Good morning. My name is Julie, and I will be your conference operator today. [Foreign Language] I will now introduce Mr. Jean Marc Ayas, Manager, Investor Relations at Alimentation Couche-Tard. [Foreign Language]

[Foreign Language] Good morning. I’d like to welcome everyone to this web conference presenting Alimentation Couche-Tard's financial results for its Fourth Quarter and Fiscal 2020. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions that were forwarded to us beforehand by analysts. We would like to remind everyone that this webcast presentation will be available on our website for a 90-day period. Also, please remember that some of the issues discussed during this webcast might be forward-looking statements, which are provided by the corporation with its usual caveats. These caveats or risks and uncertainties are outlined in our financial reporting. Therefore, our future results could differ from the information discussed today. Our financial results will be presented by Mr. Brian Hannasch, President and Chief Executive Officer; and Mr. Claude Tessier, Chief Financial Officer. Brian, you may begin your conference.

Thank you, Jean Marc. Good morning, everyone. Thank you for joining us for this presentation of our fourth quarter and year-end results. We'd really an exceptional year overall, both financially and operationally. We had record earnings, and I think more importantly, we stayed on track during COVID with our strategic goals, including growing organically across the network, beginning the rollout of our new food program in North America, pushing dynamic pricing and loyalty initiatives forward, and improving our customer experience across the globe. Our agile, decentralized model, as well as the advancements we made in operational excellence this past year helped us to face the unprecedented challenges of COVID-19, and I'm proud to say I think we've emerged from this historic year a better and stronger company, both financially and culturally. We ended the fourth quarter with strong topline trends, including 12-weeks of positive traffic before we endured a significant decline in traffic and fuel volumes with the pandemic stay-at-home orders implemented across our global footprint. Our customers changed their shopping behaviors moving to larger basket sizes, with more impulse and emergency items and take-home packages. We innovated quickly to meet this desire for less touchpoints as well as different SKUs and package sizes. We’re placing health and safety of our employees and the customers at the forefront of our decision making. We're committed to being a part of the solution in our communities where we work and live. I'm truly grateful for the courage, care, and commitment that our employees are showing towards each other, toward our customers and the business. I know these brave efforts will continue as we see the virus on the rise in some parts of our network, particularly here in the U.S. I also want to touch briefly on the recent tensions in the United States focusing on racial injustice. You know, the demonstrations following the brutal death of George Floyd. I've been particularly passionate in Minnesota where we have hundreds of holiday stores. While several of our stores were damaged there, thankfully we had no injuries of our team members and our northern tier team did a fantastic job working closely with the community to reopen all, but two locations. Across the network, we’ve expressed the heartbreak felt by our entire company over this tragic situation as well as our commitment to listening to learning and taking meaningful action toward having our entire workforce reflect the diversity of our customer base and the respect and inclusivity to which we aspire. I’m going to turn to the results for the fourth quarter. Same-store merchandise revenues decreased 0.5% in the United States and 6.5% in Europe, while increasing 4.7% in Canada compared to same quarter last year. Due to the implementation of restrictive social measures in the various geographies in which we operate, the COVID-19 pandemic had a meaningful impact on our financial results mostly driven by declining traffic across our entire network. These measures led to fewer visits to our stores starting in mid-March in Europe and slightly later in North America. The negative impact from lower traffic was partially offset by larger average basket size as customers clearly consolidated trips. From a fuel perspective, volume this quarter declined sharply during the first weeks following the stay-at-home orders. For the quarter, same store road transportation fuel volume decreased 18.3% in the U.S., 13.4% in Europe, and 23.5% in Canada compared to the same quarter last year. The sharp decline in volumes was mitigated by higher fuel margins, which benefited from the rapid and steep decline in crude prices during the quarter as well as lower competitive activity at retail. Over the course of the year, we've continued to expand the Circle K Fuel brand across North America with now more than 2,300 Circle K Fuel branded sites. We've also been testing modified branding strategies with our fuel partners that place the Circle K brand more prominently on the canopies and we're analyzing the results on a market-by-market basis. Looking forward, we'll continue to work on strategies to grow the Circle K Fuel brand with the aim of creating a stronger ecosystem and enhancing the customer experience. Another important focus in the fuel category this year has been the development of new promotional and pricing approaches to benefit our customers and increase their frequency of visits, including the testing of more dynamic pricing strategies at 2,400 sites across the U.S. Last summer here in the U.S. we also introduced our Easy Pay loyalty program, which rewards points for fuel and food and beverage items that can be converted into cash discounts. Now for all surprises and other benefits. We completed the rollout of our Easy Pay loyalty program to all U.S. markets where we have Circle K Fuel brand in place, and these provide everyday discounts to our most loyal customers. In our mobility work, we've installed more than 450 chargers at 81 sites in Norway. We now lead the country both in share and absolute number of high-speed chargers. In the urban market of Oslo, we were the first to convert an entire station to EV charging. We are now probably a global pioneer in that front. We've also launched home charging effort. This year, we've now got 1,200 units installed in residential chargers and 3,000 units committed, that we were committed to being a part of the solution and creating an ecosystem both at home and on the road for our [indiscernible] customers in Norway. In terms of our brand, we're now in the fourth year of our global Circle K rebranding project. We’ve converted more than 800 stores this year and now see the work completed across our entire European network and in more than 6,300 sites in North America, including nearly 1,000 former CST locations and more than 1,100 stores in Canada. In addition to our company-owned stores, we've also worked with our franchise partners across our global network to convert more than 1,500 franchise sites to our new Circle K brand. We continue to see many benefits from our transition to a single global brand, including increased awareness by our customers as well as the ability to speak to them in a unified voice. This latter point has been particularly impactful during the pandemic in communicating emergency procedures, company policies between our teams and our communities. During the course of the year, we've also continued to build brand awareness through our rebranding of Circle K, but we've also increased brand loyalty through many tactical initiatives. I’ve already mentioned our Easy Rewards and Easy Pay programs. Inside the store across the network, we’ve continued to deploy our Lift platform, providing us the ability to track our customers’ purchase history and offer them personalized discounts based on the makeup of their basket. We now have just deployed in about 7,600 sites in North America, and we're in the planning stages in Europe. Additionally, as we continue to look at reverse synergies out of the holiday transaction, we've expanded our Smart Value program, which was a key promotional tool for them. Now it's expanded to the entire North American network. We're seeing great success in growing basket, and we're piloting that program in Europe. Now, we’ll turn to our new food program in the U.S., which we're calling fresh food fast. As I have said in previous calls, this food initiative presents a significant organic growth opportunity, with expectations for both top line and margin improvement. We continue to be excited about its potential. In markets where the new program has been available, customer feedback has been very positive and both food unit sales and overall sales in the stores with the program have significantly outpaced comparable sales at other stores in those same markets. During the pandemic with the necessity to adhere to local government safety measures we temporarily delayed opening the new food offered in many of our nearly completed stores as if – we didn't think it was prudent to allow sampling and training during this time. However, it will continue to build out the program and we continue to install equipments and as planned, and we laid the groundwork with approximately 500 stores during the quarter and continue to expand rapidly toward our target of 1,500 installations for the calendar year and 2,300 stores during the fiscal year. As the pandemic eases in some areas, associate training is resuming and all converted stores will soon have the new food assortment available to our customers. Our efforts around delivering the freshest cup of coffee continue this quarter. As the U.S. deployment of our coffee in demand was completed this year, we moved our focus to Europe. Our next generation espresso-based beverage equipment was deployed with 450 machines during the quarter, delivering a [barista quality beverage] in under 90 seconds. The foster program, which has been a mainstay here in North America, has expanded nicely and is now available at more than 200 locations in Europe. We continue to see great opportunity to scale this offer in that region, as it's been a solid driver of incremental [indiscernible] store, especially in Ireland, where we started testing last year were traction with customers has been impressive, and more recent in the Baltics as we [entered] the warm summer months. During the spread of COVID, with the closure of bars and restaurants, we saw a movement in packaged beverage towards larger take home packages, particularly impacting all beer segments as customer buying shifted to larger pack formats. Throughout the quarter, the hard seltzer category continues to see robust growth, energy drinks, there was also a notable shift from instant consumption or single serve to take home packages in that core category and this drove positive growth during the quarter. In tobacco category, despite the tightening regulations in the U.S., [some change to 21] and the traffic challenges in the back half of the quarter, we experienced increased purchases of tobacco products across the network, resulting in positive overall sales for the category, particularly in Canada. However, with the shift in consumer buying patterns from single pack to larger cigarette cartons and multipacks, you know the margin percentage did decline. Other tobacco products continues to drive growth at our stores, with all geographies experiencing double digit growth compared to last year. While vapor flavors were removed in the U.S. in February, the sub-category remain positive and vapor products in Europe and Canada continues to see strong growth. Modern white nicotine expanded further in Europe and the U.S. and is becoming a significant part of our OTP category. Before turning to our financial results, I want to briefly mention the meaningful ways in which we became part of the solution in our community starting with the pandemic. Starting in March to recognize all front line first responders, we launched a free coffee, tea, or Polar Pop offer and we've now served over 3 million beverages to those heroes across the globe. In the U.S., we've also contributed more than 40 million meals to Feeding America, and starting in June, we pledge 5 million meals to food banks in Canada. In Europe, we've delivered goods to elderly and impaired, as well as care packages to hospitals and other facilities. We've also worked to innovate rapidly during the crisis to meet our customer’s desire for convenience anytime and anywhere. We rapidly developed a click and collect model both in Europe and in North America for curbside delivery. When we've expanded home delivery to third parties with more than thousand sites now having home delivery capability globally, we'll get in touch with some mobile payment options as well, License Plate recognitions and piloted fuel purchases in Norway. The urgency of the pandemic brought out the best in our company's ability to adapt the new community of solutions and technology adjusting to the rapidly changing retail landscape. I’m going to pause here and let Claude take you through more of our fourth quarter and annual financial results. Claude?

Thank you, Brian. So, ladies and gentlemen, good morning. For the fourth quarter of fiscal 2020 we're happy to report net earnings attributable to shareholders of the corporation of $576.3 million, or $0.52 per share on a diluted basis. Excluding certain items of our both comparable periods, adjusted net earnings for the fourth quarter of fiscal 2020 would have been approximately 521 million or $0.47 per share on a diluted basis, compared with $0.26 per share for the fourth quarter of fiscal 2019, which represents an increase of 80.8% year-over-year. Net earnings were $2.4 billion for fiscal 2020, compared with $1.8 billion for fiscal 2019, an increase of 28.3%. Diluted net earnings per share stood at $2.09, compared with $1.62 the previous year. Excluding certain items from net earnings for both comparable periods, net earnings would have been approximately $2.2 billion, compared with $1.8 billion for the previous year, which represents an increase of 374 million or 20.3%. Adjusted diluted net earnings per share would have been $1.97 for fiscal 2020, compared with $1.63 for fiscal 2019, an increase of 20.9%. The COVID-19 pandemic impacted our business and financial results in many ways with the decline in traffic across our entire network being the most important. Additionally, various actions were taken to support the health and safety of our employees and customer, which drove the incremental operating expenses. These costs were partially offset by initiatives implemented across our network to reduce our controllable expenses. During the quarter, we closed our asset exchange with the CAPL, under which a portion of our U.S. wholesale road transportation fuel operation was exchanged against CAPL 17.5% limited partnership interest in CST Fuel Supply. This transaction resulted in a pre-tax net gain of $41 million. I will now go over some key figures for the quarter. For more details please refer to our MD&A available on our website. During this most recent quarter, excluding CAPLs revenue and the net negative impact from foreign currency translation, merchandise and service revenues for the fourth quarter of fiscal 2020 decreased by approximately $33 million or 1%. This decline is primarily attributable to decreased traffic in our network due to the pandemic, partly offset by growth in the basket size. For fiscal 2020, on the same basis, merchandise and service revenue increased by $322 million or 2.2% driven by organic growth initiatives, partly offset by the negative impact on traffic, due to the pandemic. For the fourth quarter of 2020, on the same basis, merchandise and service gross profit decreased by approximately 45 million or 3.9% also mainly attributable to the lower traffic in our stores due to this spread of COVID-19. Our gross margin decreased by 0.9% in the U.S. to 33%, by 1.2% in Europe to 40.6% and by 1.2% in Canada to 31.8% driven in all three geographies by changes in our product mix towards lower margin categories. During fiscal 2020, on the same basis, merchandise and service gross profit increased by approximately $73 million or 1.5%. The gross margin was steady at 33.8% in the U.S.; in Europe, it decreased by 0.3% to 41.5%; and in Canada it decreased 1% to 32.6%, mainly due to the conversion of Esso stores during the year from an agent model to a corporate one. Let's now move on to the fuel side of our business. In the fourth quarter of fiscal 2020, our road transportation fuel gross margin was strong at [$0.4688] per gallon in the U.S., an increase of [$0.2837] per gallon driven by the rapid and significant decline in crude oil prices during the quarter, as well as by changes in the competitive landscape. In Europe, the road transportation fuel gross margin was at [$0.867] U.S. per liter, an increase of $0.39 per liter U.S., while in Canada the road transportation fuel gross margin was at [CAD0.848] per liter, an increase of [CAD0.27] per liter. The road transportation fuel gross margin in fiscal 2020 was [$.3119] per gallon in the U.S., [8.48 U.S.] per liter in Europe, and [CAD0.791] per liter in Canada. For the fourth quarter of fiscal 2020, growth in normalized operating expense was 2.3% driven by COVID-related expense and normal inflation, higher labor costs, and incremental investments to support our strategy. COVID-19 related expenses include an emergency appreciation pay of $2.50 per hour in North America for our [indiscernible] store and distribution center employees. The installation of plexiglass dividers in our store to ensure the safety of our employees at the cash register, additional cleaning and sanitizing supplies, as well as masks and gloves for our employees. While we expect to retain some of these expenses in the future, the appreciation pay came to an end on June 12 in the U.S. and on June 22 in Canada, essentially marking three months since the start of this unprecedented crisis. Importantly, as we adjusted to the challenges brought forward by the pandemic, a special focus was placed on cost containment initiatives, allowing us to reduce certain expenses without impacting the service we offer to our customers. During the last few months, we took many actions aimed at maximizing our cash flows such as deferring non-critical capital expenditures and reducing various operating expenses. We spent time analyzing data from our labor model to adjust store hours and shifts. We share best practice across business units and realize frequent scenario modeling to help optimize decision making and minimize business risk. In our global procurement team, we work with key vendors to identify areas of potential shortages and put remediation plans in place, meaningfully reducing other stocks across our network. Moving back to our results. Excluding specific items described in more detail in our MD&A, the adjusted EBITDA for the fourth quarter increased by 314 million or 42.9% year-over-year, mainly from higher road transportation fuel gross margins in the U.S. and Europe, partially offset by the negative impact of COVID-19 on our traffic, the disposal of our interest in CAPL, as well as the negative impact from foreign currency translation, representing approximately 6 million. During fiscal 2020, on the same basis, the adjusted EBITDA increased by 465.9 million or 11.9% year-over-year, mainly attributable to the higher road transportation fuel margins in the U.S. and Europe and to organic growth on the [convener side], partially offset by the negative impact of COVID-19 on our traffic. The variation in exchange rate had a net negative impact of approximately $21 million. Excluding these specific items described in more detail in our MD&A, the income tax rate for the fourth quarter of fiscal 2020 was 20.7%, compared with an income tax rate of 13.5% for the fourth quarter of fiscal 2019. The adjusted income tax rate for fiscal 2020 was 19.9%, compared with an income tax rate of 17.2% for fiscal 2019. The increase for both the fourth quarter and the fiscal year stems from mainly the impact of different mix in our earnings across the various jurisdictions in which we operate. For the fiscal year, April 26, 2020, our return on equity remains strong at 24.8% and our return on capital employees was 15%. During the quarter, we continued to generate significant free cash flows, and saw our adjusted leverage ratio declined further to 1.6 to 1. As of April 26, 2020, we had ample balance sheets flexibility with $4.7 billion available to our cash and revolving unsecured operating credit facility. During the fourth quarter and entire fiscal 2020 we repurchased 8.7 million and 16.4 million Class B subordinate voting shares, respectively. These repurchase were settled for a net amount of 233.9 million and 470.8 million respectively. Our share repurchase program ended on April 9, 2020, and was not renewed. Finally, on June 29, 2020, the Board of Director declared its quarterly dividend of CAD0.07 per share, and approved its payment for July 23, 2020. I would like to reiterate that we have always taken a disciplined approach to capital allocation and cost containment. It is part of our D&A and represent a point of pride for the company and this crisis has reinforced our belief that only to this discipline were Couche-Tard will successfully preserve and continue to grow value for employees, customers, and shareholders. With that, I thank you all for your attention and I'm turning it back to Brian.

All right. Thank you, Claude. Before I wrap up, I want to talk about what we've been seeing in the first quarter of this fiscal year as part of our network began returning to some semblance of normal. In the first several weeks of the quarter, we saw strong increases in merchandise sales as traffic trends gradually improved from week-to-week. Many factors appear to be contributing here, but more notably, we continue to see the move to larger baskets that I pointed out earlier, and see the customer adjusting their shopping habits. We think there's some preference for the ease and convenience of our locations and our channel over some other channels during this COVID period and COVID recovery. We've also gained new customers as we stayed open throughout the pandemic to meet their needs for emergency products, impulse buys, and grocery items, which became increasingly popular and we’re seeing some stickiness. On the fuel side, while still [indiscernible] we've seen a graduate return in fuel volumes and fuel margins have remained healthy through May and June. In recent days, there’s been a resurgence of COVID in parts of our U.S. network, and it is unclear how the virus in the global economy will develop in the weeks and months ahead. So as such, we will continue to adhere to our customary financial discipline, maintain a robust contingency planning. We’re taking a long-term view in our decision making and pushing forward with our [double game strategy]. Our hearts and our thoughts go out to those who continue to suffer from the virus, or take care of loved ones. In conclusion, I want to thank all of our employees, our customers, our shareholders and partners for the trust you've shown on us during this year. Throughout the last few months until today, we're operating with a long-term mindset, relying on our agile operating model, and keeping the health and safety of our employees and customers as our key priority. What could have been the worst of times is turning us into a better stronger company moving forward with our strategic growth plans and making easy of our customers lives every day, even during these difficult days. Now, we'll answer the questions we've received from analysts. Thank you. A - Jean Marc Ayas: Thank you. Brian. The first question comes from Derek Dley of Canaccord Genuity.

How did fuel volumes trend near the end of the quarter as the data we track suggest we have witnessed some week-over-week improvements over the last month? Have you gained market share during the COVID period?

You know, fuel volumes decline really reached the bottom at the end of March. Europe fared better, significantly better than North America as about 50% of our volume in Europe is B2B, which, you know, stayed much more toward normal levels. So, after the – you know, those couple of weeks in March, we saw it stabilized and began to improve as markets reopened. Volumes do remain well below last year as people still aren't driving as much, and there's a certain percentage of society that's now officing from home. So, that's a trend we'll have to continue to watch going forward. With regard to market share, you know, I think it's really difficult to say based on limited data, you know, but we focused on remaining open and consistently competitive in our pricing, which not all on our channel done, so we may have picked up some share over this period, but again, I’d say it’s difficult to say.

The second question from Derek Dley.

As it relates to merchandise margins, has the product mix begun to revert back to a more normalized mix? What were some of the categories that led the way for you in the fourth quarter?

As I mentioned, I think tobacco, particularly cigarettes were initial leaders, you know, alcohol, you know people stay at home and bars were closed. So, we saw strong, strong growth in beer and wine sales across the board, and certainly inside of that we saw a shift to larger packages, you know, from 6 packs to 24 and 30 packs. We saw spikes in grocery size packages, whether it be salty or even confectionery. So, we worked hard to modify our assortment during the period to have these products on hand and in stock. If you could get it, you know, it was difficult, but certainly the PPE or cleaning products that everybody was looking for, hand sanitizers, masks, you know, Clorox all those things were in high demand. So, when we had it, it sold very quickly. I think the areas that got hit, with no surprise, you know, it's categories that are very much reliant on trips. So, our food or Polar Pop or coffee certainly declined with -- in correlation to trips, and in many areas we’re forced to modify our offers going to, you know, full serve or handing out cups behind the counter. So, in those areas we saw even greater declines. I think as we see traffic now improving, a bit surprised to see that some of these larger package sizes are still in play. So, it seems like customers are still focused on consolidating trips, and as traffic has improved, we've seen a commensurate or almost a linear improvement in the on-the-go categories like fountain, prepared food, and coffee. So, we find that too encouraging and just hope to continue to see the improvements in traffic trends continue.

The next set of questions comes from Patricia Baker at Scotia Capital.

You noted one of the bigger impacts of COVID-19 on your business was a mix shift in each of your markets, which in turn impacted margins. Were the shifts pretty similar across all three markets and were you able to adjust your assortment easily to adapt to changing demand and reduce potential shrink on fresher items?

Yeah, I think overall as we mentioned, the shift to larger packages to alcohol, snacks, and tobacco was pretty global. Our European business and a lot of Canada, we do not have alcohol in place. So, you know, they didn't see that same benefit, but global we did see larger sizes, certainly demand for sanitation products, things like that. We started with very different mixes. You know, if you think about Europe, food is our number one category by far. Car wash is our number two, you know, both of those were significantly impacted. People washed their car and didn't drive it. So, we saw a decline in the carwash activity, which explains some of the margin impact. Again, I think it's where each area was starting from as to how much they were impacted. You know, in Canada, which was called out, cigarette volume was greater, because the illicit market was losing shares, but as the restoration in production has resumed, you know, I guess over a month ago, we're happy to see that we've seen some stickiness and retaining some of the sales that we gained during COVID. For fresh items, you know, self serve items were removed in many parts of the network. This is probably more prevalent in the U.S., and we don't have a lot of self serve in Europe. And, you know, where we were forced to go full serve, I think it was resounding that the customers preferred the old way, you know, they preferred the self serve. And then in terms of shrink, I think it was the last part of the question, there was initial impact as we really waited to see what changes in consumer patterns were happening, but I think our business units did a really good job of adjusting to demand. And we also did the same on the cost side, as Claude said. We're literally modifying and running our labor model weekly to keep up with just really significant changes not only in traffic but also underlying that traffic in the mix. So, you know, which our labor model takes into account, how much food, tobacco things like that take different time, you know, very task-oriented approach here. So, I think we've been very responsive.

The second question from Patricia Baker.

You've always talked about Couche-Tard being in the business of selling time and convenience to consumers, what have you learned or experienced through the crisis with respect to that positioning and how important do you believe it will be in the future?

What we've learned is it's really premature to predict. You know, this has almost been a weekly conversation and weekly changes that we're seeing. So, we're really trying to take a long-term view and be cautious about driving conclusions at this point. I think one benefit we do have and we had it as we entered the crisis is watching our businesses in Asia and even in Europe, which were ahead on the COVID journey. So, we're watching those with great interest to stay on top of consumer trends and see if that may provide insight into what happens here in North America. You know, in China, we're seeing a really a lot of behaviors. Go back to normal, maybe with the exception of online ordering, whether that be for grocery or just general items. I joked the other day in a meeting, my mother is 78 years old and had never used Amazon. She's got to figure it out now, and that's probably not – she's not going to unlearn that, but beyond that, I think it's premature to make calls on what customers will do long-term. Yeah, I think the one thing, you know, that we're working on and it's a core part of our strategy is, you know, we do want to sell time back to customers, you know, people want to transact quickly, and that was heightened certainly during COVID. So, we've accelerated our focus into – on home delivery, click and collect, curbside. You know, we now, as I mentioned earlier, have over 1,000 sites with home delivery and 300 sites with curbside. You know, so long way to go to prove there's a business model there to prove that customers want that from us, but we're certainly committed to learning. We are actively where we have – don't have it deploying, frictionless payment options, including leveraging mobile payments or mobile app prepay. So, essentially, our goals and [corporate strategy] is serve the customer anywhere, anytime in whichever way they want.

The next set of questions come from Martin Landry, Stifel GMP.

Could you give us more color on the home delivery initiative? How many locations currently offer home delivery in North America and what is your goal in the next 12 months?

As I mentioned yet, we're offering home delivery in the U.S. now with over 1,000 locations, partnering with flavor down in Texas, DoorDash, and UberEATS and other geographies. In Canada, Europe, we're also partnering for home delivery with a limited number of stores at the moment. You know, we'll continue to deploy these initiatives and work on increasing consumer awareness. Scale will be important to make these successful, but you know, like the restaurants, you know, the QSRs, I think the business model still has to be figured out. So, we're watching this closely. We recognized and need to better understand the trend and how consumers are responding. And I think it's, you know, what we see the consumer needing from us will dictate how we proceed going forward.

The next question from Martin Landry.

How does the basket thrive and how do the economics perform delivery compare within store?

I’d say the basket size is significantly higher for home delivery. And so far we're seeing and being very complimentary to our typical patterns. Our key day parts today are morning and evening. What we see with home delivery is, we see the spike start really after 9:00 p.m. when people don't want to go out anymore. From an economics perspective, you know, I think it's early and probably difficult to compare, as these on demand services are not at scale at this point, but again, I think the important part of these trials is to understand what the consumer wants and gain insight into the business model. These programs make sense in the context of last 12 weeks through the pandemic, but I think it's too early to tell how things will evolve longer-term, and again, we're going to let customer needs guide us going forward.

The next set of questions come from Irene Nattel at RBC Capital Markets.

We’re nine weeks into the fiscal first quarter. Can you give us a view on how things have been trending? Have you continued to outperform broader industry metrics?

Yeah, I would say Europe where – the economy started to reopen a bit earlier than North America. You know, we saw improvements in merchandise with many weeks now being positive in sales. Now, fuel volumes, as I mentioned earlier, fared better throughout due to a higher mix of B2B business, but we’ve also seen the B2C or business-to-consumer business bounce back, but more slowly. And, you know, while we've had some positive weeks on fuel volume, we're still negative in most of the countries that we were currently in. In Canada, you know, alcohol, tobacco, and grocery continue to trend very well. Nice weather has been a positive. We're still seeing traffic improving inside the box with a significantly larger basket than what we would normally have. Customers seem to be want to avoid lines and I think again, we're stealing some trips from other channels. In Canada, fuel volume is coming back more slowly in the merchandise and remains a challenge. So, we just need to see what happens with office trends and other things like that that get people on the road. In the U.S., I'd say we've seen similar trends with fuel volumes being soft, you know our rural areas are faring better, but the entire U.S. is still soft on fuel. In terms of sales and mix, we're seeing positive sales trends, merchandise categories are doing well, are some of those same as in Canada, beverages, alcohol, tobacco impulse, and now as traffic improves, you know we'll continue to see improvement in store, sorry, in food, Polar Pop, coffee. So, you know, again, you know, I think, cautiously optimistic, but as I mentioned earlier, you'll obviously see some hotspots in the U.S. and some renewed stay-at-home order. So, we're being, you know, cautious in how we look at the future here right now.

The second question from Irene Nattel.

Obviously, a lot of discussion out there right now around potential M&A. Can you please update us on the key considerations for you to move forward and execute on M&A, on your current estimate of balance sheets capacity and availability of capitals for Couche-Tard and on your geographic priorities?

Thank you, Irene. Well, first to start, we’re pleased with the current performance of the company here and we've continued to deliver strong cash flow. So, these are essential for us to continue our M&A journey. The other considerations are still the same, the quality of assets, the right price, as always, a strong strategic fit is required and solid brand that fills our network well and with good locations. Finally, our ability to drive synergies and apply our best practices is always important and will remain. In terms of geographic priorities, they're still the U.S., because it's the markets we know well and then one that provide us a meaningful synergies with the acquisition into our network and acquisition and the synergies we can generate with this. The second priority is the Asia Pacific, and we still want to create a new leg of growth and take advantage of countries with favorable demographics and consumer trends. As far as balance sheet is concerned in our capacity, we estimate our capacity to close to 7 billion with also a significant cash position that we have. So, we did a bond offering in January, that was very well received by the market and we're pleased with that. And finally, the bond market is open right now and we feel good about our ability to access the market right now. So, we're feeling good about our capacity to [confinements].

The next question comes from Michael Van Aelst at TD Securities.

To what degree has the advanced learnings from Europe Healthcare North American operations adapt quicker than the competition, and can you provide some examples?

Yeah, I think it was a big win. Maybe even starting with Asia, our Hong Kong licensee, reached out saying, you know, they needed mask. So, it's a bit ironic, but we actually shipped the mask to Asia. So, as we saw the, you know, the crisis head to Europe, and then, you know, to the U.S., we knew that was a priority. So, I think we were very early in securing mask from China went to great lengths to have those shipped at great cost, but again, the safety of our employee base is very high. A couple examples that I think we’re very meaningful, plexiglass, we actually had a business unit in Poland, start that very, very early in the process, and I think a lot of our people thought it was premature, but we pulled the trigger, you know, so I can't say we were the first one in every market, but I think we're very early and putting up barriers between the cashier and the customer, which it's been very, very well received in my travels through the stores. I think it's just done a lot to instill confidence that you were creating the right environment. And then on the community side, which again, is being a part of the solution. We had the first responders as an example giving away free beverages, you know, that was started in one of our Baltic countries, and was quickly circulated as a best-in-class idea and just the right thing to do. So in a matter of days, we had launched that globally. So, I think it has been helpful to have a global footprint, the global view here because it's helped us be more responsive in the markets that trail.

The next question comes from Bobby Griffin at Raymond James.

Understanding there's still a lot of uncertainty, but can you please talk about how the COVID-19 pandemic might change the U.S. C-Store industry? Do you believe it will further accelerate M&A and industry consolidation?

Well, what we think is that with the pandemic some smaller operators and chains might struggle to keep up with investments in technology and enhanced safety measures for customers and for the employees. So, this could even be true if we are going into a prolonged period of weakness or recession that could reduce their ability to deliver a strong performance. So, we're watching that very closely. This could create opportunities to consolidate the market or simply it could – we could see a general reduction of stores or network rationalization taking place. We believe store location will be important and are still – it's still important and we can count on having a great network with a high portion of thought here like location. So, as always, we are going to remain disciplined so that we can take advantages of situation that could help us improve our network. We're going to watch carefully what the market is doing and how the multiples are behaving in the market.

The next question comes from Peter Sklar at BMO Nesbitt Burns.

You mentioned in your press release that the company has been pushing dynamic pricing initiatives. Can you please elaborate on this?

So – go ahead, Brian. Sorry.

Yeah, I think a core pillar of our double again strategy has been to drive organic growth. And a key piece of that underlying that is just to become more local. You know, we serve a very local customer base, you know, typically two or three miles, and so when you think about a city or a state, you know the needs of those customers within that city, within that state vary dramatically. You know what you need downtown Chicago is very different than what you need in Naperville, or what you need in downstate rural communities. And we think that applies across the assortment, across pricing and promotion. So, over the last year, I think we've kind of quietly built some significant analytical capabilities in-house. And we've been examining the last 50 of the products or stores and identified different products that can be priced differently. We've had inside the box two large tests in Sweden and Arizona, and developed clusters of our store networks and applied pricing within those clusters and been very pleased with the results. Do we plan to roll this out globally over the next 24 months? If we continue to see the success that we have in our first two markets? We're focusing on efforts on leveraging that data and our systems to improve our assortment also, and ultimately, I think that will apply to promotional activities. Well, again, this is all about tailoring to benefit the customers on a local basis. On the fuel side, again using an advanced analytic capability that we've been developing, you know working on models that incorporate many more variables into our pricing than just the typical competitive price. Examples could be things like time of day and weather. So, what you'll see us doing is, you know, what we have been doing across these 2,400 stores that we've piloted at is, you know, we're changing prices more frequently. We had more data points to set the price and we're thinking – we're being more responsive to, again, to not only just competitive price, but also other demands that influence, other factors that influence demand. So, you know, we're excited. We think this is a key part of our foundation of being more local for our customers and I think can be key competitive advantages for us going forward.

The next question comes from Vishal Shreedhar at National Bank Financial.

Has this pandemic caused management to revisit its goals and timelines regarding its food service aspiration?

Say, as we ended the pandemic, we were very quick to cut capital, cut costs, but there were a few things we felt sacred, if you will. We're not altering our IT agendas. We’ve had so foundational to our futures I just talked about with data analytics. We're continuing with our MTI builds, and I would say the third is a food offer. We committed to build out 1,500 stores by the end of the fiscal, by the fall 2,300 stores by the end of the year. And, you know, that capital is committed and it is underway. You know, we're installing about 20 stores each and every week. While COVID did delay the implementation, it did not delay the installation. So, where we've installed these offers over the last three months, you know we're now opening those up as markets open with training, sampling, things like that. So again, they're very pleased with the response, large increases in food sales, large increases in customer satisfaction as we measure via Net Promoter Score. And as I mentioned earlier, I think we are seeing a halo affect with positive sales and other categories verses control sites. You know, the devil is in the details. It's also a lot about developing a culture next to this well, each and every day at every site. So, we don't take that lightly. That's a big challenge, but I think we got an offer that we're pleased with and I think fits our customer needs.

The next questions come from Karen Short at Barclays Capital.

Can you discuss promotional activity during the quarter? Historically, Couche-Tard has used things such as targeted traffic campaigns, lift and the smart value program, is there anything to call out in terms of pressing on the promotional front, specifically throughout COVID to drive traffic? Also, where are you in terms of the expansion of the smart value program globally?

Okay. I'd say overall promotional activity and marketing activities were less, you know, the, the conversation was around COVID and to the extent we thought our messaging would be lost. We cut back on a lot of those channels. What we did get to do is make it clear to customers that we're open, that we can be counted on. We want to be a part of the solution the communities that we serve. So, while we did scale back traditional [product promotions], we did push our community efforts. As I mentioned earlier, we're a large part of Feeding America and I know other people on our channel done the same and that's great. 40 million meals donated to local food banks in the U.S. We've launched a similar program in Canada. We deliver care packages to hospitals and homes for the elderly. In Europe, we've given away over 3 million beverages to first responders and healthcare workers. So, those were things we did because we think it's the right thing to do, but we've seen a lot of positive response in social media and surveys, and from our employees. So, I think that's done something for our brand. Certainly done something for our culture. Going back to your question on lift, we've deployed it in the [reigning parts] of North America and Canada, including holiday, so we're now 7,600 stores in the U.S. and, you know, largely complete with Canada. The next step is rolling out local incentive contests. You know, activating that associate to gauge with this with the customer, and we're seeing nice increases in penetration which is key to building the basket. Smart value, a great win from holiday has expanded entirely to North America, and it's now rolling out in Europe after successful pilots in Norway. So along with lift, I think smart value has just been a nice tool to help us grow the baskets and provide value to our customers during these distressing times.

The second question from Karen Short.

You announced increased wages for $250 per hour, can you parse out this impact to SG&A in dollars? Can you remind us of when these incremental wages will expire or have expired? And how you would characterize the offset from a reduction in store hours, or any benefit from the recently scaled labor program from holiday? How much of these SG&A dollars do you expect to be sticky?

So first, quarterly, we saw an increase of 2.3% in OPEC, so still very good considering what we are seeing in other industries or retailers that were affected by the pandemic. So, we stated also in the notes that the appreciation pay expired on June 12, in the U.S. and June 22 in Canada, so we still have some thank you bonuses in the summer that's for qualified workers. And we also kept health benefits to the end of our calendar year for our employees. We also incur other maintenance costs and employee safety costs as we install plexiglass, increased door maintenance, and provided masks to all our employees. To offset these additional costs, on the other hand, while the majority of our stores remained open, we in some markets or location reduced the opening hours. We also adjusted shifts within stores to better match the demand and visit patterns of our customers. We will maintain our activities related to cleaning and sanitation sorry, as well as continue supplying protective equipment as to our employees. However, we do not anticipate that the ongoing costs of keeping those measure will have a material impact on our results. Furthermore, even if the pandemic was on us, we are still working hard on our customization projects to mitigate the impact of increased cost in the business, and we're satisfied with the initiatives and the potential savings we can make using our scale. So, we're continuing to work on this in parallel.

The next questions come from Jenny Wang at Eight Capital.

Same store merchandise sales for Q4 declined the most in Europe while it increased in Canada, given the onset of the pandemic in Europe was a bit ahead of North America. In May and June, are you seeing a delayed reaction in the U.S. and Canada where the consumer stockpiling effect is wearing off and North America is now trending similar to Europe.

We certainly saw different patterns between North America and Europe, but I don't believe stockpiling was a material factor. And while I'm overall pleased with our supply chain, as we lot, you know, large percentage of items are produced in country. So, we were able to stay generally in stock, you know, those items that people were really looking for, like toilet paper, like paper towels, things like that, you know, we were not set up, and I don't think our industry was set up to stay in stock on those. And so I don't think we saw stockpiling is a major factor and even if I looked across tobacco or alcohol, I don't think that's the case. I'd say the difference in patterns that we see is, now Europe was just harder hit inside the store due to overall much tighter lock downs than what we saw in North America. And then also, because of the greater penetration prepared for the carwash, which just we're not selling is true as people stay at home. And then they don't have alcohol. You know, I guess we have a couple countries that do, but the majority of our network does not have alcohol. So, we didn't see that benefit that we see in a lot of our North American markets. So, as we mentioned, there's particularly dynamic with tobacco that help Canada sales to a greater degree, but I certainly wouldn't tie those patterns together between Europe and North America and say that stockpiling is going to create a weak trend. That's not what we're seeing.

Second question from Jenny Wang.

Is Asia Pacific a market that Couche-Tard is interested in entering in the near-to-medium term through M&A, and is there still an intention to pursue the Caltex offer once the economic environment improved?

I’d say throughout COVID, our goal here, well, you know, short-term, certainly it's about taking care of our customers and our employees. It's to take a long term look at the industry. So, you know, our focus on M&A hasn't changed at all, as Claude said. We're still interested in Asia-Pak and in U.S. consolidation. You know, the key is and always will be, it's getting the right assets and the right management team. You know, we have ongoing conversations with several opportunities, but we’ll have to see what pans out. We're going to do the right thing for our shareholders. In terms of Caltex I think we've already talks about the rationale for pausing that, you know, it's just a lot of uncertainty not only in North America, but globally and certainly within the Caltex Tech business, so that's something we'll continue to watch and make appropriate decisions as the time comes.

The next question comes from Chris Li at Desjardins Securities.

Our consumer is starting to feel more comfortable with self serve food or is there – or is there still a high degree of reluctance? Over the longer term, how do you expect the pandemic will impact the food service business and the company's expansion strategy in light of the shift from self service to packaged food and more telecommuting?

As I mentioned earlier, I think it's premature to say what the future will bring on – in terms of permanent changes in consumer habits. That said, you know, the grab and go low touch nature of our fresh food fast program could be beneficial to us where we're delivering quality products, good taste, great taste, actually, that doesn't need to be handled by our staff in store. So, you know, I think – how do you communicate that effectively to our customers, but you know, we've created very sanitary safe program there that, you know, if something like COVID were to persist, I think could be a benefit to our customers. During COVID, in some areas where changes were mandated, we did go full serve, will that be in Polar Pop or [indiscernible], we found customers prefer to do it themselves. We saw sales decline in those stores more than we did in stores where self serve remained in place. So, and then, as I mentioned earlier, in terms of our expansion strategy, no change and we've got the capital committed, the equipment's ordered. We will essentially cover the majority of our North American network and working hard in Europe. To simplify and reduce touching our food operations there will not sacrificing the quality we're known for there. And finally, we'll continue to focus on providing convenience and serving customers in whatever way they require. So, telecommuting becomes a bigger part of society, we'll figure out ways to adapt our offer and serve that trend as well.

Second question from Chris Li.

Management referred to changes in the competitive landscape as having a favorable impact on merchandise sales in Canada and on fuel margins in the U.S. during the quarter. Can you please elaborate and do you expect the changes to be structural or transitory in nature?

Yeah, I think we've covered merchandise pretty comprehensively. So, I'll maybe touch on fuel. Our perspective is, you know, there's been tremendous uncertainty in demand. Just even, what good looks like, and then volumes are down. So, you know, we've seen less competitive pressures, particularly in the U.S. When we look at ourselves versus our industry, you know, we think we've got one of the lowest cents per gallon or cents per liter breakeven in the industry. We’ve bought enough store companies and looked enough companies over the years to understand the profitability of the industry overall, and we think between having solid fuel volumes really strong back court or store and a very competitive cost structure. We believe with long-term, you know, industry will have to realize higher fuel margins and I think we're in a very good place to compete when you still look at this as being a very fragmented industry.

The last set of questions come from Mark Petrie of CIBC World Markets.

What changes in consumer behavior and attitudes have you seen that have caused you to rethink the particular ways you approach the customer experience, as well as the assortment you offer in-store?

I'm not sure if it's caused a change, but maybe an acceleration. You know, we've talked about less friction with the overall experience. So, you know, that's brought into, you know, focus just accelerating touchless payments, you know, creating social distancing measures within our stores, you know, pre-COVID people didn't like to touch bathroom doors, in COVID, they like it even less. So, we're putting foot pulls on our bathroom doors. The other things to again, just reduce the things that customers have to, you know, touch in our shopping experience. I think, we've spent more time monitoring consumer sentiment on social media and through surveys. So, I think there's a lesson that we have an opportunity to listen more, listen better, and that'll stick with us. New stores, certainly we're preparing them. There's no regret moves, you should think about, you know touch those sinks, touch those toilets, bathrooms with no doors, so some of those we just do has no regret and we've already modified our store plans do incorporate things that were just heightened during COVID. And then, in terms of assortment, you know, we've seen as we talked about a couple times, you know, larger package sizes, more grocery items more [staples] sell and that's just, you know, we think that our industries maybe walked away from some of those over the years. And I think COVID is a good reminder that the demand is out there, and we can provide a quick in and out for customers that need though. So, we're going to, you know, try to stay committed to some of those changes and see if some of those customers and some of that demand will remain sticky as we get through the COVID period.

Second question from Mark Petrie.

Could you please give further commentary about how in-store transactions have paced as miles driven and fuel volumes have improved?

Let’s again start again by reminding you that while there's certainly a correlation, there's not a perfect correlation between fuel and merchandise sales. Our store traffic is fared much better globally than our field trips as people needs for our products and services, even though they're not traveling or going to their office, you know, so as a reminder in normal times, now, 60% to 65% of our visits are to our store only. You know 25% are fuel only, and then that kind of remains, you know, 15%, 20% that's a combined trip. And so you know, customers see the importance of rapid service and proximity their home, they were being used as more of a filling trip than we were before, and while we don't have great data, we believe we welcome some new customers into our stores during COVID. So, as we've come out of COVID and society has opened up a bit, we've seen the pace of improvement of in-store traffic improve significantly faster than fuel demand.

Great, thank you, Brian. Thank you, Claude. That covers all the questions for today's call. Thank you all for joining us. We wish you a great day and look forward to discussing our first quarter 2021 results in September.

Thanks everyone. Have a great day.

This concludes today's conference call. You may now disconnect. [Foreign Language]