Good morning, everyone. Hope everybody's doing well this morning. Good morning. Thanks for being here. I know for some of you, it's been a big travel to get out here. Also welcome those online. I think we've got 700 people watching us online today. Hopefully, all our systems work and we keep things moving today. Happy everybody's here. My name is Brian Hannasch. I'm the President and Chief Executive Officer at Couche-Tard. I'm in my tenth year in that role. I started in the industry when I was sixteen, to earn money to try to go to college, and really didn't have much of a view on the industry other than that it was a way to make some money.
A lot of years later, and probably 60 or 70 M&A transactions later, 27 countries later, I've developed some views on our industry. Hopefully today you'll have a chance to share a few of those, and maybe ask us some questions later on today. There's a few things that I did want to convey before we dive in. One, I've got three firm beliefs about the industry. One, we sell time. It's really what—the only thing we sell. You know, we're convenient to people. We're close to people, we're convenient, and in my 30+ years now, time continues to be more and more valuable to our customers. The second I would say is scale matters. I'll, I'll rephrase that. I'd say scale done well matters. I was joking with somebody at breakfast this morning. It's easy to write a check.
It's hard to integrate people, it's hard to integrate systems, it's hard to integrate cultures, and I think that's something that we've done very, very well over the last decades. And the third is culture. And that's probably going to be the hardest thing to deliver today, is how important culture is. You know, we are spread across, I guess it'll be 27 countries, 28 with TotalEnergies, hundred and thirty some thousand people, and culture is such an important part of what we do. We meet almost 9 million customers each and every day, and that can go very well, it can go okay, or it can go not so well. And so how we behave in those moments and how engaged our people are with our customers is so, so important to what we do each and every day.
As the company's gotten bigger, I've often been asked, what keeps me up at night? It's really just maintaining that culture that started with one store in 1980 and making sure that we don't lose our way, that we're focused on our stores, focused on our people. Again, those three things I think are just so, so important to our industry and to why Couche-Tard has just been such a success over the past decades. Better grab the clicker here. Today, again, we'll have a busy agenda, and then for those of you that are here, you have an opportunity to go out and see some stores and hopefully experience a little bit of what we're trying to do in the field with our customers, our frontline people, and enjoy that.
There will be a Q&A session at the end, and, I'll probably say it again, we do promise to give you breaks and do promise to feed you along the way. So we're in Grand Canyon. Somebody asked me this morning: why are we here? The company started, the brand started 74 years ago in El Paso, Texas, not too far from here. But quickly, Phoenix became a big center for the growth of the Circle K brand back in the 1970s. And when we bought Circle K, which will be 20 years ago in December of this year, they were headquartered here, just up the road, a little bit.
So it's always been a very strong market for us, a great representation of the brand, great loyalty to the brand, and one of our most profitable business units that we have anywhere in the world. So I'm going to just run a quick video and tell you a little bit about the Grand Canyon business unit that you'll be seeing later today, for those of you that are here.
Welcome to the Grand Canyon business unit. Are you ready for some interesting facts about our business unit? Let's start with some of our sales. In fiscal year of 2024, we will sell 102,556 tanker trucks of fuel. Now, if you line up our fuel trucks, that will span from Phoenix all the way to the Louisiana border. In fact, a car can circumnavigate the Earth 1,365,000 times with the amount of fuel we sell in a year. We make sure to keep our customers hydrated from Arizona to Nevada. We sell enough water bottles to fill four Olympic-sized swimming pools and Monster Energy cans stretching from Phoenix to Los Angeles. There is a reason we are America's thirst stop.
13,230,000 gallons of Polar Pop have quenched our customers' thirst. If you lined up the number of beer cans we sold, it will stretch over 6,900 miles on the open road. All right, take it easy now. Here in the Grand Canyon State, our Arizona distribution center delivers to over 633 stores. We have over 300 full food locations serving Fresh Food Fast and 350 liquor licenses. Hi, welcome to my Circle K.
Our business unit takes pride in making it easy for our customers and team members by piloting programs for innovation, customer loyalty, food, and supporting our people initiatives. We make it easy with 6,642 full-time team members serving our customers and bringing our values to life every day. We play to win and stand with our community to cheer on our Arizona Diamondbacks and Phoenix Rising. We take ownership of our work and our stores. This is my Circle K. Next time you're in town, stop in and say hello. Until then, take it easy!
Again, welcome to Arizona. I've got with me my entire leadership team. Some of them flew from all over the world to get here for today. And they're here for you. So, they're dispersed throughout the room. They'll all be on the site tours later today, so I encourage you to engage with them. You know, our goal is to be as transparent as we absolutely can be without being too forward-looking for you. But again, they're all here, and then I've got a separate group that's gonna be speaking to you today. This group largely owns the strategic pillars that we'll be talking about throughout the day, and so they'll do hopefully most of the talking. I'll do less of the talking if the day goes well today. This is the roadmap for the day.
Again, I'll just point out, we do have a Q&A session at the end. We'll take questions both from the room and online. I won't drain the rest other than, again, reassuring you, we do have a couple of breaks built in, and we will feed you later on. So I'd like to invite, Filipe Da Silva to the stage. Filipe joined us six months ago when Claude Tessier retired. Filipe brings a wealth of retail experience, and not only that, but also international experience. Filipe's lived in seven countries I think?
Yeah.
Around the world in retail capacities with a variety of companies. So he just brings a great global perspective, and in six short months, seems to be fitting very well with our culture as well. So welcome.
Thank you, Brian.
A little bit of a reminder where we came from. I'm sure they're on the phone today. We have a company that started in 1980 with one store, Alain Bouchard, and then he quickly brought on three partners. All of them sit on our board today. All of them are significant, significant shareholders of Couche-Tard. This just grabs a few of the highlights. Again, I think there's been 60 or 70 M&A transactions along the way. I'll point out, we're at the 10-year anniversary, of just past it, of expanding into Europe, with the acquisition of Statoil, which again, set us a platform that we're able to grow from, adding Ireland, and now, if you skip to the end, December 31st, we'll add about 2,200 stores that we're purchasing from TotalEnergies in four new countries for us.
Another big one for me was in 2015, when we decided to unite probably six or seven global brands under one brand, being Circle K, with the exception of our On the Run and our Couche-Tard network in Quebec. That enables so much, and so as you talk to Kevin and Louise today, hopefully, they can really convey to you the power that that brings to really create a global brand that's recognized not only globally, geographically, but for doing so many things that, you know, we think the average player in our industry cannot execute on. I'll hit one more here. The other one I'd hit here is culture again, and again, I'm not a big person on awards, but through COVID, you know, keeping the culture alive was so, so important.
I want to recognize everybody that's watching from Couche-Tard today. We've been named two years in a row as a top quartile performer in employee engagement. Again, that's the heart and blood of our company and our operations, and we take great pride in just every year becoming a better and better people company as we continue to do the things that we get the press for, like, you know, doing the M&A stuff. Here's a footprint of where we are today, and again, this is pre-Total. Obviously, a big presence in North America with almost 9,000 locations. Europe with Total will grow to almost 5,200 locations.
So Europe will be a very, very big piece of the footprint, and then international, that's split between Mexico, you know, a good presence throughout Southeast Asia with licensees, and then a more recent entry into Africa. So, you know, we are truly global in nature, very geographically diversified in nature, and we'll talk a little bit more about our intentions to grow some of that network in the future. So a couple stats on what we do, and I think the Arizona video showed a bit of it. You know, we just think about stores, but so much happens every day. You know, we meet almost 8.5 million customers every day, 128,000 people in our stores, greeting those customers every day.
You know, 35 million gallons of fuel sold each and every day, and that's eight or nine gallons at a time, so it's a ton of transactions. 4,800 North American sites with Fresh Food Fast, and then again, 14,400 stores globally, and we'll add 2,200 stores to that here very shortly. So our vision. A lot of companies talk about mission, vision, values. I was a part of one that had a lot of posters. We've really tried to boil this down into very plain language that whether it's me or it's someone running a cashier in our stores, can relate to. You know, we play to win. We wanna work together, so no silos, no finger-pointing, one team.
We want to do the right thing, and sometimes that's not always obvious, but we don't reward anything but doing the right thing. And then finally, you know, act like an owner. You know, take ownership. You know, ask for forgiveness later. And so do we do those perfectly each and every day? No, but we do, we just, we want to live those. I think we embody those as a leadership team, and I think that's just a very, very important part of what we do every day, that it doesn't show up on a P&L or a balance sheet. But again, it's just hugely important to who we are and what we do. Touch on convenience. Again, it's time, and convenience consistently has grown for decades.
I think in the U.S., we have 17 consecutive years of convenience store industry having positive same-store sales growth. This is a Nielsen stat kind of projecting the next five years. For the scale of the industry, that's a $70 billion increase in sales over the next five years. As big as we talk about being, we're still a very, very small part of the global convenience industry, which again, we think we have a lot of room to both grow organically and continue to grow via M&A in the coming years in all three of those platforms. Just touching in the U.S., you know, which is our biggest presence today, two points I'd want to make out.
So despite the consolidation that's happened in my 23 years with the company, that U.S., Casey's, and others have done, still 60% of the sites in the United States are owned by single operators, and that gets to be about 75% when you look at very small chains and singles. So two things: one, we think there's a lot of runway for continued growth, and two, the marginal economics set in this industry, whether that's the cost of labor, whether that's, you know, the fuel cents per gallon break even, inside store sales, largely set by those single operators. So again, when I mentioned earlier, scale can matter. Scale can matter in a fragmented industry like this if it's done right. So double again.
You know, four, five years ago, I guess, you know, we had a similar room together, and we laid out an ambition to double the EBITDA of the company. And, candidly, there were some skeptics internally, and there's some skeptics in this room. So we're not bragging, but proud to say that we delivered. And that was through COVID. You know, and COVID got messy in so many ways, both personally and professionally. But, you know, one of the things I'm most proud of is we stayed focused. I think most strategies go sideways when you lose focus, when you can't stay laser-focused on the few things that really matter. And so hopefully today, one of the things you'll take away that we are really focused on being focused.
A lot happened over those five years, and we all had a little bit of a blip again with COVID. So put together a little video that kind of just talks about some of the accomplishments that we've achieved, both internally and with our customers over the last five years. So we'll let the owl tell you a little story.
Before we go forward, we need to go back in time, five years to be precise, when Couche-Tard was really quite different. Statoil, Topaz, and The Pantry were already part of the family, but CST and Holiday were just joining. The new Circle K brand had been introduced in Europe, but we had just started bringing it to North America, and there was so much we didn't have yet: a unified look and feel or store layout. Circle K Fuel was only debuting, and electric vehicle charging just revving up in our Norway lab. Some stores had food, but not food at scale. We wanted to keep growing and fast, but we needed a strategy to define our journey ahead. How big could we become? Could we double again? We set off on a journey to grow the business and make it better, faster, and easier.
We needed some guideposts. We called them lighthouses, to illuminate and define the path, starting with Activate Easy. Our mission was to make our customers' lives a little easier every day. It would take improved operational excellence with programs from Easy Office. Your desktop computer, your printer, where is all of that now? This is going to be transferred to the till area. To Smart Checkout, to having a recognizable Circle K Fuel brand, now across all of Europe and in nearly 4,200 stores in North America, with its very own commercial. I feel my Circle K. Woo!
Circle K needed to become the brand of choice, so our customers would come to know us and trust us. Onwards to Chain of One. We started Fresh Food Fast in the middle of a pandemic and launched easy-to-eat and -prepare yummy food at scale, now in almost 4,900 stores globally. We started a data analytics team to bring super local merchandising, pricing, promotion, and assortment, and energized the Norway lab to claim the EV customer. Today, we have nearly 1,600 charging stalls at 320 locations and have laid the groundwork in North America, taking us to Hire Right and Train to Win. Hey, welcome to Dallas. Pretty cool to be here.
Without hiring, training, and engaging the right people, it would be impossible to meet our strategic goals. So we got busy training regional directors, market managers, store managers, using new gamified training, launching career sites, and identifying top talent for our next generation of leaders. It's commitment that we have to developing our internal talent, and we need to grow the next generation of leaders. Getting some great recognition along the way. We had to simplify our processes and control our costs, which also meant reengineering our fuel supply chain.
The Circle K rebrand is a big unlock for our fuel supply chain. It's not only important for how we talk to our customers, but it's also important to give us the flexibility to work with a range of different suppliers. We could not double again unless we could grow. Come on inside and let us show you around.
Ramping up new store builds and remodels and expanding into Asia. Finally, before we finished that five-year journey, we had success in consolidating the U.S. with Big Red, True Blue, and soon MAPCO, and added growing Europe with a game-changing proposed acquisitions of certain assets of TotalEnergies. We take pride in being very good at bringing new cultures, people, stores, and operations into our company. It's at the heart of our growth and our success.
We did it! We kept to our strategic plan to double again. Our journey is not over. We still have unfinished business, and we will keep going, reaching even higher, and continue our mission of making our customers' lives a little easier every day.
All right. Before moving to talk about the next five years, maybe let's make a last halt on the Double Again. As you may remember, in 2018, when we unveiled the Double Again strategy, actually, we defined six key strategy. For each of them, actually, we defined an ambition in terms of EBITDA incremental. We are very pleased to say that we have made significant progress in all of them. Here I will go one by one to tell you a little bit more about the achievement there. First, in terms of NTI, our NTI program has greatly contributed to this ambition.
We have opened more than 600 stores over the five-year period of this plan. With very high returns above 15% after three years. On the cost optimization side, we consider ourselves as a low-cost operator, and as such, we have continued to look for ways to improve our cost operating model. So we have, for example, developed global shared service center capabilities to centralize all the transactional activities. We have continued also to increase the productivity in our stores. We have seen some example with Mashgin, but also really working on the process and making sure that we can automate and digitize the way of working of our store employees.
On the fuel side, we have also focused our attention in key initiatives to continue to reinforce our differentiation versus competitors. The first of one, and the video we are showing that, is clearly the rebranding of nearly 4,200 stores in North America. That, of course, was very impactful and build and continue to build our brand, but also help us to grant us the flexibility to source the fuel from any provider. That's something that make a big difference. We have also reinforced our supply, our sourcing and supplying capabilities, both in North America and Europe. We have signed this partnership with Musket to help us to buy better.
We have set up an internal fleet to improve service level to our stores, to improve efficiency as well in logistics. In Europe, for example, we have set up a trading company. I would say a very important step forward in terms of fuel initiative during the five years. At merchandise level, many initiatives there, as you know. We have focused our attention first on the assortment, and we are very pleased by how we have been able to adapt the customer, the assortment to our customer needs. Also, we have rolled out the localized pricing and promotion strategy across all our business units, really with the ambition to optimize our gross profits, gross profit profile.
As you know, we have invested significantly in our Fresh Food Fast program. That has been a big focus for the company. We are very pleased by the response of the customers. As you know, over the past recent quarters, sales have grown 10%-20%. So really, we see good traction there. But we are also convinced that there is still a lot of potential to unlock. Alex will talk about that later, but we'll continue to enhance assortment, to improve the store execution and minimize the spoilage. But really, a great progress there.
Finally, there was also a very significant progress on and great positive contribution from the age restricted categories. We have seen alcohol categories other tobacco products going very well, growing steadily and with high level of profitability. That allows us actually to more than offset the cigarette challenges. So all in all, the Double Again strategy was not only a success, I would say, in terms of strategy, but also in terms of numbers. And that resulted, as you can see in this slide, by, I would say, extraordinary financial achievements.
I just want to spend, you know, and focus my attention on the free cash flow. The free cash flow of this company has expanded on a CAGR basis by more than 14% over the past decade. It's a very, very strong cash generation powerhouse that we have built there. Thanks, of course, to the EBITDA performance, but also an effective working capital management. We have done many things there, we'll continue to do, and also our discipline in terms of CapEx approach. In the following slide, you can also see that here some overall financial KPIs that show how, I would say, our financial trajectory has been outstanding during the last five years.
We can see that net earnings have been growing, on a CAGR basis, by more than 13%, outpacing the growth of the revenue at 9%. As a result, what we have seen is a significant stock price appreciation. Over this five-year period, the stock price has grown by more than 100%, and exceeding the TSX performance by a factor of four. Very strong and outstanding results during this five-year period. Back to you, Brian.
I think if you chart that over 20 years, you'd see the same story. So looking ahead, you know, where are we going from here? You know, I think, you know, four or five years ago, people said, "Hey, could we keep the same 15% CAGR that I've experienced my whole career? And is there a Walmart effect or a big effect, you know, where you just can't do it on your scale?" But, you know, we think there's a lot of runway, both with the existing strategy and tactics we have in place, but also some of the things that we're gonna focus on today. So again, as Filipe said, we closed the last fiscal year hitting that number. And again, you know, we're gonna talk about a new strategy today, and my hope is, one, you don't find it radically different.
If you did, I'd be worried if I were you. You know, we, this is a lot about unfinished business. We've loaded the gun with a lot of things that build capabilities and make us better with our customer, that we're gonna continue to develop, and then we'll talk about some things we're gonna double down in. One thing that, you know, we wanna touch on here on this slide would maybe be the, the North Star. You know, I'm not gonna apologize for who we are. You know, we're not a QuikTrip, we're not a Wawa, we don't build every store we operate. We are a consolidator. We're a global consolidator. We're gonna run really high-quality assets that we buy. We're gonna buy some stuff that's average.
We're trying not to buy much that's below average anymore, and Aaron will talk about if we do, we're pretty aggressive at managing that portfolio to get it out. We wanna own long-term, winning, sustainable assets. But that said, different volumes, different sizes, different shapes, and so that requires a lot of flexibility. We won't always be the newest, shiniest thing on the block. But one thing we do think is important is that we are one of the most trusted brands in the convenience industry. And that means when a customer comes into our store, or works with us online, home delivery, wherever it may be, that it's a positive experience. And we can control that, regardless of the shape, the size, the volume of our sites.
So we believe that trust, and Kevin will talk about it a little bit later, is a true unlock and a focus point. And so when we think about what we're doing at store level, we use that lens. You know, does this help us build trust with our customers? Whether that's how we price our fuel, our merchandise, how we train our people. So the new lighthouses, and again, we stayed with lighthouses, 'cause again, you know, we think we did a good job with Double Again because we were successful at getting this strategy communicated down throughout the organization and breaking it down into bite-sized pieces at the business unit level and making it actionable. So we did not change the lighthouse nomenclatures. We've still got the beacons guiding us. And we're gonna talk today about four lighthouses underpinned by a foundation.
The foundation is not the sexy stuff. You know, it's having a great cost structure. It's having an IT infrastructure that is not only solid and reliable, but also flexible and fast. And it's having a great HR mentality and organization to build culture. On top of that, we're gonna talk in depth today about winning offer, winning fuel, winning the customer, and winning growth. And there are you know, a few programs under each of those that we'll deep dive into today. One I'll touch on, just maybe that surprises you a little bit about, is winning fuel. You know, we'll talk about fuel. We think there are decades of runway in the fuel business. If we wanna grow our bottom line or EBITDA, you know, strong double-digit growth, you know, we don't think volumes globally are gonna grow at that level.
So we believe it's imperative for us to, one, have a world-class supply chain, as Filipe mentioned, and Louise will talk about later, but also that we've got great value propositions to our customers that enable us to take share in what is probably not a growth market over the next decade. So when you. That's the lens that we have on fuel, and we'll talk more about how we think we can make that happen. So I'm gonna start, and we'll end the day with the same, we think we're a compelling value story. Yeah, we've got untapped organic growth. Again, a lot of that we believe is well underway with what we've been working on the last three or four years during COVID, and a big part of that is mastering the customer journey.
You know, making that as seamless and with as few friction points as absolutely possible. The second is the sustainability of, of the fuel margins. Louise will talk about, you know, that marginal economics of the industry, why we think that margin need has risen, but also, and probably more important, is the advantages we think we can create vis-à-vis the industry in a very fragmented market. Financial discipline and cost efficiencies. Yeah, we'll talk about a big, hairy goal around our cost structure. You know, we think I've bought enough companies over the years, I've never found one that has less overhead and is really more operationally effective than us, but we have bigger ambitions. You know, we think that's one thing we can absolutely continue to control, is our cost structure. And you see it in the M&A that we've done.
You know, you see there, you know, 30%-60% of target EBITDA, target acquisition EBITDA, generally comes back in hard synergies for us. And so that just. You know, as we continue to become more efficient with our aspirations, I think that just gives us more and more license to do M&A and generate more synergies for shareholders. The power of the Circle K brand. You know, we were largely in North America, you know, partner branded, Shell, Exxon, great partners, and still huge suppliers to us. But we did research that showed that our customers were confused. They didn't know whether they were at a Circle K site or they were at a Shell site. That canopy and that build, that MID, are absolutely the biggest signs in retail.
And so having that, flying the Circle K brand, and then being able to provide uniform, consistent messaging and programs for our customers and value for our customers, is a big unlock globally, and we'll talk more about that. Strong balance sheet. Filipe will talk about it later. You know, in a very fragmented industry, you know, we bring us a cost of capital advantage to bear. So as we do more and more M&A, you know, we've got an advantage. And finally, the culture and the team. You know, I touched on that before, so I'll skip it today, but it's absolutely what's made us who we are today, and it's not me. We have a big team here. We have, you know, a big team globally that espouses and lives that every day.
And so that's really the glue that keeps us all together and makes it work when we welcome new families into the company. So put it all together, and we'll break down our ambitions for you, and our aspirations to again grow this company over the next 4-5 years. I'd like to welcome Alex Miller, newly promoted COO. I've known Alex for, God, I hate to say it, probably 27-28 years, and recently promoted to our Chief Operating Officer. And he's gonna talk about our offers. You know, it's why people turn left instead of right, and how we can make ourselves differentiated in the future. Alex?
Thanks a lot, Brian, and thanks to all of you online and in this room for your interest in Couche-Tard and Circle K. Brian already introduced me. I'm approaching 12 years with Couche-Tard. I joined to establish our centralized fuel team and worked with our fuel teams for a good chunk of my time here. I've also worked with our real estate, commercial optimization, and various operating teams during my time here in Couche-Tard. Before that, I worked for BP for a little more than 16 years. I'm gonna focus on winning offer. We, of course, have a lot of activity happening across our categories, but these are our three priorities.
These are winning in food, owning thirst, and expanding our private brands, are the areas that we see for significant growth and differentiation as we look to the future. I'm gonna spend about 20 minutes going into our thinking and activities around these areas. Our first focus area is winning food and own thirst. Consumers are increasingly starved for time. Meal habits are changing. Traditional, prepared at-home, sit-down meals are being replaced by on-the-go snacks and meals. Further, consumers are increasingly looking to our channel for this food. Brian mentioned 27 years, and when I started in this business, we didn't sell a lot of food, and I don't think too many customers were looking for us for food. That has changed.
That creates a tremendous opportunity for Circle K, we think this trend will continue to rise into the future. Some of you might be thinking: "You guys have been talking about food for 15 or 20 years. What's different? What's different now?" I think we've accomplished a great deal over the past three years. We developed and rolled out a concept that can be executed at most of our stores. I would highlight, that is a key difference, versus our previous initiatives. Our program requires a minimum amount of space, is much simpler to execute, requires far less labor. It's a proven program, in our legacy Holiday stores for over 20 years. It's really similar in execution to Tim Hortons and Starbucks food programs.
And our program is growing sales, it's growing margins, and it is profitable today. And we did it all during the pandemic, which highlights the operational capability of our teams at Circle K. In Europe, we are further developed with food, and we've been on food for well more than a decade. In nearly all of our European countries, we rank first or second within our channel, for food preference, and we are increasingly competitive with QSRs. We continue to grow sales and improve, and have improved margins and profitability materially over the past 18 months, while maintaining fresh, which is critical with our European customers. I was just in two of our European countries last week, and I hope you get a chance to go visit them. But without question, we are a destination for hot dogs and sausages.
I'm gonna go deeper into what success looks like and our activities on the following slide. Financials. This slide highlights the journey we've been on in food and our goals for sales and margins over the next five years. We will sell nearly $2 billion in food this year, and this highlights the growth from just three years ago. We have been focused on deploying our Fresh Food Fast concept, training our team members to execute at every store, every day, embedding and delivering against our food safety targets, really trying to get trial of our products. We know they taste great, and we've got to get them into our customers' mouths. More recently, we have improved margin by 800 basis points this fiscal year in North America.
As we look to the future, the base now is in place, and we'll discuss in more specificity the activities that underpin our 10% sales growth and 13% margin growth target on the next slide. These are the priorities for us in food on our roadmap. First, let me start with locations, and specifically QSRs. We operate over 300 QSRs today and have for many years. We have a dedicated QSR team. We know that QSRs and our Fresh Food Fast concept can complement each other and both be successful at the right locations. We know the attributes of these locations: high traffic counts on both the forecourt and in the store, certain size of lot and building, and the location of the site. We have identified 267 future locations for QSRs in both North America and Europe over the coming five years.
Let's next turn to assortment. In Europe, we certainly have common themes across our food offers in all countries, but each country is unique and has assortment differences. This has been developed over many years and accounts for taste differences within the countries. We are going to do the same thing in North America. These are vast geographies with varying demographics, cultures and taste. We know we have a core offer of 10-15 items that really work everywhere. This is in place and will remain our base. We will now leverage our decentralized BU structure with the help from our central team to really get local. An example of this, I'll just give you a tidbit. We added green Hatch chilies to our pizzas in New Mexico, and our sales went up 5 x. We need to find those solutions.
We know those taste profiles are different. Next, let's go to supply chain. We run one of our own commissaries today, and we see the benefits it provides in both cost of goods and our ability to create LTOs and local products at pace. As part of our broader merchandise supply chain work, we are gonna add commissaries where we have store densities to support. That is roughly half of our network today. And last, brand awareness and trial. We're new to food in North America, and we know many consumers don't think of Circle K for these occasions. We will continue to ramp up our sampling programs and we'll be always on marketing campaigns. In Europe, we are known for food and especially hot dogs.
Our focus will be increasingly competing against the QSRs, elevating consumer recognition of how fresh our products are. I think last in food is operations improvement and providing value. Like everything we do, we are as good as the more than 100,000 frontline employees and their engagement, motivation, and execution. We will continue to improve the equipment, tools, and processes to make it easier for them to execute Fresh Food Fast. You heard Brian talk about culture. Culture is a big thing in Couche-Tard. To develop a food culture takes time. We see it in Holiday. We see it in our European businesses. We are committed to that journey. We will continue to build that culture of food in our stores here in North America and in Europe and everywhere we operate. And last is value.
Across our geography, we see our customers experience the pinch of inflation and seeking out value. We know with our scale, we can offer them time, and we can leverage our supply chain and scale to ensure we are always providing them value for their food occasions. Our food initiatives represent $150 million-$200 million incremental EBITDA over the next five years. Let's turn to owning thirst. Ask, how many of you have a drink in front of you? How many of you had more than one drink today? How many drinks, thirst occasions, will you have today? Look around your table, look around this room and multiply that. When you're in our stores later today, think about how many products we have that can satisfy those thirst occasions.
When we routinely survey our customers, the primary reason they provide to us of why they come to us is they are thirsty. This reason continues to grow each year. Channel blurring is real, and certainly no shortage of companies looking to establish convenience. But we feel we are unique in how we cross all these thirst occasions for both ready, cold, and hot to drink now, but increasingly take home. And again, I encourage you to, to think about that a little bit when you're in our stores. Kind of see how many of the products we have that would solve your thirst occasions. We also see a tremendous opportunity as we grow food to bundle thirst with our Fresh Food Fast, and food, and food offerings.
A positive of the pandemic was Brian and I spent considerable amount of time in our stores assisting our frontline employees. We stocked quite a few coolers and realized that it was not as easy as it should be to stock those coolers. That resulted in a new cooler solution. This solution expands facing assortment by up to 33%. It expands holding capacity on shelf by up to 67%. This obviously depends on the legacy cooler in place and the depth of the cooler that we're touching. It makes it easy for our staff to identify which product goes where per planogram, and ensures that the glides actually glide. So the product comes down and is facing the customer when they want it. We have installed this solution at nearly 3,000 sites in North America and Europe already.
We will nearly double that number by the end of our next fiscal year. Similar to food, I'll go a little deeper into our actions on the coming slides. Turn to financials. You know, first, let me highlight, this includes all of our thirst categories, and these are highly material to our visits, traffic, and overall P&L. This represents a significant portion of our non-fuel gross margin. Over the past three years, we have grown at slightly above industry average. Our goal for the future is to double that and to grow at twice industry across all thirst categories combined. How are we gonna do that? There's an awful lot on this slide, so I'm gonna try and hit on the big themes. I talked about cooler capacity and already talked about the cooler solution, but there's more than just the cooler solution.
We have launched this year a one-touch remodel program in North America, where we will touch over 80% of our assets over the next five years. That will involve expanding our horizon, interior image, upgrading our forecourts, but it will also expand our cold capacity. We will add to our cold caves. We will add both front and rear loading cold capacity. In Europe, we're largely done with our horizon remodels, so we'll run our cooler expansions as a separate project. They have started the first wave of that. We have started the first wave of our one-touch remodel here in North America, and I can tell you that the initial results are extremely positive, and we are excited for this. Costs are continuing to elevate in our industry.
We actually see some of our competitors withdrawing from cold capacity, putting in fewer doors, fewer holding power. We will absolutely do the opposite. Let me focus on innovation. It's another area that's just incredibly the pace of ramp-up of innovation across products in our stores, but specifically thirst products, just continues to quicken. This is a place where our scale and our strategic strong relationships with our vendor partners, we think, enables us to outposition our competitors. Where they have provided us exclusive products or brought new products, we have delivered on operational execution. We have found win-win solutions with our vendors, and things will continue to find more and increasing number of those. As we have an enhanced cooler capacity, it will enable us to carry more of these products and determine quicker the future winners.
Let me now turn to Polar Pop. Polar Pop is our dispensed beverage here in the U.S., and we absolutely sell some of the highest amounts of Polar Pop, or of cold dispensed of anyone in our industry. You know, the reality of Polar Pop is it has not advanced at the pace of innovation as what's happened in the cold box. That has to change, and we are someone that can change that, and I think we're engaged with some of our vendors that are on that journey with us. That is our primary focus on cold dispensed. In hot dispensed, our customers, they're increasingly looking to ice products, and they want to be able to customize their drinks the way they want them.
We are focused on those two areas around providing really an upgraded condiment offer that allows them to make the drink they want. We will revitalize our ice programs, and we will create unique to Circle K products. Let's turn to alcohol. You know, again, here, there's no space that kind of the pace of innovation is more rampant. There is no place that being more local or having the right assortment is more critical, and these are areas we're good at. We have had great success with the launch of our private label wine, and we'll expand our wine assortment and create wine destinations that you saw in one of the videos. We also recently purchased a small chain that had a much broader spirits assortment than we did.
You heard Brian say, "We take pride in taking the best ideas from the companies we purchase and then integrating and, and copying that across our network." This was one of those, and we took that. We will be launching this heightened assortment, and destination for spirits, where we can sell spirits, beginning the second half of this fiscal year. Take-home beverage. It's a space that big box and grocery kind of dominate. It's a space we used to do more in, I think convenience used to do more in, and we've kind of backed away from it. I'd say similar to cooler capacity, some of our competitors are almost exiting the space completely. Again, here, we will do the opposite.
We are carrying a much broader selection of take-home products across thirst occasions. We'll continue to expand that. And we're going to leverage our supply and our scale and our vendor relationships to make sure we can be competitive from a value perspective with our consumers' choices at big boxes and with grocery. Last, I think, you know, Håkon is going to go deeper into our sustainability ambitions later, but it would be, these are such big categories for us. It's critical that we deliver on our 100% of our packaging will be recyclable and reusable across thirst ier. And again, Håkon will go deeper into sustainability later on the day. Marketing. You saw America's Thirst Stop in the video. You'll see it at our stores today.
You'll see Canada's Thirst Stop, you'll see Ireland's Thirst Stop, you'll see Thirst Stop all over, all over our company today. This will be a full on, constantly on, 360 campaign across all of our channels that basically never stops. We are going to push to drive traffic, get people into our stores for these thirst occasion, and then bundle with these thirst occasions to build our basket. We're excited for this, and Kevin and his marketing team are driving this home for us as we speak, and again, you'll see some of it today. Last, let me turn to private brands. Private brands, you know, I referenced earlier that, you know, we view that consumers are being squeezed, and are increasingly looking for value. Private brands is perfect in this space.
We don't see this changing in the near term and maybe even in the midterm. We think that creates an opportunity for us to grow private brands even greater than we have over the past three years. It's been a big contributor to our growth, and we launched it about a decade ago. It's come a long ways in that time frame. We have very clear criteria related to private brand. It's got to be equivalent or better than the national brand. It's got to be priced a certain percentage below the national brand and earn a certain margin percentage better than the national brand. It's got to reach a certain level of SKU penetration or category sales for long-term viability. You can see the financials.
You can see the growth that we've had in this space over the past three years. Our aim for the forward five years is to do a little better than what we've done in the last three. You know, it's another area where as we build new stores, acquire stores, scale helps here. It creates viability for new products across our different categories and geographies. This is a big year for us in private brands, as we will launch over 100 new products, increasing our overall SKU count by 25%. We have a few business units that are now approaching 10% of non-fuel revenue and private brand sales. We've moved our private brand teams directly within our core merchandising and marketing teams, and have added human resource in this space to underpin this growth.
We think private brands will be increasingly relevant and attractive to consumers within this microenvironment or this macro environment, excuse me, and our ambition in private brands is to add $120 million in incremental EBITDA over the next five years. To summarize, our core priorities across our offer are winning in food, owning thirst, and further growing our private brands. We believe these are the right priorities, where we have the greatest opportunity to provide value and time savings for our customers. And we believe if we execute our plans, we can add $500 million-$600 million of incremental EBITDA over the coming five years. Thank you, and I'll now hand it over to Louise to discuss fuel.
Good job, buddy.
Hi, everyone. My name is Louise Warner, and I'm our Senior Vice President of Global Fuels. I joined Couche-Tard, Circle K, in January 2021, so a bit over, a bit over two and a half years ago, and I've worked across all parts of the fuel industry for the last 24 years. Today, I'm really proud to present our wonderful fuel business to you. On this slide, we've put together just a few of the statistics of the fuel business that we've been growing over the last few years. We can count trucks, we can count transactions, but really, we're really proud of this platform that we've been able to build, and I'm here today to tell you that we've just, we're just getting started.
Last time we were together, we made a promise to you as our investors, that we would deliver on additional earnings in fuel. And hopefully, you can see from the graph that we've been able to deliver on that promise and in fact, outperform what we said we would achieve. But importantly for us, it's not just about financial performance. What we've been doing over the last few years is building the foundations for our future growth, as well as delivering on strong financial returns. We heard from Brian about our fuel brand. We know that we have to have a strong customer offer to be fast and easy, to provide everyday value, to have the best locations, to have high-quality fuel, and to have the best supply chain underpinning all of that.
But we can't achieve this without our customers, our employees in our stores, and the thousands of people that work in our fuel supply chain every day. And so today, I have the privilege to tell you about how we're gonna use that foundation to continue to grow as we go forward. But before we get started on us, let's talk about the world around us. So lots of people kind of ask me questions about what's the future of fuel and where are we headed? It might surprise people that the demand for mobility is actually growing. So you read lots of articles in newspapers about the decline of the industry, but both the car park and the miles traveled globally continue to grow. We also see the car park aging.
The OEMs or the car manufacturers have done an excellent job at extending safety and reliability of the vehicles, which keeps them on the road for longer. With the current economic pressures, people are finding that the big step-change investment of buying a new vehicle becomes increasingly more difficult. We expect this car park aging trend to continue. As we turn to EVs, we see the fleet diversifying, and the introduction of EVs is being dominated by China and Europe, with the rest of the world following. We see this trend as being very different across all of our geographies. We should also note that many of these vehicles are adding vehicles to the fleet, not just substituting for internal combustion engines. As we look ahead, there's plenty of forecasts around. this is just one of it.
It's not ours, it's an industry forecast. But we see the demand for transport fuels, so in the transport sector, as being largely flat. But the biggest effect in this flattening of the curve is actually the efficiency of internal combustion engines, followed by EVs. But we also see an encouraging trend that's important for Circle K, which is ongoing growth in biofuels, both the traditional biofuels and advanced biofuels, which we believe are important and pragmatic solutions that we can bring to our customers every day and right now through dropping them into the traditional systems. Now, Brian said that he got a lot of questions on fuel margin at his table this morning. So, you know, let's get into it and talk a little bit about fuel margins.
I'm gonna talk about the U.S. market, and mainly because of its significance, but also it's a transparent market that we can think about. So if we have a look at these graphs here, we see that, you know, the fuel margin is following a fairly simple economic fundamental, which is fuel margin rising in line with CPI in this case, but you can trend this against a bunch of macroeconomic factors. We know that inflation has been high in the last few years, and that has abated somewhat with labor and, you know, other inflationary effects. But we do see cost of borrowing increasing, which is also important for operators in our sector.
When we look at break-even margins, and these are information that comes from NACS, and, you know, the gap in my chart here is just the COVID years, so we can look a little bit cleanly at the data. Hopefully, this gives you a really good indication of how much Circle K outperforms those small operators that Brian talked about in the fragmented industry. So if you're a 1-5 site chain, it's much more difficult to operate with the same cost base that we have, and, you know, we see this break-even margin setting the long-range trend for fuel margins. You also see on the graph that our ability to beat the industry margin continues to improve.
We'll talk about today that this isn't an accident, this is not just a chart, that we're doing many things to make that true today, but also into the future. So we believe that this trend will continue, and we also believe our gap, you know, between the smallest participants and the strongest participants, like us at Circle K, will continue to broaden. So then, if we look ahead, what does this mean? We know that from quarter to quarter, fuel margins will continue to vary. But you know, we're a long-range company, and we're focused on that trend, and if we think about all the things that are happening around us, we expect in the U.S. that the U.S. fuel CPG will remain in the low forties, and obviously continue to adjust for inflation and other market effects.
So let's come back to us and talk about some of the reasons why we believe that we will sustain this outperformance. Brian's already talked a lot about our Circle K brand and how important it is to us. You know, it's been a really critical part of what we've been doing over the years, but really, it's a symbol of the promise that we're making to our customers. For us, the promise we wanna send to all of our customers, whether they're individuals choosing to come to Circle K or businesses, that they will have a fast and easy experience, that we'll show them everyday value, and that we'll have the best locations and the highest quality fuels. The brand is important for us, to help customers recognize that that's the promise, that's the experience that they're gonna have for Circle K.
And so as you drive up to a Big Red canopy and the Circle K logo up on the MID, our customers are now understanding what that means. In Europe, we've been operating under the Circle K brand for many years, and you can see on the chart the progress we've made in North America, establishing 4,200 sites now out of our 6,400 globally operating under the Circle K brand. So I think as well as talking to our customers, letting them know about our offer, it's also important to help us operate in our in some of the other aspects. By having, you know, the Circle K brand, we buy ourselves flexibility and control in our fuel sourcing, and I'll talk a bit about that.
But it also helps simplify some of our back office systems and allows us to bring offers to our customers in a more consistent and quick way. So let's talk about B2C, so our consumers, the individuals that come and choose to shop at Circle K every day. You know, for, for fueling, we're selling convenience and time, and, and when someone's coming to fuel at Circle K, that's got to mean fast and easy. You'll hear from Aaron today about what we've been doing in our network, you know, the, the quality of our sites, making sure that we have the best locations and the best way to get to see a Circle K, and then get in and out as quickly as people can. But fast and easy isn't just done by having the best sites or the right sites.
It's done by a huge number of little things that are happening every day with our store teams. That might be simpler or quicker payment. It might be making sure our technology works every day for all the different types of customers that come. It's our store teams that we're really proud of, keeping our forecourts clean and tidy. It's having directional signage to help people come on and off the lot, and hundreds of other little things that our store teams commit to every day. We also think it's really important to show our customers everyday value. We know that there's huge economic pressures. Fuel is always a big spend item in our... for our customers, and so showing everyday value to our customers is really important. You'll hear from Kevin later about our loyalty programs, and obviously, they're really important for our fuel customers.
Often, you know, a loyalty program will draw a fuel customer to our sites. We've also been showing our customers value in different ways, and one of the, you know, biggest successes we've had over the last year is our Circle K Fuel Days, where we surprise and delight our customers by dropping the price for a short period of time, welcoming them to our sites, both our existing customers and new customers, celebrating their custom with us at Circle K. And if you look at the photos, you might even recognize a few faces of people running around our sites on those Circle K Fuel Days. And so, you know, as we go forward, we're, you know, looking to expand what we're doing. Loyalty, you'll hear from Kevin.
We're also working on other things, like broadening our payment options, making them frictionless, and also looking at things like cross-sell between our different mobility products, and you'll hear a bit from Aaron about our fuel and car wash cross-sells. If I move on to B2B, this is probably a hidden secret of Circle K's. Today, we have around 60 million transactions a year, by business customers coming to our sites. And so, you know, we think about Circle K as a consumer-facing brand, but actually, we have many relationships and a lot of traffic coming from business customers. This has been a big strength of our European business, who have got long-standing and direct relationships with a broad range of businesses across all of the industries that use transportation, fuels, and mobility.
But in the U.S., we think that this is an under-indexed opportunity for us. So let's talk a little bit about why it's an opportunity for us and at Circle K. The first is probably the obvious one. You know, the U.S. market is the world's biggest fuel market. It represents 20% of the globe's fuel demand, it has around 282 million vehicles on the road, so a pretty huge number. And we estimate that the number of commercial and publicly-owned vehicles is around 50 million of that fleet, so, you know, about 20% of the fleet. But importantly, those vehicles are driving further, and some are the more reliable or predictable customers. And so you might ask, you know, "Why haven't we gone after this opportunity before?" Well, firstly, we.
You know, Brian talked about our history operating under a range of brands. That made it difficult for our customers to recognize our network, and also on the backside, for us to bring a consistent and direct B2B offer to our customers. So, you know, we talk about the brand unlocking value, this is another place where having our own Circle K fuel brand unlocks value, both in terms of the customer being able to see us, and, you know, in terms of being able to bring a consistent offer to those customers. And obviously, you know, having the ability to do this doesn't just, you know, mean it happens. This is something that we've, you know, decided to focus on as well, which honestly, in our history, may not have done as much.
So you'll see some charts here as well about the fleet size and the types of vehicles that are happening and the types of transport. We believe that the over-the-road sector, so the big trucks running along highways, there's lots of networks servicing those customers really well, big trucks and highways. But we see a trend towards regionalization of transport, so where more fleets are operating in local areas, so shorter haul rather than these long-distance transports. And so that's a natural fit for our network, and so we see our opportunity to capture that opportunity there. We also, you know, are showing some data that's largely for large trucks, but that's just 'cause it's easy to get your hands on that data.
We also believe that fleet applies on any type of vehicle, so from the biggest to the smallest vehicles. So what are we focused on? In Europe, we'll continue to build on our strengths. So we see the, you know, types of mobility evolving in Europe, and we know our customers are looking for Circle K to bring different types of mobility solutions, the businesses we work with. So we have this opportunity to broaden across EV, advanced biofuels, or other fuels as they evolve. And you'll hear a bit from Håkon later about B2B in context of EVs and e-mobility. In the U.S., you know, for us, it's about making sure that our customers know we have a good offer in B2B, so recognition, building direct relationships, and then making sure that we're meeting their needs.
You know, we believe that there's plenty of opportunity to have direct relationships in the U.S. with the range of businesses that are operating. This is one of the areas where we think scale really matters. You know, as we build out our scale in B2B and as we build out our scale in other programs, we have the ability to bring that to our business customers. That might be with driver loyalty, it might be with frictionless payment systems, it might be with mobile apps. Because we have the scale globally, we're able to build that across Europe and the U.S. as we develop these relationships. The last one I wanted to talk to is our fuel supply chain, and Filipe talked earlier about the work that we've been doing here.
We've built two platforms, but following the same philosophy, the same principles, across our geographies. So as we know, the fuel brand allows us to do this, so by having flexibility in our sourcing arrangements unlocked through the fuel brand decision, we're now able to establish these platforms. In the U.S., we have our strategic partnership with Musket, and, you know, we have a team based in Houston that are working today, every day with our suppliers, with Musket, and, you know, with our logistics team to look at all the different opportunities in the broad U.S. market. Similarly, we've established a capability in Geneva, which is one of the trading hubs of Europe, and where we see the intersection of, you know, the traditional fuels and the biofuels market, which is critical for our European business.
We have some common principles that underpin what we're building. This is not, you know, a setup that's designed for anything other than the Circle K system. You know, we believe that this supply chain capability is there to supply our stores and nothing else, and we maintain a conservative risk position across everything we do. Maybe if I just give you a little example of what the sorts of opportunities we're capturing through the capabilities and draw some parallels between the U.S. and Europe situation. In the past, we had locked-in contracts with one supplier for each of the geographies we worked in, and basically, we just set and forget. We would just buy the fuel, deliver the fuel from the same place to our stores every day.
Now, with the flexibility we have, we're constantly looking to the markets as they move around, and we say each and every day, and then actually in some cases, each and every minute and hour: "Where's the best place to be buying this fuel for this store?" And we then identify opportunities, often in adjacent markets, where we say, "Hey, we can buy that same fuel and bring it to an adjacent market at a lower cost." So that adjacent market, in the case of the U.S., we might move it by truck, across, you know, a geography, so we might transport across a couple of states. And in Europe, we might put it on a ship and move it across different geographies.
But we're following the same principles of being outward-facing, understanding the market, being dynamic in our decision-making, and controlling our supply chain each day. As we've established these capabilities, we continue to see more and more opportunities that follow this trend, and so we're, we're confident we can continue to deliver value and create the sustainable advantage that we have in our fuel supply chains. So then, if we bring this all back together, what does this all mean? So we know we operate in a highly competitive market, and we have a mature product demand as well. But we're not afraid of that challenge, and we believe that we can continue to win in even with those challenging circumstances. We have built the foundations over the recent years in our brand, in our offer, in our supply chain.
We have a track record of outperformance, and we have our global scale. So this winning formula will allow us to gain share in fuel, one of our five focus areas, as well as maintaining our sustainably advantaged margins. And that's why we're confident to promise an additional $400 million-$600 million of EBITDA across the strategy period. So that's all for me. I know you're excited about that promise, but you're probably even more excited about a break. We've got a 15-minute break coming up, and so that means we'll return for the next presentation by Kevin and Alex at around 9:30 our time. Thanks, everyone .
So hello, and welcome back. Bonjour à tous. I'm Kevin Lewis. I am the Chief Growth Officer here at Couche-Tard. I have spent my career at the intersection of retail, technology, and globalization. I'm coming on seven years here, and I couldn't be more thrilled to be a part of this journey. I get the pleasure today, with my partner here, Alex, to talk about winning the customer, something that's dear, obviously, to every retailer's heart. This is generally, by the way, when they trot out the marketing guy, and you get to sit through 25 minutes of flashy commercials and loud techno music. I promise you that's not what we're gonna do. Candidly, it's not who we are, and it's not how we roll.
But our brand is incredibly important to us, to our customers, to our shareholders, so I wanna talk to you about how we are building it. It and it candidly is similar to what you've been hearing along the way: leveraging our physical footprint, focusing on the occasions that matter to our customers, and using the right level of scale to drive differentiation in ways that nobody else could. So let me give you some examples, and if I start on the left side of this page, and you saw it from Louise: using our stores around the world to drive Fuel Day and Circle K Day, getting new and existing customers to understand who we are, what our offers look like is a huge advantage we have to those who don't have those physical locations or who don't have the kind of staff and capabilities we have.
Takes advantage of who we are and what we do every day. Secondly, in the middle, no surprise, thirst, fuel, food are the constant reminders of why we are relevant every single day, sometimes multiple times a day, to those consumers. And lastly, and something I'm particularly proud of, is the use of scale to drive differentiation in ways that, quite honestly, no one else is able to. If you look at what we did in Purple Thunder, I hope many of you try it today if you're here in the audience. It's an exclusive flavor of Mountain Dew for Circle K. It's one of the best performing SKUs in our collective history with that vendor.
If you look at what we've done, and by the way, I assure you, I had no influence over this, our global partnership with Messi just before the World Cup win was our opportunity across geographies to hold hands and create a promotion that otherwise wouldn't exist. And on and on and on. Our brand is developed not through flashy campaigns, although we have plenty of those, and we've won more awards for them this year than we have in our company's history, but through the hard work across our physical assets, focused on the relevant occasions, and equally on the scale and differentiation that gives us great things. Now, we're just getting started. As we talk about winning the customer, an important part is using that knowledge we have with them, that personal relationship, to do even more and leverage those capabilities even more fundamentally.
I want to show you a little bit. You all have the little notebooks. It shouldn't be a surprise. Inner Circle and Extra in Europe are membership programs. I want to give you a little flavor, and then we'll talk more about it. Let's hit the video.
Every day feels easy! Through any kind of weather. We'll get there together. It's easy. Every day feels easy. Whatever life is throwing, we'll just keep it rolling. It's easy. Yeah. I love to see your smile. It's giving everything I need. Oh. It really don't take much. Baby, it's the simple things. Oh, I love your happiness, and the way it looks on you. So whatever it's gonna take, that is what I'm gonna do. Yeah. Oh. Every day feels easy. Through any kind of weather. We'll get there together. It's easy. Every day feels easy. Whatever life is throwing, we'll just keep it rolling. It's easy. Every day feels easy. Every day feels easy!
A little flashy music, I know. I am thrilled that you are here with us today, so we can show you what Inner Circle really is. But let me give you a sense of what it means for our consumers and also what it means for us as a company. For consumers, three pillars off of which we've built our membership programs. No surprise, value. You've heard Alex, you've heard Brian, you've heard others talk about it. Consumers searching for value, especially in these economic times, is an important thing to make sure we acknowledge. But candidly, if you're not careful, that simply becomes a bidding war. What we believe is the real opportunity with customers is in two other things: in ease and in personal connection. Creating experiences, creating products, creating services that only we as Circle K are able to provide.
We'll show you some examples in a moment, but those three pillars, value, ease, and personal connection, are the essence of our loyalty program. For us, as a company, openly, we know that getting more personal, more individualized, better understanding of who our customers are, what they want, and how to help them, but most importantly, how we make money, is important. Collecting data is the. literally the lifeblood of these programs. That allows us to do three things. For our best customers, defend them. Make sure they don't go somewhere else. Two, for folks who are actually pretty profitable today, see if we can do more to make them more profitable.
And then lastly, how do we identify that set of customers who has the potential to be the valuable customer of the future, where we can begin to test into: how do we drive them more often to our stores? What do we need to do to attract them? How do we use the power of what we know about them, plus our assets together, to increase their lifetime value? We believe those are symbiotic. These aren't actually competing interests. We and the customer are aligned in our desire to save time, save money, and on our side, make more money and deliver the brand promise. What that says, in both Europe and North America, is we've created a tiered program. First time we've rolled it out in Europe. Europe's had a program called Extra for over a decade.
As you spend or visit us more often, your benefits increase. No surprise there, but that is an interesting parallel. It says that means as we know more about you, we can know what to talk about, how much to spend towards you, and how openly you're going to be interested in some of these other services and products. Our vision over time isn't simply to drive coupon use and discounts. That's not what you'll see from us. Of course, that will be part of the program, but long-term, driving more experience, more ease through our Inner Circle and Extra programs, is exactly the game we play. And we believe that's fundamentally different than what you'll see in most of the loyalty programs across the world, not only in our channel, but in retail more broadly.
It's a really important difference that I hope you take away, and I hope you feel it today, for those of you who are visiting stores. What that means in practice is uniting two worlds. On one hand, every touch point that you have as a consumer, we need to make sure we understand who you are, what you care about, and make it as easy as possible. If you're at the dispenser, if you're at the Smart Checkout, if you're on the app, if you're on the website or any of those other touch points, we've brought them together. That is a technology LIFT that you might imagine is heroically large, and with Ed and his team have made it happen. The other side of this is making sure that all of the different products and services that we sell are ultimately aligned.
Whether you're a B2B customer, as Louise has talked about, whether you're part of our subscription services, if you're an EV customer in Europe or in the U.S., how do we make sure these come together, both from an experience point of view and a product point of view? That's really what Inner Circle is, and we're super proud to have launched version 1.0 in the U.S., and we continue to use Europe, who's further along, as a test bed to make that happen. So I know you like numbers. I like numbers. I'm gonna give you some. Right now, as we sit here, there are about 1,900 stores that have launched Inner Circle. Our plan this year, candidly, was 400.
We've had such demand from our consumers, our BUs have been so supportive, and the operations folks, I just can't be more thankful for, as they have really embraced this program. We will be at roughly 3,000 stores by the end of Q3 this year, and this is North Ame—these are U.S. numbers, 4,000 stores in the U.S. by the first half of 2025. You can see the Europe numbers. Remember, Europe already had a program. This is moving their existing Extra program to the new program that we've got today. Now, the video you saw said 2.7 million members. That was true when we made the video. As of this morning, we're over 6 million members in the United States. We cover one out of every five transactions, both on the fuel side and the merch side, and we are just getting started.
We need to prove financially this works, and I assure you, the idea of reinvestment rate, making sure we're reinvesting the money that they're spending towards this program on the right customers in the right way, is absolutely a key piece of this. This is going to be driving our marketing strategy going forward. Now, there's a little number in the corner that may have had your attention, I imagine, which is $200 million of EBITDA. You're not going to see a line item that says loyalty. Let's be clear, that would be silly. But inside of fuel, inside of merch, inside of our costs, we believe that these programs play a role in driving incremental value. My team is going to be measuring ourselves, and we are going to be holding hands collectively as a team to beat that 200.
But that's the number we've got on the page today. You may be wondering, because there are some Canadians in the room, what happened to Canada? I'm aware that there is a country called Canada. I know it is not on the page. The reality is our fuel brand partners are so strong in Canada today, that it would be silly in the near term to develop something that sits on top of that. The focus is on the U.S., the focus is on Europe, and I promise at some point in time, just as the unlock was in the U.S., which was the rebranding, right now as we have those fuel partners in Canada, we continue to focus on the U.S. and Europe as those areas, okay? It's not an oversight, it's intentional. Good. I'm going to move on. I promise this isn't a typo.
I want to talk about the present future. In other words, stuff that exists today that feels a little out there, but is an inherent part of our business. We look to technology and new experiences for three things: cost efficiency, making it easy for our customers, and making it easy for our staff. You'll hear about Smart Checkout. Hopefully, many of you will see it. You'll see a lot of technology, a lot of new processes and systems in the store, but you'll also see under this umbrella of digital acceleration, the use of data and insight to combine with these things. And one of the areas we haven't spent a lot of time on that I wanted to just touch on, is a program that we have called LIFT. You may have heard of a retail media network.
Many other retailers have them, they play ads, they get paid for the ads, whatever, it's nice. We have something pretty unique. We have a digital upsell network. So think about today, if you were to walk into a grocer and they said, "Hey, as you're checking out, did you know that you can get chicken breasts two for one? Tell you what, just, we'll wait here. Go back to the store, grab the chicken breast. Don't worry about all the other customers in line, and add that chicken breast to your cart." You'd never do that in a grocery store. But in our store, the ability to, at the time of transaction, personalize an offer, add it directly into the basket, and post-transaction, have the consumer do the fulfillment, is a behavior that is unique to us with the infrastructure and technology to make it happen.
Could be in an age-restricted area, could be in beverage, could be in any part of the store. You might say, "Well, that's pretty interesting, but we like numbers." Well, let me show you some. Over the last 12 months, we've made over 600 million offers to consumers using this technology and this capability. All of our operations team is trained to do this. There is a customer-facing and associate-facing screen. Of that 600 million offers, 100 million times they've said, "Yes, please," added something that when they walked up to the counter, they weren't planning on purchasing. Not necessarily something random. We're not there to be evil. We're there to say, "These are things you might like that are logically consistent with what you are buying." It's 150 offers per store per day, 15% conversion rate. That is now expanding to Europe.
That is net new news for all in the room. There are now thousands of stores that have this capability that did not. We will also continue to take this and now integrate it with our Inner Circle and Extra programs to make those even more logical and more personalized. Next, you can't have all of this without some sort of home. Our new global mobile app, what we call GMAP, is a global ability using one technology platform to localize as a consumer. Sometimes it has EV, sometimes it has switch for car wash. It will have offers. It is your digital hub. We've had over 2 million downloads in the U.S. We're approaching about half of that number in Europe, and about 15% of that base daily use that app. Not weekly, not monthly, daily.
But here's what I love: When we hold hands and get this right, when the technology teams, the ops teams, the shared services teams, the fuel teams, all of us hold, remarkable things come out. That app is a 4.9 rating in the App Store right now, 4.8 in Android. I guess Android users don't like it, but more importantly, I just think they're more difficult. More importantly, the day we launched Inner Circle in Florida, we were the number seven retail app in the App Store. I don't think you would have expected that from Circle K historically. We are massively investing in Inner Circle, not dollars, but time, energy, and resources to make sure that what we're doing, consumers really like. The combination of Inner Circle and LIFT give us data at an unprecedented scale. That data plugs into our data and analytics team.
We have three hubs in Oslo, Delhi, and here in Tempe, and allows us to do a variety of things to understand our business better. Sometimes that's in loyalty, sometimes that's in fuel, sometimes that's in real estate, sometimes that's in pricing. But the combination of those two, from our perspective, is an unlock that most other companies can't figure out and helps us solve problems like where do we put our stores, how do we think about our competitive set, and what do our customers need? None of that is possible without operations, and so I want to invite Alex up to talk about ops, because this is the core unlock. How do we take our digital capabilities and bring them together with our people? So hopefully, you've learned a little bit. Please sign up for Inner Circle, and I'll hand it over to Alex.
Slower than our staff, and in our pilots, received very poor NPS scores. We are approaching having 3,000 of these units deployed. We have utilization rates at 50% of eligible transactions. We will be on an annual run rate of removing 2 million hours by the end of this fiscal year. Just pause and make sure you got that. Ed and our tech teams, and you heard Kevin talk about it, are working with our Smart Checkout vendor so that our digital experience and payment options will be the same as our primary POS. The consumer will see no different. These units help significantly at peak traffic times to minimize lines and support our staff. A final benefit is that at stores with evening security concerns, we have gone to Smart Checkout only, with our employees having no access to cash.
This has proven to be a strong deterrent. Next, I'm gonna turn to Easy Office, what we call Easy Office. We established this in our fiscal year of 2022. This is a combination of our operations excellence teams and our shared service and accounting teams that Kathy leads. When we started, this slide highlights that we had an average of 73 administrative hours per week, per store. These are hours that our staff is not cleaning, not stocking, they're not engaging with our customers. We classify these as non-value-added time. Over the past two years, we have removed 26 of these hours. We aim to take another nine hours out by the end of this fiscal year by executing the things you see on the left side of this slide.
Every hour we take out represents $7.5 million annually across our network. Our focus currently is on removing paper, reimagining point of sale, further utilizing AI to prioritize work, and moving our manager workstations to the front checkout, so they are always present with our staff and customers. Kathy and I's ultimate goal is to remove all administrative hours, and we believe the technology and process will become available for us to achieve this at some point in the future. Turning now to inventory management. We recently launched a new AI-driven, holistic inventory management system across Europe. This enabled our on-shelf availability to what is now above 98% from the low 90s before we deployed this system. Further, we realized material working capital savings, and as we have less backstock.
Last, we have much better space allocation, analysis, promotion, and merchandising effectiveness reviews. We are now focused on deploying across North America and will do so over the coming 18 months. Once we are complete, we will have all of our data in a highly usable, consistent format to monetize to interested parties. We are pleased, as you heard from Kevin, with the initial results from our Inner Circle launch and are accelerating the pace of rollout. Our digital journey is about creating one common platform that is easy and our customers recognize as, as providing value and improved experiences. We believe we can further differentiate our consumer experience through the deployment of tech and improved processes.
Our scale enables this differentiation, and our ambition is to realize $200 million-$400 million of incremental EBITDA over the five-year period of our strategy. Thanks! And I'm now gonna hand it over to JP and our panel, I think. I hope. Yes? Okay, okay.
Good morning, everyone. We are now ready for our panel discussion on the foundation. The bedrock or foundation is very important as it outlines some of the key enablers that will allow us to deliver on our four lighthouses. This section also defines who we are at Couche-Tard Circle K, and talks about some of our core values as an organization. With us today for this panel discussion, we have Ina Strand, Chief People Officer, Ed Dzadovsky, Chief Technology Officer, and Niall Anderton, Senior Vice President, Operations. Ina, I would like to start with you. Before we get the customer-centric team, may I please ask you to introduce yourself?
Sure. So I'm Ina Strand. I joined Statoil Fuel & Retail over 20 years ago, after first working five years as a management consultant. I've had several roles across the business in operations, in marketing, and when we were acquired by Couche-Tard, I was leading up the European marketing organization. I later worked with the Skyfall project or the rebranding to Circle K, before I moved to the U.S. six years ago to become our first Chief People Officer.
Thank you, Ina. We just heard Alex talk about how a customer-centric team supports fast, friendly, and in-stock, and the base of our operations. With turnover and labor shortages as a big issue for the retail industry, especially during the pandemic, how can we sustain consumer-centric teams?
Yeah. So I'm glad to be able to share today that we are seeing some significant improvements in our labor force. If you look at the graph to the left over here, we are making tremendous progress in bringing down turnover, has been one of our most important challenges on the people side. But even more importantly, on the other side, you can also see that we have much greater access to talent. So this is the uptick in applications to our to our jobs, and it's been increasing year-over-year and on a stable 40% the last two years after the pandemic. While part of this is a correction in the labor market, you probably see this across many other organizations, it's not just the market.
We've had this as a big priority, and we've had some really smart people putting together some very successful programs, from improved career sites to self-scheduling of interviews, instant hire process with pre-qualifications of qualified applicants, and we've also been strengthening our employer value proposition and the way we present ourselves to candidates. And last, as you heard Alex talk about recently, we've also leaned into the gig economy and have access to a quite new labor pool that works in a different way, and that has been alleviating a lot of the pressure on our teams and is becoming a competitive advantage for us.
Those are great news, Ina. But with a 100,000-plus workforce, we still hire quite a lot of people new to retail. Must be a real challenge to train them and develop them as customer-centric team members, no?
Yeah, and, you know, we still have high turnover. Some of that is seasonality of our industry. So we bring on board, on average, 250 people every day. So think about that number. So obviously, training all those new people is a big focus for my team. And from thinking about this onboarding process in 30, 60, 90 days, we've learned over the last few years that this is really about winning the first day, and then it's about winning the first 40 hours. So to support that, we've totally revamped our onboarding practices. We've introduced much sharper content, engaging videos, a buddy system where someone actually helps you get used to the new job. We've introduced gamification, which we will talk about a little bit later, and some of you had the opportunity to try that. But also built-in alerts.
So when now in our new onboarding program, someone reports a bad experience or don't feel ready for the job after completing the program, there's alerts going to the market manager that can intervene and see what's going on at that particular store. So today, we can say that at day 14, 96% of our team members that are going through this new revamped onboarding are feeling ready for the job. So that's a huge improvement, double digits over what we saw before.
That's great. So now we have hired them, we have trained them. How do we keep these new team members, especially in operation roles?
Yeah, and same thing with the pace. After 30 days, we switch to retention tactics. So where we before were on onboarding thinking, now we're all about retention already after 30 days. Our award-winning culture that you heard both Brian mention in opening and Alex talk about is really the key. We have now twice been awarded Gallup's Exceptional Workplace Award, one of the very few businesses of our size to win it once, and let alone twice. People j oin organizations.
Do we have a? Okay, it's back on. People join organizations, but they leave leaders. In our case, they often stay because we have very leaders. So leadership is based on our analytics, the single most important factor impacting our retention. Do we have another maybe? All right. So leadership is the single most important factor that is impacting our retention the most.
There you go.
That's why we have focused on leadership development. You saw a video earlier, and Alex also alluded to it. Thank you. That over the last three years, we've had all of our regional directors and around 800 market managers through leadership training. Currently, we're in the process of having over 7,000 store managers in various levels of leadership training, and that's specifically targeted to the opportunities we have at our store level. On the picture behind me, you see a crowd of those smiling store managers with our trainer, Paul, and they're having a great time learning about how they can better retain their people at the store level.
Thanks, Ina. While I have you, and now that you have a well-functioning mic, let's talk about responsible retailer. In other words, sustainability, which is also under your purview as CPO. We know this is important to many of you with us today, and what we're seeing on the large screen are pages from this year's sustainability report and our ambitions and initiatives. Please tell us more about our work here.
Yeah, and Brian again alluded to this in his opening with our values, that do the right thing has always been one of the fundamental values at Alimentation Couche-Tard. So when I took over the responsibility for our sustainability efforts, we already had a lot of things going on. But over the last few years, as we have been progressing on this journey, we have established goals for both 2025 and 2030 that you see on this page. We have been focusing on transparency and really stressed that, and made more of the work available, both our actions and our goals available on our pages.
And then we've been converging to the known standards for sustainability reporting, our SASB and GRI, and most lately, the TCFD, to make the work that we're doing in this space easier to access and more transparent for those who are interested. I'm really proud to see the progress that we're making. Our ESG rating agency are also recognizing that we are improving, like Sustainalytics, and recently we were upgraded to a double A with the MSCI. But we're not really doing this for the ratings. It's back again to our culture and do the right thing. This work is really important for our customers. It's more and more important for our team members, especially the younger generations, and as JP just said, I know it's an important theme for many of you in this room today.
Meeting sustainability standards is increasingly becoming a part of the license to operate in most countries that we are in, and in addition, it becomes more important to any consumer brand and employer brand. Simply put, sustainability is good for our business.
Great. Great. Thank you, Ina, and last question for you, I promise. Can you please give us some concrete examples on how doing the right thing for our planet, people, and prosperity is also good for our business?
Yeah, and we already heard from Louise about our mobility work with both biofuels and EV, and you will hear more from Hans- Olav on the same topic later. But those themes are really becoming a competitive advantage for us with consumers, and especially in the B2B segment. Other things we could mention are energy savings that we have targeted with ambitious targets as well. They're very good for the planet, but they do translate into real dollar savings on the bottom line. And the same is true for our packaging and waste. When we're eliminating 40 million single-use cups like we did last year, that translates into bottom-line effects as well. And we're proud to see programs like our Too Good To Go that we have launched.
We have been able to sell over 1 million meals that would have gone to waste, bringing benefits to both our customers, to the climate, and it's minimizing our spoilage. While our programs of bringing down robberies and injuries were developed with care for our people and communities, a positive side effect is reductions in losses from both our claims and from theft. Promoting diversity and inclusion is a key component of our culture of growing together, and it's critical to continuing to be a preferred choice for our diverse customer base. Last but not least, I want to mention our community engagement. These campaigns create a lot of engagement with our consumers.
We collected $2.7 million to Ukraine in a few short weeks, so a huge engagement with our customer over the same topics, and the same is true for all of our youth at-risk campaigns that we do across Europe and many of our activities in North America, as well as in our Hong Kong business units. So as we continue to apply sustainability as a lens to our view our business, we're also improving our business in many different ways.
Thank you, Ina. I will now turn it over to Ed to discuss the broader topic of IT. Ed, can you please introduce yourself first?
Yeah. Hi, everyone, Ed Dzadovsky, CTO for the organization. I'm coming up on six years with Circle K, so started just before the Double Again strategy. Prior to that, over 20 years with McDonald's, going from a crew person in a store to doing digital transformation in the largest countries around the globe. I could not be more excited to be doing digital transformation here at Circle K, partnering closely with Kevin and Alex on some of the really cool technologies you just saw and you'll see later today in the stores. I'm based here in Phoenix, Arizona. Welcome, welcome to Phoenix.
Thank you, Ed. As we can see on the slide here, Ed, you've recently refreshed the global tech agenda, which plays a star role in fortified fundamentals. You call this strategy Modernize, Automate, Hyperscale. Can you please define what this means?
Yeah, Modernize, Automate, Hyperscale just rolls off the tongue, right? The words are tough, but I promise you the meaning behind it is very relevant and resonates with our key stakeholders. I love this question, and for all of us, if you think about tech and retail, or maybe you don't think about tech and retail, the focus is traditionally on organic growth and fuel margins and operations, and that's okay. In our space, that focus on the core business has given us some air cover. You know, we were kind of behind the scenes, and so the tolerance for speed to market and the tolerance for quality was a little more moderated, gave us a lot of room to operate. Today, tech is front and center.
It's at the center of our customer experience, it's at the center of our employee experience, and the entire executive leadership team here, and many of you are paying attention now. So our strategy had to fundamentally change how we operate in meeting changing consumer behaviors and expectations. So modernize. Modernize, for us, is all about upskilling our tech teams. It's enhancing processes and tools. It's moving to agile development. It sounds like a buzzword, but it's so important in our industry, and it's investing in new capabilities. We don't do a whole lot of automation today, so we're moving to automate our service desk, we're gonna automate our infrastructure, we're gonna automate testing and deployment, and we're gonna reduce our effort on repeatable activities to make sure that our teams can focus on the most important strategic parts of tech.
We're going to be more proactive in solving problems. We want our store teams to never know that they have or had a tech issue, so we'll be doing some work behind the scenes to simplify that for them. Last, hyperscaling is about operating at the size and scale of Circle K around the world. Having platforms and systems that can enable 6+ million digital transactions to flow through them. For us, to sum it up, we're making key investments in these three areas with a laser focus on speed and quality.
Very, very clear. Thank you. As a follow-up to that, how do you envision this will enable or power the lighthouses and ultimately our stores' performance?
So this is a long-term strategy. It's got multiple programs that run through it. You know, it's focused on people, process, tech, and cybersecurity. And I would love to talk to you all day long about the things that are in here, and I'm happy to talk after this when we're on the bus visiting stores. But I'm going to highlight a couple of the things that are a little bit near and dear to our hearts. We've got a program we affectionately call Reimagined Retail Systems. So it's a program focused on modernizing our ways of working. For retail systems, it's all about leveraging automation, and it will be focused on delivering with quality and speed to our markets. More specifically, implementing agile, streamlining deployment, and implementing proactive monitoring tools. So why is this important?
Today, when we deploy new capabilities to the stores, it can take months. We're working to do this now in a matter of days or weeks with minimal downtime to the store. So we want to activate an Inner Circle or a Smart Checkout. It doesn't take half a year to do that. So the teams are building tools to, you know, also identify and resolve issues with those technologies before the employees are even aware, and then deploy software upgrades with minimal to no downtime for the stores, not introducing any new defects. This work has already started, and we're super excited about the benefits that come with it. I want to talk for a minute about CGI. So you might have heard that we just entered into a 10-year strategic partnership with a managed service provider.
We expect some really significant benefits out of this. You know, the traditional stuff, predictable outcomes, well-defined SLAs, flex capacity, so as we need to scale up on big initiatives, we'll have the ability to do that through CGI. Again, they're going to bring boatloads of automation to the table for us that we'll leverage across our tech stack. And a bench strength, a global bench strength, tapping into new talent markets around the globe. We'll consolidate a lot of our services to one vendor, which will really simplify our world. And last but not least important, reduce service and support costs with a predictable and managed budget. It's a large operating model change, and the question often comes up, you know, why CGI? They're a company that gets our complex environment.
They're able to bring us talent, they've got great automation capabilities, and some really great leaders doing strategic thinking, that we know will supplement our people and our culture very, very well. Finally, I want to put a spotlight on a proprietary cloud services solution that we believe is the foundation to our digital capabilities. This platform allows us to launch new program and capabilities to our stores and our customers faster than ever. We call it our Next Generation Retail Platform, or NGRP for short. And you heard from Kevin about loyalty earlier. NGRP is the platform that enables us to deliver loyalty with speed and scale across North America. The same proprietary solution also enables our Smart Checkout, which you're gonna see later in the stores today. And I will tell you, this is something our competitors aren't able to do.
It's our secret sauce, and we're just getting warmed up. These are just the tip of the iceberg in our modernized, automated, hyperscale agenda. I'm looking forward to spending some time with you later today. Again, happy to take any questions you have or talk tech throughout the afternoon.
Thank you, Ed. This is fascinating. Now pivoting to you, Niall, on the topic of Fit to Serve. Why is this part of the strategy, and why now? But before answering this, can you please introduce yourself to our guests here?
Yeah. Thanks, JP. My name is Niall Anderton. I'm the SVP of Operations and the token Irish man in the room, I think. I've been with the business now almost eight years, in various roles. I'm actually a finance guy by trade. I joined the business under the guise of Topaz, which was the Irish entity that Couche-Tard acquired eight years ago. And then moved in to run the Irish business unit and then more recently into SVP of Operations, running many of our business units in Europe. And back in January, Brian and Filipe's predecessor asked me to step away from my day job to run this Fit to Serve project, which is a huge, hairy goal. So I'll explain it now in a second to you. So you asked me, what is it? Well, and why now?
I suppose Circle K, Circle K has always been a very lean operation. You know, it's been at the heart of our DNA since the start. Fit to Serve is the next journey, next stage of that journey for us. As you saw, cost optimization and Double Again achieved a $400 million, hit the goal of $400 million, which is fantastic. This time last year, when we were setting up the strategy for the next journey, we were talking about, you know, the headwinds that we could be facing as a business: high inflation, high interest rates, wage pressures, geopolitical challenges going on. We said we had to put down a big, hairy goal to make sure that our business was lean for the future and set the bedrock.
I think the goal we put down is meaty. It's $1.2 billion of a target we're going after. So I'll repeat that again. $1.2 billion, we're going after, $800 million of EBITDA and $400 million of balance sheet improvements. Now, it has to be sustainable for us because, as I said, we're a very lean organization, and our approach has to be sustainable. Anyone can go off and cut costs, but for us, we're a successful business. We need to make sure we're looking at things differently and how we're gonna do that. You heard earlier, we're gonna start leveraging our global scale better. We're gonna challenge the ways we do things and why we do it. We're gonna reengineer many of our processes. We're gonna reassess how we resource our capabilities.
That's the people we employ, and you heard from Ed in terms of CGI and how we work with partners. We're gonna look into our supply chain and how we procure. Finally, we're gonna use data to drive some value. As a result of this formulaic approach, that's how we got to our target, and I'm glad to say we're on that journey.
That makes perfect sense. Thank you. Now, can I please ask you to walk us through the main areas on which Fit to Serve will focus? As I'm fairly confident our guests here in the room, as well as online, are very curious about the components leading up to that $1.2 billion figure you just mentioned.
Yep, it's not pie in the sky. We've got some very specific targets and some very specific areas we're gonna look at. So we have seven work streams established, and we probably got ahead of our strategy by establishing these back early this year when I stepped into the role. And those seven work streams are, I'll go through each of them. The first one is costs of goods sold, and we've given this a target of $200 million, and this is basically all the products we buy from our suppliers and sell. Now, that doesn't mean just negotiating better. We're now gonna start using data, and we're gonna make sure that we're using customer-led information to drive some value in that. The second area we're gonna look at is goods not for resale.
The primary focus of the Double Again cost optimization was in this area, but we're gonna have to go deeper. We're looking at our electronic card payments. We're looking at our IT spend, professional fees right across the board and looking at how we procure. We're looking at our supply chain. We're looking at how we source our goods right across the business. So looking at new opportunities in terms of new markets, in terms of bringing products into our business. The third area is general and administration, and this is really the support cost in the business, and this is what we just spoke about, CGI as an example, looking to see how we can resource capabilities better, and get them obviously in a different way, partnering with partners that can bring value.
But it's also looking at where we are replicating tasks in the business and making sure we're as efficient and lean as possible. The fifth area is. Sorry, the fifth area, fourth area, sorry, is store operations, and this is the nuts and bolts of what you heard earlier in terms of our labor costs, our labor modeling, how we remove inefficiencies in our stores, cleaning costs, security costs, et cetera, right across that. The last piece on the P&L EBITDA impacting is fuel controllables, and this is looking at our logistics efficiencies, looking at the fuel shrink we lose, and optimizing our forecourt spending. So those add up to an $800 million EBITDA impact.
Then, going on to the balance sheet, we've identified two specific areas that we need to go after, the first being CapEx, which is a $200 million target. And this is really looking at reengineering how we buy our capital products, looking at how we reimagine them, and looking at just different ways of approaching that. And that goes right across everything. So you're, you'll hear about EV later on, the spend. You've heard about the, and you'll hear about the new sites we build, et cetera. We're looking right across the chain there. And then finally, net working capital. You know, we set ourselves a target here, a significant target, again, of $200 million.
And I think this one, we've got a lot of room here in terms of AP and AR stuff, looking at eliminating prepayments and all that type of stuff, managing our inventory, et cetera, the usual stuff, and we're getting after that as well. So very specific targets, very specific areas. We've stood up all the projects, and we're in good shape.
Wonderful. Thank you. One last question now for you on Fit to Serve. What kind of traction are you seeing thus far, six months into fiscal year 2024 on, Fit to Serve?
Yeah, it's going very well so far. We are, as you'll see in our first quarter results, we are seeing some of these benefits coming through already. So we got ahead of ourselves in this, this program, and you can see from our first quarter results, the OpEx in the business grew 2.9%, and normalized OpEx at 3.7%, which is behind inflation and significantly down on last year's increase in costs. So I think we've got the right side of inflation now in the business, and these initiatives are really adding value to the bottom line, so it's going very well.
Thank you, Niall. Very, very comprehensive. The last question here will be for you, Ina. As we close this panel section, can you please talk about Customer Star and the importance this plays into our training strategy, which you highlighted earlier? And also, may I please ask you to announce our winner?
I will. So I hope you had fun. I know some of you have tried the Customer Star and had a good experience with that. So I'll get back to the winner in a second. Just a few things about gamification. That has become a really important part of our overall people strategy. And if you tried it or you can see it on the picture here, it recreates the life at the store in a very credible way, and it takes the audience to where they need to be when they're learning, and it allows us to reach this big group of employees in a very engaging way. Obviously, this can be made available on everyone's individual device, which is important for our younger team members.
With Customer Star specifically, we have several different gamified modules supporting all our different programs, from food to fuel to safety and whatnot, but Customer Star is really targeting to educate our people in sales and service, hence underpinning this customer-centric team focus that we have in our strategy. We're teaching them all the basics in the stores, meeting customers, upselling, and when not to, and it helps them understand our loyalty platforms and how they can really help present them to our consumers. All in all, we think this is a good program for us, and we are pleased to see that the sales are following the launch of this program.
So when we do introduce Customer Star, our baskets increase, the upselling is better in all those stores, and if we ask our people how they feel about it, I think the key number on this slide is the 94% that better understands what it takes to be delivering a good customer meeting. So all in all, pretty successful. There's one of you who did better than the others, and I'm not so surprised when I saw who was topping the list of attendees here on this conference that had done this. This is our good friend, Irene Nattel. And Irene, I have something very special for you here. If I can hold it up. It's a T-shirt. What else would you want? I mean, when you win something...
And it says, "Winning the customer has never looked this good on me. #BeatBrian." You've deserved it. Because you did actually beat Brian, and you did beat JP as well. So that's something to take back in addition to the T-shirt. So come up here, Irene. Big hand of applause for Irene.
Called it the late night fashion hair.
Come up. Come up, you deserve it.
All the way up?
Yeah. Wow! Yeah.
Brian, don't hate me right now.
We also have goodies for you.
Oh, you have goodies for me, too?
Absolutely. Congratulations.
Well done. Thank you. Well done.
At this point, we are at the end of the panel session, so we will take a 15-minute break. We will be back at 10:40 local time with the Winning Growth Lighthouse. Thank you.
All right, I hope everybody enjoyed a good snack on the break. I'm gonna warn you, though, don't be eating too much 'cause you're gonna get a lot of food in the stores today. I'm Aaron Brooks, Senior Vice President of Real Estate. I've been with the company about nine years. I came in The Pantry acquisition. Since the first day with Couche-Tard, I have loved our appetite for growth, and that is what myself, Filipe, and Hans-Olav are here to talk to you about today. You've heard from Alex, Louise, and Kevin around our ambitions and our offer with food, thirst, fuel, and digital, and it is our world-class store network that allows us to bring this amazing offer to our customers. And part of that offer is going to be, Excuse me here, sorry.
Our license to continue to grow comes from our strong offer, and as part of that, we continue to see an amazing number of opportunities to continue to grow in our existing markets and enter new areas as well. Our growth formula has remained consistent since the founding of our company, and it continues to serve us very well today. We have added over 7,900 units in the last 10 years. This growth formula has three main themes that are at the heart of the Couche-Tard DNA: we are disciplined, we are strategic, and we are ambitious. Brian led off today by saying that we operate in a fragmented industry where scale matters, and we have proven that we are uniquely positioned to grow across markets, across asset classes, and across geographies as well.
M&A has obviously been one of our key growth drivers, and Filipe will be talking to you about that strategy here shortly. Our new-to-industry and raise and rebuild program continues to delight customers and provide best-in-class returns that far outpace our our internal 15% ROCE targets. I'll be talking to you shortly about how we have challenged ourselves to become even more strategic and ambitious there. At the capital light end of the approach, we will continue to build our brand through our full franchise program, which has gained significant momentum with our offer of Circle K branded and supplied fuel, along with our world-class merchandising offer and our back office support system. Supporting all of our growth has been our access to a low cost of capital and our strong balance sheet.
One of the keys to our strong balance sheet has been our disciplined network approach with divesting of assets that no longer fit our go-forward strategy. You hear a lot of retailers talk about store count. That's not us. We talk about shareholder return. Over the last five years, we have divested more than $1 billion of assets and taken that capital to recycle into higher-returning investments and newer stores that fulfill our brand promise to our customers. You will continue to see this discipline in our network approach be ingrained in our capital allocation process as we move forward. Let's zoom in on our new build, development growth strategy, and I'm gonna lead with a headline. Our ambition is to deliver more than 500 stores with an incremental EBITDA of $500 million through FY 2028.
While we continue to see select opportunities to enhance our network in Europe and Hong Kong, we expect 90% of this contribution to come from North America. As we challenge ourselves to become even more ambitious while maintaining our discipline, we started to ask ourselves: how can we refine our approach so that we can understand better what and where we are building? First, we continue to believe in our traditional growth markets. These tend to be suburban areas that have high growth populations, and they are sites conveniently located on prime corners with great access that cater to our customers on the go. We will continue to build these sites in order to enhance our existing core markets, and we are also blitzing new markets where we think we can gain top share in that market.
Our second refinement is we are gonna have a new focus on growing in rural. We already do rural very well today. We have 1,400 sites in population zones with less than 20,000 people. Traditionally, our development pipeline has been about 15% rural, but they have been some of our highest returning investments we have made. This gives us confidence that our offering and our brand resonate with these customers. These rural areas tend to be underserved, and they are also likely to be at the tail end of the EV penetration curve. They also offer faster permitting and build times for us. We have a team of people dedicated to our rural strategy, and the number of rural stores you will see built will more than double in the next 12-18 months.
Our third refinement is a focus on making our assets future-proof across both the suburban and the rural markets. You heard Louise talk about commercial fuel. She called it a hidden secret. It's not going to be a hidden secret anymore. We are building more of our sites with a high-speed diesel offer than we ever have before. We are also retrofitting our existing network, where we feel we can gain share of that commercial fuel offer customer. You heard Alex mention the importance of a quality food offer. We are going to be building more QSRs with a wider range of that offering in order to meet that local customer demand and increase the number of visits that they make to our sites.
We're going to be talking about EV and car wash here shortly, but the main takeaway is that more than any of our competitors, we are strategically building a portfolio of complementary offers that cater to our local customers' demands and give our assets a resilient profile to provide higher returns for a longer period of time. So let's talk about how we bring this to life. Currently, we are building two main prototypes. We've got our 5,200 sq ft box that we use for our suburban markets, as well as our high-speed diesel offer. We also have a 3,900 sq ft prototype. This is newly introduced to our portfolio. We've opened up a few of these, and we are using this now for our rural strategy. It comes with a lower cost profile.
Both of these buildings share the same interior layout, and this originated from our Holiday brand. What we've done is we have leveraged this interior layout across our portfolio, and we have built over 160 of these now to great fanfare across all of our geographies. These boxes are powerful. We have seen that the inside merchandise averages more than 10% out of this box than out of what we were previously building. The customer enters to a wow of fresh food, beverage, and coffee. You will get to experience this today, along with everything else that these boxes offer. And while you're in there, Alex challenged you around, thinking through thirst. Count the number of cooler doors that we have in these stores. It is industry-leading.
So development has been a challenging environment in a post-COVID world, and we have done many things to get ahead of this. But I'm going to share just a couple with you today that we think gives us a competitive advantage. First, we started by asking ourselves: where do we hunt, and where do we prioritize our resources? Kevin talked about data and analytics. So between our team and our data and analytics team, we have created a data-based model that takes into account competitor profiles, margin profiles, traffic, and demographic trends, along with many other important factors, to run that across the hundreds of thousands of block groups we have in our geographies. And what it does is it tells us where our most ripe hunting grounds are, where we would expect the highest ROI.
We have a team of dedicated real estate people in the field, specifically targeting the sites that we are building. But this new data-based model has allowed us to become laser-focused on where we are hunting, and it has also given us great confidence that there is a long runway in the convenience store space across both the rural and the suburban markets to continue growing. The other hurdle we've had to overcome, much like anybody else in development, has been long entitlements and permitting process. We've got a team of specialized people that are dedicated to working with our local municipalities to move these projects along faster, and we have seen that starting to come through. So, as I said earlier, our focus is on strong shareholder returns. Our sites have top-tier returns in the industry, and we will not compromise that.
We have ramped up our capabilities so we get the right sites and the right offer at the right location. We have been accomplishing that at an accelerated pace, which will show up in the number of projects we have under construction by the end of this fiscal year, and we will be on pace to reach our stated ambition of delivering 500 high-performing sites to our network through fiscal year 2028. Before I hand it over to Filipe to discuss M&A, I'd like to discuss one of our ancillary offers that we think is a differentiator for us, and that is our car wash portfolio. Today, we are a world leader in car wash, with over 2,500 units washing 29 million cars annually. In the U.S., the car wash market has seen a disruption with an express tunnel offer.
This express tunnel offer gives an easy, convenient, and fast experience to its customers, while also having a monthly subscription program at value. As a leader in the car wash space, we entered the express tunnel market with our acquisition of True Blue earlier this fiscal year. We acquired a talented leadership team and a top-tier brand of 65 sites in Arizona and the Midwest. And these sites have 190,000 monthly subscribers. Everything we do begins with the customer in mind, and this acquisition is no different. What we have done to create a value ecosystem for our customers is we have been focused on executing a cross-promotion effort where we would give fuel discount cards to our True Blue customers and also car wash discount cards to our Circle K customers.
Just here in Arizona, we have 150 Circle Ks within a three-mile radius of a True Blue site. Based on the penetration of the fuel discount cards, as well as the increase we have seen in True Blue's membership, we are confident we are seeing that we are driving new customers to both of these brands. So while it is early, we are confident that there is more to do here. So as we look across our portfolio, really what we want to do is say, as we accelerate our digital acceleration journey, we believe that we can make an even more easy experience for our customers so that we can provide a portfolio of services at value and scale to our customers on the go. With that, I'll hand over to Filipe to discuss M&A.
Thanks, Aaron. Let's talk a bit about M&A, and let me start providing some color about our recent activity there. As the environment has been a bit more favorable for M&A activities in the last 18 months, we have been more active in that area. We have unveiled 5 transactions in the recent months, interestingly, across all our regions in Europe, in Canada, and in the U.S. Among those five transactions, two will be concluded, we expect, before the end of this calendar year. When we look at those five transactions, the pre-close EBITDA is roughly $640 million.
And we expect to generate roughly $185 million dollar synergies within the first three years, and $240 million within the first five years of integration. So very compelling numbers, and based on our track record, we are confident that we can deliver those numbers. Now, let me talk a little bit more about the strategy in M&A. And first, it won't surprise you, as I know that you have been following, you know, Couche-Tard many years. This company has been good at M&A. We pride ourselves, you know, in executing and integrating M&A deals during, I would say, our entire life.
As a very interesting fact, 73% of our stores stems from M&A acquisition, so it's very impressive number. As you know, I have been in the retail industry my I would say last 20 years, and M&A is tough in retail. So the first few months in Couche-Tard, I tried to understand what is the secret sauce, how Couche-Tard is able to deliver and to successfully deliver this M&A acquisition. I would summarize that in four key I would say competitive advantage. The first one is definitely the decentralized operating model.
That's something that helps us to act swiftly on any deal and empowers our team on the ground to go for any, you know, interesting deal there. And that helps also to smooth the integration. I think that's also the key, a key success factor. The second one, and Brian mentioned that earlier, we are good at integrating people and integrating culture, and something that is very hard in retail. You know, I've been again, in my past experience, I did some some M&A, and most of the time, the management that has been in place left, and that's not what we do in Couche-Tard. We integrate.
And you have seen, many of my colleagues are coming from this, you know, company that we acquired. So this ability from Couche-Tard to integrate people, to integrate culture, that's a strength. A third, I think, key success factor is, and again, Louise mentioned that earlier, is our low fuel breakeven point in U.S. That's something that unlock us immediate synergies when we look at targets and deals in U.S. And maybe the fourth one, very difficult, being CFO, so I can witness that, is the financial discipline when we look at M&A in Couche-Tard. It's quite impressive.
You know, we are always aiming at delivering between 11%-15% returns and always being very conservative when it, you know, it comes to evaluate and assess synergies. And that makes also this company so successful at the moment of looking at deals and executing it. So we have capabilities, but we have also the balance sheet. And today we are uniquely positioned in that market that is much more favorable. We have a robust balance sheet. We have roughly $10 billion available at that moment to actionate any M&A.
So it's something that, you know, we have in our DNA and will make us, I would say, very, very active in that area. So what are the four, I would say, focus area for us in terms of M&A? The first one won't surprise you, is U.S. So we'll continue to, and we want to continue to consolidate U.S. We are the number two in terms of market share in that market, in that area, in that market, but with just 5% market share. So there is ample room for us to continue to consolidate this market.
It's very fragmented, and here, again, with our decentralized model, we are very confident that we'll continue to acquire and to grow inorganically in that area. The second priority for us would be Latin America and Southeast Asia. Those two areas for us are very attractive for three main reasons. First one, fuel demand is still growing there. That's attractive for us. Second one, the convenience channel is also very dynamic. You know, many of those countries are very large and very dense urban cities, and that's, I would say, a key success factor for convenience. And the third factor would be that, you know, the EV transition is lagging compared to more mature markets.
All those three make this market attractive for us. As we have done in the past, we'll be looking at strong local management that will help us actually to build a platform in those markets. The third focus will be Europe. Europe, we have, I would say, and Hans- Olav will talk about that in a few minutes, but we have also a big plate to digest with TotalEnergies, and we focus our attention in that in the next coming years. At the same time, we are very, I would say we are, we are clearly confident that there are still more there.
There are opportunity for us to fulfill gaps in the markets that we are already present, but also looking at new markets on a opportunistic way. Finally, we will continue to explore opportunities in adjacent retail. The retail today and boundaries across channels are blurring. You know, customers is looking for increasingly for more convenience for more value. And that's also that's something that we do on a daily basis. We are pretty confident that we can transfer and exploit these capabilities in different channels such as travel retail. And we believe that there we could unlock significant synergies.
On the other side, and we spend quite a bit of time today to go in detail in our strategy, we are focusing more and more in our food offer. We are increasingly enhancing our store assortment, which means actually that we see also a lot of reverse synergies when looking at, you know, channels like dollar store channel or QSR. We believe that there we could have significant reverse synergies for us. And that's why we believe that those two channels, for example, or those two areas could be interesting for us to explore. So in total, you know, M&A will remain a priority for us. We'll we want to continue to grow through M&A.
We believe that we have the right and the capability to do that, to do so. Our ambition is to deliver $1.1 billion additional incremental EBITDA over five years through M&A. Hans -Olav?
Thank you. So I'm, Hans- Olav Høidal. Came out of the Statoil acquisition in 2012, heading up, Scandinavia before I've, been heading up, the European business over the last five, six years. I'm also responsible for the EV laboratory and, testing and piloting and making the scalable solution within this, that space. And last but not least, I've also been responsible for the acquisition of, TotalEnergies. So let's take a look at this, video. So what I really like with this video is that it's not made by us, it's made by our new family members in Total Germany, preparing their own team for being a member of ACT and having the growth journey with us in the coming years. So I like, I really like that.
You got the parameters when it was announced, but I just want to repeat it again. You know, this is 2,000 well-invested stores in Germany and in the Benelux countries. In addition, it has 1,000 car wash, which actually more than double the car wash position we have in Europe today. And with this acquisition, we actually grow the European presence with approximately 80% compared to where we are today. The scope is retail, it's fuel, it's car wash, it's EV operation at the stores, and it's B2B card sales. And as we get 60% in Belgium and Luxembourg, we still get the full operational control also of that part of the business. It's a five-year supply agreement, with a five and a potential five-year agreement of keeping the Total brand at the forecourt.
We plan to start to rebrand the stores as soon as we have tested and got confidence in what we want to implement as improvement in the store offer. The stores are well invested, well maintained, and they have large forecourt, providing us opportunity to further growth on both car wash and EV as that starts to penetrate the market. Total also have a very strong fuel brand in these markets. They are supported by strong local teams. They have a good convenience offer, but we are convinced that by bringing in ACT's strong convenience competence and ACT's strong tactical and strategic development within that area, there is great opportunity for further growth.
We also see that this is attractive EV markets, and bringing in the key learnings we have from Scandinavia will give us great opportunity to also have this as a growth engine in these markets. We see significant synergy potential, both on top line and on cost, and adding 2,000 stores and 1,000 car washes to our network will get synergies on procurement, on merchandising, on store offer, and on some part of this, we also see opportunity for reverse synergies. These markets are less consolidated than the markets we are present in, in Europe today. So we also see further opportunities to continue to be a part of the consolidation journey, if and when that happens. We have a fantastic position in most of the other countries in Europe today. Six out of eight countries, we have a number one position.
With this acquisition, we move from being present in countries with 70 million people to being present in countries with 185 million people. And this market is also neighbor markets to our existing portfolio. And by that, we also see opportunity to, in particular, grow and offer a better offer for our B2B customers as this is a corridor to Southern Europe. In Germany, we will have a 10% market share, and we will be peer to peer with the Jet network, who is number three. In the Netherlands, we will also have 10% market share with a fourth position, and in Belgium, we are a strong number one with around 20%, and we are a strong number two in Luxembourg with 30%-35%.
This is opportunities both to show that we have a strong brand presence, but also opportunity to grow in these markets. We expect to close the transaction at the 31st of December, and we have an ambition to unlock synergies of approximately $170 million over the next five years. These synergies have a sound balance between top line and back-end cost, and it also a well-balanced synergies between the four countries. We are well prepared for day one and a good integration program, both in regard to, first, stabilize the business and secure a smooth transfer for customers and our employees after the carve-out. We have plan to focus on a good cultural integration.
We know how important that is for the company, and we have a clear and well-structured synergy realization plan in place. As we get operational control, the first of January, we will gain full insight into the business, and we will start very fast to pilot and test and confirm our synergy plan, or even discover further opportunities for synergies. And I also must say that the experience we have with the employees in Total so far, both at the store level and at the central level, we feel that we get both motivated and a very competent team bringing into ACT. And last, myself and a big part of the European management team actually came out of Statoil 10 years ago. This acquisition is very similar, coming out of a big oil major, major as it was for Statoil.
And I'm confident that we will realize the same opportunities here on top line, on cost, on culture, and in the marketplace as we did, we did, we did with Statoil. And I'm also confident that we will bring this forward as we have succeeded as well with the Topaz acquisition, we have succeeded with the Shell integration in Denmark, and we have succeeded with great growth for Statoil over the last 10 years. So I really look forward to the first of January, when we can really start to dig down, speak with the people, and start to make this as good retailer in these four countries as ACT is in the rest of the world. So by that, I'm gonna move to the EV transformation that we are piloting in Norway, in Scandinavia, and we also see now starting to scale in other markets.
Let's have a look at this movie. So I would actually say that we are off to a very good start on our EV journey. Being the only global brand present in the most advanced EV market in the world, will give us, and have given us, significant and early insight into how and where to position Circle K in the EV market. What we experience in Scandinavia is that we, with our existing network, are uniquely positioned to become one of the winners in the race to become the EV customers' preferred destination. We already have some of the best locations on the road. While we compete head-to-head with new players in the charging market, we can differentiate our offer something, with something more than charging alone. We have a strong convenience offer, well-fitted to address the customer that spent 20 minutes to charge their car.
Good food, good coffee and beverage, seating areas, free Wi-Fi, and good and clean restrooms. Compared to most new competitors in the EV space, we also have significant more experience from handling commuting customers, their needs, and their behaviors. We have a long history of operational excellence, something we are confident also will benefit our EV business going forward. We also have a very strong loyalty offer, with 3.4 million active members across Europe, and as Kevin mentioned, establishing similar loyalty program in North America. This gives us unique insight into customer behavior and also enable us to craft tailored and attractive offers to our EV customers. As EV adoption also gains speed in the B2B market, we see that our strong position on fuel will benefit both the EV customers, but the EV will also benefit the fuel customers.
Statistics from Drivkraft, the EV Drivers Association in Norway, tells that Circle K in Norway have a growing share of 8% of all charge sales in Norway, but close to 10% of the kilowatt charge into the cars, telling us that we actually have an attractive and strong offer to our customers. Another positive experience we have seen in Norway is that there is attractive underlying growth drivers. 92% of EV drivers use fast charging and 88% of them come to fast charging stations monthly or more often. And this is in a country where 93% of all EV drivers actually have their own parking lot. And this is very positive regarding traffic to our stores, and better than we have told you earlier. As presented two years ago, we are exploring opportunities in the wider space of EV value chain.
We have three targeted segments in our EV strategy. First and foremost, on the go, which is to target B2C and B2B customers at our location and third-party locations. Secondly, we will defend our strong B2B position. We currently have fuel, have on fuel, and further develop attractive offer on workplace for B2B customers. Thirdly, as a good portion of all charging happen at home, we are also developing attractive solutions to enable B2B customers to charge at home. Since last presentation, we also told you that we wanted to test home charging for B2C customers, but we have decided that it's better for us and for the customers to do that through partnership. We are investing heavily in these segments, both in the physical and in the digital customer journey.
Our ambition is to be the preferred destination through delivering an easy and reliable charging solutions, and to build operational efficiency, global scale, and long-term growth. Overall, we are getting recognition from our customers and from the industry in regard to what we do. No latest, when our charge app was a three top nomination at the User Experience Nordic Prize. That is one of the biggest Nordic user experience events. I'm also very proud that we are one of the first, after Tesla, to have launched Auto charge for the cars. Two weeks ago, we launched that solution in Sweden, and we are now preparing to scale that into other market. This is the easiest way to charge your car on transit.
As mentioned, with TotalEnergies being present in some of the biggest economies in Europe, and also being present in North America, we will be a significantly more interesting partner for OEM-OEMs and other players in the industry as we move forward. We have a leading EV charging network in Scandinavia. As you saw in the movie, we have approximately 1,600 chargers in these three countries. 1,000 of them is with our own brand, and then 600 partner chargers. We are enjoying strong transaction growth in combination with attractive margins and returns. Further, and I will revert to this later, we are seeing that our EV operation is adding good value to our convenience business. This is giving us a very strong platform and solid experience to expand operation to other market as EV growth increases.
In general, our strategy is to invest slightly ahead of market growth, and we constantly assess investment needs based on market data. With this, we will be relevant for the EV consumer as the market grows, but we will also avoid to invest too early in technology and hardware that's under constant development. The EV investment started to be a core part of our Scandinavian offer and operation. And the investments we have made are supported by very strong growth in transaction and in the customer growth. This year, we plan to install between 800 and 900 more chargers in Europe, mostly in Scandinavia. And this also include some charge point outside our own stores to develop insight into how that benefits the total charging experience.
We continue to see positive growth on transactions, confirming again that we have an attractive offer, and our investment case has been strong based on charging transaction, and further supported by the income we get from these customers in our stores. I'm also very proud of our development on uptime. This is hard in this industry, but we are now moving up to an uptime of 96%, which is very strong. This has happened through more reliable equipment, better and more easy digital solutions, and from a relentless focus on operational excellence inherited from our existing fuel forecourt operation. As I said, the EV investment in itself have proven to be profitable in Scandinavia. On top, the EV customers are also good in-store customers. And to see the full value of these investments, we have analyzed our EV customers' contribution in our stores in Norway.
We took out loyalty data from April 2022 to March 2023. What we see is that the EV customer adds significant value to the store. They are adding traffic growth to our stores, and compared with the traditional fuel customers, they are more frequent visitors. When they enter the store, they add more value with a higher basket and buy more high-margin products, like food and beverage. Further, they also add significant value to our growing car wash business. Unit economics on our EV investment in Scandinavia have so far been solid, with unit margins ranging from 30%-40% and return on capital employed of up to 30%. This is excluding the value from the convenience business.
Our key learnings gives us confidence in a strategy to continue to invest in a winning transit offer, driving traffic and profit to our stores, scale our B2B offer to new markets, supporting the B customers also at workplace and home, partner at home for B2C, securing data and customer leads into our transit ecosystem, and extend partnership with OEMs, utility, and the flexibility market to offer bundle solutions and support easy for our customer and for traffic to our stores. And last but not least, we will also start to unify our app and loyalty solution with the rest of Circle K to monetize through loyalty and personalization for the EV super consumer as we move forward. So that's you, Filipe.
Thank you. Thank you, thank you, thanks a lot for, for the, explaining the EV strategy. Summarizing where we are, coming back, on the, on the winning growth, Aaron was mentioning that, at the, at the introduction, we have been a growth company, and, our ambition is to continue to be a growth company. So, in, in that lighthouse, our ambition is, is important, as you can see the number, and, we, we aim at incrementing, the EBITDA through, through growth, through NTI, through, M&A, and through the Total acquisition and, and of course, EV by, a range of $2.1 billion-$2.3 billion, in the next five years. So now let's move to, to the financial summary and the closing remarks, Brian.
Maybe I could start with, actually, the summary of what you have seen today. The team has gone through the four lighthouse. We have gone also in detail on the foundation. We have there, as you can see, a very detailed and thorough plan. Our teams are fully focused on that. Here you have the summary with, I would say, the ambition and the incremental EBITDA for each of these key initiatives. Here we are confident that, in the next five years, we'll be able to increment and increase our EBITDA in a range of $4 billion-$4.7 billion.
Which means that actually, when we start from a baseline of $5.8 billion in FY 2023, our goal and ambition is to reach a $10 billion EBITDA by FY 2028. That represent a CAGR of 12% for the next five years. So very excited, very confident that we can deliver. And we believe that based on this ambitious plan, we perceive that our trading multiples, both at EBITDA or EPS, are compellingly attractive for you shareholders and investors.
When we look at our I would say financial discipline and the way that we look at how we allocate our capitals and returns, we will continue to invest 35%-40% of our EBITDA into CapEx. No big change compared to what you have seen in double again in terms of how we allocate it. Network development, we will allocate 30%. Our commercial initiative, we will dedicate 35% of our CapEx there. And here maybe highlighting the emerging, the innovation, the EV, we will dedicate 10% of our CapEx there. In terms of return, no change there. Our ambition remains the same, 15% over three years on new investments.
That's the kind of return that we are expecting for the next five years. In terms of leverage ratio, our comfort zone is at 2.25x . When we, you know, look at our leverage ratio, including MAPCO and TotalEnergies, our pro forma leverage ratio is at 2.50 x, which means that we have still some room, and actually we'll be using that to buy back shares opportunistically, and that's something that we will aim to do during the next five years.
All in all, this company, so as we have seen the last five years, will continue to be a strong free cash flow generator and will be over $2 billion in the next five years again. Finally, in terms of financials, so our balance sheet, and when we look at, I would say the maturity curve of our senior unsecured notes, we see that we have a very well-distributed, you know, curve. Our weighted average coupon rate is at 3.34%. The term to maturity spans 11.7 years. So we are, I would say, uniquely positioned with a very attractive coupon rate for the next decade.
As we mentioned earlier, we have a strong balance sheet, and we have $10 billion incremental capacity to actionate in M&A, for example. Brian, over to you.
All right. Thanks, Filipe. So being marketers, we had to put a name to the strategy. It's Ten for the Win, and that's for a couple of reasons. One, I think we do, we do a good job of owning our strategy. It's not a consultant strategy, it's ours. And the people you heard from today have absolute ownership of those functions in delivering those results. Second, I'll assure you, our financial compensation is tied to this. You know, each and every one of us, our top 75 people, have significant compensation tied to delivering this in fiscal 2028. And third, you know, it's a message to our people that, "Hey, we're not here to manage a drift, and we're not complacent." You know, we've we've played to win for the 23 years I've been with the company, the 40 years this existed, and that's still our mantra.
So we're excited about the industry. We hope you are too. Hope you enjoy the day. I want to reassure you that, you know, we're also focused. You know, there's a lot of good ideas. We have a lot of smart people, and that's good and bad. You know, you can chase a lot of things. So we've challenged ourselves to if we wake up five years from now, what are the things, hell or high water, that we need to make sure we win at? And they're up here. And these are the things that my leadership team will review regularly and make sure that we're properly resourced in terms of time, talent, and money to get these things done. It's a winning offer. You know, it's making sure that customers have a unique reason to come to our stores. Alex talked to you about food.
He talked to you about thirst and owning those occasions. Second, it's gaining share and fuel. We think fuel is going to be a relatively flat category for the next decade. How do we continue to grow it? How do we take friction out of that journey? How do we leverage a world-class supply chain, the advantages we have versus a very fragmented industry, to take share in that space? The third is digital acceleration. It's a great buzzword. Hopefully, you know, Kevin lent some meat to it today with loyalty, but it's more than that. It's broadly taking friction out of both our customers' lives and taking friction out of the lives of the 140,000 people in our stores. So, so important to us being efficient. The fourth one is, is fast, friendly, and in stock.
Doesn't sound sexy, but when you look at what customers really want from us, they want... And you guys experienced it during COVID going into stores, right? It's, you know, you got to have great people. You got to get them in and out, which is what we do for people. They've got to be friendly, and you got to have what they want, and we're investing technologies and processes and training behind those. And then finally, as Niall shared, lowest cost operator. You know, we put a big, hairy goal out there. We didn't want to allow ourselves to think incrementally about our cost structure. We wanted to put big enough goals that we had to really think about how do we break the way we do business today and reinvent it. And, these aren't just words on a chart.
As Niall shared around the cost, you know, there are real activities behind these to make these happen. So again, these will be the five that, as our shareholders and our analysts, keep us honest on these. These are the ones that we are committed to delivering on. And finally, you know, why do we think Couche-Tard is not only compelling, but I think a unique investment opportunity? I covered these before. You know, we are on a great journey to provide a better customer experience. We think fuel margins are sustainable, and we think we'll be significantly advantaged in that space, and we're working on ways to take share. We are a low-cost operator, and that just that feeds that synergy wheel as we do M&A. High customer satisfaction and working on building that brand globally.
Superior cost of capital, as Filipe just shared, and really pretty, pretty low interest rate risk for the next four or five years. So feel good about that. Then finally, culture, which is the one I started with today. You know, we're not perfect. There's something good and bad happening in our stores every day, but we are on a journey to be a better people company, to have engaged employees serving our customers. And, you know, despite the size that we've grown to over the last 23 years I've been here, I feel really good that, you know, we've got something that's very solid there. So with that, I'm going to pause. We've got two microphones in the room and would love to take your questions.
I feel like I've been asked almost everything I could be asked today already, but we'd be happy to do it. I've got a hand up here quick. I'm joined by Filipe, Alex, and Louise. But if you got questions for any of the other people in the room, we've got mics that can float around.
We're going to stop it at 55, 20 minutes.
Hi, Brian. This is Vishal from National Bank. Obviously, you know, very big numbers that you've, you've outlined here today. Just reflecting on all the shocks that we've gone through, you know, in the last several years, and it doesn't seem like the world is in a stable place yet. You can see, continue to see geopolitical shocks, the consumer shocks related to interest rates haven't fully manifested.
And of course, it's fair to say that Couche-Tard has navigated probably better than most would have thought through the historical shocks. But more yet to come and some things from in unpredictable manners. So as you reflect on this plan, and you thought about the contingencies in your plan and how much cushion you had to absorb some left field swings, perhaps, can you talk about what you think are the biggest risks as you see them currently today to achieve those numbers?
It's a good question. You know, and if you look at the last five years, you know, the math we laid out five years ago didn't exactly manifest. The total worked, but we overshot some ambitions in some areas, we undershot. That's exactly what's gonna happen again in the next five. You know, the ranges we put up there are our best estimate today, we're gonna miss. Yet today I'd say short term, the consumer, you know, just the stress they've got. But again, this is for a long-term strategy. You know, the consumer is gonna survive this, and, you know, we've been demonstrated over the 20 years I've been here to be very recession-resistant, if not recession-proof. But anyway, you know, just, you know, the consumer stress, I think, certainly there.
Geopolitically, you know, we're very diversified across now 28 countries, with pretty level playing fields and minimal government interference. So feel good about that. I think the EV curve and our ability to navigate that in the future will continue to be, you know, important to watch. You know, we've got, you know, a lot going on in that space. There's gonna be winners, there's gonna be losers, and, you know, we feel advantaged today, you know, with our presence in Norway and Scandinavia and what we've learned and, you know, the success, quite honestly, that we've had so far. But, you know, the pace of the curve across different countries will be, I think, something that, you know, we don't know the outcome of that yet, and that's certainly one we'll watch.
But, you know, again, we're gonna be selling liquid fuels for a long, long time, and our intent is to win in that space.
Oh, over here, Brian.
Yeah.
Thank you guys for, for today's session. I guess first I want to circle back maybe on, and by the way, it's Bobby Griffin from Raymond James, sorry. Circle back maybe on the store operations. You guys are coming off a period of a really impressive kind of managing OpEx during a really inflationary time, and you detailed another ambitious goal for OpEx there in, in store operations. So can you maybe contrast that goal versus, I guess, maybe the fear of, you know, labor getting too thin, and we see some stories in retail where labor actually gets too thin, and then we have the culture kind of deteriorate or the shopping experience deteriorate. So maybe just kind of connect those dots for investors that are thinking about that.
Yeah, sure. We absolutely have no intent for our labor to get too thin. We think we know how much labor is needed to do the task at store. You heard me talk about that today. Our goal is to make sure those labor hours are there, every store, every day. We spent over a year doing that time study that I referenced and made a significant, significant investment to do that. So, I don't see that as a risk for us. I think our focus is on making sure those hours are there, so that the task can get done, and then using technology, process, and capability to take the cost out. And that's our plan.
Just across the network, you know, Niall didn't touch on it, I don't think, but we forced ourselves to really say through all our verticals, whether it's marketing, it's operations, HR, legal, what do we need to be world-class at? What do we need to be good as anybody else at? And what do we need to be just good enough or low cost? Painful exercise, 'cause everybody wants to have the best organization they can have within the company. But we force ourselves to do that, and you'll see the costs come out of those areas where we think good enough is good enough. So, and that tends to be quite a ways from the customer. So I, I agree with Alex. You know, it's not about customer service impact at all.
Hi there. It's Christopher Li from Desjardins, up to your left.
Yeah, thanks, Chris.
Hi there. Sorry about that.
Bright lights.
The other left, yes. Two quick questions, maybe first, an annoying sell-side question for Filipe. You know, when we think about the EBITDA ramp-up for the next five years, should we think about it more of a linear way, or is it gonna be more back-end loaded?
There is the 1.1. Let me start with the unknown. We have, we will be active there by the $1.1 billion in M&A. This one will come when it will come. I think this one, I think we need to be cautious. On the other ones, I think you need to think about the ramp-up. A lot of things are happening today. We have good traction, and Niall has been mentioning on the Fit to Serve. You know, for example, on the loyalty, on the membership program, that takes time. I would see an acceleration, you know, on the EBITDA growth more than a linear growth over the five years.
That's how I see it.
Okay.
The one exception may be on the cost side.
Yeah.
You know, we're going through that exercise. Our goal was, you know, 24-36 months to achieve that. Some of it's going to be painful. We want to rip the Band-Aids off and get on with that. Building, you know, ramping up NTIs may take a little longer, but the cost side might be front-loaded more in the five-year period.
If I can stick another question, just on the B2B fuel side, Louise, I know I asked you this two years ago, and thank you for all the details you provided this time. Just wondering, when you think about the growth in the U.S. specifically, do you expect a lot of this growth to be more organic, or do you actually see some M&A opportunities to augment that growth over the next five years? Thank you.
Yeah. So on B2B, I think we see that majority of that growth being organic. You know, we have two areas that we're targeting that growth from. Firstly, bringing new customers to our stores and, you know, the biggest part of that is just simply recognition. You know, when our sales team go to visit our cust, our future customers, they don't even know we really exist, so there's an education journey there. But with the brand out at 4,200 stores in North America now, we're really confident that we'll be able to tell our story and explain why it's better to be a Circle K customer. We also see an ability to take more margin through direct relationships.
So, you know, there's a bunch of aggregators in our industry, and so by taking a direct relationship with those customers, we can understand their needs, get more visits out of our existing customers, offer them different services and products, and so we're able to take margin from existing customers as well. You know, if we see an M&A opportunity, like any part of our business, we will obviously look at it. And we're growing our store network and all of those good things, but we see B2B as largely an organic initiative.
Got one up here.
It's Anthony Bonadio, Wells Fargo.
Oh, I don't think the mic's hot.
No?
There we go.
Hello.
All right.
Thanks, guys. Anthony Bonadio, Wells Fargo. Thanks for all the color today. I just wanted to talk a little bit more about NTI stores. Can you just talk a little bit more about why 500 is the right number for fiscal 2028? What are the gating factors as we think about growing stores organically? And just in general, how do you think about the right level of growth for the business?
It's a good question. Aaron is not up here, but I'll give it a whirl. You know, these are $6-$7 million a copy. So if you get to that type of a number, you know, it's significant investment in the sites. So we just look at Filipe's, you know, capital discipline, and we've always been committed to 35% of EBITDA, give or take, going back in the business. So that's the constraining factor, quite honestly, is maintaining that balance sheet discipline that we're gonna have, you know, very strong free cash flow that, you know, we use for M&A or stock repurchases or whatever. So that would be it.
You know, we've been very pleased with the performance of the NTIs, and so, you know, there'll be significant dollars going into both ramping up the human talent to make it happen, but then also, you know, building these sites. Another one? There are a couple here.
Hi. John Royal from JP Morgan. Thanks for the presentation today. So, my question's on share buybacks and how it fits into your capital allocation.
Oh, the new guy gets two questions. All right.
What's that?
I said, the new guy here gets.
Oh, okay.
Gets a question.
Just, you know, you used it a lot in 2022 and 2023. Obviously, now you've got some deals in the pipeline, and, and, pro forma leverage is closer to your target. Should we think about buybacks as being essentially turned off when you get to 2.25 x? Or just how do you think of it kind of more broadly within the capital allocation strategy?
Yeah, that's exactly how you should see that. The buyback, you know, will be the variable of adjustment to get to this comfort zone of 2.25 x, okay? When we are not there, we'll be active. When we reach this level, we will kind of stop the program.
Hi, it's George Doumet from Scotia. Thanks for the presentations. Just want to talk a little bit about own the thirst. Pretty ambitious to grow twice as fast as the industry. Can you talk a little bit about some of the plans there, maybe some of the innovation that you'll be looking to introduce?
Yeah, I think we can show you some if you come to our stores today. You know, again, I think we think there's something emerging, the thirst occasion across, and we don't think our customers are necessarily aware, that might sound funny, of all the thirst occasions that we serve. We have some really cool stuff in the pipeline with a couple of our vendors that we think will be very unique. Again, the pace of innovation across these categories, it's another learning we had from Holiday. When we bought Holiday, they had 17 cooler doors without beer, and they did amazing sales out of those cold vaults. That opened our eyes, and those 17 doors enabled them to carry a much broader range of products across SKUs.
All we've seen since we purchased Holiday 6-7 years ago is that ramp up even further. We fundamentally believe that our ability to add to cold capacity and carry those innovations will separate us from the industry. I think that, and along with our vendor partners, our scale with them, and our ability to bring unique products into the market.
Thank you. Martin Landry from Stifel. I was wondering, your $10 billion of EBITDA, your growth on a CAGR basis in the low- to mid-teens%, how does that translate into an EPS growth on a CAGR basis for the next five years?
You got into the buyback question again, I guess. Yeah, it-
Should be higher, right?
I mean, you know, it. We'll, you know, we'll do total. Our pro forma comes out at, you know, 2.5 or so. Delever's fast, so, you know, buybacks will be there and to the extent that, you know, EPS grows fast, EPS should grow faster than EBITDA. Now, that how much will be driven by, you know, the level of buybacks, but-
Yeah.
You know, I've been proud my whole career, the best use of money has been investing in Couche-Tard, not buying back shares. So, you know, we're happy to do both, but, you know, we feel good that, we love the industry, we love the story. And, you know, you know, if you look at our return on capital employed with a goodwill, you know, we're, we're upper, upper teens. That's, that's a nice return.
Absolutely. Thank you.
Thanks. Irene Nattel from RBC. As you noted, you know, you over-delivered on some, you under-delivered on some other of the initiatives in the, in the Double Again I think, you know, fuel clearly was one area where you significantly over-delivered. Can you talk about as you think forward, where you see the biggest incremental opportunities on the fuel side? Is it, is it regional? Is it continuing to, to drive? And also, when you were pushing these, these numbers around, where you really kinda held the people back 'cause it was, "Well, we think we can do a lot more than, than this," and you guys said, "Eh, let's just keep it here for now?
I'll take a first shot, and Louise, you can fill in. I think one of the areas that I had more optimism in fuel that we didn't deliver on, quite honestly, was, you know, using machine learning to help us make better fuel pricing decisions. Most of that was on us. You know, how we stored, structured our data, it gets technical, but we still think, you know, it's 10,000 commercial decisions we make each and every day, and we think we can use it, you know, machine learning to help us do that better, bring in more variables, more factors. We've done more of that manually, but I think that's one that's untapped. I'll let Louise talk about the geographic.
On the sandbagging piece, I still think Filipe's shop's a little light on working capital optimization, so that'd be one that I'd say has a little fluff in it. But Louise, go ahead.
Yeah.
Thanks for all the trust.
So, Irene, I mean, for the initiatives we're looking ahead, we think there's plenty of value coming from all aspects of that. And, you know, hopefully, as you heard us talk, we don't see them sort of isolated in buckets. You know, when we think about our store offer, we're bringing both B2B customers and B2C. When we have, you know, large contracts with B2B customers, their drivers become our individual consumers. So they convert over to, you know, buying their own fuel on the weekend or coming to see us for a coffee on their own time. So we struggle to say, you know, one is separated from the other. We know our fuel supply chain is a key advantage for us.
It kind of opens doors for us to, you know, take confidence and deliver that advantage margin. But we're really focused on that customer side of the business and, you know, that top-line growth, bringing more people to the store, delivers in fuel, but also feeds customers to our other categories. So if you want to think about where we're focused, it's on that customer side, you know, chasing the value, as Brian talked about, that we see untapped, whether it's in pricing, our fuel supply chain, or in our customers. You know, my personal view is we've got opportunities everywhere we look, and, you know, we're really excited about that. The other thing that both Alex and I talked about is the ability to flex over time.
You know, and coming back to the original question on risk, we know the market is moving and uncertain, and we don't know what the outlook for fuel, whether it's price or demand, will be. But, you know, the speed of decision-making and the ability to flex to market conditions is one of the reasons why we believe we saw our way through some of that turbulence, whether it was COVID, whether it's the Ukraine conflict. And so we continue to believe that that ability to make dynamic decisions, regardless of where we are, is really critical.
Okay, we're being told two or three more, so let's.
Okay, it's Mark Petrie with CIBC, and I'll add my thanks for today and all the detail and the structure. Operations, I guess, are, you know, the founding competency of Couche-Tard, and I want to ask, though, about marketing just given how you've shifted the organization, put the brand and sort of customer marketing closer to the center of what you're trying to do. And so first, I guess, are there areas where you still need to invest in order to execute on the marketing side? And then second, just curious about how you sort of balance those two priorities, given they don't necessarily always go hand in hand. Thanks.
Take a shot at that, and then Kevin's sitting behind you, if we maybe stay, stay there, Marcelo, with the mic. But, I think it's. There's a friction there. You know, operators tend not to be great marketers, and great marketers don't tend to be great operators, and we're trying to be a little bit of both, and that does create friction in our organization. You know, we have taken down, you know, thousands of partner brand sites, both food and fuel, quite honestly. And those partners were investing in making those brands mean something: awareness, commercials, advertising, loyalty programs, et cetera. So we've got to be disciplined to invest appropriately in the Circle K and Couche-Tard brands as we move forward. And, and that's gonna be that tension, right?
When we push the Fit to Serve, we say, "Hey, we want to take $1 billion of cost out of the business," people look at the marketing budget. And so, you know, that's the friction that we set up. We understand it. We think it's good. We've got diversity of thought on the leadership team. We recognize that, really to differentiate, as we said, those five focus areas, you know, having that Circle K brand, you know, find a little spot in the heart of our customers, is gonna be the difference between being like everybody else or being different. So we're committed to that journey. Are we gonna do it perfectly? Probably not. But we recognize we've got to be not only a great operating company, we've got to be a good brand company as well. It's a journey. One more?
All right, housekeeping. JP, thank you very much for the questions.
Thank you.
Thank you.
Thank you, everyone. Thank you.
Thank you. You didn't mind the sandbagging question, did you?
All right. Thank you, everyone. Just before we leave for the store visits, a couple of housekeeping items. So for those of you going straight to the airport after the visits, please do not forget to bring your luggage with you. For the visits, you have been assigned a group. Please make sure to hop on the appropriate bus. Please also keep in mind there are four ACT executives in each bus, so please feel free to ask them questions. Not too difficult, if you don't mind, we would appreciate that. Please do not forget to bring your safety vests with you, and please wear them during the visits. For those of you that weren't able to play the Customer Star game, please note, we'll keep the link active in the next few days, so please feel free to use that link in the next few days.
Finally, please note that we just uploaded today's presentation on our website, so please feel free to refer to it now and in the next five years. Our press release has also come out just a few minutes ago, so all the details should be available. At this time, please enjoy our food. Please enjoy the store visits. Please also enjoy the tunnel car wash visit that you're about to have, and in the end, thank you very much all for attending today. We're really glad that you could all make it. Thank you very much, everybody.