M&A Announcement

Jan 18, 2021

Press Release

Good morning. I would like to welcome everyone to this conference call and webcast to discuss the joint announcement between Castrol and Couche Tard. We would like to remind everyone that this webcast will be available on our website for a 90 day period. Also, please remember that some of the issues discussed during this call might be forward looking statements, which are provided by the corporation with its usual caveats. These caveats or risks and uncertainties are outlined in our financial reporting. Will be communicated to the results and results, therefore, future results could differ from the information discussed today. Details of the announcement will be presented by Mr. Alain Bouchard, was Founder and Executive Chairman of the Board Mr. Brian Hanisch, President and Chief Executive Officer and Mr. Claude Tessier, Chief Financial Officer. Following the formal presentation, we will open the lines to analysts for Q and A and ask that you please limit yourselves to one question and return to the queue to maximize the number of participants on this call. Webcast will end at 9 am. Good morning, ladies and gentlemen. I want to thank you for joining us this morning on such a short notice. I also want to take a brief moment to acknowledge that today You all had the chance to see the press release, which we issued jointly with Carrefour over the weekend. I know you have many questions, and we will get to them on this call. First, I want to will be a great opportunity to spend a few minutes sharing some insights into the discussion with Carrefour and how they align with our history, was our long term vision. Brian will then have a few words looking into the strategic rationale behind the offer. When I opened my first store in Quebec 40 years ago, I never imagined I would be in France meeting was a very strong start with top government ministers and sharing Couche Tard's vision and mission to make our customers' lives was a little easier every day. During our discussions, we saw a significant opportunity to enhance was our respective businesses, and we were mindful of the many shareholders' was a very important part of our strategy. Over the last decade, while growing our business, we have made many bold moves, was a very strong quarter, some of which were not always obvious to our stakeholders. Let me remind you of a couple. The CircleCI acquisition was a big bite for us at the time and many didn't believe will continue to be a significant contributor to our chains of success. Our entry into Europe with stat oil, fuel and retail was unexpected at the time, And I remember lots of skepticism about our ability to drive synergies from a new geography, was a very strong year for the year. But Europe EBITDA has nearly doubled since that time. Was I hoping Our bold approach to Carrefour would have turned out differently, of course. Yet, I'm tremendously proud that Couche Tard will be a financial strength and a human to make such an offer. Proud that many more around the world understand was an entrepreneurial spirit, all the while reaffirming our commitment to our core business and our Double Again was a very strong strategy. No doubt we live in an ever changing fuel and retail landscape was a very strong year for the year. Over the last several years, we are boldly moving into the future with our work with EV Mobility, will continue to invest in fuel and grow this category. Fuel remains fundamental to our business We are also boldly moving forward with improving the customer journey. Just this week, We announced our 1st frictionless store and retail research partnership with McGill University was a very strong quarter. We are on the forefront of pay by plate license recognition in Scandinavia. Was just to name a few examples of our entrepreneurial spirit. As one of Couche Tard founders, I spent a lot of time thinking about how Couche Tard can leverage its human and financial capital to innovate We have worked hard to create a company culture that we are proud of, and I am its greatest ambassador. I believe in our strategy, our 5 year plan to double our convenience and fuel business and has been well articulated In the longer term, we are always thinking about how our strategy can develop to leverage our core competencies, was a very strong year for us to continue to grow our business and how we can find new avenues was a little easier every day. We are a retailer. I will now turn over will take the call to Brian to address the strategic rationale in more detail. Brian? Thank you, Elaine, and good morning, ladies and gentlemen. Before we get to your questions, I want to further look at the strategic rationale behind our friendly discussions was concerning a transaction with Carrefour. Although we're no longer in those discussions, I want to share with you why we entered into them and why we see value in will continue with operational partnerships with Carrefour. I also want to underscore the continuing strength we see in our existing business and our strategy. Was a great opportunity for Carrefour. We have heard from many of you over the last week that our approach to Carrefour came as a bit of a surprise and that may be understated. That was not our intention. And of course, was a very strong start to the year. We approached these discussions, as Elaine clearly said, committed to our goal of doubling our convenience of fuel business will continue to be a key contributor to our many ongoing organic initiatives in operational efficiency, improving our customers' journey and innovation. Will be a great addition to the growth platform. However, we consider it important to look at related growth platforms and how we can add to our core capabilities. Part of our Double Again strategy is to look at new geographies also, was a great start to the year. Our discussions with Carrefour grew out of the strategic vision and are a natural extension of our interest in growth and value creation for our shareholders. Was consistent with our approach to M and A over the years, we were deliberate and thoughtful in considering grocery and in considering Carrefour. With any file, even before we move to due diligence and fully explore synergies, we first start with our customary on the ground approach. Was a strong start to the year. We think about ways to expand our platform. We visited many Carrefour stores in 5 of their key countries to see firsthand their various omnichannel locations. Was a strong sense of what we think we can achieve as a combined network. I'll just list off some examples. Certainly adding scale and complementary geographies to our network, was a strong quarter for the quarter. We're strengthening our overall capabilities by adding Carrefour's core competencies in procurement, supply chain, private label, was a combination of technology and e commerce to name a few, adding value with our abilities and operational efficiency and optimal sharing of best practices would have been the foundation of Keyur at Couche Tard. Addressing the needs of our customers through many complementary formats and channels, was a combination of our combined with respect to strengths and convenience with Carrefour's nearly 8,000 convenience locations, while helping them accelerate the growth of this channel will be a great opportunity for our customers to expand their business and expand their business and expand their business. Was a very important part of our strategy. Learning and adapting some of Carrefour's advanced sustainability journey and more importantly adding tremendous competency in food will always be central to our customers' needs regardless of the format. And finally, and I think most importantly, was a great opportunity for us to continue to grow. I believe the biggest value we brought to any of our acquisitions over the 20 years I've been with the company is a culture based on believing in and empowering people to do the right thing was a very strong quarter for the quarter each and every day when we saw an opportunity in Carrefour to do this again. This led us to a level of confidence to begin our preliminary discussions was Carrefour's management. In early discussions, we were looking at a bold offer. We were looking at a bold offer that would make us one of the top 5 retailers in the world will create significant value for our shareholders through meaningful accretion. As always, we're looking to build on the fundamentals of our business and mission, will be a great opportunity for our shareholders as we've done for many years. Since 2011, we've generated a cumulative average was a strong growth rate of 22% per year for EBITDA, while converting an impressive 35% of that EBITDA into free cash flow was a great opportunity for a total of more than $10,000,000,000 $2,000,000,000 in 20.20 alone. While looking at a grocery chain, we never wavered from our commitment fuel is fundamental to our business. We're going to be in the fuel business for the long time. Just to demonstrate that and our commitment there over the last few months, We began to build even more capabilities to be involved more in the vertical supply chain, including logistics, trading and growing our B2B business in North America. Was a very strong quarter. In 2020 alone, we pursued files with sizable fuel businesses, including Ample in Australia and Speedway here in the U. S. Was a great opportunity for us to continue to grow. And as a complement to fuel, we've demonstrated our innovative capabilities in the EV business model and are investing resources to refine those initiatives and grow them. Was a great quarter. We also remain steadfast in our investments in our base business. We're building new stores and remodels and this year alone we're committing $750,000,000 was a significant contributor to building new stores in our network this year. M and A is in our DNA and will continue to be essential to our strategic vision. In addition to consolidating the fragmented U. S. C store market, we believe there are tremendous opportunities for growth in Asia and opportunistic growth opportunities in Europe. Was a significant contributor to our recent acquisition of Circle K Hong Kong is the important launching pad for our ambition in the area. In relationship to Europe, we always webinar has spoken about it as being many different markets, each with its own dynamic. We've also said we'd be optimistic in our pursuit of growth through acquisitions in this area, will always be the focus on adding value for our stakeholders. And as Elaine mentioned, we've had great success in our past moving into geographies where we've had no overlap. Will be a great opportunity for us to continue to grow. We're looking at areas of cooperation, including sharing the best practices on fuel, pulling their overall purchasing volumes, partnering on private label development, will improve the customer journey through innovation and evaluating ways of optimizing product distribution in overlapping markets. Will be a great opportunity for us to continue to see the opportunities we have in place. We see these areas of cooperation with Carrefold aligning perfectly with our 5 year strategic plan as well as our commitment to strengthen our core convenience and fuel business will be a great opportunity for us to continue to grow our business while pursuing opportunities in related growth platforms. Let me now open it up for questions. Jean Marc? This And your first question will be from Irene Nattel at RBC. Please go ahead. Thanks, gentlemen, and thank you for your comments. I guess, starting with what I've been hearing all week. So was Investors thought they knew what Couche was all about. So it's a convenience retail player with a global reach, will focus on operational excellence, financial discipline and as you point out, I'm not afraid to make bold moves, But always anchored in that convenience retail. With the Carrefour bid, investors aren't quite sure that they know was what the focus is. So can you please talk about how that fits in and whether we should be expecting you to It's a great question, Irene. Good morning. I think foremost, I think we're a retailer. That fact gets lost a little bit. Way we operate 300 quick serve restaurants as an example. We operate our core formats. We operate sites without stores. But fundamental to that is understanding our customer and what they want from us, where they want it, when they want it. And as we see The retail landscape changing, channels continue to blur even at a faster pace. Omni channel Certainly, I think is more and more important to meeting the customers' needs across multiple formats, multiple times a day And maybe in their homes we're seeing during the pandemic that being amplified. So when we looked at this, Carrefour was really advanced in that journey. They've got was a great opportunity for us to have 3 formats in addition to e commerce. They've got the large hypers as we are all aware of supermarkets and then almost 8,000 convenience stores. Was a great opportunity for us to continue to accelerate the development of that convenience format. And then that's an area we think we can bring a lot of value to them as well. And then I touched on some of the others. So I think we are more than just a small box retailer. I think we're a retailer 1st and foremost, but we also open go into both our core business and any adjacent business with our eyes wide open that way, the world's changing and it's going to take competitors with the right scale and the right culture and the right focus to win. Was That's very helpful. Is it possible that you could perhaps Look at sort of just building those capabilities instead of buying them in a massive transaction. I think we're doing both in parallel. We're making really for us unprecedented investments in data analytics. Was a great opportunity to be able to get a great deal of work. We've been able to get a great deal of work. We've been able to get a great deal of work. We've been able to get a great deal of work. Was coming to life there. So we are absolutely doing that in parallel. And so we're committed. Has been a bit frustrating with the M and A in our space quite honestly. We've been very active and we've I listed off 2 things. We took big swings at this year, but there were many others that don't make was a great press. So we're committed to growing in our base business, but also if we see an opportunity to strengthen our core, will bring value to shareholders. We're open to doing that in a very thoughtful and disciplined fashion. Thank you very much, Brian. Thank you. Next question will be from Peter Sklar at BMO. Please go ahead. Good morning. Brian, as you know, Carrefour has had significant challenges for many years. Was for example, they had hypermarkets have been that kind of format has been a challenge for them. And I'm just wondering like what your perspective was in terms of Carrefour being able to turn around its operations And what capabilities and insights that Couche Tard management could have brought to the table in order will accelerate the turnaround of that business. So I appreciate that some of you may have been along in the Carrefour over the last 20 years and we certainly follow their stock developments. It has been difficult. I think some of that is was a competitive nature in their couple of their core markets, and some of that is self inflicted, and I think they would admit that. Way, when we looked at it, they've put in new leadership in the last 36 months and we think they're getting traction. We think they're doing some of the right things and way we think we're well positioned to help them accelerate that journey. The hypermarket is one piece of the story, but there's some real jewels inside of Carrefour that don't get a lot of attention. Was a very strong quarter. When we looked at it, we think, and I mentioned earlier, culture is a big thing. And I think, really empowering was the people in the countries that Carrefour operates in to do what's necessary to do the right things for the customers and to take bold action was our areas that we could help them with, in addition to all the things we do every day, best practice sharing just being so foundational to our success. Was a very humble culture. It's not invented here culture. We're absolutely happy to steal good ideas. And way I think foundationally that's the biggest thing. And then we had very concrete synergy plan developed around fuel, around the small box. Way certainly the infrastructure, the technology investments, we think that they have a huge opportunity to improve the customer journey in was the same store and jointly developed solutions that work both in our format and grocery, I absolutely think are on the table there. Way Just again, even in the preliminary conversations, I think both sides saw the merits of the combination, not just financially, but way you're making a better, stronger global retailer. So we were excited about that opportunity. And lastly, Brian, if I could ask, how long has Couche Tard been considering other retail channels was kind of beyond C store. Is this something that you've been kicking the tires for quite a while and We just generally didn't know about it because it didn't leak out and Carrefour was the first one or is this more of a new initiative? Yes. So 3 years ago, we really sat down and developed our Double Again strategy and one of those pillars is growth. And Two things I think we publicly said were we wanted to be in Asia and we've accomplished that. We wanted to ramp up our NTIs, our new large format locations. Was a very strong and we're on that journey and investing heavily to make that happen. I'm very pleased with those. We also went through an exercise of looking at was adjacent retail and that's not for the sake of diversification, it's for the sake of can we bring our skills and our competencies and add value in other spaces. Was a great opportunity for us to do so. And so we look the dollar channel, we looked at quick serve restaurants, travel retail, grocery. Those are the spaces that we think are close to what we do will have similarities and opportunities to bring value to. So it's not new, was a very difficult time to get something done. But it's has been a part of the strategy just it's been a gradual learning process as we spent time looking at other channels in geographies around the world and really narrowing our focus into a couple of areas that we think make a lot of sense for us. Okay. Thank you. Thank you. Your next question will be from Bonnie Herzog at Goldman Sachs. Please go ahead. All right. Thank you. Good morning, everyone. I wanted to ask and see how committed are you to your goal to double was EBITDA by FY 2023. I guess I'm wondering if there is a risk going forward that this target might not be achievable from an M and A perspective and or does it now suggest you might need to pursue acquisitions that ultimately do increase your risk profile. So I guess I'm I'd like to hear from you, your risk tolerance and how we should be thinking about this. Thanks. Yes. So prior to our public release of our strategy 3 years ago, about 60%, 65% of our EBITDA growth over the prior decade had been M and A and 35% to 40% had been organic. Commitment of our strategy is to flip that upside down, drive organic, but still pursue M and A when and where it makes sense. So 3 years in, we are on track on the organic side. Setting aside a pandemic that really makes it hard to understand what good looks like. Way Yes, we're doing what we said we would do. And we've got a very disciplined follow-up process and feel very good that we're getting traction in all the key areas was across 23 work streams to make this happen. And if you look at our bottom line, we continue to grow it despite not doing wasn't any meaningful acquisition for over 3 years now. So I feel good about that piece. The M and A side Bonnie, was a great opportunity for us to continue to grow. I'm proud of that too, frustrated, but proud. We've had opportunities in front of us, opportunities that we would love to brought into the family, was a great deal of confidence in the company. We've walked away from a lot of them over the last 3 years. Just we can't get the valuations to make sense to us. And again, history will wasn't a good deal or bad deals for whoever was successful, but we're not going to do dumb deals for the sake of doing deals. Was a great opportunity for Carrefour and hopefully 3 years of not doing deals demonstrates to each of you that we're serious about that. So when we do something like Carrefour, was a good question. It's not under the pressure of doing a deal. We would have done a Speedway or something else if that was the motivator. This is looking at transactions that we think can deliver significant shareholder value both in the medium and long term. Anything additional, Bonnie? Yes. I'm sorry, I was on mute. I apologize. I just wanted to quickly verify something else about Priorities for M and A, I believe you've mentioned that the U. S. Is sort of your first priority in terms of acquisitions and then Asia a close was a very strong quarter. And then I think you kind of thought about Europe as just being maybe more opportunistic. So I just wanted to verify that. And then does that in any way limitations of deals in the U. S. And Asia as you pursued Carrefour? Thanks. Yes. So again, we were preliminary in conversation with them, but inside of our own model, way, I think we had set up a government structure that allowed my team to remain laser focused on growing was the convenience and fuel business while putting the right amount of change agent into Carrefour. So I think was a great market for us. It's fragmented yet. Way, there's still a lot of opportunity here and just because of the nature of the vendor community and everything else, it's just an area that we extract A lot of synergies out of. Asia is early. We've got Hong Kong done. We think we've got one of the best management teams was in that part of the world that will help us define the next opportunities. And we're actively working that now, now that we've got that transaction closed. I I just believe that the growth in that part of the world will just be very interesting for us in the coming years. When I look at Carrefour specifically, we'd always said we'd be optimistic about Europe. A lot of that was was level playing field, particularly in our channel. A lot of countries, take France, for example, you can't sell tobacco, you can't sell alcohol. So the playing field isn't level, but on the grocery side, we didn't find that to be the case. In every country, The grocery channels had full access to the consumer. And then I would also point out Carrefour is more much more than a France story. Was a growth opportunity. Over 50% of their EBITDA was coming out of Latin America, was a growth market for them and a market that they've got a winning formula in a nice ecosystem, not just large format, but small format, grocery, was omnichannel financial services. So this was something that again, we took our time, we understood it and we think it would brought a lot of value to us. Okay. Thank you. Thank you. Next question will be from Karen Short at Barclays. Please go ahead. Hi, thanks. Just wanted to get your perspective. Do you have a view as to whether or not Food security will always be a concern for the French government or if this was a stance that was more tied to the pandemic as in may not be a permanent And then the second question I just had is, can you quantify the potential dollar opportunity to EBITDA with respect to this partnership in terms of I'll answer the second one first. I would say we're very preliminary. Obviously, this just happened was a very strong quarter. But to Carrefour's credit, it was really their initiative to say, hey, let's continue to have relationship and dialogue and see if we can capture some value. So what we've agreed to do is enter into exploratory conversations in the coming months And we'll report back on that, but I'd say it's too early to go to really try to quantify that today. Way In terms of politics, I think we went into this with eyes wide open knowing that this was a risk. And I certainly do believe that the pandemic has heightened was the food security issue, particularly in France. So whether that changes over time, it's hard to say. Will continue to monitor that situation. But as of right now, we respect the position of the French government and we're acting accordingly. And sorry, can I just do a quick follow-up? Do you have could you remind us what your comfort level is on leverage broadly? And I know you I think you want to maintain investment grade, What would that mean in terms of like a peak leverage number assuming you could pay it get back down to investment grade over a certain period? Was Yes. I mean, our model for this transaction was very much consistent with what you've seen in the past, Karen, hitting leverage numbers very consistent with what you've seen in the last couple of large transactions. So that is very much consistent with our conversations with the rating agency and our commitment to remain investment grade. Way we were very prepared to make sure that the balance sheet remains strong and able to continue to grow both on the food side and on the convenience and fuel side is the right opportunities for economists. Great. Thank you. Thank you. Next question will be from Patricia Baker At Scotiabank, please go ahead. Good morning, everyone. Brian, in your discussion of the strategic rationale for pursuing Carrefour, You noted that you saw that there would be an opportunity for Carrefour to be able to help inform and aid you with the food journey in at Couche Tard. Is there a possibility with these operational partnerships that you'll be able to garner some help there on with the food the longer term food journey? Was a great question. I think on the procurement side, absolutely. We think they've got world class procurements capabilities and great relationships with the farming communities around the world that they source from. So I think we certainly are going to explore that. My only pause there, Patricia, is just the logistics systems that we operate within are very different than what they have in Europe. So we need to make sure that we can really make meaningful was a very strong execution of the business. And again, I'd say just remind, it's an exploratory phase. But when I look at their was just their operational competency around food for those of you that have been in their stores. They're good. I mean, they're doing a lot of things very well, was very heavy presence, particularly in the small format with grab and go meals, bakery. So I'd like to think there's some learnings there. Was I'd say it's a bit early to try to quantify anything. No, very well understood. But thank you for answering my question and good luck. Thank you, Patricia. Thank you. Next question will be from Chris Lee at Desjardins. Please go ahead. Good morning and thanks for doing this call. I mean, Brian, is there a possibility Couche Tard will look to reengage in merger talks again with Couche Tard under more favorable Political conditions or is this filed closed permanently? I'm old enough to believe that There's no sensing as permanently. We'd like the transaction and we'd love to do the transaction. So way, if we got signals that the environment could change or would change from the French government or other key stakeholders, we'd love the opportunity to reengage was under the right conditions and assuming we haven't found another way to create more value for our shareholders. So we'll stay tuned and we'll we'll see what happens, but for now, it's definitively closed. Okay. And then you mentioned earlier just in the past, you've looked at other things outside of convenience. I think you mentioned like dollar stores and others. Can you just repeat what else you looked at before? Yes. I mean, Again, some a lot of this is a paper exercise, Chris, looking globally at different channels, either emerging was a small format existing in hospitals, train stations, airports, That's an area. The quick serve restaurant business, another and then I did mention dollar stores, which was very consolidated in Canada and the U. S, but a little more fragmented in other parts of the world. So was again, those are areas that it was more of a white paper exercise as we tried to narrow in on targets that we thought were was complementary and could bring value to Couche Tard's shareholders. Perfect. Thank you and good luck. Thanks, Chris. Thank you. Next question will be from Graeme Kreindler at 8 Capital. Please go ahead. Hi, good morning and thank you for taking my question here. I wanted to follow-up here. Given the respective geographical footprints of both Carrefour and Couche Tard and Brian your previous operational partnerships or merger targets in something that might be closer was Yes, it's a good question. As we've grown in scale, we've seen some interesting things develop as I I think everyone realizes that retail is quickly evolving. You saw the partnership between Walgreens and Kroger as an example of was some of the 2 large companies come together from both a procurement standpoint, but then also leveraging each other's capabilities in private label and omni channel formats. And so we're certainly thinking about those things. We're actually entering our business planning cycle and that's one of the conversations we're going to have is, are there other partnerships, was a joint venture, whether it be procurement, logistics or others that makes sense for Couche Tard in our core geographies. But Again, that's preliminary at this point. But I've seen what both Carrefour and other retailers have done is globally as this happens is happening at a more rapid pace and I think it's something we have to be open to and give thoughtful consideration to. Understood. Thank you for that. And then just a quick follow-up to that. When looking at adjacent retail opportunities Across the number of different categories that you mentioned earlier, how much of that does Couche Tard look at as an opportunity to leverage what it's opportunity to leverage what it's currently doing in EV infrastructure or some of the R and D that it's doing, giving a potential additional touch point for where the consumer might be able to interact with that. Thank you very much. Yes, it's a good question. We're was absolutely focused on our analytics capability, becoming even more local in our pricing, our assortment, our promotion was a very strong quarter and then removing friction from the forecourt and the in store experience. And have we tracked the code? I would say it's wasn't early yet, but I'm very pleased with some of the things that we're piloting today and some consumer reaction. And some of those would absolutely have application was in adjacent spaces. So without going into too much detail, we think in addition to kind of core things we bring, culture, financial discipline, was a great opportunity for us to continue to grow. We do think that some of the investments we're making in the customer journey, the customer experience absolutely apply to some of the adjacent channels that we've considered. Appreciate the color. Thank you very much. Yes. Thanks, Graham. Thank you. Next question will be from Michael Van Aelst at TD. Please go ahead. Good morning. I just wanted to clarify a few things to start. You mentioned some of the adjacent retail areas like dollar stores and QSRs and was a good time travel retail. But you also mentioned that you had narrowed it down to a couple of areas that made sense. Are these the areas that make sense to you? Or It's a smaller subsector, Michael. Good to hear your voice. Yes, some of its valuations, there's some channels that I think have historically had high valuations For a number of reasons, whether it's a franchise model or just the overall dynamics of the channel. So we've narrowed beyond that subset I went through to, was I'd call it 2 areas today that we think could make sense for us, but I don't want to lose track of our core business. We've been through this cycle before, ladies and gentlemen, where we couldn't get a deal done, because of the valuations. And we've seen tremendous liquidity injected into the global economy by governments. We've seen persistently low interest rates was a very aggressive environment for M and A in our space. But way. We've seen this pass as well and coming out of it, coming out of some downturns in the economy have been some of the best times for Couche Tard over our history. Was a very strong quarter. So we're keeping the balance sheet in the right condition and prepared to take advantage of our existing was a core business when the opportunities are there and we're confident they will be. It's more of a question of timing than desire. Okay. And so the two areas, I guess we can assume one is grocery. Are you willing to mention the other? Yes, not at this time, Michael. No. We've had some activity in the space and I really don't want to disrupt that. Okay. And you've seen When you were going through it, clearly you saw the returns you saw some attractive returns in growth. Would they hit your historical return on invested capital. Yes, absolutely. Fundamentally, somebody joked yesterday that people will still be eating 100 years from now. So is the negative posture around grocery overdone? That's a question. But when we looked at was the synergies that we think existed between the two companies, hard synergies, not just what ifs, the hard synergies that alone got us to a very attractive place and that was without was a big assumption around turnaround, particularly the hyper format. There's again some strong formats and strong geographies inside of that network that we think that combined with the synergies that we had on the table would have delivered very nice returns for our shareholders. Okay. So with M and A appearing a little bit more difficult at this time and Couche Tard having a very strong balance sheet with was some good some very significant liquidity. What are your views on continuing to pursue was a short term versus balancing that with maybe returning some material cash to shareholders was while you weigh in. We do have a shareholder yes, we do have a buyback program in place. That's so way, I think we'll be opportunistic at exercising that. It's really us trying to balance where we think we can deliver the most value. Was for my career and for Elaine's 40 years, that's been very consistently about deploying capital was a very strong return. We don't see that opportunity there. In the short term, we'll take would be appropriate actions and that could include a share buyback acceleration. Okay. Thank you. Yes. I know Claude is on the phone too. If you want to add anything Claude, feel free. No, I think you said it well, Brian, and also Yes, and that journey into M and A continue. And the also I think there's a reality that comes with Couche Tard today is that we have also the ability to look at opportunity that comes with Couche Tard today is that we have also the ability to look at different deals and also was the deal that could bring in still bring significant shareholder value to our shareholders. So Yes. And like you said, we're going to be opportunistic on our buyback. Thank you and good luck. Thank you. Next question will be from Mark Petrie at CIBC. Please go ahead. Hey, good morning and thanks for doing all this. I just wanted to follow-up actually on a couple of those topics that you just touched on. I guess specifically when it comes to the balance sheet and capital will be a more specific framework that you might be able to share with regards to how you would prioritize or allocate capital to growth in these newer verticals I put myself on mute. Sorry about that, Mark. Yes, I mean, we've been pretty consistent over the years at taking about a third of our EBITDA or free cash flow and investing in the core business. And that's really when we look at our Double Again strategy, we've mapped out way, how much of that capital would go to driving organic growth and how much would be set aside for M and A. Was a very easy doable within the free cash flow generation model that we have today. Obviously, when you think about something of the scale of the Carrefour that was a different ballgame, but we had a plan that would allow us to very much remain in a good position with the balance sheet was at an investment grade level and with the ability to continue to drive our double again strategy inside the Cummins and fuel business. So way, in this context, I would call it, it's an and not an or. We very much had this was modeled to be able to do both and do both well. Yes. And if I can add also, Brian, is that way, we always have to focus also to bring our return on capital employed over 15% and that's something that we've disclosed and we've been was saying and that's still true also in looking at other adjacent areas for M and A. Was a very good question. Okay. Thank you. And then I wanted to just also follow-up on the topic of sort of cultural fit. And just more broadly, not necessarily specific to Carrefour, but how do you sort of think about that translating across sectors was into geographies where you don't have operations and across into sectors where They are retail necessarily, but obviously different sort of retail. I think the best example I can give you would really be our entry into Europe markets. That was 9 years ago. Was the markets were skeptical about the ability to develop synergies. And we didn't just have one culture there, right? We had 10 different countries was a very different in Ireland than it is in Latvia and on and on and on. And I think And again, a core part of us is just being humble. And I'd like to think if I went back and talk to the people about that experience 10 years ago, was about us empowering, listening, developing the right governance model to make sure that was the focus, not politics reports, things like that. And we found that that fits and it's fit per universally. It takes different shapes across different cultures, but that core was a very strong management style of believing that people get out of bed every day, wanting to do the right thing and giving them the right space to do that, was a great opportunity to continue to work with our company. But it's worked well. We doubled the EBITDA in Europe with the same management team that was there 9 years ago. Was a very strong year for Carrefour. And while Carrefour was certainly bigger, we think that that same journey could absolutely happen there. Okay, thanks. And if I could just ask one more, just with regards to sort of evaluating these sort of newer growth engine opportunities outside of kind of the core legacy business. Could you just elaborate and come back to sort of the specific criteria for how you would evaluate that? Way, presumably, there are parts of retail that are too different from the legacy business. But just how do you specifically would evaluate how these would leverage your core competencies. It's a good question. I would say the theme, a pretty common theme has been direct contact with the customer, was a great addition to the food and fuel. So everything we've looked at has really had was a very strong quarter. That common theme, we think that's where we got value to bring. We're a small box retailer today primarily, but that doesn't mean we're headed down a path of giving into hard goods or other things was a core part of the journey. So I would say food is the common theme there across everything we've looked at was a little vague, but that's really this way, we narrowed the world of retail down to those couple of areas we've referenced. Those would be the couple of themes. And then what's got to come out of that is a belief that way, the synergies and the acquisition price are right to be able to de risk the project significantly and deliver was really strong return profiles for Couche Tard shareholders. That's very helpful. Sorry, if I can add Brian to that also on the financial side, we've always We are always using the same discipline and we're looking at cash flow stability, capital requirement. Was And also the return, like I just mentioned before, we continue to provide a return on capital investment that is meaningful. Was a very strong quarter. And also we like the concepts that are resistant to harder time to recession and things like that. Could explain a bit of our interest into growth. Very helpful. Thank you. All the best. Yes. Thanks, Mark. Thank you. Next question will be from Vishal Shreedhar at National Bank of Canada. Please go ahead. Hi, thank you for taking my questions. Not sure if you can comment on this, but Any information you can provide is useful. Is Couche Tard currently looking at other files or do you perceive that there are other files in your That you can review which are meaningful regarding acquisitions or is this more of a lull at the moment? Was I would say the first 90 if you saw the 1st 90 days of the pandemic, the world kind of locked up, but we've actually seen pretty solid deal flow was over the last 6 months and that exists today. We've got a number of other files in our business that we're looking at some big, some small, but no, I would say the market is pretty robust right now. Okay. And this is more of a longer term question, just trying to understand where management's way. If multiples in the C store space don't come down to levels that's consistent with Couche Tard's strategy And management has to take on more risk, let's say, entering into new segments or regions where it's not as familiar and where its core competencies don't Will management move up the risk curve to learn more and enter new regions or geographies or new sectors or will it accept lower growth in the interim until acquisition multiples come down more consistent with its understanding? Was a good question. I think it's a bold answer to that. By definition, I think anytime you go and do something new, You're going up the risk curve. What we've done consistently over my career and Helane's 40 years is way, get our hands dirty. We're not hiring a bunch of bankers and just doing all this on spreadsheets. Even in COVID, was we were able to get into 5 countries and see somewhere around 500 stores. So that's really Our due diligence, I think, has been a foundation of how we de risk transactions, whether that be in our existing space or something else we're looking at. So our commitment is that same was a very strong quarter. That said, if we can't deliver superior returns going into new spaces, we're okay with a low. Hopefully, way you've seen last 3 years we've not done other than Hong Kong, the material transaction and that has not been for lack of opportunities and for was the interest of our shareholders in believing that some of the deals just went too expensive for us. So we'll balance those, but our approach M and A, whether it be in our core business or in an adjacent space, will absolutely remain consistent. Thank you. Thank you. At this time, we have no other questions. Please proceed. Was a great start. Yes, thank you. Yes, that's it for today. Thank you. Thanks everyone for participating and have a good Martin Luther King Day for those in the U. S. Thank you. So if I may add, the founders remain committed for the long term. So And the board was very, very supportive for this acquisition. We're very serious at adding value to our shareholders. Thank you. Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today.