Aimia Inc. (AIM) Earnings Call Transcript & Summary

Good morning, and thank you for joining us today. My name is Joe Racanelli, and I'd like to welcome you to Aimia's Annual Meeting of Shareholders. Today's agenda will be as follows: Rhys Summerton, Aimia's Executive Chairman, will deliver opening remarks and then answer questions from investors here in Toronto as well as those joining us online. For those asking questions from the room here, I'd kindly ask that you introduce yourself before posing your question. At the conclusion of the answering -- the question-and-answer session, we will then have the formal portion of the meeting. And for those who yet haven't submitted their proxies, voting will be limited to those in the room with us here in Toronto. So with that, I'd like to turn it over to Rhys Summerton. Please go ahead, Rhys.

Thanks, Joe, and good morning, good afternoon once again. We've had our quarterly results call already this morning. So you might be hearing from me twice today. We've got -- I'm very happy to say we've doubled our attendance for this AGM, which was part of Joe's KPI for the year. So well done, Joe, and welcome to our shareholders. Our auditors are here, our Board of Directors is here. So we're very happy to have a good turnout here in Toronto and as well as online. So if you're online, happy that you joined. So I thought what we would do maybe 15, 20 minutes, just go through the way I see Aimia as an investment opportunity. And we've based this really on the Chairman's letter, which we wrote a couple of weeks ago and the opportunity set going forward. So there's a bit of new information in here, and we'll also take a look at the past as well. So why is this such an interesting investment opportunity? Why did I get involved about a year ago? And why did we pursue Aimia so doggedly some would say, and eventually get to this point. Well, if you think about public markets, we're going to talk about this a bit more. Public markets, there's been this massive move from active to passive. And companies benefit from the transfer of funds from the thoughtful to the thought list. And that's basically the move from active to passive. That's what's happened over the last 10, 15 years. And that's left all these orphan companies all over the world. And we think Aimia can provide a good home for some of those orphan companies. Permanent capital, which is the second point, is the way to invest in those opportunities. You want your capital to always be there so that you can execute on it. And then what makes Aimia even more attractive is that it has these structural advantages, which many other permanent capital vehicles simply don't have. So we're going to discuss those 3 points through this presentation. I'll go over to the next slide, which you'll see there, just a summary of what's happened to public markets. 1970s, passive investing, index investing started to get popular, went from 5%. It's now at 55% of all money is managed in a passive way. If you're not big -- if you don't have big market caps, you get left behind, you don't get investors following you. It's particularly bad in the U.K., for example, where you don't even have much broker coverage because of some of the changes in regulation. And that is going to continue. That's going to go to probably 75% from active to passive. So passive is going to be the dominant way of investing that leaves all these orphan companies. If you just value a company on net asset value, about half of the small-cap AM sector in the U.K. trades below NAV. Globally, there's probably 5,000 companies that fit into that bucket of companies that trade less than the net asset value on the balance sheet. Now I'm not saying that's the way to value all companies, but that's the opportunity. It just goes to show how many opportunities there actually are out there. So let's just stop for a second and think about the 3 buckets of the way I see Aimia and the opportunity. And if you think of Aimia in this way, you can understand the opportunity quite simply. So one, we've got cash. We worked for the last year getting to this cash position. The way we've got there, we had this business -- a good business in Italy called Bozzetto Specialty Chemicals. We sold that $267 million plus. Those proceeds will come in. We can take that money. We're going to settle the debt and then we're going to have a cash pile left over, which we'll take you through a little bit later on. So that's the one bucket of value. The next bucket of value is this unique holding, which is Cortland. So Cortland has been an investment that was made in the past. When we came in and got involved with Aimia, we could look with a very unbiased view at what the good opportunities were and weren't. And we are fairly optimistic that Cortland can become quite a strong platform company, where you can add acquisitions on to Cortland and create this global distribution business with manufacturing in India. And then the third bucket of value is the $1 billion of tax losses. We're going to discuss that in a bit more detail. But we are completely focused on utilizing those tax losses. And there's different ways that we're going to do that, and we'll take you through that a bit later on. So those are the 3 structural advantages. If you take virtually any other permanent capital vehicle that's out there in the market today, and the reason I'm so excited about Aimia is that none of them actually have these components. Some of them might have a bit of cash. They might have operations, they might have land or property. But what they don't have is all 3. They don't have cash, they don't have a good operating business and $1 billion of tax losses, which will provide a tailwind for us. But if you speak to long-term shareholders of Aimia, they suffered a long time and suffered is the operative word because there's been mistakes that have been made. Now that's before our time, we were involved, but we can learn from some of those mistakes. And I think that's the kind of takeaway message from it. From 2017 to 2024, there were really poor investment decisions that were made. So I asked the question, why were they made, and we'll discuss that. Value was destroyed. I think in the last 7 years, there's been 6 different Chairman or CEOs of Aimia. So it's kind of running at 1 a year. So I've kind of made it to the second AGM. So I'm probably in office for longer than the average at this point. But I intend to do it forever. And we hope to stop all of this, this change in leadership, change in the turnover of the Chairman or CEO. The other problem that was in the past is there wasn't really an alignment of interest between shareholders and the management of the company. So there was kind of cross shareholding. But what you didn't really see is that coming through in the way the company dealt with shareholders. To sum it up, I would say shareholders were never put first. And so what we want to do with Aimia going forward, what we have done thus far is shareholders come first in the way that Aimia operates and invests. The tax losses haven't been utilized and particularly [ Erksam ] is this bottom bullet point, which $30 million was spent on shareholder activism, some of it fighting members of your current Board. So that was a complete waste of money. It should never have happened, but we've got to this point now, and we have to learn from those mistakes. Just to touch on some of those unwise investments in the past. The 2 that I've singled out here, Kognitiv and TRADE X. TRADE X is particularly interesting. This was a business that was involved with trading vehicles cross-border. Aimia invested $78 million into it, and they got -- Aimia got 0 out. This went into receive the [indiscernible] 2024. There wasn't much to get out of that business. What was the problem with it? There wasn't a significant cash flow. There wasn't cash balances on the balance sheet. These were really investments that were very, very speculative. Kognitiv, slightly different story. But even then the loss was from $110 million getting out $10 million. The cash investment was $43 million. So $43 million, you got out $10 million. It was tremendous shareholder destruction coming through from Kognitiv. Again, another speculative investment. So what you've got now is a situation where if you became a shareholder in 2005 to today, you've probably lost about 89% of your money over that period of time. And you can see on that graph, that's in market cap terms. It IPOed at $2.5 billion. And today, our market cap is around $250 million. So that shows you the kind of quantum of the loss. So share prices reflect what's happening in underlying business, and that's exactly what's happened in Aimia. So we've learned from the past. We studied that. We're not hiding behind anything that's happened in the past. That's all good. We've spent the last year rectifying it. So why can we be optimistic now? Last year, when I got involved, we said there's a 3-step strategy. Step one, we really wanted to focus on reducing the Holdco costs. The next thing we want to truckload the discount that Aimia traded to its book value. And then the third was getting ready to make investments, reviewing the portfolio. We've done all 3, and we'll talk about how we take that forward. But before that, I wanted to just touch on something that's very powerful, and it's over here and it just shows you how things have changed from the past. And it's the Board and leadership. So we have the Board with us today. You'll notice that the Board is made up of now 5 individuals. Those 5 individuals have tremendous experience in different parts of not only investing but also other leadership roles. So they hold us who are the executives to account, and we appreciate how they have -- they've really worked very well over the last year, and it's a very cohesive Board. But they've done it, and we've actually saved about $1.3 million in costs with the Board that we have. So in the past, the Board used to be much bigger. We're now a smaller Board, but very effective. Importantly, though, there's an alignment of interest here. When you look at the Board, we represent about 42.6% plus of the shares in issue of Aimia. So the Board is completely aligned with the investments that we're going to make, which is unprecedented in the history of Aimia. So we've got that right. I think the Board fees are probably the lowest they've been in a decade. And like I said, they hold us to account to make proper investment decisions. We really have put the history behind us. Now as we go forward, I showed this slide before, which is the change of the public market landscape. So just a reminder, there's lots of these companies that have been left behind, they are orphaned, how are we going to take advantage of it. We're going to target companies that are not only undervalued, but they also have other criteria, which is super important. They have to have cash on the balance sheet and they have to have cash that's available for Aimia to deploy. So the beauty of that is we have cash at the center. We then make acquisitions of other companies that have cash as well that actually builds up Aimia's cash balance. And important to note, we're not interested in paying massive premiums for these companies. We are focused on picking up the orphans that are out there that are high-quality businesses that are completely forgotten and irrelevant by the market. We want to be the home that they choose to be a part of. Now I thought what I'll do is give you some examples of the targets that we've been working on for the last year. These targets are really interesting. We've covered up the names of them, but you might be able to work some of them out if you really shop. But what you'll see is a couple of points. One, look at the market caps that's in Canadian dollars. We don't have that on the slide, but rest assured that's in Canadian dollars. So they're kind of small companies. The $150 million down to about $85 million. What you'll also notice they've all got cash on the balance sheet. So we're not buying anything with debt. The problems of the past with Aimia is they made acquisitions with debt, and we actually see that repeating itself with other permanent capital vehicles that are using debt to gear up their businesses. We want cash. The other point that I'd note is the valuation that we're paying for these things. They're very high free cash flow generators, particularly on a forward basis. The market doesn't appreciate them, we will appreciate them in the home of Aimia. And then finally, on the right-hand side, we've got this tax losses usable. And you'll see that at least 2 of the 5 targets that we have we will start to explore the opportunity to utilize the tax losses that Aimia has. So the way to think about the investment is, and this is what I wrote in the Chairman's letter as well, is when you see us making an acquisition, don't jump to the conclusion that because it's listed not in the U.S. or Canada, that we cannot use the tax losses. Often, these companies have subsidiaries that are in those markets that we can start using the tax losses potentially. And that's the way to think about it. We're not paying premiums for something where the seller gets the benefit of our tax loss. We want to pay fair value so that we can get the benefit of the tax loss. So those are some of the targets that we've mentioned. Now that's the first bucket. Remember, lots of cash, use some of the cash to make acquisitions and take advantage of the mispriced opportunity. The second bucket, remember, was this unique asset, which we have in Cortland. So I'll touch on Cortland briefly. You would have seen the results this morning in -- but a bit of history. Remember, Cortland is the merger of Tufropes out of India and Cortland in the U.S. And what we've observed is that Cortland has some strengths. It's got this huge footprint. It's got good manufacturing out of India. It's got a wide market that it can go after in very disparate sectors. So that's all very positive. The reason that it hasn't achieved what it set out to is because I think it had what I call a clumsy management structure. And what we've set about doing in the last year is actually fixing that. And I think we'll be well placed to take advantage of that in the second half of the year. You'll see on this slide, it just talks about the primary markets, some of the competitive advantages that it's got. But I'll draw attention just to the last bullet point is this low-cost manufacturing in India. So the way we see it, and you can probably see it better on the slide, is the way we want to develop Cortland is you have manufacturing out of India and then you have the spokes coming off, and that will be distribution right around the rest of the world into all the different sectors and geographies. So that's going to mean that some of Cortland's cash flow generation will go back into making acquisitions and growing the platform. So there's opportunity right throughout the world. You can buy some really interesting opportunities to take the manufacturing out of India and distribute globally. Already, we have good agreements coming through in places like Brazil, Chile and even the UAE. I think many don't really know that much about Cortland, but it's a huge manufacturing operation. It's got 180,000 square meters of manufacturing. 4 of those facilities, you'll see are in India. But we've also got Anacortes and Houston. So on the bottom right, you'll see we've got the Houston facility now part of the management structure that we've changed is we're actually moving management to be based in Houston, which before it wasn't like that. They were based all over the world. And we think that's going to create a big opportunity. Wolfgang has taken over, and we've got tremendous faith in them. The third bucket are the tax losses. So everybody is probably aware we've got this $1 billion, $1.1 billion of tax losses. It's split between capital losses and operating losses. Operating losses split between the U.S. and Canada. Now the trick is how do we utilize those losses, and there's different ways we can do it. We've already been approached to use some of the capital losses in different transactions. So we'll look at each one and weigh it up to see if there's an opportunity there. And then the operating loss side, we've shown how we're going to start utilizing those with the acquisitions that we make, and that will gain momentum overall. Welcome. We have another shareholder with a 300% increase over last year. So this slide is an interesting one because what I wanted to show here is just the value potentially of that third bucket, the value of these tax losses. And this supposes that or assumes that we use 100% of them and they're used fairly quickly. But what you'll see is that the actual value of that is about -- it's a close proxy for the market cap of Aimia actually. It's about $215 million, $214 million. That's the value of them. Like I said, I think we have every opportunity to use them. And I think what you'll see as we make these acquisitions that they start to be drawn down on. In fact, the Bozzetto transaction will start to utilize about $40 million of the capital losses coming through. So what does Aimia look like? Once the sale of Bozzetto goes through, so we expect that to happen end of May, the book value will show about CAD 3.66 per share. But remember that book value is only made up of the cash, the value of Cortland, which you can say is either understated or overstated depending on how you view it. And then the third part, it ignores the value of the tax assets. So we said the tax assets are worth about CAD 214 million roughly when they're utilized. So that is not included in this number. So that's why I say when you think about Aimia, the tailwinds you've got to Aimia growing going forward is that you've got these tax losses, which will feed into the growth in net book value per share. That's why I said in the Chairman's letter, I said we want to be measured in the long term of the growth in net book value per share. So I won't go much further summary. We are -- we've made progress in the last 12 months. It's been a lot of hard work getting Aimia to the point where it's actually once again a useful permanent capital vehicle. Sale of [indiscernible] should go through the end of the month. The notes will be redeemed. We'll see how much cash we have left after those notes. But in the quarterly results this morning, we did give a rough guide to how much cash we're going to have on the balance sheet available to make investments. We're going to continue with the share buybacks. We've got the existing authority in place. We're applying for new authority, which will come through in June, hopefully. And then the other part is we're looking to list Aimia as an additional listing in the U.K. as well in the summer. So I'll leave it there. We're open to any questions. We have the auditors here as well. So we're happy if they want to take any of the questions or you have a question for them. But...

We open up to the floor. We have a number of questions that we've received online from people participating on the webcast. First question relates to the Board. Have you introduced any new guardrails to prevent some of the mistakes from the past?

I mean the best guardrail is that 43% of the shareholding is controlled by the Board. So nobody wants to lose money, and we're going to make the best choices possible. But on a more practical basis, we've implemented a fairly rigorous investment process where any investment has to be approved before we even start building it by the independent directors on the Board. I'm not involved with that. And I think I'm not sure what happened in the past, but this is a truly independent Board who have the interest of shareholders at heart. And I think we're in a very strong place now. Certainly, when we -- when I joined a year ago, that process wasn't in place and now it is.

What percentage of the cash after the net proceeds is arrived at will you be deploying towards new investments?

Well, over time, the way I see Aimia is for us to get to scale, what I would like is to have 4 or 5 investments, which are generating $20 million to $30 million a year, those 4 or 5 investments will be upstreaming $120-odd million a year to the Holdco. So we should never be in a position where we don't have cash to make further acquisitions. If cash is the oxygen of a business, then cash is like the blood of a serial acquirer because if you don't have it, you're stuck. And the situation that Aimia was in is it actually had debt at the Holdco, which is the worst position to be in because now you're relying on the underlying business that you can't do anything, you can't make acquisitions and you have to make disposals, and you don't get the best price for them.

Okay. The company rushed into a couple of acquisitions, namely Cortland Tufropes as well as Bozzetto. How are you going to prevent that from happening going forward?

I can't really speak for the past. I mean I don't know what happened -- what the motivation was. I can only speculate on that. But I would say that the companies that we're looking at, I've obviously known a lot of those companies for a long time. And even though we might not have an investment in them, I've known those companies for a long time. So we have a relationship with them. This is not -- we're not looking at anything new that we have. In some cases, we might be presented with new things, and we'll obviously do the full due diligence. But you want to limit the potential for things going wrong. And so when you're buying things that are low in valuation with cash on the balance sheet and generating cash, you limit the mistakes that you're going to make. I'm not saying you're not going to make them, but you just limit those 100% write-offs that we've had in the past with like TRADE X.

Okay. Is there any consideration to introducing a dividend or issuing a special dividend for common shareholders?

No, no. We're using as much cash as possible to make acquisitions. We can find things that are -- we think we can deploy that capital. If we can compound at very high rates, we think the shareholders will be happier with that than the dividend.

Yes. I'm definitely -- once the sale is made, how much cash will you have...

Good question. So it depends on the notes, but we've got -- do you want to repeat the question, Joe, it doesn't come out clearly.

Once such sale is made...

It's not coming clearly through the market.

Maybe you can hear me.

Yes.

What's the cash position at the end of the Bozzetto sale that you'll have?

Yes. I just wanted to note online to hear the question because it's a good one. So in our quarterly results, we disclosed that depending on what the notes -- what the take-up is of buying back the notes, we'll probably have around $180 million, $185 million of net cash available.

And how much -- how much debt will you have?

So we'll have the prefs, which are about $40 million, which -- and then we'll probably have about another $50 million of debt at the Holdco. But we will offset that with $180-odd million of cash.

Rhys, representing the U.S. shareholders. I have a question about the effects on the vehicle from the Bozzetto sale. I'm not sure if you guys structured it as an asset sale or a sale of stock. And I'm not sure which would be more impactful, but my concern is something that I'm sure Steve is aware of with PFIC, the possibility of it being deemed in the U.S. as a passive foreign investment company. So I'm just wondering where you guys stand on that, if you're willing to let it become a PFIC if it has to be or if that will be mitigated.

Yes. Thanks, Chris. Steve has been looking at that exactly. I'll let Steve answer.

Chris, yes, so we are looking at that as there are certain rules around PFIC when depending on the timing of the transaction in the year. First of all, it's the sale of shares. That's the transaction sale of shares. And we have looked at the PFIC. We're not concerned with it in terms of a '26 event. Obviously, it's on our horizon going forward. And our intent is to stay away from it.

Thanks, Chris. So I'd like to remind everybody who's participating via webcast if you do have questions, just enter the question-and-answer feature on the webcast platform.

Vince Anderson from Calgary. Thank you very much for hosting this meeting. You mentioned in the Chairman's letter acquisition of small-cap companies, particularly in the U.K. as a source of opportunity. What is the conflict resolution framework between Aimia and [indiscernible] ? And should you find an acquisition that fits both buckets, how would that be handled?

Yes. That's a good question. One we've dealt a lot with at the Board. So I kind of referenced it earlier, the Board has a process that they now follow that anything that we look at has to be approved even before we buy any stake in the company at an Aimia level. Now the opportunities that I had on those slides, those opportunities are things that we don't actually have meaningful or we don't have an investment in at the moment. Now there is a difficult position because the question should really be, if you don't have an investment and why not. So we will have to thread that needle. But at the moment, many of the things that we're looking at don't really fit into a fund structure. So let me just explain that. What we find in our fund is we own companies and sooner or later, they get bought out. So I think in our portfolio last year, 4 of our companies were acquired. We then have to accept those offers and the buyer then gets the benefit to it. The beauty of Aimia, what's -- why I'm so optimistic about a permanent capital vehicle is that you don't have to worry about that because we can actually be the permanent holder of these companies. Secondly, when we are making an investment, so some of those ideas, you will see that there's an EBITDA multiple and then a free cash flow forward multiple. Free cash flow forward multiple looks very, very attractive compared to maybe what the EBITDA number is. And the reason it looks so attractive is because by being private, there's cost savings that can actually happen. And that's the difference between what makes the investment kind of so to what makes it a really attractive free cash flow generator. So in one case, one of the companies might be on a 10% free cash flow yield now, but literally by going private. So 10% free cash flow yield doesn't really get us excited. But take out the public being the cost of being public, the free cash flow yield goes to like 17%, 18%, that then starts to be really attractive. So it doesn't really fit in our portfolio. But we have these guardrails in place that if there's a conflict, the independent Board will have to opine on it. If I was sitting on the other feet, like I said, I think the question would be why aren't you owning those companies instead of -- and remember what I said is in the event that we do buy something that we already own, we're not paying premiums for it. So we're not getting any benefit. I say not getting any benefit from selling to a buyer that's not paying a premium. So it doesn't -- this is not a case. I mean, we can do things much easier than being a public vehicle.

Rhys, when you acquire public companies, what do you intend to do with the management team? Do you intend to keep them or replace them?

Yes. So I think invariably, the companies we look at have got sound management. I wouldn't say they've got always outstanding management because apparently, they only exist in the U.S. But we only -- we find companies with like sound management. And we have to keep them. So while we want to make the capital allocation decision, we don't want to get involved with running -- I don't know, a steel company.

How do you think about potential acquisitions and their ability to handle recessions or economic shocks? How does that factor in?

Repeat the first one?

When you're thinking about acquisitions, how do you factor their ability to withstand economic shocks or recessions?

That has to come through the valuation. We need such a big margin of safety before we buy anything that it has to take into account a lot of volatility -- economic volatility. But I would say that in the markets that we're looking at, we're not buying things that are -- after a long run-up in strong economic activity, buying things where these economies are kind of borderline recessionary anyway.

Last question from shareholders online. Are you looking to buy great companies at fair prices or fair companies with great quality?

Well, I know that expression, but we're actually looking to buy companies that underneath the layer of -- I kind of often describe it as everybody has a 6 pack. Just often, it's covered by a layer of fat. And what we're trying to buy is those companies with that layer of fat that we can take off. So we will send the company to the gym or get them fit. You'll start to see the 6 pack later on. That's what we're trying to buy. So underneath that layer of fat, there's actually very high-quality businesses, and that's what we're looking for. That's a good question. Good.

One more.

What sort of internal rate of return are you looking for in these acquisitions? And how would Cortland compare to the 5 companies that you brought up earlier on your slide?

So I think if we can't find things that are generating plus 20% returns, then I don't think we should be doing this. That has to be the hurdle. I would hope that we can exceed that, but maybe I'm just getting a bit carried away. Markets are tough. There's disruption. We're trying to buy things that are either a beneficiary or agnostic to disruption. So I would hope that we can do something like that. We'll have to restructure the balance sheet and allocate the capital. But that's what I would think that even what our hurdle is generally is around 20%. So I would hope we go above that. I think if you look at the opportunity in Cortland, Cortland is one of those companies with like a double layer of fat covering that 6 pack. It needs a lot of work to turn it around, but we've already started it. And we've made the changes. I would say that if -- the one thing we don't have is a valuation for Cortland. We've got a balance sheet value. And that is what it is. But if I had to buy Cortland, would I buy Cortland at the balance sheet value that we have, knowing what I know, absolutely. And I think that's the way I think about it. So if Cortland can deliver even within 10% of what we budget for that business, I think it will be a very attractive business. We'll fit right into that -- those 5 targets that we have out there.

One last question just came in. With the share price trading at a significant discount to NAV, wouldn't a substantial issuer bid be one of the best ways to deploy cash?

It depends on what we can do with that cash, clearly. One of the easiest things to do is a buyback. And once you do that buyback, you say, well, what then? What are you going to do then once you've done it? You're going to sit with a business that's effectively Cortland. And I think shareholders would be better served. Certainly, I'm a shareholder, and I believe that we'd be better off being more diversified and using the cash to buy really attractive things. And eventually, I think we'll get a re-rating in the underlying. But if we don't, we'll continue with the buybacks, and that's also fine. There's only less than 55% probably of free float around. So I wouldn't -- it would take less than sort of $150 million to buy the whole free float.

So regarding acquisitions, how important is it to acquire control? In the past, it seemed to be a requisite. Now you're talking about a path to getting controlling interest. Can you just elaborate on that, please?

That's a really good one. Good question. I think we want control ultimately in the companies that we look at. Do we need control immediately? I don't think that's a prerequisite. If the companies that we look at, if they want to follow sort of the playbook of being more efficient, perhaps asset disposal, et cetera, I would think we don't necessarily need outright control. But bear in mind, there's a huge cost-cutting opportunity to get rid of being -- the cost of being public. And so most of that time to go private, you need to take control over the assets. So I would imagine that ultimately, we get to owning 100% or close to it in everything, but not immediately.

And how would you align the management of an acquired company once you take them out or basically they're no longer public?

In other investments that we've been involved in, we believe in something called radical autonomy. And what that means is that each company needs to run itself. And importantly, management needs to be incentivized on the performance of their business. And that's what we'll continue to do. So any company that we acquire, that management team will be in a better position than they would be if they were run independently in a public company because they'll be incentivized only on their business.

If you do get a secondary listing in the U.K., does that mean that your investments or acquisitions will be only in the U.K.? Or could you potentially look in Europe as well?

I would say it's unlikely that we concentrate in one market. It's most likely that we concentrate where things are attractively priced. So Canadian investors remember, [ Peter Kindle ], there's always something to do, finding markets that have really been attractive for the last year. And that's kind of what the U.K. is, is that it's just been attractive, not for the last year, but for the last like 5 years. It just never rerates. So private equity keeps coming and buying these companies out and trade buyers. We want to be part of that. There's other opportunities in Europe, definitely. There's opportunities in Canada. There's opportunities. I think that will happen in the U.S. over the next couple of years, not now. We can't find anything that's really attractive in the U.S. But over time, we know the markets obviously go through these cycles and there'll be cheap stuff on offer that is attractive and high quality in the time ahead. And that's what we want to take advantage of. We're going to be always having cash to be able to make those acquisitions.

That's it for questions, Rhys.

Well, good questions. So we'll take a 5-minute break, and then we'll do the formal part of the meeting. Thanks for attending, and thanks for the questions, everyone. We'll come back in about 5 minutes. [Break]

So we're going to be starting our meeting, the formal portion of it.

Good. So we'll go through this a bit of haste. Good morning, ladies and gentlemen, and welcome to the Annual Meeting of Shareholders of Aimia. My name is Rhys Summerton. I'm the appointed Independent Chair of this Annual General Meeting. My appointment was made pursuant to Section 7.14 of Aimia's bylaws. Today's meeting is being held in person. Sitting with me is Mathieu Giguere, Aimia's Chief Legal Officer and Corporate Secretary. The meeting will now come to order. In accordance with Aimia's bylaws, I will act as Chair of the meeting and will ask Mathieu to act as Secretary of the meeting. And [indiscernible] , that's right, of TSX Trust Company to act as scrutineers. Before we begin, I would ask that you please turn off your phones and other electronic devices so you do not disturb the meeting. The scrutineers have provided proof of mailing of the notice of the meeting and related form of proxy and management information circular. I direct that a copy of the proof of mailing be kept with the minutes of the meeting. The corporation's bylaws provide that a quorum of shareholders is present at a meeting of shareholders if 2 or more persons holding not less than 25% of shares entitled to vote at the meeting are present in person or represented by proxy. The scrutineers have advised me that we have such a quorum. I direct that a copy of the scrutineer's report be kept and the minutes of this -- be kept with the minutes of this meeting. With that said, I declare the meeting is properly convened and constituted for the transaction of business. This morning, we are joined by the following directors and the following members of the management of Aimia. So we have Steven Leonard, Director, President and Chief Financial Officer; Mathieu, who we've already introduced; and Joe Racanelli. We also have our Board of Directors with us, which we welcome. Thank you for attending. Voting may only be conducted by shareholders in advance of the meeting or by registered shareholders or duly appointed proxy holders at the physical meeting in person. To the extent shareholders have voted in advance of the meeting and do not wish to change their vote, they do not need to do anything. For those voting in the meeting at the approximate appropriate times, I will ask you to compile a ballot as it pertains to each of the sets of business. Preliminary results will be announced after voting closes for all matters, and final results will be publicly available on the company's website and sedarplus.ca. A simple majority of votes cast is required to approve the matters voted on at the meeting. The annual meeting was called to consider 3 matters. We will conduct the votes on all matters subject to voting before us by ballot. On a ballot, every shareholder entitled to vote on the matter has 1 vote in respect of each share entitled to be voted on the matter and held by that shareholder. Ballots were distributed to shareholders -- to registered shareholders who had not previously voted by proxy and proxy holders as they arrived at today's meeting. If you do not receive any ballots, but think that you should have, please raise your hand and a representative of TSX Trust will attend to you. Questions should relate to motions being considered as part of the formal business of the meeting. I encourage registered shareholders and proxy holders to submit your questions at the right moment during the meeting. In order to facilitate the timely completion of the formal business of today's meeting, certain shareholders or proxy holders have agreed in advance to introduce and second the motions on the agenda. I will invite them to do so at the appropriate time. This is not intended in any way to curtail any discussion. Now let's move to the first item of business. The consolidated financial statements for the year ended December 31, 2025, together with the auditor's report thereon, were sent to the shareholders who requested them and are available at the company -- the corporation's website and on sedarplus.ca. I declare the financial statements together with the auditor's report thereon have been received, and I direct the secretary to file a copy of the financial statements together with the auditor's report thereon with the meeting -- with the minutes of this meeting. Moving now to the next item of business on our agenda, the election of directors. The Board of Directors of Aimia have previously set the size of the Board at 5, and Aimia circular sets out a list of 5 directors for election as directors of Aimia until the end of the next Annual Shareholder Meeting or until a successor is appointed. The directors will be voted on individually rather than as a slate. Biographies of the 5 management nominees are included in the management information circular. Each of the persons nominated has confirmed that they are prepared to serve as a director of the corporation, and all nominees meet the qualification requirements for directors under the corporation's bylaws. I ask for a motion and a seconder for the nomination of the Aimia director nominees.

Mr. Chair, my name is Joe Racanelli. I am a shareholder, and I move that each of the following persons be nominated for election as a director of the company to hold office until the close of the next Annual Meeting of Shareholders or until his or her successor are duly elected or appointed. The company's nominees are Mr. Robert Feingold, Mr. Steven Leonard, Mr. Thomas Little, Mr. Muhammad Asif Seemab and Mr. Rhys Summerton.

Thank you, Joe. Would Mathieu Giguere, a member of the executive team, second the motion?

I second the motion.

Thank you, Mathieu. I note that pursuant to the terms of the corporation's advanced notice bylaw, the corporation did not receive advanced notice submission for the election of other directors to the Board. Since no other nominations have been received, nominations are thus closed. Is there any discussion on the motion? As there are no further discussion on this motion, I direct that a vote by ballot be taken on the election of directors. If you voted in advance and do not wish to change your vote, there is no further action required. Any registered shareholder or duly appointed proxy holders desiring to vote in person should do so at this time. If you have not already voted or if you wish to change your vote, please raise your hand so that the scrutineers can have -- can give you a ballot. Will the scrutineers please pass out ballots to those requesting them and collect the ballots when they are done. For those now voting on your ballot, please now mark an X under either for or against next to the names of the nominees for whom you wish to vote for. You may vote for up to 5 nominees for election as director in total. You should print and sign your name clearly at the bottom of the ballot, we will pause briefly now to allow the ballots to be collected. Voting is now closed for the election of the directors of the corporation. While the votes are being tabulated, we will proceed with the agenda. The next item of business for the appointment of auditors. I'll now ask that Joe Racanelli to move a resolution to approve the appointment of PricewaterhouseCoopers LLP as the auditors of the corporation and authorizing the directors to fix the auditor's remuneration.

Mr. Chair, I so move.

Thank you, Joe. Would Mathieu Giguere second this motion?

No, I second the motion.

Thank you, Mathieu. Is there any discussion on the appointment of the auditors? As there is no further discussion, I now call for a vote on the motion before the meeting. If you voted in advance and do not wish to change your vote, there is no further action required. Otherwise, please raise your hand so that the scrutineers can give you a ballot. Will the scrutineers please pass out ballots to those requesting them and collect the ballots when they are done. Are there any other ballots to be collected? Voting is now closed for the appointment of the auditors. While the votes are being tabulated, we'll proceed with the agenda. The last item on the agenda today is the consideration of a nonbinding advisory resolution on the corporation's approach to executive compensation. The statement of executive compensation section of the corporation's management information circular discloses in detail such an approach. The results of the vote are not -- will not be binding on the Board. However, the Board will consider the results of the vote together with other pertinent information or comments from shareholders when considering the corporation's approach to executive compensation. The full text of this resolution is reproduced in the management information circular. I'll now ask that Mr. Racanelli move to approve the advisory vote on executive compensation as more fully set out in the management information circular.

Mr. Chair, I so move.

Thank you, Joe. Would Mr. Giguere second that motion?

I second the motion.

Thank you, Mathieu. Is there any discussion on the motion? As there's no further discussion, I now call for a nonbinding vote on the motion before the meeting. If you voted in advance and do not wish to change your vote, there is no further action required. Otherwise, please raise your hand so that the scrutineers can give you a ballot. Will the scrutineers please pass out ballots to those requesting them and collect the ballots when they are done. Are there any other ballots to be collected? Voting is now closed as it relates to the approval of the advisory resolution on the corporation's approach to executive compensation. We'll now wait for a couple of minutes for the scrutineers to tabulate the votes. We appreciate your patience. The scrutineers have completed the preliminary report. According to the scrutineers' report, the following are the preliminary results of the meeting. On the election of directors, the following individuals proposed -- the following individuals proposed slate of directors are elected directors of the corporation: Robert Feingold, Steven Leonard, Thomas Little, Muhammad Asif Seemab and Rhys Summerton. The resolution appointing PricewaterhouseCoopers and authorizing the directors to fix the auditor's remuneration received majority votes and was passed. The advisory resolution on the approach to executive compensation received majority votes and was passed. As mentioned earlier, final detailed results will be posted on the company's website and on sedarplus.ca. That concludes the formal business brought before the meeting as set out in the notice of the meeting, I wish to thank you for your attending, and I now declare the meeting closed. Thanks for attending.