Good day. Thank you for standing by. Welcome to the Superior Plus 2022 Fourth Quarter and Full Year Results Conference Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I will now hand the conference over to speaker today, Rob Dorran, Vice President of Capital Markets. Please go ahead.
Thank you, Victor. Good morning, everyone, and welcome to Superior Plus's conference call and webcast to review our 2022 annual and fourth quarter results. On the call today from Superior Plus are Luc Desjardins, President and CEO, Beth Summers, Executive VP and CFO, and Darren Hribar, Senior Vice President and Chief Legal Officer. For this morning's call, Luc and Beth will begin with their prepared remarks. We will open up the call for questions. Listeners are reminded that some of the comments made today may be forward-looking in nature and are based on Superior's current expectations, estimates, judgments, projections, and risks. Further, some of the information provided refers to non-GAAP measures. Please refer to Superior's continuous disclosure documents available on SEDAR and Superior's website yesterday for further details. Dollar amounts discussed on today's call are expressed in Canadian dollars unless otherwise noted.
I'll now turn the call over to Luc.
Thank you, Rob, and good morning, everyone. Thanks for joining the call to discuss our 2022 annual and fourth quarter results. I'm pleased to say we've achieved a record fourth quarter posting adjusted EBITDA of CAD 182.6 million. We also achieved full year adjusted EBITDA of CAD 449.8 million, which was CAD 51.4 million increase from the 2021 and above the midpoint of our 2022 adjusted EBITDA guidance range. I'm so proud of the Superior team and their ability to achieve this result an unprecedented year that saw challenges related to the continued public health restrictions earlier this year, rising inflation and labor costs in a volatile commodity pricing environment.
Our financial and operational results are a testament of our resilient business model in the propane distribution businesses and our Superior Way Forward strategic initiatives, which saw us close 8 acquisition in 2022 for a total of CAD 519 million and announce a transformative acquisition of Certarus. The 8 propane acquisition we complete 2022 were geographically diverse, including business in U.S. Northeast, Southeast, Upper Midwest and the California. We also had 1 small acquisition in Ontario, Canada. In March 2022, we closed the acquisition of Kamps and Kiva, which provide us with a platform for future growth in the attractive California Western U.S. market. The acquisition completed in 2022 increased our customer base in the U.S. and Canada, and we expect to generate significant synergy from these acquisitions consistent with our historical experience of improving propane distribution business we acquire.
Maybe I'm repeating myself a little bit here, but over 20 deal and each of those 20 companies we've acquired have improved the bottom line by 25%. The Certarus acquisition announced in December 2022 has the complementary high-growth, low carbon fuels, compressed natural gas, renewable natural gas and hydrogen to Superior extensive distribution platform. To the use of mobile storage unit, MSU, Certarus delivers low cost and low carbon intensity energy alternatives to its customer. Certarus MSU are interchangeable between CNG, RNG, hydrogen, giving Certarus flexibility to service its customer across North America as they transition away from diesel and other distilled. Certarus provides a virtual pipeline to its customer that do not have infrastructure in place or require backup to support existing infrastructure.
From 2020 to 2022, Certarus has more than doubled its adjusted EBITDA, driven by continued volume and efficiency improvement and the benefits from diversification to their end-use customer segments. I'm also happy to share that Certarus had its best month in December 2022, only to be surpassed by another record month in January 2023. The Certarus business is starting the year well, and we expect they will achieve adjusted EBITDA in the range of $140 million-$150 million during the year 2023. The shareholders of Certarus have voted in favor of acquisition of Certarus, so there is no fiduciary out related to the deal, and we're only awaiting regulatory approval in Canada. In the U.S., the 30 days awaiting period required under HSR filing has expired, so we are only waiting for the regulatory approval in Canada.
More important, while we are awaiting approval from the Canadian regulator, all economic benefits being generated by Certarus business is accruing to us. We're including the full year results of the Certarus business and our 2023 adjusted EBITDA guidance range of CAD 585 million-CAD 635 million because the cash generated in the business is ours based on our terms and our arrangement agreements. We're excited to welcome the experienced Certarus management team into the Superior family and to continue to grow the combined companies after close. Certarus is a high-growth business. We expect to generate attractive financial return, including double-digit accretion to Superior distributable cash flow per share in 2023. Superior expects to achieve CAD 1.9 billion acquisition target at the close of the Certarus acquisition, which is three years ahead of our expectation.
Superior also expect to achieve the Superior Way Forward, EBITDA from operation target range CAD 700 million-CAD 750 million by the end of 2024, which is done two years ahead of expectation. I will now turn the call over to Beth to discuss financial results in more details.
Thank you, Luc. Good morning, everyone. As Luc mentioned, Superior's fourth quarter adjusted EBITDA of CAD 182.6 million was a record for us in the fourth quarter and was an increase of CAD 40.4 million compared to the prior year quarter, primarily due to higher EBITDA from operations, partially offset by higher corporate costs and a realized loss on foreign currency hedging contracts compared to a gain in the prior year quarter. The full year 2022 adjusted EBITDA was CAD 449.8 million, which was CAD 51.4 million higher than 2021, primarily due to an increase in EBITDA from operations, partially offset by higher corporate costs and a realized loss on foreign currency hedging contracts compared to a gain in the prior year.
The fourth quarter earnings from continuing operations was CAD 63 million, an increase of CAD 49.2 million compared to the prior year quarter. The primary driver for the higher earnings was higher gross profit and a gain on derivatives and foreign currency translation of borrowings compared to a loss in the prior year quarter, partially offset by higher SD&A, income taxes, and finance expense. Full year net loss from continuing operations of CAD 87.9 million decreased by CAD 105.1 million compared to the prior year, primarily due to a loss on derivatives in foreign currency translation of borrowings and higher SD&A, partially offset by higher gross profit, lower finance expense and lower income tax expense. Turning now to the individual business results.
U.S. propane adjusted EBITDA for the fourth quarter was $116.7 million, an increase of $36.8 million compared to the prior year quarter, primarily due to the impact of acquisitions completed in the current year and to a lesser extent, increased prices to offset inflation and the impact of the weaker Canadian dollar on the translation of U.S.-denominated transactions. Full year adjusted EBITDA in 2022 for U.S. propane was $284.9 million, an increase of $58.7 million compared to 2021, primarily due to the impact of acquisitions completed in the current and prior year and to a lesser extent, higher unit margins, the impact of the weaker Canadian dollar on the translation of U.S.-denominated transactions and the increased costs due to inflation. Canadian propane adjusted EBITDA was CAD 58.3 million.
This was an increase of CAD 4.7 million compared to the prior year quarter, primarily due to higher prices to offset the impact of inflation. Full year adjusted EBITDA in 2022 for Canadian propane was CAD 144.8 million, a decrease of CAD 15.4 million compared to 2021, primarily due to the impact of the CEWS benefit recorded in the prior year, lower sales of carbon offset credits and increased costs due to higher commodity prices and inflation, partially offset by higher sales volumes and unit margins. Wholesale propane adjusted EBITDA was CAD 22.7 million, an increase of CAD 13.1 million compared to the prior year quarter. This was primarily due to the impact of the Kiva acquisition.
Full year adjusted EBITDA in 2022 for wholesale propane was CAD 48.7 million, an increase of CAD 25.2 million compared to 2021. This was primarily due to the impact of the Kiva acquisition and to a lesser extent, stronger propane wholesale market fundamentals compared to the prior year. Turning to corporate results, the adjusted EBITDA guidance and leverage. Corporate administrative costs for the fourth quarter were CAD 11 million, an increase of CAD 6.4 million compared to the prior year quarter, primarily due to higher insurance costs, professional fees, the impact of inflation and higher incentive plan costs. Superior realized a loss on foreign currency hedging contracts of CAD 4.1 million compared to a gain of CAD 3.7 million in the prior year quarter due to lower average hedge rates relative to changes in exchange rates.
On a full year basis, corporate administrative costs were CAD 25.9 million, an increase of CAD 1.8 million compared to 2021. This was primarily due to higher self-insured insurance claims, partially offset by lower incentive plan costs due to the decline in Superior share price compared to the prior year. For 2022, Superior realized a loss on foreign currency hedging contracts of CAD 2.7 million. This compared to a gain of CAD 12.6 million in the prior year due to lower average hedge rates relative to changes in exchange rates. Superior's total net debt to adjusted EBITDA leverage ratio for the trailing 12 months ended December 31st, 2022, was 4.1 times, which is slightly above our target range of 3.5 times to 4 times.
The higher average leverage ratio was primarily due to the impact of higher U.S. CAD rate on U.S. denominated debt. Superior is maintaining its targeted leverage ratio at 3.5-4 times while it continues to focus on integrating acquisitions and executing on the Superior Way Forward initiatives, including achievement of the anticipated organic growth in the Certarus business. Superior expects to be in the target range of 3.5-4 times at the close of the acquisition of Certarus. As Luc mentioned, we achieved our 2022 adjusted EBITDA guidance range of $425 million-$465 million, with adjusted EBITDA of $449.8 million coming in above the midpoint of that range. This extends our streak of achieving the adjusted EBITDA guidance we set each year and demonstrates the resiliency of our business.
For 2023, we're introducing our pro forma adjusted EBITDA guidance range of CAD 585 million-CAD 635 million. Based on the midpoint of the 2023 pro forma adjusted EBITDA guidance range, this is a 36% increase compared to the full year 2022 adjusted EBITDA of CAD 449.8 million. The increase is due to the expected contribution from the Certarus acquisition, the first quarter contribution from Kamps, Kiva, Quarles acquisitions completed in 2022, being partially offset by the warmer weather experienced at the start of 2023. The 2023 pro forma adjusted EBITDA guidance range includes estimated full year Certarus adjusted EBITDA in the range of CAD 140 million-CAD 150 million. This guidance assumes average weather for the remainder of 2023 to be consistent with the 5-year average.
As for our capital allocation priorities in 2023 and going forward, the Certarus acquisition presents us with a great opportunity to invest capital in high organic growth. We will continue to evaluate M&A targets in the propane space, but growth CapEx for Certarus is currently our view of the near-term priority. We also have the ability to repurchase shares through the normal course issuer bid we announced in 2022 if that opportunity generates the appropriate level of returns. We're focused on creating long-term shareholder value, and we'll only allocate capital to our most accretive opportunities. With that, I'll turn the call over to Q&A.
As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes line of Ben Isaacson from Scotiabank. Your line is open.
Thank you very much, and good morning, everyone, and congrats on the quarter. Just a question on your guidance. If you strip out the Certarus, the acquisition where you've called for CAD 140 million-CAD 150 million of adjusted EBITDA, can you talk about the change from 2022 to 2023 for the rest of the business? How much of that is the normalization of volume due to weather? How much of that is net growth? How much of that is the realization of synergies from some of the smaller acquisitions that you made? Thank you.
Okay.
I'm just gonna break-
Take the next two minutes.
22 to 20-
Yeah, yeah. I can. What I'll do is at a high level here, just sort of call out some of the pieces. The first one, and maybe I'll talk about it from a division perspective. If you think about the U.S. propane division, on a year-over-year basis, you know, basically think of it as sort of a $20 million-$25 million increase. That's being driven by sort of the impact of the M&A. You've got the Kiva and the Quarles acquisition, so you're gonna have Q1. There is a weather impact or there was, you know, headwinds from a weather perspective in January. Think of that in sort of a $10 million-$15 million range. You have a bit of an offset there as well.
From a Canadian propane perspective, well, there's gonna be sort of volume and margin growth in that business and a little bit from the McRobert acquisition. What you are seeing on a year-over-year basis is we're expecting, you would have seen in the disclosure carbon credit sales. From a carbon credit sales perspective, we would anticipate some lower carbon credit sales moving into 2023 versus 2022, as well as there'll be no wage subsidy or the CEWS benefit on a year-over-year basis. Net overall, think of that as, you know, you know, negative headwind on that business in and around a range of, say, around CAD 5 million.
Those are really, I'm gonna say, sort of the key changes that would take you in the base business from that, you know, 2022 of the CAD 449 that you would have seen.
Also-
Up in that range. Yeah, well, about flat.
Yeah.
The rest of the business, you've got ups and downs.
Yeah. On a running rate with normal weather, let's say the CAD 610 would probably be CAD 620-CAD 625, wasn't for the start of the year with such warm weather.
Perfect. Just to follow up on that one. For the big acquisition that you made in December, on your slide deck at the time you talked about the virtual pipeline providing you with optionality. Can you talk about what that could look like, that optionality? Can you also just remind us what the synergies are from this acquisition? Thank you.
I'll start with the synergy, and Beth will talk about the question of. No, there really not much synergy. This is a division with a, you know, products selling to industrial. They can take the equipment and use CNG or RNG. The flexibility is you could have different liquid that goes into those trailer, so which is great because you can move them, they're mobile, and you can use different products. This is a business that has a fantastic management team, very good assets. It's a pretty new industry with big growth, and we intend to run it totally separately.
What we like to do is, and we're doing in 2023 for sure, and I hope, even after me, it's always the priority because I always said in my career, probably done over 100 deals, and there's nothing more profitable than internal growth. Compared to acquisition, we make acquisition in, say, in the 7, 8, let's say in the 8 multiple. After we've done our Superior Way execution, we get down to 6. It's worthwhile and it's good. When you look at internal growth, a better return than that. You know, great business will be run totally separately, same management team, and we're there to help and support them in their growth. Not much synergy in that regard.
Great. Thank you very much.
from an op-.
Oh.
Just to answer the optionality portion of the question, are you referring to the optionality to the customer and the ability to move to lower carbon fuels using the virtual pipeline, where primarily they'd be using these lists now? Are you talking about it from a capital allocation perspective in the business?
No, the first one. The first one.
Oh, okay. Yeah. I mean, fundamentally, we're, you know, the virtual pipeline provides that lower carbon option. We're, in particular, if diesel is being used for generating energy, et cetera, what it does is it allows the customer to now use either renewable natural gas, in the instances where that's available, or natural gas, which is lower carbon intensity than diesel, which is typically what it's replacing. On top of that, there's also opportunities from a hydrogen perspective as well as we go forward.
Great. Okay. Thank you so much.
If there's anything more specific you want, I'm happy to answer. Okay. Thank you.
One moment for our next question. Our next question comes the line of Gary Ho from Desjardins Capital Markets. Your line is open.
Thanks, and good morning. Maybe more of a high-level question just on the CEO announcement. You know, the wording from the press release identifies internal growth, operational improvement, and executing accretive tuck-in acquisitions. It feels like, you know, the larger platform type deals were not mentioned, and I know you've completed several larger ones recently, including Certarus. Am I reading into that correctly, you know, strategy will be more inward focus, organic growth and smaller tuck-ins? That make sense?
I think for the short term, it makes sense because we wanna allocate more of the overall capital to Certarus. Then, we still intend to do some small tuck-in. The tuck-in, I've talked earlier about 8x turn. We buy the small tuck-in around 6x-7x would be the high number that we would pay. There's often the return are more than 25% improvement. They're more in the 30-35 range of improvement of the small tuck-in. We intend to do small tuck-in 2023, then Certarus, more capital for that internal growth opportunity. What happens after that? I think it's a good way to look at 2023 or in 2024, 2025. It's all a question of 4x leverage. We don't wanna go over that. We'll be able to...
Of course, there's a lot of opportunity in the propane as in the States and some in Canada, and we intend to continue to do that, but we're always taking in consideration what's our leverage ratio. I can tell you more specifically, 2023, I just did. After that, then it remains to be seen. Yes, we intend in time to continue to do propane acquisition. They're very accretive as well.
Okay. Maybe just follow on to that to see, make sure I understand. Outside of the growth CapEx, essentially slowing down M&A, may that lead to ability to kind of pay down debt quicker? Is that an increased emphasis, perhaps?
Yeah. I mean, I think we'll always look at it and make a decision on how we wanna allocate capital so it drives the highest shareholder return. The reality is there'll be times when it makes sense to pay down debt, and, you know, and net overall. I mean, I think where Luc's comments coming from on the 2023 is when you look at it as we've sort of discussed, we're towards the top end of our 3.5- 4 times. In looking at all the financial metrics, you know, it just we have to be more prudent and focused on where we're gonna allocate that capital. As you move out and as the synergies are delivered in the M&A transactions that we've completed and they start rolling through, it frees up more free cash.
As the organic growth delivers more free cash, there is more room to look at more potential acquisitions or frankly, more potential internal organic growth. As I said before, we'll always look at it and allocate the capital to the highest returns. As you start moving out in the future year, as the business as always, and we've talked about, as those acquisitions are fully integrated and the synergies realized, you know, we very quickly de-lever the business, so it provides that opportunity to continue to grow or allocate that capital either to internal growth, to M&A transactions, to potentially share buybacks, or frankly, reducing debt.
Mm-hmm.
Okay. Makes sense. Just one more question just on the Certarus. Can you give us an update on the closing of the transaction, especially on the Canadian Competition Bureau side, maybe a more narrower range than first half of 2023 that you've disclosed? As a related question, the lockup of management and larger shareholders, you know, have you chatted with them their intentions to hold on to the stock after the lockup? That's been a bit of an overhang for investors I've talked to.
Maybe I'll start with one point. I'll ask you Beth for, and Darren is here, our Chief Legal Officer, to add some detail if necessary. In the U.S. business, we're good to go. That's 80% of the business and more growth there, very pleased about that. Canadian, it's a work in progress, and it's hard to predict the date. They're asking question, and we wanna be, you know, very straight to giving them all the answer they have. I'll turn to Darren for. He's with Lars in discussion on a regular basis, so I'll turn to him for the rest.
Sure. Thanks, Luc. Yeah, I think, you know, as Luc says, in the U.S., the waiting period under the H SR Act expired February 13th. We've got a final order. The only thing really, the only condition left to closing is receipt of approval from the Canadian Competition Bureau. Their review is still ongoing, and we expect they may need some additional time to conclude that review, which is why, you know, we've extended the expected timing to the first half of 2023. Our view on that, I think, you know, I guess we would say, look, the businesses are highly complementary, not in the same product market. We expect we'll be able to get that regulatory clearance in the first half of 2023.
The reason we pushed it out is we think the Bureau's gonna likely need a little more time to get there.
Okay. Then, any feedback on the lockup?
Yep. That's coming.
Yes. Yeah. I mean, I'll jump in on the lockup and just sort of walk through at the highest level. At the highest level, roughly 45% is subject to lockup, and that's split by roughly 36% of that would be after six months, roughly 9% would be after three months, the rest of that would be tradable on day one.
Okay. All right. Those are my questions. Thanks very much.
Thank you. One moment for our next question. Our next question comes from the line of Nelson Ng from RBC Capital Markets. Your line is open.
Great. Thanks. Congrats on a strong quarter. Just on capital allocation, I think the, in the MD&A, the guidance was for CAD 200 million-CAD 240 million for, I guess, maintenance CapEx, non-recurring CapEx and leases. Can you provide a breakdown of that, and also how much of that CAD 200 million-CAD 240 million is going to Certarus?
Yep.
Yep.
Okay. First of all, Nelson, maybe the best way is to split it into the broad categories first. Of the CAD 220 million-CAD 240 million, think of the maintenance CapEx in the range of CAD 75 million-CAD 80 million. So that would be split roughly CAD 30 million Canada, you know, in that, and these are rough ranges, but $25 million in the U.S., and then Certarus maintenance CapEx would be roughly $15 million for 2023. As you look at capital leases, think of those in roughly CAD 30 million-CAD 40 million range. Looking at the growth in non-recurring, that's the CAD 105 million-CAD 115 million. Certarus of that, think of that, and this is for the 9 months going forward, that's sort of $40 million-$50 million.
Canada sort of in the CAD 20 range, the U.S. in about a CAD 40 million range.
I'll just pull you.
Just to clarify, the actual amount so that CAD 40-50 for Certarus, that's for the 9 months. For the full year, it'd obviously be a bit higher than that, right?
Yeah. Think of it for the full year in the range of CAD 100 million.
Yeah.
Yeah. It's obviously depending when that CapEx, when you're thinking it for the full year, and maybe that's the best way to think about it in the full year, 'cause it's gonna depend when, in particular, the deliveries of the MSUs occur, right?
It's a, call it CAD 100 million for the year.
Okay. All right. That's fair. 100 just for the trucks and trailers and before leases and, like, before maintenance CapEx.
Yeah. Yeah.
Okay, that's great. The next question is, I think, Luc, you mentioned that Certarus will operate on a standalone basis and there's limited synergies. I guess longer term, do you see... I guess you'll be retiring soon, so it's probably not your decision.
Sure.
Do you see the benefits of putting the two together in terms of, I guess Certarus is headquartered in Calgary, but most of their operations are in the U.S. and then Superior Plus is headquartered in Toronto?
Yeah.
I guess from a corporate perspective, there should be some synergies there.
No. No. What we have a division with SCL in Calgary. We have a division with the U.S. business, and we have the Canadian business located in Mississauga, in Ontario. That business will be located in Calgary. You know, it's a North America business, and we have division that are spread out between North America. I probably forgot one thing on synergy. I'm a strong believer that, you know, the 80% of their business in the States are big industrial company. Those big industrial company and they're replacing diesel. Those big industrial company also use propane. I think when time and within the next year, as we work together, we'll look at helping each other to sell more product.
You know, as you know, Superior Canada, I don't know if there's any big industrial company we don't do business with. It's probably all of them. What Certarus is replacing is mainly diesel. Can we take those accounts and those relationship and say, "Hey, Certarus team, let's introduce you to those big industrial customer in Canada and see if you can replace the diesel with your product 100%." There are some synergy. I thought the question was more on cost synergy. There's not much there, if nothing. On the growth synergy, absolutely. We're gonna touch base with all of their customer in the States we don't have. They're mainly big industrial. As you know, today, what we do in the States is like 90%+ residential. In Canada, we're big industrial.
We're it pretty much in Canada on big industrial, we wanna make sure that those contact relationship develop more internal growth business for both businesses. That will happen, I'm very convinced.
Okay, that's useful. It's more on the cross-selling side where you see the value add. Just one last question. Just one last question, in terms of like inflation and staff and wage pressures. I guess you've been through the worst of it by now, but are you still seeing any... Like, how's the labor market in terms of finding seasonal drivers? Can you just touch base on wages?
Many time, well, during COVID and during, all the, you know, lot of people, you know, changing position these days, I have a lot of exposure on that. I think we're lucky. I think we're lucky because we have over 85% of our employees are responding that we're at least 85%, 100% happy to work with us, the way we treat them, the way we communicate, the way we have them participate in the business. It's a very high quality culture and values that we've built. What we've learned from Certarus with the multitime we met and travel with them is the same. It's just a perfect fit on culture value, very human. We're lucky. I always add to that from a truck drivers in our propane business.
You know, it's their small truck and the driver goes out during the day, does his thing, come back home. There's a ton of truck drivers that have larger truck and larger miles that they do, and they go away from home, which is much harder. I wouldn't say it's easy. What our truck driver do is wintertime gets very rough at many time in many areas. It's, we don't have real difficulty of finding good truck drivers. Once they work for us, they're I would call a lot of our employee are kind lifer. They're well treated. They love to work at Superior, appreciate our success and our communication style.
It's really, very proud and very pleased of the overall thousands of employees appreciate working here, and we wanna treat them very well, and they deserve it.
Great. Thanks for the color, Luc.
It's all about people.
One moment. One moment for our next question. Our next question comes the line of Steven Hansen from Raymond James. Your line is open.
Mr. Hansen.
Good morning, everyone. Just a quick one again to, can go back to Certarus. You know, the previous owner had been spending quite aggressively on the fleet to grow the top line, I think logically. If I'm not mistaken, that included a large inflow of new units in the back half of last year. You spoke briefly, Luc, earlier to the CapEx profile going forward, but I just wanted to get a sense for what kind of untapped utilization you have available today with the units that came in last year. You know, how quickly do you need to replenish? Or add new units to a year, and ultimately what kind of organic growth do you think is sustainable over the next couple of years for the top line for this business or maybe from an EBITDA perspective? Thanks.
Yeah. I'd be pleased that the next call, I probably won't be here but I'd be pleased that we could invite Curtis, who's the president, and his team so that they can answer a lot of those specific questions. I think from organic growth, correct me, Beth and Darren, if you think the number is not exactly what we've talked about, but we certainly think in the at least 10% growth a year, internal growth. I hope it could be more. From your question, first question on CapEx, I think we're continuing to spend as much as they spend in the past, if not more, with the CAD 100 million in 2023. I think we're not slowing down their progress and their opportunity to develop new business.
If more cash flow comes in, I think we hopefully can push more their way. For the moment, from a budget and where we stand today, it looks more like CAD 100 million. Beth, anything else you think I've missed or?
Yeah. I mean, I think what I would add is, you know, along your question of, for the new units that came in, whether they're being utilized and whether they're ramped up. I mean, the beauty of the business is that there's much more demand for mobile storage units than there is supply. For those units, they're very quickly being used to supply customers and frankly generating that EBITDA. As you look at it, I think it's with that business, it's really more getting the MSUs produced, purchased, and then in, they can quickly be generated to generate EBITDA. From that perspective, they would all be being utilized. Again, from a sales perspective, there's more customers than there's MSUs.
Mm-hmm. Mm.
That's great. Maybe just a follow-up, and maybe this is too far into the weeds for now, but I'll just ask anyway. Just around sort of the hub and spoke strategy as it relates to service, a re they in all the regions they need to be? Luc, you had referenced some cross-selling earlier. I'm just trying to get a sense for whether this is a densification strategy at this point and, you know, ability to reap incremental high margin return opportunities as opposed to sort of greenfielding new hubs that might be a little bit less, you know, margin accretive. You know, where are they in that strategy life set of evolution, I guess, thus far?
I'll answer from what we know, and I'll always preface that those answer with next quarter. The real people that knows it very well can answer more specifically. My understanding is there's such a growth in this industry in those three products that we talked about that they can supply, that the number of hubs will continue to grow and there'll be more. I think the intent is to have three to four more hubs every year. If you look at, they've done a big study with McKinsey that shows the growth in those three products. I won't give you the number because they're totally the billions and billions of growth in those industries.
They're in the best position in North America to be the one that grows with their position and their team that they built and the equipment they've already put in place. I would say three to four hubs continuously for years to come and continue to grow. I don't see that... If there's one thing and the result can help having a good year, I think they can grow more than 10%. We say that 'cause we wanna be conservative and not giving you other numbers than what we're sure about. There's growth there that could be in the 15% a year for sure.
That's great. Appreciate the color. Sounds like a great addition. Thanks.
As a reminder, that's star one one for questions, star one one. One moment. I'm not showing any further questions in the queue. I'd like to turn the call back over to Luc Desjardins, President and CEO, for closing remarks.
I'll wrap up this call. I would like to take this opportunity to thank all of you for being there and for all the 12 years you followed this company and many of you following us and supporting Superior. Has been a pleasure and a privilege to share with you this incredible journey of growth and the transformation of Superior, which we've gone through over the years. Many of you remember multi-business we have. Now we're focused in energy big time, North America. I'm proud of all the employees and what's been accomplished. We have a super great management team. I'm confident that I'm leaving this company in exceptional position to pursue its growth. I wanna mention my appreciation to everyone and every stakeholders, team, employee, management, board, everybody that's really worked hard to make this situation happen over the years.
I really have told that to people internally in the last 4 or 5 months, and maybe more in the last 3. With the Certarus deal, when you think of our platform, with number of customer we have, which in the million, and then you think of Certarus, what they bring as a new entry with internal growth. I mean, I'm leaving this company in better shape than it was. Even as we ended up just being in propane, it was good, and we built and we improved every business 25%. Now we're just going to the next level. This is the transformation that is happening. Very, very proud of everybody and very pleased that I'm leaving with this new gain and new opportunity for a super great Canadian company. With that, I wish you all the best. Thank you for your support.
Hopefully, the question was, Luc, you're retiring. I don't know what retiring is. I will not retire. I'll be working probably not at the same pace as a full CEO, but doing something of a scale of to keep busy because I love business and it's my passion and been my life. Wish you all the best. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.