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 d'aujourd'hui. I will now introduce Mr. Mathieu Brunet, Vice President Investor Relations and Treasury at Alimentation-Couchetard. Je vais maintenant passer la parole à Mr. Mathieu Brunet, Vice-Président 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 troisième trimestre de l'exercice 2025 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. De plus, prenez note que certains des sujets discutés au cours de cette webdiffusion Good morning. I would like to welcome everyone to this web conference presenting Alimentation Costar's financial results for the third quarter of fiscal year 2025. 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 are 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. Alex Miller, President and Chief Executive Officer, and Mr. Felipe De Silva, Chief Financial Officer. Alex, you may begin your conference.

Thank you, Matthew. Good morning, everyone, and thank you for joining us for our presentation of our third quarter results. We are pleased to report positive improvements in the business this quarter. While consumers continue to be cautious in their spending, we are seeing encouraging signs of resilience. Same-store sales were positive in both Canada and Europe compared to the same quarter last year, and we had sequential improvement in the United States. impacted by historic winter storms in our southern business units. Food continued to grow in the U.S. as our meal deal promotions performed well and have been extended to Canada. In our fuel business, we are maintaining market share in the United States and margins aligned with trends seen in recent quarters. As inflationary pressure persists, our number one priority is winning our customers by being ready with the products and services they want at compelling value. Later in this presentation, I will go into more detail on these initiatives, as well as on our convenience and mobility results. However, before I do so, I will touch on two notable areas of the quarter. Our global efforts to grow the network, both through M&A and organically, as well as the impact of the devastating wildfires in Los Angeles and unparalleled winter storms in the southern parts of the U.S. I want to begin by briefly mentioning our ongoing commitment to acquire Seven and I holdings. No doubt you've seen our most recent press releases giving clarity to our proposal for a combination with Seven and I, as well as accounts of our visit to Japan last week. For many years, we have firmly believed that there is a unique strategic fit between Kushtar and 7 and Up, and that we can achieve significantly more together than each of our companies can achieve individually, including accelerating the global growth of the iconic 7-Eleven brand and strengthening the 7 and I business in many parts of the world. We also firmly believe that a combination provides an opportunity for shareholders and stakeholders of both companies to realize significant value. We have reiterated several times over the past few months that we intend to be friendly and persistent in pursuing a transaction, which we believe is in the best interest of all stakeholders. We have done that in the face of significant frustration and distraction. We look forward to fulsome engagement with Seven and I so that we can reach definitive terms and move forward with the transaction that is in the best interest of all stakeholders. It is worth noting that while there has been extensive media coverage, internally, a very small team is involved in our efforts concerning Seven and I, as the vast majority of the business is laser-focused on our global operations. Moving to Europe. This quarter, we reached our one-year anniversary of acquiring certain assets from Total Energies and almost doubling our size in Europe by expanding to four new countries. With the one-year mark, I'm happy to report that we are now reporting synergies from the transactions, which are on track with our expectations. Felipe will cover in more details in his presentation. We are truly proud of how the new team members have embraced our culture, values, and customer-focused approach to retail operations. We continue to see strong progress with store rebranding, both on the physical store layout as well as with product assortment and EV charging dispensers. While discussing M&A, let me briefly mention the good progress we are making with GetGo, which we expect to close in the first half of calendar 2025. As we have always done with all of our acquisitions, we have identified local management to lead the business as they know best how to serve local customers. We also continue to be excited about our learning from GetGo's extremely popular food and loyalty programs and dedicated team members. In organic growth, we continue to make progress on our 500 new store effort. We've opened 39 stores in Q3, 69 year to date, and we are on track to open over 100 in North America this fiscal year. Our recent new stores include dozens of high-speed diesel and rural locations. As of today, we have more than 56 stores currently under construction and about 1,000 sites in our overall real estate development pipeline. The second point I want to acknowledge is the heroic work of our teams in our West Coast business unit to support and serve their communities during the catastrophic wildfires in Los Angeles in January. While we had a few stores impacted, team members showed incredible courage and dedication by getting out to our locations to provide essential supplies to customers, free beverages, and replenishment to first responders. We also had a successful Fuel Day fundraiser from which, with the support of our global franchise team, we donated 100,000 US dollars to the American Red Cross for their continued relief work in the region. Also in January in the US, our southern business units endured a historic winter storm that in a region completely unaccustomed to accumulation of snow and ice caused widespread power outage and left millions grappling with hazardous road conditions and freezing temperatures. As always, our teams kept stores opened and offered the services and products needed by our customers. Now let me get back to our quarterly results starting with convenience. Compared to the same quarter last year, same-store merchandise revenues decreased by 0.1% in the United States, increased by 0.2% in Europe and other regions, and by 2.8% in Canada. While we had sequential improvement in the U.S., our same-store sales performance was negatively impacted by those winter storms, and Felipe will provide more details on this. Again this quarter, as challenging inflationary conditions persisted, we have been relentlessly focused on winning our customers by providing compelling value on products and services. Following our successful launch of meal deals in the U.S. in January, we expanded the line offer across Canada by bundling popular food items at value-packed price to create a satisfying and affordable meal option. Across North America, we are now at nearly 465,000 meal deals being sold on a weekly basis, and that number is growing materially every week. Our win-in-food strategy continues to progress, with over 5,890 fresh food fast stores open globally. We recently appointed a new Senior Vice President for Global Food and Marketing, Meta Ugleberg, who is bringing her decades of experience in our popular European food program to our global operation. Under her leadership and listening closely to customer feedback and data, we are focusing now more than ever on value, consistency, and having the right products available at the right time. Turning to our loyalty membership programs, In the U.S., Inner Circle registrations and full enrollments are up 13% from the previous quarter, and we are closing in on 10 million members. We continue doubling down on our personalization efforts, and the team is working on implementing new capabilities to tailor our offers and content to different segments of customers. EasyPay and Inner Circle were successfully linked this quarter, allowing customers a more frictionless single-card experience at both our pumps and in our stores. We are pleased with the large number of customers already taking advantage of this benefit, unlocking increased personalized value. In Europe, the number of active Extra members continues to grow, with one out of every two fuel transactions and nearly one out of every three merchandising transactions coming from Extra members. We successfully rolled out our new Extra 2.0 loyalty concept in Sweden and are working to expand it to additional European business units later this calendar year. The new concept is designed to offer rewards across all products and services at our sites, whether a customer is looking to fill up with fuel, charge an electric vehicle, or grab a snack. This is the first time we have brought our entire offering under one loyalty value proposition, and we are seeing a lift in both traffic and increased value per extra member. In our goal of owning Thirst, we are excited about our many exclusive product launches in the U.S., including Celsius Watermelon Ice during the quarter and our first Ghost brand exclusive this month. Looking towards the summer, we will have our second Gatorade exclusive, Cold and frozen dispensed beverages in the U.S. continued impressive double-digit unit growth, with margins beginning to normalize following the completion of our summer traffic campaign. In the adult beverage category, it is worth calling out Central Canada's business unit's excellence performance in the beer space. Last quarter, following a change in legislation in Ontario, Canada's largest market, We've been able to offer a selection of beer, cider, wine, and ready-to-drink alcoholic beverages in our nearly 600 eligible stores. The response has been overwhelming, with customers thrilled about the added convenience, wider selection, and competitive pricing. Now, close to 50% of beer sales, both in dollars and unit share, for the entire country comes from our Central Canada Business Unit. which also has the highest percentage of sales coming from beer in our entire global network. In the U.S., the overall nicotine performance was slightly negative, as lower demand for cigarettes was partially offset by the growth in other nicotine products. However, we continue to outperform the market due to our efforts around price optimization, assortment expansion, and the continuation of personalization programs for our age-verified customers. In Europe, we had a strong performance in nicotine products, with growth of OTPs, especially e-cigarettes, and increased tobacco cigarette sales in the Netherlands, which has new legislations favorable to our industry. Moving to our fuel business, same-store road transportation fuel volumes decreased by 3% in the United States, by 0.9% in Europe and other regions, while it increased by 3.6% in Canada. As I mentioned earlier, we are maintaining market share in the United States and margins aligned with the trends of recent quarters as we continue to work on building value from our fuel supply chain and serving our customers through lower cost sourcing options. Our Europe B2B fuel business has demonstrated resilience this quarter, delivering solid income despite experienced volume volatility across markets. Growing non-fuel income remains a strategic priority for our European B2B, and B2B transit charging volumes grew steadily, up 70% year over year, contributing approximately 50% of transit charging in our Nordic countries. B2B fuel share in the U.S. continues to grow quarter over quarter as we develop customer relationships with fleets of all sizes and implement new strategic partnerships. Our U.S. B2B customers see great value in our ability to offer consistency across the entirety of our network to serve their businesses and provide a great experience for their drivers. As for our truck segment, we are seeing positive momentum, especially in the northern United States. We also have nearly 200,000 B2B customers as members of the Inner Circle Loyalty Program receiving personal rewards for commercial fueling. Our EV fast charging network in Europe now consists of nearly 3,300 charge points. In our new mid-European business units, all EV chargers have been rebranded. Perhaps our most exciting recent development in e-mobility has been the opening of our biggest charging hub in Sweden. The site features 26 high-power chargers for both passenger cars and heavy vehicles. It has solar-powered energy integrated into the station's design and a new four-core concept with drive-through layout for seamless and efficient charging. Before I turn the call over to Felipe, I want to mention our positive development in employee retention and engagement. First, I'm very proud of our continuous improvement in bringing down store turnover and increasing new hire retention across the network. We are now at levels that were once hard to imagine and significantly outperform the industry. We were also just awarded for the fourth consecutive year, the Gallup Exceptional Workplace Award. For me, there is nothing more important than protecting and promoting the strong one team culture we have at Kushtar. We will continue to build on this momentum of engagement and retention. Ensuring our workplace remains one where our team members can grow and thrive while living our values and embracing our mission to make our customers' lives a little easier every day. With that, let me turn it over to Felipe to dive deeper into our financial performance this quarter. Thank you, Alex.