Alimentation Couche-Tard Inc.

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

English will follow. Bonjour. J'aimerais d'abord vous souhaiter la bienvenue à la téléconférence qui porte sur la diffusion des résultats financiers du deuxième trimestre de l'exercice 2024 d'alimentation croustarde. 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. De plus, 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 Hanisch, président et chef de la direction, et M. Philippe Da Silva, chef de la direction financière. Good morning. I would like to welcome everyone to this web conference presenting Alimentation Couche-Tard's financial results for the second 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.

Thank you, Jean-Philippe, and good morning, everyone. We're pleased to announce a solid second quarter with progress across most of our key metrics. Although we did see some softening in the quarter in same-store sales, in the U.S., driven by weakness in the cigarette category and cycling against a very robust second quarter last year of 5.6%. In an environment with continued inflation and high interest rates, we remain committed to offering compelling value and ease, and we believe we'll continue to grow our share in key categories as we continue to implement key pieces of our strategies. In the quarter, we substantially expanded the rollout of our Inner Circle membership program. which is providing meaningful convenience and fuel rewards to our most valuable customers. As America's third stock, we're focused on the growth of our beverage category by offering great assortment, innovation, and value in both packaged and dispensed beverages at affordable price points. We also continue to be pleased with the performance of our fuel business in terms of both volume and margins as we continue to bring traffic to our sites through reoccurring promotional fuel days. I'll return to each of these areas with more detail later in my presentation. During the quarter, we held a very well-attended analyst investor conference, and I want to thank those of you who joined us either in person or online. At that time, we announced our new 10 for the win five-year strategic plan, with winning and growth being one of the lighthouses or pillars of that strategy. Here, we're excited by the recent developments in growing our network. In the beginning of November, we closed on the acquisition of 112 Mapco sites, accelerating our development in key markets in Georgia, Tennessee, Alabama, Mississippi, and Kentucky. and adding approximately 1,300 team members to the Cushtar family. We also received a very important decision by the European Commission allowing us to now, in only a few weeks, complete the acquisition of TotalEnergies in four new European countries. We're excited to welcome the TotalEnergies teams into the family and begin the journey of realizing significant value for all of our stakeholders. On the organic front, we're making progress on our stated goal to build 500 stores over the next five years, having already finished 40 new stores this fiscal year, with more than 100 sites in the construction pipeline and 1,000 sites identified for future growth opportunities. We've also added 20 new Circle K branded sites during the quarter under licensing agreements, bringing that total to over 2,100 sites. Now let's turn our results for the quarter beginning convenience. Compared to the same quarter last year, same-store merchandise revenue decreased by 0.1% in the United States and 0.2% in Europe and other regions. It's worth noting here that Europe really had healthy same-store sales. However, the overall results were impacted by a challenging tobacco market and cross-border traffic in our Hong Kong market. Same-store sales increased by 1.6% in Canada, driven by our growth in beverage and food offers. As I mentioned at the start, I'm especially pleased this quarter with the expansion of our Inner Circle membership program in the U.S. Inner Circle is and will be an important tool in helping us provide consistent and high visibility value for our customers both inside our stores and at our forecourt. Starting only five months ago, we're now in seven business units covering nearly 3,000 locations, and we're well on our way to reaching 10 of our 13 U.S. business units by the end of this fiscal year. We continue to see steady growth in enrollments in the program, with now over 8 million members enrolled since the program launched this summer. In Florida, our first business unit with the program, we're seeing enrolled customers visiting more often than non-inner circle customers, and we're learning how to best personalize our offers to increase traffic, grow fuel volumes, and most importantly, reward those most valuable customers. In Europe, the updated EXTRA program continues to perform well, and our most recent deployments into Lithuania are showing positive volume results, matching the results we've seen in other European markets. Across the network, Fresh Food Fast is now in over 5,500 locations globally. Our operations teams continue to improve execution in stores as we simplify assortments and increase the number of locally relevant items and trials in our markets. Our LTO sandwiches continue to perform well, as does our cookie offers. As the program matures, we're giving a better understanding of demand and controlling waste. As America's third stop, packaged beverage sales were up across the network with energy products and carbonated waters and enhanced waters leading the way. Great assortment and exclusive product offers, innovation, and activations are contributing to our overall success in that category. As with food, we're focused here on better operational tools and procedures. Nearly 3,000 stores globally, we've introduced new cooler solutions, which greatly expands customer-facing assortment and holding capacity while simplifying the restocking process for our team members. We're well on our way to doubling the number of stores with this solution by the end of the fiscal year. As I mentioned in the opening, we continue to see headwinds on cigarette sticks globally, and we believe the belt tightening by this consumer group has increased price sensitivity and impacted overall demand. We have initiatives underway with our supply partners and are looking at the best ways to invest in this category to make sure we stay relevant with our tobacco customers. On a positive note, polyusage continues to grow, driving strong growth in other nicotine products in the quarter globally. Moving to our fuel business, after two positive quarters in the U.S., same-store road transportation volumes decreased 1.5% in Europe, excuse me, in the U.S. In Europe, same-store road transportation fuel volumes decreased by 0.9% and increased 3% in Canada, favorably impacted by more people returning to the office, easing of retail prices and promotional activities. Our results compare favorably to our other public comps, and we believe we're growing share in key markets. Over time, we're excited at the prospect of further growing this category with our inner circle loyalty. In addition, unit margins continue to remain strong, reflecting the increased margin requirements of a very fragmented overall industry. In our Circle K fuel rebranding work, we've now completed 4,300 Circle K fuel sites in North America. We also continued the promotional activities during the quarter, including our first-ever Global Cushtar Circle K Fuel Day, with an additional 50% locally, covering nearly 8,500 sites. These fuel days offer valuable discounts at the pump, as well as fuel cards to save on future visits. We're bringing increased exposure to our new brand and significant value to our customers. Our EV fast charging network now consists of almost 1,900 charging stalls. That's up over 50% from the same quarter last year. We also now have over 40 chargers for heavy trucks in Sweden and over 11,000 home and workplace chargers deployed. Also in Europe, our B2B business had a solid quarter with truck volumes remaining very robust across both fleet and truck segments. Small fleet remains the main driver for growth and margin performances remain very strong in the quarter. As of recent quarters, we continue to see improving labor situation globally, particularly in North America, and we're now focused on piloting comprehensive programs to improve retention and turnover at our sites, as well as positively impacting sales. We're also continuing to implement solutions that reduce administrative hours, making it easier for our teams and allowing them to focus more on serving the customers. With that in mind, we now have more than 3,250 smart checkouts globally and which contribute to savings on labor hours while improving the customer checkout experience. With technology at the forefront of every customer and team member experience, we're focused on market agility, quality, and reliability. In the support of these objectives, early this quarter, we established a 10-year strategic partnership with CGI for our managed IT services. Through this collaboration, we're excited about the opportunities to better support our stores and customers while enabling our internal IT organization to focus on customer-facing enhancements. With that, I'll pause and turn it over to Philippe.