Morning. I would like to welcome you to this annual general meeting of shareholders of The North West Company Inc. My name is Brock Bulbuck, and I am a Director of The North West Company Inc, and Chair of the Board. We are pleased to host today's meeting through a virtual meeting platform accessible to all our shareholders, regardless of physical location, to participate, submit questions, and vote. I will act as chair of today's meeting. I will now call this meeting to order. I would like to begin by acknowledging that The North West Company head office is located on indigenous ancestral lands on Treaty One territory. The Red River Valley is also the birthplace of the Métis. We acknowledge that drinking water in Winnipeg comes from Shoal Lake First Nation.
I also want to thank Frank Coleman and Deepak Chopra, who will not be standing for re-election this year. Frank Coleman retired from the board of directors on February 13th this year in connection with the company's term limit for directors. As noted in the information circular, Deepak Chopra will not be standing for re-election. Frank Coleman has served as director of the company since 1999, and Deepak Chopra was appointed as a director in 2018. On behalf of the board, I want to thank Frank and Deepak for their valued contributions as directors. 2023 was another year of strong results for North West. Sales increased 5.1% to $2.5 billion, and net earnings increased 6.7% to $134 million.
Company also made capital investments of CAD 123 million and increased the dividends paid to shareholders to CAD 74 million. These results were achieved within a challenging environment of inflationary cost pressures, changes in government payments to customers, and the negative impact of wildfires in Northern Canada and Typhoon Mawar in the South Pacific that affected communities we serve. Within this challenging environment, the diversity of our business and the strength of our essential product and service offering once again demonstrated the sustainability of our financial performance. These results could not be achieved without the passion and dedication of all Nor'Westers, from the frontline associates in our stores to our support office teams. I want to thank them for their continued efforts to North West's mission of helping make people's lives better in the communities we serve.
This year, management and the board focused on company strategy, including further developing our ESG strategy. Our stores and associates are at the center of the communities we serve, addressing ESG in our operations, policies, and strategy is critical to ensure business success, long-term value creation, and community success. In 2023, the company worked with community members, associates, and non-government organizations to prioritize which ESG topics are the most important to the communities we serve and other stakeholders, also have the greatest impact on our business. Together, we have developed a shared-value framework that focuses on people and our planet, which we believe creates strong partnerships for the future. This work also builds on North West's promise to Indigenous peoples, which reaffirms our commitment to building more collaborative relationships that enhance the inclusion and social well-being of Indigenous people of Canada.
I would now like to introduce the people joining me at the head table. To my immediate left is Dan McConnell, President and Chief Executive Officer and Director. At the head table is John King, Executive Vice President and Chief Financial Officer. I appoint John King to act as secretary for this meeting. Kristine Kolehmainen of TSX Trust Company will act as scrutineer for the meeting. I will now ask John King to read a notice regarding forward-looking statements.
Certain information presented today may constitute forward-looking statements. Such statements reflect North West's current expectations, estimates, projections, and assumptions. These forward-looking statements are not guarantees of future performance and are subject to certain risks, which could cause actual performance and financial results in the future to vary materially from those contemplated in the forward-looking statements. For additional information on these risks, please see North West's annual information form under the heading Risk Factors. This presentation may also refer to EBITDA, adjusted EBITDA, and adjusted net earnings, which are not recognized financial measures under international financial reporting standards. For further information, please see North West's annual report under the heading Non-GAAP Financial Measures.
I would now ask the secretary to report on attendance.
Mr. Chair, I have been advised by the scrutineers that there are present by proxy a sufficient number of persons holding a sufficient number of shares entitled to vote at the meeting to constitute a quorum. As there is a quorum present, this meeting is regularly called and properly constituted for the transaction of business.
A notice calling the meeting, together with a form of proxy, management information circular and proxy statement, and annual report containing the financial statements of The North West Company Inc. for the year ended January 31, 2024, and the related auditor's report were provided to each intermediary and registered shareholder of record on the record date for the meeting. We have received an affidavit of mailing from TSX Trust Company, North West's transfer agent, confirming the mailing of the notice. Voting on the items of business to come before today's meeting is being conducted by poll via a single electronic ballot that is now available on the web portal. Only registered shareholders and duly appointed proxy holders are able to vote or ask questions. Voting can only be done through the virtual voting platform on the webcast.
If you are a registered shareholder or proxy holder and wish to vote, click the Voting icon at the top of the webcast page. Voting can be completed at any time from now until the polls are closed at the end of the formal business of the meeting. If you have already voted in advance of the meeting and do not wish to change your vote, you do not need to vote again during the meeting. The polls are now open. Questions can only be submitted through the webcast platform. If you are a registered shareholder or proxy holder and wish to ask a question, click the Question icon at the top of the webcast page. Type in your question in the text box at the bottom of the messaging screen, and then click the Send button.
If your question relates to a specific motion, please start your question by identifying the motion. We will respond to questions relating to specific motions before the closing of the polls and will save all other questions for the general question and answer session at the end of the presentations following the formal portion of the meeting. We will receive the questions and read them out in order for everyone to be aware of the question being addressed. If we have a number of questions that are the same or very similar, we will consolidate the questions. We will endeavor to address all general questions. Please note that due to time constraints, we may not be able to do so. If you have questions, we encourage you to submit them now. Questions can be submitted throughout the meeting. A bit about the format of today's meeting.
We will deal with the formal requirements of the meeting, and thereafter, Dan McConnell will provide his comments on the company's strategy and key initiatives that drive our business performance and potential. I would now like to introduce all of the members of the board of directors who will be standing for election this year. Stewart Glendinning is from Ocean Ridge, Florida, and is Chief Executive Officer of Express, Inc. Stewart is the Chair of our Governance and Nominating Committee. Rachel Huckle is from Toronto and is the Chief Executive Officer for Staples Canada. Annalisa King is from Vancouver and is a past Senior Vice President and Chief Financial Officer of Best Buy Canada. Annalisa is the Chair of our Audit Committee. Violet Konkle is from Fenwick, Ontario, and is a past President and Chief Executive Officer of The Brick.
Violet is the Chair of our Human Resources, Compensation, and Pension Committee. Steven Kroft is from Winnipeg and is the past Chief Executive Officer and Executive Chair of the CEL Group of Companies. Jennifer Nepinak is from Winnipeg and is the Vice President, Strategic Partnerships and Reconciliation at TIPI Group of Companies. Victor Tootoo is from Iqaluit, Nunavut, and is the President of Nvision Insight Group. Of course, there is our President and Chief Executive Officer, Dan McConnell, and myself, Brock Bulbuck. We are recommending you re-elect the aforementioned directors to our board. With those comments, I would like to move to the formal part of the meeting. The first item of business is the presentation of the consolidated financial statements of The North West Company Inc. for the year ended January 31, 2024, and the related auditor's report.
A copy of the financial statements was made available to all shareholders with a notice of meeting. Shareholders are not asked to take any action regarding the financial statements, if any shareholder has questions relating to the financial statements, I would request that they be asked later in the meeting after Dan completes his presentation. The next item of business is the election of directors of The North West Company for the ensuing year. Apart from the directors listed in the Management Information Circular and proxy statement for this meeting, no additional individuals have been nominated for election. I will now entertain a motion with respect to the election of directors. Kevin Wasylik, Canadian Operations Controller, has been asked to place before the meeting the names of those persons proposed to be nominated for election as directors and Pam Pronyk, International Operations Controller, has been asked to second the motion.
I move that each of the persons whose names are listed under the heading Election of Directors in the Management Information Circular, who are Brock Bulbuck, Stewart Glendinning, Rachel Huckle, Annalisa King, Violet Konkle, Steven Kroft, Dan McConnell, Jennefer Nepinak, and Victor Tootoo, be elected as directors of The North West Company Inc. for the ensuing year or until their successors are appointed.
Thank you, Kevin.
I second the motion.
Thank you, Pam. Please cast your votes before we move on to the next item. We will now proceed with the appointment of auditors and the authorization of the board of directors to fix their remuneration. Kevin, may I have a motion to appoint the auditors of The North West Company? Pam, please second the motion.
I move that PricewaterhouseCoopers LLP be appointed as the auditors of The North West Company Inc. to hold office until the next annual meeting of shareholders or until their successor is duly appointed, and that the board of directors be authorized to fix their remuneration.
Thank you, Kevin.
I second the motion.
Thank you, Pam. Please cast your votes before we move on to the next item. We will now consider a non-binding advisory vote on the approach to executive compensation, which was outlined in the 2024 Management Information Circular that was previously sent to all shareholders. Kevin, may I have a motion regarding the compensation of North West executives, please? Pam, please second the motion.
I move that on an advisory basis and not to diminish the roles and responsibilities of the board, the shareholders accept the approach to executive compensation disclosed in The North West Company's 2024 Management Information Circular, delivered in advance of this 2024 annual general meeting of shareholders.
Thank you, Kevin.
I second the motion.
Thank you, Pam. Please cast your votes. We will now take a short pause to answer any motion-specific questions that have been submitted and to permit any registered shareholder or proxy holder who has not already done so to record their votes on the motions before the meeting. Thank you, John. Having received no questions, I will close the polls in 30 seconds. The polls are now closed. I have now received the preliminary scrutineers report. With respect to the election of directors, I am advised by the scrutineers that each of the proposed nominees has been duly elected. With respect to the resolutions to appoint the auditors and the non-binding executive compensation, I am advised by the scrutineers that these resolutions have been duly carried.
The detailed results of this meeting will be announced in a press release and also included in a voting report to be filed on SEDAR as soon as practical after the meeting. We have now completed the formal part of the meeting. On behalf of management and the board of directors, I would like to thank you for attending today. I will now invite Dan McConnell to say a few words about the company's strategy and key initiatives that drive our business performance and potential. We would be pleased to answer any questions you may have after Dan's presentation has concluded. You are welcome to submit any questions any time during the presentation by typing in the question in the box displayed on the screen and clicking the button Submit.
Thank you, Brock. Good morning and welcome. I stand before you today as we navigate through an exciting next phase of growth at The North West Company. Last year, I spoke about the journey we were beginning and the progress we made despite the challenging economic climate and our team's response to the ongoing impacts of inflation. This continued impact has resulted in a significant increase in retail prices, and all retailers are under pressure to reduce costs. The impact of inflation has further heightened concerns about food security, particularly in Northern Canada. The Nutrition North Canada subsidy program in Canada is a critical component of helping people address food security. However, the positive impact of this program has been eroded as the allocated subsidies have not kept pace with inflation.
This is why I am pleased to build on my narrative from last year and provide you with an update on the work we are doing to provide more value for our customers. Within this challenging economic environment, we will deliver on our commitment to help make people's lives better in the communities that we serve. The North West Company has a rich history as one of the longest continuing retail enterprises, having served many northern communities in Alaska and Canada for over 200 years. We trace our roots back to 1668 and the establishment of one of North America's early trading posts in Waskaganish, Quebec, a community we continue to serve today.
Back then, like today, we are a retailer of essential products and services, and we have made it our mission to enhance the well-being of the people in the communities that we proudly serve. This tradition continues as we move the company into the future with a focus on continuous improvement in all areas of our business. This keen focus is looking at every microcosm of our operation with the primary goal of delivering value to our key stakeholder groups, including empowering our employees, providing them with career opportunities, training, and equipping them for long-term success. Continuing to deliver value to our customers and being in stock on the products and services they need and want. Honoring the shared responsibility we have with the communities we operate in and respecting the environment. This is our firm commitment to our people, our partnerships, and our planet.
To this, we have initiated a program of operational improvement across all business areas. This program, entitled The Next 100, is a journey to enhance operational efficiency, expand on our capabilities, all while relentlessly pursuing value for our employees, our customers, and our shareholders. Central to The Next 100 is our unwavering commitment to the communities we have served for over 200 years. All of our efforts in this program are guided by our promise. This is our reaffirmed commitment to building more collaborative relationships with indigenous peoples that will enhance the inclusion and social well-being for all communities in which we operate. The three pillars of our promise being well-being and security, stronger community bonds, inclusion and economic success are at the core of our operational strategy. It is important to note that this is not a traditional business project.
The Next1 00 is a tangible program to improve the value that we offer to the communities we serve and live up to the spirit of our promise through the way we execute every hour of every day. The Next 100 touches on every aspect of our business and aims to drive annualized incremental EBIT over the next three years while ensuring sustainable investment back into our core operations. It is this value that we are able to offer to the communities we serve through more efficient operations and execution. This benefit is expected to start later this year and continuing to accelerate through 2025 and 2026 as our initiatives reach maturity. As we lay the groundwork for these improvements in how we work, we anticipate incurring some one-time costs and capital investments.
We will share more details on these impacts in future updates. But I must stress, this journey is not just about financials, it is also about people. We are asking every layer of our organization to challenge the status quo, from our frontline associates in stores and distribution centers to our support office teams. This cultural shift is complemented by investments in technology and training, ensuring our processes are efficient, that our workforce is not only excited about the challenges and changes, but we are also prepared for them. In executing these changes, we are making use of new tools and analytics, harnessing the power of our data in new ways to run our operations more effectively. These investments in people and tools are what will allow us to sustain the impact of this effort in the years to come.
This is why we have termed this program The Next 100, to have our teams thinking about building capabilities to drive top performance into the future while appreciating our history and how far we have come. Recognizing the complexity, scope, and the importance of this program, we have appointed an executive to lead the company through this journey. Leanne Flewitt, who has extensive experience across various sectors of our business, makes her the ideal candidate to drive these changes, ensuring we remain focused and aligned with our strategic objectives. Along with Leanne, our entire executive team is engaged to execute elements of this program, including our presidents, as this work spans all of our business units and geographies. Below the executive level, this work is being driven by leaders across the organization who are leveraging their knowledge in their respective areas to implement the initiatives across the company.
This not only sets us up for success as we dive into the, each segment of our business, but it also develops these leaders, allowing them to shine in their areas of expertise. All of this sets The Next 100 up for a long-term success and sustainability. Our approach to The Next 100 is comprehensive. We are refining what we sell to ensure our product assortments meet the evolving needs of our customers, inclusive of private label, ensuring we offer even more value to the communities that we serve. We're enhancing processes and employing new technologies to streamline backstage operations across all of our teams. We're building on our logistics operations, enhancing the forecasting and replenishment capabilities to reduce costs while improving product availability and freshness for our customers.
While we expect most of the impact of the program to land in the next three years, we are already seeing positive and early wins across the initiatives. These early wins are pivotal in building momentum as we continue to roll out further phases of the program and are contributing to the conviction in this effort. As a few examples, we're using data analytics to refine merchandise assortments and test new forecasting and replenishment algorithms in order to improve product availability for our customers. New labor optimization tools and methodologies are starting to enhance efficiency across our stores by more closely aligning store resources with our customer shopping patterns. We are scrutinizing all costs in our business, such as right-sizing our marketing expenditures, identifying opportunities to reduce the number of printed flyers, and supporting materials lowering costs.
All of this while maintaining the same support of our promotional programs that offer important value to the customers. These wins have also contributed to progress on the specific ESG objectives. For example, in reducing our environmental footprint through lower food waste across all of our stores. Continued growth through partnerships with local suppliers and indigenous businesses, enabling us to increase the access of local product and services for our customers. I want to reiterate that a core objective of these initiatives is to deliver greater value to the communities that we serve. In doing so, we can also create value for our shareholders. This reflects our balanced approach of investing in the business and providing value to our customers and to our shareholders. Earlier today, we released our first quarter results.
Overall, we are pleased with sales in the first quarter up 4%, driven by same store sales gains in both Canada and in the international operations. Net earnings increasing 22.3% compared to the first quarter of last year. I'll provide more details on the first quarter results in our investor call this afternoon, but I wanna emphasize that our entire team, from our executive team to our frontline teams, are energized and excited by the journey and the value that we believe it can bring to the communities that we so proudly serve and work within. Our journey is not just about improving margins or reducing costs. It's about setting a foundation for sustained growth that benefits the communities we serve and all of our stakeholders, including customers, employees, and the shareholders.
Thank you for your continued trust and commitment to The North West Company. Together, we are not just preparing for the next year, but we are preparing for The Next 100. We'll now play a short video where you'll hear from us and our leaders about the initiatives and the impact that they're driving through The Next 100. Thank you. At The North West Company, we pride ourselves in supporting communities with the products and services they need to fulfill their daily lives. Working in, serving remote regions across Canada, Alaska, the Caribbean, and South Pacific, each day presents us with a unique set of challenges and opportunities. With a robust logistics network and operation, our teams rise to the challenges, meeting each with passion and courage.
As Nor'Westers, it remains critical for all of us to find new ways to deliver unparalleled value for each of the communities and the customers we so proudly serve.
Reviewing our assortments has always been an important task for our category teams to drive the right product mix to best serve our customers. This past year, our review work has been underpinned by a new set of tools and analytics, giving our category managers unprecedented visibility into how our customers shop our stores every day. In doing so, we've been able to develop holistic strategies in each food category, identifying the products that matter most for our customers. From this, we have identified a more streamlined assortment, which, when implemented, will improve the availability of the products our customers really want while unlocking more efficient operations for us at The North West Company.
Our supply chain is at the core of our business, allowing us to reach remote communities around the world. It is also one of our biggest drivers of cost, given the complexity of the markets we serve and the unique challenges they pose. Lowering these costs will be a key enabler of our ability to offer further value for our communities and for The North West Company. Over this last year, we have reevaluated every step of our processes, from how we plan an order to how we operate our warehouse to how we deliver product to shelf. This relentless push for efficiency at every step of the process will drive a more cost-effective supply chain now and for years to come.
Here at Alaska Commercial Company, we are expanding our offer to provide the right stores with the right assortment. Over the past year, we've opened two new stores, one in Point Hope, Alaska, and another in Anaktuvuk Pass. In both communities, we're providing families with fresh, healthy, and nutritious food, and that is being very well-received. We also opened a general merchandise store in Dillingham and a motorsports store in Bethel. Across the AC store portfolio with these new stores and expanded assortment, we are reinforcing our reputation as the community store of choice in rural Alaska.
To best support our customers, we're enhancing our labor planning and staff scheduling processes to ensure optimal staffing levels across our stores. By leveraging advanced tools and practices, we're empowering our store management to better align schedules to customer demand, enhancing operational efficiency, and ultimately elevating our customer experience. We're also implementing robust forecasting and ordering systems to optimize inventory management and on-shelf product availability. This initiative will ensure that our shelves are consistently stocked with the right products at the right times, driving higher customer satisfaction, sales growth, and more efficient inventory investments. While we're in the early days, both initiatives are showing promising results and underscore our commitment to delivering value to our customers.
Reducing product waste in our stores is a critical step for us driving impact to our customers. With the total focus, we minimize our environmental impact with less product waste going to local landfills. It helps keep our operational costs low, allowing us to pass on further savings to our loyal customers through lower prices. To support these efforts, we have developed new operating procedures and tools for our teams with enhanced monitoring practices to reduce waste in our stores. By implementing these practices, we improve availability and freshness for our customers and reduce the cost throughout our network. Here in our Cost-U-Less Barbados location, we have already started piloting new processes and in the early days are seeing great results with strong energy from the team members.
We believe Northwest has a responsibility to make a positive impact in the communities we serve. This is central to our company's purpose. As we reflect on the good work our teams have done this year, we demonstrated our commitment to this purpose by enhancing our capabilities and ESG focus across the entire enterprise. Our 2024 ESG strategy was informed by our promise to Indigenous peoples, as well as a materiality assessment that heard from employees, external partners, and community leaders across all our business. Our very first enterprise ESG strategy will now guide Northwest to achieve our aspiration to co-create an equitable and sustainable future with the involvement of all our partners. We are committed to our three core pillars: people, planet, and partnerships. Central to our strategy is enhancing the community and employee experience. We believe we can do good, and we can do well.
We have a unique opportunity to create value in our business operations while listening to the communities we serve and fostering collaboration. By establishing clear goals, robust governance, and a vibrant culture, we have laid the foundation to building a strong and sustainable future for Northwest.
Thank you, Dan. I will now entertain questions from shareholders.
Mr. Chair, there are no questions.
Thank you, John. There being no questions, I will bring this meeting to a close. Thank you all for attending this year's AGM.