AGM 2021

Sep 9, 2021

Thank you for standing by. This is the conference operator. Welcome to The Empire Company Limited Annual General Meeting of Shareholders. As a reminder, all participants are in listen only mode and the conference is being recorded. Today's discussion includes forward looking statements. The company cautions that such statements are based on management's assumptions and beliefs and are subject to uncertainties and other factors that could cause actual results to differ materially. The company refers you to the Empire news release and MD and A for more information on these assumptions and factors. I would now like to turn the presentation over to Mr. Jim Dixon, Chair of Empire Company Limited. Thank you, operator, and good morning, ladies and gentlemen, and welcome to the Annual General Meeting of Empire Company Limited. My name is Jim Dixon, and I am chair of the board of Empire, and I will be chairing the meeting today. In response to the ongoing public health impacts of COVID nineteen and to mitigate health and safety risks for all involved, we've again chosen to host our annual meeting through this virtual meeting platform. The meeting is also accessible in listen only mode through the North America toll free number +1 (866) 428-0907. Once again, that number is +1 (866) 428-0907. I'd like to begin by acknowledging the indigenous peoples of all the lands that we are on as we come together virtually today. I would like us all to take a moment to acknowledge the importance of the territory in which we each call home. I'm joining you from Pictou County in Nova Scotia in Mi'kmaqi, and I would like to acknowledge the traditional homelands of the local Mi'kmaq people of Pictou Landing First Nation who have been living on these lands since time immemorial. We do this to reaffirm our commitment and responsibility in improving our relationships with the first peoples of this land and to improve our own understanding of local indigenous cultures and communities. From coast to coast to coast, we acknowledge the ancestral territories of all of the Inuit, Metis, and First Nations people that call this land home. In accordance with our company's articles and applicable company law, a quorum of shareholders or their proxies is also physically present in attendance at this meeting at Empire's office at 115 King Street here in Stullerton, Nova Scotia. On the call with me this morning are Michael Medline, our President and Chief Executive Officer Michael Vels, our Chief Financial Officer Doug Nathanson, our Senior Vice President, General Counsel and Corporate Secretary Heidi Jamieson, our Senior Vice President, Finance Reporting and Treasury, Sobeys and Jane McDowell, our Assistant Secretary. And also joining us online today are my fellow directors and other members of our senior management team. Doug Nathanson will act as secretary of the meeting today. I've also asked Cindy Harrott and Lori Grinton of AST Trust Company of Canada to act as scrutineers for the meeting. Our agenda today includes, first, the business and formal part of the meeting. We will then close the formal meeting, after which I look forward to sharing a few remarks with you. Michael Medline will then provide some remarks. We will do our best to answer any questions that you may have. And finally, we will hear from our guest speaker today, Tabitha Bull. Tabitha is President and CEO of the Canadian Council for Aboriginal Business. Questions and comments may be provided by shareholders or their registered proxies through the question box identified by the messaging icon on the navigation bar at the top of your screen. When submitting a question, please indicate your name and whether the question relates to a motion that's being considered as part of the formal business of the meeting or whether the question is general in nature. Questions directly related to a particular motion will be addressed at the time of that motion, while general questions will be addressed following Michael's remarks. Questions covering a common topic may be grouped together. If there are questions relevant to meeting matters that are unanswered this morning due to time constraints, we will respond to you after the meeting. I now call the meeting to order. Notice of this meeting has been duly given. The secretary has advised me that we have 98,138,079 Class B voting common shares represented at this meeting either in person or by proxy, and this represents 100% of the total outstanding Class B voting common shares of our company. Quorum is present, and I declare this Annual General Meeting to be duly constituted. For shareholders or registered proxy holders who have logged into this webcast using a control number, Once the voting opens, the polling icon will appear on the navigation bar at the top of your screen. The resolutions and voting choices will then be displayed. We hold here proxies for all of the Class B common shares, and we'll vote them as directed unless otherwise revoked. Unless you want to change your vote, there is no further action required. We will conduct all other voting by ballot through the facilities of this webcast. So you may choose to vote immediately or wait until conclusion of discussions of the applicable resolutions prior to casting your vote. There will also be an opportunity to ask questions on the resolutions. Voting is now open. Shareholders and registered proxy holders may now cast their votes through the webcast platform. Please ensure you scroll down on your screen to view all resolutions. If you have submitted a proxy, there is no need for you to do anything as your vote will be logged automatically. Once discussion on all items of business has concluded, I will give you time to enter your votes and then declare voting closed on all resolutions. The results of the meeting will be published following the meeting in accordance with the rules of the TSX. The minutes of the Annual General Meeting held last year on 09/10/2020, have been provided and are available through the link provided with this webcast or in the Investor Center section of our website at empireco.ca. As the minutes have been made available, unless there are any objections, I will dispense with a formal reading of the minutes. Are there any objections? Having received no objections, we will proceed without reading the minutes. Unless Class B shareholders have any comments on the minutes, they will be considered final as presented. And having received no comments, the minutes are approved as presented. At this time, I would like to introduce the 15 nominees who are standing for election to our Board of Directors for the ensuing year: Michelle Bannock, Cynthia Devine, Sharon Driscoll, Greg Josephowitz, Sue Lee, William Linton, Michael Medline, Martine Reardon, Frank Sobe, John Sobey, Carl Sobey, Paul Sobey, Rob Sobey, Martine Turcotte and myself, Jim Dickson. As noted in the notice of Annual General Meeting and Management Information Circular, at this meeting, we are to approve the following regular items of business: the election of each of the directors I have just introduced and also to fix the maximum number of directors at 18, the directors' remuneration as set out in the circular, the appointment of PricewaterhouseCoopers LLP as auditor for fiscal twenty twenty two and finally, the authorization of the directors to fix the remuneration of PricewaterhouseCoopers LLP. Are there any questions on any of these matters? And as a reminder, questions can be provided through the question box identified by the message icon at the top of the screen. No questions have been received. And as proxies for 100% of the voting shares have been deposited in favor of these matters, we have the necessary votes for their approval. I'll now turn to the advisory resolution on executive compensation, which both Class A and Class b shareholders will vote on. This is an advisory vote, so it is not binding on the board of directors of Empire. However, the board, and in particular, our human resources committee continue to be interested in feedback from all shareholders on our approach to executive compensation. Our philosophy is based on the fundamental principle of pay for performance to align the interests of our executives with those of our shareholders. We believe this approach to compensation allows us to attract, retain highly qualified executives who are encouraged to make decisions and take actions that will drive long term sustainable growth and shareholder value. Of the proxies received, 100% of the Class B shares and 82.9% of the Class A shares were in favor of the advisory resolution on executive compensation. So we have enough votes already to pass this resolution. Are there any questions or comments? As a reminder, comments again can be provided through the question box identified by the message icon at the top of the screen. Having received no questions or comments, please proceed to register your vote if you have not already done so. And we will move on to the next item of business. A copy of the audited consolidated financial statements for the year ended 05/01/2021, have been made available to shareholders and are also accessible through this webcast via the link provided. While there is no requirement that these documents be approved by the shareholders, at this stage, we are open to any discussion or questions anyone may have. Are there any questions related to the audited consolidated financial statements? Again, thank you. No questions have been received. So ladies and gentlemen, that concludes the formal business of the meeting, and I will now pause to allow any who have not already done so to cast their votes through the webcast platform by clicking their desired selections. Thank you. Voting is now closed. Based on proxies received and votes cast at the meeting, I declare each item passed as outlined in the notice of meeting and our management information circular. At this time, are there any other business related questions that anyone would like to bring forward from the floor? If so, again, please use the question box identified by the message icon at the top of the screen. As there appear to be no further items, I will now ask Heidi Jamieson for a motion to terminate the meeting. Mister chair, my name is Heidi Jamieson. I move that the meeting be terminated. Thank you, Heidi. And I'll ask Jane McDowell to second that motion. Mr. Chair, my name is Jane McDowell. I second the motion. Thank you, Jane. Unless there are any objections, we will consider the motion carried. Are there any objections? Having received none, I now declare the motion carried and the formal business of the meeting terminated. So before I hand things over to our President and CEO, Michael Medline, I'd like to take the opportunity to say just a few words. It's a privilege to meet with you today, albeit once again virtually. Ladies and gentlemen, the challenges faced by our company and our team in fiscal twenty twenty one were unprecedented. However, the operating and financial results that we have achieved as an organization over the past year, I believe, are a direct reflection of the strength of our incredible frontline teammates in our stores and our distribution centers across Canada. Our frontline team showed up to work when many other workers across the country were forced to stay home. They helped keep millions of families across Canada safe and well fed. During this pandemic, our team has stepped up their support to their local communities like never before. They were resilient, compassionate, and dedicated, and most importantly, they lived our values of care, trust, and respect. Many people say that the true strength of any organization relies on the integrity of the team. Our team of 134,000 people across Canada stands firmly behind our values, and we are very proud of our family focused culture. This year, our team at Empire and Sobeys mourned the great loss of Donald R. Sobeys. During a career that spanned more than five and a half decades with our companies, Donald played a vital role in shaping Empire into the great Canadian business that it is today. Donald made tremendous contributions to our country both as a business leader and a very generous philanthropist. Donald was a staunch supporter of the arts community. He was passionate about equality in education, and he was instrumental in the development of many scholarships for universities and colleges across Canada. The impacts of Donald's generosity will be felt for many years to come. During this past year, we also bade farewell to our great friend and colleague, Jim Gogan. Jim spent his entire career with Empire and then the Sobe Group of Companies. He ultimately retired from his position as president and CEO of Empire in 1999, after which he continued to serve on our board for several years. These two incredible leaders left an indelible mark on our industry, our communities, and on our hearts. Fiscal twenty twenty one also ushered in a renewed focus diversity, equity, and inclusion strategy. We're focused on increasing representation for a diverse spectrum of teammates with a particular focus on persons who identify as black and indigenous. You'll hear more later this morning about why this is important and how we're doing with these initiatives when you hear from one of our guest speakers, Tabitha Bull, president and CEO of the Canadian Council for Aboriginal Business, who are partnering with us to develop our indigenous inclusion strategy. Empire also recently published our first sustainable business report. That report adds further disclosure and information with respect to how we are driving growth and building a sustainable future for our people, our products and our planet. Focusing on growth is important for our teammates, our customers, our partners, and of course, our shareholders. And we look forward to sharing more on our evolving sustainable business plans at future meetings. As they say, there is always more that we can do in this area. I'd also like to take a moment to welcome Michelle Bannock to our board of directors. Michelle is an accomplished global c suite executive with a distinguished career in the human resources sector spanning a diverse portfolio of companies. I'm very proud to serve on a board which shares many diverse voices and perspectives. It's been incredible to see our transformation plans come to life at Empire over the last five years. And, of course, none of this would have been possible without the leadership of our president and CEO, Michael Medline. Michael has led our team not only through the pandemic, but more importantly, through many significant and necessary changes for our business. In less than five years at the helm, Michael and his team have completely revived our business, embraced innovation, restored employee morale, and returned Empire to profitable, sustainable growth. Just over a year ago, we launched an ambitious three year strategy, Project Horizon. Despite the many challenges of the pandemic, we are already exceeding our Project Horizon targets. Our strong, focused and united culture continues to fuel higher performance and better business results. I'm pleased to report that our Board, the executive team and the entire company have stayed focused and committed to that plan over the past year. We stuck with our strategy, and most importantly, we didn't deviate from our core values as we worked through our strategic initiatives and the many challenges of the pandemic. This focus has paid off in the strong operating results we're now enjoying, once again taking our team and our business to new heights. We're moving forward full steam ahead with Project Horizon toward our goals with the great confidence that Michael and his executive team will deliver on all targets. We will continue to tackle this bold but achievable plan as evidenced by the results we've seen to date. So thank you again for joining us today, and I will now turn the meeting over to Michael Medline for his remarks. Good morning, everyone, and thank you for joining us. Jim, you captured the highlights of the last year so well. I share your pride in our team's ability to deliver results, innovate and live our values. There were many proud moments this year and a few somber ones too as we sadly lost Donald Sobe, a great philanthropist and savvy business leader. Our Empire team is made up of 134,000 incredible people across Canada. Our frontline heroes in our stores and RSCs are the lifeblood of our business. At Empire, our goal is to be Canada's finest retailer, put industry best numbers up on the board in a way that is consistent with Sobeys' values. With year one of Project Horizon in the books, we're on track to achieve our ambitious growth targets. We continue to reap huge benefits from expanding and renovating our store network, improving our store operations and leveraging advanced data and analytics. Our strategic sourcing and own brands efforts are also driving further efficiencies and value. E commerce is absolutely key to overall retail success across the globe. Voila, our home delivery grocery e commerce business has set a new bar for grocery e commerce in Canada. Customers just love the service. More Canadians will be able to experience it as we expand to Montreal in 2022 and then Calgary in 2023. And our curbside pickup service is expanding in Western And Atlantic Canada. Farm Boy also continues to blaze a trail for us in Ontario. We've opened 14 stores since we partnered with them. Their customer satisfaction is second to none. And we are more than halfway through our FreshCo expansion plan in Western Canada. In March, we welcomed a crown jewel of grocery into our family of brands, and I'd like to welcome our new partners, CEO Anthony Longo and his team to their First Empire AGM. Returning capital to shareholders continues to be a key priority for us. It is why we have continued to increase the dividend and have been buying back shares, reflecting our growing confidence in the strength of our business. All the while, we continue to give back to the communities we serve. At Empire, we believe that doing good is good for business. I am particularly proud of four ESG focus areas that we zeroed in on this year. First, we continue to champion our charitable and philanthropic causes that are so important to the communities we serve. This includes advancing our child and youth mental health initiative in partnership with the Sobe Foundation. Second, this year we also launched our first ESG report with data that helps bring our people, product and planet successes to life. We are very proud of this report. Third, we renewed our commitments to improve diversity, equity and inclusion. This year, we have made great strides in our partnership with the Black North initiative and created a refreshed strategy to support black and indigenous and other teammates and communities. Finally, in partnership with Food, Health and Consumer Products of Canada, we championed a blueprint for Canada's grocery supply code of practice, a first in our industry. It has moved the needle on the important issue of the health of retailer supplier relationships for our industry and for Canada. Another highlight for our team was our important role as the first official grocer of our Team Canada Olympians. Our Feed the Dream campaign supported our athletes and created an emotional connection with our customers, further entrenching our role as a champion of the connection between family, food and sport. I'm proud to be a part of a team that continues to build and grow based on our values. I'd like to thank our shareholders, our business partners and the Sobe family for their enduring support. Thank you to our Board of Directors. They are our biggest supporters when it comes to Empire's values based approach to business. And importantly, they hold us accountable for results. I'd like to give a special thank you to our incredible Chair, Jim Dixon, for his unwavering support. Jim's counsel and experience are invaluable as we work to push Empire to greater heights. And, of course, none of this would be possible without our world class executive committee. Our team is relentless in their commitment and focus to our people and our business, and they are so committed to growing and strengthening the next generation of leaders and talent at Empire. I'm proud to work with them. Thank you to everyone for joining us today. We look forward to years of profitable growth on behalf of you, our shareholders. Thank you, Michael. We've now reached the part of the meeting that every chair looks forward to, and that is to ask, are there any general questions? As a reminder, with that, I will thank you, and I will now introduce our guest speaker. Today, we are welcoming Tabitha Bull, President and CEO of the Canadian Council for Aboriginal Business and a key partner in Empire's indigenous inclusion strategy. Tabitha is an Anish in Abbeh Kway from Nipissing First Nation. As CCAB's president and CEO, she's committed to help rebuild and strengthen the path toward reconciliation and a prosperous indigenous economy to benefit all Canadians. With a focus on indigenous economic development, Tabitha often works with various heads of organizations, companies, government officials, and departments, and notably her role with the federal government's COVID nineteen supply council. She serves the indigenous community through her commitment, her sense of duty, and support to indigenous business and the economy. An electrical engineer, Tabitha informs Canada's energy sector by participating on the boards of Ontario's electricity system operator, IESO, the Positive Energy Advisory Council, the MERS Energy Advisory Council, and the C. D. Howe Institute's energy policy program. At Empire, our diversity, equity, and inclusion team has partnered with Tabitha and her team at CCAB to advance our indigenous inclusion strategy, which includes advancing internal awareness of issues faced by the indigenous community, a strategy to attract, grow, and retain indigenous talent, developing business relationships with members of the indigenous community, and finally, strengthening our community relationships. So, Tabitha, I wanna thank you, for taking the time to join us today and hand the meeting over to you for your comments. Hello, and thank you all. My name is Tabitha. As Jim mentioned, I'm a member of Nipissing First Nation, and I belong to the Eagle clan. I want to humbly thank Jim for recognizing in the best way possible the land that we are all sitting on as we gather virtually. By introducing myself in Anishinaabemowin, I also recognize my ancestors and all ancestors who came here before me. I want to note that the land acknowledgment isn't just words. It is a moment for all of us to think about where we live and work and who was here first. I encourage everyone on this call to take a moment to do that in the next few days. I'm honored and humbled to be here today to speak about CCAB's relationship journey with Sobeys, and I want to acknowledge the choice made by Empire leadership to provide space on today's agenda for a discussion on indigenous inclusion. There is no doubt that I'm speaking to an influential group, that each of you has a significant potential to create impactful change through growing the indigenous economy, not only as shareholders, but as investors, employers, employees, and consumers. With the recent confirmation of children's remains at former residential schools and the continued news about missing and murdered indigenous women and girls, Canadians are beginning to learn and understand the extent of the damage caused by generations of oppression suffered by indigenous people. Awareness of the past, acknowledging the harm inflicted, atonement for the causes, and action to change behavior are necessary steps to make this country whole. In part, the role of CCAB is to build relationships and partnerships between indigenous and non indigenous businesses, helping to grow the economy, which means prosperity for indigenous peoples and the whole country. In 1867, through the Indian Act, indigenous inherent economic rights were systematically and expressly stripped. Many Canadians do not know that from 1881 until as recently as 2014, the Indian Act still contained a permit system to control First Nations' ability to sell products off the reserves. Nor that until 1951, indigenous peoples were not considered Indians under the Indian Act if they obtained a postsecondary school degree, which then meant if you were a lawyer or an engineer or a doctor, your Indian status was stripped away. We lost mentors and role models for our youth and the opportunity for intergenerational wealth, which made ways to generations of financial struggle and trauma. This is why we all have a role to support an indigenous economy and why we must work together to ensure all Canadians are dedicated to building respectful economic partnerships. Although indigenous peoples were effectively excluded from the Canadian economy, they have persisted. Indigenous peoples are the youngest and fastest growing demographic in Canada, and they are creating businesses at nine times the rate of the average non indigenous Canadian. Today, there are close to 60,000 indigenous businesses across Canada in every sector and size and every province and territory. The outlook is positive, but there is significant work to do. An Empire company and the Sobeys teams are doing the work. I first met some of the Sobeys team almost exactly a year ago. I recall leaving that meeting incredibly impressed with the work done on gender inclusion and excited to see where the partnership could take us. Since then, we have met with the Diversity, Equity and Inclusion Council, the Supplier Diversity Steering Committee and had the opportunity to speak at various internal events. In July, Sobeys committed to the Progressive Aboriginal Relations program. These are significant steps forward. A Canada wide survey on indigenous and non indigenous businesses conducted by CCAB in partnership with Environics Research showed intense mutual interest in improving and facilitating procurement opportunities as one of the critical elements of economic reconciliation. The Empire team has a duplicative opportunity in this space, both in the services and products you procure for your businesses and in the opportunity you provide to indigenous businesses and consumers by providing a space on your shelves. Indigenous owned businesses like Birchbark Coffee and Merryman at Seafood who are on Sobeys shelves today. I'm often asked, what can I do as an individual to help the indigenous community and economy? And my answer is almost always, you have power in your wallet. As consumers, we can make an impact by changing the way we buy goods and services, by directing the money we already spend towards a positive impact. Consumers today are aware of how and where they spend their money, which is why we have seen that strong push for environmentally sustainable businesses. Purchasing goods and services from indigenous businesses where sustainability and social responsibility are rooted within their business models, like Birchbark Coffee, who provides a water purification system to a First Nation home for every 50 bags they sell. Empire has an opportunity to make even more choices available to consumers that not only support indigenous entrepreneurs, but are also ethical, socially responsible and good for Canada. I want to end by thanking Empire, Sobeys, each of your teammates, stores and franchisees who are finding their way on this journey. By engaging in cultural understanding and strengthening relations, we can walk the shared path towards an inclusive economy and prosperity for all Canadians. Economic reconciliation is where we each can make a tremendous impact every day. Thank you very much, Tabitha. I have to say at Empire and Sobeys, we feel very fortunate to have such engaged and visionary partners as you and your team at CCAB. In the spirit of partnership and celebrating the groups that Empire supported and cheered on this past year, we're going to close this year's meeting with a clip from one of our team Sobeys Olympic athletes, Canadian decathlete, Olympian, Olympic champion, and Olympic gold medalist in the Tokyo twenty twenty games, Damian Warner. Hello, everyone. It's Damian Warner here. We all know how difficult the last year and a half has been. The uncertainty of the pandemic has affected us all in many similar but also different ways. We've leaned on friends, family, and our communities to get us through these difficult times. It's the continued support, that we give and receive that allows us to persevere. As a new dad, family means more to me now more than ever before. Sobe's supporting my community and family as I trained to compete in Tokyo this summer. Your ongoing commitment to supporting Canadian families is so important. Having a peace of mind that Sobe's was there to support me allowed me to focus on my journey, my family, and to prepare for the Olympics. I want to extend a huge thank you to the entire Sobeys family for your unwavering support in my journey. I achieved my childhood dream of becoming an Olympic champion, and I wanna thank you for believing in me. Thank you. Now on behalf of the board of directors of Empire Company Limited, I'd like to thank all of you for taking the time to join us today. We will close the meeting. Enjoy the rest of your day.