw at the very beginning. Of course, as I mentioned, our role to 2030 is to grow the water business and be closer to our fuel business, and we are sure that we can do that just by sharing the results I mentioned that we doubled the revenue of water over the last 3 years. Finally, we all think that there are opportunities for inorganic growth. And our current stage is that water is where we really can benefit not just of an expanding market, customers that are really satisfied with the product, but also the scale of the product. We are servicing, for example, hospitals and new malls, and this is increasing with more and new legislation everywhere. So composite technology, material science, latest manufacturing and a passion for new technology to increase our profitability. Thank you very much. And more importantly than myself, I would like to introduce Keith Spiker, Head of Fuels Systems, with one of our most lasting customer, QuikTrip. Keith?

Good afternoon. I really appreciate the opportunity to speak to this group today. QuikTrip was established in 1958. That's the appearance of one of our standard stores. So today, we operate in 17 states. We opened our 1,000th store earlier in '23. We currently have around 31,000 employees. We are listed as the 17th largest privately held company through Forbes. And of the 1,000-plus stores, 920 of those are standard, what we call a C-store standard gas station and forecourt. And as of today, 116 of those are travel centers, are serving commercial trucking and with the traveling interstate public. I'm here to talk about tanks and talk a little bit about our growth in tank procurement over the last 4 to 5 years. We have gone from opening 47 stores in '19. We are going to open 73 stores in the current year, project to open 80 stores in '24 and '25, and of the 80, 30 of those would be the travel center truck service facilities. So we have -- it's interesting that we've had a 115% increase in the number of tanks we have installed over this time period when we've only had a 30% increase in the number of stores we've opened, and that is primarily due to the increased number of tanks for the truck service travel centers. We have made some changes along the way to make sure that we can meet our goals for opening 70 to 80 stores a year. We have adjusted our development staffing in all of our markets, and our development and real estate permitting folks are focused on permitting sites and permitting actually more sites than we plan to build. We've had way too many disappointments over the years with sites getting hung up in permitting, being delayed for long periods of time due to permitting requirements and permitting bulls*** in a lot of cases. But we have implemented kind of a fishbowl mentality in that our development staff is now responsible for keeping sites that are ready to build. They've been permitted. They've been fully vetted. All the engineering has been completed. And our construction staff can really pick and choose sites to start, and that keeps us on target with our construction goals. Yes, it adds cost. Yes, it forces us to buy property that we may not be ready to develop, but we can maintain a long-term development strategy by focusing on that. And then I mentioned the focus on travel centers and commercial trucking, that will be the theme for QuikTrip for the next few years as I would expect for many of our competitors. A little bit about our tank infrastructure. We currently have over 5,000 tanks in the ground. So it's a little interesting to see that we have about 1% of the tanks in the ground nationally. We claim that we sell about 5% of the fuel in the U.S. Of these 5,000 tanks, about 70% of those are manufactured by Xerxes. The average age of our tank is about 2.5 years. And our capacity, from the time I've been at Shawcor, which is 38 years, our capacity has grown from around 12,000 gallon average per tank in the ground to just over 21,000. For the EPA, there are about 242,000 -- 542,000 tanks installed, and the EPA estimates that of those, 40% are in the 20- to 29-year-old range, 10% are over 30 years old. So looking at that, it would tell you that about 250,000 underground storage tanks need to be replaced over the next -- over 30 years old not necessarily needing to be replaced, but over that 30-year mark, as Martin discussed earlier. The focus on trucks is real, meaning that our business is -- are beginning to focus on truck and truck service. The sale of diesel fuel through the Bureau of Transportation Statistics, I learned that there's been a 23% increase in the number of trucks on the road between 2010 and '21. So that was somewhere around 3 million trucks in 2010 and getting close to 4 million trucks today, an increase of 11% in the miles driven or the miles trucked and an increase of 6% in the fuel consumed in that time frame. And that's even with a reported 13% in the fuel efficiency gain on those trucks. All industry indicators that our group puts at, they tell us that focusing on trucks and focusing on the sale of diesel fuel, biodiesel and renewable diesel, is where we should be. The 10-year plan for QuikTrip would focus on continuing to build about 40% truck service travel centers and 60% of our standard gas station C stores. With, a consistent growth of 70 to 80 sites per year. We will focus on improving our offer between our existing markets, tying a market like St. Louis in Atlanta and a lot of opportunities on interstates to do so, and improving our offer to the commercial trucking and to the traveling public. I mentioned our changes in our development process. It's really nothing more than a focus on making sure that we don't use the excuse that permitting or a municipality is holding us up. That is no longer an excuse for not being able to start a store. We take advantage of outdated facilities when we look for new sites. There's no secret there. When we do that, it forces a competitor on an interstate off-ramp or wherever it might be to either upgrade, look at compatibility of the tanks they have in ground, they either upgrade or they may decide to operate somewhere else. We have, and a lot of our competitors have, increased the storage capacity of our tanks. We commonly put in 30,000-gallon tanks. And I would say, as of about 10 years ago, I've never seen a 30,000-gallon tank. We are, as a rule, installing 10 up to 12 tanks on the truck travel center due to some of the emerging fuels that we're dealing with, be it 15% ethanol, biomass tanks, diesel exhaust fluid, which is primarily water, and also focusing on making sure we have enough storage capacity to deal with sort of a hurricane or challenges that the trucking industry presents by being understaffed today. As far as EV chargers are concerned on our sites, we are not in the EV business. We have 3 to 4 sites in Colorado, where you will find EV chargers on our sites. They are there because we are required to have them. But we always make it clear, we are in -- we are a liquid fuel, gasoline, diesel marketer. We are not in the EV charging business. As we go forward, and as QuikTrip and our competitors go forward, we have to think about aging tanks. Tanks will be replaced either through normal site attrition as sites are redeveloped. A 30-year-old tank fits pretty well with a 30-year-old site. In a lot of cases, when a convenience store building or any facility is 30 years old, it's outdated enough that the upgrades work hand in hand. We do, however, have 30,000-gallon tanks -- or 30-year-old tanks on the ground, and we evaluate those. We are entering those tanks. We are looking at them. We are self-insured, so we don't necessarily replace the tanks at 30 years, but we are putting a program together to make -- to evaluate whether or not they need to be replaced. And Martin, it's not necessarily good news, if they really look pretty good at 30 years, they do. We are dealing with the emerging fuels. We offer E15 at only a few sites in Dallas Fort Worth, in the Chicago metro area and in Iowa now. There are municipalities and [ early ] states that are starting to mandate the sale of higher ethanol blends. So that does force us to make sure our tanks are compatible. And of course, our competitors will be dealing with that as well. Renewable diesel is a product that we're beginning to see a lot of movement in. We've got sites in Houston, Texas that are selling about 1 million gallons a month in test sites. And so far, renewable diesel, which is 100% petroleum-free, has been -- the test results have been very good. We haven't had a single customer complaint. We haven't had any equipment issues, filter problems or anything like that. So we're really seeing some positive results with renewable diesel. Diesel exhaust fluid is something that as more trucks are on the road and as newer -- more and newer trucks require release of exhaust fluid for the diesel -- between diesel technology. Another item that I found interesting was that the EPA estimates that 42% of sites nationally are not compliant with 2015 regulations, which will ultimately require tank replacements and there are -- through the recent Inflation Reduction Act, there will be some incentives and grant programs nationally that we will be and other competitors will be taking advantage of, which will help offset the cost of replacing new tanks. Well, that's a quick rundown on what we do. I would like to say that we've partnered with Xerxes. I remember seeing a 38-year-old tank, I didn't know what it was, but I can vouch for the fact that there are a 38-year-old Xerxes tanks. We've -- Xerxes has been a great partner to us through the years. Xerxes is pivotal to our industry. Any of the marketers that were listed up there earlier would say Xerxes is more important to them than they are to Xerxes. We have to have things, we have to have this company, and this is the best tank company that is in the business. Any questions? Yes, sir?

30-year investment in tanks and all these new facilities, how do you guys think about EVs as a threat to the fuel business? And what gives you the confidence to invest in those assets?

EVs are beginning to happen. We're beginning to see EVs. Our strategy focuses on a long-term decline in liquid fuel sales and a flat program for diesel. So we do not see it as a short-term threat at all.

Zachary Evershed, National Bank. If I can use a direct quote, very interested in hearing about the permitting bulls***. You've changed your permitting strategy to deal with it. Do you view it as an ongoing risk to your development plans?

Look, it adds cost. It slows down the process. We do what we say we will do. We work very well with municipalities. We think that is more of a risk to our competitors than it is to us. But it's certainly somewhat of a long-term risk. It slows things down dramatically.

[ Harrison Morris ]. Do you see any water application for Xerxes tanks in the future?

I certainly do, and that is something that we simply haven't looked at enough. But also the things that Martin mentioned as far as site development and picking up -- having to buy more property or being able to reduce our overall footprint by putting in fiberglass tanks underground is very valuable and it's something we talk about every day.

It's Keith MacKey with RBC. Just curious, when you look at either building a new center with new tanks or replacing existing tanks from an existing C-store or travel center, what are the main factors you look at as far as what tank you select? Is it price? Is it reliability? Is it steel concrete versus composite? What are the main things you look at when you decide which tank to use?

Right now, I would say it's the ability to get the tank. But it is price. But long term, it's reliability and it's the trust that we're willing to put that tank underground and not have to worry about it.

[ Dan Cherney ]. Could you comment on how many -- or what percentage of your mix of tanks is steel versus composite that you're using?

I will. I know that number. Four years ago, we had 0 steel tanks. Today, we have, I think, 206 steel tanks. The supply chain issues and the demand for tanks, we had to buy steel tanks. We're still buying steel tanks. But we've had a supplier that is taking a good share of this. And we will not pull the rug out from under them. We'll continue to install a few. Steel tanks are not -- we don't believe steel tanks is a big part in our industry as a whole long term.

Just a follow-up on EV adoption trend. Just curious, if you have a scenario where fuel demand is declining, but there's still a significant amount of liquid fuel demand, do you think that your tank demand goes down as well? Or is it kind of binomial you need to have because there's some -- a significant portion of the fleet on the road is still consuming liquid fuels?

Yes. I don't have an answer for that. We see a bright future for liquid fuels. And all indicators tell us that we should go forward as fast as we should be now, and we should get ready for truck traffic and I can't speculate as to what would happen with EVs or what we would -- how we would react to it at this time.

Ian Gillies, Stifel. I'm just curious, what would cause you to go back to using steel tanks? Is it price sensitivity? Or is there anything that would cause you to go back to using steel?

I can't think of anything now that would cause us to go back other than continuing any kind of a supply issue [ in anticipation ]. But all things being equal, fiberglass tanks, composite tanks are a superior product, in our view.

Thank you very much, Keith.

Thank you all.

All right. Now I'll spend a few minutes just talking about the ESG and investor landscape at Mattr. At Mattr, we take a very balanced approach to ESG. We look for opportunities to operate smarter and more efficiently. And in 2021, we shared our ESG ambitions, which focus on 3 primary areas. The first is greenhouse gas emissions. We committed to a 50% reduction from our 2019 baseline by 2030, and we've made great progress on this goal. Our approach to emissions reductions is primarily centered on being more energy efficient, lowering our cost base, lowering our emissions intensity and lowering our total emissions, all in parallel. As you will have heard from our business leaders, we are certainly in growth mode at the moment. And as a consequence, we will expect that our activity levels will rise and our consumption and emissions may rise as well. But we're still very confident in our ambitions, and we're committed to our 2030 goal. We've also established an ambition related to diversity on our senior management team, and I'm proud to share that we surpassed that ambition as of the end of 2022. And last, but certainly not least, we have a consistent vision of an incident and injury-free workplace, and safety is our top priority. We work hard every day to send our employees home in the same condition that they arrive at our sites. Across all of our businesses, we engineer solutions that enable responsible and efficient operations. Our team spoke briefly about the advantages of Flexpipe, particularly when we compare it to legacy materials such as steel or concrete. Saudi Aramco actually completed a study on this a few years ago on the GHG emissions profile of composites versus steel. The study found that carbon emissions from steel production exceeded that of composites by more than 10 tons per kilometer of pipe manufactured. And when you factor in the installation process, that delta grows to almost 20 tons of CO2 equivalent per kilometer. So to put that in perspective, our 50,000-kilometer milestone would account for an almost 1 million ton reduction in carbon emissions versus steel. Water management is another global issue that will only become more significant as populations continue to grow as does the frequency and severity of extreme weather events. Our solutions, while complex from a design and manufacturing perspective are quite simple when it comes to construction and installation. And finally, a recent example from our DSG-Canusa business is our Shuttle 2.0 product, which was designed for terminal sealing. Our first project with this product occurred in 2022 for the Volvo FH Electric Truck, an all-electric long-haul truck that successfully completed the Green Truck Award route with 0 emissions. We also look very closely at our own footprint to find opportunities to be more effective and reduce intensity from a resource, emissions and cost perspective. When we evaluate ESG opportunities, we look at things through a similar lens as we would any investment. A great example of this is our solar array installation and LED retrofit that's currently underway at our Flexpipe facility in Calgary. It's set to be online early next year. And almost the entirety of these improvements have been funded by a blend of government grants and landlord incentives. On top of this, we'll expect -- we expect that these changes will yield almost $300,000 in annual savings on electricity costs and reduce our company emissions by roughly 5%. Since I also lead Investor Relations, and we do get questions about this from time to time, with our portfolio transformation, we have seen a shift in our analysts and investor profiles. In 2020, we were largely considered an oilfield services company covered by predominantly energy analysts. And as I look around at our analysts today, the majority in this room are diversified industrials. We continue to update S&P on our transformation in an effort to align our [indiscernible] code with our business today. And the last thing that I'll say is from an investor style perspective, as we've transitioned from transformation into growth mode, we've seen an uptick in growth-oriented investors as a consequence. With that, I'll pass it over to Tom to talk about financials. Please welcome Tom Holloway, our CFO.

So I stand to see you in the end of prepared remarks and Q&A. So I'll try to wrap this up, bring it all together a little bit for everyone as to what does it look like from a finance perspective. So those of you who know me will have heard a lot of this before, but hopefully, we can provide some better insights and forward-looking. These goals as to where we're headed. So when you start here, where Mike was, so moving beyond transformation. We spent the last 2.5 years focused on transforming this business from what it was a pipe coating business, a family owned business, somewhat slow moving, I'll say, to what it is today, we have sold those businesses. In the process, we generated $400 million or more than $400 million of proceeds. And I'll walk you through what we've done with those proceeds. What else have we done? I'll walk you through that here in a minute as well. We've also had a second strategy at the same time. We've grown the businesses that you've heard us talk about today. These 4 businesses, we own them, Shawcor own those businesses. Those are not new businesses, but we put capital into them. We've deployed and are deploying over $150 million of capital to prepare this company to continue on that growth trajectory in the future. So you'll -- and we'll talk a little bit about that. And then looking off into the future, aspirationally, we look to try to double revenue organically, and I'll touch on that point again as I end it up this way. Let me start with the transformation itself. The bottom number is where I'll start, $442 million of gross proceeds from a variety of activities that we've been telling you all about over the course of the last couple of years. Some of you, I'll recall going around [indiscernible] investors and some of you will have said, if you have any more [ subscriptions ], you can find another $5 million or $10 million from another couple but not very many. We've done most of what we can do at this point. So $442 million. Part of that was $225 million of the sale of the majority [ subscription ] again, the majority of the pipe coating business. To remind those of you who have followed the story, we did originally tell you that we thought the working capital would be a negative, and that would be offset by proceeds between signing and closing. The working capital came in neutral. I don't know like proceeds between [indiscernible] we haven't closed the period, but I can tell you, it is a very active Pipe Coating period for that business. October, November will be very substantial. So I would just say the expectation, you should see substantial proceeds and follow in line with the story we've been telling, a better result than we originally expected. So I want to make sure I got that point home. On the right-hand side of this slide, again, we've talked about capital allocation. The 4 things we've been focused on giving our net debt to adjusted EBITDA ratio down, we are where we need to be. It's -- we are in a net cash position now with the proceeds from the sale. We are in a very strong balance sheet position. And with all the hard work of the people around these table over here and over there as well. Organic investment on the prior page, I showed you $150 million we're investing in the businesses that you've heard us talk about today. I think that organically, those are the biggest investments you'll see us make in the near term. That will get us positioned for the future and moving forward. It will allow us to expand capacity in ways the business leaders have talked about today allow us to expand our margins with automation, semi-automation and a variety of other things. And then moving to returning capital to shareholders, we have an active NCIB. We will continue to be active within the compounds of what we can do, and I'll talk about that here in a few minutes as well. And then inorganic M&A hasn't really been talked about a lot today, that's intentional. We want you to see that organically, we really control our own destiny here. Inorganically, we can supercharge this business. So I'll start with that and move to the next slide. Welcome you through the first capital allocation priority that we have, reducing our debt. Back in 2020, Q2 $421 million of net debt. To be fair, that was coming off the acquisition of Xerxes and going into a very tough period for all businesses around the world with the pandemic. But we've set our minds to reducing that number to a ceiling now of 1.5x net debt to adjusted EBITDA, which were much below that number. You'll see the trajectory is taken. And you'll see it has picked up the last few quarters, primarily related to the new leases we've signed. That's why the first bullet on here this year, $76 million of leases. I don't think of them as that, but that is how we show our metrics, just to be consistent with how some others we think about that. The net debt to adjusted EBITDA target was 1.5x. It's now a ceiling of 1.5x. We intend to stay at or below that 1.5x with very, very few exceptions, and we can talk about that as I get to the [ M&A ] slide. And then the last one on this slide, the debt reduction, of course, creates significant dry powder for this business to be growing in all the areas that I've touched on, including returning capital to shareholders. Organically. This is a story you're seeing. This is a slide most of you probably will have seen many times. You can see that this year 2023, by the end of the year, we will have deployed something close to $100 million of capital with a remaining commitment of $50 million to $70 million next year to complete those projects, very substantial capital deployed in these businesses because we believe in them. We think we are the leaders to move this forward, and we think that we can continue to grow in the areas that we've discussed. What you'll note on the right-hand side, the normal run rate, we expect to be about $15 million annually, $10 million to $15 million of maintenance CapEx. So despite the growth of the footprint, the maintenance CapEx will remain low , $10 million to $15 million is not a significant number. And then the $30 million of growth CapEx you see, again, that's just a rough number, but this is not intended to be guidance, but the $30 million of growth you see going forward is recognition that these businesses do still have opportunities for investments. So not of the substance from the size that 2023 and 2024 will be, but there are opportunities there. And the last thing I'll say on this slide is, you'll note the long list of investments included, it's not just the capacity increases. There's automation, semi automation, there's water product manufacturing. There's Xerxes facility expansion. There's steel mold conversions. Some of those may be foreign terms to you, but I can assure all of these drop to the bottom line and increase the EBITDA percentages, which is why we're confident in our goals. Returning capital to shareholders. 2 years ago, we put in an NCIB program. We've remained active through that entire close to 2-year period. We terminated and reinstituted that in June of this past year -- sorry, in June of 2023, and we have a year on that program. We have about 1 million shares left to buy on that program. And the reason I point that out is because we've been very active as we've promised, as we've seen the share price drop with no real reason in our mind. It just came down. Our results were roughly in line, and so we took advantage of that. We'll continue to be active with this program to the extent that we can be -- there is a window that we cannot renew that program until June of 2024. So if we do buy all the shares, we will have to pause or look at another way of deploying that capital. Again, seeing aside from Mike, just to wrap it all together. So what have we done? From an execution perspective, 45% CAGR from 2021 to 2023 on EBITDA, very significant growth. We went from 3.2x net debt to adjusted EBITDA in 2019 to a net cash position today. I'll say everyone knows that with the proceeds we have. We have significant capital we can deploy at this point. So we will continue to be active in there. As we've talked about, we will look at M&A, and then I'll get to that here in a second. On the left-hand side, we still believe we can grow this business 10% a year on the revenue line and likely a similar number at the bottom line. We still have aspirations of 20% EBITDA margins. We still believe this business can produce free cash flow of 70% or north of that number going forward. And we will maintain -- while doing all that, our net debt to adjusted EBITDA at a very modest level of 1.5x. On the right-hand side, I won't be late at the point, Mike did a good job earlier talking about the multiple, but I'll leave that graphic up there for you. But the one thing I'll say that is, even if you don't think multiple expansion is there, which we firmly believe it is, the growth in and of itself at the same multiple to provide a significant opportunity as an investor and for us at the business. So going through all that, what does that leave us with an M&A potential for this business. Where we've talked about, we've said we're going to be opportunistic. We're going to be very strategic. We're going to remain with our tuck-in strategy, $10 million to $15 million of EBITDA targets at reasonable multiples, and we intend to maintain that strategy. The balance sheet, however, is positioned in a very strong point for us to deploy additional capacity if something down the middle of the third way strategically fitting came my way, and we thought it was something worth taking a look at. So we're in a place where we could stretch again within the compounds of what we've just surge. But again, I'll remind you all of what you've seen today is organic only. M&A in the areas of likely water, which Martin talked about, likely ShawFlex, the U.S. footprint in ShawFlex, something along those lines are the areas where we'd focus and deploy this capital, which would supercharge the growth potential this year. And then I'll just leave you with a slide showing what we -- what again, Mike shared in the beginning. Our targets are 10% annual revenue growth 20% adjusted EBITDA margin, 70% free cash flow conversion. And we see a very clear path beginning to those numbers in the future. And I will turn it back to Meghan.

May be we'll cut to a 5-minute break, and I'll invite our management team to get set up on the stage here today. I want to come back in 5 minutes. That would be great. [Break]

So we have a couple of mics stationed around the room. If you have a question, just raise your hand, and we'll just ask that you state your name and who you're with before you ask your questions. So maybe I'll open it up to the floor if there's any questions. Got a question from Tim. Just one moment there's the mic coming for you.

A question for Tom. The doubling of revenue growth target over the next, I mean, by 2030, is that captured within the sort of $30 million -- $30 million to [ $50 million ] CapEx per year?

Generally, I would say, yes. I mean we were not anticipating any massive organic investments to get to that number.

And what's the revenue capacity of the business going to be following $150 million to 4 new facilities showing online by early '25? Yes, I'm just curious what the revenue capacity of the business will be after the 4 facilities online?

So I'll take that. The initial investment that we're making between this year and next year, as you see, it gives us fairly substantial footprints in each of the 4 businesses. But in no case are we putting 100% of the equipment into those facilities. So the investments we're making this year and next get us the long-term footprint and the near-term requirement in terms of machinery, but we are confident we'll give us at least an incremental $150 million of annualized revenue. But in every case, there is physical floor space that is not occupied. So when we think about the longer term $40 million to $50 million a year of total CapEx, that includes the assumption that over a period of time, we are adding incremental machinery to each of these sites to ensure that in total 2030, we've effectively added the best part of $1 billion of revenue capacity through these 4 sites.

Okay. Understood. And then just one more to add. So on the Flexpipe business for Martin. Can you give a little more detail on the additional SKUs you guys are thinking about adding?

We've been meeting all our customers and the moment we told them that we are going to have a new facility in Texas, they're now interested in longer plans, in better plans and giving us more visibility. As you know, the energy industry is an industry where you have visibility for 1 or 2 quarters. Now we are discussing about yearly projects because they know that they can have the type closer to what they have made. Oh, sorry, I heard new facilities. So the new -- as I mentioned, those customers are changing their well pad designs. So the new -- the development of 5 and 6 inch allow us to get to increase the [ SAM ] and we double that. So we are now talking and discussing with customers who prefer to first source a larger diameter and use the small diameter as secondary. So with these new technologies, we are now being able to talk with some customers that in the past we were unable to talk. Do you want to add more to that, Mike?

Yes. Just specifically, just getting to a 6-inch product has opened up a very substantial market for us, not just because of the diameter of our pipe, but because it can now be used in combination with smaller diameter pipe as well. The same would hold true if we go to that next level of diameter. I don't know if you caught on the SAM slide there, that 8-inch pipe would provide the exact same types of benefits where now we are a single solution provider over multiple ranges just within 1 diameter makes us a little bit more attractive from a customer perspective.

Are you able to [indiscernible] an 8-inch diameter, right?

We haven't done that yet, but we certainly think that is technically feasible. We've learned a lot in terms of the technical feasibility of getting to larger diameters with a glass wound product with our 5- and 6-inch research and development. So we're, I would say, highly confident at this point in time that we can school an 8-inch product with the glass.

Is there any progress on developing a liner that could handle gas?

That's certainly in our R&D funnel at this point, yes. It certainly is in particular -- our liner can handle gas as it is right now. As you can see, we do applications in CO2, and we did our first helium project in Alberta here as well. So it can handle it. Our R&D is going to be more towards making it just that much better at certain specific gas applications.

David Ocampo from Cormark Securities. Martin, just sticking with Flexpipe, I'm just curious what your customers are saying as it relates to the competitive advantages. And when you think about the longer-term growth trajectory, how much of that is coming from stealing market share from existing competitors versus the market growing itself?

That's a good question. So now -- as I said earlier, now that we have the larger diameter, we are able to really capture market share at a decent level. In the past, we were a leading provider of small diameters, but now having [ 5 and 6 ] allow us to be in the conversation. So we believe that most of our growth in the next few years are going to come for market share gains with these new diameters and with the new technology we are introducing to the market.

That's great. And then last one for me, just circling back to the question about growth. The $150 million that's coming from the 4 facilities. If I add that up, I think you mentioned before that it's 3 to 5 years that you're going to hit that target. That seems to be well behind the 10% organic growth that you guys have alluded to and the $30 million of incremental growth CapEx doesn't seem like it's going to be able to hit that 10% number. So just curious what we're missing on how you bridge that out?

So as I said earlier, the $150 million we're spending now is partly equipment, although it is important to say that the vast majority of the equipment that is populating the new Flexpipe facility in Texas was actually purchased several years ago, you may recall the company had a [indiscernible] to establish a production facility in Saudi Arabia. Had we had to pay cash move for everything that we're doing now, that number with where we have been a lot closer to $200 million. So there's -- probably that's a big part of the equation. I think we are always thoughtfully conservative in what we put out there in terms of the benefits of the investments that we're making. So I would say $150 million of incremental revenue from the equipment that we're establishing over the course of this year and next is below the end of the range. But I'd also say [indiscernible] let's call it the foundation in place in facility. So you're paying for the power, the air, the water, the air conditioning, et cetera, et cetera, et cetera. Adding incremental lines of production equipment is actually a relatively low cost, high-return investment. So as we think about the same [ $30 million to 50-ish ] annual investment for, let's say, '26 in demand, I am very confident that gets us to our goal.

It's [indiscernible] Investment. The question is on HydroChain. How much of the growth that you are implying is rising by 2030, the fuel tank business? How much of that will come from the organic investments versus M&A? Will all the growth come from the facility that can currently makes the tanks as well or you will separate other different business or different facilities?

Maybe offer some early to making. We would imagine that the M&A activity that we undertake at least in the near term [indiscernible] space were relatively modest in terms of the capital that it requires because we do believe that we can achieve our objectives with organic growth. But clearly, we have to make sure we have all the pieces of the technology puzzle under our control to do that. And we've lost open today. We don't have all of them. The ones we don't go, we have [indiscernible] of relationships in place to have access to the technology, but that doesn't necessarily give us exactly the platform that we'd like for the long term. So we're going to see M&A in the [ outer ] space. I think it's likely to be on the smaller end of the spectrum and the rest of it will be organic. When we talk about production capabilities, clearly, we consider ourselves a manufacturer at heart. So it would be for us to build a substantial business and not be the actual manufacturer of the products. Today, clearly, we have the capacity and are adding to the capacity when it comes to the tank side of the water business. You should expect that among the investments we're making now and we'll make in the future that there will be investments to ensure we can ramp the reduction of the other components of the water technology system. It's possible that we might break the water business out to be a totally discrete business, separate front fuel. But I'd say it's likely several years away because the tank production side of things is so completely coming. And I'm not sure it creates an enormous value for us as an operating organization. But we will start to call out more and more of the details of the growth of business on water [indiscernible] in our annual updates so that investors can get a better feel for how much water represents within the broader organization. Okay. I'll pass it to my team, but I think I answered the question entirely.

And one follow-up on that the understanding of the water business is that -- our understanding of the water business is that this is that player -- there's one formidable competitor that is leading that space. And there are a lot of kind of smaller players that even if they are trying to assemble and integrate [indiscernible] because of the technological requirements, the relationships, et cetera, it is very hard to get into that. What gives you comfort that you will be able to get into the -- it will be actual good business, not a competitive business?

That's a good question. So we are a leading player composite in the other 2 businesses. So first, the relationship with some customers that are also going to be customers in the strong work of space is what is giving us a lot of confidence to grow significantly revenue from an organic perspective, trying to link also to your earlier question. So we have customers. We are currently -- we increased the quotes on the products like 30x just in the last few months, and the response we are seeing from those existing customers are incredible. Of course, I would agree with you that other customers nonresidential customers like hospitals, hotels, those are customers we still necessarily interact all the time, but we are growing with those customers as well. So between a combination with teasing customers also helping us to work with their internal departments to deploy our technology and also creating other new customers with the same level of service as we do in composites. One of the other thing that's worth talking about here is the store water business is one that you can categorize in a few different ways. But clearly, you have to have products that are capable of doing what is required. Secondly, you have to have commercial pathways to reach the customers. Otherwise, they can't be used. Thirdly, we'll have to have commercial pathways to reach the customers. And then fourthly, clearly, that we keep up with production, if you are successful on the commercial front. And I'd say we are one of a small handful of organizations that has the full spectrum of technology available. Admittedly, we don't make and own 100% of our technology portfolio today, but we can offer it to our customers. The front-end engineering process, all of the physical products certified and qualified. And as Martin said, we have a [indiscernible] initial customer base because we serve so many worth of customers through our liquid fuels side. We have an existing line entrenched commercial path to market with distributors who have for decades been distributing our fuel products. They have also been engaged in the storm water management market, typically using other people's products. So we have those pathways opening up for us as we roll forward, and I've already spoken about the manufacturing side. So I think for us, we view ourselves as being in a somewhat on position amongst that next group of smaller providers. And I think we are very well on the way to deliver the kind of growth that we've talked about. In fact, we have been delivering it here the last several years. And right, there's one very large competitor here. We're a great company and quite certain they won't give up market share easily. But at the same time, it's the customers that make the buying decision, not the vendor. And I think the combination of technology and service makes a huge difference.

Ian Gillies, Stifel. This one is for Tom. This is an analyst question, primarily because I'm an analyst. I'm just curious whether you think the organic revenue growth over the next couple of years will be materially different from the guidance that you provided from a longer-dated maybe thinking about it a bit differently, how much variability do you think you see around that revenue growth target year in, year out?

So I think you're asking, is it going to be a straight up into the right or is it going to be more of a rollercoaster?

Yes, pretty much.

I think what we said on the last call for 2024 was, you should expect mid-single digits to high single-digit revenue growth for '24 and then '25, it will start to ramp up as facility come on in '26 as everything moves fully online, it will be even better. So that gives you a little bit of a trajectory, '24 is a little lower, '25, '26 [ product program ] is a little bit better?

That's helpful. And Frank, as you think about your business and as you're asking for capital, what's the next leg you're looking for to help, I guess, accelerate the growth in that business?

Yes. I think as we pointed out earlier today, the 2 attractive markets for us and where we will look at to putting more capital into the U.S. market. Part of that U.S. market, there's the medium voltage side of the business. Today, we're only low voltage. And given the utility expansion opportunities and the need for capacity expansion, grid hardening and medium voltage is a requirement, and it's a great business to get into. The one for -- the priority for DSG would be the electrical [indiscernible] complementing our current portfolio of heat shrink termination with cold applied termination and not only just cold applied termination, but smart termination, where now you're monitoring power and control in the utility that allows for efficiency usage of the product.

Zach Evershed, National Bank. Take another pass asking CapEx question, if you could think about the first leg where you're investing in the square footage and machinery as $1 of revenue per dollar of CapEx, what's the likely revenue generation per dollar of CapEx in the out years?

I appreciate the question, and probably not be able to give you the precision you're looking for, but you probably missed to that, too. Certainly, when we think about the returns on the outer years, the supplemental equipment that goes into a preexisting facility, we would expect those returns to be higher than the returns that we're going to deliver from this '23, '24 round of maybe substantial infrastructure investments.

And as we think about the opportunity to invest in the U.S. wire and cable capacity either through a greenfield or an M&A opportunity, how is each one looking today? And what would [indiscernible] one way or the other?

I would say, a greenfield is a very long, long road for us. So I think you're 5 years at a minimum before you start generating any revenue versus buying something that comes with certifications, production, et cetera. So it's a time versus [ money ] equation classic rule but I think it's a very long-dated issue if you try to do that greenfield.

I just had a question on the EBITDA margins, the 20% target, what are you assuming for composite technologies and connection technologies on a segment basis and then for corporate leverage as well to get there.

So we're really thinking of this as a corporation target to 20% at the bottom line. But I can tell you, if you look today at margins in the composite segment, they're around 20%. I think those tend to trickle upwards over the next few years. I can give you an exact number. But if they're 2021 today, I think you see them go up in the next few years when production comes online again, probably into the low to mid-20s, 25-ish at the high end. And then for Frank's segment Connection Technologies, they're getting close to 20%. I think 2021 is where they end up bit tricky because you've got an allocation to kind of moving in pieces. So I would encourage you take what I just said. I think of it as a bottom line target of 20% because the numbers move around a bit.

But then I guess, more of it coming from the corporate side. Just you won't -- as you keep growing, you won't be adding much there to get that...

Highly leveraged on the corporate side, I would say you're not going to see us add much on the corporate side. But in fact, that number will be coming down as we're able to do that post sale of the PPT business, not massive numbers of reduction, but a couple of million dollars over the next year or 2, you'll see that numbers down.

Judy from [indiscernible] . I just have a question for Martin. Yes. So I was wondering for your water solution product, can you give me a breakdown of your revenue across different geographies like U.S., Canada and Europe?

So vast majority is North America, in particular U.S., of course, the U.S. and Canada, but we also have revenue coming in the Asia Pac and Europe.

And I was wondering, is it like a cookie cutter, like let's say you have some products in the U.S. Is it the same that they sell in Canada? Or are the codes different?

So we basically offer 2 main products in the storm water solutions, and we typically use one internationally and the other in North America, but we are seeing demand for both products now in both markets. So there is no one product specifically third geography today. Those of them can be [indiscernible].

Okay. So you're basically selling the same product in the U.S. and in Canada. And I was wondering, can you give me a breakdown of maybe the competitive dynamic in U.S. and Canada, like, how many competitors are they a barrier to entry?

As mike said, we are extremely -- we are really focused on capturing market share right now. There are 3 main competitors that are quite well established, and all customers we tout their need options, and they are used to our engineering solution and this type of level of support. That's why they are our customers pushing to our solution. So I don't see -- and we have a lot to grow. So I don't see any barriers in the next few years. We have a lot to growth with capturing market share. We got fantastic prices, and our customers are really happy so far. So basically, 3 main competitors, and we have for the next 5 years no problem to increase and potentially triple or revenue.

And last question, I just wanted to ask why your advantage in technology. Can you speak more on that? Like yes, it's like -- because my impression is these products are pretty commoditized. So I was wondering what is the advantage in technology?

Okay. I'm sorry, the question was about water and...

Yes. The water like, for example, like the [indiscernible] systems, the chambers, the water quality products.

Sure. Water quality products are part of where we think the growth is going to be in the future regulations and requirements were not just retention, but also water quality, effluent quality on the discharge side of storm water is going to be an increasing focus for owners and for regulators both. And the reference was made to other very large competitors, yes. But we know that to compete with large established competitors need superior products and you need superior service. We very much understand that, and we're focused on that. If you look back on our Xerxes business, you look back over the years. And Xerxes was quite a small player back -- 20-plus years ago, up against some very large entrenched competitors. And today, we're -- we believe we're -- we know that we're the market leader. So we've come from being a small market player to a dominant market, a significant market player within the Xerxes business.

Michael [indiscernible] . Thanks very much for the presentation today. So the focus of the CapEx is all North America, and you have an interesting business in Europe. Can you talk about what the opportunity is there? And if there is a CapEx plan for that market or how you intend to serve it?

Yes, I can take that. Yes, we've certainly have spoken a lot about North America. The European market is certainly attractive, and there's a large addressable market there for us as well. As you know, we have an established footprint there from 2014. We remain focused on that business and expand the CapEx where the space is allowed. We still have a few more years to continue to add capacity expansion there, and we continue to do so. After that, certainly, there's opportunities for additional locations in the space with our existing businesses. We also look at Europe from the ShawFlex perspective. The addressable markets we spoke to today primarily were North America, but there are large addressable markets. It's a global electrification megatrend that we're tracking, and we certainly look at Europe just as closely as we look at North America.

And can you service Europe from the Canadian facility? Or do you need a European facility for that wire and ShawFlex business.

Yes, I'll hand it over to Alan to answer that.

So we have service business in Europe from our North American facility. Again, primarily on a project basis [indiscernible] logistics are, especially with wire and cable type product logistics are considerable expense. So specific opportunities specific to infrastructure, nuclear being one of them, we are able to service that. So for sort of recurring regular business, I think we would look at an opportunity to locate manufacturing capability. But at this point, we're looking at a more unique project basis.

So I think we've reached the end of -- for Q&A. For anybody that had a question I didn't look to answer it, we'll be around. So please feel free to come [indiscernible] we will do our very best to give you response. But I just want to say thank you. I realized that many of you had other places to be, particularly at this point in the year. So you traveled quite extended distances, and we do appreciate your commitment to come and spend a day with us. I think a very exciting story to tell. We're kind of working a long way in a relatively short period of time, so much change and so many opportunities in front of us. So as we conclude here in the room, we'll break. There are refreshments outside, including a variety, I think, of maybe [indiscernible] beverages. And on the other side as well are set up with the display of wide variety the products that we offer and many of the people that you see on the stage as well as others here around the room will be on hand to walk you through what our business is doing, the products that we make, the customers that we serve, the applications that we serve and the areas where we're focused on looking forward for the future. So please take advantage of that for as long as you can. And for those who have signed up, we'll obviously have facility tours happening tomorrow at the Rexdale Facility, which has shared both ESG and ShawFlex. So seeing you guys tomorrow. But otherwise, if you don't see me, have a great end of the year, a wonderful holiday season, and thank you again for supporting the company and being here today.