Alimentation Couche-Tard Inc.

Good morning, my name is Sylvie and I will be your conference operator today. Bonjour, je m'appelle Sylvie et je serai votre opératrice pour la conférence aujourd'hui. I will now introduce Mr. Jean-Philippe Lachance, Vice President Investor Relations and Treasury at Alimentation Couchetard. Je vais maintenant céder la parole à M. Jean-Philippe Lachance, Vice President Relations Investisseurs et Trésorerie pour Alimentation Couchetard.

English will follow. Bonjour. J'aimerais d'abord vous souhaiter la bienvenue à la téléconférence qui porte sur la diffusion des résultats financiers du premier trimestre de l'exercice 2024 d'alimentation couche-tard. Toutes les lignes seront placées en mode discrétion afin d'éviter tout bruit inutile. À la suite de la présentation, nous répondrons en direct aux questions des analystes. Nous souhaitons vous rappeler que cette webdiffusion sera disponible sur notre site Internet pour une période de 90 jours. Please note that some of the topics discussed during this webcast could consist of prospective statements provided by society with usual warnings. These warnings or risks, as well as these uncertainties, are described in our financial reports. It is therefore possible that our future results may differ from the information presented today. Les résultats financiers seront présentés par M. Brian Hanush, président et chef de la direction, et M. Filipe Da Silva, chef de la direction financière. Good morning. I would like to welcome everyone to this web conference presenting Alimentation Couchetard's financial results for the first quarter of fiscal year 2024. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analysts asked live during the web conference. We would like to remind everyone that this webcast presentation will be available on our website for a 90-day period. Also, please remember that some of the issues discussed during this webcast might be forward-looking statements, which are provided by the corporation with its usual caveats. These caveats or risks and uncertainties are outlined in our financial reporting. Therefore, our future results could differ from the information discussed today. Our financial results will be presented by Mr. Brian Hanisch, President and Chief Executive Officer, and Mr. Felipe da Silva, Chief Financial Officer.

Brian, you may begin your conference. All right. Thank you, John and Philip, and good morning, everyone. Thank you for joining us for this presentation. We're pleased to announce a good start to our year and a good first quarter. with our Canadian operations leading the way with strong performances in both convenience and fuel. Same-shore sales continue to grow in all Canadian business units, with our packaged beverage category performing exceptionally well. Fuel volumes also grew significantly in this region. And across North America, we're seeing the benefits of our promotional initiatives, including our reoccurring fuel days, which are contributing to our volume growth. At the end of August, we had our very first ever global Custar slash Circle K fuel day with limited time food and fuel discounts across our network from Hong Kong to Europe and coast to coast in North America. With inflationary conditions continuing around the globe, our focus has remained on providing value and ease to our customers both inside our stores and on our forecourts. This quarter, we're especially excited to have launched our Inner Circle loyalty program, Early in the summer, we went live with the program in nearly 430 stores across the Florida business unit. Inner Circle is a free membership program with fuel rewards, food rewards, and much more. We're also providing new personalized experience to our most loyal and most valuable customers. We could not be more pleased with the rollout so far. In a few short weeks, we have over 2.7 million enrollees. And in terms of customer adoption, we've had very positive feedback and growing popularity with our app. This past quarter, we also accelerated our rollout into the Grand Canyon business unit, and we plan to expand to more business units as the year progresses, starting in the southeast part of the U.S. in the upcoming days and working our way across the continent. No doubt, Inner Circle is an important milestone in our personalization journey to see how our members behave and how we're able to reach them with more relevant, meaningful communications and offers that drive repeat visits and loyalty. I want to thank the many cross-functional team members for bringing this to life. This is a very unique program that's targeted at making it easier and more rewarding for our customers. During the quarter, we also started the next stage of our strategic journey, having successfully completed Double Again at the close of Pistol 23, and we look forward to presenting to you at our Analyst Investment Conference in a few short weeks in Phoenix on October 11th. Now let me return to the results for the quarter, beginning in convenience. Compared to the same quarter last year, same-store merchandise revenues increased by 2.1% in the U.S., 2.7% in Europe and other regions, and by 6.4% in Canada, all driven by our diversified offer in the beverage category as well as continued growth in our fresh food program and private label. As I mentioned in my opening remarks, we're very pleased to see this strong performance in our Canadian markets especially. Across the network, our Fresh Food Fast program is now in nearly 4,980 stores globally, and sales and profits continue to grow double-digit as our store teams focus on optimizing pricing and assortment to maximize profitability. Assortment localization is increasing, and we're introducing more operational innovations, which are bringing savings to the program, such as an equipment energy saving initiative this year that we anticipate will save us more than $4 million just in electricity consumption. North America packaged beverage sales continue to be strong with new product lines in sports drinks, water, energy, and ready-to-drink coffees accounting for the majority of the growth. Also in North America, we're seeing success in cold and frozen dispensed beverage with good promotional activity and the continued popularity of our Mountain Dew Purple Thunder, which launched in Canada during the quarter. In Europe, iced coffee performed well, supported by our Summer Stop campaign. In age-restricted, total company alcohol sales were up, and in tobacco, we're seeing continued pressure on cigarette sticks globally. Here, we have initiatives underway with our supply partners, and we're focused on maintaining our market share. In Canada, sales performance is improving compared to prior year. OTP continues to drive sales in the category in both the U.S. and Europe. And in lottery, growth was driven by large mega-million and Powerball jackpots in the United States during the quarter. On the overarching supply chain landscape, we still have some isolated challenges. However, our in-stock and on-time delivery rates continue to improve from previous quarters. The bulk of the issues in supply chain remain upstream with manufacturers where production, labor, and packaging shortages are still driving some of the outages. But overall, we'll continue to see ongoing improvements in the overall merchandise supply chain, and thus, our in-stock continue to improve at our locations. Moving to the fuel business, same-store road transportation fuel volumes increased by 0.7% in the US and by a strong 7.2% in Canada, favorably impacted by lower crude oil prices and promotional activities in our stores. Same-store road transportation fuel volumes decreased by 1.5% in Europe, unfavorably impacted by challenging macroeconomic conditions, including persistently high inflation in many of our countries. In our Circle K fuel rebranding work, we've now completed nearly 4,200 Circle K branded sites in the U.S. and Canada. We've also continued with our promotional events during the quarter and had over 7,000 sites in North America hosting local fuel days to alleviate some of the cost pressures of the pumps for our customers. These fuel events, including our first ever global fuel day held on August 31st, are leading to percentage growth fuel volumes, as well as increased exposure of the Circle K fuel brand, at the same time bringing significant value to our customers. In our EV fast charging network in Europe, we've deployed nearly 160 fast charging points during the quarter, bringing the overall total to around 725 points in more than 340 of our stores. We also now have over 30 chargers for heavy trucks in Sweden. In Q1, we had nearly a 70% increase in charging transactions from the same period last year, driven by both network expansion and improved utilization of our existing chargers. We continue to expand the charging network in Europe with increased focus on Ireland and pilots in the Baltics and Poland. In North America, including partners, we have over 80 EV sites in operation. Our footprints in Canada now cover Quebec, Ontario, and B.C., In the U.S., we have charging sites in California, North Carolina, South Carolina, Virginia, Florida, and New Hampshire and Colorado. We remain committed to our 200 EB site target in the next two years, which we communicated in the spring of 22. Now, before I turn it over to Felipe, I wanted to discuss the continually improving labor situation in North America. Candidate flow and our ability to hire remain strong. We're averaging over 25,000 applicants per week, which is a 6,000 applicant per week increase over the same time last year. Rolling 12-month annualized turnover in North America for our frontline store teams is trending materially better than the same time last year, and just improving our ability to operate our stores, you know, both effectively from a customer service standpoint, but also to control our labor costs. We also continue to utilize our smart checkout tool to improve labor efficiency at our stores, as well as enhancing the customer experience. In North America, we now have nearly 2,700 smart checkout units in around 2,200 stores, with about 40% of our in-store payment transactions running through the smart checkout at these sites. More importantly, the equipment makes payment faster and easier for our customers, as well as making it easier for our store team members to focus on serving them. I'm going to pause here and let Philippe check you through more of our first Florida results.