Thanks for joining us for now afternoon sessions. So, we're very excited to have AECOM with us. Troy Rudd, who is the CEO, he joined AECOM in 2009, time goes fast, huh, and was the CFO before he was CEO. So I'm going to turn it over to Troy. I think you have a couple prepared remarks, and then we'll go into Q&A.
Okay, sounds great. Thanks, Andy. And I will say, just for everyone's benefit, I looked a lot different when I joined in 2009. So just start with a reminder of a little bit about what AECOM, what we do. So we are an infrastructure consulting firm. We're about 52,000 engineers, architects, scientists, program managers, construction managers. So the base of our business is based around deep technical ability. We have about 90% of our business now in four countries: the U.S., Canada, Australia, and the U.K. And one of the biggest hurdles that we've had in the past has been around our ability to hire people so we can grow. That's been a limiter on our growth. But also, it's really important to have a highly engaged workforce.
I'm pleased to say that over the last few years, we've been investing significantly in leadership development and technical development, and I feel really comfortable where we are in terms of an engaged workforce. A couple of really important data points are: number one is our voluntary turnover this last quarter and today is about 15% lower than we saw pre-COVID. Secondly is amongst our, I'm going to say our most influential people in our business, we put people through leadership training. The 5,000 people that participate in the last 12 months, our turnover amongst that group, and there are different groups within that, that 5,000 people is turnover between 1.9%-5.5%. It means that the people that are most influential in our business, we see voluntary turnover being around 3%.
That's fantastic for our business because one of the limitations in our business when we're a technical advisor is our ability to add people. We had an investor day in November or in December, and a couple of really important points I felt were, we wanted to communicate out of that Investor Day. Number one is we are lucky enough to be participating in really healthy markets. I would say 95% of the markets that we participate in are actually well-funded and probably near their peaks in terms of funding and longer-term opportunities. Secondly is, the business has been winning work at an extraordinarily high rate. In the last nine quarters of all the work that we bid, we win more than 50% of the work that we bid. So out of every $2 we bid, we win more than $1 of work.
But most importantly, within what we define as the largest and most important projects to our clients and to us, our win rate is actually over 70%, which I'll come back to this in the Q&A why that's important, but it's helping us actually transform the business. The other important point to us is we have a really solid technical foundation of people, and what they do is they deliver the most complex kind of iconic infrastructure projects in the world. There's only a few people that can compete with us to do that. We have been transforming that business so that we're not focused on the design, but we're actually participating much more in our clients' project spend. And we've been building an Advisory and Program Management business. So in the past, we would participate in about 10%-15% of the project spend.
Given what we've built, we now participate in about 30% of a project spend. More importantly, when you sort of look at the underlying profit in that project spend, it represents somewhere between 30%-50% of the profitability that might be inside that project. And so we've been transforming the business by growing our program management advisory business very rapidly, and we've doubled the size of that in the last three years, and now represents about 15% of our total revenues. The other thing that we've been focused on is actually transforming how we deliver work.
I'll simply leave it at this: we believe, based on the investments we've made and we're continuing to make, that over the next three years, we will be able to deliver the same amount of work with 5%-15% less hours, which will have a tremendous impact, obviously, on the business, our ability to invest, but also on our margins. Then last, over the last really four years, we've transformed the business, and we're in a place where our mantra is that we will deliver on our targets, deliver what we said we would do today, but at the same time, we're investing to deliver more tomorrow. Over the last four years, we've very consistently delivered against all of the targets that we set out for ourselves.
Great, Troy. So I think you answered like half of my questions, but let me start. So you've been at AECOM for a little less than four years. You know, you and Lara took over as CEO and President. Obviously, a lot has gone right, you know, since you took over. You talked about some of the highlights, but what are the one or two accomplishments or changes that you're most proud of? And, you know, what are the one or two targets, you know, that have either lagged or you're still working on or you're yet to accomplish?
When we first took over the role, we recognized that there was an amazing opportunity for the people at AECOM. But in order to really get the best out of the organization and those people, we had to take a lot of risk. And the risk that we took was we changed everything. We changed what we were going to perform in terms of our business. So we exited, and we're still finishing that process, but we exited a whole bunch of businesses that we didn't think they were important to the future of the business, being an infrastructure consulting business. We changed the entire leadership team. We changed the operating structure. We changed the strategy. And most importantly, we changed the culture of the organization.
I think that changing the culture of the organization has been what's really been important to our success. So, you know, what are we most proud of is that we took that risk and we changed everything, and ultimately, it turned out to be successful, but that was a risk in the beginning. When I look forward, I think the things that are most important for us to accomplish is to continue to transform the business so that we have half of our business in Advisory and Program Management, and that becomes really important to our people. The people who work at AECOM are purpose-driven. Their view is they really want to deliver a better world, and that's the mantra of the company because they really do feel that and they believe that, and that's why they join us.
Delivering a better world in the past meant that you would deliver better economic outcomes through infrastructure. Well, now it's even more meaningful because they can deliver social outcomes and environmental outcomes, transform the world through infrastructure. And so by us continuing to invest and build Advisory and Program Management, we give them a much greater opportunity to participate in it and the business to participate in it. And then the second thing is we've got a lot of work to do to actually, as I said, transform how we deliver our work.
So I want to go talk about the funding environment for a little bit. Can you characterize maybe, you know, give us the U.S. baseball analogy, what inning you think AECOM is in in terms of fiscal tailwinds in the U.S.? And then, you know, you talk about the visibility you have to what, you know, I think are relatively high growth forecasts for the company: 8%-10%, you know, for this year, 5%-8% over the longer term. Do you worry about U.S. elections, what that could mean for AECOM's future? Like, how do you think about all that?
So I worry about a lot of stuff every day. That just goes with the job. But I feel very good about the opportunity in North America, but I'll start with the U.S. So there's been a lot of funding that's been available for infrastructure. And if I think about a baseball analogy, I would put us kind of in the third or fourth inning in terms of the funding that's available and how it's being deployed. So we have the opportunity to look at, through a dialogue with our client, the pipeline of projects that are coming to market. And I think that we see sort of the peak funding being 2027 or 2028, around the IIJA and the other money that's being brought to market to fund infrastructure. An example of that was the CHIPS Act. The first large award was actually just made today.
Yeah, very recently.
Yeah. So it takes time for that to come. So I look at that. But then when I look around the rest of the world, I said we're in four really important markets. In Canada, the federal government and the provincial governments in Ontario and Quebec and in British Columbia have announced really large long-term programs to invest in infrastructure. So that's just coming to market, and it will come to market over a number of years. And similar in Australia, the Australian government has a large BOLD program. They just went through, revisiting all of their planned investments, and they have completed that, and now there's great certainty around what they're going to be investing for the next number of years. And in the UK, there's a lot of, I think, certainty around water investments and certain social infrastructure investments.
It's the one place in the world where I see there's a little bit of a speed bump because I think transportation and large transportation programs that were announced have been canceled, and I don't think we'll have certainty as to what's going to happen until after their next federal election, which is in the late fall, and it'll probably take a year before the new government or the current government figures out what they're going to do in terms of that long-term investment. But I think it'll come.
They canceled High Speed 2, which was a $35 billion investment, but they immediately pivoted and said, "We're going to invest the same amount of money in infrastructure in the northern states within the U.K." So when I sort of look at the medium term and the longer term, I think that there are fantastic long-term opportunities in our markets. That's why I said I'm really happy about our markets.
Troy, I want to ask you about regions in a second, but like just while we're on the UK, how much of a percentage of the business is it these days, approximately?
The U.K. would be less than 10% of the business.
Okay. Do you think it can still grow through this, or is it kind of going to be more muted? Like, you know, what do you think?
So our U.K. business has actually been growing double digits the last two years. I think it will be muted. I think it will still continue to grow, and as I said, because of the growth in environment, water, and social infrastructure. Transportation, I think, will be slowed growth. What we will benefit from is over the last three or four years, we've been investing to win what are called frameworks, and so framework with the large transportation customers. So as they continue to spend money on their operating budgets or on their maintenance capital budgets, we participate in that, and so the business remains stable, but I don't think growth in transportation will be significant until we get through this election.
Got it. I want to go back to your comments on program management and larger wins in general. You know, obviously, 50% win rate on, you know, just across the portfolio and 80% for large projects, that's pretty good. Like, I think you sort of said program management is 15% of the business now.
It is now, yeah.
How do you keep that up, though? Because it just seems to me like, you know, wouldn't competitors try to adjust, you know, to that? And then you've, in your 5%-8% long-term guides, you talk about 2%-3% from expanding your markets, of 1%-2% from market share gains. Again, how do you keep that up? It seems hard to sustain that.
I think in the long run it is hard to sustain, but our, again, the focus of our strategy has been in investing to create a competitive advantage. And if you create a competitive advantage, so something that's different than your customer's experience, the win rate is sort of the byproduct of that. It's not something that we're doing to say, "We're going to get this win rate. We're going to win no matter what." So we've got the question, "Are you winning because of price?" And the answer is, "No, we're not winning because of price. We're price competitive, but in being price competitive, we're still generating the best margins in the industry." At the same time, again, we're investing to create a competitive advantage, and so we're doing that in some very different ways.
Will the competitors recognize that, and will they start to try to repeat that? The answer is yes, but at the same time, we're continuing to invest to maintain that advantage and that win rate. So I'm going to give you a sort of a simple example of why I think we're winning at a really high rate. One is because, as I said, we changed our culture. We've created a culture of globally collaborating. Now, in our industry, this may sound weird, but a lot of the competition is local. So it's, "What does your local team bring to the table against the other people you're competing with to win that project, and they bring that local expertise?" Well, we've pivoted. What we do is we figure out what do we need to bring globally, and we bring the best globally.
I t doesn't mean that they have to fly into town and relocate and live there. It means that they'll participate in the project where they bring this very different experience. And when you talk to the customers about it, they say, "I want that because that's not something I'm getting through the conversation, through the bid, or even through my experience with your competitors." So will other people do that?" Yes, but to do that takes a little bit of time, requires leadership change, behaviors, it requires culture change, and it really requires an operating structure change, and it requires the investment in the tools and the ability to actually be able to do that, to deliver work globally. So that's one example. It sounds simple, but it makes a meaningful difference. Beyond that, we're investing in some other things, so transforming how we actually deliver the underlying work.
When we're also focused on, this is going to sound a little odd, but delivering an entirely different customer experience. So I'll, I could talk for this for quite a while. In the interest of giving you one more question, I'll simply say is, you know, our customers in our industry, they typically expect you to deliver something that is technically correct and capable of being delivered on budget and on time. That's great. Do you know how often that happens? Never, right? There's always some element of change. There's always some element of how confusing it is or how you interact with your customers. Well, imagine if you can change the way using technology and through how your people work, is you can deliver something that's an entirely different customer experience. So even as that happens, the customer is understanding, and you work with them to adjust and change.
So ultimately, they get something that they want, and along the way, they get the outcome in a uniquely different way that gives them confidence, transparency, accountability, and trust. And so we're able to do that with technology, and we're able to use that, again, through our platform of the people that we bring to projects. And so that's going to be a really important part of the future. We're making some fairly significant investments in how we actually change the customer experience of delivery.
It's helpful, Troy. And then maybe just focusing on the near term for a minute, your total design backlog growth in your fiscal Q1 that you reported still looked good, you know, up 9% year-over-year. It was a bit of deceleration versus Q4. I think you're at 12%. You know, obviously, 9% is right in line with your growth expectations for the year, but would you say your pipeline momentum is still growing? Is it stable? Is it moderating a bit? What do you think?
Well, our pipeline is growing. So, we don't see, first of all, the marketplace opportunities moderating. They're continuing to grow, and we're looking out a number of years. In terms of our win rate, we haven't seen a meaningful difference in the last nine quarters, so we're still winning at a really high rate. I don't expect that to change. But in terms of the ebb and flows around timing of projects, I would expect our backlog to kind of grow organically 7%-12%, just bump along quarter to quarter and continue to kind of match the trajectory of the market and our win rate.
It's helpful. Like, maybe if I focus on international markets for a second, we already talked about the U.K., but like, you know, you're pretty strong in the Middle East, Australia, Hong Kong. Like, so can those markets still grow in that 7%-12% range as you just talked about, or how do you think about those other ones?
The answer is yes, but it's a portfolio. So will it bump around a little bit? As I said, the U.K. in transportation, I don't think it's going to grow at the same rate, but over the long term, it probably will. Our Middle East market is still a very healthy market. What we have been seeing in the Middle East is we've actually seen a rationalization of the number of projects down to a smaller few and the things that really are the priority of the Crown Prince. And so there still is a really healthy pipeline of opportunity in Saudi Arabia and growing across the Middle East. In Hong Kong, there's been a, I mean, it's a really good stable business, but there hasn't been a great pipeline.
But in the last two quarters, we have actually seen the dialogue and the momentum building around a really good long-term pipeline of large infrastructure projects that will be invested in over the next decade around Hong Kong or the Greater Bay. And so that, I think that there is an opportunity for that market to grow over the next decade.
Very interesting, Troy. And then, you know, the other way to split your sales is into public and private, you know, 60% public, roughly. I think you suggested in your last earnings call that you don't see a discernible difference between the growth rates of either, but I continue to get the question around, you know, private-sector clients, as I think you do too, you know, when rates are higher, people worry about offices, blah, blah, blah. So how do you think about, you know, maybe tell us your confidence level that, you know, both sides, public and private, could grow at those high single-digit rates?
Yeah, my confidence around both of those markets would be equal, but it's a little different. So there are certain private-sector markets that are interest rate sensitive. So the most obvious everyone talks about is commercial real estate, no question. I would say that the investment in commercial real estate has, I'll just say, slowed, really slowed. But at the same time, again, we have the benefit of sort of understanding from our customers what will happen over the course of the next two or three years based on their activity of bringing things to market that we would help them with or bid on. So we saw that starting to happen a few years ago. So our reaction to that was, is we said, well, there are opportunities where they will grow, for example, in aviation. So aviation is sometimes private, so it's developer-led, or sometimes it's government-led.
We've been able to sort of take the teams of people that do the kinds of work and sort of pivot into aviation away from something that would look like commercial real estate investment. So I have confidence around it because I see broadly the opportunity in private and public the same, but I do see that within the private sector, that there are things that have slowed down or will stop, and there are things that are picking up. If you look at North America, for example, there is a very strong and large investment that is going to be made in aviation or airports, and whether that's at the large city level, large airport level, or where it's at the local or regional airport level, it is going to be made, and it's going to happen for the next decade.
You know, I apologize to everybody who is using JFK, but I'm sure the airport experience is difficult, and you can blame that on us because we're in the process of rebuilding Terminal 1 and Terminal 6. O'Hare has got a large redevelopment plan. New Orleans has a redevelopment plan. Fort Lauderdale has a redevelopment plan. And so we can see this visibility of this investment being made in airports over a longer period of time. So long window way of saying I'm comfortable with it. They're both equal, but you have to kind of manage those opportunities.
It's helpful, Troy. And then related to that, I should ask you, you know, AECOM's work on PFAS and, you know, the DE-FLUORO technology that you've talked about occasionally. Lara did mention on the call growing opportunities with large industrial clients. I think we're cognizant of the fact that, you know, a couple of companies I cover, you know, are potentially settling with water utilities here in the U.S.. So are you seeing any meaningful pickup? Like, how would you define PFAS potential growth at AECOM?
Well, PFAS, the work that we do around PFAS in our predominantly in our environmental water business, I would say today represents maybe about 1% of our revenue. I would think over time, based on the visibility that we have to what our clients are going to spend their money on, I would think over time it would grow maybe in the 3%-5% of revenue. So that would be over a period of years. So it's an opportunity, but it's not a massive transformative opportunity. And the work that we do is for the customers that have to do the work to first of all understand if they have a problem, and then they have to build a plan to remediate, and then they remediate, and then they report back that it's been addressed.
And so we're seeing that funding grow within our government client base, and it's here in the U.S., it is in Australia, and it's in Canada, but it's slowly picking up momentum. So I just see it as a slight gradual increase over time.
Got it. Any questions from the audience? Anybody? Tim?
Thank you. I just wanted to circle back to the comment you made about the peak funding being, you think, potentially 2027 or 2028. A, what were you referring to? Is that infrastructure focus? And then B, if the funding dollars occur in 2027 or 2028, when is the actual spending associated with that peak?
So I was, what I was referring to was I was referring to funding under the IIJA specifically. So just Andy's question was around that particular source of funding. And so, you know, originally when the law was enacted, it's long-term, it was long-term funding that was appropriated, and the view was that, you know, kind of the peak spending would happen earlier. It took a lot longer to actually start to execute and get the funding into the market. It's the IIJA funding peaking sometime in 2027 or 2028.
The question is, you know, there, what's after that? There are other sources of funding in the U.S., federal funding for infrastructure, but the bulk of funding around infrastructure actually comes at the state and local level. And so I would describe this - it's probably better classified as - there is just good long-term momentum [audio distortion] and need in infrastructure.
So will there be ebbs and flows along the way? I think the answer is yes, but we sort of have the view that in the foreseeable future, the funding will continue to increase as supported by our pipeline. Longer term, a little different view. There'll be a bumpy ride, but over the next few decades, we see there being a long-term investment being made in energy transition. And without me belaboring the point, technology has enabled and will enable a bespoke investment in generating, creating energy capacity. So instead of being lucky that you actually have hydrocarbons in the ground, you'll be able to actually invest in energy. But in order to store that energy, to distribute it, and to use it, it will require an investment in infrastructure.
All of the investment infrastructure, I believe that, again, we will participate in and in a meaningful way because that infrastructure is large and complex. Again, there are only certain organizations in the world like ours that have the ability to actually deliver that complex infrastructure. And whether it's the design or whether it's the program management of it, we will participate in that in the long run. So when I look across our long-term opportunities, I see the long-term opportunities, as always, there's always going to be bumps in the road, but there's just a massive transformation that's going to happen over the next 30 years in energy infrastructure and energy generation. And as a result of that, almost all of our infrastructure is going to have to be transformed as a result of that.
Any other questions? So, Troy, maybe let's go back to margins for a second. When you hosted your Investor Day, you came out, you know, your new long-term framework was 20-30 basis points plus of margin expansion every year. But, you know, when you took over, you've averaged 75 basis points plus of margin per year, and this year the guidance is actually, you know, maybe even slightly higher than that with 15.6% margins. So why can't AECOM do better than your long-term guide? I know you want to leave room for investment and, you know, rainy days, but is there some sort of upper limit? And that's kind of why, you know, margin expansion might be less. Like, how do you think about that?
So, I'll make it. It's two points. One is, as we're investing in the business, so as our pipeline grows, we have to spend more money on business development because we can create the backlog for the future. So we spend more money, and that goes through margins. So we're growing margins while actually increasing our investment and delivering better results in the future. We're also investing in transforming the business, as I said, to create long-term competitive advantage. And part of it is also moving ourselves from being a design firm into a consulting firm. So we have half of our work in the future being Advisory and Program Management and half being design. And so we're investing to do that, and those are some fairly substantial investments that we've made over the last three years, and we're going to continue to make. And so they go through margins.
So that's, I'm going to say, we've set out some reasonable expectations about continuing to improve our margins because as we build these things and are successful at them, they allow us to increase margins, and we borrow some of that, and we invest that in the future of the business. We set a margin target of 17% for the business over the next few years. Do I believe we can go well beyond that? I do, but we don't want to be too ambitious in setting a target that we can't show some visible progress and success at. So we originally set a target of 13% and achieved that. Then we set one of 15%, and we've gone through that. We now set 17%, and we'll go through that.
But ultimately, I would think we would start to look like a consulting business, more or less like a design business. And consulting businesses typically have operating margins that are 20% or higher, and their return on invested capital is well in excess of 25%. And so as we transform, that's the view that we have in mind. But what we've sort of set out as an ambition today is to try and be reasonable, that we can attain a goal and then keep stepping beyond it.
It feeds right into my next question, Troy, about, like, you know, this wanting to become a digital consulting design firm. You know, you talked at the Investor Day about getting to a 25% ROIC, you know, from 20%. But, you know, if you're going to sort of tread on management consultants' turf in this sense, like, it just seems like you will have to invest more, or maybe you change your business a little bit more. Like, so, so sort of how do you get there? How hard or easy is it? You know?
Well, I don't think it's easy, and it does require investment, but I can say that we've been making the investment. We've proven success. So, for example, in program management, we doubled the size of the business in the last three years, and that will have the business over $1 billion. So we've proven that we can make the investment and through our margins to do that. So we'll continue to make those investments and advance that forward. Is it hard? Or, sorry, are we treading on management consultants' toes? Absolutely. Yeah, for sure we are. Do we have something that's different?
I think we do because if you look at the underlying expertise, and I think about this as kind of building a moat around a castle, we have 52,000 professionals that have these deep technical skills where we have an understanding of engineering, design, technology, and we keep building that knowledge. So in terms of energy, we have teams of people that have understanding and a fundamental understanding of the technology that is evolving and will be developed. So we can give advice on what technology will look like around energy generation 20 years from now. Management consultants can't do that. So we're taking advantage of the strength that we have, and what we're building on top of that are the skills that a management consultant would bring to the table. So ultimately, what we would bring to the table is something different. Are we stepping on their toes?
Absolutely we are. But are we doing it in a way where they can't step on ours? The idea is yes, we can, because if they want to go and create that technical ability, there's two ways they can do it. They can come and they can buy it on a buy it on a per unit basis from us, but I don't know if we'll be selling it since we're competing. And secondly is they can go out and build what we've built, but that will cost you tens of billions of dollars. I'll just say billions of dollars. You can do it in a smaller fashion, but it will take time to do it, and you have to integrate it into their culture.
And so I haven't seen any management consultant that is actually in a meaningful way willing to do that or to step up and do that. So I view us as actually having the path where we have something that creates an advantage, and we're going to build on it like we've done with Program Management, and we'll encroach on the management consultant space.
Helpful. So how do you, just shifting gears, how should investors think about your Construction Management business overall in fiscal 2024 and beyond? You know, maybe talk about the outlook for that business. I think you're sort of transitioning a little bit toward net service revenue, you know, in that business. So maybe talk about that. Can that backlog, NSR backlog, grow? And how do you think about the strategic value of construction management in terms of, you know, AECOM running it and owning it versus somewhere else?
So just we have Program Management, and we have Construction Management.
Different things.
Two different things, but a little bit similar. So a program manager will actually manage the delivery of outcomes, which means that they will manage contractors. A construction manager will actually manage all of the people that a contractor would manage to deliver that. So they will actually manage procurement, they will actually manage the delivery of design, and they will actually manage the delivery of the project, but they will do it on a fee basis. And so it effectively provides depth to your program management ability. So from our perspective, is program management, we're always trying to figure out how do we create that differentiation. If we have really deep skills in construction management which complement our program management skills, we bring them together, and we offer something that's not available in the market. So we view it as being strategically important, and it can differentiate us.
In terms of the business that we have, it's a smaller part of our business. Our Construction Management business maybe represents 6% of our business today. As I said, one of the things we're doing is we're pivoting that business. We're having that business participate and bid on aviation projects and actually take that Construction Management skill and build it into a new market and move that away from the markets that we'd bid in the past. So it's in a transition period. It's a great technical professional consulting skill that exists. It is a world-class consulting skill, and we think it works well with our Program Management offering that creates some differentiation for us.
And then, Troy, like maybe digging into margin again for a second, like your America's margin has been best in class. You know, it's high, but it's been growing maybe a little more slowly than international, which I know you've been sort of working on. So when you think about, you know, the 17%+ NSR margin target, like how do the two sort of shake out in that target? Like is, you know, maybe a couple of years ago you were telling me I thought, well, you could get to 12% in international, but now it feels like, well, maybe, you know, 13% is the new 12%. Like how do I think about, you know, where the margins can go?
I think that each of the markets are a little structurally different, and some of it has to do with the scale of your business, and some of it has to do with the actual underlying market and how those services are valued. Our international margins, on average, will never achieve the same level of margins that we have in the Americas. It's not to say that in certain places in the world the margins aren't the same. So, for example, in our Australia business, the margins rival the margins in the Americas. It's just that in other places in the world, they don't. So it's just the way we've divided the pie up that it shows that there's a visible difference. I think our international margins should do better than 12%, so there's still some room to go.
I also believe our U.S. or North American margins will continue to improve. We will reach a point in time where I think the margin opportunity for expansion will be the same in all of our markets, and we just sort of view it as a large portfolio. Part of this is the way we just sort of the world of design has sort of divided up the world and said, this is how you should look at it. But the truth of the matter is you should just look at it as the entire portfolio.
I'm not going to complain about 100% cash conversion. That's 100% plus, excuse me, but you've averaged, you know, close to 120%, I think, you know, over the last couple of years. Is there anything different this year, you know, or is it kind of 100% plus and we'll see how it goes and you could do better?
Year to year, there are ebbs and flows. So this year we are investing some more money in the CapEx of the business. Our CapEx budgets are higher, so that will have a little bit of an impact, but over the long run, I would expect us to be 100%+. We sort of been that way in the last seven years, so I don't see that really changing. We're, again, as a consulting business, you should have really good cash flow conversion.
Then on cash flow deployment, you know, you have a very prescriptive way of doing things. As you know, you know, you focus on organic growth, share purchases, then dividends. I mean, you bought back a lot of your stock, $1.8 billion since 2020. However, as you think about the next several years and you focus on how to achieve the highest growth with the best returns, you know, it does seem like at least a couple of your peers have chosen a different path than you, you know, focused on strategic acquisition. So why not augment your growth with strategic bolt-ons?
Yep. Well, first of all, to be fair, some of our peers have also pivoted away from M&A to say that maybe the AECOM way is not so bad. So it's not that we don't like M&A, just to be clear. The fact is, is that we try and take a very disciplined returns approach. And the fact is, is that we see the greatest opportunity is to invest in organic growth, but also to invest to transform the platform of our business. All right? So you could take your capital, invest in M&A, but what have you really gained that builds long-term competitive advantage? We think it's more important to actually spend the time and the energy and the capital to transform how we deliver, which means that you've got a business that delivers meaningfully better margins.
Then at some point in time, you say, well, if I have something that can deliver that same revenue in a much meaningfully different way with higher margins, well then maybe it is time because now if you're returns focused, maybe M&A makes sense. You can acquire something on someone else's platform, but you can deliver it in a lot higher margin and a higher return. So, you know, that's what we've chosen in the long run. This, it's not because we don't like M&A, it's just that we want to be very disciplined of what we're trying to do. Our job is to invest in organic growth, create a long-term competitive advantage, deploy capital in a very disciplined way.
At the moment, it's organic growth, and we look at our stock price and we say to us, it looks like it's a good place for us to deploy capital. Over a period of time, maybe it isn't, but we have to. We'll always be returns focused, and our priority is to create a different platform, which will then create opportunities that might look different than how we deploy capital today.
Great. Last question, like I asked you this question last year, I ask it to every company. What are the top two or three innovations and structural changes affecting your company over the next five years, and are there any emerging industry trends that are perhaps being overlooked in the current discourse?
Well, I think first of all, the thing that we can't overlook is the energy transition. Again, I just think that there is a massive investment that's going to be made. People think about it or talk about it as decarbonization, but instead think about it as you're investing in technology to generate energy that you can choose to do independently, and ultimately the cost of that energy will be cheaper than fossil fuels. Right? It makes great economic sense, and at the same time, it is, right, better for the world, the future of the world. So I just that's a tremendous trend that we'll participate in. Second thing is innovation. And again, we're investing to actually transform the way that we deliver work.
As I said simply at the beginning, this is we're investing to deliver work that will require 10%-50% less effort or hours. So if it took 100 hours to deliver something, we'll do it for 85%. That is transformative if you can accomplish that. The world that we've lived in has been delivering work the same way forever. If we can transform that, that creates a long-term competitive advantage, and then it creates an opportunity, a platform which then you can, you know, you can leap forward. So I would say those are the two most important things.
Great, Troy. We really appreciate you being here.
Thank you very much. Thanks for having me.