Thank you for standing by. I would like to welcome everyone to the Saputo Inc. Second Quarter 2025 Financial Results. I would now like to turn the call over to Nick Estrela, Senior Director of Investor Relations. Please go ahead.

Thank you, Dustin. Good morning and welcome to our second quarter fiscal 2025 earnings call. Our speakers today will be Carl Colizza, President and Chief Executive Officer; and Maxime Therrien, Chief Financial Officer and Secretary. Before we begin I would like to remind you that this webcast and conference call are being recorded and the webcast will be posted on our website along with the second quarter investor presentation. Please also note that some of the statements provided during this call are forward-looking. Such statements are based on assumptions that are subject to risks and uncertainties. We refer to our cautionary statements regarding forward-looking information in our annual reports, press releases and filings. Please treat any forward-looking information with caution as our actual results could differ materially. We do not accept any obligation to update this information except as required under securities legislation. I'll now hand it over to Carl.

Thank you, Nick, and good morning, everyone. Q2 marked another quarter of progress for Saputo, both in the execution of our long-term strategy and with the achievement of important milestones on the innovation, efficiency and network optimization front. Leveraging our global capabilities, we are also generating savings across our value stream, including in manufacturing and distribution. Before we dive into the quarter, I would like to share a few thoughts and organizational updates with you. With over 25 years of experience at Saputo, I was able to hit the ground running when I took over as President and CEO in August. The first thing I want to say is that I am very encouraged by what I am seeing within the business. While there is still much work ahead of us to achieve our full potential, we have a great foundation and a clear opportunity to excel. My goal is to build upon Saputo's already solid core, but also to significantly improve on it, so we can thrive in an increasingly complex and competitive global environment. To that end, I am confident in the strength of our executive leadership team, which has recently been reinforced through several internal promotions. Frank Guido, who was our President and COO of the U. S. Sector has been appointed Global Chief Operating Officer and will play a key role in the company's continuous efforts to drive growth and operational results. Leanne Cutts, who is previously President and COO for International in Europe has been appointed to the newly created position of Chief Commercial Officer, where she will be responsible for driving commercial strategy, more specifically by amplifying sales in global markets and channels and overseeing marketing, brand management, innovation and market insights functions for all divisions. Dominick Bombino, who has held both operational and commercial leadership positions in Canada and the U.S. over the past 25 years has been appointed President and COO, Dairy Division USA. Steve Douglas, who most recently served as Senior Vice President of Operations and Supply Chain in our U.S. Dairy Division has been appointed President and COO Dairy Division U.K. He has been with Saputo for more than 30 years. Through their expanded roles, each of these accomplished executives will now further leverage their experience and expertise to drive long-term growth and promote operational excellence across the organization. Turning now to the second quarter. We delivered a strong quarter of both volume and pricing growth and steady cash flow generation. However, our strong execution, cost containment efforts and returns from strategic initiatives were overshadowed by commodity and macroeconomic volatility. Across the world, we are leveraging our scale and local expertise to navigate varying local market dynamics. In Canada, we generated robust top line and EBITDA growth. Leading brands like Saputo and Armstrong grew both in volume and market share. In the U.S., we are clearly seeing the benefits from the bold actions we have taken. Our base business is strengthening across core categories and in new channels. We have several commercial initiatives in flight that will continue to drive this performance. In Europe, we improved EBITDA for the third consecutive quarter. Despite challenging market dynamics, we are now approaching a more normalized margin level. In International, we saw continued pressure on the export business in Argentina, but the alignment between farm gate and commodity prices are improving in Australia with the start of the new contract year. Taking a global perspective, consumers continue to look for value. However, demand for dairy remains important given its relevance as part of a nutritious diet. In this dynamic environment, our investments in technology, supply chain, brands, capabilities and our people have put us in a stronger position to meet the changing needs of our customers and consumers. By accelerating innovation and commercial execution, we are growing our share across key categories and markets. Steady cash generation has also enabled us to achieve a pivotal capital allocation milestone. Yesterday, we announced our intention to make a normal course issuer bid. We believe a share buyback program will optimize our capital structure and underscore our commitment to drive long-term value creation. Before I turn it over to Max, I'd like to thank the entire Saputo team for their hard work and commitment in finding ways to deliver in an ever evolving consumer environment. Our collaborative working style continues to be a strong differentiator that is enabling us to deepen relationships with our customers, attract and retain the best talent and operate as a socially responsible and sustainable company. The efforts and passion of our talented team are why Time Magazine recently recognized Saputo as one of the world's best companies. This paired with the tremendous progress we've made in transforming Saputo's business paves the way for a very exciting new chapter in our history. I will now turn the call over to Max for the financial review before providing my concluding remarks.

Carl, thank you and good morning everyone. I'll begin by going over financial highlights of the second quarter. Consolidated revenue of $4.7 billion while adjusted EBITDA amounted to $389 million. Adjusted EBITDA was impacted by unfavorable U.S. dairy commodity markets, higher cost of production in Argentina including higher mill costs as Peso devaluation has not kept pace with inflation and unfavorable FX and application of hyperinflation accounting in the international sector. On the positive side, favorable adjusted EBITDA drivers included a significant year-over-year improvement in adjusted EBITDA in our Canada sector. Operational improvement driven by our global strategic plan initiatives in the U.S. sector. Lower mill cost in Australia and an improved performance from our Europe sector led by higher branded cheese sales volume. We reported net earnings of $126 million in the quarter. And on an adjusted basis, our net earnings were $157 million or $0.37 per share. Take you to key highlights by sector, starting with Canada. Revenue for the second quarter totaled $1.3 billion, an increase of 4% compared to last year. Revenue increased due to a favorable product mix and higher selling price in connection with the higher cost of mill as raw material. Adjusted EBITDA for the second quarter totaled $162 million up approximately 10% versus the same quarter last fiscal year. Our improved performance reflected the benefit derived from operational efficiencies including from our continuous improvement program, our supply chain optimization and automation initiatives. Our results also include the positive impact from cost saving initiatives notably around SG&A reduction. In the U.S. sector, revenue totaled $2.2 billion and were 14% higher versus last year. Revenue increased due to the combined effect of the higher average cheese block, butter and dairy ingredient market prices and a favorable volume and mix. Adjusted EBITDA was $145 million which was relatively close to last year at $147 million. Our results include $18 million in benefit derived from capital investment in our Cheese assets, operational improvement including increased capacity utilization, higher productivity which resulted in increased cheese sales volume, supply chain initiatives, cost reduction and lower SG&A. Our results also include $17 million unfavorable impact from U.S. market factor mainly due to the negative milk cheese spread. The negative milk cheese spread was partially mitigated through the favorable impact of our pricing protocols for our dairy food products. Finally, duplicate operating costs incurred to implement previously announced network optimization initiatives amounted to $10 million during the quarter. Year-to-date, the USA sector is performing well with adjusted EBITDA 23% higher versus last year despite the negative impact from a persistent negative milk cheese spread, a testament to the progress we're making around operational and commercial execution. In the international sector, revenues for the second quarter were $912 million, up 4% versus last year, despite the lower volume following the sales of our two Australian fresh milk processing facility during the first quarter. Adjusted EBITDA totaled $54 million down $29 million. The year-over-year decline in adjusted EBITDA was mostly driven by our Argentina division, which results were impacted by inflation and the lower FX devaluation leading to higher production costs including higher mill costs. Reduced mill availability in Argentina further contributed to higher mill costs. The less favorable effect of currency fluctuation on export sales denominated in U.S. dollar and the negative impact of $17 million due to the application of hyperinflation accounting to the results for our Argentine business. The Australia performance was in line with our expectation following a better alignment between milk cost and commodity prices. In the Europe sector, revenue were $277 million while adjusted EBITDA amounted to $28 million. We benefited from a higher branded cheese sales volume supported by incremental spend in advertising and promotion. We're pleased with the continued recovery in Europe sector with notable progress in this quarter around margin expansion, volume growth and our ingredient business. With these indicators moving in the right direction, we expect further sequential improvement through the balance of the year. Net cash generated from operating activities in the quarters amounted to $162 million while CapEx totaled $90 million in line with our plans. Finally, as Carl mentioned, we announced our intention to proceed with a normal course issuer bid allowing us to purchase up to 2% of share outstanding. The level and timing of stock repurchases under the NCIB will be driven by cash flow generation. On that note, this concludes my financial review and I'll turn the call back to Carl.

Thank you, Max. In Canada, we delivered what I would call a stellar performance with adjusted EBITDA increasing 10% from last year, led by another strong quarter of operational efficiencies, cost savings and cheese sales volumes. Our retail platform drove year-over-year revenue growth with our core portfolio as well as our new products performing well. Everyday Cheese outperformed category growth with our Saputo brand gaining high-single-digit share, driven by strong mozzarella sales in the discount channel. We also see strengthened our Armstrong Brands national leadership position with gains in slices and snacking categories. Volume growth in Everyday Cheese reflects our focus on accelerating innovation, recent customer investments and expanding distribution. Examples include our new small format cheese shreds and bar listings and new lactose free specialty cheeses. Foodservice sales volumes were stable year-over-year. Although we have seen a recent slowdown in that market segment, our foodservice volumes benefited from our customer diversity and relationships. Our direct selling organization is key in times of industry slowdown. Our team can connect directly with operators to find strategic solutions for their challenges, lower their costs, and create meaningful relationships. Taken together, our foodservice teams are exceptionally well positioned to drive innovation, value and operator engagements. In the U.S., we grew total cheese volumes by mid-single digits supported by positive macro trends and capacity expansion across our cheese network. Volume growth was broad-based and we gained share within our snacking, blue, cheddar and Italian cheese categories in the domestic market. In dairy foods, volume declined in certain categories mostly due to a slowdown in some of the QSR markets. However, we have seen early evidence of U.S. restaurant traffic trends improving. The dairy commodity environment remains volatile, notably with the milk cheese spread. That being said, the fundamentals that drive our business are strong with balanced milk supply, low inventory levels and stable demand. Our strategic initiative benefits are growing and the work streams continue to mature. We are on track to reach our target of $100 million of savings from our operational initiatives by the end of the fiscal year. And we are also pleased to see duplicate costs continuing to decrease. We are unlocking additional production capacity and realizing cost savings across our network. These wins as well as our focus on continuous improvement across all our facilities are resulting in the highest levels of cheese productivity, since the launch of our capital investment cycle. Our productivity and commercial performance are also providing the flexibility to increase investments behind our brands. A good example is Montchevre, our leading U. S. Goat cheese brand. We launched the Montchevre Mike's Hot Honey Goat Cheese, a collaboration with Mike's Hot Honey to bring the sweet heat flavor to our award winning goat cheese. Our Treasure Cave brand expanded its portfolio to include a creamier version of our traditional blue, creating an approachable entry point for consumers that may be apprehensive of the sharper flavors associated with blue cheese. In the international sector, our results were lower than last year. In Argentina, currency devaluation has not kept pace with inflation, which has impacted export margins, operational costs including milk. Still, domestic cheese volumes were higher and we're gaining share, a good performance given the dynamic economic situation in Argentina. In Australia, our performance in the quarter showed continued improvement compared to the challenging environment we faced last year. Domestic volumes were steady, and we strategically increased our export volumes as international prices were moving higher. Our teams have also made significant efforts to reduce costs and respond to the changing marketplace, particularly from a capacity and a milk supply standpoint. On that note, milk supply in Australia is improving and milk costs have come down since July 1, which marked the start of the new milk year. Our milk intake so far this fiscal is ahead of plan, resulting in increased capacity utilization, which will be an additional tailwind in a lower milk cost environment. We're very pleased with the current state of the business in Australia and optimistic about the balance of the year. In Europe, our financial performance continues to improve. Cathedral City had a strong momentum with double-digit volume growth in the quarter. We continue to focus on affordable price points, value packages, tailored promotions and premium offerings to drive our demand. We expect this improvement to continue into the second half of the fiscal year fueled by innovation and selective investments in advertising and promotions. Equally important, we saw a rebound in our Ingredients business with better pricing and a significant volume increase. The increase in volume is mostly due to the transition to a direct to customer marketing and selling strategy. Looking ahead to the balance of the year, our fiscal 2025 outlook remains largely unchanged. We are focused on delivering on our priorities and we're hopeful that the markets will move in our favor as the year progresses. Heading into Q3, we expect further improvements in all our divisions. It's likely premature to forecast how Argentina will trend given the currency fluctuations. But overall, we see good momentum building in our business. We expect the consumer environment to remain dynamic. Our proven ability to navigate this type of environment gives us confidence that we can drive further volume across our business. We are focusing on managing the elements within our control and taking actions that position us for long-term success. Our strategy provides a roadmap for achieving strong and consistent results over a multi-year period, and we aim to incrementally advance our strategic pillars every quarter. The long-term potential of the business to create value continues to be very exciting. That concludes our formal remarks. I will now turn the call over to Duston for questions.

Thank you, sir. [Operator Instructions]. And we'll begin the question-and-answer session. Our first question comes from the line of Mark Petrie from CIBC. Your line is open.

Yes, thanks. Good morning. Thanks for all the comments. I'm hoping you could just expand maybe on what you're seeing in the U.S. specifically, the selling environment there, specifically the competitive dynamics. And then how you're balancing sort of your investments in price with volume growth?

Thanks Mark for the question. The U.S. had seen early in coming off the tail of Q1 into Q2, we had seen some slowdowns in the QSR market in particular. And as you're likely aware, there has been some investments that were made in value meals, if you like, value offerings and we're starting to progressively see the benefits of that. Although we may not play directly in what is being offered in these value offerings, foot traffic is improving. And with foot traffic, we're starting to see our numbers in that sector improve as well. But beyond that, we continue to have quite a diverse portfolio. We're selling into numerous different channels. So if your traditional pizzerias are on the slower end of things, some of the industrials who are producing frozen pizzas or other for the retail sector have some tailwinds. So the diversity of our portfolio across the channels we service continue to put us in a good position for what we see as continued volume growth.

Okay. And is that any different sort of across other channels and I guess across sort of cheese and dairy ingredients or dairy foods?

We're -- it's across the board. Like I said, the -- both of those segments of our business, call them cheese and dairy foods, play in all spaces, whether that's retail, whether that is in private and/or branded products, foodservice, quick service restaurants as much as full service. So at the end of the day, we're seeing that momentum building as some of the consumer confidence improves.

Okay. Fair enough. And so it's helpful to sort of hear your perspectives on sort of the U.S. commodity landscape, the supply demand balance? And then I guess related to that, but a bit of a separate question, I know one of the challenges in the U.S. commodity picture is the whey price and sort of the puts and takes on the different sort of refinements or types of way. And I'm just wondering if there's any way to sort of add flexibility to your network. I know it's difficult, because those are long cycle investments and big ticket items. But just wondering sort of big picture if there's a way to address some of those challenges, when it comes to whey sort of specifically?

Where I would start with, Mark, is that some of the fundamentals in the U.S. sector, dairy sector are good. And by that specifically, the balance between supply and demand is in a good place. Some of the most recent information in and around cheese inventories across the nation are also showing that they're relatively low. So that puts us in a general good place when it comes to that supply and demand dynamic. Yes, the current price of whey, which is sweet whey powder, basically the most basic of the commodities in the whey space is high today that has an influence on the price of milk influencing our spread. But we also believe it's somewhat transitory. It's not a sector that necessarily has seen any real meaningful investments over the last five to 10 years. And it's partly the reason for why that whey price is as high as it is. There has been an increase in demand, steady demand for that product, but with a very little inventory available that has driven sort of the pricing to where it is today. But it is not a -- I'll say, a value added ingredient that we believe long-term will be the source of whey protein for customers and consumers. The diversification we have today in higher fractions, first and foremost are also benefiting from that whey price. And we continue to believe that that is the right balance of product offerings and the tools that we have within our U.S. business match that for our long-term success.

Yes. I mean, I understand it's not a value add ingredient, and I'm not suggesting you would make big investments to focus in that area. But at the same time, clearly, there is an imbalance in supply and demand. So are you -- you're saying you believe it's transitory. Are you seeing supply come into that space? Or do you have a reason to believe that demand would fall off or move to other areas of the protein market?

So there is supply, and some people are being opportunistic, including Saputo. We do still have sweet way capabilities. So that basic commodity. We do still manufacture that and we too will shift some of our production to that category, as long as we're balancing our customer needs across the board. So yes, there is flexibility. It's not a complete 100% capability from one to another. And it will take a little bit here for that demand to be satisfied, and we expect that pricing to subside at that point.

Okay. Appreciate all the comments. I'll pass the line and all the best.

Thank you, Mark.

Thank you. Our next question comes from the line of Michael Van Aelst from TD Securities. Your line is open.

Thank you. So you had a pretty impressive growth rate in Canada's EBITDA up 10%. And the investments there are a little bit more mature. You're -- they -- the Canada got the investments in technology and automation and capacity earlier than the U.S. did. And I'm wondering is that part of the reason why we're seeing an acceleration of your EBITDA growth and your margin expansion? And is this a precursor of what you think could happen in the U.S?

For sure. So in the Canadian sector, they have been on a multi-year journey for some time now to optimize their platform, equip themselves with the various tools to be successful and to support the brands that we have. And what we're seeing today comes from a combination of things, but a high percentage of it is from operational efficiencies, whether that be in automation, whether that is in maximizing the throughput in the various facilities that we have as well as having the appropriate equipment to be able to supply the innovation, the demand in the marketplace for our products. So the short answer is yes. Our reduction in operating costs in part associated to the capital expenditures that we put there through numerous years as well as the Canadian team ability to reduce its other costs like SG&A have also assisted us in delivering the results that we have today.

So where do you think you are in the U.S. with respect to achieving the same type of operational improvements as you are in Canada? What's the timeline?

Well, I would say that in some sectors of products that we manufacture, we're already there. And Mozzarella could be one of those elements that we point to where we feel with the most recent investments. For the most part, we are where we want to be from an efficiency perspective and very translatable to the Canadian comparative. When it comes to the assets associated to what we can bring to the retail market, the investments in Franklin and what we would have coined the network optimization will be the key to unlocking that continued penetration in the retail sector, efficiencies and diversity in what we bring to market, which will emulate to a greater degree what the Canadian business has. So our timelines associated with network optimization still see us into the next fiscal year before we're able to complete that and have all of the tools that we expected to and lines started up needed to support the brands and our offerings in the retail sector.

Okay. All right. And then just on those duplicate overhead costs, when do you see those falling off?

Every week, we're seeing these falling off. We expect another important reduction in Q3 followed by a continuing reduction into Q4. So those duplicate costs right now is really a function of the timeline I described, whereby we expect to complete our network optimization sometime in '26. But we should see the large share, the lion's share of those duplicate costs come off by the end of the fiscal.

Okay. And then Max, on the NCIB, can you explain what's behind the decision to limit it to 2% of shares outstanding given that your balance sheet is deleveraging? You seem to be comfortable where your operations are and the valuation is so low on your share price historically?

Well, Mike, we are committed. We want to continue to maintain a balanced approach as it regards to capital allocation. We've highlighted priorities relative to the dividend. We highlighted that we want to maintain, we protect and we did increase last quarter. From a CapEx perspective, a lower pace. So this year is lower than the prior year and so we intend to maintain to a lower level than historical last three, four years. Certainly, I want to take care of the debt, so debt reductions continue to be in our priorities. So we moved on and very consistent in our balanced approach. We removed the DRIP back last winter in sort of February. And now where we sit is based on our cash flow generation. It certainly opens the door to do different things. And one of those different thing is to proceed with some share repurchase with the NCIB as we did in the past and NCIB will continue to be part of our future. There's no really change in the approach. And the 2% really is what could be realistically purchased within the next 12 months. Should we see cash generation exceeding or those type of level, nothing would prevent us to augment it or to push that limit. So in reality, we just want to have a consistent balanced approach and want to be calibrated and continue to build some financial flexibility to support our growth organically and through various investments.

Great. Thanks for that, Max.

Thank you. Our next question comes from the line of Chris Lee from Desjardins. Your line is open.

Thanks. Good morning, everyone. My first question is, I noticed there was a subtle wording change in your 2025 outlook and I just want to see if I'm reading too much into it. So in one of the line items, you noted that cash flow generation should increase as you harvest the benefits from operational improvements. I think the previous outlook, the wording was driven by improvements in adjusted EBITDA. So I was just wondering is that just more somatic or did you kind of intentionally try to flag some sort of outlook in terms of what the EBITDA growth should look like for the balance of the year? Thanks.

Thanks, Chris for the question. And yes, you're reading too much into it. We did say in the very first bullet, in fact of our outlook, we talk about expectations for steady improvements and being able to maintain or be able to remain on course for delivering our long-term goals. So that has not changed in any way. So we still feel very strong about the fundamentals in each of the operating sectors that we have. As Max and I both described, there's some very good momentum occurring across the board, and that has not changed our confidence in our near term and long-term outlook.

Okay. That's great to hear. And maybe I'll just take the opportunity to ask you a follow-up on this then. I guess so far in the first half of the year, your EBITDA has been flattish for obvious reasons you highlighted. As we look into the second half, can you at least at a high level talk to us about, do you expect second half to be a bit of an inflection point in terms of EBITDA growth assuming kind of the current conditions remain where they are?

I think the best way to answer that is to give you some sort of some clarity on what is occurring in each sectors. And let's start with Canada without taking it for granted by any means, but we do expect there to be continued stability and performance in that sector with the fundamentals of our team, our offering, our customers being favorable. If I move to the U.S., when we take a look at where we're at with our returns from our capital investments and the various initiatives, we do believe that in Q3, Q4, we're going to see continued improvement. The sum of the first half was about a $44 million improvement in the U.S. We're confident that we will be able to meet the $100 million target that we set for ourselves. This will translate fundamentally by increased performance in Franklin as well as the rest of our base business. So we feel good about that. We feel good about the demand as well. And right now, the signs with regards to the market conditions, so more specifically milk cheese spread. Although we don't expect it to be positive by any means, we do expect it to be better than what we have seen to date. And then if we move on into Europe, the European sector continues its recovery. I think we all know by now the story in and around the high cheese cost inventory is behind us. The U.K. consumer is in a better place. I certainly don't want to underestimate the inflationary pressures that they all went through and there's still some inflation there that they need to contend with. The Cathedral City continues to make share gains and is in a very good place. Our ingredients business is performing better as well as the rest of the product that we produce in that sector. And then if I move over to Australia, Australia continues to be right where we wanted Australia to be following the capital investments we put in there, the network optimization, very hard work that has gone on with the team to deliver the platform we have to match the demand both domestically and internationally. And we do believe that with the better balance between the milk price and that of the international selling prices, which are holding steady. We also expect the Australian platform to perform quite well. That leads me to our Argentinian team, who continue to do extremely well under the circumstances that they operate in. But I'm certainly not going to venture into what kind of monetary policy or changes in the inflationary rates or the value of the peso and the impact that might have. So overall, it is some very good momentum across the board and has to -- will deliver on results.

Thanks, Carl. That's very fulsome answer. Really appreciate it. Maybe if I can squeeze another question. I know it's still very early days, but I would love to get your comments on your thoughts on the U.S. election and what the implications could be for you guys and for the sector maybe so looking back what happened the last time Trump was in office? Thanks.

Very early to tell. There are a lot of potential implications to the overall consumer. Let me start with that. But overall, I'm going to say neutral when it comes to the consumer. I don't expect the consumer to overnight have higher confidence and discretionary income to spend and for it to have tailwinds in our business. But I think the question is more pointed to whether or not it may either impede our ability to export and or have implications on various trade deals. And if I go to those two in particular, if we take USMCA, yes, it's a very open agenda item and we do expect there to be a requestioning of each other's obligations within that trade deal, dairy being an element that will be discussed. But I also don't want to overplay it. It isn't the most meaningful, if you want of implications to our Canadian business and or U. S. for that matter, should there be a change. We operate in a number of different jurisdictions for milk, number of different rules of imports and allocations and quotas. Whatever decision the Canadian government and that of the U.S. make, we'll be able to adapt to. So it isn't something that we're overly concerned with by any means. And when it comes to exports and the potential trade tariff wars that might exist, the demand for dairy isn't necessarily going to change. So the beauty of our platform is that we have the ability to supply customers from different basis. So should there be some sort of impediment for us to export from the U.S., to which let's not forget our export platform is not extremely large from the U.S., especially not with the core products. More meaningful than our ingredient sector, but it's also the sector by which we've got the most redundancy globally. So we can adapt where we need to should that come to fruition. And so having said that in the end, I'll say it's fairly neutral as far as the potential impact of what has been presented by the Republican government.

Thanks very much. Appreciate your thoughts. And all the best to you too. Thanks.

Thanks, Chris.

Thank you. Our next question comes from the line of Irene Nattel from RBC Capital Markets. Your line is open.

Thanks and good morning everyone. I really appreciate all of the color and the detail you provided. So you addressed most of my questions, but one thing I just want to ask explicitly. Haven't heard the two letters M&A in any of the answers today. Just if you could, and as you're reaching your cash flow in inflection point, can you just please update us on your current views on potential for M&A?

Thank you, Irene. Excellent question. And I think in part, Max, sort of addressed it with the desire to maintain a balanced capital allocation approach. Part of the reason why we are not, we didn't pick a number higher than 2% for the NCIB is to ensure that we remain flexible. We will continue to look at opportunities for growth in our business in different geographies, whether that is to complement some of the portfolios that we have or whether that is potentially in different geographies. So M&A is still on the table for us, but it's -- I'll say a priority by which comes secondary to delivering on what it is our current capital deployed is supposed to deliver to our bottom line. But we do have a dedicated team of individuals who are constantly looking at what would be complementary for our growth strategy, our commercial strategy as well as what is available in the market. So I think by being balanced in what it is, we allocate our cash generation to will allow us to remain flexible as well as being opportunistic should it be required.

That's very helpful. Thank you.

Thank you. Our next question comes from the line of Vishal Shreedhar from National Bank. Your line is open.

Hi, thanks for taking my questions. Wondering if you could just give us your updated color on the proposed USDA changes on the federal milk marketing orders. How should we expect that to enroll, when and what will the impact be to Saputo?

Thank you, Vishal, for the question. As we understand it today, the USDA final recommendation should be published by November 12th. And following that, there needs to be a farmer ag sector vote, referendum that occurs either in December or January. Once that election or that process is completed, and if accepted, we would probably see an implementation of the changes in various pricing mechanisms occur in June of 2025. We remain optimistic that the final proposal by USDA will be voted upon favorably and therefore accepted. And as it's currently drafted, it would be beneficial to Saputo. One thing I can point to as an example would be the components associated to the block and barrel spread. If we just look at it over the last six to 12 months, the way the current draft of the proposal is written, the barrel will be removed from the milk pricing formula. That removal, considering the disconnect that existed between the block and the barrel, would yield a favorable impact by comparison to the last six to 12 months for Saputo. So at the end of the day, we do feel that what is proposed, what will be proposed by the USDA helps bridge the gap from the last time this was done in 2008 with regards to a variety of make allowances and fundamentally positions the ag sector closer to today's market realities.

Okay. Thank you for that color. And just a high level question here as you settle into your role. And you know there's so much volatility in Saputo's results, seemingly more so more recently than it has been over the longer-term. So when you look at your business and you look at the year and you say, hey, these are the metrics I look at to define whether my company has been successful or not, whatever they are market share, EBITDA or earnings. I was hoping you could give us an insight into your preferred metrics to deem whether the company has been successful in any timeframe?

I would say that if I look at it purely on a financial basis, certainly our cash generation and our continued EBITDA performance are two top metrics from that perspective. But you're right, with the kind of volatility that we have today in some of the -- I'll use the word uncontrollable environment. We have to continue to understand clearly the things that are in our control. And some of the things that we do look at as well is our market shares, our brand penetration numbers, because these in part are things that will help us mitigate the influences of these sectors or market conditions that we're faced with. So we have internal benchmarks and expectations on lowering our input costs, on improving with regards to the percentage of our business that is in the retail sector as well as the performance of our brands. And if I can check those four, five, six things off at the end of the year, I think we'll be able to say that we've created value for our shareholders and that we are well positioned for continued success.

Okay. And just one more quick one here for Max. In terms of the buyback, given the approach for a balanced capital allocation, is this something that we should sum in for the remainder of our forecast? Or should we just take it as it comes year-by-year?

Well, you -- I mean, it's going to be part of our priority as we're looking the next 12 months. But like I said, I mean, the timing and I'm not going to commit on any timing and so on. But yes, you could factor in within the next 12 months, that's for sure.

Thank you.

Thank you. Our next question comes back from the line of Michael Van Aelst from TD Securities. Your line is open.

Thank you. Just a few clarifications. First, Carl, you talked about you're being optimistic on the farmer vote in the U.S. Is that an all or none type vote? Are they voting on components of the formula individually? Or are they voting on take it or leave it just one vote?

No. They don't vote on the components of the formula. They do vote on the package that is recommended. But it -- they could -- there's also regions. So there could be a scenario whereby one region chooses not to vote for it favorably and are no longer part of the federal milk marketing order. And I kind of bring you back to another referendum that was held post 2010 when California, who was not part of the federal milk marketing order decided to enter that ring, if you like. So there could be some regional differences in where the vote goes. But again, we're prepared to adapt to whatever those circumstances are.

Okay. And then on your M&A comments, in the past, I think Lino had been saying that whatever -- if you were to do M&A, it has to be immediately accretive. Is that what you're trying to get out when you talked about has to be consistent with your other or do at least better than what your other options are?

Absolutely. I mean, we always look at it on the basis of if we were to invest our own capital and you look at the kind of timelines associated to it coming to fruition, delivering to our bottom line versus that of a potential, whether it's a tuck-in in nature or something larger, it has to be accretive in nature. We're not looking for, I'm going to use the word a fixer upper that is going to distract us from what we're currently focused on. We'd be focused on ensuring that whatever comes our way and whatever we have an interest in, delivers to the bottom line today and puts us in a position to deliver on what our commercial expectations and obligations not obligations, but our commercial objectives are.

Okay, perfect. Thank you.

Thank you. Seeing as there are no more questions in the queue, that concludes our question-and-answer session. I will now turn the call back over to Nick Estrela for closing remarks.

Thank you, Dustin. Please note that we will release our third quarter fiscal 2025 results on February 6, 2025. We thank you for taking part in the call and webcast. Have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.