Metro Inc.

Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 Fourth Quarter Results Conference call. At this time, all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that the call is being recorded on Wednesday, November 19, 2025. I would now 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 fourth quarter, which ended on September 27th. With me today is Mr. Eric Lafleche, President and CEO, Nicolas Amieux, 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 fourth quarter results and comment on its highlights. We will 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 uncertainties 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 statement 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 Q4 results, starting with a comment on our Toronto freezer situation. As you are all aware, operations at our frozen distribution center in Toronto have stopped on Friday, September 12th, as a result of a mechanical issue with the refrigeration system. Since then, our teams have been working hard on securing supply for our Ontario food retail network. Our contingency plan is ongoing and working well, and Eric will be sharing more color on the state of the D.C. in a minute. On my end, I will be focusing on the financial impact of this situation in Q4, as well as the expected spillover in our first quarter of F26. The after-tax financial impact of this situation on our fourth quarter was $22.5 million, or $30.6 million before taxes, which includes $24.5 million for inventory losses, as well as $6.1 million for other direct costs related to temporary equipment rental to keep the temperature down in our freezer, as well as incremental transportation and third-party logistics costs for the execution of our contingency plan. Looking forward to Q1 of F26, we estimate that the direct costs associated with the rental of temporary chilling equipment and with the execution of our contingency plan will impact our net earnings by approximately $15 to $20 million. The impact on sales and margin is expected to be modest given the contingency plan in place, and we expect being essentially back to normal by the end of December. Now turning to our Q4 results. Total sales reached 5.1 billion, an increase of 3.4% versus the fourth quarter last year, driven by higher sales in our discount and pharmacy retail networks. Food same-store sales grew by 1.6% in the quarter, while pharmacy same-store sales grew by 4.8%, supported by a 5.5% growth in prescription sales and a 2.9% growth in front-end sales. Our gross margin reached $1.22 billion, 20% of sales, versus 19.7% in the same quarter last year. The year-over-year increase is partly attributable to shrink improvement in food retail activities, as well as productivity gains at our food distribution centers. Note that the direct costs related to the freezer were recorded under operating expenses. Turning to operating expenses, they were $535 million in the quarter, up 4% year over year. As a percentage of sales, operating expenses were 10.5% versus 10.4% in the fourth quarter last year, as they were unfavorably impacted by $6.1 million of direct costs related to the temporary shutdown of our freezer. Excluding these costs, operating expenses grew by 2.8% year over year, and represented 10.4% of sales, the same percentage as Q4 last year. EBITDA for the quarter amounted to $485 million. That's up 5.5% year-over-year and stands at 9.5% of sales. Adjusting for the $6.1 million direct costs incurred for the Toronto DC, adjusted EBITDA stood at $491 million, up 6.8% year-over-year, reaching 9.6% of sales and increase of 30 basis points over Q4 2024. Total depreciation and amortization expense for the quarter was 140 million, up 4.1 million. Net financial costs for the fourth quarter were 34.4 million compared to 32.6 million last year due to higher interest on net debt. Our effective tax rate of 24.1% is lower than the effective tax rate of 24.5% in the fourth quarter last year, largely driven by the Tarbon tax holiday. Adjusted net earnings were $246 million compared to $227 million last year, an increase of 8.6%. While adjusted fully diluted net earnings per share amounted to $1.13 versus $1.02 last year, this is up 10.8% year over year. These results are adjusted for the $22.5 million after-tax impact of the freezer situation. Our capital expenditures in fiscal 25 totaled $511 million, down $69 million versus last year. The lower year-over-year CapEx level is mainly the result of the completion of our automated distribution centers in the summer of 24. Looking forward, we expect CapEx and F-26 to reach approximately $550 million as we continue to invest in our retail network. On the food retail side, in fiscal 25, we opened 14 stores, including five conversions, and carried out major expansions and renovations at 17 stores for a net increase of 294,000 square feet, or 1.4% of our food retail network square footage. Under our normal issuer bid program, as of November 7th, we have repurchased 8.7 million shares for a total consideration of 848 million, representing an average share price of $97.51. Closing in on fiscal 25, we are very pleased with our financial performance and the fact that we delivered against our financial framework. I will now turn it over to Eric for more color on our DC situation as well as on our overall performance. Thank you.