Alimentation Couche-Tard Inc. (ATD) Earnings Call Transcript & Summary

Good morning, everyone. [Foreign Language] On behalf of Alimentation Couche-Tard, welcome to our strategic update 2026. Thank you for being with us today, whether it's in person here in Toronto or through the webcast. Now I will continue in English. Welcome to our 2026 business strategy update. Thank you for those joining us in person here in Toronto and to everyone connected via webcast. I'm Mariusz Chojnacki, Director of Investor Relations. Today, our leadership team will share our positioning Couche-Tard for the next phase of profitable growth and long-term value creation. We will begin the event with a fireside chat featuring our President and CEO, Alex Miller, and Mathieu Brunet, Vice President, Investor Relations and Treasury. This will be followed by presentations and a Q&A session. We'll wrap up before noon with some closing remarks, and for those attending in person, we will be providing a light lunch. Before we begin, a few housekeeping items. Today's remarks will include forward-looking statements, which are subject to risks and uncertainties. We refer to the following forward-looking statements accompanying this presentation as well as the risk and uncertainties outlined in our financial reporting. Therefore, our future results could differ from the information discussed today. Full details are available in our public filings, and a recording of today's event will be available in the presentation -- in the Investor Relations section of our website, along with presentation materials to follow. With that, Mathieu, over to you.

Hi. Good morning, everyone. I am pleased to kick things off today, and I have the privilege to interview Alex Miller. As we look back at the last 18 months since he was appointed CEO of Couche-Tard. So Alex, when you took over as CEO, I remember you came to me and you said you needed to know a lot more about that Investor Relations stuff and what that actually meant for you. Since then, we've actually spent a lot of time together, working on quarter ends in different projects. So it's been great to know you since then. But now I ensure that many investors will also like to know more about you since you've been with the company for many more years. So why don't you start things off by telling us more about yourself and your career path.

Thank you, Mathieu. Thank all of you for being here, excited you're here today. I grew up in Central Illinois, in a small rural town. I met my wife, Vicki in college. We've been together for over 30 years. I have 3 children, 3 wonderful children, at least most of the time. One is in college now, 2 are in high school. I like to be outdoors. I like to try and stay active. I'd like to golf, I'd like to ski, I'd like to my mountain bike. I'd like to read. From a work perspective, I started after school after I graduated college working for Amoco Oil Company in St. Louis, Missouri. My first job was running 3 convenience stores. I spent my first 8.5 years with Amoco for about 3 years, they got bought by BP in retail, different jobs in retail, category management, pricing, fuel pricing, I wrote a new labor model, I remember, moved kind of all over the United States or several times in the United States. And then I moved to London to BP's headquarters to work in finance, planning, worked on M&A, then moved into what we called alternative energy. So I worked in solar, wind, natural gas liquids, combined cycle gas turbines. And then I moved back to Chicago for my final 4 years working in BP's fuel value chain and their supply and trading teams. Brian Hannasch, our former CEO, and I met in my second job in Amoco. So I've known Brian for more than 30 years, and I worked for him twice in BP and Amoco. We obviously kept up through the years and Brian brought me over to Couche-Tard to -- he had the idea that we had gotten large enough at that time to kind of consolidate our supply and logistics fuel trading in North America. So I started doing that for Couche-Tard. We decided to then do that globally. I then took on a senior operating role. I ran real estate for a while, and then I became COO and here I am.

That's quite the experience in retail actually. It started about 5 years ago for me, working for Couche-Tard, and it's been quite impressive to see how retail is fascinating initially. So if we're reflecting now just on the last 18 months in your career and you in your role, can you give me the top 3 most important things that you have learned since becoming the CEO?

Yes. Mathieu, I think, first of all, just the scale and resiliency of our global platform. I've visited all of our business units every year. And I'm just amazed by quality of our assets, the quality of our teams, the diversification of our teams, how local our teams are, it is just a pretty profound network and platform that we've built. The free cash flow that comes off of that platform is impressive. We're very blessed by that. I think secondly, just the power of being in stores and being with our people, I think it's pretty easy to get chain to a desk chain to PowerPoint slides, really resist that. Our business is alive in our stores. I learn more being in our stores than I do sitting in front of my computer or looking at a PowerPoint deck. I learned from talking to our people, hearing what's really happening, what's working, what's not working, what projects we didn't get quite right and where our focus needs to be. And then I think the third thing I would say is just the pace of change with consumers. It's -- I've never seen just the ramp at change and what's happening across retail, how consumers are behaving. So it's just imperative to stay close to the customer right now, really stay on top of that of what's happening and adapt and adapt quickly.

Yes. And you're totally right. It's been such a changing environment, whether it was customer-driven, the outside environment, the interest rates, inflation, so it's been a wild couple of years actually for us as a company. Now I'm sure there's a question that is on everyone's mind today, but what has not gone to plan that impacted the execution of the 10 for the Win strategy that we presented 2.5 years ago?

Yes. I think I'll touch on 3 things. I think first, we didn't anticipate the consumer softness. The environment, obviously, COVID never been through COVID coming out of COVID, the inflation. We hadn't experienced inflation like that in decades. Many of our people and many of us had never experienced inflation like that and just the pressure that it put on consumers, their consolidation of trips, their pursuit of value. We didn't anticipate that in what we built intend for the win. I think secondly, just category headwinds or category changes. I guess it kind of gets to the changing consumer. I've been in this business for a long time. And usually, categories would move 1% or 2% year-on-year, up or down, seeing categories move up or down 10%, see it happening very quickly. That continues today. Again, I don't think we anticipated that. I don't think we'd necessarily change quick enough. I think we've learned from that. I guess third, I would say, just our food execution. I think as we reflect when we first rolled out our food program, it was too complex. It had too many SKUs. The processes weren't tight enough, we need thousands of people to execute anything we give them. It has to be tight, kind of has to be bulletproof. It was too complex when we initially rolled it out.

I mean those are quite good learnings, I think, from what we've seen over the last 2.5 years. But if we -- let's continue to expand on the same topic for a moment. There's also been a few successes as well as part of 10 for the Win. So why don't you tell us what you're the most proud of from the strategy that came out?

I think there's a lot of successes and there's a lot of things I'm proud of, Mathieu. I think let me first just start with our people and our operating metrics. We're a retailer. We focus on execution coming out of COVID. It was very difficult during that time. We have just improved our core people metrics and our core operating metrics, just quarter-over-quarter really ratably, and we're back to being Couche-Tard and our people metrics are better than they've ever been. I think secondly, just our network growth and discipline. You saw in the video there, 100 new stores. We have a machine, real estate and development team that is a machine. We are building sites. We are doing it with our normal discipline. And just Total. It's a big transaction for us, complex transaction, and we're integrating it. We're ahead of our model plan. We put on the business when we acquired them. I'm really proud of the progress we've made there. Thirdly would be digital transformation. Candidly, 18 months ago, we were waffling a bit. I think we were behind in 18 months, I think we've leapfrogged and we're ahead. And you're going to hear Erica and Ed talk about that later today. I guess fourth would be a food reset. We have learned from our mistakes. We've gone back, we've reduced SKUs. We've tightened our process, and we're in action now, and Louise and Hans-Olav will talk about that later today. Fifth, our cost discipline and reinvesting. We delivered on our agenda. We've saved hundreds of millions of dollars. We've performed pretty consistently at CPI, absorb this inflation, while investing materially in systems and platforms. And just last is culture as a performance engine for us. Our culture is so important to who we are as a company. I think our culture is as strong as ever right now.

Yes. It's -- I think those achievements really make my life easier in Investor Relations, that's for sure. It's certainly been great the last couple of quarters to be able to showcase the successes that we've had and also the momentum that we've been building. So you kind of finished on culture. So I want you to kind of keep that thought and talk to us about the culture. I know you've told me a few times, one of the reasons you were appointed CEO is because you were the one that was going to protect that culture. So talk to me about what makes the culture of this company so special and unique?

I think first is humility, being humble. We are a team of 150,000 people. We are all together. We are out in stores. We are talking to each other, humility in everything we do. I think second is our values. I'll talk about those a little bit later, but we live by those values every day, and we all share them. I guess third bit of our culture is just absolutely being customer obsessed, focusing on the customer and everything we do, listening to them, adapting to them, that's our culture, Mathieu. I'd say the second thing is our decentralized operating model as a structural moat. That model, our founders put in place has served us so well. We have 30 business units around the world. They are local. The people that work in those businesses come from those geographies grew up in those geographies. They are close to the business. They own the business. I recall maybe 6 months after Filipe joined and he and I were just sitting around talking and he said, he goes, the thing that just amazes me about this company is the ownership of their P&L and the ownership of their business. That is our decentralized model. That's pretty unique.

I would definitely echo everything that you said. And I think a personal example for me is how everyone came together as one team as we were preparing for this Investor Day, right? I mean it was -- I mean everyone was very happy to chip in. So that was great. But other than preserving the culture, are any other points -- any other points of emphasis that you have focused on?

Yes. I think a few things, Mathieu. I guess, first, I'm sure the team is pretty sick of me saying now less is more, less is more, less is more, something I've lived by. I've managed by I fundamentally believe in. What does that mean? It means focus. And I think with the company of our size and our scale and the complexity that's happening around us, it's even more important. Less is more focused on what is priorities and get after it. We know when we focus this organization, they can deliver amazing things. I think secondly would be customer-ready operations, just we are an operating company. We have to be ready for those customers. It is the most differentiating thing we do. I'll talk on that a little bit later. Digital and supply chain enablement, that is our scale. That is deploying our scale. That is things smaller, single-site operators. They don't -- they can't do that. Those are advantages for us. Those are how we utilize the scale, and we are working on that. I guess last, just retention and engagement back to our people, Mathieu, our people are who get it done. When we're turning over people, we have to retrain people, and that customer ready suffers, really getting after and continuing to improve on intention and engagement is always going to be a priority for me.

Great. Thank you, Alex, for the amazing opportunity to have this interview with you and for providing us with a better understanding of your achievements at Couche-Tard and also what your priorities have been as the CEO of this great company. Now I know that investors and analysts are eager to learn more about where you're taking Couche-Tard into the future. So before we start the presentation, why don't we just take a quick moment and you tell us why it was important to bring everyone here today and present the company's outlook and the strategy for the future?

Yes. I think I'm just incredibly proud of what's been built and what we're continuing to build. We are going to grow this business. We have great people that are highly motivated, Telling all the time. You asked me about people all the time. And I always tell him I said we need more great people, but I fundamentally believe we have stronger people than we've ever had. We have phenomenal leaders up and down in this company. And I'm excited for the future. I'm excited for you to get to be with some of our leaders and to hear about where our focus is.

Great. Alex, thank you so much. The mic is all yours.

Thank you, Mathieu. I'm excited. I hope you can sense to share with you our strategic update. I'm going to take you through just a bit of our history because our history is important to us. I'm then going to pivot to kind of our vision of the future and the things we're paying attention to. And then we'll bring it back to the strategy. I'll introduce the strategy and then several of our leadership team will go into greater detail around that strategy. This is a condensed time line of our history. As the video said, our founder started this company with one store in Laval in 1980. They grew in Quebec, they grew into Ontario, and they continued to grow West into Canada. Our founders would tell you a lot of people told them not to go into the United States. A lot of foreign companies failed. A lot of Canadian companies failed going into the United States. If you know our founders, they believed in their model. They believed in themselves, and they entered the United States in 2001 when they bought big foot oil. They doubled down on that bet when they bought Circle K was a huge transaction for us at that time, a couple of years later. Then they entered Europe. They were -- I remember they had been talking about entering Europe and they found the right opportunity. They bought Statoil in 2012. I think maybe it will help if I tell you a little story to try and underpin who our founders are and we're up really is our culture. I joined Couche-Tard in January of 2012. Brian hired me to do the fuel role. I lived in Chicago, Illinois at the time. My kids were in school. I was supposed to move to Phoenix to do my fuel job. But I couldn't move until the summer because my kids were in school. So Brian said, I want you to go work in one of our stores before you move to Phoenix. So I went to work for out of store in Oakland, that's in South Chicago. And Brian told me, he said, get in there, learn what we do. He goes, if something comes up that is relevant of why I hired you, he goes, "I might reach out and ask you to do something". I don't think it's been 2 weeks and he sent me an end. He called me, said, I'm going to send you an NDA, go sign it and I'll call you. So he sent me the NDA, I signed it. It was Statoil. They were working on acquiring Statoil. So I spent months working in our store in South Chicago. And at night, I was in the data room reviewing fuel contracts, working on a model. I ultimately wrote a paper for our Board suggesting that the fuel margins were sustainable in Scandinavia, turned out I was mostly right, luckily. I then went to -- in the early summer, Brian invited me to go with Elaine himself and Ray Pare, who at the time was our CFO, to go ride sites in Benelux on another file and -- and that was really cool for me because I got to know Elaine and then and Brian a little more. And all we were riding the sites, they were pleased with the assets we were buying. They were holding on price and pleased with what we were paying on price. But what they talked about the most of why they were doing this transaction was the leadership team they were acquiring. They fundamentally help that for them to enter Europe, they had to get a great leadership team because they knew we weren't going to bring Canadians or Americans over to run our European business. I sit here 13.5 years later. And Hans-Olav sitting right there. He is one of our senior leaders. Ina Strand, who is our Chief People Officer; came in that transaction. Jorn Matson who is another one of our senior leaders over in Europe. They all 3 came in that transaction and 13.5 years later, they are still here with us. I think they like our culture. You can ask Hans-Olav later. That's our culture. That is our culture. I think we entered Asia in 2020 and when we brought out our franchisee in Hong Kong, but we've kept adding with additional transactions. So in Canada, multiple transactions in the United States, Topaz in Europe, then Total in Europe. So we just keep building on those platforms that our founders have built. Now this is our network. This is what we built. 29 countries, 30 business units, 17,000 sites, as you heard in the video. We don't chase site count. We don't have an aspiration to have 20,000 sites or 30,000 sites. That's not who we are. We take a very focused view on our network. And we're actually very active with our network, and it is an incredibly differentiated in our channel, and in retail in general and provides the foundation for our strength and our ability to grow and to grow earnings. And Aaron, who runs our network will talk about that in quite a bit more detail later today. We pursue NA for 4 reasons. We want attractive long-term assets. We want robust return on capital. We have to believe that we can deliver meaningful synergies, and we better have a plan, and we follow that plan to do it. Lane just challenged us this week on something we were talking about Filipe, right? What's your plan? Can you need a better plan, but we follow that plan. We developed those plans, we execute those. Everything we do, we have a model, that's what goes into our budgets. We know with every transaction we've done, whether we've achieved those models. I can tell you with a couple of exceptions, we have. And we -- the final reason is, can we acquire distinct capabilities or platforms, programs or people, as I mentioned, with Statoil. This is our operating model or the flywheel that our founders developed they gave us and that we follow today. We invest in the business, strategic growth. We invest in our business. We ratably invest in our business. We do that with financial discipline. We invest in our existing assets. How does that show up? That shows up through ideas then the piloting of those ideas, proving those ideas and then scaling those ideas. We do that over and over again, and we ratably invest in our business. I mentioned our decentralized business unit operating model, global local. We will not change that. It is unique. It is differentiated. We fundamentally believe it's one of the things that makes us so strong and has delivered the returns that we have over many decades. We only add regional enterprise or global headcount or where we feel we can deliver scale and unique capabilities. We're pretty aggressive about restricting, monitoring where are we doing and how are those interfaces working with our business units. And then finally, it's a cliche, right? Retail is detail, it is a cliche, but it's right. retail is detail. We focus on operational excellence. We monitor a lot of KPIs. We talk to our business units every period about their performance, the things that are working, the things that aren't working, and we are focused on our stores and our operational execution. 25 years of EBITDA, EPS and net earnings. And some of the many transactions, sizable transactions on the bottom of this slide. I think it's a pretty good performance under any lens. You've owned Couche-Tard for these 25 years, you've done pretty well. It's quite an amazing story. It's one all of us. I've been CEO for 18 months. It's a responsibility to take over for Elaine and Brian in this trend and what's been built. I take that extremely seriously as does this team. I know what's on your mind. Hey, it's a great chart, Alex, but what about those last 2 years? What about that orange bar and that pink -- or the orange line and the pink line, those went down the last 2 years. I could sit here and I could talk to you about COVID and margin -- pretty extreme margin expansion. I could talk to you about the Ukraine Russia war and the dislocations that drove an oil gasoline and diesel markets and increased margins and our capability to capture a pretty substantial share of that, but those are excuses. I know what you want to know, are those bars going to be going back up in this trajectory. I can tell you, the answer is yes. We're going to talk to you about our vision of how that happens. I'm pleased with the last 2 quarters we've talked with you about. We've gotten some momentum, that momentum has continued in this latest quarter. And as we talk with you about our strategy today, the answer is yes. So that's a little bit about our history. It's hard to talk 45 years' worth of history in 3 or 4 slides, but it means a lot to us. It is where we come from. It is kind of what grounds us as leaders of this company. I now want to pivot to our vision. Our vision has changed. This is a new vision for us as part of the strategy refresh, to become the world's favorite stop for people on the go. Why did we decide to change it? Again, I mentioned earlier that the environment is changing, right? It's changing rapidly. Consumers are changing. I referenced, I have 3 children. They're a lot different than I am. They live differently, they interact, they consume differently. The world is changing. We need to adapt. What does that mean for Couche-Tard? It means channel blurring. It means digital. It means where -- we need to beat the C-store industry, right? And we are by increasingly widening gaps candidly. But we need to win in retail because channels are blurring. Consumers are making choices. Consumers have more choice, more visibility through these digital channels than they've ever had. Consumers are starved for time. They're looking for efficiency. They're looking to be talk to where they live and where it's relevant for them. And they are on the go. We love on the go. In bricks and mortar retail, I would -- there is no other space I would rather be than where we're at. We have incredibly great assets. We are incredibly convenient. People get into our stores and they get out of our stores very quickly. Most of the things that are purchased from us are consumed immediately or within 90 minutes. We believe there's broader things we can sell in those stores that fit these criteria. You guys are very intelligent people and you read like I do. Blue collar jobs are growing. Trade schools are growing. These are our customers. They're on the go. We can serve them. So people on the go is our sweet spot. And it's not just in the C-store channel, it's in retail as a whole. Our mission hasn't changed. You heard it in the video to make people's lives a little easier every day. It's kind of simple. Maybe you think it doesn't matter. We think it does. I'll just tell you a story, right? You hear us -- you hear me saying I'm in our stores all the time and I visit all of our stores. I think one of the things that just amazes me when I'm on those rides and I'm with these guys and people kind of see us standing around. We're usually wearing protective orange or yellow jackets because we're out on our parking lots. And they're kind of like who are you guys? Are you the big wigs, but the number of times that people come up to us and thank us and want to recognize one of our employees, you wouldn't believe how many times that happens. It happens all the time. It tells us a story about somebody and how great they are, how -- what they do for them, how they've come through for them. That's real. I think that we're all consumers. We're all time pressured. And I'm 53, but for me, the experience is getting worse. I get disappointed a lot, I wait in line. People don't have some people are rude to me. People don't seem to care that I'm there to transact with them, this matters, right? This really matters. So making people's lives a little easier is what we do. This is our customer promise. Again, it's a pretty simple slide. One of the things when I took over as CEO, I thought we had the opportunity to -- we hadn't lost focus on the customer, but I thought we had the opportunity to focus even harder. So we did a ton of consumer research to go out, ask our customers what they were -- what they wanted from us, what were the most important things they said they wanted. This is it by a long ways, not even [indiscernible]. That's why we use our cameras in our stores to monitor wait time. And I can tell you our wait times in almost every business unit is getting faster. They want us to be fast. They want us to be friendly. As per my story previously, they want to have a positive experience. They want employees that are engaged and happy to be there. Customer ready. What does that mean? It means that they want our stores to be clean and they want us to have the products that we are supposed to have that they came to purchase. They want us ready for that. We are investing in platforms and technology that you'll hear about later today. It is going to be a game changer. It's in Europe for us today. It is going to be a game changer for us to improve on our customer readiness. And I think the thing we added -- so those 3 have been in focus for us for quite a while. We added a fourth, it's called compelling value. That is the change in the consumer. It's not like value wasn't there. Clearly, you've had the Walmarts of the world for a long time with low price. But value with these constrained consumers is even more important. You might be sitting there saying, Alex, you guys are on a convenience store. You're not really known for value. So let me be clear. We're not planning on complete -- competing with Walmart for everyday low price. But the places we participate in our core and the things we're developing, we absolutely can compete in value. We have tremendous scale. We have tremendous vendor partnerships. So -- and we can run real compelling deals, so we are running fewer promotions but more compelling promotions. And when we get this right, our consumers respond, and this is something we're going to double down on as we look to the future. I talked about our values a little earlier. One of the questions I get, I saw it was on a the IR group always gives me a Q&A. But I get asked this all the time. One of the questions on the tough Q&A was, Alex, is it hard to lead and manage in this polarized political environment? The answer I always give is no, it is not. The reason it is not is because this is how we lead this company. These haven't -- these aren't values we created this year or last year or 10 years ago, these are the values for the 14 years I've been here. And if our founders and Brian were here, they would tell you these were our values before then. Let me give you a little color about -- so what is one team. You heard it on the video. I was glad to hear it. One team is we don't do politics. We don't do silos. We don't do skip coating. We are all in this together. We are all attacking the customer, servicing the customer, this is what we do. We do it every day. We work together. We support each other. We welcome people for who they are, what skills they bring to us and provide an environment for them to grow and achieve. We do the right thing. Again, sounds simple. We do the right thing in everything we do. We support our communities. It is at the core of our decentralized model. We just went through a pretty nasty snowstorm in the Southeast United States. We always have 2 priorities. Louise and I talked about this just recently, keeping our people safe. First and foremost, we will do anything to keep our people safe, make sure they have housing, make sure they have food, make sure that if they're stranded at work, we can get them home from work. And then we look to keep our stores open because we need to service our communities. And our communities really rely on us in times of disaster. It's really important for them. And having water and fuel. Basic food is really important, and we deal with them a lot. But it's even more than that. We -- you won't see -- I don't have a big corporate marketing budget. I don't think you'll see Couche-Tard or Circle K on the Bell center, if anybody is going to make that decision, it's Steve who's sitting in the back, we go to our business units. Our business units carry those budgets. And we encourage them to participate with local charities and support their communities for the things that they value. My favorite value is play to win. One thing I'd love since the day I joined this company is we get after it, right? We get after it. We work hard. We want people to make decisions. We want to push down decision-making. We want them to own their business. That is my job. I view my job as success. The fewer amount of decisions I need to make the better. I want our people on the ground empowered to make decisions and owning their business. So now it's time to balance our strategy refresh. Core plus more. We are focused on long-term profitable growth, consistent organic growth, the customer is at the center of everything you will hear about, leveraging our scale, that's in our network, our platforms and our systems. And the thing I'll tell you, everything you're going to hear about today, we are in action on today. It's not on a slide, it's not -- it's -- you're not going to hear about a lot of bright shiny objects or some massive change for Couche-Tard. You're going to hear about us focused on our core and the things we think we can do more of and leveraging our scale. Financials that Filipe will share with you at the end of this don't include any M&A. They are all organic. We are going to grow organically. And what we are talking about, and you see the word on this slide is we want and need to grow traffic. We want more people visiting our sites and shopping in our stores. And I referenced that I was proud of the last 2 quarters, been improving. That trend has really continued into this quarter, and we are seeing positive traffic in a number of business units and I really feel great about that. So we're going to amplify the core. This is our core business, fuel, nicotine and thirst. It is the predominant reasons today that people come and visit us. We like this space. Two of these 3 things are growing from a macro sense. We are taking share in all 3, an increasing amount of shares. Trey has sent me Nielsen, all of us Nielsen data in the last 2 periods where we outperformed market by 500 to 600 basis points we have never achieved that -- those type of gaps. We can't do that without executing in the core. Then we're going to do more. You're going to hear more about the food reset. Our numbers, we've grown nicely in the first 2 quarters of this year. That has continued and again, progressed further in this latest quarter. Offer -- what is offer. It's assortment. We need to evolve our assortment, change our assortment. We think we can. We're going to underpin that with our investments in supply chain, and you're going to see a video later from Trey on that. Network. I've talked already a lot about it. Aaron is going to talk about it later. Mobility solutions, that might surprise you. I think if you live in the U.S. or you live here in Canada, it looks like EV, Wow, I just watch all these automakers take these huge ride-offs and the subsidies aren't there and things, but I can tell you in Europe, EV is very real. It is growing and we have built just a fantastic platform under Hans-Olav's leadership, and he's going to talk to you more about it later today. And our enablers, and I'm really excited that Ed and Erica are here to talk with you today because -- it's always -- I know for me, it's a black box. What are we doing in tech in these systems. This is our scale, right? This is our scale, data, digital platforms. This is where AI comes in. They're here to talk you about it. We're going to continue to drive efficiency into our business so we can keep our costs controlled and make the right investments. I've heard Elaine say once, I've heard him say it 50 times. Alex put people around you that are smarter than you. You're going to meet 6 of them or hear from 6 of them later today. I think maybe we're -- I've added to Elaine's guidance to me is these 6 people have very different backgrounds, different experiences in life. And probably most importantly, different skill sets. We are good at different things, and we complement each other, and I'm really excited for you to hear them later today. I guess last, I'm going to finish with people. Anyone that knows me knows that I fundamentally believe the most important thing in a business is people. We have incredible assets in this company. But our people are blood. Our people are how we execute, how we get things done, nothing is more important to me. I created operations first when I became COO. That was a focus on our people and our customers. I referenced our people metrics. We are hitting levels we -- this doesn't sound humble. We are crushing industry on turnover levels. We are beating them by 20%, 30% and then we continue to get better at it. We're increasingly being recognized by various entities for being a wonderful employer. That is really important to me. It is really, really important to me. And great people enable this strategy. So with that, I'm going to finish. I'm going to hand it over to Louise, who is going to take you into the core.

Hi, everyone. I'm Louise Warner, and I'm the EVP of North American operations. And I have the privilege of presenting the core on behalf of all of our teams across the world. You heard from Alex about the importance of the people in our stores and in our teams across the world. And you'll hear later from Aaron that location is the #1 reason why people build a convenience store. Erica and Ed will tell you about all the amazing things we're doing in tech and digital and the personalized offers we're bringing to our customers, which they love. But in the end, we need to have the products that people need and want when they visit on a convenience occasion. And as Alex said, those things today and into the future, things that are pretty simple, fuel, nicotine and thirst. For fuel and nicotine, these are mature products. They've been around for a while. And many of you will think that these are declining products. We don't see it that way. Firstly, we believe and can and evidence that we take market share. And second, the underlying consumer is actually growing in both of those areas. For mobility, we see fuel and e-mobility growing in totality. And in nicotine, the underlying use is actually growing as well. And hopefully, I don't need to convince you about first. First is a category that is growing overall and broadening the diversity of the occasions, the diversity of the products that are offered. It's amazing how many different things can be in those occasion. And I'll tell you a little bit about why we're so excited about this. You can also see the financial significance of these products to our business. On this slide, you can see the significance to revenue and gross profit. And so for us, to continue to grow organically, as Alex referenced, we believe and can continue to outperform in these categories. In the coming slides, you'll also see me talk about U.S. statistics quite a bit. Why do I talk about the U.S.? It's our biggest market. So obviously, that's a good reason to talk about it, but it's also the most transparent market. So it's where we're able to get lots of good data to share with you transparently and tell you the story of why we're winning. So let's start with fuel. We're incredibly proud of the business were bill and fuel. Alex told us his journey as the first dedicated fuel employee of the company. And today, we employ thousands of people working in this business with an integrated business all the way from customer to supply. These customers are pretty diverse. Their individual guests like you and I pick up our cars, but there are also businesses large and small visiting our sites. The majority of our stores globally are now under the Circle K bands. So Circle K, Couche-Tard, INGO, the controlled banners, our brands that we control. And you'll hear from Aaron and Erica also why that is really important as part of the unlocks in the network and our digital solutions. But it's more than that. Having our own brand isn't about some marketing presentation that someone came up in a dark room. The red canopy allows our customers to recognize us to see Circle K as they come down the road. It allows us control and cost advantages in our supply chain. And it also simplifies our tech platforms, allows us to own it and then tailor our solutions to our customers. And with this formula that we've built with fuel, we're on the same path with nicotine first and the more categories to emulate a success. So one of your favorite topics and also fortunately, one of mine, fuel margins. We presented a view very similar to this a couple of years ago, and our conviction continues to grow in this year. On the left-hand side, you'll see the cost of doing business continuing to grow. Alex mentioned inflation. We see ourselves with a strong cost discipline, continuing to be out of beat that inflationary pressure that we see across the industry. Secondly, we also see industry margins continuing to rise, people acting rationally saying, "Hey, my cost of doing business is rising. I need to find a way to pass this cost on". So we see fuel margins continuing to rise in line with CPI, taking also into effect the volume demand destruction in some of our markets. And we see this trend in all of our geographies. This is not something new. This is not something that you will see period-to-period, quarter-to-quarter and maybe even year-to-year, but it's a continuous trend that we see and we believe in. The other thing on this chart is our outperformance. So you see the gap between the industry and our performance continuing to rise. We believe not only is this sustainable, but we have more opportunities to outperform, and it's from all of the things that we've been working on over the years. This is not one thing. These are the hundreds of things your team are doing every day. So what are some of those things? Well, lets us more. So we'll tell you them all, but it's thinking about our customers, thinking about keeping our focus fast, keeping them clean online the whole time. How do we approach our customers? How do we build personalized loyalty offers that they love with fuel at the core? How do I think about my supply chain, my sourcing, my logistics, the efficiency every little piece goes to the bottom line and also making sure that we're dynamic with our fuel pricing strategies. So let's move on to nicotine. We see rapid shifts in the products that are available to our customers in the nicotine category. We see our customers choosing to either broaden or substitute the products that live traditionally used into the small products. So let's use a couple of examples of what this looks like. In some cases, traditional cigarette user will add another product. So this might be one of our white nicotine products. Or maybe I'll -- for my friend, Trey, on the example, he would have traditionally used snuff and now he's fully transitioned to white nicotine product. So what that means, overall, we see across the industry, a decline in the traditional cigarette products, but an increase in the consumption of the more modern alternatives like vaping and white nicotine. And in the later part of the decade, we believe that these new products will have more significance in cigarettes in our overall business. And like fuel, we are outperforming the market in this category. And we're doing that by working closely with manufacturers, watching these trends and making sure that we have the products available to our customers as and when they need them. It goes without saying that the regulatory environment is a significant influence on this category and how and when we introduce products is dependent on that regulatory environment. Our commitment to our communities, as Alex talked about in this space is to be a responsible retailer and to only introduce products that are legally allowed in the communities that we operate in. And our customers then have confidence also that they can trust us to be that responsible retailer. As you can see a few statistics on this slide, we are outperforming the markets we operate in, in all of these categories, both the traditional cigarette categories but, in particular, these new modern products. So let's give a couple of examples. The traditional cigarettes in the U.S., we sell twice the number of volume of the average industry location. For modern oral in the markets we trade more than 1 in every 5 cans that are sold in those markets go through our register. And that means that our manufacturers come to us when they want to help us bringing an offer to our customers. Some of you will be aware of the amazing information we ran last fall. In the space of 4 weeks, with the support of our manufacturer, every time someone bought a nicotine product of any type, we were able to offer a free caners in to our customers. And in the space of those 4 weeks, we gave over away millions of cans of ZYN, and that's maintained momentum of those customers coming back. Compelling value to our customers through deals like the ZYN promotion I talked to and the digital solutions we're bringing together. This is also frontline pricing and personalized offers, so we can attract all types of customers. And later, you'll hear from Trey in our video about how supply chain is going to help us continue to grow in this space. Okay. But let's move on to first. I think you heard the excitement from Alex. We're all so excited about this across our business. We see demand from drinks growing, and it's an all-day occasion. You can see on this slide, we talk about some. Sometimes it's hot or cold. Sometimes it's a big drink or a small drink. Sometimes it might be dispensed or packaged. It may be nonalcoholic or it might be beer and wine or it might be ready to consume something on the go or someone wants to take home. For all of those things, we've invested over many decades to serve all of those needs. And so we're outperforming in this category. Our customers know that we're the destination for thirst. You see on this slide, we talk about globally 7 out of 10 customers when they come into our stores, they buy a beverage. In terms of value SKUs, this is over 8 out of 10 customers. And these are often now private label controlled brands. So in the U.S., that's -- we're known for polar pulp. In Europe, it's Circle K coffee. And in Canada, the most popular as Froster, which [indiscernible] at this time of year is incredibly popular. And our customers are evolving. You may have seen in some of our publicly listed suppliers reports, but they have headwinds on some of these categories. But that's not the whole story. We see thirst evolving and in particular, energy and functional drinks being the growth category. This, as Alex referenced, is not a small change. We see double-digit percentage growth in all of our markets on energy, showing that the customer is just embracing these drinks and wanting to buy them on the go and every day of the week. And we're winning. We saw this trend coming through analysis, through our data, through our market research, and we invested and partnered with manufacturers to make sure that we were ahead of the curve, first to market. On a store-by-store basis, ours per cell 2x our convenience store peers. And in fact, when we look across all channels, we also sell 2x the industry average of all channels. What are we doing to make this a success? First, the investment in our stores. Alex talked about upgrading, investing ratably in our stores over time. This is our cooler capacity. These are our beer caves, and we're able to fit extra capacity into the stores in all shapes and sizes. So our people are creative. They find some more space. We're investing in physical plant. We also are investing in data. So looking at market trends, seeing which products we're selling, making sure we stay ahead of these curves. And our strong relationships with suppliers allow us to bring product exclusive all amazing deals to the market to win that customer. And unlike some of the channels that we're competing with, we have some extra opportunities for ourselves to use our digital platforms to help us. Two examples. Actually, you can see it on the picture here. Because we sell both thirst and fuel, we're able to use our loyalty platforms and personalize offers to our customers. So if they buy 3 energy drinks, they can get a discount. Customers love it. All we're partnering with a company called [indiscernible] who allows our customers to get an instant rebates through our digital platforms, sometimes $5 or $10 off a pack of beer. So it's a way of us driving both thirst and other sales in our core and winning that customer to keep returning to Circle K. So hopefully, you've heard from Alex and I this morning about the passion for our business, our strategy, our history and how that flows into our core. We're winning in fuel, nicotine and thirst. And we not only currently outperformed the industry, we believe we have more growth to contribute more earnings from these categories. This is through our scale. This is through our brand, and we have more opportunities, as you'll hear later, particularly in the emerge categories to build on that success through our supply chain. But none of this is possible without the people in our stores. They are the ones that bring these products to life, that encourage our customers to come back every day with their friendly service. So it's time for a bit of a break. Hopefully, you get a chance to go outside and have a chance to have some of our Circle K coffee. And then after the break, I'll join by my colleagues, Hans-Olav and Aaron, and we will get into the next part of the strategy, which is invest in more. Thanks for your time. [Break]

Okay. Welcome back, and thank you to Alex and Louise talking about the culture, the values in the company and how we drive our core of the business. And Alex, yes, I can confirm. I love the culture of this company, and I love the value. And actually, that's what I also see when we acquire new companies. So now we have talked a lot about the core. Now together with Louise and Aaron, I will talk about the more. More is the 1, 2, 3, 4 more reasons to get the customers into our stores. In retail, it's all about get them in. If we get them to our food court, that's the best place to attract them into our stores. When we get them into our stores, it's all about trading them up and trading them even up more, and is meeting a well merchandise store, in stock, a friendly face, easy access, and then if they have this good experience, we get them back even more. That's what we're going to talk about with the more. It's not about any shining new objects. It's about the things we already have done. We have piloted everything we're going to talk about. We're going to talk about food. We're going to talk about our merchandising or supply chain or super good new store program. M&A, we're going to talk about EV, and we're going to talk about car wash. All of this we already have, and we have great experiences and it's all about scaling it up and getting more out to it. So let me start about the food journey that we have been on in Europe. We have fantastic food offering in Europe. About 23% of our stores or sale of all merchandise sales in our store in Europe and is growing is food, and it's a fantastic food offer. When I go and want a hamburger, and I'm 100% nonbiased, I'll go to Circle K and I buy my hamburger there. It doesn't go to a QSR. In the morning, when I go and I go too often to take a plane, I always stop at the same store. It has 28 EV chargers, is completely filled up at 7:00 in the morning with 4 transit EVs with the EVs, all the plumbers, all the electricians, they go into the store, they charge the car, before they start their working day. They buy a coffee, and they get a breakfast offer. And that breakfast offer is so good that I myself before I go on the plane, go and buy that breakfast offer to eat it on the plane. We have developed this offer over the last 20 years. And we see that it's super important. It's not only about offer, but it's also about the profitability. And we have great operating profitability on our food offer. We have a great skill set. We have the toolbox, and when the customer start to food from us, they also be more emotional connected to our brand. It's a destination and it's not the commodities, not the sneakers is actually a difference on the taste, the quality and the freshness of the product. And we have succeeded on this journey in Europe. So let's take a look at the movie, and then Louise will talk more about the food in North America. [Presentation]

That was a pretty cool video, right? And pretty yummy-looking food. And I personally was like, maybe I could do with one of those burgers. So that will showcase what we're doing in food in Europe and why we're being so successful as HO talked about. Food is a critical priority for us in more and where we see opportunity to grow. As Alex mentioned, when we step back from what went well in temp for the win and what we needed to improve on, food was a big topic for us. We asked ourselves what -- why are we successful in food in Europe, but we hadn't met our goals in North America. We looked into our own North American operations, and we found some bright spots. In particular, we had a couple of business units in North America, who came to us through mergers and acquisitions, our Northern Tier business unit, our GetGo business unit, who had really strong food-centric cultures and practices. We also thought about our winning formula in Core, what has made us successful in the other products and how are we outperforming? We also know from our experience in retail across many decades that this is not something that is exactly the same in all of our geographies. We know that we need to tailor our offers and our operations to our local markets. So -- for us, as we went through this reset, it wasn't a lift and shift of what you saw in the video, but instead taking a step back and finding the right ingredients, yes, good food for our business in North America. So this reflection has guided where we've been working in the last 18 months and some of the success that you're seeing come through in our numbers. Firstly, as Alex said, we took the opportunity to think about our customers. As HO mentioned, we have potential food customers all the way around us. But we wanted to make sure that we were successful in the customer groups that were easiest or the best -- most likely food customers for us. Firstly, we looked at the first circle in this chart. The people that are already buying food from us, how could we sell more food to these same customers. We also have a number of people already in our stores that we heard from their feedback that we're willing to try our food products. So we've really centered our attention on these 2 groups. We also know later that we can go and find more opportunity in our forecourt customers, any new customers to our channel, the food available opportunity is so huge across our industry and across other channels. But today, we're focused on those first 2 circles. And as part of our reflection, we said to ourselves, we needed to focus on 4 things. I'm going to talk about 3 of these and you're going to hear the role of the controlled supply chain for food and all our other products in a video later from Trey. We also look to industry data and saw what we were achieving today and what is possible for us. And so we set ourselves this goal to grow food revenues at 4x the pace of merch revenues are ahead of us. So let's start with these -- the 3 priorities I'm going to talk about. As Alex mentioned, operational execution is core to who we are as a Couche-Tard and Circle K. And when we looked at what we were doing in food, we hadn't applied our retail excellence to this particular area. So we've been doing a lot of things in the operational excellence area to make sure that we do what we do best when we're winning. That's looking at operational metrics, that's changing our processes, simplifying them, changing the tools we use, making sure we're measuring ourselves and setting ourselves goals. And most importantly, using our decentralized model and setting up some healthy competition between our business units to go after and chase the targets that we need to, make sure that we have food available when our customers want to buy it at the right times. And one, a lot of the improvements that you've seen so far -- that we have seen so far is being driven by this operational execution. We still have gaps, but we know what they are, and we're now on track to continually improve. We also looked at what we were selling. And we realized that we were trying to sell products to our customers that they didn't actually want to buy. So we've taken a step back from our menu and reduce the number of products that we sell, we call it SKU rationalization. We also took the decision to make it clear to our business units what their hero products were. These are hero products are different in our different geographies, catering to the local customers' needs. And there are things like in where I live in Charlotte, North Carolina. There are things like a hot dog, a freshly baked cookie or my personal favorite, our spicy chicken sandwich, which is amazing. So we looked at our heroes and made sure that these were the focus of all menu and the focus of what we were selling and make sure we get those heroes available at the times of day that our customers wanted to buy. We've also centered on meal deals around these heroes. So we -- Alex talked about what we heard from our customers, "Hey, we want compelling value" and with the partnerships that we have with our merchandise suppliers, we knew we had a unique opportunity to provide eye-catching value to our customers. So we've gone all in across all of our geographies on meal deals, and hopefully, you can see some of the results we've got. Customers love it. And for us, by partnering with some of the -- our best vendors on our first categories, we're able to bring value to the table without impacting profitability. Then when we look to what this allows us to do, we have operational control, and we simplified our menu, targeting our customers to what they really want to buy. This now allows us to innovate, to pilot different things that we're doing. And this is where our decentralized model really comes to life. This allows us to do different pilots in different parts of the country or the globe and try things in a particular geography. These -- each of these things may not be a product offer or there maybe an experience like a digital menu board or how we talk to our customers. And not all of these pilots will be successful. The benefit we have of having multiple BUs trying different things is we can try things and decide they're not going to be successful and choose not to scale. And some of these things may be scalable all the way across the globe or they may be scalable into only certain business units based on customer tastes. We're taking learnings from some of our acquisitions GetGo being a really key one in the United States. And so we really believe that this is going to fuel our next wave of growth. So wrapping up, you'll hear from Trey on the supply chain. But through this reset, we believe that we have the winning formula that were transferred from core that we've taken the learnings from Europe to drive food sales in the U.S. and Canada, taking the learnings from our own experience and be able to hit that 4x goal that we've set ourselves. So in a similar way, we're thinking about the rest of our stores. So we've talked about first fuel, nicotine, food and we sell some other stuff in our store. So we believe that we have opportunity in this space as well. Firstly, we talk about private brand. Actually, we sell a lot of private brand. We probably don't talk about it in this way, but our private brand is our fuel, our Polar Pop, our Froster, our Circle K Coffee, our private label water and many products in our store. So -- and even food, we made the choice as we brought our food products to North America, that these would be Circle K food products. So today, actually, our whole strategy, our whole operation is underpinned by private label or controlled brand products. However, we also know that we have more opportunity in this space for the rest of the store. And so we have taken a different approach similar to our reset on food. We realized that the private label products that we're putting into the rest of the store weren't very purposeful. So just like we have with food, we've taken a step back and reset our strategy. We've set ourselves this flywheel on category management to say what role does private brand play in our portfolio. And we are working through this cycle to identify the right private brands. And this may be nuanced. It may be a Circle K brand. It may be a controlled brand or it may be something like a co-brand. So let me bring this to life with the key example you see on this slide. So when we first brought some tea products into our store, we decided, okay, we can save our customers some money, we'll put some Circle K on again. We're just slap it into our stores and how we go. Unfortunately, our customers didn't really want this product. They didn't know what it was. They didn't know what it tastes like. They didn't understand the flavors, it didn't really appeal to them. And it wasn't very successful. So instead as part of what we thought about with private brand, we said, okay, what role do we want private brand or a controlled brand or a co-brand to play in our portfolio. We decided that our customers one of the confidence of a known brand, and we had the opportunity to co-brand with Arizona Tea, and to bring product exclusives into our store. And you can see from the results on the slide that this has been a really successful and purposeful approach in this category. So this is the approach that we're going to take going forward in private brand. And we believe that it's -- it will be straightforward for us to meet this goal of 10% private brand in any of the categories that we think private brand plays an important role. So when we think about this more broadly, private brand is just one of the opportunities we have in expanding our offer. Alex talked about his kids and how they are very different to Alex and how we see evolution of customer choices as we move through different generations. You'll hear from Erica and Ed later, how we're supporting that with different digital offers personalized rewards and all of these things. But we also have the opportunity to follow some of the customer trends, what people are looking for differently. We also talked about channel blurring and -- the younger customer doesn't have a fixed view of what they buy and what sort of format or store, they're happy to shop wherever, for whatever. And so for us, we see this as an upside opportunity for us to say what products do people want on the go and to bring those offers to the store. This is not a story of are though. We're not saying, hey, throw out the old and bring in the new. We have a loyal set of customers that come to Circle K every day for a set of products that they love and know. We want to continue to have those customers come to our stores and have the products that they want. But we also want to bring new customers to our stores, and we see these 3 themes of global flavors and wellness and functional as important things that younger people want in our stores. So let me give you an example of global flavors to bring that to life. Our Southwest -- in our Southwest U.S., some of our business units identified that their customers wanted to buy Hispanic candies. So they went out, got a local supplier for the Hispanic candies and put them in the stores. These products are selling like crazy. And so the other business units adjacent to that business unit, Stolt Pride, one of the things that we talk about with our business units and put those same products into their range. Out in Florida, they realized that they had a similar opportunity, but maybe with slightly different regional profiles for that same set of Hispanic candies, to pick the ones that worked in Florida and brought in some different types. Then halfway around the world, we're following the same theme. In Hong Kong, they're embracing global flavors, but in Hong Kong, this is products from Japan or Korea, which people in their stores are just grabbing and wanting to buy every day. So same theme applied totally differently in a different set of stores. And like food, we don't see the evolution of our offer as a one-off exercise. We see this as an ongoing change for us as our customers evolve, being first to market, tracking trends, using data of what works and deciding what doesn't evolving our offer as we go. As I've mentioned a number of times, a key enabler for our skill journey has been our supply chain. The ability to control the products that we source and the cost advantages that come from supply chain control have been critical to underpin the success in fuel. We are on a journey to expand our ambitions in merchandising and food in the same way. This will benefit all of the categories that I've talked about today in the store, whether that's thirst, nicotine, food or any of the offers that we're talking about, being able to bring the range of the products into the store that we want and have the cost advantages of controlling our own supply chain. This is a multiyear journey. So this won't happen overnight. And so it's really important for us to have the right patience and discipline to bring this to life. But there's no one better than anyone Trey Powell's made us a nice video to show you our merchant supply chain and food supply chain today and to tell you a bit about our ambitions in this area. So let's play the video. [Presentation]

All right. Thank you, Trey. It's exciting to see how our merch supply chain is coming to life, and is going to deliver value to our network. I'm Aaron Brooks, Senior Vice President of Real Estate and Fuel customer. I've been with the company about 11 years now. I came over in the Pantry acquisition in 2015. I'm here to talk to you today about our existing network, how we're growing that network and M&A, 3 things you heard Alex get excited about today. So I'm going to tell you why you should be excited well. Let's start with our network. In our industry, location isn't just a factor. It is the #1 reason for customer choice. And we have a network of locations that is not easily replicated. The thousands of locations that we control and operate are in some of the best metro areas, suburbs and small towns across the world. But scale is only part of the story. It's the quality and the way that we manage our network, which sets us apart from other retailers. If you look at where our industry is heading, customers are telling us through their behavior, their real estate and asset quality matter more now than ever before. You've heard Louise talk about traditional categories such as fuel and nicotine changing. And there's a lot of operators that also have cost pressure as well. So what this means is that the gap is widening between the best performers in our industry and those operators that have underqualified or poor asset quality or potentially have high leases or high debt levels that they're dealing with. This is where our scale, our balance sheet and our disciplined approach to our network helps set us apart from the industry. We have a very structured and data-driven process to manage the full life cycle of our assets from site identification to remodel and eventually to divest. Over the past 10 years, we have divested more than $1.5 billion of noncore assets, and we've recycled that capital into higher returning such for us. So while you may see total store count staying relatively flat, in actuality, we have been on a multiyear journey to improve our network for the future. You can see this on the slide where we are selling tail end and underperforming assets and investing that capital into sites that not only bring our brand promise to life, but are substantially outperforming the legacy network as well. So given the promise we see with sites we're adding to our network, let's talk about our growth engine, where the U.S. is our primary target. We are continuing to take advantage of scale in this fragmented industry. Nearly 65% of convenience stores in the U.S. are owned by operators who have 10 or less locations. I'm going to get to M&A, and I'm going to get to development here in just a minute, but let me talk to you about 2 levers that we have to attack this fragmentation. The first is franchise. So we have a full franchise program. What that means to us is that the Circle K banner is both on the store, but it's also on the food court. This is a capital-light approach for us to grow our brand, but it's also a very attractive offer for our franchise partners to tie into our scale, through our fuel supply chain and our merchandise capabilities. With this attractive offer, we will add more full franchise sites to our network this year than ever before, and the pipeline is robust with franchisee applications. The second is what we call single-site acquisitions. So that's us targeting operators who have 10 stores or less and looking to acquire. When we go into our growth markets, we are making conscious build versus buy decisions. And as we go through, if there is a quality asset that we can buy at an advantaged multiple and plug it into our scaled economies at a faster rate in which we can build it, we are buying. If we're in a small town and there is an independent who has the best corner in that town, we're going to look to pursue to buy that versus buy -- versus build on a secondary corner. So just like what you've heard with full franchise, just like what you're about to hear with development, we will add more stores to our network this year through single-site acquisitions than ever before, and we feel very strongly about the pipeline that we have. So let me get to the headline. And I'm going to reference our single-site acquisitions and our development with this. We are confident and delivering 750 new high-quality company-owned, company-operated sites to our network over the next 5 years. We have the capabilities and we have the capacity to outperform on that 750, but we will remain disciplined. The commitment that you shareholders have from us is that we will not chase volumes at the expense of returns. So speaking of returns, let's dive into our development program, where you'll notice that we have increased the performance and ramp of our new stores. Many of you saw our new store layout a few years ago, and you saw how they're engineers to bring to life what Louise has been talking about, about food, thirst, nicotine and fuel. The customer feedback has been phenomenal. And we have shown in the numbers that these categories outperformed the legacy network substantially in our new builds. And as we told you as well, we have an industry-leading return hurdle rate on our development program of 15%. And we are proud that we are in our second consecutive year of historical new growth while outpacing those return thresholds. So you may be asking, how do we do it? And what's the opportunity for more? First, we have always had a disciplined site selection process. It's anchored in finding a location with strong traffic, great visibility, easy access. That's not unique to Circle K, and that's what one in the industry is doing. What is unique to us is that we will never compromise on paying more than fair market value for our assets. If you think about our pipeline, we're screening about 1,000 stores every single year. And the first question from every level of our development and our operations team is the same question that Elaine and the founders were asking back in 1980. What's the cost? And what's the return profile? And I'm proud of the team and the culture that Alex is referencing that we're passing on throughout the organization. I actually took Elaine on the trip a couple of weeks ago. We went to 4 different states. We saw somewhere between 40 to 50 sites. And what made me proud is while we were out there kicking the dirt, not once did Elaine or myself have to ask about cost of returns because each development manager led with that information. I tell you this because really what our discipline is doing is it's making sure that we have the right cost basis to effectively operate our sites for decades to come. So cost disciplines remain the same. What has evolved is our intentionality behind building asset resilience. We are doing this through ancillary offers, high-speed diesel, food, car wash. But we're also doing it through geographical diversification as well. We have more than 1,400 rural locations today that outperformed the rest of our network, where we know our brand, and our offer resonate with those consumers. And actually, the picture you've been looking at all day. This is our new, what we call our rural core building. When we talk about fit to serve, when we talk about bringing all of our strategies together, this building was designed, value engineered specifically for a lower cost profile that we could roll out faster to some of these rural markets. So you've heard about food, and Hans-Olav will be discussing car wash here in a minute, but let me highlight the high-speed diesel network that we have, which consists today of more than 500 accessible sites for the professional drivers. We are not trying to be a travel center with capital-heavy projects tailored to the overnight driver. Instead, we are catering our offer to the local professional drivers who need a convenient place to stop and fill their tank and tummy. So when you heard Louise talk about B2B, this is another good example of our strategies coming together. We've built the capabilities. We've built the sales team to go out there and win the professional gallons. We're also building the assets so that folks can come in. And because of this combination, I'm proud to say that today, in the United States, we sell more than 1 billion gallons of diesel. So to wrap up on development, our goal isn't just to be bigger. It's to be more profitable. We've managed to accelerate our build rate to historic levels without compromising on our returns, a feat that distinguishes us in this high-cost environment. As we refine our data and focus on high-growth markets, we're interest adding [indiscernible]. We are building destinations that create a network and give us a sustainable competitive advantage for years to come. So speaking of competitive advantage, let's get to M&A, where we are experts. We don't just buy. We integrate and we realize accretive synergies. We are committed to M&A in our channel, and we are executing on our playbook, which is to be disciplined, be strategic, but also to be ambitious. First, our bread and butter over the years has been consolidating regional chains in the United States, and we continue to see upside here to strengthen our network where our scale drives immediate margin expansion. Second, we see a similar story in Europe, where we have room to grow in our existing geographies but also we can expand into new territories and fill regional gaps. Third, we see accretive return potential in Latin America and Southeast Asia. While Europe and North America continue to evolve, markets like Latin America and Southeast Asia offer long runways for traditional fuel growth and rising GDP as well. So the main message is we will continue to focus on what we know and what we have done well throughout the decades. With the acquisition runway we see today, there is no need for us to move into other adjacencies. So when I started, I was talking about the importance of location to our customers. This is critical for our on-the-go customers. It's critical for our mobility customers, and now Hans-Olav is going to give us an update as we deliver more to these customers as the markets evolve.

Thank you, Aaron. It's fantastic to see how we can grow the company and leverage scale with all the opportunities we are working on. So now I'm going to talk a bit about the EV journey. Just to start with this journey. We had our first EV charger in the market in Norway in 2011. That was done in a partnership with a utility company. And we continue to evolve the rollout of EV chargers with the Teslas and with the utility companies until 2018. Then we decided that the market in Norway was so mature that it was the right time to start to invest ourselves. And I think this is important because we, as a company, we doesn't have a big technical depth on EV chargers at our forecourts. We are only a modern charges above 150 kilowatts and all the investments over the last years have been 300 to 400 kilowatts. But for a move in to talking about what we do, let's take us a short look at the global growth. Europe, definitively market where EVs is growing. I live in Norway, 30% of all the cars in Norway today is pure EV. More than 95% of all new cars sold in Norway is pure EV. And if you look to Scandinavia, it's similar. It's today, 30% is EV. And as you see, [ 61% ] of new cars sold in Scandinavia is EV. If you look to European markets, it's also growing. Our biggest market is Germany. And there has been some uncertainty also in Germany due to the big carmakers. The growth in Germany had a slowdown in 2024 with 17% sales but it increased in 2025 to 22% sales. And now in January, we saw 24% of new cars in Germany was pure EV. If you look at U.S. The uncertainty in Canada is bigger, both the political and the regulatory environment is changing, and we have seen a decline in the forecast for U.S. of 50% if you look at the expectations in 2035. So our focus on investment on EVs is in Europe alone, and in North America is primarily to do it in a partnership until we see that the market is right and then they probably will go in and invest ourselves. But the growth is big. So if you look at the global EV sales, 3 million cars in 2020. Now we are at 15 million cars yearly. It's just going up and up and it's more low-cost cars also. So it's more customers that can adopt to this journey. And if you look at that again and you look at the kilowatt, which is really matters, the growth is 11x between 2025 to 2035, and we want to take our fair share of this growth. So if you look at how we're doing it, we have more and more proof point that we can be and we will be a winner in this space. If you look at the customer, we have the best locations. We have built this company over 100 years. We have the locations on the corner on the highway where the customers need to charge their cars. And when they go to our stores, we have the amenities. We have the restrooms. We have the seating. We have free WiFi. We have the food, we have the coffee. We have everything you need when you spend 20 minutes to charge your car. And that's what we see also. If we ask the customers in Norway and Sweden, where do you prefer to charge a car, we get the #1 position in Sweden, and we get the #2 position in Norway. And if you take Norway, we are #5 in regard to number of chargers. And in Sweden, we are #2. So the customer wants to go to our stores to charge the car. When the customer come to our stores, we see that the EV customers in Norway come 50% more often than a fuel customer. And then they come to our stores. They actually go more frequently into the store than the fuel customer and they have a bigger basket. And if you look at the pure EV charging station compared to a fuel station, it's 30% more profitable with a pure EV charge station based on the gross profit we have today on the charging station. So everything is going in the right direction. And you also see, if you look at Norway, the forecourt traffic the last year have declined with 3% to 4%. While the in-store traffic in Norway, has increased with 6%. And we know that this is due to the EV chargers and a good, valuable food offer. So the conclusion is clear. The customers have told us that they prefer our brand, and they prefer the uptime. They prefer the good digital solution we have with them. I prefer to go to our stores and buy the amenities and the products we have in our stores. If you look at the digital solution, is if we want to win in the EV customer journey, you need to have the best digital solution in the market. And our digital app is rated as the top 3 in the whole Europe. So we also have developed a fantastic digital solution and more than 40% of the customers are paying through the app or through -- another 30% are paying through a tap and pay solution with our cards. So we have to have that interaction. And then a lot of the customer is also paying through auto charge solution, where you only plug the charger and you walk into the store and you buy all the good stuff that we have in there. We also know that we are doing much better than the competitors. If you look at the number of charges we have in the market, we have 10% market share in both Sweden and Norway. But if you look at the charge stations or the kilowatts sold or our chargers is 20% market share. I just saw a statistics from a Norwegian interest organization, average kilowatt hours on the market was 43,000 kilowatt hours per charge point, and we had 70,000, so significantly higher than the average in the market. We also see that in Norway, we have or in Scandinavia over the last 3 years, our combined fuel gross profit and EV gross profit have increased 7% yearly, that's a fantastic number, and we are agnostic. We are not only focusing on EV. We also want to sell the last droplet of fuel, and we actually take market share on the fuel game also in the Norwegian market. So we are a winner. And I think that is important. We have proven that we have the right to win. We have proven that we have the best network. We have proven because we have the best amenities, but we also have 3.7 million loyalty customers in Europe. We have 2.2 million customers with the company card that we can communicate with and that we can lead the journey from normal fuel into EV opposite to what most of the competitors can do. We have the capability. We have a top-notch EV team and we have a great digital team that support us on developing our digital solution. And then last but not least, we have the best uptime in the market, 97% to 98% of the time the chargers up working is as good or better than the fuel pumps. And we mostly have 300 to 400-kilowatt chargers that we lost and will be relevant for the next 8 to 10 years. What we focus on is to fortify Scandinavia. We want to be the #1 top player in Scandinavia is to conquer mid-Europe, with Germany and Benelux going to invest more and more in this market as we see the growth coming in. And last but not least, in North America, will focus more on partnership and look at what the development is. And when the market comes, then we are ready to invest if it comes. So that was all about the EV. We are winning there, and we're going to continue to invest and it's good for the business. This customer or something that we will win together with. Then I'm going to talk a bit about car wash. We are one of the biggest car wash players in the world. With the True Blue acquisition and with the acquisition of Total, we have more than 3,500 car washes in our business. We have the opportunity to scale this business, the opportunity to take out certain regard to procurement of chemicals of carwashes; we have the opportunity to learn from best practices. I take an example, and we acquired Total in Germany. We have more than 800 carwashes. They closed their car wash when it was under 3 degrees. When I who is living in Norway, I wash my car at minus 8. It's all about keeping them open. You need to eat them, but you get much more customer when you can start opening more of the car washes. We have great locations that Aaron is building and through the True Blue learnings, we know that we can expand this into the new to industry stores that we are investing in. We can scale it up and it's something that the customer wants to have. We also see on the EV journey that those customers are washing the car more often than other customers. So here again, it's all about doing more of what we have and investing more in this and being one of the big winners in the car wash journey. So I think to sum up the more, Aaron and I talk about it, more better stores, more acquisitions. Louise have talked about more food being as good as we are in Europe on food, doing more private label, improving the supply chain. All of this is doing more of what we already have proven that this company are good in giving the customers 2, 3, 4 more reasons to go into the core, giving the customers more reasons to come to the store, we'll trade them up and we will get them back. We think we will be successful with this as we move forward. So that's all for me. Now we're going to take a break and Ed and Erica will come back and talk to you about how the digital journey will support to win in the market going forward. [Break]

All right. Hello, everyone. Welcome back from the break. I'm Erica and I'm joined here today by my partner and friend, Ed, we are going to discuss how digital, data and technology enable the core plus more strategy. I'm a new face in the room. I joined the company 18 months ago. But I am not new to Circle K. I've been a loyal customer since the Dairy Mart acquisition in my small town of West Lafayette, Ohio over 15 years ago. And my family and I frequent the station every single weekend. It's very common to see us there, fueling up our truck, filling up our coolers and grabbing snacks before we head to the ball fields. I had the privilege of interviewing with both Alex and Brian before I took this position. And I'll tell you the one thing that came through very strongly in the interview process was the importance of culture here at Circle K. That became very evident the day that I visited stores with Alex for the first time. We walked into the store just any other customer who walked through the door. And instantly, he was greeting every single team member by name. They were excited to see him. They were excited to see me and show me the store and how passionate they were about serving our customers. We then grab his go-to meal. I think it was a spicy chicken sandwich and an unsweetened ice tea and sat down and conversed with the team members about all the great things and being part of the Circle K family. So it's definitely been an exciting journey for me so far. And I know you are a familiar face to many in the room. Could you take a moment and introduce yourself.

Yes. Hi, everyone. I've been at Circle K for 8 years. I've seen some of you before in Phoenix for an Investor Day. How we say I was a customer before I was an employee. I love this channel. It's a morning energy drink for me, an afternoon chicken sandwich or Cherry Coke on the way home, but I promise you when I'm home, I'm in a store every single day, my friends, Rich and John know me very well. They know when I'm in town and they know what I'm not in town because I'm not in the store. And they know I'm here with you in Toronto and they're going to be asking me questions when I get back about how the meeting went. So looking forward to seeing them and giving them a recap of the week. This culture is real, and it's authentic, and it's what keeps me going. You see this come to life on our pride tours. When our leadership teams are out in the stores, interacting with people, Erica mentioned, Alex, knowing people by name, Rich and John, my friend is back in the store. You see that across the leadership team. And for me, I love combining this culture with a passion for solutions that make a difference for our employees and customers, making it easy, and we're doing that with mobile applications. We're doing that with handheld devices for our employees and customer-facing technologies like our smart checkout and digital applications. We are enabling tech to try to keep things simple, we make sure it's reliable, and we're doing it at a scale that nobody else can do. Over the last few years, we've leaned harder into back to basics, and staying close to our stores with a focus on removing pain points or friction, a renewed focus on our core. And today, digital and tech move together, no handoffs, no silos, one team. And I hope you've seen that theme come through as we have conversations today. We like to think that we power nearly every part of the store experience. And that's how Erica and I'd like to think of ourselves as e-squared.

Erica and Ed, e-squared.

Erica, when you joined and you first looked under the hood, what were some of your early observations? And where did you focus first?

Yes. So my title on my position were new but there were foundational building blocks already in place here at Circle K. We had been making investments across data, digital and technology far before I joined. But there were 2 key areas that we really needed to dive into to deliver a better experience for our customers and for our business. Number one, internally, we needed to make sure that we were breaking down those silos that we were connecting the road maps we were positioning the resources to move together to provide a connected experience for the customer. And that alignment needed to go back to our merchandising strategies, to our fuel strategies to ensure that digital data and tech were integrated as part of the business solution, not developing one-off solutions for just the sake of doing digital. Number two, we needed to make sure that the customer experience felt seamless. We didn't want our customer to be shopping by our org chart, right? They wanted a connected experience that both easy, fast and friendly. So those were the 2 focus areas when I came in. We also built out exceptional teams. I'm so proud of the talent that we've been able to bring into the organization and find within the organization to optimize and grow across data, digital and tech. So we're going to show you a little view to see what we've been up to in the last 18 months. [Presentation] All right. I love that video. It makes me very proud. And J, J is not unique. Jay is every customer for us. We are able to personalize offers, rewards and content at a national level at a local level and at a personal level. And that didn't happen by after spot. We've made tremendous progress the last 18 months. And the investments that we've made across digital, tech and data are showing up in our P&L. If you look at our app engagement, as you saw, it's a key component of our digital journey. We are meeting consumers where they are, and we know that is on their mobile devices, and we want to ensure that our digital capabilities are able to deliver real-time value. Our app utilization is up 31% year-over-year. And that's good news for our consumers. That's where they can unlock the greatest value from Circle K. And as Hans-Olav mentioned, highly rated, both our EV app and our mobile app across the globe. Our consumers are also visiting us more often. They came in 6.5 additional visits this year versus last year. And when our rewards customers are coming in, they are buying the product that shouts value to them. Our Polar Pop sales are up 26% for our rewards customers. That $0.79 is resonating with them, and they are fueling more often. Our rewards customers in North America purchased 121 more gallons this year than they did last year. They're also utilizing our digital channels for nicotine offers, which we can now personalize and customize specifically for those rewards customers in their preferred brands through our channels. One of the things that I'm most excited about, as you saw in the video, was Jay was able to be recognized at the pump to drive traffic to and through from our forecourt to our stores. we're seeing a 21% conversion rate by that real-time offer that's focused on food and thirst to get customers and traffic into our stores. It's pretty exciting.

And how are you making all this happen so fast? I know I'm pushing you daily, but we're getting a lot done.

Yes. It hasn't been easy. I can tell you the biggest unlock has been really about simplification and standardization that allows us to move with speed and scale. I've been here a little bit longer than you. It's been a hard road. We used to have this saying that I'm happy it's retired called #44IsTooMany. Four different combinations of our retail systems, tech sac across our stores, different hardware types, payment types, fuel brand partners, back office systems. Think about designing deploying, integrating testing on that many -- it really kept us slow. So we kind of -- we've consolidated those platforms, and we built our own middleware layer. Behind the scenes, we call it Information Super Highway. And we think this is our secret sauce. This is a thing that allows us to connect disparate technologies and an ecosystem of things you wouldn't see bolted together in other places. So a smart checkout. Next to a traditional POS that is a competitor of that device. You saw it in the video, if you look closely, that doesn't happen anywhere else. It doesn't happen in our competitors. So today, it's not down to 1 million but is far fewer than 44, which enables speed and duration without sacrificing reliability. And speaking of reliability, laser focus on operational resilience. Our systems have to work. Period. And we've had a ton of focus. This is how we tie into that fast, friendly customer proposition. Customer already means our payments up, our network is up. Our technology works and point of sale, our digital applications or working for our customers. And for us, that translates into -- and we've made improvements in network and payment uptime, and we've shortened the time to resolve tech issues when they come up. So this means less lost sales. and more time for our associates to focus on what's most important, and that's the customer. So today, I'm proud to say our tech foundation is solid. And this enables digital data and tech to move together and not in silos. This is how we scale experiences without breaking infusion.

Yes. And I think where this is most evident in our recent results and experiences is in our loyalty program. across the globe, both Extra and InnerCircle have had transformational years. Members are up 8% in Europe, and I'm proud to say we will be fully rolled across all company-owned stores in the U.S. by the end of this year. which is amazing for our consumers as we know that they want to shop our brand across state lines. We've also evolved. We've evolved from an e-mail program into meeting customers where they are, whether that's through push or tech or personalized offers directly through their mobile app. We are meeting consumers, and we are connecting with them in meaningful ways at a time that is convenient for them. One of the things I'm also excited about is we are moving towards a program that rewards customers, every visit every time, whether you come to us to fuel, whether you come to us to charge, grab your favorite hot dog or wash your car, at Circle K, every visit counts, and we are going to allow you to choose the rewards that are most meaningful to you and deliver those through our digital channels. That is a real differentiator and we're making it even easier to enroll in the program. We have simplified the program, removed the steps so that a customer only has to reply with three letters. Yes. whether they're in the forecourt or in our store, being introduced to our program by our team members, we can instantly detect to enroll, they respond, yes, and they are getting instant savings that day. I also want to mention, actually, we just had a field day in North America, in our U.S. stores. And in a single day, we were able to add 70,000 new customers into our program. This is strength in numbers. We are so excited to have the ability for our consumers to enroll in multiple ways, and they are seeing the value attached to fuel, attached to food, attached to first by getting into our program. So outside of me monopolizing your time and making improvements across data and digital, what else has the tech team been up to.

We've got a lot going on. I want to talk about the 70,000 customers signing up in 1 day. There's nothing short of a shuttle launch to make that happen. Like the days before we scale up all of our back-end systems. We've got a mission commander on that day. And it's a networks go, payments go, mobile app go, loyalty, starch your engine. And it is super impressive. This effort that we have built on these platforms and the outstanding collaboration across our teams to pull something up like that off in a flawless and seamless way. We're investing in platforms that enable this that allow us to scale at the speed our business. And quite honestly, you all expect from us. We run a journey of data platform modernization with streamlined data flows and advanced security with a foundation to tap in emerging AI with great partners like Snowflake, and data bricks. As you can imagine, growing through M&A like we have, you pick up a lot of disparate data sets. So consolidation is underway to tap into the full potential of the data-driven decision-making that you heard Louis referenced earlier. We're building productivity, embedded decision tools like Realex, which is improving forecasting, inventory accuracy, store execution. You might have seen this reference in the earlier video, you might have heard Filipe talked about it on previous earnings calls. And certainly, all the underlying components driving our digital ambition, loyalty engines, promotion engines, mobile app, customer data platforms that enable personalization in a connected customer experience. This is coming to life for our customers in very meaningful, very profitable ways. And we have an initiative that is redefining the retail systems tech stack. It's about simplifying the back-end systems, so capabilities scale across markets. This is the one that the tech guys get excited about. This is the stuff that happens behind the scenes, but we're building a point of sale for the future. asked this question, when did your phone south being a phone? Talking on it is the thing that you do a lease. When does the cash registers not being a cash register. For us, it will be an application or a micro service that can run on any screen side by side with other business applications with a supporting tech stack of payment gateways, back-office applications, edge compute and more. Actually testing this concept in Sweden with ambitions to scale rapidly here in the year ahead. By the way, if you've seen our point of sale in Europe, I call it the Flip Phone of POS. It's got an old school keyboard. And it served us really well. It's over 20 years old, but it is time to modernize and we're building a solution to do that. We're bringing this to life in a way that's going to support all the great M&A activity and integration that Aaron talked to you about a little bit earlier, and it's going to allow us to retire some legacy technology. Final note here. As you see on the slide, we nearly doubled our investment in tech over the last 5 years. And what I can assure you is these investments are disciplined. They have business cases, they have KPIs associated with them, and they have returns targeted in line with other company initiatives. And I can tell you, Filipe and team challenge us on this every step of the way. We'll continue to test, learn and scale what works and we'll adjust quickly when it doesn't. Speaking about investments, Erica, would you like to tell us about an exciting new opportunity?

Yes. I am excited. As we talked about, we had a foundation in place. We needed to connect the foundation across our 4 core off-site and in-store. We needed to make sure that we had high data quality and we were able to measure results. And bringing that all together, I now have great confidence that we are able to introduce to you full circle media. Retail media is a huge opportunity. It's a $150 billion business across the globe. And we believe Circle K has the right to win in this space, and we plan to. We are unique in the fact that we see both convenience and fuel transactions. We know the mobility patterns of our drivers. We also have habitual shoppers. We know that they come and visit us multiple times a week. That allows us to connect with them in real time when we know they're on the road or on the go. Our consumers also come to our stations ready to buy, right? They're impulsive buying. They're not browsing. They're coming in and they're ready to put their dollars to work, right, and purchasing hopefully, our food, our fuel and our thirst products. In our vendor community, they're ready to go. They are very excited about this program. They are excited about the investments that we've made across data, tech and digital whether that be our forecourt opportunity, whether that be the ad walls in our stores or our proprietary lift screens at our point of sale. We are now in a position to monetize all of those assets and provide consumers with products and promotions that are relevant to them in real time. So as we bring all of this together, and we've talked about core plus more, hopefully, you have a better understanding of how digital data and technology come together to enable this. We are able to deliver end-to-end experiences here at Circle K. It's powered by technology. It's informed by data, and it's delivered through our digital products. This is a differentiator for us in a position we've not been in before, and we are very proud to be in now. Our scale, our speed and our One Team approach really has positioned us to enable core plus more and win for the business and for our customers. Thank you for your time. We really appreciate it. I'm now going to hand it off to Filipe to talk us through our financial guidance. Thank you.

Thank you, Erica, and Ed. Let me start by sharing a secret I really think that I have the easiest job in this company. When I'm hearing that -- listening at Erica and Ed, each of my colleagues this morning, I'm sure that you have noticed how much they care about returns. How much they care about profitability. Speaks a lot about the culture. And Alex has been mentioning this morning, the ownership that this company has and all our leaders across the organization about how they care about investment, how they care about the SG&A. It's really a stronger asset and make my life easier. And it's true. When we look at our numbers the last 2 years, it doesn't been up to expectations. Let's look -- let's step back and look, and let's look at our numbers. We are still a strong cash engine. We have 1 of the best-in-class returns in the industry. And that speaks a lot about the strength and the foundation that this company has. So now let's move and let's talk about, I'm sure that you are all waiting for about the financial framework. But maybe let me step back and provide a bit more context about how we have been thinking about this guidance. And I will start mentioning Alex and his opening remarks, when he was mentioning that this company has been built through acquisition. And that has built actually the company that we have today to scale the footprint. That's been very successful. But the focus is now to prove that we are able and can grow the profitability of this baseline consistently and organically. The -- for that, we are -- and during all these days, you have seen and you have heard the team talking about everything that we have in plan and already in motion to deliver a long-term sustainable growth. And we believe here that we have the right plan, the right CP to achieve that. and give us the right level of confidence to get there. And this guidance that I will share with you in a while, it's really about providing you greater transparency and how we expect actually this baseline business to create value. So let me be clear. We continue to play offense in M&A. And Aaron mentioned that earlier, we'll continue to grow footprint, our footprint in the geography we are present and we'll selectively expand into new geography. But really, this framework is about how we can deliver additional value from the base line. So with that in mind, let's move to our growth algorithm. So first, let me incur ourselves in this page before moving to the details. What you see here is basically our 5-year long-term guidance. And here, it reflects actually, how we are seeing our business and the strength of our core, but also the acceleration that we are already seeing in the more. And at the same time, the benefits that are coming through our cost discipline and our operational execution. This guidance also have three main characteristics. And let me share each of them with you. First, we strongly believe that this guidance is balanced and realistic. We are laying out in front of you a plan that really is building on what we are able to achieve with our core. And also with all the plans that the team has showed you this morning, explained to you this morning, how we believe that we can increasingly see the new growth engine contributing to the bottom line. The second characteristic of this guidance is that we -- this outlook is really designed to be resilient. We have learned and Alex was mentioning what was one of the opportunity of the 10 for the win strategy. Here, we believe that we are taking into account a steady macroeconomic backdrop. And we are actually taking into account here a similar macro that we have seen in the last 3, 4 quarters. And we are also including the evolving dynamics in fuel, in merchandise and in mobility. That make us believe that actually, this plan here is, again, realistic and can be achievable. The last piece that I would like to say about this guidance is that each of these into that you see in this page are connected back to a strategic lever that we control. Whether we are talking about the same-store sales the operating expenses, the total fuel gross profit, there is a concrete plan behind that, and there is a set of actions that we are already executing. Again, this guidance also is really about the baseline. There is no material M&A embedded into it. The [indiscernible] M&A sit outside this framework. It's not a different seat. So now let me spend the next coming slide to explain to you each of these indicators one by one. And I will start with the top line guidance. So as you can see in this slide, we are expecting our same-store sales growth to grow by 2% to 3%. And how we'll be doing that? First, relying and on our core. As we highlighted this morning, we are leading the nicotine transition. We are -- we have a very strong customer value proposition on the first. And so with that, we really believe that the core will continue to grow. Half of this same-store sales growth will come from the more. And again, Luis shared this morning, we have a plan to grow meaningfully our food offer and food category. But we are also putting in place new levers through price brand, for an enhanced offer that will help us actually to drive further growth in our same-store sales growth. On top of that, you can see that we are adding 1% to 2% through the NPI programs, our new store plan. And Ironshore with you. We are aiming to open 50 new stores over the next 5 years. And Aaron, again, share with you these stores are consistently outperforming in basket, in traffic, in profitability as they mature over time. So give us a high level of confidence that looking at this guidance, we will be able to grow the total merchandise revenue by 4% to 5%. Now let's move to fuel. And here, Luis already put a bit of context there. We know that this category is inherently very volatile. So it makes forecasting volume or margin in isolation, forecasting that in isolation is not necessarily very, very helpful. But the fundamentals of this category remains very solid. We are in each of the regions that we are today present. This is a very disciplined market. We have rational players competing with us. And so it shows that demonstrate that the economics are quite predictable over time. And Luis also shared with you that we see a strong correlation between total gross profit fuel gross profit and inflation. And we see that actually to continue to persist over time. That is the reason why we have incurred our guidance on the total fuel gross profit. And we believe that we can grow this indicator around inflation. And again, here, we know how to do that. We have a strong momentum on the B2B business, particularly in the U.S. We have seen in the last quarter, we are growing volume there. B2C and it's really connecting with our loyalty capabilities. We believe that there is room for growth there as well. And of course, our supply chain capabilities. We continue to increase sourcing optionality, increase our supply chain, their capabilities to help us to drive additional total gross profit. Now let's move to expenses. And here, the core discipline has been and remain the core strength of this company. I've been mentioning, and you have heard the teams today, we care about any investment, any dollar that we're putting into this business. And the goal here is very simple for us. We want to see our comparable expenses to grow below inflation point. But that -- and for that, we are balancing strong cost discipline and strong cost initiatives savings with balanced and targeted investment. I will talk in the next slide about our cost-saving initiatives. So here, I would like to spend a bit more time about the investment. First, those investments that we'll be doing are really targeted and clearly linked to the core plus more strategy. You have heard the team this morning. We are talking about investing in food, investing in digital and technology and also in supply chain. Those investments are important for us. We need them to build a company that will be here for the long term. But let's be clear, at the same time, we are making those short-term investment with an expectation of returns. And here, I will take it as an example, we are very clear and very meaningful on that. And I have some examples to show you. We have been talking the last few years about the investment that we have done in data, for example. And that's true. We have invested in people. We have invested in tools. And that has impacted our G&A. But the reality also is that now we are starting to see the benefits of it. you are hearing what we can do with this data in terms of enhancing our and personalizing our offer, how we can negotiate better with suppliers. So really here, it's starting to come to tuition. And the same with other investments that we'll be doing, supply chain, for example, supply chain, you have heard trade this morning. We are investing. We have opened three DCs this year. And of course, again, that's an impact in our P&L in the short term. But let's look at the long term. We will gain control in our supply chain. We'll be able to negotiate tighter conditions with suppliers and will improve working capital as well. So there is clearly, intentions and financial expertise behind any of this investment. And let's also be very clear to get to this guidance that we are putting in front of you, we will offset actually this investment. And that's why here, we have a strong cost initiative program. And it's what you can see in this page here. We have done that in the past. So yes, there's nothing -- nothing new. You know this company and some of you even better than me, I think -- we have been delivering consistently on the savings and on G&A. And the last few years, and Alex was mentioning about one of the positive things that happened during [indiscernible] is clearly our G&A. We have been delivering more than $800 million sustainable savings over the last few years. And that helped us actually to absorb inflation to protect margin and again, to invest in some of the growth initiatives. And we have some of all investments is running through the team. So when we look at those four pillars, there is nothing new here. We are already working on it, executing and actually delivering it. So of course, the procurement, we will continue to work on the store operating efficiencies. That's who we are. We are looking at how we can operate better and leaner in our stores. We are also looking at reviewing the process and putting automation there. And of course, we'll continue to leverage where it makes sense, our global capabilities. Let me bring to life some of this and what's happening today. On the procurement side, you have heard me talking about how we scale our procurement from a GNFR point of view, from an expense and CapEx point of view. We are ramping up this centralized and global team. We are today in reducing optimizing category, reducing number of SKU, and we are being smarter and using analytics to analyze our spend. and good things are already happening. So was sharing with you our intention to accelerate on the EV program. And the last few months, we have been delivering meaningful savings on negotiating globally the chargers. We have got 30% to 40% unit cost savings just on leveraging our scale. And that's an example among others. On the process redesign, we have -- you have heard the team here to talk a lot about merchandise supply chain. We are reviewing actually the end-to-end process on that and very significant value to unlock there, not only on the G&A side, but also on the COGS side, we are now -- we will be in a position to negotiate much better with suppliers will be able actually to also lower the cost to serve our stores. And of course, it's -- we are to say that we'll be able actually to manage much better our working capital. So there's a lot happening there and give us a high level of confidence that we can achieve these cost initiatives. And let me share with you the numbers here. What you can see in this page first is that we are not leaving nothing in the table. Each -- it's a company-wide program. We are touching every line of the P&L. And in summary, what we are expecting over the next 5 years is to deliver around $500 million in SG&A, $350 million in COGS for a total positive impact of EUR 850 million at EBITDA level. But actually, our feet-out program goes even beyond the EBITDA. We see meaningful upside on the working capital. And here, Trey and his team has a big and important role to play. We, again, are going deeper in the supply chain integration. We expect meaningful savings and improvement in our management of the inventory. So all in all, our fit-to-soft program is expected to deliver around 1.5 billion of value unlock over the next 5 years. And again, part of that will be intentionally invested into our business to continue to sustain the growth of this company. Now let's move to, I think, the most important element of our 5-year guidance. And here, we're talking about our adjusted EBITDA and adjusted diluted EPS ambition. We -- when we look at that, it clearly shows the power and that this core plus more strategy brings to the table. Focusing on these core areas will really pull in motion and maintaining, of course, the discipline on costs will bring actually a flywheel and a positive in terms of profitability. At EBITDA level, we are expecting to grow between 6% to 8%, again, excluding M&A. We see really M&A as an incremental to this baseline trajectory. From EPS point of view, we are showing here a growth of above 10% for the next 5 years. How will be doing that? Of course, through the operational improvement, but also using we've proposed our share buyback program. And that will be a program that we'll be using if we are not deploying our excess cash to M&A. Again, here, CPS is really about the baseline and exclude any additional M&A. Let's talk a bit about the capital allocation. And again, here, you know this company, we will continue to be very disciplined in our CapEx allocation. That's something for us that is key in how we want to continue to create value on the long term. And first, let me talk about free cash flow. Just in FY '25, we have generated $1.8 billion cash flow in this company. And we are expecting to generate in excess of 2.5 billion this year. So we are, again, a strong cash generation engine. And that gives us a lot of flexibility and strength to reinvest in our business to support our growth and actually to return value to our shareholders on a responsible and a consistent way. When we look at our CapEx allocation, we want to reinvest into the business up to 35% of our EBITDA. And again, here, we will be very intentional in how we deploy this CapEx. 70% of this CapEx actually will be allocated to growth initiatives and 30% to stay in business. And here, we are being very careful on how we are prioritizing. Of course, prioritizing first, the high returns initiatives. But also the initiative that will help us to transform the core and to enhance the customer value proposition. On the CapEx, specifically, we'll be allocating roughly 40% of that to NTI. And again, [indiscernible] mentioned that earlier. That's our highest returns in our portfolio initiative portfolio. And we'll be investing 15% in EV. Again, here, EV, we are accelerating why? Because the returns are there. On the balance sheet, we keep maintaining -- we want to keep maintaining a strong investment grade credit rating currently standing at A+. Our goal is to keep a leverage between 2 and 12x. And without M&A, we will be continuing to use our share buyback program. That actually will help us remain in this target leverage framework. But again, if there is an M&A opportunity, the files that can -- with the right profile of returns, we will be in position to act because we have the balance sheet to make it happen. So let me conclude this financial guidance just to tell you that we are very confident in achieving this outlook. We have the right momentum. Alex mentioned that earlier and my colleagues as well, we have shown a sequential improvement between Q2 and Q1. And we are seeing a strong momentum in Q3, particularly in U.S. we are very excited by that. We are really focusing on the things that make us stronger. And that's why also we believe that we have the right plan the core plus more. It's really about leveraging our strength and the core, and we are winning there. I believe that there is still a lot of value to unlock. But we are accelerating in those new growth engines. Again, food, mobility, price label, those will help us actually to accelerate the growth. And of course, we'll keep maintaining our cost discipline. And finally, we have the balance sheet. It's in our DNA. We all remember this 4 decades history of [ Couche-Tard ]. We will do M&A, and we have the balance sheet for that. So we believe that we are well positioned to deliver meaningful profitability and share value return. So thank you, and let's take, I think, a 10-minute break before I think back to Alex for his closing remarks. [Break]

Welcome back. I'll look to be brief in the closing because I know less is more, and I know you're keen to get to Q&A. The business model that our founders have given us is as strong as ever. It is ingrained in us. That culture that focus on detail, that focus on basics. Our values remain extraordinarily strong. One of the things Brian used to say is we don't want to be like anybody else. We want to be Couche-Tard. And we are very focused on those models. Our founders have given us, and we absolutely believe that will carry us into the future. and continue this great trajectory this company has been on for more than 45 years. We see significant consumer change. We see the heightened pace of that happening. I think the message I would leave you and you heard some of it today is we have the data capability to really stay on top of that change and increasingly adapt at pace. We talked about our network. I think you know us for our capital discipline, our M&A discipline. I don't know if you knew our network discipline. And I thought Aaron did a great job today of walking you through that. It's another core piece that our founders have given us. It is a platform that is increasingly advantaged versus what others in our channel and retailers are doing. It really gives us that base to deliver on the organic growth that we signaled today. Invest, amplify the core. The core is the primary drivers of our traffic today. And again, we like this space. If you haven't heard, we are bullish on nicotine. I know here in Canada, we need some things to work through for us. But for us, across our footprint, nicotine is growing, and it's growing in spaces at much higher margin profiles than traditional cigarettes. And we are a destination. It is a place we are massively outperforming the market today. We are bullish on nicotine. As Louise pointed out, first is just growing the innovation it's just fantastic for us. What's happened in energy, functional drinks was just with Pepsi and Coke last week, just the new products, the things that are happening. That is our space. We are adding coal capacity. We really feel good about our journey on first. And then in fuel, right? We've been -- hey, liquid fuel demand in our core markets is going to slowly decline. I think you heard from HO today about what happens with EV. And you saw in Norway and Sweden, we are going -- the combination of liquid fuel. We are taking share in liquid fuel. We throw EV on top of that. We're actually growing that mobility CAGR at a nice rate. And the great thing about these EV customers is they like our stores and they like the other things that we do, and it is driving increased trips to our sites. Investing more. You got some exposure to our European food today. We're pretty good at food. I know you're skeptical about our journey on food. I know you are. I'm looking forward to announce in 3Q. We've had -- we've had some nice growth in the first 2 quarters. And I can tell you that growth has accelerated. We've got the playbook down. We've got it now. We've got it in 2,800 stores. We're putting it in another 900 stores. we've got it. And we are going to stay focused on food. It is a natural place for us. We are under-indexed against industry. We have the capability to do this, and we are going to execute against that. Our offer assortment, again, the consumer is changing. You heard -- you watch the video and saw the investments in the supply chain. Our ability to adjust offer is informed by our data sets. Our investments in the supply chain give us access to broader assortment advantaged cost of goods. That is a primary focus for us over this 5-year period. And then the enablers, right? Our job is to deploy against our scale. We are large. We have capacity. We have great leaders, great people. Now we have great platforms, processes. And I'm glad you got to hear from Erica and Ed. Again, it's usually -- it can be a black box, as I said earlier. They were here today, they talked about what they're doing. They talked about what they're enabling in our business. and we are ramping at scale, and we have real momentum right now. Our commitment to you is to grow organically. That is our focus. We are focused on our core. We are focused on the model our founders have given us. We have momentum in our business right now. And that is what we want to do. And that is what we will do. So I'll stop. I said I'd be brief. I know -- I assume you're eager for Q&A, and I've got the whole team up here with me, and we'll take your questions.

Thank you. Thanks for everything today. Nice seeing all of you. I had a question on your new long-term targets as it relates to your new robust store expansion goals. So first, hoping to hear how confident you are in hitting the new store build targets in terms of I'm thinking about it like identifying and acquiring site locations, construction time lines, et cetera. And then second, how dependent are your new long-term growth targets on you hitting those NTI targets? I guess I'm wondering if you maybe fall short on the new store builds are there other levers to pull to kind of offset that and still hit your targets?

Thanks, Bonnie. Thanks for being here. Thanks for the question. And Aaron, I'll come over to you to talk about it. I'm highly confident. Why am I highly confident? We delivered and exceeded our target last year. we will exceed our target this year. Why do I know that? Because those stores are under construction as we speak, and we have good visibility to their progress. You heard Aaron reference 1,000 stores. So we have a really strong team in this space, Bonnie, and all of this is kind of mapped out because it takes a long time to do it. Aaron?

Yes. No, I think, Alex, building on some of your points. So on our foundations in place. The team is there, the foundations are there, the processes are there. Just like anybody coming out of COVID, we face challenges in terms of time to build cost inflation, and I'm excited by the fact that this year, we've actually decreased our number of days of construction. We've actually seen costs come out of our build. So that gives us really good foundation. But then when you look at the pipeline, we've spent the last couple of years with our D&A team really outlining where our key growth markets and what do we think those opportunities are. We are confident based on that data, but also on the activity that we see and the projects that we see coming through Alex has mentioned a few times to you in the past, we have a pipeline of over 1,000 sites. And they're in different phases of our development program, where we are focused on building those and bringing them to life faster. And again, as Alex said, we have a lot of confidence, but we're going to keep to our discipline and make sure that, that is our foundation.

Aaron, do you want to talk about SSAs as part of delivering that target?

Yes. And as I mentioned in the presentation, we have a team specializing in our single-site acquisitions. And as we go, again, it's a build versus buy decision as we see these operators facing additional cost profiles we think we are uniquely positioned to go take advantage of that, our balance sheet, our ability to act quickly helps in those conversations. So again, as we go, it's focused on asset quality and building our network in the right shape.

Yes. And Bonnie, we didn't answer your question. So you saw a 2% to 3% same-store sales, 4% to 5% total network grows. So that's this right? That is what that is.

Yes Martin Landry from Stifel A lot of good discussion on organic growth. I'd like to maybe switch to M&A. Valuations of public equities have risen a lot in the last couple of years. Has that translated into private valuations? And is that impairing your ability to transact right now?

Thanks for being here, Martin, and for the question. Asset prices remain kind of high. I think it's fair to say, Philippe. We're active on a number of things. So there's plenty of activity in our geography. And for us, it's the discipline will remain intact. I mean, the model that our founders have given us, we follow it to the letter. And that's all about returns and synergy delivery and what are we going to pay. And so I don't -- I think you heard Philippe say and Philippe, you can comment in a sec that I think we're confident we will do M&A over this 5-year period. Are we not getting several files? Yes. Is that new? No. Philippe?

Yes. I think what gives us confidence that M&A, we tip and will be part of our growth in the future that we have been very good at delivering synergies. And I don't think that there are so many players that can do that in the industry. So that gives us much confidence that we'll be able to position in the right files, we will be there. We'll be able, and that means that we'll be able to deliver this level of synergies and to pay, of course, always the right price. But there is no doubt for us that M&A will remain part of our growth.

The framework that you've articulated on the EPS side, it's more tempered than Couche-Tard's longer-term history of growth. So if you look at it even in 10 and 15 years. So wondering if this -- so wondering if this reflects heightened conservatism and certainly, the lack of M&A and/or a recognition of the law of large numbers and Couche-Tard is bigger than it was, and it's just more difficult to grow as you get larger. And maybe you could give us -- because I ask in the context because Street estimates are a bit higher than the framework, at least at the low end. So you can give us some sort of context of what would characterize at the low end and what would be a reasonable kind of middle end target of that 10 plus, which could range so widely.

And Philippe, I'll quickly come to you. This plan is based on organic growth. We want to put a plan in front of you and a strategy that we're going to deliver on. Delivering against our commitments is also part of our core fundamental foundation in our culture. This plan is pretty tightly tied to the way we budget and how we set targets internally each year. And I think the other thing I would say is that, what we've put in this plan, we are very close to or at delivering currently in this current environment. Philippe, I'll come over to you.

Yes. I would say that one of the them, main components between the EBITDA and the EPS and where we can act it's a share buyback program. And the reality here is that this buyback program for us is -- it's a kind of a plug in the model. And here, to your question, are we being conservative? SP-5 Maybe, but why? Because we want to make sure that, again, here, Vishal, we give us enough flexibility if we need to act on the M&A side, okay? So if you ask me, are we or guidance being in the lower range, we think so. But we have learned in the past. We prefer to underpromised and overdelivered, and that's what we'll be working on in the future. Irene Nattel, RBC.

Irene Nattel, RBC. One of the newer elements here that I'm hearing from you is around loyalty, data, personalized offers, a lot of which is the holy grail in retail. Can you talk about where you are on that trajectory? And what role that might play in, let's say, delivering 3% instead of 2% or even something higher than 3% on the same-store sales number.

Erica, I will be coming to you. You saw some of our capabilities today, and it's real. We're all members and we get text in. We have personalization capabilities, and we've got some cool stuff in the future that Erica all talk to. I think I referenced earlier this kind of gap that we just see widening in the U.S. to market to 500 to 600 basis points, Irene. And those are new levels for us. It's -- we're not possible to link that directly back to our just kind of advancements in digital, but we sure think they're helping. And when Erica says, we see it in the P&L, that's what she's referencing. Erica?

Yes. I would say -- thank you for the question. We're excited about where we are because we're here. We are here now. Millions and millions of our consumers are receiving communication from us on a daily basis. in the moments that matter to them at the time that matters to them on the categories that matter to them. And the ways of working is really what's a differentiator from where we were to where we are now. we are embedded in strategies with merchandising. We're attending and understand our nicotine goals, our third schools, our private label goals. And digital data and technology, we are enabling those. We're not off developing separate strategies. We know our ambitions and energy drinks. And we're going to develop customer journeys that facilitate that growth along the way. The channels are in place, the technology is in place. And underlying all of that is the data that's so powerful to connect to our consumers that our vendors really value as well.

Irene, I'd add one last piece that I'm really excited about, and that's partnership. I and Erica have now developed our ability to plug in partners. We're pretty big. So I think the notion to partner, obviously, partner loyalty programs here in Canada are pretty powerful, I believe. So we have the ability to partner both kind of nationally or country-wise, but also very locally. That's something I'm pretty excited about as we think about the future of this program.

Mike Van Aelst, TD. So I wanted to touch on the same-store sales number that you provided 2% to 3%. It's been a challenge the last number of years, tough consumer drag from cigarettes. Can you talk to us about what's so going to enable you to get to that 2% to 3% when you break it down, say, between maybe can change in the consumer health, if you're seeing that, the drag from cigarettes within the nicotine category seems to be diminishing quite a bit just because the other nicotine products are becoming much greater in size. And then also the new program. So if you kind of break it down into the less dragon cigarettes or nicotine in general, the consumer health and then these other programs, like what's how you get into?

Okay. And Philippe, I'll come to you. I believe you had a kind of a chart in your presentation. So we are planning, as Philippe said, really at a consumer environment that we've experienced the last, call it, the last past year. So there is not a plan in a massive consumer upward trend from a macro perspective. We are delivering at that level now. And I think the build is -- it's probably best Philippe, I'll just let you speak to the build because it was in your deck.

Yes. Again, when you look at this 2%, 3%, what we're saying is that we do -- we believe, Mike, that half of this growth will come from nicotine and first because -- the slide we shared about nicotine, we do see this category actually growing. We know -- we are taking into account that the cigarette is declining. But the reality is that other nicotine products are really with a strong trend there. So that's the piece. First, you have seen the number again here. There is a huge and significant trend, and we see that to continue actually to happen across our geographies and Louise and Trey can talk even more about the strong partnership that we have bid with the major vendors of this category. And we believe that here, we are really well positioned to build growth there. So that is on the core. So half of the 2%, 3% guidance. The other half is about the new offer. And here, again, Louise has mentioned, we are expecting food to grow 4x faster than the overall box. So here, there is a significant upside that we are expecting by food. And this number is not coming from anywhere. That's happening today. And we're confident that we can build up on this momentum. And of course, here, there is also the upside. We already have a lot of pride brand, as you know Louise mentioned, but there is still a significant room there. So all these components give us very good confidence that we'll be between this 2%, 3%. And when we look at dynamics between the regions, there is no doubt that for us that U.S. will be a key driver of this growth, following by Europe. And yes, there was maybe some question about nicotine in Canada. We are taking into account that. And for sure, Canada will not get this potential tailwind because we know that the environment is not the same. But overall, yes, we are very confident about this 2%, 3%.

But just to be clear, the nicotine in the past few years, was that a drag? And now you see it -- now you see it turning to growth?

Oh, yes. Yes. Yes, yes. And for us, because we -- it's true that maybe is a misconception. And again, with you can comment further there. But we talk a lot about cigarettes. But again, when we look at the overall category and including now the opportunities, the vaping and so on, this category actually is growing.

Yes. And I think we still see a strong base in traditional cigarettes, right? There's some people that are just wedded to that product. That's the product that they know and love and they're staying cigarette buyers. And when we think about sales, the manufacturers know that, that product is declining, and so they've gone to look for these other products. We talked a bit about like nicotine as we went through, but each geography has a set of products. Vaping is bigger in some of the European markets than it is in, say, the U.S. where white nicotine is the one that's growing but the breadth of the products is really an important part of the story. And we were talking in one of the breaks that -- some of these products are now socially acceptable again as well, which I think is helping drive some of this change, especially with the younger consumer.

Chris Li from Desjardins. I have a 2-part question on margins. First on fuel and then one on merchandise. On fuel first, you guys were obviously bang on 2.5 years ago in predicting industry margins will be low $0.40 per gallon and you guys are outperforming it. However, as I look back the last 2 or 3 years, your reported few margins have been largely stable. So my question is, what are you seeing that gives you confidence that it will continue to grow in line with inflation. And then the second part is there is a slide around supply chain optimization that Philippe has. Does that mean that you expect to -- your outperformance versus OpEx, you expect that to continue to widen? $0.04 to $0.05, do we expect that delta to grow because of some of the initiatives that you're putting on?

So, Louise, I'll come over to you quickly. Yes, I think the cost increases in our space are very real. They are tied to regulatory, environmental, cost of labor, increased regulation. And our breakeven point is one of the lowest in the industry, right? We have great merch sales. We have a strong cost discipline. So all of those things are supporting those margins needing to go up. And I'll let Louise talk to our ability to continue to widen our gap.

Yes. No, thanks for the call out to our outlook a few years ago. And I think it's really hard -- we're not in the business of predicting fuel margins. Hopefully, you got the sense of that. But we do believe in the fundamentals that Alex just talked to. I think a lot of our competitors are more dependent on fuel than they are -- than our business. So we have much stronger store sales to help offset some of that cost inflation. And so that's one of the things that we think underpins that the fundamentals, the macroeconomic principles behind that growth. We also see it in all markets, right? And by markets, we share with you very aggregated statistics, but we have the opportunity to look very granularly across different countries, different states and provinces in Canada. And so we see a very consistent trend as well. So that's one of the other things that gives us confidence. And then your question on the supply chain side, I think we have this big scale. And increasingly, that scale is within our control. So often when we did transactions in the past, it came with a fuel supply contract. In some cases, we still maintain long-term relationships with fuel suppliers. But in many cases, we have full freedom to source however and whenever and whatever we want in the fuel supply chain. And because of the scale, things that are a little bit boring mightn't sound like very much can add a tremendous amount of value very quickly. But this is a commodity. And we also know that we need to keep on adding that value every day because other people are out there trying to do the same things. So we believe in our ability to outperform, but we know we need to continuously reinvent ourselves in that fuel supply chain in that commodity market to keep that sustained performance and also exceed it. Supply chain is just one of those things as well. Hopefully, you've got a sense that we just look at -- we're not a company-owned departments on fuel. Many companies are. We look at it through the full integrated value chain all the way from the board pricing, the rebates we give right to the source, and that's why we're being able to drive that performance.

Just to add a final that, rightfully so we're really focusing on the U.S. But obviously, in some of our countries in Europe, we've seen some pretty significant volume decline. We have seen -- up to this point, we have seen margins largely adjust for that decline really in almost every instance, right?

Luke Hannan, Canaccord. I wanted to follow up on the same-store sales growth CAGR that you guys have outlined. And maybe more specifically, in the past, you've talked about there being challenges with the consumer that's showing up in those BUs where there's more exposure to those border states. I'm curious to know and also trying to reconcile that with your comments about Q3 momentum to date being somewhat stronger as well. So are you seeing a rebound specifically in that consumer that's showing up in those BUs? And if so, can you share anything on that front as far as what you're seeing as far as basket traffic, et cetera?

Yes. We are seeing our gaps to market widen to levels we have not experienced previously. We are seeing that pretty broad-based across all of our business units with maybe 1 or 2 examples. So we don't -- we think maybe the underlying has improved just a touch. I don't know, 7/11 announced today. I didn't read it yet. But we really believe the driver is us outperforming market further, and that is pretty broad-based across the United States.

And Alex, I'd just add this topic of channel blurring. I think, particularly in these markets where we see this change in customer behavior, different people shopping at different occasions. We've taken a step back and said, hey, what's happening in these other channels around us. And some of that outperformance is that reflection to say, where are our customers shopping? And how can we help them? Whether it's a time of economic prosperity or a time that they are uncertain. How can we help them across the board? And I think that reflection in some of these challenged locations is actually helping us really get targeted on how we help the consumer in the state that they are at the given time.

Yes the final piece I'd add is this digital component because that helps us with the channel blurring and we, I think, is helping us here because I'll just speak to myself I shop at Circle K a lot.

He does.

We know what I bought. So this isn't -- we all have separate e-mails or the e-mail companies have gotten good at filtering out this load of just mess we all get from people, right? What I get from Circle K is directly targeted to me. It knows what I buy. And now it knows when I'm on one of our sites. That's pretty powerful, and that's pretty useful to me, candidly. So we think that's part of it as well.

John Zamparo, Scotiabank. I want to come back to capital allocation. I wonder if there's an EPS or a buyback number that's implied in the guide. And then you're guiding to organic growth in a lot of component of organic plus M&A. And I wonder how we should interpret that. Is it that M&A is less likely extension part of the history of this company, but I think a lot of that's one of the products that Booster success is that it's harder to move the needle in that trend. So I wonder if we are considering doing something different M&A that you're paying more for higher quality assets? Or is it just that the opportunities are not there right now you'd rather focus on internal capital allocation?

So I'll come back to you, Philippe, on the buybacks. We want need and believe we can grow this company organically. That -- we are focused on that. We thought it was the right thing to do to provide that guidance and to share with you why we have confidence in doing that. That does not mean that we are not confident in M&A. We are as active on M&A. I've been here 14 years. I've worked on almost any sizable M&A we've done over those 14 years. there is a lot going on right now. So there's plenty of M&A. We are as active as ever. As we said we are focused on rolling up our channel. Will we pay more? So we are focused on high-quality assets. We will pay when the returns are there inside of our financial playbook. That's -- Philippe?

Yes, yes. And just to build on what Alex said, I think you like certainty, guys. And here what we're saying, okay, that's the baseline. That's what we are saying that we can control. And the M&A will be just pure upside. And we'll be achieved there. We don't want to send a message that we'll do M&A at any cost. That's what we are. We won't do that. But yes, to Alex point, we are active as ever. And there is a strong likelihood that over the next 5 years of this plan, that yes, we will be announcing M&A. I have no doubt about that. And coming back to your question on the share buyback. I mentioned that earlier. It's kind of the plug. What we are saying to you guys is that -- the share buyback is for us to remain between the 2 and 2.5x target leverage. So that's what we have embedded in this plan, and that's how we'll continue to use the share buyback program.

Bonnie Griffin from Raymond James. I guess I want to go back to one of the slides about the supply chain, but on the merchandise side, it seems you're pushing more into own kind of your own supply chain. So just curious if you can unpack that more maybe in terms of where ultimately you see can go in terms of the merchandise you have in your stores, the speed of that? And then ultimately, for us, what could the potential unlock be from a cost saving standpoint when you get to the end goal, whatever that might be 3, 5, 6 years from now?

Louise, I'll come over to you. We are pushing into the merch supply chain. Why are we doing that? When I joined 14 years ago, we bought every molecule fuel rack forward. We bought contracts. We had a bunch of fuel brands. Now we haul half of our own product. We have storage, we have traders. We have realized significant value by going into that fuel supply chain, as Louise talked about earlier. We also believe we have the capability to go do it on the merch side. We believe that the merch side unlocks a number of things, and I'll come to Louise for that. But at the critical point is channel blurring and assortment and the ability to procure what we want to procure bring those products and at a cost of goods, we like. Louise?

Yes. And I think you heard in the video, Trey talk to these advantages. So we have existing facilities today. And we see some advantages of operating them in the way that we operate them. So we do know that just with a fairly simple setup, we can already create value. And then as Alex talked about, as we go and extend our capabilities into the merch supply chain, we think we can deliver more value from 3 things. One, the customer, so bringing different types of products to them that they want. Maybe it's fresher maybe is quicker, all of that stuff, but making sure that we have those products that they actually want. And they, in many cases, may be private label, but there may also be an assortment that we struggled to get cost competitively in another way. We have the benefit of the efficiencies in the supply chain, the cost advantages of doing it ourselves. We know that when we have a supply chain solely focused on our stores, they're more reliable and they're more cost effective. So we see that as well. And then it's the commercial leverage it gives us. So the ability to go to different suppliers, manufacturers that we don't talk to today and say, "Hey, what can you do for me today? And then to use that commercially back with our existing supplier base and negotiate either with the new one or the old one or a combination of those to deliver that incremental value. and then it kind of feeds on itself, right? You're bringing new products to market, cost competitive, better sourcing arrangements. The suppliers then want to work with you and so on and so on. So we see it in the same way as fuel less commodity focused, more offer focused.

Yes. Thanks, and I'll echo my -- thanks for putting this day together. Very helpful. Mark Petrie with CIBC. So I wanted to ask about the merchandise growth beyond same-store sales growth. So I think we talked about the NTIs but that's essentially half of your top line growth for merchandise is nonsame-store sales, and that's much bigger than what we've seen historically. So could you just expand on that? Like NTI we talked about, but then some of those other pieces? And what is it that puts you at an inflection point to be able to accelerate the growth from those different areas?

Aaron, I'll come over to you. This -- we've been ramping this up for several years. And as I said, we've been delivering against our targets. You heard Aaron say these sites outperform our average sites materially. They sell a ton of food, they sell a ton of merch. They do strong volume. So it is predominantly that. I mean we will build more than 100 this year. That -- it's significant. Aaron?

Yes. Yes, I think as Alex has mentioned, we've really gained confidence by what we've seen over the last couple of years with the stores to life. And what we're seeing in the numbers, as Alex has mentioned, across our key core categories. We are very happy with the sales volume, but also the returns that we're seeing out of these assets. So tying it back to the question that Bonnie first started with, at the end of the day, we have a lot of confidence in our pipeline. We could go out there, could we build 1,000 stores. But I say that because -- we bring it back to our discipline. We bring it back to what the market gives us. We're not going to do things that we see some of our competitors doing. We're going to keep to that discipline. But the 750 number we feel good about.

And maybe just to complement the -- your question about what's in there between same-store sales and total merchant revenue. There are to a business that have been talking about that will be growing meaningfully. EV. EV that we are investing 15% of our CapEx, we are expecting actually EV to drive growth and the second one is a carwash. Carwash is already a big business for us. We believe that there is also a meaningful growth to unlock there.

Corey Tarlowe with Jefferies.

This is our last question. Sorry, I should... Thanks for coming in.

I'll try to make it a good one. I think, Alex, you had mentioned that promos were down. Curious what's driving that? And then secondarily, how do you think about pricing and promotions going forward? Given, I assume some of your large suppliers, namely one of them, I think, last week, Pepsi announced up to 15% reductions in price. And other retailers have also talked about disinflation and even deflation in certain categories within food. So how do you think about how that informs getting to that 2% to 3% and what that means for the business?

Yes. Thanks for the question. Louise, I'll come over to you. Yes, the promos are down. They're down because we're a lot better with our data. And we are analyzing our promotions. We have boundaries and frameworks for what's a successful promotion and what's not a successful promotion. I think you heard me say we're more focused on just impactful promotions on impactful products in spaces that we know we -- these are products that people really want. We know that they're looking to us to have them and we can offer very attractive price points. So that journey for us will just continue. You heard about the investments in data platform 2.0. It will just continue and the data is going to drive that. We do not view that as a negative. We view it as a positive. You've seen the last 2 quarters, we've had some gains and that's part of it. Deflation, I think Pepsi lasers get killed. And they're not the only CPG company, right? I mean these are -- the price points between private brand and some of the CPG companies, and they're losing market share. And I think some of them believe they've gone too far. I think we'll make decisions on where we price and how we do things. But I guess we're not at a point where we see that as a significant risk at this stage. Louise?

Yes, just said, we're trying to drive sales through selling more products to our customers. That's our ultimate objective, right? And so we know we need to have them priced and promoted in the right way to make money for ourselves and for our customers to get a good deal for things that they really want a good deal on. So being more purposeful with promotions is a key part of that. We'd rather have something that people get really excited about rather than the whole store on sale. Our data and analytics capabilities are getting better, but we still have more room to go in that journey as we collect the data using the identified customer data that we have through loyalty, that helps us drive that even more. So I think it's all of the things Alex talked about, price promotion deals, rewards, personalization will play a big role, and we'll continue to evolve that. But to address your question on deflation, I think our objective is to drive sales through more customer visits, people wanting to buy more products from us. That's where we start that conversation or traffic.

Just want to sincerely thank you all for being here and engaging with us today. We're excited about our future. We're focused on our culture and who we are in our core -- we see other areas to grow. So thank you very much for being here and spending the morning with us. We have some lunch out there. If you're able to stay, please grab some lunch and get home safe. Thank you very much.