Morning. My name is Bill McFarland, and I'm the Chair of the Board of Dexterra Group Inc. I would like to welcome all of you to the annual and special meeting of the shareholders of Dexterra Group. As you know, this meeting is being held in a webcast format only. Registered shareholders and duly appointed proxy holders may vote online during the meeting by clicking the voting icon. If you cannot see the full text of the resolution, please scroll down on your device in order to see the resolution as well as the voting options. If you have already voted by proxy, there is no need to vote again during the meeting since your vote has been recorded in accordance with your proxy instructions. Given the virtual format of the meeting, we've appointed certain individuals to motion and second items of business in advance.
In order for us to efficiently address any online questions on the matters to be voted upon, we encourage shareholders who are attending online and have specific questions on an item of business to submit their questions now. To enter a question or comment, select the messaging icon. Compose your question or comment at the bottom of the screen, and then click on the arrow icon to submit. Please note that questions submitted during the meeting via the online platform will be moderated before being sent to me. Your questions will be addressed before voting closes. Before we proceed with the formal business of today's meeting, I would like to acknowledge that Mark Becker, CEO of the Dexterra Group, and Drew Knight, CFO, and other members of our executive leadership team are also present at the meeting. I now request that the meeting come to order.
With the consent of the meeting, I, Bill McFarland, will act as the chair of the meeting, and Christos Gazeas shall act as secretary of the meeting. I appoint Nicole Severa and Megan Rocha of TSX Trust Company to act as scrutineers to report on the number of shareholders and common shares represented at this meeting. The scrutineers will compute the votes on each matter and report the results to me as chair. The secretary has advised that he has received a declaration from the scrutineers stating that the shareholders have been given notice of this meeting and that the notice, information circular, and form of proxy were mailed to shareholders of record as at March 21, 2023 in advance of the time required for such notice. The secretary has also advised that a quorum is present.
I further direct that the formal report of the scrutineer be annexed to the minutes of this meeting as a schedule. I now declare that this meeting has been regularly called and is properly constituted for the transaction of business. Voting at today's meeting for those that are entitled to vote and have not already submitted a proxy will be conducted by online ballot for each matter. The voting panel on your screen should now display the voting options for registered shareholders and duly appointed proxy holders. The voting panel will remain open until discussion, if any, has concluded on all items of business. I will then declare voting on all items of business closed. I now declare the polls open on all items of business.
A copy of the minutes of the last annual meeting of the shareholders of the corporation held on May 11, 2022, has been signed and filed in the corporate records of the corporation and is available from the secretary. The first item of business is the presentation of the audited consolidated financial statements of the corporation for the year ended December 31st, 2022 and reported thereon by PricewaterhouseCoopers LLP. A copy of such financial statements and the report of the auditors thereon has been mailed to each registered shareholder of record at the close of business on March 21, 2023, who elected to receive the financial statements and report of the auditors. No vote by the shareholders is required or proposed to be taken with respect to the financial statements. The next item of business is the election of directors of Dexterra Group.
In accordance with Dexterra Group's advanced notice bylaw, the only individuals entitled to be nominated as directors at this meeting are the persons named as nominees in the management information circular and proxy statement prepared for this meeting, as there were no other individuals nominated prior to this meeting. Those nine nominees are Mary Garden, David Johnston, Simon Landy, Mark Becker, Bill McFarland, Kevin Nabholz, Russell A. Newmark, Tabatha Bull, Toni Rossi. May I have a motion regarding the election of directors?
Mr. Chairman, my name is Drew Knight, and I am a duly appointed proxy holder. I move that each of the following nominees, Mary Garden, David Johnston, Simon Landy, Mark Becker, Bill McFarland, Kevin Nabholz, Russell Newmark, Tabatha Bull, and Toni Rossi, be hereby separately elected as directors of Dexterra Group Inc. for the period commencing as of the date hereof and ending at the close of the next annual meeting of shareholders of the corporation or until their successor is elected or appointed.
Thank you, Mr. Knight. Will someone second the motion?
Mr. Chairman, my name is Christos Gazeas, and I am a duly appointed proxy holder. I second the motion.
Thank you, Mr. Gazeas. You have now heard the motion. Mr. Gazeas, are there any online questions on this motion?
Mr. Chairman, there are no questions on this motion.
Thank you. The next item of business is the appointment of the auditor of Dexterra Group. It is proposed that PricewaterhouseCoopers LLP Chartered Accountants be appointed the auditor of Dexterra Group until the next annual meeting of shareholders of Dexterra Group or until a successor is appointed. Will someone so move?
Mr. Chairman, my name is Drew Knight. I move that PricewaterhouseCoopers LLP Chartered Professional Accountants be appointed auditor of Dexterra Group until the next annual meeting of shareholders or until a successor is appointed. At such remuneration as may be fixed by the board of directors, and the board of directors are hereby authorized to fix such remuneration.
Thank you, Mr. Knight. Will someone second the motion?
Mr. Chairman, my name is Christos Gazeas, and I second the motion.
Thank you, Mr. Gazeas. You have now heard the motion. Mr. Gazeas, are there any online questions on this motion?
There are no questions on this motion.
The next item of business is pre-approval of Dexterra's 10% rolling stock option plan as required by the TSX every three years, and approval of the proposed amendments as outlined in the management information circular and Schedule B therein. Will someone move that the option plan and the resolution set forth in the management information circular be approved?
Mr. Chairman, my name is Drew Knight. I move that the Dexterra stock option plan resolution be approved.
Thank you, Mr. Knight. Will someone second the motion?
Chairman, my name is Christos Gazeas, and I second the motion.
Thank you, Mr. Gazeas. You have now heard the motion. Mr. Gazeas, are there any online questions on this motion?
There are no questions on this motion.
Thank you. If you are a registered shareholder or duly appointed proxyholder and have not submitted your votes, you can do so now online by selecting the applicable voting option on the voting panel. As a reminder, if you have previously submitted a completed proxy, you have already voted, and it is not necessary to vote again on the ballots. We will pause briefly before closing the polls. The polls are now closed, and I will ask the secretary to provide the report from the scrutineer.
Mr. Chairman, I've received a report from the scrutineer. The shareholders have voted in favor of each of the items of business to be voted on at this meeting.
Thank you. Accordingly, I declare the election of each of the nominees to the board of directors, the appointment of PricewaterhouseCoopers LLP as auditor of the corporation, and the reapproval of the Dexterra stock option plan, including the amendment, the full text of which are set forth in the information circular of Dexterra Group dated March 21, 2023, to be passed. Following this meeting, a report disclosing the final voting results of this meeting will be filed on SEDAR, and we will also issue a press release with such results. This now concludes the formal portion of the meeting. Accordingly, I declare this meeting terminated. On behalf of the Board of Directors of Dexterra Group Inc., I would like to thank our shareholders, customers, employees, suppliers, and communities where we work for their continued support.
As the formal portion of the annual meeting has been completed, I will ask Mark Becker in a couple of minutes to provide an update on the business. Mark and Drew Knight, CFO, will be available to answer questions following the management presentation. After the meeting, we will post a copy of the management presentation to Dexterra Group's website. To enter a question or comment, select the messaging icon, compose your question or comment at the bottom of the screen, and then click on the arrow icon to submit. Please note that questions submitted during the presentation via the online platform will be moderated before being sent to me. These questions will be addressed following the conclusion of management's presentation. I will now make a couple of introductory remarks.
First of all, I would like to thank John MacCuish for his leadership over the past three years as CEO of Dexterra. John was instrumental in helping make the 2020 merger of Dexterra and Horizon North a success, and we wish him all the best in the future. Secondly, I would like to welcome Mark Becker to his first annual meeting as CEO. Mark has filled a number of senior roles in the organization over the past several years, including most recently as COO. The board is looking forward to Mark executing on our vision with energy and passion. Finally, I would like to thank our almost 10,000 employees and all of our customers for their support as we develop a brand and business that shareholders and all stakeholders are proud to be connected to. I'll now hand it over to Mark for the business update.
Great. Thank you very much, Bill. Thank you to everyone who has taken the time to join us here today. I'm very, very happy and excited to be here in the capacity of CEO for my first of many annual meeting updates. I know I speak on behalf of the full Dexterra leadership team in saying we are very excited to be discussing with you the progress of our business. I'll take you through a brief presentation highlighting what we're focused on at Dexterra and how we see the future of the business. Before we begin, I would refer you to the forward-looking information slide from the presentation that we have posted on our website. You'll find cautionary notes in that regard.
While I obviously won't read the content of the cautionary notes, we do claim their protection for any forward-looking information that we might disclose today. First and foremost, I'd like to talk a bit about what Dexterra Group is. We're a support services business, but what does that really mean? I know on this slide we've got a nice infographic, and I really like these views because a picture is always worth a thousand words, but I'll walk you through some of the elements of it. Dexterra supports the management of infrastructure and facilities across many market sectors in Canada and now in the U.S. as well. We bring the right teams with the right skills together. We offer both best-in-class expertise and innovative solutions, providing clients confidence in their day-to-day operations.
Activities include a comprehensive range of facilities management and operation services, industry-leading workforce accommodation solutions, forestry services, innovative modular building capabilities, and other services for diverse clients in the public and private sectors. The diagram really just shows some of the diverse services we provide to our clients that enable their success. We continue to scale this platform as we pursue our strategy of profitable growth. In doing so, we aim to create greater value for our stakeholders. Over the years, our guiding principles have been consistent. We take a client-centric approach that is relationship-based. We continue to develop high-quality solutions and build capabilities that meet our clients' needs as part of our approach. We ask our clients for feedback and we action it through our formalized processes and implementing improvements. Our decentralized model allows us to maintain a nimble and entrepreneurial culture as we build the business.
Our business unit presidents and their teams are fully accountable for their businesses and for their results. The group level organization supports those businesses with effective policies, processes and tools that ensure strong business governance practices, business integrity and cost-effectiveness. Our commitment to stakeholders, which includes our employees, clients, suppliers, and the communities in which we operate, forms the basis of our license to operate. We are focused on building and expanding these relationships as a critical cornerstone of our business ambitions. Our focus and progress on our ESG strategy as a company, but also in partnership and in support of our clients is something we are very proud of and really is a key to our future. Last but not least, disciplined financial management is a primary prerogative.
This includes ensuring we continue to be well-financed, which supports our business resilience and is key to our merger acquisition program and helps us stay agile as the world develops and changes over the long haul. In 2020, at the time of the Fairfax/Horizon North merger that Bill mentioned, we set a goal to profitably grow the business to CAD 1 billion revenue and CAD 100 million in EBITDA. We've made excellent progress towards this objective. 2022, as we all know, is a challenging business environment, including rapid inflation, supply chain limitations, and labor shortages in key sectors which impacted our profitability. Our Q1 results demonstrate that we've turned the corner on many of these issues, and we are confident we are back on track with an improved and improving profitability profile.
We've seen positive new sales momentum in many areas where we have market position and strength, as well as with our acquisitions that demonstrate the true value of these decisions. As always, free cash flow generation remains a key focus. We are confident in our ability to achieve this interim milestone in the near term. This includes both elements of that goal, albeit not exactly at the same time. On slide five, there are another element of foundation. There are other elemental foundations that we are focused on in support of our strategic direction. We continue to invest in our talent, including appointment of three new business unit presidents, Sanjay Gomes for our IFM business, Jeff Litchfield for our WAFES business, and Rob Johnson for our Modular business.
These three leaders are proven within their business segments and are focused on their respective strategic objectives, driving execution and delivering results. They are part of a senior leadership team that is fantastic and I feel very privileged to be working with. We continue to focus on developing key talent across the business in all areas and at all levels. We've renewed and won a number of major long-term contracts, building our relationships with key flagship clients. We are capitalizing on our areas of strength while continuing to build brand recognition in the areas of integrated facility management, including healthy buildings and energy management. We continue to develop our commercial acumen, helping us to deal with inflation impacts and to build margins.
On the merger acquisition front, we've completed several strategic and what I would call first-level acquisitions that are both accretive and are now providing a stable base of profitability and are continuing to build a greater portion of the long-term service-based work. We are seeing them grow and expand their footprint as we expected. Our social license that I referred to previously has encompassed direct investment in communities, but more importantly, the engagement and time of our employees on many great initiatives and events. We are continuing to expand our indigenous engagement in Canada with 82 partnerships now in place, contributing over CAD 15 million in annual business activity, including joint ventures on things like open camps as well as modular builds for community housing. Equity, diversity, and inclusion are key focus areas for us.
We have a number of key initiatives in flight, including our Women in Leadership committee, our EDI employee focus groups. We are engaging our people at all levels on these important initiatives that we know are critical to people engagement, attraction, and retention. In March, we released our third environmental, social and ESG or governance report that we are very proud of. We continue to refine our priorities and focus on ESG elements as a business, but also in partnership with our clients as it is of equal value and priority to them. Last point, we were happy to be voted one of Canada's top growing companies in Canada by The Globe and Mail.
We've also recently had two employees, Lee-Anne Lyon-Bartley, our EVP, Health, Safety and Environment, who's part of our executive leadership team. Also Shawneen Abrams, who is an HSEQ Director, who were both named Canadian Occupational Safety's Top Women in Safety for 2023. We appreciate these recognitions as they are a strong acknowledgment of our strategy and our strong and capable people. Beyond the near-term milestone I mentioned, we are focused on a larger objective of profitably growing the company to CAD 2 billion in the next four to five years. We first committed this goal last year. We are now in the process of updating the roadmap for it. IFM remains our biggest component of expected growth. We aim that it will be ultimately comprised of at least 50% of our total business when we achieve that goal.
The IFM market is very large, both in Canada and the U.S., and we see continued movement outsourced by clients. It's important that I clarify what we mean by profitable growth. It isn't growth for the sake of growth, but only opportunities that support and enhance our profitability objectives. On the organic growth front, scaling up our business in market segments where we have established capability and knowledge and where we have demonstrated success, we feel is the right approach. For example, segments such as aviation, institutional, education, leisure, and transit, and across a range of services in those sectors from soft FM food service all the way up to integrated FM activities. We're continuing to prudently expand our U.S. presence in selected markets. With acquisitions, we're looking at strategically relevant targets broadly, including where other service line opportunities may exist.
Our goal for IFM means over tripling the size of the business from today, making acquisitions a key part of the plan. We've established experience and expertise in onboarding new businesses successfully. Our deal focus is strategic acquisitions, not those based on cost synergy, but rather strong alignment of business models of people. In WAFES, the growth in longer-term, non-asset-based operational support services activity has increased over 50% of the business today. This shift helps us to insulate the business from resource cycles and support a stable returns profile. The WAFES business remains in the top three in each of our competitive segments and categories in Canada. The business has grown organically through market share capture by over 25% in the last three years, making our target of a CAD 500 million-CAD 600 million business revenue business highly achievable.
A critical success factor for the business unit is to win new high-margin work as major projects like Coastal GasLink come to completion in 2023 and early 2024. WAFES continues to be a strong foundational profit engine for Dexterra. Modular Solutions today is a CAD 200 million business driven primarily by social affordable housing projects, which has a long tail that we will continue to pursue profitably. We also plan to continue to diversify the business. Considerations include lower complexity, repeatable product lines to fill manufacturing plants, and to help stabilize business activity levels and earnings volatility. For example, our Ontario educational portable business is about CAD 36 million in annual revenue, is a highly productized segment, and delivers very reliable profits. There are a range of similarly reliable product lines and market opportunities we're investigating.
We are taking a step back this year in this business to take a new look at augmenting our long-term strategy for modular. In summary, there is no new overall vision for the company. A key part of my responsibilities and time allocation as CEO will be to refine our growth strategy and support the team to execute with excellence. Fundamentally, we will stay true to our guiding principles. The path to our long-term goal likely won't be linear. It may be somewhat lumpy given the economy and the impact and timing of acquisitions. Our strategy and our direction is clear, long-term profitable growth, delivering superior stakeholder value. Our focus, like the focus of our major shareholder, will continue to be on the long term and not on quarterly earnings.
Having said that, however, part of our strategy is to use free cash flow generation by the business to fund acquisitions. This means we need to continue to focus on to deliver steady and increasing EBITDA with a high conversion to free cash flow to accomplish that. I'll conclude with how excited I am to step into CEO role at Dexterra. There are tremendous opportunities ahead for the company and I look forward to working with and for the support of the board to make our vision a reality. Thank you very much.
Thank you very much, Mark. I would now be pleased to entertain any questions. To enter a question or comment, select the messaging icon. Compose your question or comment at the bottom of the screen, and then click on the arrow icon to submit. Mr. Gazeas, are there any online questions?
We have the following question, Mr. Chairman: "How are you thinking about capital allocation going forward, dividends versus share buybacks versus investment in the business?
Mark, why don't you take that?
Sure. Thinking about capital allocation, you know, we think about it in two categories. One of those categories is investments in the business. Per my prepared comments, we view that as around merger acquisition, that's really funded from a strong balance sheet and our free cash flow. Those acquisitions, we really wanna focus on opportunities that are really accretive to our share value, deliver strong returns, and are primarily in IFM. Then beyond investments in the business, return to shareholders is another element of capital allocation that we focus on. The NCIB that we recently announced will be less than CAD 10 million.
You know, it's reasonably modest but still a strong investment in our shareholders. Second of all, our dividends. You know, these are. We expect these to grow as we do grow the business and to get larger over time.
Thanks, Mark. Are there any further questions, Christos?
The next question's regarding the normal course issuer bid. The question is why? Why now?
Drew, why don't you take that one?
Okay. Sure. Thanks, Bill. Both management and our major shareholder feel Dexterra shares are significantly undervalued in the market, which represents a real opportunity for us. Going forward, as we execute on our business plan of consistent profitability and growth, we feel strongly that the market will more fairly value our shares. You know, the 1.3 million shares described in the NCIB is to keep our major shareholder at less than 50% ownership and preserve available tax losses. Also, we want to take advantage now before the share price recovers with our earnings recovery and also before the new tax kicks in on buybacks in January 2024. Should note also the, you know, dividend savings from any share buybacks offsets any cost of leverage.
Thank you, Drew. Christos, are there any further questions?
Yeah, we have another question. It says, "You mentioned key market segments in IFM you're focusing for growth. What are those?
Yeah. I guess around that question, you know, to me, I think it breaks down into market segments the way we think of it and service lines and geography. Those three categories. As it relates to market segments, you know, our education market, our airport market, our aviation sector, defense, rail, hotels and leisure. Like, we have a strength of operations, a strength of capability within those sectors. You know, we expect to continue to focus on those sectors 'cause we know we have the strength, and we know we can continue to deliver in those sectors. You know, second of all, you also think about service lines as well.
Service lines such as food, you know, FM, both soft FM, hard FM and integrated facility management, which we aspire to continue to grow, are again key service lines where we've got expertise, we've got capability, we've got established contracts, and we, you know, continue to leverage those on in the future. I guess the last piece being geographies. In addition to Canada, you know, we're taking a disciplined approach to our pursuits of opportunities in the U.S. Really focused on selected areas and, you know, so far we're operating in places like Texas, Arizona and Washington. I think that kind of encompasses sort of our overall approach to IFM.
Thank you, Mark. Christos, are there any further questions?
Yes, Mr. Chairman. We have one final question: How should we be thinking about growth in WAFES? Do you expect the business cycle to continue?
Mark, why don't you take that?
Yeah. I think in thinking about WAFES growth and, you know, the business has grown well. It's grown 25% since the merger. You know, we see building this business as part of our longer term goal, building this business to CAD 500 or 600 million in profitable growth well within reach. As we think about that, you know, diversification is a key piece of it. We're involved within WAFES in things like forestry, obviously energy, but also mining. Supporting mining projects, mining clients, and we see that segment growing. Infrastructure as well in Canada, and we see that growing. Also the cross-ties with IFM.
We see many opportunities and clients where we're doing both kind of pure workforce accommodations or other types of activities, but then also cross-tying that with IFM style activities, with those clients and with those opportunities. We really just, you know, as we grow WAFES, you know, proportion of what we would call support services or operational ongoing support services, not asset-based work is growing. You know, our broad focus on energy becomes less and less over time. While we do value the energy business, we do see diversification both in market segment as well as the services we're offering.
Thank you, Mark. Thank you also, Christos. That's the end of the questions that we have for today. I'd like to thank everyone for attending the annual meeting. We look forward to staying connected with us over the upcoming year, and I wish everybody a great day.