Good morning. My name is Veronica, operator with CNW, and I’ll 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 would like to welcome everyone to this web conference presenting Alimentation Couche-Tard financial results for the second quarter of fiscal 2021. 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. For those of you south of the border, a happy Thanksgiving. Thanks for joining us for our presentation of our second quarter 2021 results. Across our network, we really had a strong performance during -- in the quarter, both in our stores and in our forecourts, even with the continued impact of COVID-19. New customers and associated share gains since the start of the pandemic have continued, as customers are taking advantage of the convenience and proximity of our channel. This led to solid same-store sales in all of our regions. While fuel volumes remained negative across the network, we did see some sequential improvements in our three geographies, particularly in Europe with favorable weather, more consumer travel during the quarter and a more stable B2B business. Overall, we continued to achieve healthy fuel margins, which have allowed us to offset the volume declines and grow our fuel gross profit dollars. Earlier this month, we announced, we’ve entered into an agreement to acquire the convenience store business, Circle K Hong Kong, which operates a network of 340 convenience stores across Hong Kong and franchises, and additional 33 stores in Macau. Since 1985, Circle K Hong Kong has been a licensee of the Circle K brand, and we followed closely the progress for almost two decades. Upon the closing of this transaction, which is expected by the end of this calendar year, Circle K Hong Kong, its management team and employees will officially become part of Couche-Tard family and our journey. We’re excited about this transaction as it provides us with a strategic platform in Asia, from which to launch a regional growth ambition. We will undoubtedly benefit greatly from Circle K Hong Kong’s experienced team to understand the many opportunities in the region and to navigate the tremendous potential of some of the world’s largest and fastest growing economies. We’re also looking forward to sharing best practices as the Circle K Hong Kong team has developed solid expertise in operating small footprints, convenience only stores in dense urban areas, as well as advanced merchandising, loyalty and supply chain capabilities. Before I move on, I want to add that I’m truly pleased by the strides we’ve made this quarter on our strategic goals, from entering the Asia Pacific market to any milestones in our Fresh Food, Fast program, and as we continue to cope with the increasing severity of the pandemic. Our teams in the stores and support offices remain focused on growing business and making our customers’ lives a little bit easier every day. And I’m continually inspired by their commitment to each other, our customers and our shareholders. I’m now going to turn to the results of the second quarter. Same-store merchandise revenues increased 4.4% in the U.S., 8.6% in Europe and 11.4% in Canada, compared to the same quarter last year. This increase is primarily attributable to growth in basket, which more than offset continued softness in traffic due to the pandemic restrictions across the network. Now, turning to nicotine, packaged beverage, alcohol and grocery categories continue to perform well across the business, while in Europe our fresh food categories did see a slight increase year-over-year. We’ve also worked hard to drive more traffic into our locations through increased awareness for our loyalty programs, gamification and by ensuring that we remain focused on our core value propositions. We continue to be very pleased with developments in North American food program, which is the biggest project ever undertaken by Couche-Tard. In United States, we met our target of introducing 1,500 Fresh Food, Fast locations by this fall, and now we offer in 11 of our U.S. business units. Our focus remains on the quality and ease of our fresh food offer, both for our store team and our consumers. Stores with Fresh Food, Fast have been performing very well relative to test stores or control stores in the same markets, and we’re also tailing our offer to meet the tastes and preferences of our local communities. Based on these results to-date, we plan to roll out the program to additional 3,000 locations by the end of next fiscal year. In Europe, our food program saw increased demand this quarter, despite COVID. During this time, we kicked-off a pilot for self-serve hot and cold food in several of our locations in Denmark. This is targeting at a more grab and go self-serve offer with a goal to provide a quicker and easier experience, while allowing us to optimize store labor. In Norway, this quarter, we launched new pizza offer in collaboration with the country’s biggest pizza chain. And we sold 120,000 pizzas in first six weeks following the program introduction. Interestingly, this initiative has provided a big boost to our Circle K app into our click and collect ordering option, as pizzas are popular offer. With changes in driving habits and softer traffic patterns, especially during the morning commute, the dispense beverage categories continued to be challenged during the second quarter. But, our volumes outpaced the market, thanks to some innovative project extensions. We’ve introduced all flavors to our coffee assortment, as well as enhanced water and energy on our Polar Pop offer. Our first Froster program in Europe is now available in more than 400 sites and continues to show very strong sales. Since the onset of COVID-19, we’ve seen consistent market share increases in packaged beverage, as customers continue to favor larger sizes and quantities, while also trading up some more premium products within the category. Alcohol remains a bright spot and we continue to robust growth as growing COVID-19 cases further impact on-premise restaurant and bar sales. In addition to beer, emerging segments like seltzers are showing very strong demand. In other age-restricted products, nicotine sales continued to show strong performance versus prior year, particularly in Europe. Other tobacco products showed solid sales growth due to extended selection of modern white and vapor products, in line with changing consumer trends. In the U.S., our backbar program, which is really expanding our backbar and allowing us to have additional assortment, we’ve been able to expand our selection of modern white products and position Circle K as a leader in the white nicotine and vapor segments. We’re also excited that we’re advancing our joining to become a more localized retailer with a very data-centric merchandising pricing effort. We’ve ramped up our in-house and loose capability, which have enabled us to begin the rollout of this initiative to nine additional business units, touching all three of our platforms, after having successfully rolled out in Sweden and our Grand Canyon business unit. We think this is a really important step to build out an enterprise-wide capability, and we plan to further expand the program into our remaining business units by the end of fiscal ‘22. And in parallel, we’re going to begin to tackle data-driven assortments and promotions. Moving to the fuel business. Same-store volume growth this quarter remained negative due to the COVID-19 impact on miles driven. However, we did see some improvement in demand as portions of our network returned to more normal operations during the quarter, particularly in Europe. But we do remain cautious, given the recent rise in COVID-19 cases globally and the return to stricter social distancing measures. For this quarter, same-store fuel volume decreased 15.5% in the U.S., 4.5% in Europe, and 11.8% in Canada, compared to last year. Despite these declines, we have continued to realize healthy fuel margins across the network, benefiting from rational market dynamics in many areas, as well as great execution at retail. During this quarter, we converted more locations to our Circle K fuel brand, bringing the total to nearly 2,600 sites in North America, and we’re also piloting in more than 500 sites across various geographies to build the Circle K fuel brand awareness and claim the premium fuel customer. And again, the pilot is still early, but we’re pleased with the initial results. Additionally, we furthered our fuel procurement and transportation capabilities, adding more trucks to our fleet and launching the trading operation in Houston, which we expect will lead to improvements in the value chain and our margins over time. We also continue with fast pace in our mobility network. In Norway, we launched additional products this year tailored to our B2B customers. Most notable feature is a combined fuel and charge card, which consolidates all purchases from fuel, merchandise, carwash and electric onto a single bill for the businesses. Circle K is a first mover in this product and we believe will give us a competitive advantage being a partner for B2B customers using both, liquid fuels and electric charging. We’ve now also hit a milestone in home charging in Norway, selling more chargers in the last quarter than for all the quarters combined since we launched the program. We take this as a clear sign that we can grow our position in customers’ homes and where they work, and are looking to build on that momentum. In North America, we’re continuing our preparations to place more chargers in our Circle K sites and core EV markets. In the near-term, in Quebec and California will be our likely starting points. I also want to briefly mention our continued efforts to expand our network through new store builds. While this work has been slowed a bit during COVID-19, we have restarted and continue to invest heavily in this organic growth lever. We’ve had a solid return on these investments and we are looking to accelerate openings in the back half of the fiscal year. Shifting to innovation. Our work in innovation is progressing. We’re seeing some things come to life in our sights. We’re progressing on both the forecourt and inside the stores. In Norway, we’ve expanded our license plate recognition payment system at the forecourt to more locations, and planning a launch in Sweden. And across the network, we continue exploring gaining insights into what the consumer wants in terms of curbside pickup and home delivery options. And we’re evaluating these models for further deployment. This quarter, we expanded our home delivery capacity with DoorDash and Uber Eats, and continue our delivery work with Favor in Texas. We now have approximately 1,200 sites offering home delivery and we’ve tripled the number of transactions since the beginning of the pandemic. We’re moving from pilot phase of a limited number of stores in a region to testing entire markets, particularly in our Northern Tier Florida and Texas business units. Our partnership of these third party providers is bringing new and different customers to the brand. And we’re seeing their locations are gaining traction as a late night destination for the home delivery customer. We’re committed to taking the friction out of the shopping experience and providing an offer to our customers anywhere and anytime that’s most convenient for them. With that I’m going to pause there and let Claude take you through more of the second quarter financial results. Claude?

Thank you, Brian. Ladies and gentlemen, good morning. For the second quarter of 2021, we are happy to report net earnings attributable to shareholders of the Corporation of $757 million or $0.68 per share on a diluted basis. Excluding certain items for both comparable periods, adjusted net earnings for the second quarter of fiscal 2021 were approximately $735 million or $0.66 per share on a diluted basis, compared with $0.50 per share for the prior year, which represents an increase of 32%. Net earnings were $1.5 billion for the first half of fiscal 2021 compared with $1.1 billion for the first half of fiscal 2020, an increase of 37.3%. Diluted net earnings per share stood at $1.38 compared with $0.99 the previous year. Excluding certain items from net earnings for both comparable periods, net earnings were approximately $1.5 billion compared with $1.1 billion for the previous year, which represents an increase of $413 million or 37%. Adjusted diluted net earnings per share were $1.37 for the first half of fiscal 2021 compared with $0.99 for the first half of fiscal 2020, an increase of 38.4%. Our business continues to show a lot of flexibility and resilience, despite the disruption on shopping and commuting behaviors caused by the pandemic. Once again, we executed well during the second quarter on our cost optimization initiatives, including solid labor efficiencies, savings on goods-not-for-resale and strong control on discretionary expenses. This has allowed us to stay the course when it comes to investing in the health and safety of our employees and customers, as we strive to remain relevant in their time of need and good steward of their trust. I will now go over some key figures for the quarter. For more details, please refer to the MD&A available on our website. During this most recent quarter, excluding CAPL’s revenue and net impact from foreign currency translation, merchandise and service revenues for the second quarter of fiscal 2021 increased by approximately $208 million or 5.9%. This increase is primarily attributable to the growth in basket size, which more than offset continued softness in traffic. The tobacco, package beverages, alcohol and grocery categories continued to perform well across all our regions. For the first half of fiscal 2021 on the same basis, merchandise and service revenues increased by approximately $512 million or 7.2%. For the second quarter of 2021, on the same basis, merchandise and service gross profit increased by approximately $72 million or 5.9%, mainly attributable to the strong organic growth, despite lower traffic in our network due to COVID-19. Our gross margin increased by 0.1% in the United States to 34%, while it decreased by 1.1% in Europe to 40.2% due to a shift in our product mix towards lower margin categories with tobacco virtually strong contributor to that end. In Canada, the gross margin remained steady at 32.6%. During the first half of 2021 on the same basis, merchandise and service gross profits increased by approximately $181 million or 7.4%. The gross margin increased by 0.4% to 34.4% in the United States, while it decreased by 1% in Europe to 40.4% and by 0.6% in Canada to 32.1%. We now move on to the fuel side of the business. In the second quarter of fiscal 2021, our road transportation fuel gross margin was $0.3748 per gallon in U.S., an increase of more than $0.09 per gallon. In Europe, the road transportation fuel gross margin was $0.111 per liter, an increase of almost $0.03 per liter. And in Canada it was with C$0.1005 per liter, an increase of more than C$0.02 per liter. Growth in road transportation fuel gross margin across our three geographies was driven by changes in the competitive landscape and improved supply conditions. The road transportation fuel gross margin for the first half of fiscal 2021 was $0.4014 per gallon in the U.S., $0.1082 per liter in Europe and C$0.1016 per liter in Canada. For the second quarter of fiscal 2021, normalized operating expenses decreased by 0.8%. We achieved this decrease while maintaining investments in our stores to support our strategic initiatives, even as we continue to see higher labor costs from minimum wage increases in certain regions, normal inflation and COVID-19 related expenses. This decrease was a result of cost and labor efficiencies as well as rigorous work and activities initiated to streamline and minimize our controllable expenses. Excluding specific items described in more details in our MD&A, the adjusted EBITDA for the second quarter of fiscal 2021 increased by $223.5 million or 20.9% compared with the prior year, mainly from a higher road transportation fuel gross margins, organic growth on merchandise and service sales, as well as from the net positive impact from foreign currency translation, representing approximately $11 million, partly offset by the negative impact of COVID-19 on our traffic. During the first half of 2021, on the same basis, the adjusted EBITDA increased by $543.9 million or 25.8% year-over-year, mainly attributable to the similar factor as those of the second quarter. The valuation and exchange rate have a net negative impact of approximately $1 million. Excluding specific items described in more details in our MD&A, the adjusted income tax rate for the second quarter of fiscal 2021 was 20.4%, compared with 19.5% for the second quarter of fiscal 2020. The adjusted income tax rates for the first half of fiscal 2021 was 20.5%, compared with 19.6% for the first half of fiscal 2020. The increase for both, the second quarter and the first half of fiscal 2021 is mainly stemming from the impact of different mix in our earnings across the various jurisdictions in which we operate. As of October 11, 2020, our return on equity remained strong at 25.7%, and our return on capital employed stood at 17.3%. During the quarter, we continued to generate significant free cash flows and saw our leverage ratio declined further to 1.13:1. As of October 11, 2020, we had ample balance sheet flexibility with $3.5 billion in cash and an additional $2.5 billion available through our revolver credit facility. Finally, on November 24, 2020, we announced the renewal of our share repurchase program for up to 30.3 million Class B shares or 4% of the public float, beginning on November 27, 2020. As well, the Board of Directors declared a quarterly dividend of C$0.0875 per share, an increase of 25% and approved its payment for December 17, 2020. This represents our second dividend increase of 2020 after raising the dividend by 12% on March 17th. While our business continued to deliver strong financial results and record free cash flows through the pandemic, we are not letting down our guard and realize that we are living through a fragile situation that can change rapidly. Consequently, we are maintaining our disciplined approach to managing costs and deploying capital to ensure that we come out of this crisis stronger for our employees and customers. Our balance sheet with $6 billion of cash on hand and available under our credit facility remains well-positioned to support our global growth ambition and to drive value-creation for our employees, customers and shareholders. With that, I thank you all for your attention. And I turn it back to Brian.

All right. Thank you, Claude. We finally got some good news these past two weeks. There is a light at the end of the tunnel with some successful vaccines. So, I think, as Claude said, our approach of taking a long-term view and staying focused on our strategies has served us well. No doubt though, in the meantime, COVID-19 is persisting. In many areas, we’re seeing renewed wave of the pandemic. Our thoughts certainly go out to those who are suffering from the virus or taking care of loved ones. Over the last quarter, I’m proud of how our teams have successfully navigated the business with a long-term mindset. As I said, keeping our customers and employees’ safety in the forefront of the decision-making. As Claude said, we remain prudent with our capital and investments while staying committed to our double gain [ph] strategy. We’re excited to acquire Circle K Hong Kong and begin our growth journey in the Asian markets. And we’re cautiously optimistic about hitting organic sales, growth targets for the year. As Claude noted, we’ve got a very healthy balance sheet, putting us in a strong position for future opportunities as they may arise. And most of our culture has shown itself to be resilient during the crisis. And we’ve been able to provide an even better stronger foundation for our vision to become the world’s preferred destination for convenience and fuel. With that, we’ll now answer questions we’ve received from Analysts. A - Jean Marc Ayas: Thank you, Brian. So, the first question comes from Irene Nattel at RBC Capital Markets. Can you give us some color around the impact of Fresh Food, Fast in the stores in which you have rolled it out? What kind of customer behavior are you seeing in those stores? What is the magnitude of any lift in basket and traffic? And lastly, what type of customization are you doing? How should we be thinking about the impact on same store sales?

Thanks, Irene. Obviously, the pandemic has thrown a lot of noise into this. So, some of the data we are looking at to make our decisions are pre-COVID, where we had some significant number of pilot sites out and also, pleased with the results during COVID as these sales continue to outperform control sites. And the impact will be important not only in our top-line, but our gross margins as we scale this. We typically see margins in the 30% to 60% for these types of products that we’re introducing. Our initial results, again, despite the pandemic have been very promising, when we compare scores with and without, in the same markets in our business units, reach a more important scale in the rollout. We will be able to turn on some meaningful marketing initiatives. We’ve done no promotion, we’ve done no sampling, to support or grow these programs, obviously, because of COVID. We’re continuing to work on refining the business. It’s a cultural shift in our stores. We want to make sure that our teams are well supported and have their very best chance of success. So, we’re working on that, improving the teams working on supply chain. We’ve had some disruptions from COVID with some of our providers. So, again, as we work those out, despite all that, we are comfortable that we’re seeing a solid business. And I guess, the biggest testament to our belief in this and confidence as we emerge in COVID second quarter, third quarter next year is that we are committing the rollout of additional 3,000 stores in fiscal 2022. And post-COVID, we’ll certainly be able to give you a cleaner look at the true impact on profitability and top-line, both in that category and then the halo effect we’re seeing in rest of the store.

The next question comes from Martin Landry at Stifel GMP. Could you discuss the findings of your click and collect pilot? Has this proven to be a viable business model? What would be the hurdle to prevent you from offering it to all your locations? And, how long would it take to rollout?

Yes. I guess just starting, I’d say, our vision, our mission is to make our customers’ lives easier. We focus on the solutions that help them on this journey, getting the right product to the right place, where they want it and when they want it. The pandemic has certainly had a change in customer shopping behavior. I think, there’s a big question out there as to what persists post-COVID and what doesn’t. We know there will be a continued desire for touchless payments. We’re investing in those areas, testing customer adoption. We’re also looking at other ways to service a customer remove friction inside the store, and into forecourts we talked about. Click and collect is still in the pilot mode in our Grand Canyon business unit. Home delivery, we scaled and moved into larger market tests with different partners, as I said, the marks Favor in Europe -- Favor in Texas excuse me, Uber Eats and DoorDash in Florida and Northern tier business units and currently have about 1,200 sites on it. We’re seeing a good basket, a differentiated customer, usually a bit younger, certainly a different daypart for us, as it’s generally at night, and transactions are growing. But, I would say today, it’s still not a meaningful piece of the business. I think, what we really need to watch is, is this sticky consumer behavior or not, and react accordingly. But, the good news is, is we’ve got the capability and technologies in place to do this and to scale very quickly, if it works. I’m thinking, in some later questions we’ll talk about limiting friction at the forecourt and inside the box as well. But, we just see this as one of the best along that journey and we want to be prepared as that consumer demand for this type of service continues to grow.

The next question comes from Derek Dley at Canaccord Genuity. Your balance sheet continues to deleverage meaningfully. What are your capital allocation priorities? And what is your comfort level in terms of leverage ratio?

Thank you, Derek, for the question. We’re very happy with our progress, strong execution by our teams on driving the top-line and gross profit dollars, as well as controlling the costs. So, this is allowing us to drive to record cash flows and then repay debt when required. So, from a capital allocation perspective, we want to keep reinvesting in the growth and maintenance of our business. And frankly, our priority number one is the allocation of capital towards our strategic priorities, and in inorganic initiatives also, such as M&A are really the priority. Secondly, we want to grow -- continue to grow our dividend at the steady pace each year. And we also -- we increased it 25% this quarter after raising it by 12% earlier this March. So, finally, using our share repurchase as an extra tool in our tool belt to return cash to shareholders. So, we’ve been -- we have been approved for a 4% buyback and look to buy back shares on an opportunistic basis, when we feel it will be beneficial to our shoulders. So, I will remind you also that our comfort level remains around 2.25 times leverage with the possibility of extending that by 1 to 1.5 turn of debt to execute an acquisition, depending on the outcome of our discussion with credit agencies or lender. But, as we are sitting today at the 1.13 times, this leads us to a great deal of flexibility for future acquisition, and we feel we have a pretty strong balance sheet right now.

The next question comes from Graeme Kreindler at Eight Capital. Can you please discuss recent trends surrounding customer loyalty as consumer baskets continue to consolidate? Has there been increased stickiness from customers in merchandise revenue, given sustained same-store sales growth? How sustainable do you think this trend will be in the future, particularly as you continue to optimize merchandise mix within the store and rollout new offerings like Fresh Food, Fast?

I think, what we’ll see, some of the behavior that we’re experiencing today, because we’re quick, easy now, we’ll stick and then other parts of that won’t, as customers revert back to more normal behavior. But, we’re certainly not sitting here and looking for one silver bullet when it comes to increasing customer stickiness or loyalty. We’re working on improving the whole customer journey inside of our stores. From the basics of keeping our stores, clean, safe and well stocked, staying sharp on our pricing, and we think there’s a huge opportunity out there to truly get localized pricing and assortment right, working hard on staff training and being very innovative of how we’re attracting new employees and train them. Our food program, we know that’s going to create stickiness. We know there’s demand there. And we think long-term that will drive repeated trust and loyalty. And then, on the innovation side, we’re continuing to look at how can we play role with changing -- how our customer pays, checks out, just the overall experience at our store and at our forecourt. So, it’s a multipronged effort to retain these customers and attract new ones.

The next question comes from Bobby Griffin at Raymond James. Company operated site count has declined year-over-year for a few consecutive quarters with closures outpacing the number of organic openings. Is that a result of COVID-19 delaying new store projects? Should we expect company operated sites to begin growing again in calendar year ‘21?

Yes. We’ve got a five-year plan to double the business. We have a target to grow our new to industry store count from approximately 100 where we’re at today to over 200 by the end the fiscal 2023. I’d say, we’re nicely on track. We paused a bit during the pandemic until we’re more secure and condition of our balance sheet and the industry. But, we’ve fully resumed construction. Fiscal ‘21 has been challenging. But again, we think we’ve got the team to execute that. And we’ve got a very good pipeline. In terms of store count change, we had a significant impact from the transactions we did with CrossAmerica. But you’ll see more of that. We’re going to continue to harvest our weaker sites in the network, and we’ll continue to build big, strong, new sites that we think can win in the marketplace over decades. We’ll be more active at that than we probably have been in past year. So, not focused on total store count, just a message that the ones we’re adding, they’re doing 3, 4x the business of the ones that we would be taking out.

The second question from Bobby Griffin, can you provide additional details on how fuel volumes trended throughout the quarter? And how are these volumes performing in the third quarter to-date?

Just going back to my comments, it’s a great news, the vaccines are on the way. So, there is an end to this and we fully expect that fuel volumes will return to much more normal levels after the next six to nine months. But, did face six to nine months of restrictions, potential lockdowns, and we’ve seen some happening in parts of Canada, the U.S. and Europe. So, while the lockdowns are temporary, they will impact fuel demand, as people stay at home and less -- fewer kilometers are driven. That said, trends were improving through the quarter in all three regions, but restrictions started to impact, particularly the Toronto market is raised in the quarter. U.S. has held pretty stable and Europe had a slight improvement. We’ve been very pleased with the B2B business in Europe holding up very, very well. But, again, with the lockdowns, we do expect Canada and Europe to get a bit worse in the coming quarter as restrictions are put back in place. So, good trends during the quarter, but we remain cautious.

The next question comes from Patricia Baker at Scotiabank. The second quarter saw a nice recovery in the merchandise margin in Canada. Can you address the specific dynamics there? And what led you to post the steady rate year-over-year?

The benefit in Canada really came from mix, mainly in the service side. Lottery has been strong globally. People, a lot of casinos and things are closed and lotteries really performed very well globally. Tobacco grew over a year, but it was a smaller portion of total merchandise sales, as other categories grew faster. Package beverage in particular and then grocery were two areas that are higher margins and really showed strong growth. So, that’s bolstered overall margin in Canada.

The second question from Patricia Baker. You note in the MD&A that you opened 13 new stores, 38 since the beginning of the fiscal year and have a further 52 sites in the construction pipeline. Can you discuss the new store program, and specifically, what unique features they might have? How do store openings in calendar years 2020 and 2021 differ from new store cohorts from five years ago?

Sure. I’ve touched on this a bit. But, starting in March, we really froze all capital. And so, we paused construction for about 90 days, but we’ve resumed that. We’ve got 52 under construction. We’ve got roughly another 150 sites in various phases of zoning and permitting in North America, and probably 30 or 40 in Europe. In terms of how the stores are changing, if you’ve been to a holiday store, we’re incorporating some of the key attributes of those networks. They’re unique and they’ve got in and out door, and they really guide the customer journey through, starting with food, getting them very exposed to package beverage and then ending in the checkout area, with heavy exposure to impulse. We’ve piloted that in some existing Circle K sites via retrofit, and it’s shown strong growth. So, we believe in that format. And the new boxes we have coming out of the ground will start to show those characteristics. Obviously, there’s a piece where we’ve gotten early and permitted. So, it’s really over the coming months, we’ll start to see that show up. And then, we’ve agreed on a harmonized image, we call horizon. So, they’ll have a refreshed new look, new colors that have tested very well with customers, both in U.S. and in Europe. Our new Circle K stores in Europe, we’ve been at that a bit longer. We’re seeing a higher traffic and higher food penetration at those sites. So, it’s a good ROI, and it’s something we think we can scale when the time is right, pretty cost effectively into our existing network. And then, I think, I touched on our urban markets. We’ve never been a big player in the urban centers. But, with COVID, there are obviously vacancies accumulating as we’ve seen other retail not fare as well. So, we think there’s a window of opportunity for us to accelerate that expansion into non-fuel sites in the urban centers. So, you’ll see more activity from us in the coming year, in some of our big metropolitan areas in North America and Europe.

The next question comes from Karen Short at Barclays Capital. Fuel margins in U.S. exceeded those disclosed by OPUS again. Was the geographic mix benefit you saw last quarter, again a benefit in the second quarter? If so, can you maybe provide more color on what exactly is driving that benefit?

Yes. This quarter really geography didn’t play a material factor. It was pretty spread evenly across -- particularly the U.S. So, I wouldn’t say geographic mix was material. And we certainly understand the logic behind OPUS’s guide, particularly for a company like us with a national footprint. But, we do a lot of initiatives that we’re working on and I think are unique to companies of our size. We’re able to leverage resources at scale. As I mentioned earlier, we set up a trading office in Houston. We think there’s opportunities with owning one of the longest shorts in the fuel industry in the world that create unique opportunities for us. We’ve increased our investment in our fleet of trucks to capture geographic arbitrage opportunities, capitalizing on volumes that are coming up for renegotiation and continue to push for improved costs in a long -- quite honestly, a long value chain out there today. So, again, we’re working on improving our procurement abilities, we’re building optionality into our contracts when possible. And then, on the sell side, we’ve continued to roll out AI fuel. We paused it for about six months during the pandemic, as it was really hard for anybody to understand what good looked like. But we spent that time building new capabilities into that system and we think it’s even stronger and smarter than it was before. And so, we’ve reintroduced our AI pricing initiative back at the Street. And we think long term, that’s going to be very, very strong for us and continue to allow us to outperform much of the industry in terms of fuel margins. And finally, I’d say, our Circle K fuel brand, it’s 2,600 locations. We’ve done approximately -- in process another 500 this year. And, there’s no doubt that we see enhanced margins when we’re able to do that.

The second question from Karen Short, you’ve talked about accelerating the localized pricing strategy. Can you provide some color on what you’ve learned about the elasticity of the assortment, based on pilots in Sweden and in the Grand Canyon? Can you also provide more color on the clustering of stores? And finally, can you talk about the timeline and cadence of the rollout to different business units globally?

Yes. We’ve been working on this awhile, for some significant time before we started to talk about it, just to kind of validate our vision here. But, our belief is that there’s a very large prize to truly execute localized pricing assortment and promotions. I’ve talked to the pricing because we’re well underway after two successful pilots. We’re adopting our pricing to the local markets. When I say markets, it’s really site level based on data-driven clustering. This is isn’t an exercise aimed at raising prices. It’s an exercise of targeting the optimal price by cluster and also maximizing gross profit dollars. So, we’ve seen many SKUs that remain flat, others have gone up and others have been reduced. And again, that varies by geography and by cluster. So, I really can’t stereotype a given category or even SKU. It’s an investment in data analytics to better understand elasticity by SKU, by cluster, and includes a lot of variables that people that I talk to, and I joke, we put it in our basement that I quite honestly don’t understand. And it’s exciting. It’s an exciting, exciting journey that we’re on. After two successful pilots we’ve rolled out to an additional nine business units this quarter across all three of our geographies. And we’ll be increasing the scope, not only in terms of number of SKUs that are in that, in that pricing program, but also in parallel launching work on assortment and promotion in the coming quarters.

The next question comes from Mark Petrie at CIBC World Markets. Can you please update us on the shift to the Circle K fuel brand? How many sites are converted and what impact do you see to your volumes and customer loyalty when you switch? Can you quantify the margin lift from branded to owned brand fuel, or if not, how material a factor is this in your relative outperformance versus OPUS in fiscal 2021?

Yes. I’d say, this is an important journey for us. We’ve had great relationships and partnerships with the brand. We’ll continue to do a lot of business with the Shells and BPs and Exxons of the world. But, we started from a consumer standpoint, and we did consumer studies. And we showed that when we had a Circle K site at the backward and a major brand or a brand, a non-Circle K brand at the forecourt, there’s confusion. So, we think this is an opportunity to absolutely dramatically increase the awareness of the brand, particularly in North America is we’re largely -- we are 100% our own brand in Europe. It’s also the ability to control and simplify the consumer experience at our site. Today, we will own those technologies at Circle K versus having to share software from the major oil companies. So, again, controlling that consumer experience is important as we look to the future and our ability to innovate that journey to forecourt. Today, we’ve got 2,600 sites that are operating under our brand, mentioned all of Europe is that way. And then, anything new that we’re building today is on the Circle K brand as well. And as I said earlier, we’ll convert additional profit 500 sites this year. For that brand, we’re working on our strategies to drive loyalty in volume, much at around -- much of it’s around building awareness but also seeing can we resonate with customers with our premium fuel offering. Over time, we think there’s a clear benefit, both in terms of volume and margins as we create a simpler experience. In terms of quantifying that, it really varies dramatically by geography and by the brand we’re switching from. So, more to come there, but net-net, a positive, it’s a good ROI for us and we’ll continue to invest in that direction.

The next question comes from Peter Sklar at BMO Capital Markets. Now that you’ve acquired Circle K Hong Kong, can you talk more specifically about other markets in Asia that you would be interested, focus there? For example, do you still have an interest in the Australian market? Would you ever consider an acquisition in China?

Just like Europe, Peter, Asia is a large market with different countries that have their own dynamics. We mentioned in the past that we find many markets attractive and mostly in Southeast Asia, so the Philippines, Indonesia, Vietnam, could be Thailand also to name a few. So, our focus is to enter a market with favorable demographics, good population growth, GDP growth, increasing earnings power and an expanding middle class also is very favorable to our store. So, as well a country that already counts on a good c-store infrastructure as we are not looking to spend years building from the ground up or greenfield our operations in these countries. So, we’re looking for networks that have a meaningful footprint on their markets, but also a strong growth potential. To revert to the part of your question on China, it’s a market that we need to learn more about, understand what the regulations are for foreign companies to operate there. And our new family member in Hong Kong is going to be a great help for us to better understand the China and also the rest of the region also. As for Australia, we continue to find the market attractive. But, as we mentioned many times, we’re waiting for to see how the countries will fare as it eventually exits the pandemic and what asset that could look like -- what the assets are going to look like in the pipeline when they’re going to exist pandemic? So, it’s -- we’re still on pause for Australia.

The next question comes from Vishal Shreedhar at National Bank Financial. You disposed of a property for $55 million? What was the reason for the disposal? And should we expect more disposals across the network?

Well, it’s important to stress that these actions happen in a more normal course of business. We always look at the capacity of a site to generate operational cash flows versus the real estate value. So, this is also one of the reasons why we like to own our own store. So, it’s also our duty to shareholders to consistently evaluate our assets. And we have teams that are always looking at optimizing our real estate and our store portfolio. So, at times, the value today is worth making a deal versus operating the assets in the long term. And we will always ensure that we are allocating our capital efficiently and investing in the areas that will provide with our best return -- with best return and while staying focused on our long-term strategy. These transactions are common in our network, but the materiality of this transaction suggested additional disclosure for this one.

The next question comes from Chris Li at Desjardins Securities. Since B2B is a relatively small part of Couche-Tard fuel business in the U.S., is there an opportunity to grow the B2B business to take advantage of the structural growth in fuel demand by trucks and fleets driven by e-commerce?

Yes. I’d say, the short answer is yes. We’re very strong in B2B in Europe and we’ve seen it hold up very well, during the pandemic. These drivers are also great C-store customers. The key to activating this opportunity is really having a harmonized network under our own brands. So, today, it’s a little bit of a chicken or the egg. We’re evolving from a major brand marketer to more of our own brands. So, today, in many markets here, we would climb multiple brands, Circle K, Exxon, Shell. And that’s confusing for the customer, and we’re not able to provide a common offer. So, we have done more transitions to Circle K. We are now having some very large markets where we are leading in and able to have our own brand. We absolutely feel that B2B is a big opportunity for us here in the United States. And you’ll see us focusing on more on that in the coming years.

The next question comes from Michael Van Aelst, TD Securities. Normalized operating expenses declined 0.8% and you attributed this to labor efficiencies, lower cost of goods-not-for-resale and lower discretionary expenses. Can you provide the relative importance of each, so we can get a feel as to how much of this will return when traffic increases? Can we also assume that the rollout of Fresh Food, Fast stores does not add much to operating expenses?

So, Michael, labor efficiencies were an important factor this quarter, so. But, our success in controlling and operating costs is a constant discipline. And we’ve mentioned many times that we have a long-term objective to optimize costs in our business. When we talk about cost optimization, it is mostly about leveraging our scale, and we have built a formal structure to ensure that we’re developing the right model in place and that the benefits will be long lasting. Savings are expected to be significant throughout 2023. And part of those savings will be reinvested in our businesses, and either in dollar terms towards return generating initiatives or in labor by relocating towards more value added tasks. Our decentralized model is our strength, and this will not change. But there -- always there’s ways to work together across businesses and sometimes even within a given business unit. So, to drive cost optimization, use our scale is very important, and that program is all about that. So, this relates to areas like goods-not-for-resale, so GNFR. We refer to that often as GNFR, like marketing goods, real estate and construction costs, maintenance, labor, and parts. We’ve spoken about the smart safes also in the past, which permit time-saving on cash register reconciliation and bank deposits. And we also mentioned smart AI enabled cameras that help our teams to reduce the amount of time required to review tapes, to spot fraud or tests. These time savings are being reinvested into more front-facing activities that ultimately benefit service levels and sales. Our labor model, which was initially developed at the holiday, gives us control over the labor allocation of each task, with our stores, and allow us to adjust to traffic and demand patterns, making sure we maintain service excellence, while optimizing the distribution of labor across the stores. And of course, that’s real dependent, we took a very close look at all non-critical expenses, whether in marketing, travel or consulting fees. And while these are not to be permanent, it demonstrates the ability that the our team has in adjusting our business model to maximize cash flow during more challenging times. Finally, Fresh Food, Fast program will be driving relatively low increase in hours worked at store level. But, as we’re looking at the total contribution of the program on the return on capital basis, we’re including all these components to deliver the desired return of the program, which is in line with our typical return for these types of programs.

Our next question comes from John Royall at JP Morgan Securities. Are you dealing with restrictions in any localities that are inhibiting the rollout of the Fresh Food program? Have you noticed any hesitation in terms of consumer behavior to this type of offering, or are they generally comfortable with the safeguards you’ve put in place?

Good question, John. I think that part of our program is one of the things we’re very excited about. The program has been rolled out successfully to our 1,500 stores. And I’m not aware of any local rules that prevented it. The vast majority of the products in this program are wrapped at the production facilities and never touched by our store. So, we think that’s really fits in well with consumer wariness, if you will. And particularly some of those behaviors and concerns persist post pandemic. More traditional categories like hot dogs and bakery have certainly been impacted by COVID, and local rules, many of them were closed at the height of the pandemic, both in Canada and the U.S. Cold beverages continue to perform well in Europe and in North America, despite the restrictions. So, it doesn’t appear our customers are shying away from the hot and cold side of the business. We are seeing increases in these categories, but they are dependent on traffic and the routines of our customers going to work, and those have certainly been disrupted. So, we’re optimistic that post-COVID that normal traffic patterns and habits and even that morning daypart will come back. It’s a good opportunity to remind you too that this is a low-touch program from both an employee and customer perspective that’s important from the customer standpoint, but also food safety as customers want to get in and out, and grab and go. We think the trends of more snacking, less meals will continue, post-COVID. And we think this program very well fits into those trends.

We received a lot of questions on the EV market, how it’s evolving, what trends we’re seeing in Norway and elsewhere and what initiatives we’re working on that are allowing us to learn and build our strategy So, perhaps, Brian, you can speak to our investors about what we’re seeing and what we’re doing on that front.

Yes. I think, we started this journey I guess nine years ago, when we bought Statoil. And this journey was underway in Norway, which had a lot of factors in place to accelerate that journey, one very wealthy country overall, heavy government subsidies to assist the adoption, low electricity costs and clean grid. Now, it’s largely a hydro grid in Norway, and the structure in place to handle that load and the consumption. So, we’ve seen EV grow there over the years, now up to 13% of the fleet in the most recent year, and 50% or more of the cars being sold, being EV. So, we’re certainly very-attuned to these trends. And we’re taking advantage of what we think is a leadership position in the country to test different strategies to see how we can participate in this journey. There’s a journey to see who own these customers. And we think our industry is well positioned versus utilities or others to create an ecosystem for our customers’ mobility and energy needs. We’ve mentioned that we partnered with Tesla, in particular, to add high speed charging stations for our networks. We’ve also rolled out Circle K brand in chargers in Norway. We now have over 1,000 chargers on our sites, including more than 500 of those in Norway, with 2,700 Circle K chargers, in people’s homes and offices. We added more in the last quarter than we did in the previous year for the home charging. We now have 90,000 customers who have signed up for our Circle K charging app on their phone. And as we continue to develop new sites, we’re contemplating how we lay EV into those and include those with our fuel pumps, our car washes and making sure that we’ve got the right location. And we’re focused on the washrooms, we’re focused on the food offer just to make sure that that continues to be relevant as customers look for places to charge. We know that the conversion rate of a charge into the store is actually higher than a fuel conversion, approximately 40% of the occasions shopping in the store. So, we think there’s business there. And we’re very pleased to be on this journey in Norway, working to see how we can be a total solution. Here in North America, we’re working with different partners to strategically deploy chargers in some areas. The goal, we’ll likely start in Quebec, which also has a very clean grid, and then in California. But, we absolutely believe that the learnings from Europe are transferable. And we’re going to continue to focus on a winning model there and be able to quickly adopt that in North America when the time’s right.

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

Thanks, everyone. Have a good today.

This concludes today’s conference call. You may now disconnect.