Saputo Inc. (SAP) Earnings Call Transcript & Summary

Good morning to all, and welcome to this shareholders' meeting. My name is Lino A. Saputo, Executive Chairman of the Board. In this capacity, I will be chairing today's meeting. I am delighted to welcome our shareholders in person for the first time since the pandemic. I'd also like to welcome our shareholders who are participating in this meeting online wherever they are in the world. With me today, I've got Carl Colizza, who assumes the role of President and CEO, following my transition, to the role of Executive Chairman of the Board. I'm also here with Maxime Therrien, CFO and Secretary, who will act as the Secretary for this meeting. And we have Lydia Pham, Senior Vice President, Legal Affairs, who will act as moderator. Congratulations on your promotion. So in case you missed it, Lydia just got a promotion. I would like to highlight in particular the presence of my father, Mr. Lino Saputo, Founder of Saputo Inc. I would also like to highlight the other members of my family who are here present, thank you for being with us this morning. I am very touched. I would also like to acknowledge the presence of the following members of the Board of Directors, Anthony Fata, Annalisa King, Henry Demone, Annette Verschuren, Karen Kinsley, Diane Nyisztor, Franzisca Ruf, Olu Beck, including our new Board members, Victor Crawford and Stanley Ryan. And today, in particular, we have some of the... Before beginning, I'd like to say a few words with regards to general proceedings of the meeting. The meeting will be conducted primarily in French with simultaneous French-English translation. The procedure for asking questions during this meeting is described in the proxy circular. Registered shareholders and duly appointed proxyholders present in the room will be able to ask questions at one of the microphones when invited to do so. You must identify yourself and confirm your status as a shareholder or as a proxyholder before asking your question. Online participants must be logged in using their control number to be able to ask questions during the meeting. [Operator Instructions] Online participants who have logged in as guests will not be able to vote or ask questions. [Operator Instructions] If we cannot answer your question in the allotted time or any of the questions in the allotted time, we will publish the answers in the Investors section of our website. We reserve the right to modify or reject questions that substantially repeat the content of a question asked by another participant. The concerned personal grievances, any question that is deemed inappropriately relevant to the meeting that deal with nonpublic information concerning Saputo or that serve the personal or commercial interests of a shareholder. At this meeting during the management presentation or during the question-and-answer session, we may make statements containing forward-looking information within the meaning of the applicable securities legislation. By their nature, these statements are based on assumptions and are exposed and subject to significant risks and uncertainties, and our actual results could differ materially. I refer you to the cautionary note on forward-looking statements in our annual report on our website. I would now like to appoint Ms. Martine Goutie and Ms. Teresa DeLuca of Computershare Investor Services, Inc. as scrutineers for this meeting. The scrutineers have provided an attendance report, and I can confirm that a quorum of shareholders present or represented by proxy is present. The matters to be dealt with at today's meeting are set out in the proxy circular dated June 6, 2024. The company used the notice and access system to make its meeting documents available and sent a notice including all relevant information in this regard to all shareholders on or around June 25, 2024. The circular, notice of meeting and annual report are available to shareholders on our website. Additional copies are also available at the registration table here today. For online participants, you have access to these documents by clicking on the Documents icon on your screen. All these documents are also available under the company's profile on SEDAR+. I will, therefore, omit reading the notice of meeting. Our transfer agent, Computershare, has confirmed that the applicable meeting materials have been sent to shareholders in accordance with the Canadian Business Corporations Act and the company's bylaws. I hereby declare that this meeting is duly convened and constituted to transact the business of the company. I move to omit the reading of the meeting of the minutes of the annual meeting of August 11, 2023, and to consider them carried. The minutes will be kept in the company's books and may be consulted by any shareholder. We'll now proceed to voting instructions. Voting will be by secret ballot. On all motions under consideration today, each shareholder of the company is entitled to 1 vote per share held. Firstly, for those present in the room, registered shareholders and duly appointed proxyholders who have not already sent in a proxy or who have revoked their proxy have been given ballots at the entrance. Computershare representatives will collect these ballots after the last motion. For online participants, registered shareholders and duly appointed proxyholders who have logged in using their control number can vote on all agenda items. For our shareholders who have already sent in a proxy, it is not necessary to vote during the meeting unless you wish to change your vote on a motion. A shareholder or proxyholder authorized in writing who wishes to change his or her vote must immediately revoke his or her proxy either by going to the Computershare office at the -- or the Computershare table at the entrance or if you're in the room or by clicking on the voting icon if you're online. As Chairman of the meeting, I move all motions, none of which need to be seconded. Once discussion of all agenda items has been completed, a short period of time will be dedicated to voting. Preliminary results will be announced before the end of the meeting. The first item on the agenda is the presentation of financial statements. A copy of the company's financial statements for the year ended March 31, 2024, is available on our website and on SEDAR+. I would now like to invite Max to come and make a few comments with regards to fiscal 2024 and first quarter 2025, I will then continue with my presentation of our achievements for the next year. Carl will then do an overview of our strategic priorities. Max, the floor is yours.

Good morning. Thank you for being with us here this morning today. Fiscal 2024 was marked by further progress for our company. We showed that we could be disciplined and stayed the course despite volatility in dairy commodity prices and the effect on consumer behavior when it comes to persistent pressures from inflation. Although dairy commodity prices on international markets continue to have a negative impact on our financial performance, our core businesses performed well. Cash inflows from operating expenses and activities were $1.2 billion up, so up 16% on the previous year. We have achieved this by focusing on the elements that we can control, specifically cost management initiatives, improved operating performance, which allows us to position ourselves to be able to mitigate market effects and sustain organic growth. As for our strategic initiatives by sector. Let me start with Canada, where the focus has been on increasing capacity. We've completed several automation projects in packaging and palletization in our plants across the country. New equipment has been installed at many of our manufacturing facilities. We also benefited from measures implemented as part of our continuous improvement program. In the United States, several investment projects to optimize our cheese plant network are now fully operational or will become fully operational over the coming months. Our investment program has made good progress. We've emphasized automation, improvements in quality, capacity and efficiency to be able to maintain our status as a high-quality, low-cost dairy product processor. New grated cheese production lines have been successfully launched, and we are in a good position to be able to meet customer demands. Further investments will contribute to supporting our growth ambitions and allow us to maintain our leadership position in the string cheese category. New automated cutting and packaging facilities in Franklin, Wisconsin, is also up and running and should generate short-term profits. Once the start-up phase is complete, and that this state-of-the-art plant is operating at full capacity, it will allow us to transfer existing packaging activities from other manufacturing sites, making it a focal point of our cutting and packaging capabilities in the American Midwest. Optimization of our network of cheese factories is one that is of utmost importance. To date, we have closed 4 of the 6 facilities previously announced for closures in the United States, thus allowing us to reallocate resources to more efficient plants, improve our product mix and offer better services to our customers. In the international sector, which includes Australia and Argentinian -- Australian and Argentinian divisions, we are seeing the positive impact of network optimization initiatives aimed at improving our operating efficiencies and boosting our competitiveness. In Australia, we recently completed the sale of 2 fresh milk processing facilities to further streamline our operating model. We achieved cost savings through the closure of the facility, the reduction of activities at the facility and the consolidation of some warehouses. We are also evaluating strategic alternatives for our King Island facility in Tasmania. These combined measures will allow us to consolidate 11 plants into 6. In Argentina, we have maintained our leadership position. La Paulina is the country's most popular cheese brand. Our team continues to leverage the flexibility of our platform in order to achieve the best return per liter of processed milk. In particular, we have carried out several network optimization projects, which have led to increased volumes in the hard cheese and mozzarella categories. In Europe, in the United Kingdom, we sold the surplus inventory produced at a time when higher milk prices existed as planned. We have progressed with our optimization initiatives. Our capital expenditures to bring together all our cheese cutting and packaging activities together at a single site, Nuneaton is now complete. Several new lines are currently being commissioned at this facility. We have also closed our Frome plant. The stage is now set to make Nuneaton a center of excellence in the U.K. in terms of profitability, efficiency and capacity. Now for our financial results for fiscal 2024. Consolidated revenues amounted to $17.3 billion, down 2.8% from the previous year. Although the core of our business remains solid in terms of volume and price management, the decrease was mainly due to: one, the combined effect of fluctuations in the average block market cheese -- for cheese and the average butter price in the U.S. segment; and two, lower prices on international markets for cheese and dairy ingredients. Adjusted EBITDA for fiscal 2024 amounted to $1.5 billion despite an $80 million negative impact from unfavorable U.S. commodity markets. We achieved solid results in both the Canadian and U.S. sectors, both of which benefited from operational improvements, specifically cost-cutting measures, implementing or implemented to minimize the impact of inflation and lower logistics costs. In addition, the benefits of our strategic plan also had a positive impact on our results. In the international sector, profitability was affected by the growing gap between the price of goods on international markets and the cost of milk as a raw material, particularly in Australia. It was mainly this unfavorable relationship that led to a noncash goodwill impairment charge of $265 million. Net income totaled $264 million or $1.64 per share for 2024 compared to $711 million or $1.70 per share in fiscal 2023. With cash inflows from operating activities of $1.2 billion, $245 million was used to pay cash dividends and $652 million was allocated to net capital investments to support our growth initiatives. During the year, we announced the suspension of the dividend reinvestment plan. This suspension is attributable to our level of indebtedness and our expectations regarding cash flow generation. Yesterday, we announced our results for the first quarter of fiscal 2025. Adjusted EBITDA was up 6% at $383 million, while first quarter adjusted net income was up 8% at $167 million. We had a very good first quarter marked by revenue growth driven by higher volumes in all sectors and strong cash inflows from operating activities. The U.S. sector had its best quarter since fiscal 2021, while the Canada sector continued to perform well. More importantly, we have begun to reap the benefits of the decisive actions that we took over the past few years. We expect short-term volatility to persist when it comes to input costs, currency fluctuations, changing consumer behavior and macroeconomic conditions. In this context, we continue to focus on what we can control and on rigorous execution. We expect to gain momentum in fiscal 2025, thanks to realizing the benefits of network optimization, growth in sales volumes, lower milk costs in Australia effective July 1 and finally, at the end of the cycle of disposing of inventories manufactured at the time of high milk costs in the U.K. This positions us well for growth in margin improvement, cash flow generation and debt reduction. As at June 30, our net debt to adjusted EBITDA ratio stood at 2.26, in line with our target. In closing, the Board of Directors has revised the dividend policy and raised the quarterly dividend to per $0.19 share, an increase of 2.7%. The quarterly dividend will be paid out on September 20th to shareholders of record on September 10, 2024. Before handing the floor back over to Lino, I would like to thank our colleagues, customers and partners for their loyalty and their support. Thank you very much.

Thank you, Max. Thank you. The past year has been a testament to our collective strength and determination. In the face of market headwinds and industry-wide challenges, we stayed the course, remaining focused on our goals while displaying our trademark dexterity. I am very proud of what we've accomplished. Among our notable wins in fiscal 2024 include a simplified and strengthened manufacturing footprint, a further reduction in complexities, improved recruitment and retention practices and we successfully met consumers where they shopped with our diverse product portfolio. As always, behind all the important progress we've made are the dedicated employees who make us the innovative and resilient organization we are today. I'd like to thank our valued team members around the globe for their ongoing commitment to excellence. This is an exciting time for us. I firmly believe Saputo is more agile and collaborative as a company today with a long runway of promising opportunities ahead. Embedded in each stride of our journey, our Saputo Promise continues to guide our everyday actions, create shared value for all stakeholders and ensure our business operates with integrity and accountability. Supporting our 7 pillars remains as important as ever, and I'm delighted to share some of the headway we've made in the ESG space over fiscal 2024. A key pillar of the Saputo Promise. We've continued to make significant investments in our people, our most valuable asset. Last fall, our commitment to fostering diversity, equity and inclusion saw us recognized as one of the world's top companies for women by Forbes for a second year in a row. Complementing this, our Canada, U.S. and corporate service teams also received parity certifications from Women in Governance, a nonprofit organization dedicated to empowering women at all levels. Under the people pillar, we continue to focus our global well-being strategy around 4 priority areas: Work, Life, Physical and Mental. As part of these efforts, we completed the deployment of our mental health first aider program across all our divisions in fiscal 2024. Through this global network, any employee in need can now turn to qualified colleagues to get immediate support and be referred to appropriate resources. Our relentless focus on our people has also led to improved employee retention with lower turnover and absenteeism rates in many of our facilities. Moreover, I am pleased with the further enhancements we made to our onboarding process and ever more important employee recognition programs. As for our environmental pillar. I'm delighted to report we've invested $70 million in capital to fund more than 65 projects to reduce the carbon, energy and water intensities of our operations since fiscal 2020. These important efforts have already borne fruit. The carbon intensity of our operations has decreased by 18%. Meaning, we are well on track to achieve our fiscal 2025 target of 20% compared to our fiscal 2020 baseline. Ensuring the sustainable sourcing of our dairy ingredients also supports the Saputo Promise. As part of our supply chain pledges, we continue to engage with our milk producers and funded several initiatives supporting sustainable farming practices in our U.S., U.K. and Australia divisions. These projects will serve as a model for similar rollouts to come in Canada and in Argentina. An intrinsic part of our promise, we also achieved great things under our community pillar. Through our community engagement initiatives focused on building healthier communities such as our legacy program and community partnerships, we've helped over 4.4 million people globally, an increase of 258,000 compared to fiscal 2023. And in fiscal 2024, we strengthened our commitment to encourage our employees to volunteer. We've expanded our volunteer time-off program across all our divisions, allowing our employees to give back to their communities by providing them paid time off to volunteer with nonprofit organizations close to their hearts. Finally, we continued our efforts to redistribute our food surplus in communities where we operate, donating more than 2.2 million kilos of product to food banks across our operations. This represents almost 6 million people fed around the world in 1 fiscal year alone, something we're very proud of as a food company. I could not be more delighted by the positive impact we're making. Now on the final stretch of our most recent Saputo Promise 3-year plan, we are staying focused on executing our strategy, remaining accountable and laying the groundwork for our future goals. We anticipate our post fiscal 2025 climate targets to be validated by the science-based target initiatives. So you can see by now, I'm very optimistic about what the future holds. Over the past 70 years, we've worked hard to build a robust foundation to grow from, and I'm confident we have what it takes to sore to new heights. As always, I'd like to thank our Board of Directors for their sound guidance, vision and their insightful leadership, especially during these uncertain times. Thanks to their prudent counsel and support, we've stayed the course and emerge a stronger company, improving our operational platform, making us one of the most efficient players in the global dairy industry. It is truly a privilege to work alongside this outstanding group, and I look forward to all we will continue to accomplish moving forward. I especially want to recognize Henry Demone, who is not standing for reelection today. From all of us on the board, we thank Henry for bringing his invaluable expertise, wisdom and steadfast dedication for 12 years. In closing, I'd like to take this opportunity to once again acknowledge our remarkable employees for their passion and unwavering loyalty. Thank you for your ongoing commitment to Saputo and for continuing to make us a world-class organization. Now I'd like to hand the stage over to Carl Colizza, Saputo's new President and CEO. Carl, you sure you want this job?

Yes.

Great. I'm happy to give it to you. Carl, do you have been an instrumental individual in developing and delivering on our strategy and I have no doubt that under your leadership, Saputo's global business and unique culture will continue to flourish. For better or worse, Carl, the 2 of us have worked together for the past 25 years with more great years to come, I'm sure. Congratulations, again, and now my friend, over to you.

Thank you, Lino, for those words. I would like to take this opportunity to thank you on behalf of the entire Saputo team for your focused leadership, your integrity and your unrelenting commitment to making Saputo the success that it is today. Your patience, your passion and your enthusiasm are truly infectious and you've inspired us every single day with your bold vision for the business. It is an honor to follow in your footsteps after having had the privilege of working closely with you over the past 25 years. As CEO over the past 2 decades, Lino has successfully shepherded Saputo through phenomenal growth and international expansion. He did so while navigating and adapting the business in dynamic markets and through evolving consumer and customer needs. Today, Saputo is leading global dairy company steeped in history and filled with the promise of a bright future. Our standing today as a top 10 global dairy processor was attained through the execution of a clear growth plan, which included mergers and acquisitions and strategic investments. It was and continues to be underpinned by our Saputo Promise, our strong culture and a passionate team. We have been challenged along the way, but all of these challenges have made us a stronger company and have made us more determined to execute our plan, all thanks to Lino's visionary leadership. I'm very happy to have been able to be part of this journey and to be able to count on Lino, both as a leader and a mentor throughout my career at Saputo. Today -- President and CEO at a pivotal moment for our business. Like all of us at Saputo, I am immensely proud to be part of this organization, and I very much share Lino's enthusiasm for our future. We have a strong foundation with a portfolio of exceptional brands and world-class assets. My goal is to improve and build upon Saputo's already solid core and make certain that we move expeditiously and decisively through our next growth cycle. My #1 priority is to ensure we remain good stewards of capital, investing in future growth while maintaining a healthy balance sheet with a strong liquidity profile. We will also continue our relentless focus on the metrics that drive shareholder value. Starting with operational synergies. Achieving sustainable improvements in our cost structure and capturing high-quality growth opportunities. To echo Max and Lino, our global strategic plan has taken us on an exciting journey, and we have now reached a critical inflection point. We can now begin to fully capitalize on the robust and agile global platform we built together. We have made material progress in advancing the key initiatives of our strategic plan with a clear line of sight to project benefits. After 3 years of investing to optimize our global network, most of our capital projects have been completed and commercial production is ramping up at several facilities. We continue to build confidence in the next stage of our growth, one in which we will leverage our capabilities and capacity to support earnings growth and cash flow generation. While the majority of our global strategic plan initiatives are behind us, you will continue to see the results of those efforts. We do have more work ahead of us, and we are laser-focused on achieving what we set out to do this year, our priorities to execute with excellence. Throughout the balance of fiscal 2025, our focus is set on controlling the controllables, delivering on our remaining major capital projects and positioning ourselves to maximize the benefits that will materialize following a return to more stable dairy market conditions. We are building upon the momentum created with numerous commercial wins in our core categories. In the quarters and years ahead, we will further adapt our strategies as we leverage our world-class capabilities and asset base, accelerate our commercial agenda and remain agile in adapting our manufacturing footprint. I can also say without hesitation that we have the best people working together in an amazing culture that gives us the courage to set big bold goals and the passion to deliver on them. I'm very enthusiastic to when I look at the opportunities waiting for us. I will dedicate all of our energy to delivering on what we want to do within the context of the next phase of our growth. I am very confident in our long-term strategy, and I'm optimistic about our future as we execute on our plan with the support of our strong leadership team. I wish to thank and recognize all Saputo employees for their passion, our customers and consumers for their loyalty, and our shareholders for their trust and support. I would also like to thank, once again, Lino; the Saputo family; and the Board of Directors for their trust. In conclusion of my first Annual General Meeting with you and hopefully not my last, I would like to emphasize my unwavering commitment to our shared vision. We'd like to continue to stimulate innovation, uphold our core values and seize opportunities to propel Saputo to new heights. Thank you.

All right. The next item at our -- No pressure, Carl. The item on the agenda is the election of Directors. The Board proposes that the current members of the Board, with the exception of Henry Demone, be nominated for election as Directors. Their biographies can be found in the proxy circular that you received. I move that the following 10 persons be elected as Directors of the company to hold office until the next meeting of shareholders or until their successors are elected: Olu Beck, Victor Crawford, Anthony Fata, Annalisa King, Karen Kinsley, Diane Nyisztor, Franzisca Ruf, Stanley Ryan, Annette Verschuren and myself, Lino Saputo. All candidates have confirmed that they are entitled and willing to serve as Directors if elected. We will now take your questions on this agenda item. We will first take questions from the floor and then we will move to questions online. [Operator Instructions] There are no questions in the room. Lydia, do we have online questions on this item? Okay. Thank you. Lydia. We do not. We can now vote on this item. In order to vote online, please select the applicable voting options on the voting panel appearing on your screen. Participants in the room who have received ballots may also vote. [Voting]

The next item on our agenda is the appointment of the auditor. I move that KPMG be appointed auditor of the company until the next Annual Meeting of Shareholders and that the Board of Directors be authorized to set KPMG's remuneration. If you're in the room and wish to ask a specific question at this point, please come to the microphone, identify yourself as a shareholder or proxy holder before asking your question. I don't see questions from the room. Online, Lydia, do we have any questions online?

No, we do not.

Thank you, Lydia. I invite you to vote now on this item. [Voting]

The next item on our agenda is the adoption of a consultative nonbinding resolution on the company's approach to executive compensation. I move that on an advisory basis without diminishing the roles and responsibilities of the Board shareholders accept the company's approach to executive compensation as described in the proxy circular for the 2024 Annual Meeting of Shareholders. If you're in the room and wish to ask a specific question on this item, please do go to a microphone, identify yourself as a shareholder or a proxyholder before asking your question. I do not see questions in the room. Any questions online, Lydia?

No, we do not have any questions online either.

Okay. Thank you very much. I now invite you to vote on this item. [Voting]

We will now move to the shareholders' proposals. We have received 4 proposals from the Mouvement d'éducation et de défense des actionnaires. Following our discussions the MEDAC accepted that we only have 1 up, something that provides the company with an advisory vote on environmental policies. I will turn the floor over to Mr. Willie Gagnon, who is normally on holiday, but it is -- he is here this morning with us. Willie Gagnon, thank you for being here. The floor is yours.

Mr. Chair, thank you very much. My name is Willie Gagnon, I am acting on behalf of the MEDAC, I am supposed to be on parental leave, but I'm very happy to be here. This said, for 4 years, the meetings were virtual only. So we have not seen each other for 5 years. No, that's not true. We saw each other at the metro -- sorry, the National Bank meeting. We saw each other at that AGM. We are in the same circles. We had a motion on this with regards to in-person meetings. We decided to not submit some proposals, and you said you don't expect to come back to only virtual meetings. We're very happy to hear that there -- that you've joined the list meetings who still do things in person, and we are encouraging everyone to come back to in-person meetings. Those who refused to do it this year unfortunately lost the vote. So we won the vote on this question, and we're very happy about that and we will continue to use your example, in the future for all other companies that continue to resist in-person meetings. And we have 4 motions. Over and above that, there were 3 others. There was one based on incentive remuneration for ESG goals. As all employees, we signify all employees who could have an impact on ESG principles. And we've had discussions with you, and we know that you already have measures in place, and this has been the case since 2022. You can read that on Page 85. For the languages disclosed, we asked that you're doing it in the same way that we have asked that, that happened and so you accepted to disclose the languages spoken by the management and we are happy to see that. And we had a proposal that will be submitted to the vote, which is following -- the following: So the consultative vote, the company should get a policy on this annually with regards to its goals and its environmental action plan and climate action plan. You know that the environmental question is more and more important with time, that is for sure, specifically in your sector of activity, that's clear. And your answer is the management continues to communicate with shareholders and other stakeholders in different ways. And so this would be one other measure. It's not there in place to replace anything that's already there. And the arguments in favor of a consultive vote are the same. So those in favor of this vote on the compensation that you are already doing, so you are already doing that. So it's a target. And we hope that you will be in favor of what we are asking of you that you do this. Other companies do it. You say you're not keen. Others do votes like that. It's a consultive vote, an advisory vote, so even if you lose, you are not held to do that. So we're wondering why you don't want to put in place an advisory vote? You say that you are in constant discussion and the measures that you have in place are exhaustive measures and efficient. We don't see how a vote such as this one could make your other actions inefficient. Anyway, so we don't agree with your answer and I understand the motion, it's submitted to a vote and we ask all shareholders to support this motion. Thank you.

Thank you, Mr. Gagnon. Thank you to the MEDAC for the discussions that we have had. Lydia, do we have any questions online with regard to shareholder motions?

No, we do not.

Okay. If you're in the room and you wish to ask a specific question on this item, please come to the microphone and identify yourself as a shareholder or a proxyholder before asking your question. There are no questions in the room. The reasons why the Board of Directors recommends that shareholders vote against the motion to provide the company with an advisory vote on environmental policies are set out in the circular. You may now vote on this item. Online voting will close in just a few moments. If you have not yet submitted your vote online please do so now. [Voting]

I invite everyone in the room to raise their hands so that scrutineers can collect completed ballots. Are there any in the room? No, I don't think so, right? Okay. Great. So thank you to all. I declare the ballot closed. Scrutineers, confirm the following preliminary results. According to the proxy voting results received, at least 99% of the votes cast were in favor of the 10 Directors proposed in the proxy circular. Approximately 99% of votes were in favor of KPMG's appointment as auditor. The advisory resolution on executive compensation was approved with approximately 98% of the votes cast were in this -- in favor. The shareholder resolution submitted by MEDAC was rejected, 93% of votes cast were cast against the motion. Shortly after the meeting, we will file a report on SEDAR+ showing the final voting results for each item put to the vote. In addition, we will report on the election of each director in a press release. We will now open the floor up to questions and answers. We look forward to answering your questions. I'd like to remind you that registered shareholders and duly appointed proxyholders who have logged on online using their control number may asks questions by clicking on the messaging icon. [Operator Instructions] We'll now open the floor to questions-and-answers.

[Operator Instructions]

My name is [ Michèle Goette ] I'm a shareholder of the company. I had 2 questions. The first one is, I'd like to get some information on the impact of the new Canada's food guide on you. And in line with that question, the percentage of revenues produced for plant-based products, what's the percentage of your sales? And what target are you aiming for on the long term?

Thank you for the question. Today, we manufacture plant-based cheese and oil-based cheese. We do that in the U.K. currently. We have a good brand, and we're marketing a good product in that sector. Here in North America, we market the same product, specifically in food service restaurants. Retail-wise, consumers didn't like it as much. North American consumers are not necessarily as ready for that product. As for beverages, as such, we're still manufacturing beverages under private brands, so plant-based beverages and that is our marketing. We are also doing marketing in Australia. We have 2 brands associated with that. Revenues and profits are still quite low, though, this said, compared to milk.

My second question is you -- in your report, you said that you have a whole lot of opportunities to seize. Can you give us more details as to these opportunities? What's the reference? The earning power -- earning power potential.

Right, right. So today, with the strat plan that we have in place, there are lots of investments in new technology. We have consolidated platforms, but the whole thing has been put in place to be able to increase our capacities and our efficiencies so that we remain extremely competitive on the market. Over and above that, we have tools now that will allow us to improve the marketing of our brands, that continues to grow. We have to continue to invest in the whole portfolio and so those are things that will be coming down the pipeline as well. We're very happy with the investments that we have done around the world in all of our facilities and we are looking forward to seizing opportunities as things evolve.

Okay. So it's more a question of internal growth then. Am I understanding that correctly?

Well, it's internal growth, yes, but new markets as well, new markets -- there are new markets to explore. We have a lot of plans around our commercial ambitions. Thank you, [ Mr. Goette ].

[indiscernible] I am an engineer in logistical operations. My question is how -- and I'm a shareholder, how can AI or data analysis optimize the supply chain as laid out in your strat plan?

Okay. Thank you. On a high level, okay, high level, I have to tell you that this is something that we are currently doing. We're adopting new technologies. So data analysis, our colleagues are currently doing some manual work they work with software, but they're also adopting AI approaches in that sector. So all that to say that we have a very clear vision of the use of tools to improve our manufacturing planning to ensure that everything is aligned with market demand. And ultimately, we want to optimize where our products are stored. We want to be close to our markets, we want to be efficient and we want to increase not only return but have a better user or consumer experience.

Do we have other questions from the room before we move to online? Okay. No others. Lydia, do we have online questions?

No, I confirm that we do not have any online questions.

Okay. All right. Thank you all for being here today. We've very much enjoyed seeing you again. I'd like to thank our Board of Directors for their exceptional work and their invaluable counsel and advice. It is with great enthusiasm that I begin my new role as Executive Chairman of the Board. I look forward to supporting Carl and the management team in achieving our corporate objectives over the coming years. Carl can also count on the support of our employees who are at the heart of what we have been doing since the very beginning, 70 years ago. Their passion and dedication are a great source of inspiration for me, and I thank them from the bottom of my heart. Thank you as well to our customers, our suppliers, our business partners our community partners and our shareholders for their loyalty and trust. Given that there are no other items on the agenda, I declare the meeting adjourned. Thank you to all, and have a good rest of your day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]