Good morning. My name is Sylvie, and I will be your conference operator today. [Foreign Language] I will now introduce Mr. Jean-Philippe Lachance, Vice President, Investor Relation and Treasury at Alimentation Couche-Tard. [Foreign Language] Jean-Philippe Lachance: [Foreign Language] Good morning. I would like to welcome everyone to this Web Conference presenting Alimentation Couche-Tard financial results for the Fourth Quarter and Fiscal Year 2022. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analysts at live during the web conference. 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-Philippe, and good morning, everyone. Thanks for joining us for the presentation of our fourth quarter 2022 results. We are pleased to report really a remarkable year, despite some of the most difficult operating conditions in my career. Not -- nonetheless the pandemic, a war in Europe, supply chain, staffing challenges and now inflation. With our unique geographic diversification, scale, and operating resilience, we had record breaking results across many key metrics we made good progress on our strategic goals. During this quarter, we saw growth inside the store accelerate, as well as innovating for the future, including beginning our e-mobility journey here in North America and launching the rollout of our smart checkout technology in the U.S. and in Scandinavia. I will go into these initiatives in a bit more detail later in the presentation. But before moving to results, I also want to take a moment and comment on the broad impact of inflation hitting a 40-year record high this quarter. No doubt consumers are feeling the pressure both at the pump and the checkout line. Thankfully, in most of our geographies, unemployment remains very low at record -- really record lows. We remain committed to providing good value to our customers across the network and to our localized pricing efforts and fuel promotions. We are working hard to make sure our customer’s lives are a bit easier every day, even during these difficult times. Now turning to our results, beginning with convenience, compared to the same quarter last year, same-store merchandise revenue increased 2.3% in the U.S., 6.2% in Europe and 0.1% in Canada. In the U.S. the quarter cycled against a very strong comp last year at plus 8.1% and food was very positive compared to prior year with strong double-digit growth. Across the network our Fresh Food Fast program is now in over 4000 stores around the globe, meeting our objective for the fiscal year. We are excited about the acceleration insales and engagement of our operators, as we refine our offer for our customers. During the height of COVID, we struggled with supply chain, and we were not reliably able to source chicken as one of our key skews. Happy to say today as we sit here that we are in the chicken business. We launched a variety of great tasting chicken items in the quarter and they are generating very strong incremental growth in our stores and we are expanding that across North America. We continue to optimize our assortment as we identify new items that are desired by our customers and increase purchase frequency. While supply chain issues have been a challenge in some items, our expanded supplier relationships and duplicate supply sourcing have enabled us to improve our in-stock positions versus prior quarters. We are pleased with the progress we have made in our food journey and we are excited with the additional opportunities and new items in our pipeline. In our dispense beverages, our Sip & Save beverage subscription continues to attract new users to the program, with inflationary pressures customers are seeking deals and Sip & Save is truly an amazing offer. We are currently have over 450,000 active subscribers in the program that are now visiting our stores with more frequency. We continue to refine our online enrollment experience and make it easier for customers to sign up and renew monthly and enjoy their favorite drinks at a great value. Packaged beverage growth increased through the quarter led by substantial growth in the media consumption, soda and sports drinks. Largely due to innovation and first-to-market opportunity including our Mountain Dew proprietary flavor that we launched in conjunction with Pepsi, which has just shown great results. Strong national activities continue to drive year-over-year growth in energy drinks. Supply chain continues to be a core focus to ensure our needs are met in the marketplace as immediate consumption increases as our markets come out of COVID. In our age restricted category, beer sales showed mixed results with European beer business exceeding prior year sales. Across the network, wine and liquor finished the year with a positive performance and we continue to see good results from our upgraded wine display instruction where we have rolled that out. Thanks to our localized pricing initiatives, we are creating new data and analytics tools to make our category managers lives easier, allow them to respond more rapidly to changing cost environment. In our assortment optimization effort to new ways of working in conjunction with more sophisticated analytics, we are aiming to more effectively identify products that are top and bottom performers across the network on the store-by-store basis and adjust our assortment more quickly to better meet our customer’s needs. We also want to provide an update on the rollout of our loyalty initiatives. In Europe the Extra program has been alive for many years in seven of our BUs and it has been a key driver for the growth of our business this year. At the same time, we finished scaling an improve program concept which we piloted last year with great results and feedback from customers in three of our BUs in Europe and a small market in South Carolina. The goal is to continue to expand this concept across the remaining European BUs over the coming quarters and the U.S. while we see promising results in the test sites, we are at the tail end of development of our new global infrastructure -- loyalty infrastructure that will make us able to roll this out on a scalable basis throughout North America. Moving in the fuel side of the business, same-store road transportation fuel volume decreased 1.7% in the U.S., impacted by high retail prices and some of our fuel brand -- rebranding activities that we will get into it a bit later. Fuel increased 3.7% in Europe as we continue to take share in stroke show very strong performance and increased 4.3% in Canada. In our Circle K fuel rebranding work over the quarter, we completed about 300 rebrands, bringing the total for the year to 680 additional sites and the overall number to nearly 3,500. The Circle K brand ambassador program nearly has 900,000 activations and our brand ambassadors continue to educate our customers about the brand value proposition, a quality guarantee and premium claim. The wind free fuel for a year U.S. campaign wrapped up this quarter with 288 winners announced and we are pleased with the growth of our Premium Thursday program and the increased transactions in our EZ Pay program which gives a great discount in these times of high prices. Based on the test results, we do believe the rollout of our enhanced loyalty program later in the year in North America will also deliver enhanced value for our customers and drive incremental visits in fuel volume. Like our peers in the industry, we are experiencing pressure in different areas of our supply chain, particularly the fuel supply chain, however we have been able to maintain reasonable inventories with our strong sourcing capabilities. Now with more than over 1,000 drivers in our U.S. fleet for fuel, we are working hard to maintain reliable supply for our customers during the challenging time, both in the trucking industry and also in terms of U.S. supply overall with the inventories being at record lows in many of our products. Like all participants, we are impacted by the inflationary pressures in labor and fuel yet having our own internal fleet we are able to accurately measure these effects and mitigate these cost pressures where possible. In Europe, volume for both cars and bulk fuel are trending ahead of prior year, car volumes have again trended ahead of pre-COVID levels, driven by strong recovery in the fleet and B2B sectors and continued very robust performance in the transport sector. We have also seen continued improvement in card operational margin across most of our markets. Our European charging EV network now consists of over 1,100 charging units, up 11% versus prior quarter and covering more than 250 stations primarily in Scandinavia countries. In May we building on our relationship to bring electric mobility solutions to our customers in Europe we announced our first Circle K branded charging station in South Carolina and our plans are to bring EV charging to 200 Circle K and Couche-Tard stores across North America in the next 24 months. As we expand EV charging availability in the U.S. and Canada, we will be taking a strategic approach, building a network for the future by looking at areas with strong EV adoption rates and electric delivery infrastructure to enable us to provide convenient charging options for our customers, whether that be in town or on the highways. We anticipate deploying both our own charging assets to serve the growing EV customers as we do in Europe and also to partner with other participants in the emerging EV mobility economy. Turning to innovation, we are excited about the rollout of our pioneering easy-to-use smart checkout. At the end of the quarter, we had 90 stores live in Sweden and over 450 sites in the U.S. We recently announced the smart checkout will be expanded to 7,000 stores over the next three years. We have also had one more frictionless site in Arizona bringing that total to eight and our license plate recognition, which is a Pay by Plate where the customer does not need to insert or tap at the pump is now active in over 800 locations and Net Promoter Scores remain very robust. This past year was also record one in terms of our new store builds, the ongoing strengthening of our network real estate team, combined with their efforts to improve our design, development and entitlement processes have resulted in a robust pipeline for future store openings. During the quarter we completed the construction of 42 stores, reaching a total of 300 -- 133 since the beginning of the fiscal year. We currently have another 58 sites under construction that will open in the coming quarters. Despite supply chain challenges, combined with cost increases, our teams have worked very hard in renovating existing stores and developing a new prototype, which will -- we are value engineering to deliver reduced cost and quicker build times. In Europe, we now have over 350 locations with our Horizon brand look and feel. These sites have new fixture to offer grab-and-go fresh food sales and we are seeing increased traffic and basket in these locations. And before turning it over to Claude, I want to address the staffing challenges particularly that we felt in North America in the past year. It’s truly been a pain point throughout the year in all of retail. I am pleased to report that we have seen steadily increase in candidate flow over the last quarter and currently into this quarter due to increased social media outreach and engaging employee branding campaigns. We are encouraged by the higher ratio we saw in May, which look much better than previous months and it’s allowing us to be more selective in the candidates that we bring on Board. It should also result in reduced over time as we go forward. As we are looking to hire additional 25,000 team members this year, as we reach our summer season in order to good trend to hit this goal. I am going to pause there and let Claude take you through more of our fourth quarter financial results.

Thank you, Brian. Ladies and gentlemen, good morning. For the fourth quarter of the 2022 we are happy to report net earnings of $477.7 million or $0.46 per share on a diluted basis. Excluding certain items describe in more detail in our MD&A, adjusted net earnings were approximately $573 million or $0.55 per share on a diluted basis for the fourth quarter of fiscal 2022, compared with $564 million or $0.52 per share on a diluted basis for the fourth quarter of fiscal 2021, an increase of 5.8% in the adjusted diluted net earnings per share. Adjusted net earnings for fiscal 2022 were approximately $2.8 billion, compared with $2.7 billion for the previous year, which represent an increase of $54 million or 2%. Adjusted diluted net earnings per share were $2.60 for fiscal 2022, compared with $2.45 for fiscal 2021, an increase of 6.1%. Our results for both the fourth quarter and fiscal 2022 have exceeded our expectation on many fronts, especially in light of a challenging global environment. Inflation was particularly notable during the fourth quarter, impacting mainly many aspects of our business. We once again diligently managed through these challenging conditions and were able to mitigate the impact from a higher inflation level and continued pressure on wages. We have also continued to reinvest in our operations, while maintaining a particular strong balance sheet allowing us to return capital to our shareholders during the quarter, including the completion of our upsized 2021, 2022 share repurchase program. As we look ahead to fiscal 2023, our healthy financial position and strong capital structure including our newly implemented U.S. commercial paper program position us well to continue delivering strong results and return further value to our shareholders as we remain focused on our ambition -- our ambitious double-digit again strategy. I will now go over some figures for the quarter. For more details, please refer to our MD&A available on our website. During this most recent quarter, excluding the net impact from foreign currency translation, merchandise and service revenue was increased by approximately $75 million or 2%. This increase is particularly attributable to organic growth and to the contribution from acquisitions, which amounted to approximately $27 million, while being offset -- partly offset by the disposal of stores following the strategic review of our network. During fiscal 2022, excluding the net impact from foreign currency translation merchandise and service revenues increased by approximately $623 million or 3.9%. Excluding the net impact from foreign currency translation, merchandise and service gross profit increased by approximately $72 million or 5.9%. This is primarily due to organic growth, including the positive impact from our Fresh Food Fast program, as well as to pricing initiatives. Our merchandise and service gross margins increased by 1.2% in United States to 33.1% by 0.2% in Europe and other regions to 38.3% and by 1.4% in Canada to 32.4%. Our merchandise and service gross margin in the U.S. and Canada were also impacted in the prior year by unfavorable adjustment -- inventory adjustments related to net of re-eligible value provision on personal protective equipment of $26.4 million or $3.2 million, and sorry, $3.2 million, respectively. For fiscal 2022, excluding the net impact from foreign currency translation, merchandise and service gross profit increased by approximately $318 million or 6%. Our gross margins increased by 0.6% in the United States to 33.7%, decreased by 0.9% in Europe and other regions to 38.2% and increased by 0.8% in Canada to 32.2%. The decrease in Europe and other region is due to the inclusion of Circle K Hong Kong for the full year in fiscal 2022. Moving on to the fuel side of our business, in the fourth quarter of fiscal 2022, our road transportation fuel gross margins was $46.12 per gallon in United States, an increase of $11.67 per gallon. In Canada, it was $13.41 per liter, an increase of C$2.49 per liter. Fuel margins remain notably healthy throughout North American network due to the favorable market conditions, a higher fuel breakeven margin in the industry and the continued work on the optimization of our supply chain, including our Circle K fuel rebranding initiatives. In Europe and other regions, our road transportation fuel margins was $5.51 per liter, a decrease of $3.34 per liter. Fuel margins were impacted by increase -- increases in crude oil prices, supply chain challenges from the current geopolitical context, as well as volatility in the diesel market. For fiscal 2022, the road transportation fuel gross margin was $39.62 per gallon in the United States, $9.86 per liter in Europe and other region and C$11.74 per liter in Canada. Now looking at SG&A for the fourth quarter of fiscal 2022. Normalized operating expenses increased by 15.6% year-over-year, excluding a 3.1% unfavorable impact of higher electronic payment fees. This 15.6% increase on a normalized basis is driven by prior year government grants of $41 million measure. This is stated by the impact of the labor shortage and a need to improve employee retention and increase of marketing initiatives and other discretionary expenses that were significantly reduced in the prior year quarter and French inflationary pressures, including higher utility used costs in Europe, higher costs in -- from the rising minimum wages, as well as incremental investments in our stores to support our strategic initiatives. This increase was partly offset by lower COVID-19 related expenses compared to the corresponding quarter for the fiscal year 2022. When considering the cost of the retention measures implemented, which totaled approximately $19 million, the employees’ related COVID-19 costs in the prior year, such as thank you bonuses of $5.2 million, as well as government grants of $41 million, the normalized operating expense increased year-over-year up 15.6% is further reduced by 4.3%. For fiscal 2022, normalized operating expenses increased by 9.4% compared with the previous fiscal year mainly due to the factors similar to the one described for Q4. Despite the challenges, we have deployed strategic efforts in order to mitigate the impacts of our -- of higher inflation level and continued pressure on wages, which is demonstrated by a compound annual growth rate of 3.4% of our normalized growth of expense compared to 2020, including employee-related costs below inflation despite the challenging market conditions. Excluding specific items described in more details in our MD&A, the adjusted EBITDA for the fourth quarter of fiscal 2022 increased by $50.8 million or 4.7% compared with the corresponding quarter of fiscal 2021, mainly due to the higher road transportation fuel margins in the United States and Canada, and organic growth in our convenience store operations, partially, sorry, offset by operating -- higher operating expenses. The translation of our foreign currency operations into U.S. dollars had a negative impact of approximately $15 million. During fiscal 2022, the adjusted EBITDA increased by $261.3 million or 5.2% compared with fiscal 2021, mainly attributable to factors similar to the one described for Q4. The variation in exchange rates had a net positive impact of approximately $27 million. From a tax in perspective, the income tax rate for the fourth quarter of fiscal 2022 was 22.6%, compared with 18.5% for the corresponding period of fiscal 2021. The income tax rate for fiscal 2022 was 21.5%, compared with 19.5% for fiscal 2021. The increase is mainly stemming from the impact of gain and loss -- losses taxable or deductible at the lower income tax rate between current and prior year, and a different mix in our earnings across the various jurisdictions in which we operate. As at April 24, 2022, our return on equity remained strong at 21.8% and our return on capital employed stood at 15.4%, which includes an unfavorable impact of 0.3% caused by one-time impairment costs incurred in Q4. During the quarter, we continued to generate strong free cash flows and our leverage ratio stood at 1.39 times, only 6 basis points higher than Q3, despite having repurchase more than $800 million during the quarter under our NCIB. We also had strong balance sheets liquidity with $2.1 billion in cash and our additional $2.5 billion available through our revolving credit facility. Turning to the dividend, the Board of Directors declared yesterday a quarterly dividend of C$0.11 per share for the fourth quarter of fiscal 2022 to shareholders on record as of July 8, 2022 and approved its payment effective July 22, 2022. With that, I thank you all for your attention and turn the call back to -- over to Brian.

All right. Thank you, Claude. In the context of a difficult year in so many ways, we had clearly one event in the year was the highlight for me. Gallup who we have used as a partner to work with us in measure our engagement named us an exceptional workplace, the only convenience retailer on this year’s list. According Gallup’s workplaces worldwide face continued historic people, we sit out in our ability to engage and develop our people amid disruption. We are far from perfect. We do have a clear goal. That’s a goal to create a culture in which our team members feel valued, heard and respected and have opportunities to grow together within the business. Through their hard work and engagement that we are fulfilling our vision to be the world’s preferred destination for convenience and mobility. My sincere gratitude goes out to all of our team members, our customers, our partners and shareholders for another record-breaking year and continued commitment to our business. And with that, I will take some questions from the analysts. Operator, over to you.

Thank you, sir. [Operator Instructions] And your first question will be from Peter Sklar at BMO. Please go ahead.

Hi. Good morning. Can you talk a little bit more about how cost of living inflation and these high fuel prices is impacting consumer behavior as you see it in your business? What do you -- how is it impacting your in-store sales, have you adjusted your assortment, the impact on fuel volumes and what trends you are seeing in the current quarter, the first quarter-to-date?

Yeah. Peter, thanks for the question. I will take a shot at it and welcome Claude to chip in. Inflation is taking different forms, depending on where we are out in the world. When we look at Europe, really our wages have been relatively flat compared to what we see in North America, but we have seen significant spikes in food and energy, particularly from the Ukraine situation in Europe. In the U.S. we all read the same papers. We are seeing 7% to 8% hourly rate inflation on top of commodities and fuel. In terms of what we are seeing, I would say that, we are clearly seeing an impact on fuel demand that’s taking shape in a couple of forms. I think the most recent data showing that we are seeing some softening in miles driven, we certainly view this is temporary, but a fact. And then as you look the consumer behavior, our average fill pre-COVID and really up until recent quarters would have been 10 gallons per visit to 12 gallons per visit, that’s declined to 8 gallons per visit. So that’s a signal to us that there is some pressure on consumer’s likely increased -- likely results and increased visits. But I think that’s a sign that there are some pressure and we are very fortunate to see unemployment levels remain at historic lows. So we think the consumer relative to where we were in 2008, 2009 is in much better condition. Inside the box, traffic actually remains pretty robust. We are happy with what we are seeing both last quarter and what we are seeing into this quarter, but we are seeing some trade down. We have seen conversions from premium beer to budget beer as an example, same in the cigarette category, where people are looking for value and we are pleased. We have really worked on private label over the last three years and we are seeing very, very strong growth in private label, as again, people are looking for value. So with our private label program we have been able to provide good value to the customer and actually have a higher penny profit typically in most of those items. So we are seeing private label up in the U.S., strong double digits. So that’s again a sign that consumers are heightening, they are looking for value. Claude anything to add?

Yeah. Maybe one thing on Canada, when we are seeing of the performance in Canada, we have seen a bit more pressure on our cigarette category, there’s seems to be a shift down to -- back to the black market in Canada.

Okay. Thank you.

Thank you. Next question will be from Karen Short at Barclays. Please go ahead.

Hi. Thanks very much. I wanted to just see if you could talk a little bit about what the actual inflation contribution is to your in-store comp in the U.S. and how you are thinking about that and just overall pricing going forward in terms of narrative on maybe pushing back on vendors on price increases a little bit more than you maybe have been over the last couple of months, but so its contribution in the comp in-store and then thoughts and philosophy on how you are having conversations with the vendors?

Yeah. I will start with the vendor piece first. One, I think, COVID has certainly changed our view a little bit from transactional to the -- there is so important just from a supply chain and liability standpoint, truly been partners during COVID. But that said, they have got pressures and we have pressures. So as we have a dedicated procurement group largely based in Ireland, we get to see globally what vendor behavior looks like and we I think have use maybe some other retailers don’t around what the underlying cost structures they have, whether that be transportation, aluminum, corn syrup. So we are pushing back. We are trying to be fair. But, at the same time, if we see suppliers getting greedy that conversations being add. So there is a fair amount of attention. We are focused on being a provider of good value for the customer at the same time recovering the cost increases. So it’s a fine balance and daily, daily conversations around that. In terms of the basket itself, we have actually been pleased. We have more than recovered the cost increases inside the store with our price moves. We kind of artificial basket that we create and we measure that on an ongoing basis. So our gross profit dollars are intact. If you kind of break it down, you would see on average across the world, our basket is probably up in the 3% to 4% range, while our traffic relatively flat may be down a bit in Canada where we have got, as Claude said, some pressure on tobacco transactions.

Great. Thank you.

Sure.

Thank you. Next question will be from Patricia Baker at Scotiabank. Please go ahead.

Yeah. Good morning, everyone. Thank you for taking my question. I just want to ask you on the labor shortage and you called out the costs associated with retention activities. Just curious about how you are looking at labor going forward, you indicated that, you are looking to hire another 25,000 people. Should we think about the extra cost associated with employee retention is something that will be ongoing?

I would say I knock on wood. I think we see the light at the end of the tunnel. We have really rolled back a lot of the retention products that we have in place. We are currently contemplating some variable products programs take for example, gift cards with fuel for some of our customers attempting to keep this pressure on wages on a variable basis and maybe moderating the wage rate increases that were pressure to give in the marketplace. But as we have seen in the last really few weeks, our higher rates are significantly higher than our termination rates. So staffing is returning to normal levels even as we go into the summer season and that should result in a significant increase in over time, as we look at the coming quarters, which has been another key part of the inflation. So, Claude, maybe more specifics on the numbers there?

Yeah. So when we are talking about the impact on our costs, there is probably a third of it from the 15% that’s due to the inflation and 3.4% of that 5%-ish is due to wages. So and we understand that one third of that is over time and as you are seeing some -- that trend might reduce -- be reduce in the future with better workforce in our stores.

So I would add two things. We continue to work on efficiency in the store. So if you look at our hours used were actually negative versus prior year on a same store basis and then with the smart checkout rollout that I commented on earlier. Our focus on that product is really around the customer experience. It’s faster. It’s easier. We are seeing really strong uptake on eligible transactions, but there’s also a labor mitigation opportunity, If we can get 30% 40% of the transactions going through those machines, we are able to either reduce labor or reallocate that labor to other things. So that will take quarters to show up, but it’s a big push and a big initiative on our side.

Thank you very much.

Thank you. Next question will be from John Royall at JP Morgan. Please go ahead.

Hey. Good morning guys. Thanks for taking my question. Can you talk about the M&A market in USD stores right now? I know you have been taking a more disciplined approach on multiples in some others have and with the uncertainty building in the economy today, are you starting to see valuations come down to levels where you may consider transacting.

Thanks for the question John. I would say, in theory, what you said should happen. We have got certainly higher interest rates, high yield markets, much higher if not closed. I don’t think we are seeing a lot of private equity opportunity or activity. But there’s not been a ton of deal flow either, so I think we need to see a couple of quarters to see what happens. There is some activity, but on our side, we are seeing more right now in Europe and in Asia than we are in the U.S. But that will come and I think I have been waiting for years for this. The balance sheet ready and we are confident that will be some opportunities and probably less competition and what we have seen over the year, the past few years, and I think, lower multiples as a result.

Thank you.

Thank you. Next question will be from Bobby Griffin at Raymond James. Please go ahead.

Yeah. Good morning and thank you for taking my questions. Brian and Claude, just curious to fuel margins here this quarter materially outperform the industry average and even you guys have typically been outperforming, but the performance is really notable. So, just curious if you could unpack was there any drivers or anything unique in this period and when we look at the May period, we have seen some pressure. So maybe just any comments on what you have seen in May and in June a few margins?

Yeah. Thanks, Bobby. It really is a few things happening. One, I think, there is a few players the industry that have the supply capabilities we do. When we look at the industry is still largely independents in the U.S., Canada and maybe a little more balanced in Europe. And when we look at it continue to be able to procure fuel better and I think that really manifest itself when you see volatility in the market. That’s both in location arbitrage and also just a construct of our contracts. So I think that delta that we have seen versus the industry has been strong and we expect it to continue to pay benefits as we invest in and realize benefits from our partnership with Musket. It’s really extraordinary when you look at the quarter and you think about crude going from $80 to $120 during the quarter and normally that is just the worst environment we could have. So deliver this call or the set level margins, I think, is really shows the markets disciplined, first of all. And then two, there’s some things underneath that I think need to be thought about, one is credit card fees. As you look at, let’s call it $5 gas just for easy math, and let’s say, the average independent is paying just 2% on the Visa or Mastercard, that’s $0.10 a gallon, they need to recover just in credit cards. So the some of the scaled retailers like us and we will be able to source credit cards, a little more economically than the average dealer or independent out there. So I think that also widens our advantage a little bit in the market. But it also supports the need for higher than to historical margins as we face these how retails, because that not only did inflation, we all see every day, but that credit card fee is very material particularly independent operator. And when you talk about recently, I do see the OPUS data. We feel good about our margins. We feel good really across the network, how we have held up during the year, again a very volatile period, so recent weeks, we have been pleased

Okay. I appreciate. Best of luck. Thank you.

Yeah. Thank you.

Thank you. Next question is from Irene Nattel at RBC Capital Markets. Please go ahead.

Thanks and good morning everyone. I want to come back to the double again target of $5.1 billion in F 2023. Can you walk us through the key pieces in your mind that will underpin your ability to achieve that number, despite everything that we are talking about on the call, fuel volatility, pressure on wages, pressure on spending, et cetera?

Well, Irene, thank you for the question. I have to say that we are optimistic about our ability to reach our $5.1 billion target. Our organic initiatives are going very well in our stores like Fresh Food Fast. We are really happy about the performance of the program in the last quarter and it continues to grow and be stronger as traffic is back into our stores. So we think that we are going to do well and achieve what we committed to do on that Fresh Food Fast program for fiscal 2023. Merchandise of pricing promotion local pricing, that’s all on track with what we shared with you. So that’s another initiative also that, despite all the challenges you see the improvement in our margins -- gross margins for merchandise in there. Brian just talked about fuel and the ability for us to continue to deliver good margins and also the improvement that we were doing in procurement, that’s still there. And I would add to what Brian mentioned that our rebranding also is contributing also to our improved margins, when we are, looking at our margins compared to history. So that is a good thing as we are continuing our rollout in our -- and rebranding our stations, we are benefiting from that upside, and that’s in line with our expectations when we did our strategy. Finally, like North American development. You have seen that in the quarter. We had -- for us, it’s a record year in terms of the new stores, even if at the end of the quarter we may be have been challenged a bit on the opening of our NTIs, but we have opened a record number of NTI this year with 133. So this target also is in line. And finally, cost optimization, we were pressured on cost, but we are still working hard on our program to deliver all our cost optimization initiatives. So overall, we feel pretty good about our objective in what we shared with you and optimistic about achieving our $5.1 billion.

Yeah. I will just add, our share Claude’s optimism for hitting the target. Certainly, we think a lot about the consumer out there today with the prices at the pump. Again I view that is transitory what fixes high prices and so this will past. And then, is there a recession or not and we have to remind ourselves and we have gone back and looked at our performance over the last couple of recessions and I would never say our industry is recession-resistant. But we are pretty resilient. We are pretty much a part of people’s everyday lives and so as we look back at in the last two major recessions we actually performed very well. So, again, I think share optimism that we are in a good track

That’s great. Thank you.

Thank you. Next question will be from Bonnie Herzog at Goldman Sachs. Please go ahead.

All right. Thank you. Good morning, everyone. I wanted to circle back to OpEx since it really was quite a bit higher than expectations in the quarter. So I just I guess I wanted to better understand the key drivers behind the pressure, if you could walk through those drivers that would be helpful. And then also could you talk about your expectations for OpEx this year given your comments about the labor market and certainly the broader inflationary environment, I guess I am just trying to get a sense of we should think about normalized OpEx to remain as elevated is what we saw last year or do you have any levers you can pull such as the cost optimization program that you just mentioned to help offset some of these pressures? Thanks.

Thank you, Bonnie. If we start a new, we want to understand a bit the 15.6% increase that we have in our SG&A. I think we need to break it up in three buckets, so which would be one third, let’s say, 5% each, the first bucket is really how we performed last year. And remember, last year our on SG&A we were minus 2.5% in terms of growth for the quarter. So we are facing a quarter where we were -- that we were very low in expense and that was mostly driven by COVID related subsidies and also retention measures. So, when we are comparing that there is a 5% in our growth in SG&A, that’s coming from countering really good quarter last year and also measures that were there and that we benefited from with COVID. The second third of it or the second bucket it’s inflation. So we have -- we talked earlier about 3.4% inflation on wage. Third of it is inflation. We see that potentially being better in the future. Expenses also are under pressure. Like everyone, I think, you need to think about 2% maybe of that coming from expenses. We are challenge in expenses in Europe, energy prices are very high in Europe and it’s been like that for a couple of quarters and also maintenance and all the contractors are increasing prices. So that puts a bit of pressure also on our expense. Finally, the last third of it in our increased expenses is really composed of two things, one is our organic growth initiatives where we are pushing a lot on our data and workforce and putting a workforce together, having a help also of professionals to put that team together. But also fuel marketing, we have talked about the rebranding earlier and the positive impact on margins, while you need to think about us branding also our selling our own fuel and putting marketing at work also to support that effort. And overall for…

Just -- yeah. Just…

…positive. Yeah.

Just to emphasize, that one to me, that’s material. When we look at the brand fees we would pay to a Shell or BP and Exxon, they were very material. So if you said 5 billion gallons, 6 billion gallons. It was a big number, it was over $100 million for sure. And now we have got largely Circle K fuel brand out there. So our -- that was always in cost of goods, right? That was just part of our cost of the fuel. So now as we spend money to promote our fuel brands, whether that be loyalty, fuel promotions other things that is showing up in OpEx. And so that’s something that -- it’s not changing the bottomline, it’s very positive. The bottomline for us, but it just shows up in a different way in the P&L. So, sorry, Claude, go ahead.

Yeah. Yeah. So net-net positive on this. So going back to its own thing about one third is really COVID related and low quarter last year. The other third is really wages and expenses. So 5% is impact and the other 5% is fuel -- marketing the initiatives that we have. So in terms of mitigation, I think, our -- we have a lot going on. We talked about [inaudible] our point of self checkout that we are deploying in 2,500 stores. We have also a program that we have called Easy Office. We were able to reduce the number of hours worked in the back office with automation. We have those initiatives also going on. So we have another goal on that this year to reduce by further more this year. And also our Smart Pay program, we are reaping the benefits of rolling -- rolled out this program in our network last year. So we are continuing to push on our cost optimization program and then, I wouldn’t say that we are really looking into it with the new situation, the new pressure that we have to really relaunch our program and bring it to another level.

Okay. So just to summarize that was super helpful, but just -- so the pressures will remain elevated, but not probably as much as what you saw last year given some of the factors you just talked about?

Yeah. Exactly. Yeah. So your…

Second quarter will cycle comps. Yeah, so we expect that pressure to mitigate a bit, yeah. And again, if we can get over time down that’s as we faced in the industry face staffing shortages last year. We expect that to moderate to -- if labor trends continue.

All right. Thank you.

Yeah. Thank you, Bonnie.

Next question will be from Mark Petrie at CIBC. Please go ahead.

Hey. Good morning. Thanks. You have touched on it a few times today. But given the importance of tobacco in your business, can you just give us some more detail about the performance by region basket and traffic, the impact of trade down there and as well the specific performance of OTP and the impact, thus far and what your view is on the potential impact of a regulatory change? Thanks.

Yeah. A lot in there Mark. Thanks. Just in terms of overall trends and we are actually growing share in Europe. Our business there just continues to click really on all cylinders. In Canada, I think, Claude mentioned, we have seen really is the markets have reopened, engine reservations in the black dark market have regained, share and I think there’s temporary pressure there inflation prices -- price pressure in general on the consumer. They are probably gaining a bit of share from the marketplace. And then I think the second thing in Canada and it’s the same in the U.S. We certainly saw consumption rise a bit in COVID and now the COVID’s open, I think, people are smoking a bit less and when you look at Reynolds and Altria’s [ph] reports, I think, you would see the same thing broadly. Both in Canada and the U.S., when we look at our trends, we are holding market share. So while units are down somewhat significantly in Canada’s and a little bit in the U.S., sales continue to be positive and again maintaining share. In terms of behavior, we have seen lower tier brands gaining strength. We have a product that we are really focusing on the U.S. called Seneca, which provides really one of the lowest cost to the consumer of anyone in United States selling tobacco. So we believe we are in a good place to help that consumer find good value if they choose to trade down. And then the last thing on the non-combustible if you will, you will continue to see that grow whether that be the white space. And then the vaping there’s been some noise with being taken off the market for a few hours and now back. We are working hard with our suppliers to make sure that we have got adequate inventory of alternative brands and also working with dual to make sure that we are providing inventory and those products as long as it makes sense for both of us. So, again, I think, when we think about nicotine delivery, I think our expectations aligned with what we see in that industry as combustibles continue to have pressure, but there is good uptake on a much higher margin product around white nicotine, vaping moist and so we continue to focus on making sure that we have got the right selection pricing in those areas.

Thanks for that.

Yeah.

Thank you. Next question will be from Michael Van Aelst at TD. Please go ahead.

Thank you. You covered a lot. But I am just wondering on the fuel volumes in North America and particularly in the U.S. where still seems to be trending in mid-teens below 2019 levels and getting a little bit worse in the last few quarters. I am wondering if you could talk a little bit about the competitive challenges within that market, how much of this is just people not buying as much fuel and are driving them as margin, how much is it the discounters like cost will on Walmart gaining share? And do you see any pressure there any cracks in some of the traditional C store operators and starting to maybe discount themselves to try and maintain some volumes?

Yeah. It’s a good question. I think there’s a couple of things going on when we focus on the U.S. One, we do see -- one, I’d say, we measure our competitiveness in a pretty sophisticated way with deltas to main and low competitors. So we understand our price position site-by-site at all times and we remain very consistent in our price position. I think it’s fair to say that when you look at high prices, the focus that the costcos of the world would receive our and I would expect they are gaining a bit of share. There is only 500 costcos wholesale and they have only got somebody pumps and so I think that impact while real is limited. Third, in terms of our performance, when we look at it, we have got markets that are better than 2019 and we have got markets that are worse than 2019, as you alluded. So it’s not a consistent story across the U.S. And I’d say the four thing in there is, our fuel rebrand has had an impact. We have got significant disruption at site when we rebrand our sites. Again, this economic equation is tremendously profitable for us. We make more money and it’s the right thing to do long term for our brand and consumer awareness. But again we are tailoring our sites up hundreds at a time. So there is some disruption that we are imposing on ourselves and as we have a transition with the customer, a customer that maybe used to buying from a major and that’s got a certain credit card or loyalty program associated with that. It’s up to us to make sure that one we are providing the right value, the right experience, but also with some urgency getting our loyalty products and payment programs in place and making sure that we engage those customers. Long-term, I’d liken it to what we did in Europe, we took Statoil which is number one fuel brand in the majority of the countries we operate in took it down and converted it to Circle K early on disruption, but long-term five years later just been a tremendous success and we are confident we can achieve the same thing in the U.S. over time.

So, the U.S. competitors then they are kind of looking at the costcos of the world and realizing there limited capacity and staying disciplined and passing through the higher costs?

I would think that’s how they are thinking about it. I can’t speak for them, obviously, but when we look at the behavior. Again, in the quarter, crude went from $80 to a high of $120 normally. That is a very, very difficult margin for retail. But you have seen the margins industry has continued to maintain and as we look at the current quarter, as I mentioned earlier, we feel good about the margin profile. And again, I think, we benefit when there’s volatility. So we feel good about that.

Thank you.

Yeah.

Thank you. Your next question will be from Chris Li at Desjardins. Please go ahead.

Oh! Hi. Good morning, everyone. Hi, Brian. Maybe just a question on the -- follow-up question on the tobacco regulatory landscape, can you share with us your thoughts around the FDA plan to reduce the nicotine levels? What do you think is the potential impacts and do you think people who simply just more or could it push more people to other tobacco products? Thank you.

Yeah. Good question, Chris. I think I am reading what you are reading there. I think it really depends on the approach and also the timing. I think in my belief is the industry will fight back and there will be litigation and there will be multiple years of conversation negotiation before anything would really happen. That’s my speculation based on talking to suppliers. And then, I think, there’s a couple of different approaches out there. One is a gradual phase phasing of nicotine and the other scenario is a more significant drop in nicotine early on. So I think it depends which way the industry would go, but again in the coming years, I just think this is going to be tied up in conversation. So we continue to focus on the alternative products, which again we are seeing strong growth in it’s quite honestly a lower risk way of consuming nicotine. So, near-term, we don’t think it’s a big threat and then we are certainly watching for how this -- how do we think this is going to come into the industry.

Great. Thanks and all the best.

Thank you. Next question will be from Vishal Shreedhar at National Bank. Please go ahead.

Hi. Thanks for taking my questions. With respect to the European fuel margin, can you give us a sense of typically what the issue was with the just the increase in oil price and would that the trend this year and is it behind us now?

One second.

Go ahead, Claude.

Yeah. So for European fuel margins, obviously, there is a lot -- there was a lot going on in Europe last quarter with Ukraine -- this Ukraine situation. And so we need to -- we have to reshuffle supply find alternative source of supply and also do volatility in the diesel market also in Europe was strong. So we have to reshuffle all that and that had an impact on our margins in Europe for the quarter. So we see that as something that’s temporary is for us to recreate those new relationships to procure our fuel for our network and the impact you have seen it also in the margins for…

I will add little clarity. I mean, Russia supply the significant amount of both petroleum, particularly diesel in the market and you guys all read about the natural gas saga that continues there. So we like many, we moved away from Russia quickly. Today we have no Russian product in our portfolio. I mean it caused significant disruption, when you think about the price increases we have seen in the U.S. it’s been magnified in Europe, just because of significantly more supply disruption in shortages. And so the consumer price continue to rise more quickly move, retails did not move as fast as cost, so we did see a margin squeeze during the quarter, but we have no reason to believe this is temporary and that industry margins should retain -- should return to more normal levels as cost stabilize.

Thank you.

Sure.

Thank you. And at this time, Mr. Lachance, we have no further questions. Please proceed. Jean-Philippe Lachance: Thank you, Operator. 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 looking forward to discussing our first quarter 2023 results at the end of August. [Foreign Language]

Thanks. Everyone have a great Canada Day and forth.

Yeah. Have a good summer. Bye.

Thank you. Ladies and gentlemen, this does indeed conclude your conference call. We now ask that you please disconnect your lines.