Superior Plus Corp. (SPB) Earnings Call Transcript & Summary

All right. I'm slowly going to get started here as you take your seat. But thank you all very much for joining us today, both in person and on the webcast. We're really excited to be sharing this presentation with you today. A lot has gone into it, and we're really excited and hope you are, too. For those of you who I haven't met, I'm Chris Lichtenheldt. I joined the company last fall as Vice President of Investor Relations. We will be making some forward-looking statements this morning, so I'd encourage you to review that content at some point. So in terms of agenda this morning, Allan will make some opening remarks, and then you'll hear from each of the leaders in our propane business over the course of the morning. We'll then take a break, a short break. After that, we'll regroup, and we'll go through Certarus, some of our interesting technology initiatives, and Grier will wrap up with some financial conclusions. After that, Allan will have some closing remarks. And then we've got a Q&A session, and we've left a fair bit of time for Q&A. So if you don't mind just holding your questions until the end so we can get through everything on time, that would be great. And then after that, for those of you in the room, we will be having a lunch. So thank you all again very much for being here, and I hope it's a great morning. So before I pass it to Allan, we have a short video we'd like to share with you, and then we'll kick it off. [Presentation]

Well, good morning, everyone. Thanks so much for coming here today. It's so good to see you all. A long anticipated Investor Day for Superior Plus. I would be remiss if I didn't thank you for your patience. I know you've been looking forward to this day as much as we have. And the more time you have, the more time you use to plan. So it's been a long couple of months for us, and it'd be good to see tomorrow. You can tell from the video, this is a company with a lot of history, both in Canada and on all the companies that make up Superior Plus across the whole continent. And we've got a team of people that are incredibly proud of what they do, and so they should be. So it's really nice to see. I have to laugh because we talk a lot about propane in the agriculture sector, and I grew up on a farm. The farmer that I worked for the dairy farm didn't believe in heating the milking shed like our customers do today, and I wish he had. We're really excited to share our vision with all of you today and the strategy we have to execute for Superior for the next generation. What we're really talking about today is this transformation to sustainable profitable growth for our company. How we're using our existing assets to perform better, how we're creating a new operating model, and positioning Superior Plus for growth and incremental profitability for many years to come. Now having a great team is central to your success in an endeavor like this and running any successful company, and the people leading this organization are as passionate a bunch as I've ever met. They are the future of Superior Plus and the role they play is incredibly important. We have a team made up of people from outside the industry that have a long history of transformation who put their change agents, and a group of people from within the industry who bring decades of experience and understanding of just how the propane and CNG sectors work. And like I said, they're as committed to our success as a group I've ever worked with. Today, you're going to hear from Steve Quinn, our Chief Transformation Officer. Steve is going to outline superior deliveries and the transformation that we're undergoing. We've got big ambitions, and we're executing with discipline and a data-driven approach. Tommy Manion is going to come up after Steve, our Chief Operating Officer for propane. Tommy is a 30-year industry veteran. He's thinking differently and he's challenging traditional operating models and how propane works across North America. Rick Carron is going to talk to you about our plans to grow organically. Rick is our Chief Commercial Officer. And he's going to talk about how we're investing in tools to acquire more customers, retain them longer and transition to driving customer lifetime value. Shawn Vammen is the President of Wholesale, and he's going to give us an interview -- an overview, sorry, of the wholesale division and how that strengthens Superior's role as a leader in the propane sector. After that, and a break, you're going to get to meet Dale Winger, our new President at Certarus. There's a tremendous future for CNG, and Dale is the right leader for this new era, how we're going to be capturing growth, focusing on operations and maintaining our position as the market leader in compressed natural gas, renewable natural gas and hydrogen. Following Dale, Ash Rajendra is going to come up, our Chief Information Officer and talk about how we're investing in technology to make all of this possible. And then finally, Grier Colter, our Chief Financial Officer, is going to walk through the financial implications of our strategy and how we're setting new expectations for financial performance for Superior Plus from this day onward. So before Steve, let's talk about this great company and why I'm so confident in our journey. Starting with purpose, vision and mission, a lot of people would say that's table stakes. But for us, that's our guiding light. We got together as a team early last year and spent a few days saying -- evaluating where we were, what the challenges were in front of us, and we wanted to set a stake in the ground for how we were going to focus and how are we going to work together as a team. Our purpose, mission and vision are really about how we work, what we value and what would be required to build the Superior that our investors expect, sustainable financial performance and profitable growth. Our vision is interesting, to be recognized as North America's best-in-class energy solution provider. Two words there are turns of phrase that are really important. One is recognized and the other is best-in-class. That's in the eyes of our stakeholders, our customers, our investors, and our employees. They get to decide. It's their expectations that we have to live up to. It's a high bar, but it forced us to focus long term, gave us the courage to challenge everything and the obligation to stay focused and never be distracted and never think short term. Our mission is what we value and how we work. I'm hoping that you'll see these themes throughout the day. Our relentless focus on safety, how we challenge ourselves every day to achieve that high bar that's set by our stakeholders, that we've built a world-class team and identified that that's imperative in terms of our success. And that above all else that we're retaining, attracting and knowing our customers because they're at the heart of everything that makes us successful. So why did we choose this path? And how are we executing on our vision to make it a reality. Well, Superior Plus is a unique company. Every year, we make 2 million deliveries across Canada and the U.S., making us one of the top 3 propane providers in North America. We have 500 locations and a fleet of 2,100 delivery vehicles. Superior operates in the most coveted markets on the continent, serving over 750,000 customers a year. We deliver critical energy services to businesses, farms and homes, in communities from St. John's, Newfoundland to Vancouver, British Columbia, Bangor Maine to Bakersfield, California. With CNG, we have a fleet of 850 MSUs and over 20 hubs. We deliver almost 30 million MMBTUs a year. And we are the stand-alone leader in over-the-road CNG, RNG and hydrogen. Certarus' pioneered over-the-road CNG and created solutions for industrial companies to safely and reliably adopt CNG beyond the pipeline, reducing their costs to operate and their carbon output. Certarus changed the game, and it's just the beginning. Superior is in a position of strength, both in propane and CNG and we see a world of opportunity. In propane, seasonality, weather and market trends have led many to believe this is a market in decline. The reality is quite the opposite. Despite conservation and electrification efforts, our research, our history, and PERC data, PERC is the Propane and Education Council -- Propane Education Research Council, sorry, are affirming that propane is and will remain an essential low-carbon energy solution beyond the pipeline for years to come. And this is a unique market. 71% of the share in propane is in the hands of independent retailers, and it's growing. There's no clear market leader, no innovator, no disruptor. That's our opportunity. We're in a position of strength. We can capitalize on our scale, invest in the tools and capabilities to be that disruptor, to increase our share, which despite our size is only 6%. 750,000 customers in a market of 50 million households and businesses that use propane across the continent. With CNG, it's about growth. Demand for industrial energy is increasing across all sectors. With almost 50% share, Certarus is uniquely positioned. We have the fleet and reach to continue to grow with the market and provide energy solutions to more customers in more verticals, but we'll be diligent. Maintaining our focus on operating efficiency, being smart with our capital investments and growing with the market, not ahead of it. So let's talk about our strategy to take advantage of these impressive assets and market conditions to create a high-performing company. Shareholder value at Superior Plus will come from these 3 pillars: First, operating efficiency, unlocking incremental profitability, reinventing our operating model, modernizing our tools and processes, embracing data and reshaping our teams. This will all result in lowering our operating costs, so we can deliver more energy with more efficient routes with fewer trucks and fewer locations. Second is growing the business. We're in attractive markets and the best geographies, but we haven't been acquiring customers organically. We've underinvested in the marketing and the capabilities to continue to grow. Today, we're thinking differently. We're focusing on capturing a bigger share of those 50 million homes and businesses. Our third pillar is our financial performance. Over the past 2 years, we've been working hard to establish a financial -- a solid financial base for Superior Plus, stabilizing our financial foundation so we can think long term and invest in this transformation. What you're going to see today, I think, speaks for itself. Superior Plus will be delivering substantial free cash flow from here forward. So why are we convinced these markets hold this value? Well, you're going to hear a lot more from the team about the opportunities in the segments. But this industry is so often overlooked or misunderstood. In CNG, it's obvious our customers have grown dramatically. They've created a new industry for over-the-road CNG and they've got strong unit level economics. And you're going to hear from Dale that we remain the market leader. Our scale, our fleet and our hub network, along with our safety record, mean we're perfectly positioned to grow profitably as the CNG market expands with existing verticals and into new geographies and industries. Propane customers represent a very attractive opportunity for us but you have to think about customer lifetime value. Seasonality and weather, cloud the value proposition within the propane customer base. This is a stable base that has a very high cost to switch. It could be very profitable if we stay focused on retention, offering competitive pricing and creating an excellent customer experience. Like many direct-to-customer businesses, density is our key -- is the key here. The value proposition, the price and the cost to serve all depend on density. So let's look at why large propane companies haven't captured this true potential within the industry. This is what we call the negative value cycle. Now large propane companies, Superior included, have failed to capitalize on this market and let independents take more share. Why? Well, there's a vicious cycle that's been following us and others. Weather, inflation, seasonality and declining share has put pressure on these organizations to deliver the results, especially public companies with quarterly growth expectations. A normal reaction that's too often used is monetizing your customer base, responding with raising prices to offset this financial pressure. As you raise prices, you drive churn. The churn is incredibly costly to this business. Churn creates lower density. Lower density means less efficient routes, underutilized assets, excess capacity, higher cost per customer to serve and ultimately, further lowering your margins. The further financial pressure on results means the cycle repeats itself. The impact of this negative virtuous cycle is perhaps most felt in the long term. Companies in this cycle are too distracted with short-term performance and cost pressure to invest in the capabilities to break free. They've underinvested in things like customer acquisition and retention. And I can tell you firsthand, this was our experience. Our marketing budget was incredibly low. And until 2024, we had no leader of customer retention at Superior Plus. In fact, we didn't have a means to even measure it accurately. The customer experience investment that's required to continue to serve your customers well to share information and to engage them is in decline. You underinvest in other tools like the capabilities to operate more efficiently at scale, especially if like us, you've grown through mergers and acquisitions. So in the end, the result is the operating model becomes static. It becomes outdated with every passing year less and less effective. Now we're in an attractive industry. It's very stable. We have profitable customer base, but we're not growing or capturing the true value. As an industry, we're losing share to independents. Ask yourself how many other industries are in a similar position. The answer is very few. The only solution here, only solution is to break that cycle. You have to transform, you have to reinvent yourself and you have to capture the opportunity in this market. If we don't do it, someone else will. That's what Superior delivers is all about. It's not a cost reduction exercise. Although addressing cost is important, this is a transformation. We're building an industry-leading cost to serve using new capabilities to deliver more energy, more efficiently with lower costs and fewer assets. It's about growing our share, putting those lower cost to use by investing in lowering prices, capturing share and creating a customer experience beyond anything our competitors offer today. And it's about acting like the company we are, from source to home or business using our world-class wholesale business as a competitive advantage, really for the first time. Procuring propane at the source and having to supply where we need it, when we need it without incurring the cost that third parties charge our competition for that same capability. Superior delivers ultimately, is about breaking that negative value cycle, modernizing our model, lowering our costs and being obsessed with customer lifetime value, not being distracted with short-term results that come at the cost of the future of the company. It's about getting serious about investing and growing our share well beyond 6%. At Certarus, we have different opportunities. From 2022 to 2023, we went through a period of incredible growth. The team accepted that challenge. They captured the growth in the market, building incredible market share. They did a great job investing in the business and building a world-class operation, an excellent job. Certarus is the market leader in over-the-road CNG today with over 20 hubs in a fleet of 850 MSUs and an impressive 44% share. But now market growth is normalizing, and we have to adjust accordingly, and we will. As Dale is going to outline, Certarus is in a very attractive market, but it's one in its infancy. As demand for energy grows, so too will Certarus if we stay focused, focused on what's been key to our success. Continuing to be the market leader, growing with the industry, establishing new geographies and verticals and innovating engineering and logistics solutions as we've done in the past. But it also means focusing on our operations, being as efficient as possible so we can maintain the advantage of scale, something that was forsaken really in the propane business. We can't make that mistake. And finally, being patient with our capital, growing as the market grows. Investing with returns and timing in mind not getting ahead of the market. It's an exciting time for Superior Plus. You can probably tell I get pretty passionate about this stuff. We've been very impatient as you could probably imagine. But we had to temper that anxiety because true transformation takes time. It has to be thoughtful. It has to be well planned and diligently executed. The journey we're on is incredibly serious and complex and we have to make sure we're building the right team to take on this challenge. And we knew it wasn't going to be quick or easy. But we also knew we had the right assets, the right people and the plan to change the course for Superior, and we are definitely on the right track. We announced today that we're raising our target for Superior delivers from $50 million plus by a further $20 million to $70 million plus in incremental EBITDA by 2027. This is nothing more than a testament to our confidence in the strategy and the path forward to unlock value that exists within this enterprise. Our plan changes the trajectory for Superior Plus. We're looking at a very different financial future. We're projecting EBITDA growth of 25% between now and 2027. Free cash flow increasing by nearly 200% and a 300 basis points improvement in our return on invested capital, all while managing our leverage and reinvesting in our company by buying back shares. Most importantly though, beyond all of that, we're creating a future where Superior has the cash and equity to continue to grow for a generation to come. So it's a big day for us. I can't thank you enough for your patience and for joining us today. We're very, very excited to walk you through all the details of this plan. But not only are we excited about where we're going, but it's been quite a journey in terms of how we're going to get there. So let's get started. With that, let me hand things over to Steve Quinn to talk to you about Superior Deliveries. Thank you.

Thank you. Good morning, everyone. I'm glad to be here with all of you today. Definitely glad to be the first one to speak after the CEO. I think we got some great advice from Allan yesterday on this presentation, given that it's many of us, it's our first time having a chance to address the investment community. And he said to me, specifically, "Steve, it's only your job at stake, Don't worry about it. " So I think we're all ready to go as I think the important thing here. So let me get started. I'd like to just share that I've been at Superior for just under a year. I spent my career in industry and in consulting, working on value creation, and strategy work and P&L performance activity for companies as small as $30 million and as large as $30 billion. Most recently, I was the Chief Transformation Officer, executing the largest retail transformation in Canada, delivering over $300 million in incremental profit. Now why did I join Superior? Well, simply, I saw a fantastic opportunity in under-the-radar part of the energy market to reinvent the business model and create a lot of shareholder value. So I don't know about all of you, but that kind of stuff excites me. So that's why I'm glad to be here today. Three topics to cover with you today. Superior Delivers is transforming our propane business from top to bottom to allow us to capture the untapped potential we have in this market. Secondly, we're laser-focused on our virtuous cycle which is our reinforcing flywheel for winning in the long term in propane. And we want to show you our shift to performance management and performance outcomes using real data and accountability. So let's start at the start, kind of the origin story of superior delivers. We have 3 pillars in Superior Delivers. Each one has 20 to 40 initiatives inside. Each is led by an executive sponsor that you'll hear from today. And we have a total of over 100 initiatives with business cases, road maps and milestone plants, 60 -- a little bit more than 60 are in execution today. But how did we even know we needed transformation in the first place? While in 2024, we took a sober clinical look at our business, it was almost a year in the making, an empirical assessment of the business, challenging all of the assumptions about our business and our industry. Who are our customers? How do we price them? Why do they leave? What are -- what's our cost base look like? What are our unit costs? What's our productivity? What duplication exists in our business? And honestly, what advantages do we have? What we found was that there are a wealth of gaps in the business. And actually, those have turned into our opportunities. At a high level, we know that our shareholder returns have not been good enough for the last few years. We know that our M&A strategy historically has not produced the kind of profit growth that we would like and all of you would like. And we knew that our asset base was large, but it wasn't advantaged. And so we had to change that. So now here's the good news. The insights from this assessment led us to our new business model, the virtuous cycle, and more on that in a moment. For now, we've begun to tackle these opportunities. Simple things like a single active customer definition for all of our propane businesses so that we can measure and monitor our customers like implementing a new capital framework so that when we invest in our business, we know that, that dollar will deliver stronger returns. And we have complex initiatives to tackle like improving the pricing and volume relationship with our customers, where the correlation has not been as strong as we'd like in the past. Diving deep into local customer economics, and addressing the large variance in our asset-based productivity market by market. We have some markets where we invest a dollar and it creates double the profit of another market. And so we need to address that. We've also found that there's lots of work to do to shift our leadership culture to focus on performance management. These are must haves for transformation because Superior Delivers is preparing our company to fully execute on our virtuous cycle over the next few years. Now let's talk about that virtuous cycle. This is about an uncompromising focus on lowering our costs. We're attacking our costs, our trucks, their operating costs, our bulk plants, our labor profile, our tanks. We're looking at all of it. This allows us -- by looking at all this and lowering our cost, this allows us to improve our value proposition and have better pricing, more competitive pricing for our customers, which in turn allows us to acquire more customers and retain our existing ones. As Allan mentioned, once we do that, as we do that, we increase our density in all of our local markets, which creates a marginal cost advantage for us. And we're back to the start of our virtuous cycle where we're looking at our cost once again. Now managing our cost and pricing is a very complex ecosystem of data. It requires millions, if not billions, of computations, 2.1 million deliveries, 750,000 customers. We need to know how much fuel is in each of their tanks. How long does it take to get to the customer? What's the distance between the customers? What type of customer are they? What do they expect from us? And many, many more variables. This is difficult, if not impossible, to do manually. So building scale in the virtuous cycle means we must move to real-time cost data. We have to have new tools to analyze that data, and we need to have a performance management system that brings the whole thing together. This allows us to gather, sort, understand our data and connect it to pricing and operations. Geo-targeting customers is one example for density purposes, which we're doing today, where all of this has to come together. So now I'd like to talk about one more quick example of the virtuous cycle. And actually, this one is my favorite. It's about customers. Customers are our lifeblood. We can't treat our customers like my daughter who's 9 years old, treats her piggy bank, which is very short term. If you take a look at the left side of the page, historically, we've offered a teaser to our customers to attract them, whether that be a low introductory price or free fills or otherwise. But this offer, it's time bound. It expires. And then we move to market pricing and, in some cases, higher while you're in a negative value cycle. This is to cover your initial costs and some of your ongoing cost inflation. And historically, this has resulted in just too much churn a lot of times in the second and third year of a customer relationship before you breakeven. And now you have to acquire another customer to replace the first one and incur all of the costs of marketing, acquisition and set up once again. If we take that same customer and we look at the right-hand side, and we think it through it from the perspective of the virtuous cycle, we offer the customer a competitive price, we maintain that price for a longer period of time. We do that by managing costs and managing density, which is our job, and we keep the customer for a very long period of time. Customer goes from having a negative customer lifetime value to almost $1,000 and for each successive year, past year 8 in this chart, you obviously have incremental profit on that customer. So you may be thinking now, Steve, I get it. What are you actually going to do in Superior Delivers? So let's talk about the first pillar, customer -- or sorry, cost to serve. This is led by Tommy and we expect more than $35 million in incremental EBITDA. Historical acquisitions and less focus on operational performance management has led to a significant opportunity for us to lower every cost line in our business and at the customer level. So some of the opportunities from our assessment that we're converting to value through superior delivers include things that are related to inefficient delivery movements. A few examples. 6% of our deliveries historically are 0 fill or no fill. This means we drove to a customer site and we didn't put any fuel in their tank. In one difficult example, we went to a customer 3 times in 7 days and didn't put any fuel in their tank. This is a huge opportunity for us. It's the kind of example that's really low-hanging fruit. Another example is when a customer tank falls below 30%, it triggers us to schedule that customer for a delivery within about 3 or 4 days. This isn't very flexible for delivery purposes as we end up in the same neighborhood or driving the same street twice in the same week. And so what about their burn rate? That customer, when they're below 30%, the fuel in their tank may last a week, it may last a month. Sometimes, the seasonal customer lasts the whole year. And so we don't need to go to see them within 3 days. So we have to align consumption rates of the customer to when we make deliveries so that we have a better use of our assets. And speaking of asset efficiency, our cost base is just plainly overbuilt. Some of that's due to historical M&A, and some of it is due to us building for the peak of winter, an 8- to 12-week period where we have the maximum operational activity. And Tommy is going to talk to you a little bit more about what we're doing to shave the peak. What else are we doing in this pillar? Well, we've built a cost-to-serve model to attribute costs at the local and customer level. Marginally for cost management and ultimately, pricing purposes. We're rolling out world-class analytical tools to optimize our 2.1 million deliveries using actual customer consumption data to determine how to reduce the distance traveled, reduce the visit frequency and maximize fill percentage for every visit. We're expanding our tank refurbishment program so that we have a capital-light way to deploy to new customers. And we're simplifying and deduplicating processes in a single operating model for speed and efficiency. So we're addressing cost to serve. Obviously, the next question is how are you going to grow your customers and margin. Our second pillar is customer growth. This is all about understanding customers from the perspective of lifetime value. It's led by Rick and we expect more than $30 million in incremental EBITDA. When I joined, I saw this as an exciting opportunity. We hadn't modernized any of our go-to-market capabilities. So opportunities we're converting in this area from our assessment are things like 5% to 10% of our customers historically were unprofitable. 50% of our existing customer contracts had fees that we had not enforced. And we can be better with add-on products to create stickiness like auto pay and equal payment plan. In our largest customer segment, which is our U.S. residential customers, we have less than 15% penetration of these products. And Allan mentioned our churn rates, which have been mid- to high single digits historically, and we had no one accountable for churn. Can you imagine a bank or a telecom or any other company that has a large installed base with nobody responsible for retention? So we're changing that. As we've said, we've added a proactive retention function using our own proprietary data and propensity models to identify and determine when customers may churn and intervene. We're redesigning our products to make them simple and modular. We're building a pricing capability that's tied to customer-specific economics. This is all part of the virtuous cycle. So Rick is building an unmatched organic growth engine by expanding outreach channels, including outbound calling and digital capabilities and managing the full cycle of commercial customer relationships. This leads us to our final pillar. And certainly, the question may be, how does wholesale fit into all of this? So we expect an incremental $5 million or more from this pillar. It's led by Shawn, and this is our Wholesale Advantage. Wholesale is an advantage for us over every one of our competitors, whether they are scaled or independent. This is all about securing advantaged supply, better cost and risk across all of our geographies. So opportunities we're converting here. Historically, our U.S. supply team was separated from our mature wholesale business platform in Canada. We are duplicating some of the hedging risk and supply activities. We had internal pricing models between wholesale and retail that were just plainly inefficient. We are spending more time talking internally than facing the external market and looking for value. So we've brought together our supply function across North America. It's a 1 billion-gallon leading wholesale management platform integrated with our retail business. In one quick example, our U.S. group had 3 intermediaries supplying the same bulk plant for us. Shawn's team has taken a look at it and quickly figured out that we can eliminate those 3 intermediaries and go directly from terminal to bulk plant ourselves within our own system. We're also automating tools in this area for both logistics and margin. Shawn will talk more about this, but this is about managing North American cost and risk, all the way from gas plant to customer tank. So now, what's the payoff of all of this work? As Allan mentioned, this all adds up to $35 million or more in achieving industry-leading cost to serve. More than $30 million from customer base growth retention and margin management and more than $5 million from our Wholesale Advantage platform. In total, the incremental EBITDA opportunity is more than $70 million from Superior Delivers. This is an 8% compounded growth rate through 2027, including our organic base. We also expect capital productivity improvement throughout the time frame. So again, the good news. Hopefully, you've heard a little bit and you'll hear more today. There's a lot of low-hanging fruit here. I and we are really excited about this opportunity. So now that I've covered the what of transformation, let me briefly cover the how. Cultural expectations are must-have in transformation for leaders, for employees and for execution accountability. In my transformation experience, you have to change the cadence of the organization and accelerate the speed of decision-making. One week has to become 1 day. Decision commitments have to be closed loop in nature, and you have to measure everything with financial and operational KPIs. This started over a year ago for us. We're bringing the best talent into the right roles. We're setting very high expectations for performance, and we have an executive line leader that owns every one of our 100-plus initiatives directly. We will not compromise on accountability in this transformation. There are no points for trying and only the results matter. Let's look at operational performance management, really briefly, and the new elements to our approach. I just want to share a couple of examples. Monthly performance reviews of our business and weekly, if not daily reviews of our Superior Delivers initiatives to accelerate decision speed make sure things are happening and moving them forward. This is a big change for our organization. We're automating business intelligence so that we have hundreds of KPIs at the field level, up to the executive team and across the organization quickly. And we've got disciplined measurement of value creation in all of our activities. You'll often hear me or one of my colleagues asking the team, does this add value this activity? And if the answer is yes. The second question is, tell me where it shows up in the P&L or the balance sheet, show me. So we are finding opportunities in our business that we didn't even know existed. Some areas are performing much higher than expected. In other cases, we're just learning something new that we can analyze, understand and tackle as we try to build the best propane business in North America. So in recap, Superior Delivers is going to reposition our platform from top to bottom with the virtuous cycle in mind. And we have a singular focus for this year and for next year, and that's results. So next, I'd like to introduce Tommy my favorite Chief Operating Officer of propane from Kentucky to share more detail on our cost to serve pillar. But first, let's look at how Superior is improving directly from our field team. [Presentation]

[indiscernible] I forget one thing. One of the reasons I came over to Superior in 2019 was just the desirable geography and the markets that they were operating in. They were targeting high-value companies for acquisitions. They were some of the best companies with very valuable customer base. Due to that early growth through acquisition, too, we ended up creating natural gaps in our geography, allowing additional space for us to grow in those high-value markets. When you couple that with the great -- coupling this great footprint with the market-leading cost-to-serve tools is very powerful for us and strengthens our company. We plan to execute on these initiatives to improve efficiencies through a data-driven approach and injection of technology using various tools, which enable us to improve scheduling and better utilization of our assets, allowing us, of course, to have a lower cost to serve. So imagine all that work we're doing on the operations side to lower cost to serve. Rick is doing all the work over on the commercial side to grow our business. And as we integrate these 2 work streams together, it allows us to do what no other has done within our space. Filling 2 legs of the virtuous cycle that Steve talked about earlier, lowering our cost to serve and growing our business. Once we start that, it will be perpetual and magnified. So let's level set on the landscape of our company. The blue highlights the states that -- and Providences that we currently have retail operations. And as you can see, we have enviable coverage in the population areas in high-value markets. So let's take a look at some of our '24 data. In U.S. propane, we produced $219 million in EBITDA. Canadian propane, we produced $82 million in EBITDA. We have over 4,000 dedicated employees across North America, 861 delivery vehicles in the U.S. and 399 in Canada. All of this underpinned by 750,000 customers and 500 locations in both divisions. We have a very strong foundation, and we have scale. And as Allan mentioned earlier, we're North America's largest propane retailer and Canada's largest propane retailer. But most importantly, behind all that, we have a tenured and talented leadership team. These individuals are excited to leverage our existing scale while executing on cost to serve and the growth initiatives. They know that we have an opportunity to methodically grow increase density and lower our cost to serve, ultimately delivering value to our customers and our stockholders. Before we get into the cost to serve that I want to talk a bit to you about driving customer safety at Superior, we're committed to creating a safe work environment for our customers and our employees. Safety is a core value to us and it's a priority. We've established a really good safety culture at Superior, and we've done that through individual ownership by our employees. For instance, when an incident occurs at one of our facilities, we stop work, we reflect upon the incident, and we determine root cause through an investigation to ensure that it doesn't happen again. And then secondly, all of our employees are empowered and have the authority to stop work when an incident -- when they feel an unsafe condition exists or if they feel that they're not properly trained to do the job. These are just examples of actions that we're using to build a strong safety culture and are furthering our journey to 0 harm. We have aggressive goals for '25, but the ambition is that everyone goes home in the same condition they came to work. We've established high expectations for our contractors and how we maintain our facilities and our equipment through our Supplier Code of Conduct and our Asset Integrity program. All of this for the safety of our customers, our employees, our communities and the environment. Additionally, we're leveraging technologies like the Samsara collision avoidance and severity reduction system. To prevent collision, also using AI to identify potential driver fatigue. Samsara is, of course, is a forward and backward-looking cameras that we install in all of our vehicles and allows timely coaching of all of our drivers. We also use it, though, to reward safe behaviors because Samsara scores our drivers and to help them promote safe driving habits. Our drivers with the 100% safety score have driven over 2.8 million miles and I'm proud to say, we've decreased our DOT rate by 41% in 2024. We're also using other technology like Intelex Software, which allows timely incident management and as a clearing house for our data collection, which will use that data to identify trends for future improvement. And lastly, we're improving our training programs. For example, we're using HazMat online training and technology training tools to improve all of our safety and ensure compliance with their drivers. We're doing the right things for the safety of our employees and our customers. So let's get back to cost to serve. As Steve mentioned earlier, we're currently on track to increase EBITDA by $35 million through 2027 and these 3 improvement levers. First is our dynamic route planning, that's our customer delivery efficiency. We use this technology to reduce inefficient fails and 0 fails and to deliver at the right time to the right customers. which reduces our trips for a year to that customer and improves our overall customer satisfaction. Two, we're optimizing our scheduling. That's our customer delivery efficiency. We use this technology to reduce inefficient fails and 0 fails to deliver to the right time and the right customers. Third is rightsizing our asset footprint, which we inherited our current asset footprint due to acquisitions. This tool analyzes the work allowing better management of assets, identifying potential redundancies and allowing us to capitalize on opportunities to improve. So we have the scale and now we have the data analytics capabilities to better manage our business. Ultimately, these 3 levers will reduce our cost to serve and improve our value prop. But first -- so let me take you through some examples of pilots and projects that we currently have in progress. And -- but as we go through these, just keep in mind, these are just a few initiatives that we're -- out of the 130 initiatives that we currently have on our slate. My first example pertains to route optimization. This is a very, very powerful example here. On the left, we have a legacy route evaluating customer, in red with the cost to serve of $3. On the right, we have an optimized route evaluating the same customer A, resulting in $1.50. Moving customer A from one route to another through optimization, reduces cost to serve that customer behalf. That's 50%. What a difference. And keep in mind that this improvement cascades and magnifies in real time as we optimize all customers. Again, the example is just for illustration, but now the highly efficient routes aren't obvious without this technology. In smaller companies without scale, route optimization are seen as necessary unless -- is not seen as necessary due to overall magnitude versus a company of our size. We deliver over 2 million -- we make over 2 million deliveries a year. So that means we need to get this right and it equates to substantial savings. Ash and his IT team are enabling this tool and other tools through data-driven insights. He'll speak to this a bit later. These insights enable us to competitively through real cost savings and the technology to increase our capabilities to optimize routes at scale and drive density ultimately relieving our cost to serve. So this tool is built and is currently in place being used in a pilot that we're running in the Southern Ontario. Miles per delivery and gallons per delivery are the metrics we're using to measure the pilot performance. For each, we've established a baseline, which based upon their historical performance. And we've established targets, which were determined through initial modeling that, if achieved, would mean the success of the pilot. And as you can see, the early results are encouraging, surpassing our targets in both metrics. Miles per delivery target was set at minus 8% and the gallons per delivery at plus 6%. This pilot is just one example of how we're approaching transformation. It's a continuous improvement mindset. It's a data-driven approach where we test, learn, make changes and continue to focus on targets measuring outcomes for a sustainable improvement. From our early results in this pilot, we'll apply the same continuous improvement mindset and continue to strive for additional progress in this pilot. By optimizing scheduling and delivery, we promote more efficient fields, reduced miles driven, reduced number of deliveries, all while delivering the same or better gallon production. We're a seasonal and weather-dependent business that creates peaks and valleys in our demand. While certainly, some of our customers must fit within this demand curve. It's not necessarily true for all the customers. In this project, we ship deliveries from our first and fourth quarter peaks into our second and third quarter valleys where we have latent opacity. This is a nontraditional approach in the propane industry as we generally just staff up during the peaks. The data display represents 2024 gallons by quarter segmented into 3 customer categories. Listed first and on the bottom of each category is the not flexible category. It's in gray. And these customers must be delivered to within that quarter. There's a requirement of that customer that they need the gallons and within that quarter, so that can't be moved. The next is the semiflexible category, denoted in green. These customers require 1 to 6 deliveries per year. So we'll use the tool to determine the amount of customers to move from the first and fourth to the second and third quarter. So that's the primary use of the tool. And then lastly is a fully flexible, denoted in blue, these customers only require 1 delivery or less per year and represents 12% of our deliveries. And obviously, all of these can be moved into the second and third quarter. So by making these shifts, using the tool, the goal delivery schedule represented by the -- we end up with the goal delivery schedule represented by the blue line, which will mean we'll have better labor management and more efficient asset usage. This reduces the peak of staffing and truck needs during the first and fourth quarters, allowing our existing resources to take up the slack in the second and third quarters, of course, reducing our cost to serve. So I mentioned several times, we built -- we're built through acquisition. So in this, we end up with a lot of over and underutilized assets. There's a clear opportunity for us to considerably simplify and rationalize that footprint, if we use a more data-driven approach. Steve mentioned earlier, our geo analytical team evaluated this U.S. region looking at every plant's fixed cost which includes the capital lease, utilities, other associated costs for that plant and then weighted those fixed costs against the increased variable cost of making the same delivery from another bulk plant. As you can see, this also is not a very simple process and requires technology to achieve. The bulk rationalization tool uses a balanced approach between location costs and delivery cost to the customer. And this example displayed using the tool illustrates substantial legacy network overlaps due to past acquisitions. On this map, the green denotes plants to keep, read denotes the plant suggested to close and light blue represents the customer footprint. Through plant rationalization in this region, we expect to shed 35% of the plants, reduced location costs by 50%. Now our delivery costs will go up because we're moving plants, but we still realize net savings of 10%. Historically, we lack this capability, but the plant rationalization tool allows us to reduce our cost to serve. Additionally, these new analytics enables us to identify areas to target for growth to increase our customer density, which Rick will talk to you about later. In summary, through optimized scheduling and delivery, by 2027, we expect a 10% capacity reduction due to reduced miles and number of deliveries. Optimized schedule and delivery has 3 focus areas in which we change the way we work; route optimization, which is simply minimizing the distance traveled; optimized scheduling, which is simply increasing fill rates on each delivery and then balance seasonality, which is lowering deliveries during our peaks. By doing the work, injecting the technology and using data analytics, we reduce costs, optimizing delivery routes and scheduling improves efficiency and enhances our customer service. Just through better scheduling and routing, we plan to reduce cost by 10%. In closing, I'm definitely excited about being -- about the future of the company. We have tools that we never had empowering efficient operations. As a matter of fact, I wish this technology had been around over my 34 years, it would make my job a lot easier. The team is energized to execute and drive results. We have positive momentum. We have successful pilots so far, and we're encouraged about what we're going to achieve now and over the next 3 years, actually a great time to be at Superior. In addition to reducing the cost to serve through the tools and processes I just described, we also having an opportunity to capitalize on growth through the work being done by the commercial team. So let me introduce Rick Carron, our Chief Commercial Officer, to describe the plenty grower business.

It's great having a partner like Tommy doing all the hard work, I get all the glory. How about that propane weather this morning? I'd love to say we had something to do with it. Of course, we didn't, but we love it. Thank you, Tommy. I'm Rick Carron, I'm the Chief Commercial Officer for North American Propane. Just a little bit of background about me. 20 years as an executive in multi-industries from consumer packaged goods, to telecom, to software, but more importantly, the lion's share of my experience is in energy. I've shaped and rejuvenated go-to-market strategies. I've led growth initiatives in many roles in my career. I couldn't be more excited to be doing that with Superior. Allan and Steve, Tommy talked about the importance of profitable growth, really growing our customer base. while maximizing lifetime value is the path that we're on. We're excited about this renewed commitment. We have a tremendous, tremendous opportunity. The past 8 years have largely been focused on M&A, which is where we got our growth from. Allan talked about historically, we've underinvested in growth and retention. Those days are over. We're transforming to organic growth. The video showed the passion of our employees this morning. They see tanks going out to be installed versus reading about an acquisition. This is tangible evidence for our employees that were changing. My material today, all things customer, expanding our knowledge with data-driven insights, attracting desirable customers with innovative offers and I'll spend some time on that, proactively securing customers with consistent long-term pricing with clear terms and conditions and providing that exceptional level of service, growing our customer base while maximizing lifetime value. Tommy shared the work that his team is doing. He's building capacity for our organization. He's creating a cost-to-serve advantage as part of that vertical cycle, lowering our costs gives us the opportunity to have a competitive price, more attractive offers, which gives us the ability to compete with big and small competitors no matter where they are, which fuels our growth opportunity. Proactive retention, we're really upping our game and taking control. As a few of our speakers mentioned this morning, we have 750,000 customers across North America. We need to pay attention to that. Targeted customer acquisition versus in the past, national broad reaching campaigns that are the same for everyone. We're going to drive a more targeted acquisition strategy in the desirable markets and regions that both Allan and Tommy talked about. Deepening our customer intimacy and knowledge really modernizing and leveraging the insights we get from our own data, this will be a differentiator for us. As the commercial leader, I see so many opportunities in our business. I'm energized to tackle this opportunity and I can tell you, our employees are fired up about Superior Delivers. I've yet to talk to an employee that doesn't see opportunity in our business. No matter what they do from the drivers that you saw on the screen today to people working on our accounts payable department. It's awesome. Okay. Tommy shared some factoids about our North American business. I'm really going to just set the tone. We are unmatched any other retailer in North America. Allan talked about capitalizing on our scale, leveraging those attractive markets and the customers that we serve. In Canada, we operate in all provinces and territories, and we're active in 23 states in the U.S., as Tommy mentioned. The numbers on the chart is impressive. We're very proud of our presence. But I will note some differences. You'll see on the bottom of the green chart, but 71% of our gross profit comes from residential customers in the U.S. On the flip side, same stat, 70% or so of our gross profit comes from commercial customers in Canada. That gives us unique comparison opportunity where we can take best practices in both segments and leverage across our business. In 2024, we delivered 580 million gallons to customers across North America, but you can see at the top of the chart, the total addressable market is exponentially higher than that. What a great opportunity. Just look at what we could do there. We have several advantages to grow our market share. First, and Tommy highlighted this, safety. Safety is a core value of ours. It's our cornerstone, and frankly, customers expect that. We have 500-plus distribution points that we can service all types of customers and deliver to the needs that they have. We have 170-plus dedicated professional salespeople covering customers across the entire continent, sharing our value proposition, making sure we understand what their needs are. Our technical and engineering knowledge is our reputation. We bring value to our large customers. And lastly, maybe not something that's terribly obvious, Certarus is being part of the Superior Plus family gives us a unique opportunity to provide a low-carbon multi-energy solution to large well site and industrial customers. The customer have asked us about this. Nobody else in North America can do that. We have clear line of sight, as Steve talked about, there's great opportunity in the customer side. We see a clear line of sight to $30 million plus of incremental EBITDA. We have dozens and dozens of commercial initiatives. So let me really summarize the levers that we're going to pull in commercial. Simplified, consistent pricing making it easy for our customers to understand. Creative product offerings. No, we're not going to add all sorts of other products, but I'm going to describe to you how we're going to offer solutions to customers. Focused proactive retention. We haven't done it as much as we should have in the past. We're going to do a whole bunch of that going forward well before we get that termination call. Targeted growth optimizing customer density. We talked about the importance of that, driving down our overall costs and our delivery routes and pursuing best-in-class through the eyes of our customer, the level of service that we give them. These levers support the virtuous cycle that Steve introduced to us, lower cost equals an increased value proposition, equals our ability to grow which improves our density and so on. All right. Let's talk about pricing strategies. I could spend the entire morning on this. I'm going to show you why. We're illustrating at a point with the distribution curves on the left-hand side. The concept is pretty simple. The black line shows you where we're coming from. There are some customers that were priced incorrectly and -- sorry, were priced incorrectly. This makes us less competitive and increases the risk of churn. On the other side of the black line, we have some customers that we lose money on. We didn't have accurate cost to serve data at the customer level. We bought companies without an understanding of what that cost to serve was. Neither of these scenarios for us or the customer is a good place to be. The red curve is where we're headed, a narrow distribution of customer pricing with overall better returns. So the superior propane of the future, competitive pricing tied to customer economics, underpinned by cost to serve at the customer level and intimate information about what that needs of that customer is. We'll use data to drive how we structure products and product offerings that are competitive and create stickiness with our customers. Now here's where I'm going to get excited, bear with me. It's a pretty common place right now, and this is how we're being disruptive. That customers are seeing their electricity sources going down, brownouts are happening, power outages occur. Backup or a standby solution, is an opportunity for us. So in the past, we would have just sold that customer through a national marketing campaign and hoped that we got some consumption out of them because their consumption is very variable. It's all over the place. It depends on what happens with weather. Well, we launched a product called Superior Standby, and it's exactly what it sounds. It's a standby product, that's subscription-based. We charge the customer a nominal monthly fee, they get their tank filled up at the beginning. We monitor that tank, and we fill it when it needs to be filled. All the customer has to do is pay the monthly subscription fee. Why is that different? Because it gives us a clear economic return on that investment with that monthly subscription. It's easy for the customer to manage that standby product. And more importantly for us, we get a committed monthly recurring revenue stream, disruptive, important, different. We want to reduce the triggers of churn. So let me give you another example. Like I said, I could spend a lot of time on this slide. Let's talk about a budget-conscious family who gets 3 deliveries per year. Let's say, each delivery is about $800. That's a big bill to swallow, $800 at a time. This could be a trigger for them. So what if we charge them $200 per month on an equal payment plan. We took that worry away from them on how am I going to pay that $800 bill. What if we took it even further, what if we build them just for what they used, that's not done in the propane industry today, but it could be. We have the technology to do that. It's something that we're exploring. Now that's being disruptive. Disruptive in this case, is good, not like when I was in high school and being disruptive. This is a great thing for our customers, and it will change our industry. We want customers for life. So engaging regularly with them on what's important, rewarding them for their loyalty is crucial. All right. Churn. We talked about it this morning Ash and his team is helping us build a churn prediction tool. So why is that important? Well, why do customers churn? There's usually an event that happens could be a big bill like I talked about earlier, could be price change, could be an out-of-gas situation. It could be an error on their bill or miss delivery. The customer will investigate. They'll determine that the price they pay is premium to the service that they perceive to be getting, and they look for alternatives. So our approach, first step, all about that product offering that I talked about. The next step is being more proactive though and predicting that the risk side, customers that may be, this enchanted we're mining customer data, customer events and proactively reaching out with purpose to address the issue or offer a better value to that customer. Finally, we'll develop a personal offer specifically for them, and that's the punchline, one that will resonate value for them in the long term. You can see a quote on the screen, and I'll tell you why we got that. Prior to last year, we really didn't proactively reach out to customers as we talked about earlier. Early in '24, I had a team pulled together some customers that we thought were at risk and we mined a whole bunch of data, and we looked for those event triggers that I talked about, there's about 2,200 of them. We did a pilot, called them. We fast up to something that may have happened, but more importantly, we offered a resolution to that. That quote on the screen is from a customer that said, "Wow, there was a reason you called me. I've never had that before". Not just a telemarketer reach going, "Hey, how are you doing", it's actually, "hey, this happened, here's what we want to do about it. We hope that makes you happy". Going forward, this is a big opportunity to scale, and we need a tool to be able to automate this, look at data rapidly, put information in the hands of our call center people and develop an automated churn prediction tool, giving us the insights to those customers that we deem to be at risk. All right. I'm going to show you a simple example of how we're going to target our marketing growth activities. So let me really walk you through this. This is in Georgia. And what this diagram shows is the green dots are our bulk plants, and the larger circles are what we call delivery zones. Delivery zone #1 is a high-density area. We have a cost-to-serve advantage, and we can offer competitive aggressive offers in that area. Zone #2, a little bit less dense. The benefit of adding customers will drive down our overall costs. So we'll target that group of customers with specific offers to get them to convert from their current provider. Zone #3, a little further away. We'll leverage our cost to serve in density data. We'll work on developing critical mass, adding customers and then develop a business case to potentially add another distribution point. The red zone at the bottom of the screen would be deprioritized. It's got less density far from our distribution points, not a priority for us. This is a really basic example, but it underpins the targeted approach versus a broad national marketing growth initiative campaign that doesn't have customer centricity built into it. It's -- here's a practical example. I think Steve talked about this a little bit. Southern Ontario, where Tommy did. In December 2024, we looked at the density map. We called the Gulf area green zone with an opportunity to be aggressive with our pricing structure and speak directly to those customers. We put together a targeted lead campaign, and we went aggressively with our sales force to get customers. I can tell you, double-digit growth since then in that area. We're proving out that concept, and we know we can scale this, better data, better insights around customer, costs and returns sets us up for profitable growth. We talked about the customer experience and how that is so crucial to us. The bottom line is customers want peace of mind. They want access to account information 24/7. They want a competitive price. They want assurances that the delivery will come and they want confirmation when that delivery or service happens, pretty simple. What we need to do is to be able to support our internal folks that are focused on customer by giving them access to the entire customer record in a 360 view. And really what that means is instead of having to navigate through 5, 6, 7 screens to understand what that customer is all about, they can do it through one view. The days of us haunting for information are behind us. Day in and day out, our drivers are technicians, our frontline employees and those on the phone are the face of our company. They live and work in the communities we serve, and we see that in our customer satisfaction surveys and our Net Promoter Scores, our frontline employees get called out all the time in a positive way. Overall, we think we're positioned very well in our industry with our scale, our digital capabilities and are focused on improving and providing an outstanding customer experience. We want to be consistent no matter where you're located as a customer, this will be the building block for us around growth and retention. So here's the things I want you to take away. We're leveraging the capacity creative from operational excellence. We're accelerating our targeted growth activities, and we're ensuring that we're protecting the lifetime value of our customers. We're transforming this industry through innovative offers. We're capturing value from mining data. We're retaining high-value customers while targeting and acquiring similar customers across North America. We will be best-in-class in customer experience. I've been with Superior for almost 14 years. I can't believe that. And there's not been any other time that we've been so focused and committed on driving organic growth. Our customers, our commercial teams, our leadership group, we're excited on the future. Now with that, I'm happy to pass it over to Shawn Vammen, who will talk about our Wholesale Advantage. Thank you.

All right. Good morning. I was just thinking I'm in a pretty high pressure situation here. I'm following all these great speakers and then I'm followed by the coffee break. So I really got to work hard here to keep you excited. So good morning, everybody. I'm Shawn Vammen. I lead the wholesale division, and we focus on supply, logistics, risk management and third-party sales. Now I've been in my current role a little over 10 years and with Superior coming up on 17 years. And I've had various roles in the LPG industry for over 30 years. And I'd like to say that this industry and the market is always evolving, but that's what makes it exciting. And I hope you can feel some of that excitement today with some of the things that we're trying about and what's going on. So today, I'm going to give you some insights into our division and how we play an important role in achieving the goals and the ambitions you're hearing about today. Our organization has a great footprint in North America and it does provide us with an advantage when it comes to the supply and logistics function within the company. Now our scale, it not only helps to provide supply security to our customers during the busy winter months, it also gives us insights into how we can continue to drive more effective and efficient supply costing. And the third point, similar to what the other speakers have talked about. I'm going to touch on some of the things we're doing within our group as part of Superior Delivers to drive innovation, reduce cost and grow data-driven capabilities. Now in 2024, we moved 669 million gallons of propane to internal and external customers throughout North America. And as Steve mentioned, this is going to grow to over 1 billion gallons for 2025 as we integrate the U.S. retail supply into our group. Our total volume is made up of deliveries to our internal retail needs in Canada and the U.S. as well as the third-party customers spread out throughout both those countries. And because of our size, we utilize many of the supply points in Canada and the U.S. as well as our own terminal assets to provide reliable and cost-effective propane to our customer base. And this is one of the differentiating factors for us in this industry. You can see on the map that we have supply points and terminal assets in key locations in Canada and the East and West Coast of the United States. And this gives good access to supply in all the areas we're focused and in some of the largest propane consuming states and provinces in North America. Now I want to give you some insights into what our division does within the Superior Plus organization. And I'm not going to go through all these points, but I want to speak to some of the highlights. Now we use the term wholesale, I know that can cause some confusion or questions. But really, we are the supply and logistics optimization group for our internal retail needs and we also use that scale to make significant sales to other propane users, whether it's other retail companies or larger industrial commercial type customers. And in 2024, 57% of the propane we procured was for those third-party sales. Now because of our size, we purchased directly from most of the available supply points throughout North America. We have term agreements with gas plants, refineries, and we also have multiple propane storage positions where we store over 30 million gallons, which ensures we keep our customers supplied and allows us to facilitate fixed price offers. Also, given the large volume of propane, we're buying and transporting in the domestic market. This creates strategic partnerships with our suppliers and our logistics providers to drive better value and reliability for our customers. Now all of this gives us a good understanding of what's going on in the domestic propane market, and it also allows us to take advantage of arbitrage opportunities that open up due to price differentials from one market to the next. And it gives us more options to rebalance our physical positions to match the changing demand. Now a great example of this was the winter of 2022, and I don't know if many of you remember that, but we had a really good market condition in California where we've got a really good footprint. It was cold down there. There were supply challenges, and we were able to take supply that was destined to go to the Eastern markets and redirected down to the West Coast. And this kept us supplied with propane when our competitors are struggling but it also allowed us to capture some really advantageous margins, and it resulted in one of our best quarters for our division. So it was a great example of how we can use that scale and breadth to not only keep our customers supplied, but take advantage of opportunities when they arise. Lastly, through the use of creative risk management tools, we're able to manage the price risk with our inventories and we're also able to bring different pricing offers to our customers to better fit their business needs. So as both Allan and Steve mentioned earlier, we're working to improve how we do our business in every area. And similar to what Rick and Tommy just highlighted, we do believe that by bringing better data tools and focus to this aspect of the business, we can generate additional value for the organization, which in turn allows us to be more competitive. Now through these improvements, we have a line of sight to bring over $5 million of incremental EBITDA to the organization by 2027. And this is through enhancing our supply and logistics tools, expanding our third-party sales and by offering our customers new pricing products to differentiate ourselves from our competitors. As Steve mentioned earlier, starting in 2025, we consolidated all the U.S. retail supply and primary logistics into our Supply and Logistics group and this is creating opportunities where we can remove intermediaries from the supply process and go directly to the supply points, and this is reducing costs within the organization. We're also finding ways we can leverage our broader scope to move product where it's needed, both for supply security and for value capture. This past winter, we were able to shift supply back and forth between Ontario and New York as the regions were changing due to the changing weather patterns, and it really does open up opportunities for us to make those kinds of adjustments as we go through the winter and it's been a great advantage to us to keep our customers supplied and move product where it's needed. And also, this is going to open the door to utilizing our own assets more to sell to third parties which is enhancing our wholesale volumes, particularly in the large East Coast market. All right. So I know this looks like an air traffic map, you find in the back of your airline magazine. But it shows our deliveries over the past year in Canada, and it's a great illustration of the complexity of our business. But it also emphasizes how if we can make better choices on a daily basis, it can add significant value to our organization. We schedule more than 50,000 shipments a year by truck and rail, and this does require a group of experienced people who are focused on this function day in and day out. But it also is an advantage for a company our size because we can do this where the competitors don't have that same in-house expertise. Now this is a data-heavy process. And historically, we've relied on spreadsheets and intuition to drive these decisions. But having a tool that gives the real-time information at our fingertips will drive better decisions and enhance cost savings. So on that note, similar to the other groups, we're developing a supply optimization tool that will allow our logistics team to pick the most cost-effective supply point on any given day and to measure the improvement over our older manual methods. And as a company that is now more focused on continuous improvement, these daily improvements compound over time and will result in a significant value gain especially with our scale. This type of investment is not something a smaller company would do nor would they even have the optionality of the various supply points to make these kinds of decisions. So again, another example of where our scale and size can bring us advantage over the smaller competitors. So to wrap up, a company with our size and footprint in North American propane gives us a unique advantage over our competitors and that we gain insights into supply and logistics advantages, which helps to drive lower propane cost procurement, keeps our retail business competitive and allows us to expand sales to external parties. Now this is another touch point in the virtuous cycle where we can help to improve competitiveness through cost-effective supply. And equally important, it also brings assurance of product supply for all of our customers when they need it the most. When we execute this function better than our competitors, it gives us one more advantage as we move to become the industry leader. So thank you. I hope I did okay in my time block between the speakers and the coffee break. We're now going to start a 15-minute break. And followed by that will be Dale Winger, who's going to talk about our CNG business. Thank you. [Break]

All right. We're going to get going again with the next portion, if you don't mind describing your seat. So up next is Dale, as Shawn mentioned. But before we get to Dale, we've just got a brief video we want to share with you on Certarus, the CNG business. So without further ado. [Presentation]

All right. Good morning. It is great to be with you here, and it's been exciting to meet you this morning and look forward to more introductions as we go on throughout the day. I'm really excited to tell you about the Certarus business. Of course, I'm Dale Winger, the new President of the organization and recently joined following more than 2 decades of commercial and strategic and leadership experience in the chemical and oil field services sectors. I'm really grateful to be a part of the Certarus winning team that's built the industry's most formidable energy delivery and services platform. We'll talk more about that today. As I've had an opportunity to start meeting and working with the Certarus team, one question that I get a lot is why did you take the role. So if it's okay, let's start with that. First of all, the business. So Certarus is an actual unicorn. We all know most startups don't achieve market leadership and a strategic acquisition within their first decade. It's really a special team and culture that focuses on customers and has a track record of innovating and winning with simple and reliable solutions. It's an incredibly capable values-driven organization whose best days are ahead. Who wouldn't want to be a part of that. Secondly, the market. Natural gas is an essential and growing fuel for heat and power in North America for the rest of our working careers. There's a -- and there's good reasons for that. Number one, there's an abundance of economical feedstock. It's energy dense, it's lower emissions than most alternatives and the technology required across the value chain from production of natural gas to consumption is developed and scalable. And importantly, for Certarus, there's been a persistent underinvestment in both pipeline and grid transmission infrastructure that requires mobile energy solutions to meet growing needs. And then third, the situation. As you're going to hear more, and I learned more throughout the diligence materials prior to joining in several discussions with Allan and Grier, the business is at an important inflection from building valuation with rapid growth and expansion to using this platform that's been built with invested capital to generate returns and cash flow while continuing to drive growth and targeted expansion. The opportunity was a great fit with my experience, and I'm excited to work with the team to build the future. Importantly, what we will share today is not a strategy that's been developed since my arrival. I'm going to share with you the organization has built a set of capabilities that's led to the establishment of an advantaged industry position. We will discuss those in more detail and how we will use those investments to drive capital-efficient growth and increased cash flow generation from here. There's 4 important themes to understand how Certarus is uniquely positioned to drive value. First, building upon our leadership position. We will share how the business has distinct competitive advantages to drive customer loyalty and continued growth. Second, operational efficiency. The largest market position enables economies of scale on technology such as equipment instrumentation and data analysis to inform real-time decisions that reduce cost and maximize asset utilization. Third, targeted expansion. The Certarus business has been built on the experience and capability to enter new markets, to bring new customers, new options to reduce fuel costs and emissions while maximizing uptime. And finally, we'll discuss our plans to deliver attractive returns and increase cash flow. Notably, the investments that have been made in recent years into a market-leading hub network and a fleet of mobile equipment to drive increased utilization and allocate those existing assets to the highest return opportunities. The Certarus story begins with market leadership. Let's start with the financials. $431 million of revenue in 2024 and $148 million of adjusted EBITDA with more than 80% of the business in the United States. Certarus' 20 hub footprint is 4x that of our nearest competitor. And Certarus' 842 mobile storage units is more than 3x the next closest. What this means for our customers is the ability to provide cost-effective solutions in more places where they need us, even as those needs evolve and expand, including large opportunities that our competitors are not built to handle. And what this means for our investors is we have the most opportunities at the top of our sales funnel and the most operational experience with the most customer types, allowing us a unique perspective to win opportunities and allocate equipment to the best returns. So how does Certarus operate? We start with safety. It's important to provide a great place to work for our people. And of course, it's important to most of our customers that we are contributing to and advancing their own safety culture. Let's share some stats that measure the progress on this journey. In 2024, the organization had a total recordable incident rate of 1.33, a 12% improvement over the 3-year average and our DOT recordables were 0.31, a 54% improvement from the 3-year average. Importantly, let's look at how we do it and how we drive it forward from here. I want to start with technology. In 2024, Certarus and our third-party drivers drove nearly 25 million miles to bring mobile energy solutions to our customers. 25 million miles. And so if context is helpful to conceptualize 25 million miles, that is the equivalent of 100 one-way trips to the moon. So our drivers spend a lot of time on the highway, and highway safety is critically important to us. All our Certarus vehicles are equipped with cloud-based AI dashcams with inward and outward facing video. These vehicle monitoring systems include detection of distracted driving behavior, collision avoidance and AI fatigue monitoring. And our drivers are measured by a score that quantifies their performance along with opportunities to earn incentives much like the program that Tommy shared with you earlier. Looking ahead, we are beginning the rollout of a proprietary trailer system, which will provide early warning incident prevention with real-time mobile notifications to drivers to mitigate brake fires and tire blowouts. Now in addition to technology, we're also improving the culture through an investment in training. Training helps our team members identify and prevent hazards, assess risks, promote proper use of equipment, and learn procedures. To put it short, we empower employees to improve workplace safety. Notably, Certarus employees completed over 19,000 hours of in-person and instructor-led training in 2024. That's approximately 25 hours of training per team member. These are just a few notable highlights of how Certarus uses technology and training to advance our safety culture. Let's move next to Certarus' competitive advantages and how those are built to deliver a unique and durable value proposition to our customers. So why do customers hire Certarus? How has this market share been built? We provide safe, simple turnkey solutions that integrate easily into customers' operations to reduce fuel costs and emissions while maximizing uptime. Our competitive advantages are designed to consistently deliver customer value. To earn and keep business, we first must be the most reliable provider. How do we do reliability? First, Certarus designs and operates a proprietary and connected fleet of equipment that allows us to provide unmatched reliability, continued equipment innovation ensures that we can serve a diverse set of customers in even the harshest and most remote operating environment. Our advanced logistics platform includes next-generation IoT devices to enable real-time visibility and remote control capability so that we can view fill levels at customer locations and optimize replenishment deliveries. Next is responsiveness. Having the largest hub network and equipment fleet means we are in a position and ready to quickly mobilize to meet customers' needs. The third component of our distinctive advantage is efficiency. Certarus builds custom software and workflows to support the dynamic requirements of our business. We prioritize the collection of high-quality data sets from our operations and our approach to efficiency is based on the understanding that anything that can be measured, can be improved and data is very important to our decision-making. With over 1 billion data records collected and analyzed daily, we have the industry's best data set on cost to serve, different types of work. This provides a unique capability to drive efficiency improvements for every job and every asset. The final pillar of this distinct advantage is experience. No player has more experience across more applications, more customer types and more geographies than Certarus. This provides a unique capability when customers need a partner to collaborate on the unique requirements of a new mobile energy solution. Taken together, these 4, Certarus has invested in an industry-leading differentiators -- an industry-leading set of differentiators align to what customers value. So let's talk about market segments. As you saw on the earlier slide, the Wellsite business generates 2/3 of Certarus' profitability. And to be sure, we are committed to be the preferred provider to this segment of customers and have built the industry's best business to serve their unique requirements. And while the growth in this segment has moderated from double digit year-on-year levels, we still expect mid- to high single-digit growth driven by continued favorable economics of diesel substitution and the ongoing importance of hydraulically fractured energy resources to the North American energy mix. In 2024, nearly 40% of the hydraulic fracturing fleet was diesel-powered, leaving a substantial addressable market for substitution ahead of us. As these diesel pumping assets reach end of life, they will be replaced by natural gas-fired and electric equipment. Both of these ongoing trends will drive market expansion for well site delivered CNG. Importantly, we have business and relationships with the largest customer players in these markets and a hub and equipment footprint aligned to their needs. The next piece of Certarus' capital-efficient growth is targeted expansion into new markets and geographies. Let's first discuss the utility resiliency market. Importantly, it's currently our second largest segment, and we are a double-digit share player with good returns in a 30 million MMBtu a year market. And what's exciting about this market is the growth outlook. We forecast the utility resiliency market opportunity to grow at a mid-teens compounded rate, driven by load growth, especially during peak seasons as well as the ongoing impact of aging infrastructure. Specifically, we are targeting expansion in this segment with bulk trailer leasing agreements with major utility clients and supplemental gas supplies for planned outages. Another area for targeted expansion is renewable natural gas or RNG. There are ongoing capacity build-outs in RNG supported by durable policies at the state level that lead to an expected 20% compounded annual growth rate through 2030. There are actually 36 state level programs in 23 states supporting RNG usage, and these are concentrated in the U.S. West and Northeast. Certarus has a high share in the RNG segment. And while these projects do take longer to develop, these have attractive longer-term contracts. They offer dedicated trailer utilization and do not require new hub infrastructure capital aligned with our capital-efficient growth objectives. In addition, our breadth of experience is a valuable differentiator to collaborate with customers developing these projects, especially in comparison to smaller regional competitors. In particular, we are pursuing stranded landfill projects that cannot easily or cost effectively be connected to sales to a sales gas pipeline and our expertise in RNG compression and transportation of high-pressure gases enables RNG developers a pathway to market their product. We are also seeing early interest in new feedstocks in new geographies such as food waste and livestock feed lots. In summary, Certarus is well positioned with experience, footprint and capabilities to capture attractive growth and returns in the utility and RNG segments. Taken together, Certarus has a great trajectory to deliver capital-efficient growth and increase cash flow. We mentioned earlier that we will employ our scale advantages to drive growth. We have the most visibility into customer opportunities across North America. We have a robust hub network and large and flexible mobile asset base we can deploy to the highest returning opportunities. We have the most data and the most experience to inform project pricing and service terms to maximize returns. Efficiency is part of our advantage, and we have several actions being driven by team members across the organization to achieve a 12% cost reduction of nonproduct cost per unit delivered. A few of the major items include reducing loads by third-party carriers, increasing Certarus driver utilization and our planning and reliability are driving improvements in fill per load, which increased 5% in 2024 and remains a priority efficiency improvement for the organization. And finally, through a combination of increased EBITDA and reduced capital expenditures, we'll generate an increased $65 million of cash for the company through these targeted expansion opportunities and efficiency improvement. In summary, we are enthused about the future. As we transition from building growth with building valuation through rapid growth and expansion to a business that generates high returns, and increased cash flow, while continuing to drive growth and targeted expansion enabled by North America's leading CNG delivery platform. We have the industry's best team and quality assets positioned to deliver reliable, responsive and efficient mobile energy solutions to customers. We look forward to sharing more progress as we go forward. It's been great to meet you all today. It's now my pleasure to invite forward, Ash Rajendra, Vice President and Chief Information Officer, to share more about our data analytics journey.

Thank you very much, Dale. Welcome again to the company. We're all looking forward to partnering and working with you.

Thank you.

All right. Before we get started, let me tell you a little bit about myself. I've had an opportunity to work businesses ranging from early-stage start-ups in emerging markets, to dual exchange listed global firms across a series of verticals, life sciences, CPG and energy and finally, this organization. I'm really, really excited to tell you about what attracts me to this company and this industry. It's the art of the possible. When you look at many other industries, if you're an automotive and you're chasing production quality, you're going to see a Toyota nameplate in front of you. If you dare to launch rockets, odds are Mr. Musk and SpaceX have a head start. When you look at this particular industry, nobody has pole position. We get to do that as a team. What a great canvas for a technologist. I spent the last couple of years really focusing on integrating the high-quality assets that Tommy talked about. They're fantastic. They're all a little bit different. They now operate on common platforms and modern data centers that are elastic that allow us to scale. We're able to use our size and mass when it comes to contracting, and bring cost efficiency back into the whole. We take customer security and our corporate security very, very seriously. All this is protected by a modern cybersecurity infrastructure. I'm really excited to talk to you about the new tools we'll be bringing to this industry that I think will be revolutionary and game changing. We're going to unpack that on the next couple of slides. The great thing about digital assets, it's marginal cost to scale. They scale extremely well. We are a growth-focused company. So that matters. Let's spend a minute to talk about system technology architecture. The great thing about this journey is it's not just technology. It is nested in performance management and results orientation and that is exactly the way we're looking at things. We're looking at leveraging things like pricing data, demand forecasting, routing. These are near and dear to any asset-rich business. Let's talk a little bit about the approach. I'm going to unpack a little bit about the industry for you. Remember that 70% of the market that is independent. They all use one of a half of a dozen software packages, especially built for this industry. Great thing about software packages as they focus on the mass. The problem here is the mass is 70%. The problem and challenges and opportunities that independents have are very, very different compared to the size and scale of our organization. They're often county and state bounded. We've got a trove of data relative to them that we can mine for performance excellence. When it comes to that, it means we have to innovate at the edge. It means we're bringing and building capabilities that this industry has not seen before, and we're doing that in a manner that is scalable, highly scalable. I'm now going to focus in on a couple of really, really neat tools that we're bringing to the market. And you've heard my colleagues talk about this. Let's talk about marginal cost to serve first. Our next speaker, our CFO, is super excited about this one. We get cost granularity down to the customer level. We're not looking at things in terms of averages. And we're doing that in real time. This is a set of integrated tools that talk to each other as route densities increase as bulk plant locations change as commodity and weather curves change. We have the ability to leverage that and understand exactly how it affects our operation dynamics. With that, we can feed the data back in and make some really, really intelligent decisions. Let's talk about scheduling and delivery optimization. I'll take a moment here to walk you through how the industry does this. Remember that 70% of independents out there. Again, they're bounded by geographics and don't have the same opportunities that we do. So what does that look like? It looks like a series of people getting into assets, driving around routes and topping off tanks. It's the kind of efficiency they need at their level. Take it up one step more and look at a larger player in the market. Those larger players are adding a little bit of technical sophistication. They're not going to the same place twice, they're driving an efficient route on a day but they're looking at a limited number of variables and route combinations. Let's look at how we're doing this. I have 2 million decision variables at my disposal, and I'm literally looking at billions of route combinations in real time to pick the exact perfect combination of routes and assets at the customer level to deliver operational efficiency. Let's move on to Shawn's world. Shawn, with the wholesale group is really about efficiency at the penny level. That's how wholesale works. The beauty about it is if you can capture those pennies they translate to dollars on the balance sheet. Shawn, in his business has to choose between does he store, does he route, does he use rail, does he use third party, does use our internal groups. And all of those dynamics in near real time. Then you throw weather and commodity curves on top of that and you get a ton of complexity. Excel only has about 36,000 rows. It's not the right solution for that class of problem. Crunching that in real time allows us to unlock additional opportunity and value in the book. The next 3 elements are all about Rick's world. He gets 3 because he's a sales guy and they're all kind of prima donna's in my experience, but super fun to work with, and he is growth-oriented. He has a propane power car that only has 2 accelerators and no break. Why does understanding your customer matter? Because churn in this industry is deadly. We've talked about that a little bit. When we turn to customer means we have to deploy an asset to go pick up an asset, haul it back to a yard and then find that N+1 customer. That is a ton of work. Wouldn't it be awesome if you could use predictive algorithms to understand what are the nuances on the customer journey that cause undesirable activity and then put digital tools in front of it to make faster decisions to get in front of that customer and intercept that catch, if you will, and bring it home. That's in fact what we're doing. So same with lifetime value estimators. We're very, very interested in understanding the lifetime value of a customer because we treat customers differently based on their margin opportunity. That doesn't mean we don't deliver safely to everybody. It doesn't mean we don't offer phenomenal service. But it's a little bit one out of the AMEX playbook. Some customers might be more valuable than others and how do we double down on those. In conclusion, I think this journey is very, very believable because it's grounded in fact, in reality. We have a sustainable solid infrastructure. Those are heavy investments we made across the past 2 years, and that's allowed us to consolidate systems and now be able to shift it to focusing on weaving the tapestry of the possible in this business. The tools we're bringing to this industry are groundbreaking and I think, first in market in many cases, and will be differentiated. And you can hyperscale them. We want to continue to grow. We want to continue to establish a marginally reduced cost to scale as we continue to fuel that virtuous cycle. Better at targeting creates density, density creates the opportunity to reduce an operating cost footprint, reducing an operating cost footprint creates optionality in the product stack. Some people think energy retail products are not very interesting. I'm going to give you something else to think about when it comes to that. Nobody buys our products and services for the sake of housing molecules. You're not calling up your friends and saying, "Hey, I just got some new molecules. You want to come over and check them out?" It's not how it works. However, we are in experience-based good. You have individual needs each one of you when it comes to your energy consumption. You had an individual presence, you have an individual physical location that has unique thermodynamic properties, and you have unique behavioral characteristics. Those are the perfect ingredients to start structuring hyper-accretive products. Rick spoke a little bit about that. The more efficient you get, the more accretive it allows you to be. With that, it's my pleasure to introduce you to our next speaker, our CFO, I sometimes refer to him as master of coin. He's always packing something. It's usually a calculator. Grier Colter?

Well, good morning, everyone. I think I know quite a few of you in the room. But for those who don't know me, I'm Grier Colter. I'm the CFO of Superior Plus. I've been part of the team here for about 18 months. So let me try to bring everything together here, put some numbers on it, all with a focus on stronger financial performance here, top and bottom line, a focus on greater capital discipline and how that all translates to value for our shareholders. So Allan earlier walked through our high-level strategy, and I'll provide detail on our 3-year financial targets momentarily. You heard from our propane team how we are going to drive accelerated performance and financial results from these businesses. And then Dale has laid out our plan for continued growth in our CNG business in attractive core markets and expansion in other select markets, but also very focused on free cash flow generation in this business. And this all ties in very well to our overall capital allocation strategy. One, driving capital efficient growth in EBITDA and free cash flow; secondly, strengthening our balance sheet to provide increased financial flexibility; and lastly, a relentless focus on shareholder returns. So let's get into it. Here, we have the core of the numbers, which is the growth in EBITDA. We're showing during our outlook period 2025 to 2027, growth in EBITDA from $455 million to $570 million in 2027. And I'll go through the bars and just kind of tell you how we're getting there. So the first bar is the base propane business. That's really 2 pieces. So the first is some weather tailwinds. You'll recall in 2024, we had a very warm year. And so as we move into our outlook, we're assuming normal weather and that represents roughly half of that $20 million. The other half comes on the tail end of the plan, so more towards 2027. Once we have the final platform from Superior Delivers, we believe we can grow this business kind of low single digits, and that's kind of the other half of that $20 million, which, as I say, will occur in 2027. The next bar is superior deliveries. You've heard a lot about that today. Hopefully, that has been very helpful and that will add $70 million. Just to be clear, we anticipate leaving 2026 with a full run rate of $70 million. So that $70 million will occur in year in 2027 as the work and the initiatives will be complete by the end of 2026. Continuing to move across to the right. Our CNG business, you heard from Dale, our continued growth we expect, not at the same levels historically, but at more of a mid-single-digit level, around 5% is what we've assumed. As we continue to add to our MSU fleet at more modest levels and, of course, drive additional efficiency out of the business. Beyond 2027, we expect these businesses to continue to grow organically. And I'll mention, while it is not our focus today, this retooled propane platform, we believe, will position us very well, obviously, for organic growth, but also for inorganic growth in what is a very fragmented industry. So a little more detail. And again, this all bridges off the EBITDA growth. I'll move deeper in and just kind of move left to right. I've walked through the adjusted EBITDA bridge, which takes us from $455 million to $570 million by 2027. That represents a compounded annual growth rate of 8%. Our adjusted EBITDA per share metric is also on that graph on the left. We are seeing that increase from $1.27 per share to $2.05 a share and that's 17% CAGR. And it is accelerated by, of course, being a slightly smaller base, but also accelerated by share repurchases and debt reduction. This EBTDA per share measure is a key metric for us. We use it in our short-term compensation program. So it is the biggest driver in how we're compensated from a short-term standpoint, and we believe it is aligned very well with our shareholders. Moving to the next set of numbers, free cash flow. So we see free cash flow over the outlook period going from $93 million in 2024 to $240 million in 2027 and that's a compounded annual growth rate of 40%. That is driven by EBITDA growth, higher capital efficiency in the business, lower debt levels. And of course, this is off a smaller base, so you get more accretion. Free cash flow per share, which is also on that same chart, going from $0.38 in 2024 to $1.10 in 2027, and that's a CAGR of 45%. And that you see benefiting obviously from the growth of free cash flow, but also benefiting from the share repurchases that are in our plan. Moving across to adjusted net income. Moving from $39 million in 2024 to $145 million in 2027, and that's a CAGR of 55%, again, driven fundamentally by the higher EBITDA and a flat depreciation curve as we move away from acquisitions. Adjusted earnings per share is growing from $0.16 to $0.65, that's 4x. And again, you're seeing the leverage from buybacks and, of course, the movement in adjusted net income. Return on invested capital is the last set of charts on the right. I'll just acknowledge it insufficient historically. This is driven by an acquisition-based approach, which historically has yielded lower returns. That's not an easy metric for us to turn overnight, but we anticipate an increase of 300 basis points in this measure over the outlook period. We have also provided another metric on the same chart, which is overlaid. This is an adjusted return metrics. All we've really done is we've removed goodwill from the calculation, and we're trying to highlight the return on hard assets. This metric increases from 7.5% to 15%, so doubling over the outlook period and we think better represents our organic returns-focused approach going forward. Just some base assumptions. We've assumed flat interest rates, minimal working capital investment. Conversion of our pref shares to common equity in 2027 and continuing to buy back shares at a similar pace as what we committed to in our 2025 guidance. So a lot here, but in summary, we are expecting significant improvements to our financial performance and significant value creation for our shareholders. Moving to our capital allocation strategy, a significant difference in the way that we're approaching capital allocation from the historic approach, the left circle is our approach over the last 5 years, so 2020 to 2024. The circle on the right represents the way we see it for the outlook period. So just to point out some major differences here, just as M&A-focused growth, historically a significant dividend payout. And then repeated capital raises funding that strategy of M&A growth. Looking to the outlook what we have going forward, our capital allocation approach, organic growth focused, as you heard from the team today, a reduced dividend payout, which we made that change at the third quarter of last year, significant share repurchases. So over the outlook period, we plan to repurchase CAD 400 million, which is basically on the same path as our 2025 guidance and a focus on leverage reduction estimating to take out about USD 275 million in debt. All at the same time, and this would be consistent with both circles, continuing to invest in our business, and that's consistent. But I will say, and hopefully, you heard that from the team today. The focus is so different on returns. And I can tell you, in the 1.5 years that I've been at the company, the way the team talks about returns is completely different than when I walked in the door, and that's a big part of this. So overall, our disciplined approach to capital allocation is a very key input into our overall shareholder value creation. Just moving to the balance sheet and talking about our debt. So overall, a very favorable debt profile, and we'll continue to improve leverage and financial flexibility. We have no near-term maturities in the debt stack and therefore, no immediate refinancing risk. I'll just talk about the -- this is the top chart. I'll talk about the 3 bars kind of what's in there. So the first that's appearing at 2027, this is our credit facility, matures in 2027. Current cost is around 5.5%. It's on a floating basis, so SOFR and COR based plus 170 basis points. This is provided by a syndicate of large Canadian and U.S. banks who are very supportive. And you can expect us to just continue to naturally move that maturity out over time. The right 2 bars are bonds, the 2028 bar is a Canadian bond, CAD 500 million. It's got a coupon of 4.25%, matures in 2028. And then the blue bar on the fee is a U.S. bond notional $600 million, it's a coupon of 4.50% and it matures in 2029. So extremely attractive coupons and 3 to 4 years of tenor left. Moving to the bottom chart. We have a plan to reduce our leverage to below 3x in 2027. So we'll cross through that probably mid-2027 and end the year lower than 3x. This is obviously being driven by higher EBITDA. There's an increase of $115 million of EBITDA over the outlook period. And then as I said, outright debt reduction of $275 million, which will provide additional financial flexibility for the company we're committed to a strong balance sheet, and we have sufficient liquidity to execute the strategic plan. So as I conclude, I'd like to reiterate our excitement for the plan, quite frankly, this is why I'm here. As we grow our adjusted EBITDA by over $100 million to $570 million, we will see our free cash flow more than double to $240 million and our adjusted EPS gross 4x. At current levels, share repurchases are an excellent use of capital for us. Our shares are trading at 4x 2027 free cash flow and at current levels, we'll take out 8% to 10% of our float per year. We have in our plans assumed share appreciation -- share price appreciation. So in our models and the per share numbers, we actually plan to take out 15% to 20% of the float by 2027. We've been really consistent about the importance of a strong balance sheet and financial flexibility, and we're on track for leverage at investment-grade levels by 2027. Our strategy is based on driving performance from our high-quality asset base and a relentless focus on capital allocation and this sets the stage for meaningful returns for our shareholders. With that, I'm going to turn it back to Allan, who will make a few closing remarks.

Thanks, Grier. Well, good morning. You wanted to hear what was going on? You heard what was going on. Look, I can't thank you enough for your time and attention this morning, and we're going to switch over to Q&A here in a few minutes. But as I reflect on what you heard from the team today, it's really interesting. We contemplated whether -- went to talk about superior delivers and when to have this Investor Day. And this transformation of the organization is so encompassing. It's not just redefining our expectations for financial performance, but it's redefining how the propane business actually works. We wanted to give you some insight into that negative value cycle that you've seen with so many people in this industry where constant cost pressure causes you to go after margin in the short term, which decreases density, increases your cost and put you in a hole that's really hard to get out of, because you have to invest to get out of it. And this is an ecosystem. It's why I've often said it's not a cost reduction exercise. It really is a transformation. You can't address one aspect of that virtuous cycle and expect magic results. You can't just lower your cost. You have to improve your customer experience. You can't just have individual pricing without that reinvention of your IT infrastructure and your data capabilities. You can't just improve your route efficiency. You got to address density. So these all came into play. And one of the reasons that we've been so diligent about this journey was it was going to take a world-class team with great tools and a really solid plan to make it all come together. So we wanted you to meet the team today to see who the people are that are behind this. And when you hear Tommy talk about how he's transforming the organization, you realize there's a wealth of opportunity to get at the cost structure of this business. When you apply that to that virtuous cycle, you say, well, if you can get costs out, it gives you pricing capability that you just didn't have before. What we didn't tell you, there's a lot of slides on the cutting room floor, I can assure you, we've been very busy for the last couple of months. That example that Tommy used, where you take a customer, that's $3 a gallon to deliver through route optimization, you dropped that to $1.50. Think about that in the context of margin. If your margin was $0.50, you've just increased your margin by 3x. That's an incredible impact. Now that's just one example, but it's indicative of the types of opportunities we have in front of us. The part we didn't show you is we did the math and if you added another customer that was next to that dot that went from $3 to $1.50, your incremental cost to serve that customer is $0.10 a gallon. Think about the capability. Think about the opportunity that creates to acquire more customers more competitively. But again, it's an ecosystem to do that, you got to build a marketing team. You got to have the EBITDA, the cash available to invest in marketing. You got to discover what -- how you get lead generation, what marketing tools we should be using. So it all comes together. We're moving from that negative value cycle to that virtuous cycle by completely transforming how we work. On the Certarus side, you saw this is a great company that works really well within the Superior family. Under Dale's leadership, we're going to be disciplined and focused. We're going to drive growth, but we're going to grow with the market. It's a new day. It's an exciting industry, but it requires a different type of discipline. Great market development, great business development, but also a focus on making sure you get the timing of your capital investments right and that you're getting maximum utilization for your assets. And we're perfectly positioned to do exactly that. And then Ash talked about the IT implications of this. We couldn't do this 2 years ago. Ash has all kinds of IT turns of phrases that I love and sometimes drive me crazy, like digital cement and technical debt. But digital cement and technical debt when you unpack them, they're a harbinger for a company like us because you can't do any of this if you have operating systems that are constantly failing, that are outdated, that need to be replaced or need to be constantly updated. So you have to have a solid foundation, and Ash and his team did an amazing job building that. So we have a foundation to grow from. And he's exactly the type of leader who loves this visionary way of thinking. And he's putting tools in the hands of our leaders that we never had before. And then, finally, you heard from Grier what he and I have been saying all along: we're going to grow organically. We have the assets, we have the people and we're in the markets to do it. We're going to be responsible in how we allocate capital. We're creating a solid foundation for Superior with the financial flexibility to be able to continue to invest and to capture that lifetime value so we're not finding ourselves in a position where we're held hostage by quarter-over-quarter results that cause us to try to monetize our customer base and go back into that negative value cycle. The results that you've seen in front of us -- in front of you today are real, and we wanted to make sure that Superior delivers and that the transformation of Certarus were all underway before we unveiled it to you so we could get up here and speak very confidently about the progress we're making. And not about what we think or what might happen one day, but the trials that are actually in place, how we're getting an impact in the market, how these tools are already, in some cases, developed and in use. So hopefully, today, despite the amount of time we asked from you, gave you a really good insight into how we're running the organization and how the investments we've been making in the team and in the capabilities are really clearing a new path for the company going forward. So with that, my sincerest thanks. We're now going to just break for 30 seconds, put some chairs up on the stage. We're going to invite everybody to come on up. And we'd be more than happy to take your questions. Thank you very, very much. With safety first in mind, I got to make sure I don't fall off the stage.

So we're going to ask you to use the mics because -- and look, thanks to the audience that's joined us via our webcast. For all of you, we really appreciate you taking the time to be here today. But we've got to use the mics so that the folks online can hear you. Yes, go ahead, Rob.

Rob Catellier, CIBC Capital Markets. Thank you very much for the presentation today, especially those medium-term targets that you put out. I do have a couple of capital allocation questions here. So the first one, I'll just start with what you're thinking in terms of the pace and the sequencing of the share repurchases versus deleveraging.

Well, I mean I'm going to let Grier jump in here, too, but it's always a balance. You want to get it right. When you look at where the shares are right now, we think it's great timing and a good -- we're at a good juncture to continue to invest. As we move forward, we'll see what the opportunities are based on those returns really is how we're doing it. So it's going to be quite a dynamic process. You might have something...

Yes. Maybe just really quickly. Look, I think the share repurchase will be pretty consistent. Our view is we made a change to the dividend. We're reallocating that to share repurchases. We'll continue to kind of go along that pace, plus or minus. So I would expect that to be pretty consistent. The delevering will probably increase over time as the cash flow generation increases. So that's kind of the way I would think about it. But the share repurchases will probably be relatively flat.

Okay. Just a follow-up on capital allocation. You mentioned you have some pretty good organic growth for the first few years and it sort of flattens a bit. The message I took back is maybe you'll consider M&A once your house is in order at that time and all of that sort of stuff. I just can't help but wonder, as you look to diversify Certarus a little bit, if there's not an opportunity to use M&A as a way to accelerate the diversification strategy there.

Well -- don't read anything into my coughing. Yes to your first question in terms of M&A opportunities. But look, when it comes to M&A today with the propane business, I mean, we're fully consumed with Superior Delivers. So that's not something we're going to contemplate until we have confidence that our operating model is well entrenched, that it doesn't require the time and attention of the entire team and we'll evaluate whether or not we can apply that to other assets to generate growth. From Certarus, I mean, it's not something that is immediately apparent in terms of good adjacencies. We've done a lot of looking to say, look, is there a natural adjacency? Power generation is the obvious one that comes to mind. We've looked at it very carefully. It's not right for Superior. It's very, very capital intensive. But as the industry evolves, we'll obviously always be looking to make sure that if there's a way to accelerate the growth that makes sense for us, we'll look at it.

It's Ben Isaacson from Scotiabank. Can we just go to Page 13 on the slide deck, if that's possible? It talks about all of the underinvestment that has been made.

Give us a sec, we'll go there yet. You can start asking.

So you talk about underinvestment in customer acquisition, underinvestment in technology, in data analytics. So people are rational. So why have the returns not been there? Why has there been underinvestment? And why are the returns going to be there now with your investment? So that's kind of part A. And part B to the same question, I didn't hear what the spend is going to be or what the investment is going to be to generate the $70 million. So can you talk about the why the returns are there and why they weren't there in the past, and what the timing and the shape of the CapEx spend is to get to that $70 million? And then I'll have a follow-up after.

Okay. So let me give you a couple of examples or at least one maybe that'll articulate that point. One of the frustrations I felt when I came into the role was we used sort of regional pricing to create price in the market. And it was rudimentary for 2025, but not for the time and kind of anchored in what the competitor price is. And the competitor price is, in some cases, relevant, in some cases not. So when you go to a regional price, we don't really ever have a regional cost. Our cost is very customer-specific. So in order to understand if we were pricing effectively, for 2 reasons, one, to be able to make sure that we're making a margin on the customers that we serve, but also to make sure that we're competitive enough to be able to acquire more customers. You really have to understand what your cost per customer is and that, for us, was quite elusive. We were using kind of average costs. And while there are customers that behave the same, all customers are not created equal. In some cases, you have home heat customers, which are burning a lot of fuel, and there's a volume-based pricing that makes a lot of sense. In other cases, there are customers, like the one that Rick was talking about, that are seasonal or maybe using backup power, so their volumes are actually quite low. So to use one pricing mechanism -- and then you factor in how far they are, there's a lot of variables: how far, how frequent, how much volume. It's really hard to understand whether you're pricing for acquisition and profitability. So the capabilities that we're building, if I use that example, are really that ecosystem. Understanding your routing efficiency, understanding the customer and what kind of dynamics they have and then being able to price dynamically so that you're able to say, well, we can be really -- provide this customer with a really attractive value proposition because we know exactly what their cost to serve is based on who they are. That all has to happen in real time at -- and this is where the challenge of scale -- when you talk about scale in broad terms, it make sense. But as you get bigger and bigger as a propane company, scale can actually work against you because we have to do that with 750,000 customers. If you're a small regional player and you and I started a propane company and we had 1 truck, we'd know what the routes are, we'd know where they're delivering, we'd know the prices. It's when you get bigger and bigger and bigger that you lose that visibility. So the investment that we're making and where we've under-invested is not having that capacity. Does that give you a bit of an insight?

Maybe I'll jump on this because I'm going to get the second part of your question, Ben. I think Steve Quinn had a great slide that talked about the life of a customer. I think part of this also is like the lack of patience that the industry has had. So you make the investment, you have a new customer and then you almost, like in mining terms, you high-grade the customer, right? I think the lifetime value, that requires some patience, right? To get at it and get the lifetime value out of it, it takes longer. I think that's probably a factor, particularly when you look at it in the light of public companies and quarters and all this kind of stuff, right? The cost to get at this, I think I said on the last quarterly call that the cost for 2025 would be $10 million to $15 million. It's probably a similar number again in 2026. And then as I said, like the program will be complete at the end of 2026. So yes, the full run rate will be achieved, but there wouldn't be any cost in 2027. So think about it kind of $10 million to $15 million in 2025, again, same thing. And this would be a combination of consulting costs, cost for us to build tools. And some of this will be -- and even some cost to make these changes, whether they're investments into the changes. But yes, that's all in. Some of it will be CapEx. Too early to tell how the accounting's going to work on it. But yes, just think of that as the total bucket, $10 million to $15 million in those 2 years, and that's the total cost. And we'll obviously articulate more detail kind of as we go.

Great. And just a very quick follow-up. So $240 million, I think, of free cash in '27 out of $570 million of EBITDA. So that's a 40% free cash flow conversion rate. I think you did 20% last year. Is 40% kind of where you want to be? Is that a target of yours? Is that kind of what you think run rate could be going forward?

So yes, I'll start, if you want to jump on this. I think it depends, right? I think we're looking at this right now, we see -- there's 2 big changes really in getting at that growth. The first is obviously just the growth and the profitability of the business and getting that Superior Delivers. The second is our capital allocation approach and we're -- you look at the difference in how we spent capital in 2023 and 2024 at Certarus and what we see in 2025, it's more of a kind of a balanced approach, like instead of taking all the cash flow and reinvesting it into MSUs and growing the business to, yes, let's continue to buy some MSUs, grow in select markets, but also shift and have cash flow return. How will this change over time? I mean, it's -- I think I would say it this way, like I don't think we had any magic target about what the free cash flow yield is. I think if there were opportunities, as Dale kind of gets into this business and sees maybe other opportunities to maybe grow in certain segments, I think we'll look at those. I think, for me, anyways, it's all anchored on return. And I think for us, if we see great opportunities for return, there's no magic to that. I think we would certainly take free cash flow down a little bit maybe to take the returns up. But just that's the way I would answer it. I don't know if you guys...

No, that's perfect. That's exactly right. I mean, it's incumbent upon us, I think, to continue to look for opportunities, to invest in the way that's going to create the most shareholder value. I think one of the things you can take away from today is we're having a very disciplined approach about it, and we have options.

We have a question right here.

Yes. So Gary Ho from Desjardins. Rick, I've got a question for you. You can nerd out on your pricing model again. So when I think about a high-density area, if you can add an incremental customer, will you give them preferential pricing as a result? And then second, over time, when you reduce your cost to serve, any thoughts on maybe reducing pricing in that whole area to keep it competitive? Just want to talk about that a little bit.

Yes, I mean -- yes, go ahead, Rick. I'll add something.

Is the mic on? Yes. Absolutely, I think being competitively priced in the market based on customer-specific economics is our path forward. What we're not going to do is revert back to introductory pricing, change that the year after, change it potentially the year after that. That creates an event like I talked about this morning. So we're going to be more consistent using customer economics, being competitive based on the markets that we serve, much more strategic and surgically focused than we have been in the past.

Yes. What I'd add to that, I think, is in a data-driven world, you start to look at your customers completely differently. So rather than thinking of them as a home heat customer or a suburban customer or a cottage country customer, you start to look at the data will start to create customer cohorts that act and behave very similarly. When you overlay that with where we have an inherent advantage, whether it be because of capacity or cost to serve, you want to find that pricing equilibrium point where your prices are low enough that you're able to acquire customers cost effectively, but high enough that you're maximizing your margin. And you can maintain them, like that slide that Steve have up, so that you can maintain for lifetime value. So it's really what we're targeting is finding that equilibrium point. And this is where the data transformation plays such a big role. We have to do it on an individual customer basis. So think of a cohort like everybody on Third Street that's within 3 kilometers from our bulk plant that has a home heat as their primary consumption mechanism, they're going to all behave very similarly. So we create that as a cohort, we have very specific targeting for them. And then we have 750,000 customers. But when you start to apply that kind of logic, now you're talking about all 50 million and you're trying to be very targeted with who you're going after and you can invest more to acquire them because you know that the lifetime value is higher.

Yes, Allan, I'd just add one more quick thing, just an example from this morning, is maybe not all customers need to be priced on a per-gallon or per-liter basis. Maybe that subscription model is better suited for that customer. So we're going to change the dynamic in our industry by offering different solutions to different customers based on their needs.

Okay. And then my second question, I'm a big believer of what gets measured gets done. Grier talked about EBITDA per share, short-term comp. Just curious if there's any changes in compensation structure or guys at the field to motivate them to hit some of these targets.

Well, we've made some changes to the management team for exactly that reason, which you know. It's funny you ask, we're in the process right now of developing a couple of company-wide incentive programs based on customer acquisition. When you look at our cost to acquire, if your cost to acquire is $200 on average, that's a pretty big margin you have to play with to create incentives for employees. So what we're doing is thinking if we're happy to pay our digital partners like Google or Instagram $200 to acquire a customer, I'm making this number up, please don't write it down, that gives you a pretty good sum to work with to create incentives for employees to do the same. So we're being very gorilla about this, and we're in the works right now of actually rolling out a pilot to do exactly that. So yes is the short answer.

Daryl Young from Stifel. Just wanted to keep harping on the pricing question. So do you have examples of markets where you've rolled this out already. And I'm thinking about the competitive response, when you've got this many small mom-and-pop operators in the market and potential for irrational behavior and lower return hurdles by those competitors, is that something you can speak to?

Yes. Well, obviously, something we're very conscious of. And it's part of that cohort discussion. We're not really -- we're changing our mindset away from regional and just trying to focus on the areas where we have an inherent cost advantage. If we have an inherent cost advantage, then we don't need to go in and reprice a market. We may be very targeted in individuals and say to a customer, you're really attractive to us because 3 of your neighbors are already customers of ours. So we can offer you a particular incentive that we may not offer someone 5 streets over. So we're being very conscious of the presence that we create in the market. Look, we deal with some great competitors, and we learn a lot from them. And they do a great job in the markets they serve. For us, it's about driving density and being able to really just attract the customers that are right for Superior. So do we expect a competitive response? Of course. But we're not being irresponsible and starting to blanket markets with -- this would be the worst thing we could do. You go in and you blanket a market with an area-wide pricing scheme that's going to reprice the market. And then you find you inherit a lot of customers that are not profitable. So we really want to avoid that. So it's about targeted growth.

And then just one follow-up. As an industrials analyst, I don't get real fired up about the IT stack very often, but it does seem like it's going to be pretty powerful for you guys. Is this something that's in place already that you're executing on day-to-day? Or do you really have to get behavioral aspects going inside the organization today to get everyone on board with using these tools and trained up and using them?

Well, I'll let Ash jump in here from a technology standpoint. But the first step in this was culture because you've got to put a team of people together who are prepared to engage in this and to think differently. We have been saying internally that don't say what you think, say what you know. And that's really anchoring people and data-driven decisions. So when we start to talk about hypothesis, like, oh, you're going to reprice the market, show me the data. It's all about show me the data. Then I totally agree with you what gets measured gets managed. So everything that we're doing, as you heard from Steve, is metrics-driven. So we've got religion about saying, if we think that creating an incentive for this cohort with this investment is going to drive this kind of customer growth, we've got to measure every aspect of it or we don't do it. It's that simple. So culturally, I mean, the first big lift of this was that sort of data- and metrics-driven culture of accountability and responsibility and then having to put those metrics in place. So it was a big culture shift for the organization. Creating Superior Delivers was all data driven. Very -- like the business case seems to be like Steve's mantra. That in itself created a massive culture shift for the organization. So we're already through the first wave of it. So I'm really, really pleased with the progress. But Ash may have some comments on the infrastructure we have.

Yes, absolutely. Thank you very much for your question. I think Allan is bang on. You get the culture, you get the operating rhythm of the business in place first. In terms of the infrastructure we're using to build this out, I would say a fair bit of it is actively being piloted. We've got result from that. It's really now a question of scaling, and we're being very intelligent and picky about our deployment. So this isn't a big-bang approach. As we get into a market the tools effectively gets smarter as they ingest more data and then we unleash them on the N+1 market. I don't think there's really any drilling for unobtainium, if you will. The stacks are built out, the elasticity is there. Now it's just a question of moving on through the target list and refining the tool sets.

Chris, do you have a question from...

It's Nelson Ng from RBC Capital Markets. So first question is more big picture about the guidance. So obviously, some management teams are conservative and they love to beat and raise. Other management teams are pretty optimistic and they have very ambitious plans. . So from your perspective and your approach, should we think of this as you're going to hit your numbers and you have very high confidence? Or maybe it's more like you'll hit your numbers if most of the things go according to plan? Or does everything need to be firing on all cylinders? What's your approach in general?

Well, Grier and I don't get often accused of being overly optimistic.

Yes, particularly me.

I would say they're quite serious. I mean, we're not in the business of making promises we don't think we can keep. We don't control the weather, but you've heard me say that we're going to be very disciplined about not coming off our plan because of any kind of short-term anomalies, whether it be great tailwinds or the type of headwinds we've faced in the last couple of years. But we wanted to demonstrate the reality of Superior Delivers. When we came out with the first target of $50 million, we had to risk factor a lot of elements of it because it was 6 months ago, 5 months ago, whenever it was. Today, we have better line of sight, we have more confidence, so we're able to take some of that risk factoring off the table. So I think you can rely on that as a solid number. No one can promise it's going to come in quarter-by-quarter, year-by-year exactly the way you think it's going to. You're going to have some tailwinds and you're going to have some headwinds. But our confidence level is really high. And I think what I would hope all of you would take away is we waited till now to unveil this and we went to the level of detail we did because it's real, it's underway and we're very, very serious about it. So that hopefully will give you some confidence that we have a good line of sight. Would you add anything to that?

I would have said it similarly like I think we've done a lot of work here, and we're confident in the numbers.

Just to follow up on that. So there's over 100 initiatives, and was it roughly 60 is in place? In delivery. So if you just execute on the 60, does that deliver the majority of the 70-plus million...

Maybe -- before Steve goes, I'll answer it this way. I mean I look at this as almost similar to sales pipelines, right, like where you've got whatever number of prospects and you kind of work them down and then you've got how many of them do I think I'll get and all that. It's very similar. You've got this funnel we're working with. And so we've not counted everything in the funnel, but the same thing I would say is we're not going to get everything in the funnel, right? So we've got this list. Some have higher confidence, some have less confidence. And we filtered it down and we've come up with kind of what we think is very realistic. Steve, I don't know if you would...

Yes. I don't think there's too much to add to that. I wanted to give you a sense for how many of them we've already started that we -- it's not just 1 or 2. So 60-plus is the number I gave. And Grier said it correctly. Some of them are timing related, we'd like to implement some of the more operational things as we head out of our winter season and we're testing and learning on a few of them. So some of them we want to do through the spring so that we have time to get them really right before we get back into a heavier season. So some of them, we time them that way on purpose. So it's not to say that 40 of them aren't ready to go. It's just -- and also trying to measure the impact on the organization and the amount of change you can handle at one given time.

Yes. I mean to give a real-life example. I mean transitioning the supply to the U.S. retail from third parties to wholesale means you got to shift 500 million gallons of delivery. If you do that in October, you're full. I mean, you want to get through your busy season when all the product is flowing and be able to do it in a deliberate methodical way. So it's not that we had less confidence in that, but it's complex and you want to be able to do it when the time is right for the business. So you get some of that there too.

Okay. And then you guys talked about customer retention. Can you just give a bit more color on churn historically? You don't have to give exact numbers. But can you talk about the churn on the base business, churn on the businesses and customers you've acquired through all that M&A and how you see that churn going forward? So you can use like x as a reference point or whatever. But can you just talk about how churn -- how has churn moved and how you expect it to move going forward?

Well, the biggest insight we've had on churn is understanding it better. It's fascinating to me because when I came in, having a telecom background for a dozen years, churn is a big number there. And you can see it in real time. And when I started to work with the team to unpack and understand churn, the way that we looked at it, and this goes back to Ben's underinvestment question, you'd see -- well, we think of customers in terms of active customers. So the customers who got delivery in the last 12 months. And your customer base goes down by 5%. You think, oh, my God, that's terrible. And then a little bit of cold weather comes and it goes up. And you think, well, what's going on? I thought we lost these customers. You go, well, now they went inactive. But that's just an arbitrary tag that we assign to them. In fact, you may have cottage country customers that only have -- only require delivery once every 2 years. Or you may have an ice storm, like the one we just had -- are still experiencing in north of the -- northern GTA, where customers who are using backup power are now consuming and have been activated again because they need deliveries. So really understanding the true churn is important versus active, versus inactive. And we've done a lot of work on that, so we're getting a lot better insights. Our inactive customers that we're investigating would total in the tens of thousands. So that work's largely been completed. The second piece is the timing of churn. And this is where predictive models come super important. If you take a delivery in April, and for some reason, you get some sticker shock or the delivery was late or you're dissatisfied for one reason or another and you decide to leave Superior or another company in favor of a competitor, that transaction may not happen for 8 to 12 months. It depends on your consumption. You want to burn down the fuel that you have. And we may not even know for another 12 months after that because you may not call us and say, by the way, I've disconnected your tanks, can you come get them, please? So you have that inactive measurement that you want to have real-time data on. But then you also have -- trying to correlate the cause of the churn and the actual event. And this is where understanding that data and getting predictive models in place really help. The third component of that is a much more sort of prevalent rollout of tank monitoring, so we can see consumption levels. And when they start to become erratic, we can intervene by, first of all, understanding it and not having someone have to go in manually and have a call center agent spend 45 minutes trying to understand what's going on. Have that all done automatically. Prompt the call so someone from Rick's team reaches out to the customer and say, "Hey, is everything okay? Is there anything we can do? We've seen some changes in behavior." And it could be something as simple as, yes, we bought a house in Florida and we're down there now, so we turned the heat in the house down. Or yes, we've been really dissatisfied with the last delivery, in which case, we can intervene. So to bring that all back to your question about churn, our first challenge was understanding it, being able to identify it and now it's to intervene. And we think there's double-digit improvement potential in improving our churn rate. Sorry, that was a long answer, but it's a complicated topic.

Pat Kenny, National Bank. Maybe just back to some of the headwinds. We're hearing a lot about this big build-out in natural gas infrastructure over the next, say, 10 years. Have you guys taken a look and figured out how many of your commercial customers or even residential might be exposed to connections that might come their way on the gas side?

Yes. Pat, it's a good question. As it stands right now, we're looking at 750,000 customers in a market of $50 million. And all of our sort of trending data and all of our research data is really predicting that to remain relatively static. Excuse me. You'll always have some customer churn because of conservation, heat pump replacement, although we're seeing that trend kind of normalize, which is good, with incentives being removed and stuff. But we see the addressable market as being really attractive. So the stability in propane is interesting and important. But just the sheer size of the unaddressed market that we haven't gone after presents such a great opportunity that we think we can still improve our churn rate and grow the business. I don't know, you guys may have some comments on that.

I think you nailed it.

And I guess maybe just on the Canadian propane business. So the profitability metrics have always been a little bit lower than the U.S., and density being a big part of that, but also the customer mix being more commercial. So I'm just curious, is there an opportunity to close the gap on those profitability metrics just through targeted acquisitions on residential areas or by improving the margins on the commercial side? Just your comments on the overall strategy there?

Rick, you want to go ahead?

Sure. Is my mic working? Yes. Okay. Absolutely opportunity to grow our residential segment will take some best practices from our U.S. counterparts, invest in marketing, really identify those high-value customers. I think Allan said it earlier, is not all customers are equal. And we'll target customers that make sense for us to acquire in that area like a whole home heat customer in a dense area. That's great for us. I think our commercial presence and our expertise is unmatched and we continue -- we will continue to have runway to grow that segment at the same time in Canada, but also in the U.S. So I think there's lots and lots of opportunity for us to manage margin, find profitable customers and scale our business organically.

And last one for Grier. Maybe just -- I know if all goes well, the preferred shares likely get converted in mid-2027. But can you just walk us through again what happens if they don't get converted, what the options are and how that changes things on the leverage ratio front?

Yes. So one of 2 things is going to happen here, right? So we've assumed in our numbers that they convert, and we've assumed that the share price will accelerate as we put these numbers on the board. And to the extent that, that doesn't happen, actually, the numbers are a little bit more favorable like so if you -- so that -- the first alternative is, yes, there's a conversion of common equity, it's 30 million shares. I think all the details are pretty well understood. If that does not happen, then Superior would take them out at par. So it's $260 million notional. And I mean, if we're headed towards that type of an event, then we'll adjust some of -- adjust probably some of the capital allocation to prepare for that moment. Maybe some of it is a little bit of financing. We'll address that. So yes, I mean, maybe you get to the point maybe the share purchases adjust a little bit, maybe the debt reduction adjusts a little bit, maybe you do finance it with a little bit of bank debt. These things are probably pretty hard to yet fully factor right now. But yes, I mean the 2 alternatives are that, right? I mean, it's going to be one of those 2 things. Like there are a bunch of other mechanisms in it like we can convert it at a higher price, that's not going to happen. We can continue to keep the instrument in and there's step-up in coupons, that's not going to happen -- or I'd say it's highly unlikely that's going to happen. So it's one of those 2 things. Yes, to get at leverage ratios and all that stuff, I mean, there are a few moving pieces that you can pull out a few things. It will depend a lot on kind of where the shares are trading, where our leverage is sitting, where the cash flows are looking. There's a lot of pieces there. But as I say, I think the way we've modeled it with the conversion to equity is actually a harsher picture. If you look at us taking out that bond or that preferred at kind of notional value, it's actually more favorable for shareholders in the long run, obviously, assuming that you get to a same end share price, right? Is that remotely helpful? Okay.

It's funny because when you think about that eventuality today versus 2 years ago, we're in a position where we'll just handle it. Two years ago when cash flow is an issue and your leverage is an issue and your growth is an issue, that becomes a much more sort of critical and concerning eventuality. And today, as Grier just mentioned, there are a couple of scenarios, we can handle both quite easily. The worst case is factored into the numbers, life goes on. So it's a different day for us.

So I can't see any hands at the moment. Feel free to ask some more if you have them. I'll read in the meantime a question from online. Aaron MacNeil from TD Securities asks, given the utility resiliency is the largest growth driver for Certarus, will you communicate contract awards going forward so we can track your success in capturing this market vertical?

It's a good question. I mean -- and thanks, Aaron, for joining remotely. We don't have a history of announcing big contracts at Certarus. There's a couple of reasons for that. One, we're not always at liberty to, depending on if the customer agrees or not. So we've had the discussion where we wanted to announce some contracts and customers were reluctant to do so. And the second piece would be, historically, at Certarus, a lot of these contracts, though they may be big, they're short term. So they may be for 3 months, they may be for 6 months, which really isn't as nearly as material as bigger long-term contracts. But for long-term material contracts, we're certainly open to sharing those with the public if it makes sense.

Great. One more from anonymous investor has asked, how do you balance optimizing the markets you're in versus building out new markets in the propane business?

Well, I asked that question myself. When you do a presentation like this and you talk a lot about operating efficiency and excess capacity and the value of density, the first thing you want to do is build more density. So we're in some fantastic markets where we have a lower share than is optimal and we want to really focus on building that density. When you add a new customer to a region, bear in mind the cost to serve every other customer on that route drops. So it's got this exponential impact. So density is really, really important for us. I'd say a secondary expansion discussion we've had is with this excess capacity, do we want to move into adjacent either geographies or communities? And the short answer is there aren't a lot of real-life examples to say that should be our top priority. We're very quickly, within the next couple of years, going to be faced with the question of, okay, where do you grow from here? You've got an operating model that's working really well, you're building your density, you're continuing to acquire. But surely now that Superior Delivers is behind you, you can do more. And that will have to be a combination of that type of geographic expansion and then maybe something inorganic, if that makes sense at that point.

It's Nelson Ng again. A quick question on Certarus. So given that most of the EBITDA is earned at the well site, and I know some of the other energy services companies are becoming more vertically integrated, providing a broader range of services, does that give them a competitive advantage to take share? Can you just talk about like, obviously, Certarus is much larger on the CNG side, but the other energy services companies are providing a broader range of services. Can you talk about the competitive dynamics there?

Why don't I talk to it specifically and then I'll see if Dale wants to chime in, in his 1.5 weeks of experience at Certarus, but 20 years' experience in that sector. As a leader in CNG, you look at it and say, is this something that you'd want to in-house -- in-source? Based on the complexity, the capital profile, it doesn't immediately lend itself to being something that you want to do internally. When you think about the competition for capital, a lot of these other oil services companies that you're referring to have a lot of demands on their capital. And they're -- where they're putting their capital, like if it's power generation, that's their differentiator, not the fuel supply. So to invest in the fuel supply is going to come at the cost of expanding their business and their core business. So we are continually seeing organizations that say, look, this is something we'd rather partner with someone to do than doing it ourselves. And the last piece I'll say is the difference between doing this in-house and doing it at scale dramatically changes the economics. It's like an airline. The more density -- like the propane business, the more density you have, the more flexibility with your fleet, the more reallocation you can do. If you have it internally, you've got to keep those MSUs -- you have enough demand to keep every MSU utilized fully. And that's really hard to do in-house. Dale, you may have some...

Yes, I think that's all well said. And it is a different competitive environment, and that's why we kind of focus some of those investment areas around making sure that we are the best at that particular piece of the value chain, whether it's the footprint or the efficiency drive or the reliability that we offer customers. If we can continue to be the best in that segment, yes, there will be competition and integration and some things like that, but also we can provide a distinct value proposition that others that are trying to sort of take other roles in the value chain it's more difficult for them to specialize and excel.

And just one last question. Data centers have been a hot topic for the past year or so and the need for gas and need for power. Are data centers a good opportunity to chase based on what you've seen?

No. And here's why. Take 2 examples, a mine and a data center. With the mine, you're going to go where the ore is. And obviously, you all know this, but the ideal customer for Certarus is someone -- is a customer that uses a tremendous amount of energy in a single location that make delivering energy in these quantities a real benefit to them. And CNG obviously provides a massive benefit over other forms like diesel. But they're -- but because the mine is going to be located where it is -- where the ore is, it doesn't get to determine its geographic location and the chances of it being on our pipeline in the short term are usually pretty remote. With the data center, energy is, by far, their largest or one of their largest costs and they're all greenfield for the most part. So if you're locating data centers, you're looking at robust electrification infrastructure and you're looking at a robust secondary fuel source, which is typically the natural gas pipeline. So what we're seeing is a lot of data centers are locating with energy solutions in mind and trucked energy in any form really doesn't fit the profile, at least that's what we're seeing today. Will there be short-term opportunities? Invariably, there will. Will there be conversion opportunities where you have existing data centers that are going to convert? Yes, that will happen, too. But as an industry so far -- and by the way, we haven't seen -- there's not that many data centers that have actually opened. But we're seeing other opportunities and that's why we laid out the view that we have for Certarus the way that we did.

Question here.

Just maybe a question on Certarus, like...

Sorry to interrupt. Would you mind introducing yourself for everybody on the phone?

Yes, sorry. Eric Gibouleau from Dorchester Wealth Management. Just curious to know, in terms of Certarus, there's been a lot of leadership changes over the last 2 years. Maybe for Dale, do you feel that right now you have the team in place to be able to deliver some of the objective you have? And do you feel that the leadership changes that happened in the past has been impacting the consumer relationship in some sense?

Yes. Let me start and then Dale can pick up. When you build a company up over 10 years and then you go through a transaction, invariably there's going to be leadership changes. I mean, it's part of the natural course. And we've been very mindful of working as hard as we can to plan that. The business is changing both in terms of the way that it's run and the way that it's growing, such that some of these changes are really important to make sure you have the right experience set and the right skill set for not only where you are, but where you're going. And that is most especially true with Dale joining. We've got members of the Certarus team in the room here today who are -- who've been through the transaction, who've been a big part in building it and are a big part of our future. So I'd say that the changes we've had, some of them were normal course of just a transaction. Some of them were us retooling the team to make sure we have the right skills. But we've also had a great -- the great benefit of having a lot of continuity in Certarus. And we shouldn't forget, this is a company that 3 years ago had 200 people and is now up to 500, 600. So it's been growing. It's been through a lot of churn. Of course, having a big installed base in the oil patch, you get churn in the early days. So I'd say there's more stability now at Certarus than there has been despite a few changes that, of course, would be a little bit more newsworthy. And we absolutely have the right team. We have a great group of individuals and we're really lucky to have them. But Dale, you've been meeting people over the last 1.5 weeks, what's your thoughts?

Yes. That's all well said. And as Allan referenced, early innings of getting out to all of our locations and meeting all the team members. It's a very fun culture. You can see what they've built. I mean, it's a winning-oriented organization that measures, has goals, collaborates well, is very customer focused. So I'm really -- it's been a lot of fun to engage with them and a lot of potential in the organization, very capable.

I mean, put a human face on it, Dale sent me a text on his second day of a cake that said, welcome, Dale. And I'm like a cake, I didn't get a cake when I joined. So he got a pretty warm reception. It's that kind of culture and it's that kind of team. So we're in good place.

Credit to the Calgary team. Yes.

All right. It looks like we've answered all your questions, which is an impossible task to even aspire to do. We're going to take a little break now. We've got some lunch set up. The team is going to hang around. And look, again, I can't thank you enough for everything that you've all done, not only for spending the time to be here with us today, but the patience and letting us tell you our story in the best way that we know how. And your continued patience and belief in the organization on the journey we've been through for the last 2 years is not lost on any of us. We take that responsibility and obligation incredibly seriously. When we have meetings internally and talk about how we should think about churn or how we should think about acquisition, we really try to do it through the lens of how you think about it, not what would be better, not how we could improve marginally, but what your expectations of us are. And I hope you saw a reflection of that today. But I can absolutely assure you you're going to continue to see us run the organization with that light, with that mindset and that our aspirations will always be as high as yours for what comes from Superior. So thank you all very, very much. It's been a real pleasure to see you today. Thanks.