MONTREAL — WSP Global CEO Alexandre L'Heureux is "feeling extremely good" about the engineering giant's prospects in the United States despite the Trump administration's professed aversion to spending on big projects hatched in recent years.
Speaking to analysts on a conference call Thursday, L'Heureux said infrastructure remains a bipartisan concern in a polarized America.
"I feel that there is bilateral support on both sides of the aisle by the Democrats and Republicans around infrastructure. So if there is one positive aspect of what's happening right now, I feel that there's some commitment to infrastructure," L'Heureux said.
"That, I believe, will continue to be strong in 2025," he added, even though "it's changing week by week."
U.S. President Donald Trump last month ordered a freeze on infrastructure spending approved under the Biden administration, which had allocated billions of dollars to states and cities for everything from highway expansions to water system upgrades. As of September, about 60 per cent of the money remained unspent.
Transportation and infrastructure projects account for 37 per cent of revenues for WSP, making up its largest segment. Contracts across all divisions in North America generated 60 per cent of its revenues, with the U.S. far and away its biggest market globally.
Last quarter, contracts in the U.S. and Canada achieved organic net revenue growth of 10 per cent year-over-year, the highest level for any region. Whether that pace can persist amid an upended political landscape remains a key question.
L'Heureux, who has led a buying spree over the past few years, qualified that uncertainty can breed hesitation around deals in general.
"With this new administration, I think the investment community was hopeful for more deregulation and therefore fostering more of an environment for mergers and acquisitions," he said.
"The flip side of this is that when you are creating an unstable environment, people tend to take a pause ... The first half (of 2025) will probably be a bit more quiet. And I'm not talking about WSP; I'm talking about the world, the world of M&A."
Transactions will likely pick up again "in the coming years — and we intend WSP to actively participate in that," he added.
"As a company, we feel extremely strong and feeling extremely good around the markets in which we operate at the moment, both in the U.S. and in Canada."
There are signs of swift adaptation at the Montreal-based consultancy.
Earlier this month, the firm announced a seven-year partnership with Microsoft that makes WSP a preferred partner for "digital and AI transformation services," particularly in the engineering and construction industry. The deal represents a "combined financial commitment and investment" of up to $1 billion, WSP said.
Trump has expressed enthusiasm for the potential of artificial intelligence, backing a private effort to invest billions of dollars in AI infrastructure and stating he aims to "help a lot through emergency declarations."
As for more traditional infrastructure, L'Heureux noted last year that Congress had until the end of 2026 to award the majority of the US$1.2 trillion in transportation and infrastructure spending — a boon for legions of engineers — under a bipartisan bill signed in 2021.
But Trump's executive order pausing the outlays threw an unexpected wrench in their gears.
Federal courts have blocked the president's executive orders from putting a halt on spending, over which Congress has authority. But some federal agencies have continued to withhold the money, making the medium-term impact of the freeze unclear.
On Thursday, L'Heureux reiterated WSP's plan for still more expansion over the next three years as it comes off a spate of acquisitions.
Released earlier this month, the 2025-2027 strategic plan forecasts higher financial targets than previously expected, with revenues set to rise by 40 per cent in that period. For 2025, it is targeting net revenues of between $13.5 billion and $14 billion versus $12.17 billion in 2024.
WSP has notched remarkable growth over the past few years, emerging as one of the largest pure-play engineering outfits in the world.
Between 2022 and 2024, WSP snapped up 16 companies and grew its head count to nearly 73,000 from 55,300. Annual revenues jumped to about $16 billion last year from roughly $10 billion in 2021, with net earnings per share rising more than 60 per cent in that period.
WSP has been eyeing larger acquisitions since last summer, after working to integrate its sprawling operations across North America, Europe and Asia.
In October, it completed its acquisition of Power Engineers Inc., an Idaho-based consulting company with a focus on energy and 4,000 employees across the continent.
For the quarter ended Dec. 31, WSP said Wednesday it boosted net earnings 28 per cent year-over-year to $166.9 million. It increased fourth-quarter revenue 25 per cent to $4.66 billion.
The company also beat analysts' expectations for the 10th quarter in a row, clinching adjusted net earnings of $2.34 per share versus projections of $2.27 per share, according to financial markets firm LSEG Data & Analytics.
This report by The Canadian Press was first published Feb. 27, 2025.
Companies in this story: (TSX:WSP)
Christopher Reynolds, The Canadian Press
