Metro Inc.

Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 Third Quarter Results Conference call. At this time, note that all participant lines are in the listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Wednesday, August 13, 2025. And I would like to turn the conference over to Sharon Kadosh, Director, Investor Relations and Corporate Finance. Please go ahead.

Merci, Sylvie. Good morning, everyone, and thank you for joining us today. Our comments will focus on the financial results of our third quarter, which ended on July 5th. With me today is Mr. Eric Lafleche, President and CEO, Nicolas Amillot, Executive VP and CFO, Marc Giroud, Chief Operating Officer, and Jean-Michel Coutu, President of the Pharmacy Division. During the call, we will present our third quarter results and comment on its highlights. We'll then be happy to take your questions. Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information. In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Words or expressions such as expect, intend are confident that, will, and other similar words or expressions are generally indicative of forward-looking statements. The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, and our 2025 action plan. These forward-looking statements do not provide any guarantees as to the future performance of the company and are subject to potential risks, known and unknown, as well as incentives that could cause the outcome to differ materially. Risk factors that could cause actual results or events to differ materially from our expectations as expressed in or implied by our forward-looking statements are described under the risk management section in our 2024 annual report. We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking statements except as required by applicable law. I will now turn the call over to Nicolas.

Okay, thank you Sharon, and good morning everyone. I will now go over our Q3 results. Total sales reached $6.9 billion, an increase of 3.3% versus the third quarter last year. Food same-store sales grew by 1.9% in the quarter, while pharmacy same-store sales grew by 5.5%, supported by a 6.2% growth in prescription sales and a 4% growth in front-end sales. Our gross margin stood at 19.8% of sales versus 19.6% in the same quarter last year. The year-over-year increase is partly attributable to productivity gains in our food distribution centers as well as shrink improvement in food retail activities. Operating expenses were $702 million, representing 10.2% of sales, a similar level to our third quarter last year. We benefited from the fact that we cycled transition duplicate costs last year related to our Terrebonne Automated Distribution Center, but these benefits were offset by inflationary pressures, operational expenses related to our fresh phase to DC and Toronto, as well as an increase in fees related to the growth of our online partnership sales. eBuildUp for the quarter totaled $656 million, up 5.7% year-over-year, while EBITDA, as a percentage of sales, stood at 9.5% this quarter, an increase of 20 basis points over Q3 2024. Total depreciation and amortization expense for the quarter was $185 million, up $11 million. The increase in depreciation and amortization expense is mainly driven by retail investments as well as by the commissioning of investments in our supply chain, including the final phase of our fresh distribution center in Toronto last summer and some automation technology in the pharmacy division. Net financial costs for the third quarter were $45 million compared to $47 million last year. The decrease is mainly attributable to a lower interest expense on net debt, partly offset by lower capitalized interest. Our effective tax rate of 24.1%, is lower than the effective tax rate of 25.9% in the third quarter last year, largely driven by the Terrebonne tax holiday consistent with what we have reported in our first two quarters this year. Adjusted net earnings were $332 million compared to $305 million last year, an increase of 8.8%, while adjusted net earnings per share amounted to $1.52, versus $1.35 last year, and that's up 12.6% year-over-year. Our capital expenditures for the third quarter totaled $146 million, down $41 million versus last year. As expected, the lower capex level is mainly the result of the completion of our automated distribution centers. On the food retail side, after 40 weeks, we opened eight new stores including three conversions, and carried out major expansions and renovations at 12 stores for a net increase of 194,000 square feet, or 0.9% of our food retail network square footage. Under our normal course issuer bid program, as of August 1st, we have repurchased 5.7 million shares for a total consideration of 562 million, representing an average share price of $98.55. To conclude, we have delivered solid Q3 results, and I will now turn it over to Eric for more color on our performance. Thank you.