Parkland Corporation

Good morning. My name is Miranda and I will be your conference operator today. At this time, I would like to welcome everyone to Parkland 2022 Q1 Results Analyst Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. Thank you. I would now like to turn the conference over to Valerie Roberts, Director, Investor Relations for Parkland. Please go ahead.

Thank you, Operator. With me today on the call are Bob Espy, President and CEO, Marcel Tunison, Chief Financial Officer, and Ryan Krogmeier, SVP Supply Trading and Refining. This call is webcast and I encourage listeners to follow along with the supporting slides. We will go through our prepared remarks and then open it up for questions from the investment community. Please limit yourself to one question and a follow-up is necessary, and if you have other questions, re-enter the queue. We would ask analysts to follow up directly with investor relations team afterwards for any detailed modeling questions. During our call today, we may make forward-looking statements related to expected future performance. These statements are based on current views and assumptions and are subject to uncertainties which are difficult to predict. These uncertainties include, but are not limited to, expected operating results and industry conditions, among other factors. Risk factors applicable to our business are set out in our revised annual information form and management's discussion and analysis. We will also be discussing non-GAAP and other financial measures, which do not have any standardized meanings prescribed by IFRS. These measures are identified and defined in Parkland's continuous disclosure documents, which are available on our website or on CDAR. Please refer to these documents as they identify factors which may cause actual results to differ materially from any forward-looking information or statements. Dollar amounts discussed on today's call are expressed in Canadian dollars unless otherwise noted. I will now turn the call over to Bob.

Thank you, Val, and good morning, everyone. We appreciate you taking the time to join us to discuss our record first quarter results, which has set the stage for a strong year. Before I begin, I'll highlight the photo on the cover slide, which showcases an M&M retail location in Calgary alongside our On the Run branded vehicle. We are excited. about the coming together of these brands, which will enhance our quality food offering and provide customers with even greater convenience. M&M is one of many steps we are taking in our retail diversification strategy to expand our proprietary food offer. In addition to its retail network and capitalite operating model, M&M creates a runway of organic growth opportunity for us to offer a high-quality food offering. Parkland delivered an exceptional quarter against a volatile backdrop that ongoing COVID recovery, inflation, and the invasion of Ukraine. By focusing on our customers and by staying one step ahead of their evolving needs, we demonstrated the strength of our proven integrated business model and our ability to thrive through various economic environments. During this call, we'll share the highlights of the quarter Our integrated supply model delivered record results across all three regions. Our renewables EBITDA was $25 million in the quarter. We grew our mining business by 60%. We continued to expand the on-the-run convenience brand by adding 37 sites. We grew our journey rewards loyalty membership by 10%. We accomplished a co-processing co-processing first using low carbon intensity tall oil, a product of the forest industry. We advanced the integration of our acquisitions from last year, and we maintained a strong balance sheet despite working capital headwinds that increased our leverage. I would like to thank the entire Parkland team for a strong start to the year and for delivering record results, which continues to demonstrate the quality of our team and the trajectory of our company. Now let's start. We continue to expand our customer base and successfully grow the contribution from our marketing businesses. Our accomplishments generated adjusted EBIT of $387 million in the first quarter. In addition to underscoring our confidence in achieving the high end of our 2022 adjusted EBIT guidance, our performance puts us on track with our 2 billion run rate ambition by the end of 2025. Before Marcel walks through the enhancements we've made to our reporting disclosures and does a deeper dive into our Q1 performance, I'd like to take a few minutes to outline the strategic themes from the quarter. Teams in each of our markets continue to advance our strategy, which is built on our unique supply advantage, which is embedded across our marketing business. We continue to advance the integration of great companies we welcome to Parkland, last year. In parallel, we successfully managed the impacts of inflation while optimizing margins. During the quarter, we continued to advance our retail initiatives. We added 37 on-the-run stores and grew our journey membership by over 10% from Q4. Yet again, driven by proactive sales efforts and strong volumes and margins, we continue to prove the strength and resilience of our commercial business. As an example, as residential customers and new home builders transition from furnace oil, we grew volumes in our Eastern Canadian propane business by almost 15% versus Q1 last year. We see green shoots of the tourism industry and during the quarter, we secured marine contracts for over 130 million litres per year, spanning the international cruise lines and the provincial ferry sectors. As you know, we are committed to leading our customers through the energy transition, helping them lower their environmental impact. Our activities are far-reaching, and I'd like to draw your attention to one highly innovative accomplish from our renewables refining activities in Burnaby. Recall in 2017, our Burnaby refinery became the first in North America to co-prost biofeed stocks using existing infrastructure. We extended our leadership in Q1, delivering a world first by co-processing tall oil. This feedstock comes mainly from pine trees and is a byproduct of the pulp mill process. Ryan will talk about this later. During the quarter, we benefited from last year's U.S. and international acquisitions and closed our previously announced purchases of Previer and M&M Food Market in Canada. Each transaction advanced our strategy to further develop our platform, diversify our revenue streams, and strengthen our customer offer. Recall that we effectively executed two years of acquisitions in 2021. On the last call, we estimated that we could generate $80 million of synergies by 2024 on the $200 million of acquired EBITDA included in our guidance. We are now focused on integrating these high quality companies capturing the synergies, driving organic growth opportunities, and are reducing our leverage by slowing down acquisitions. Consistent with our commitment to deleverage, we've decided to defer our option to acquire the remaining 25% of Sol in 2022. With a record Q1 performance, 2022 is shaping up to be an exciting year. I'll now pass it over to Marcel to discuss our results in more detail.