TSE:PKI Parkland Q3 2023 Earnings Report C$32.65 +0.44 (+1.37%) As of 04/17/2025 04:00 PM Eastern Earnings HistoryForecast Parkland EPS ResultsActual EPSC$1.28Consensus EPS C$0.81Beat/MissBeat by +C$0.47One Year Ago EPSN/AParkland Revenue ResultsActual Revenue$8.87 billionExpected Revenue$8.57 billionBeat/MissBeat by +$301.23 millionYoY Revenue GrowthN/AParkland Announcement DetailsQuarterQ3 2023Date11/1/2023TimeN/AConference Call DateThursday, November 2, 2023Conference Call Time8:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Parkland Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 2, 2023 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good morning. My name is Jenny, and I will be your conference operator today. At this time, I would like to welcome everyone to the Parkland Third Quarter Analyst Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:38Thank you. I would now like to turn the conference over to Valerie Roberts, Director, Investor Relations for Parkland. Please go ahead. Speaker 100:00:48Thank you, operator. With me today on the call are Bob Espie, President and CEO Marcel Tunisin, Chief Financial Officer and Donna Sanker, President, Parkland USA. This call is webcast, and I encourage listeners to follow along with the supporting slides. We will go through our prepared remarks and then open it up for questions from the investment community. Please limit yourself to one question and a follow-up if necessary. Speaker 100:01:09And if you have other questions, reenter the queue. We would ask analysts to follow-up directly with the Investor Relations team afterwards for any detailed modeling questions. During our call today, we may make forward looking statements related to to the Q1 of 2019. Risk factors applicable to our business are set out in our annual information form and management's discussion and analysis. We will also be discussing non GAAP and other financial measures, which do not have any standardized meanings prescribed by IFRS. Speaker 100:01:45These measures are identified and defined in Parkland's continuous disclosure documents, which are available on our website or on SEDAR. Please refer to these documents as they identify factors which may cause actual results to differ materially from any forward looking statements. Dollar amounts discussed in today's call are expressed in Canadian dollars unless otherwise noted. I will now turn the call over to Bob. Speaker 200:02:06Thank you, Val, and good morning, everyone. We appreciate you joining us today. I want to start off by thanking the Parkland team for another excellent quarter, delivering record results well ahead of plan. These include record adjusted EBITDA both in the quarter year to date, to record earnings and earnings per share and record refinery utilization and co processing volumes. Collectively, they demonstrate the quality of the business we have created, our ability to drive shareholder value. Speaker 200:02:41We are doing exactly what we said we would do, advancing our strategy, serving our customers and executing consistently on organic growth and synergies. Each part of our business has contributed to our record performance. This gives me unwavering confidence that we will continue to deliver the ambitious targets we set for ourselves. With that, let's move to Slide 3. We are building tremendous operational momentum by executing on the strategy we outlined at our 2021 Investor Day. Speaker 200:03:15This included doubling our business by growing adjusted EBITDA from $1,000,000,000 to $2,000,000,000 by 2025. One of the highlights of my role is visiting our frontline customer facing teams. Without exception, they are focused on safely servicing our customers and on growing our businesses. I continue to be impressed by the team's ability to drive organic growth, capture synergies and deliver the cost efficiencies. Their accomplishments have enabled us to increase 2023 adjusted EBITDA guidance, while at the same time lowering capital expenditures. Speaker 200:03:51We believe we will exceed our revised adjusted EBITDA guidance this year. We have also accelerated our $2,000,000,000 ambition by a full year from 2025 to 2024. For some time, we have been laying the foundation to deliver $2,000,000,000 of adjusted EBITDA in 2024. The outstanding work of our team gave us confidence to share this target with our shareholders. Lastly, we have over delivered on our 2020 to deleveraging commitment 3 months ahead of schedule. Speaker 200:04:23Our leverage is now within our target range and we will continue to drive this lower. Let's turn to slide 4. You'll recall that we entered the year with 3 priorities. 1st, to capture synergies and cost efficiencies 2nd, to drive organic growth and third, to optimize our portfolio by divesting non core assets. I'd like to take a couple of minutes to outline examples of what we achieved last quarter. Speaker 200:04:51We continue to make progress on our synergy capture and efficiencies. A great example is the terminals we acquired from Vopak. As you know, we have a strong retail and commercial market presence in Eastern Canada, where we acquired these terminals. These assets provide us with significant optionality to source and receive local supply, as well as import supply. This flexibility positions us to secure lowest cost product, Which we can reliably provide to our retail and commercial customers. Speaker 200:05:24We see the impact of owning these terminals and others like them in our margins. Shifting to the middle column where you see a picture of our recently opened standalone site in Montreal. This is a great example of bringing together our brands and marketing programs to continue to deliver strong and consistent organic growth. This site unites our On the Run brand M and M frozen food offer and is home to the launch of our Bites On the Run by M and M fresh food offer. We are eager to see how this new food offer performs in our pilot sites, and I'm excited to see how sales evolve. Speaker 200:06:03Lastly, let me touch on divestments. In the last column, we will recycle proceeds from this and other non core assets $500,000,000 of disposition proceeds by the end of 2025. These sales will not compromise our adjusted EBITDA growth targets. With that, I'll pass to Marcel and move to Slide 5. Speaker 300:06:31Thank you, Bob, and good morning, everyone. Parkland delivered an incredible quarter and set several new performance records. We delivered an adjusted EBITDA of $585,000,000 which is up $257,000,000 from last year. During the 1st 9 months of this year, we delivered $1,450,000,000 of adjusted EBITDA. This is up $285,000,000 from last year despite an approximate $100,000,000 impact from the refinery turnaround in the Q1. Speaker 300:07:06Canada delivered 3rd quarter adjusted EBITDA of $206,000,000 which is 47% higher than last year. This increase reflects higher fuel unit margins, which were driven by our supply and integrated logistics capability and favorable market conditions. We also saw the benefit of our Husky and Krevie acquisitions completed in 2022. Our KPIs highlight the impact of our consistent execution and organic growth investments. We grew company owned same store fuel volumes by 4.2% in the quarter. Speaker 300:07:45Our Journey Rewards program continues to drive to the forecourt and into our convenience stores. Food and company same store sales growth excluding cigarettes was 3.5% and we delivered gross margins of over 34%. Our C store performance was driven by sales of packaged beverages and center of store products such as candy and salty snacks, which grew at over 10%. As noted in Q2, Cigarette sales have normalized, while they are lower margin products, they remain an important traffic driver for our stores. Our international segment delivered adjusted EBITDA of $170,000,000 in Q3. Speaker 300:08:29This is up 63% from last year. We delivered organic growth with higher volumes in our wholesale business, strong fuel unit margins driven by our supply advantage and the consolidation of the remaining 25% of Seoul. We see continued activity in the tourism sector, which we benefit from. Industrial activity in Guyana and Suriname continues to ramp up with the significant offshore oil discoveries. These also drive further economic growth and energy use. Speaker 300:09:00We are positioned to win in these fast growing markets. Our USA segment has rebounded from a challenging Q3 last year. The team delivered an adjusted EBITDA of $52,000,000 in the quarter. This is up $70,000,000 year over year. We delivered cost savings and benefited from to strong commercial fuel margins. Speaker 300:09:23Across the U. S. And in our markets, industry retail fuel volumes were down. However, we successfully outperformed industry benchmarks. We have confidence in the future of our USA segment. Speaker 300:09:38Our refining business generated an adjusted EBITDA of $188,000,000 which is up nearly 40% from last year. The Burnaby team operates and optimizes this asset exceptionally well. We delivered a composite utilization of 103%, reflecting record co processing volumes of 2,600 barrels per day. This enabled us to take advantage of a very strong crack environment during the quarter, which added approximately $50,000,000 of incremental adjusted EBITDA in the quarter. We feel confident in our Q4 results. Speaker 300:10:14However, I will highlight that KRAX pulled back in early October and we assume normalized margins going forward. And as always, we have come off a seasonally high driving period and expect that to be reflected in our Q4 retail results. During the Q3, we delivered $230,000,000 of net earnings resulting in a record earnings per share for Parkland. Cash flow from operations was $528,000,000 in the 3rd quarter and almost $1,400,000,000 year to date. Once again, this fully funded our capital program, including $57,000,000 of growth CapEx as well as other financial obligations. Speaker 300:10:57As a reminder, Parkland has increased dividends consistently for 11 years and our payout ratio was 32% over the past 12 months. During the quarter, we also repaid $160,000,000 of debt on our credit facility And we lowered our leverage ratio to 2.9 times. This is a big milestone as we have now achieved our 2023 leverage ratio target a quarter earlier than expected. I will continue to reduce this to the low end of our 2 to 3 times range by the end of 2025. Our trailing 12 months adjusted EBITDA is now at $1,900,000,000 which includes the benefits of favorable refinery margins. Speaker 300:11:42We're well positioned to achieve our 2024 guidance of $2,000,000,000 without further acquisitions. Growth will come from organic investments we have already made, synergies from acquisitions we've already done and cost savings from organization changes implemented last quarter. We have assumed normalized refinery margins into our financial forecasts. A significant part of our 2024 growth will come from our USA segment where we've already made great improvements. And with that, I would like to move to Slide 6 and pass the call to Donna to discuss our USA business. Speaker 400:12:19Thanks, Marcel, and good morning, everyone. It's a pleasure to be here with you today. The map on Slide 6 shows the current footprint of our U. S. Business. Speaker 400:12:28We selected these markets purposefully. They have great demographics with steady population growth, are demand resilient and have inherent supply inefficiencies. Simply put, in these markets, fuel demand exceeds local supply and fuel needs to be imported from other regions. These dynamics play to Parkland's core strengths and create opportunity for us. Our U. Speaker 400:12:53S. Footprint is located in the Pacific Northwest, to Rockies and Upper Midwest regions. This is a natural and adjacent extension of our Canadian supply and logistics capabilities. In these regions, diesel imports come from Canada via rail or truck, and we have considerable expertise in both. Gasoline is typically imported from the South using the same distribution infrastructure as our diesel imports. Speaker 400:13:19There are tremendous synergies in serving both Canada and the U. S. And our skills and capabilities position us to win. In the past 5 years, we have invested approximately 1 point to $7,000,000,000 to buy 20 companies. These were primarily in the Pacific Northwest and Rockies markets. Speaker 400:13:37However, we also seized an opportunity to build a position in the highly populated rapidly growing Florida market. To this place to supply and logistics strengths we have fine tuned in our neighboring international business. The result is a U. S. Business comprising over 650 retail and 45 commercial card lock sites as well as several terminals and bulk plants. Speaker 400:14:02Together, they enable us to serve customers with the fuels, lubricants and convenience products on which they depend. Similar to our Canadian and International segments, our U. S. Business is underpinned by our supply advantage. This includes strategic infrastructure assets such as to trucks, railcars, storage terminals and pipelines as well as supply and trading capabilities. Speaker 400:14:25These give us a powerful competitive advantage in the markets we serve. By executing a thoughtful strategy, we have developed a compelling growth platform in the U. S. Let's move to Slide 7. I became President of our U. Speaker 400:14:39S. Business in January of this year. Upon my arrival, I saw tremendous opportunity to create a focused, fit for purpose organization that can drive full value from the platform we have created. I started with the leadership team, bringing in proven Parkland operational leaders as well as some external talent. We streamlined our organization and structured it around our retail and commercial lines of business. Speaker 400:15:05This provides clear accountabilities, enables greater focus on our customers and has resulted in a lower cost structure. We have also been focused on completing the integration of the 20 companies we acquired, including the rollout of best practices, to process and tools throughout the business. In our retail business, we are building out our category management and merchandising capabilities, and we are beginning to see the impact of this through positive same store sales growth and higher margins. We have also rebranded approximately 35 backcourts to On the Run. Results from these conversions have shown a 17% lift in store sales and a 23% increase in store margin year to date. Speaker 400:15:48To recent consumer research in the Florida market highlighted that our On the Run convenience store brand is clearly resonating with customers as it's scored among the most preferred. We serve a diverse group of commercial customers spanning the construction, to Automotive, Mining, Agriculture, Industrial and Marine Industries. During peak season, We serve 7 cruise ships a day out of the Port of Miami alone. In addition to supplying gasoline and diesel to our commercial customers, We have seen significant growth in our lubricants business and believe there are future opportunities to grow this segment. As I mentioned earlier, our retail and commercial business are underpinned by our supply advantage. Speaker 400:16:32We will continue to optimize this advantage to achieve the lowest cost of product, reliably serve our customers and enhance margins. 2023 has been a year of transformation. We are hitting our stride operationally and are beginning to see the impact of the steps we've taken with adjusted EBITDA approaching the levels we expect. Looking forward, we have ambitious growth plans and targets for our U. S. Speaker 400:16:57Business. We expect to grow 2024 adjusted EBITDA by approximately 25 percent to between CAD230 1,000,000 to CAD250 1,000,000 and I believe there's more potential in 2025 and beyond. These targets are supported by detailed plans and proven strategies that we to taking from other parts of the Parkland business. These include strategic pricing tools and capabilities that leverage technology to drive better margins, to fleet optimization and delivery efficiency measures that ensure we effectively utilize our logistics assets, high grading our portfolio through divestment of a series of non core retail assets, taking a rigorous approach to retail site labor using site to sales data and transactions to determine staffing levels, disciplined cost management, a relentless focus on growing our retail and commercial to our customer bases and strengthening our retail brands loyalty and food offerings. As you can tell, I am very excited and optimistic to the Q1 of 2019. Speaker 400:18:06With that, I will pass back to Bob for his final comments. Speaker 200:18:10Thank you, Donna, and congratulations to you and the team. We have built a tremendous business and platform for growth in the U. S. We entered this year determined to prove the strength of our strategy, our business and our execution capabilities. By staying disciplined, I believe we have demonstrated the power of our platform. Speaker 200:18:32Our record performance to date Demonstrates our team's continued focus on organic growth and synergies. I'm confident we will continue to build momentum in the final few months of the year to to Finish 2023 Strong. Parkland is a remarkable business. Over the past 5 years, the company has been transformed. We have developed industry leading brands, capabilities and customer relationships across our retail and commercial lines of business, and we have advanced our supply and logistics expertise to maximize our margins. Speaker 200:19:07We are a resilient business operating in diverse markets. We have a long runway of growth opportunities in our conventional business and as consumer demand for renewable energy increases, We are positioned to play a leading role. Having accelerated delivery of our key targets, the question many of you have been asking is what's next for Parkland? We will answer that during our Investor Day on November 14. Specifically, we will provide details on the continued execution of our strategy. Speaker 200:19:38We will share our new targets we have set for ourselves. We will discuss our go forward capital allocation framework, and we will outline our plan to to deliver enduring growth and value. With that, we'll turn it back to the operator for questions. Operator00:19:56Thank you. Ladies and gentlemen, we will now begin the question and answer session. Questions will be taken in the order Your first question is from Ben Isaacson from Scotiabank. Please ask your question. Speaker 500:20:32Thank you very much and good morning and congrats on the great quarter. Bob, we've seen GM and Ford pulling back on their EV ambitions. Exxon and Chevron have both just doubled down on oil with the acquisitions of Pioneer and Hess. In North America, unsold EV inventory is at an all time high. What do you think about that? Speaker 500:20:54And does that lead you to rethink the pace of your investment into the EV transition? Thanks. Speaker 200:21:03Yes. Good morning, Ben, and thanks for the question. It's interesting. As Parkland, we're focused on what our on the needs of our customers. And we recognize that we need to provide cheap and reliable energy independent of what to the customer wants. Speaker 200:21:23That being said, we continue to invest in our base business and make sure that our customers to have the cheap energy that they're used to getting from us. With respect to the EV our EV plans, I mean, look, there. We do see these continuing to penetrate markets. As we've said, it happens at to different paces in different markets depending on the level of depending on the regulatory environment and the degree of subsidies. We are continuing to roll out our BC pilots. Speaker 200:22:01We're close to having that completed. And the value of that is the information that we gain on how the consumer interacts not only with the charger, but with our sites and how we can continue to grow our basket size with that customer. So it doesn't change our plans. Again, we're committed to the pilot and but at the same time, we'll continue to invest in our base business to make sure that we can continue to service our customers. Speaker 500:22:31That makes sense. And just a quick follow-up. In Canada, you guys called out softness in the food business tied to inflationary pressure. Same store sales growth was still positive, but it was just lower than it was a year ago. Can you just give us a little bit more color into the categories or maybe the regions That you're seeing that pressure and now we're a month into Q4. Speaker 500:22:51Are you still seeing that same level or are things getting worse or perhaps getting a Speaker 200:22:55little bit better? Thank you. Yes. We one of the things we really like about the convenience business, its resilience through economic cycles and we continue to see the segment perform strong relative to other food channels. I would say specifically the reference to food is M and M's and the frozen food category, which we've seen Although we were up year over year, it wasn't quite as robust as our convenience business. Speaker 200:23:29But that being said, the business continues to In terms of what we're seeing, I mean, look, I think we're seeing the consumer be a bit more cautious than they've been. Again, that convenience segment has proven resilient through various economic cycles. But we see, like I say cautious consumer a little more measured on gasoline volume. We'll see them come to fill up less but more often. But generally the business is holding in and you see it in the overall on metrics and the fact that we've been able to deliver industry leading same store sales growth. Speaker 500:24:13Thank you. Appreciate your time. Operator00:24:21Thank you. Your next question is from Steve Hansen from Raymond James. Please ask your question. Speaker 600:24:28Oh, yes. Good morning, everyone. Thanks for the time. Congrats on hitting your leverage targets earlier than planned. It does raise some obvious questions about future capital allocation priorities, and I'm not trying to steal any thunder from the Investor Day, but to the degree you can, how do you feel about the prospects of additional tools being executed here. Speaker 600:24:48I'm thinking buybacks in particular. I know it was referenced that you'll look to get the lower end of the range for next year. I'm just trying to understand if any other policies or priorities might come into the mix going forward. Thanks. Speaker 300:25:01Good morning, Steve, and thank you for the question. It's Marcel here. If we look at the interest rate environment, it continue to be elevated, Right. And so if you look at overall and our balance sheet, we are aiming for that lower end of the range by the end of 2025 and have a more conservative balance Going forward, so that continues to be priority for us. But given that we're now within the range, we'll We also look at additional means to kind of deploy capital within our business. Speaker 300:25:33And we'll talk more about that in 2 weeks at our Investor Day. Appreciate the Speaker 500:25:37today. Speaker 600:25:38Appreciate the comments. Thanks. And just one quick follow-up. There's been some pretty extensive press in the last couple of weeks on all the offshore success taking place in Guyana and you referenced that in your remarks. I'm just curious on how much visibility you think you have into growing That offshore business down there, specifically around Guyana and Suriname over the next 3 to 5 years. Speaker 600:25:58Do you plan on expanding existing services? Just continue to support what you're doing today. Just any color around the growth plans there would be helpful. Thanks. Speaker 200:26:07Yes. Good morning, Steve. It's So Bob Espie. Look, we're fortunate to be in that market. The team has done a remarkable job in meeting to demand and demand growth. Speaker 200:26:21We facilitated that through some investment in the market in storage capacity. As we've talked about in the past, one of our strategic pillars is our supply and our ability to supply difficult markets. And The additional supply along with our shipping capability in that market has allowed us to continue to to meet demand and meet the pace of growth. We expect that to continue. Currently, I believe production is to. Speaker 200:26:53About 350,000 barrels a day out of Guyana, targeting up to 1,500,000 barrels a day And there'll be a lot of energy required to bring that to market. And we do have the leading position in the markets And we'll continue to leverage that to grow in that market quite nicely. So expect a nice tailwind from that business. Speaker 600:27:19Appreciate the time. Thanks. Operator00:27:25Thank you. Your next question is from Luke Cannon from Canaccord Genuity. Please ask your question. Speaker 500:27:33Yes, thanks. Good morning and congratulations on the results. I wanted to dig into the U. S. Business if we can. Speaker 500:27:40It was mentioned that that market was a little bit more competitive and that resulted in slightly lower volume. So Bob, just curious to know if you can talk about what exactly you're seeing there from a competitive perspective and what your strategic reaction has been to try and recapture to share the market. Speaker 200:27:58Sure. We're really fortunate to have Donna here with us today and I'll have Donna answer that question. Speaker 400:28:05Good morning, Luke. This is Donna. So yes, we saw the industry soften a bit, particularly the fuel margins. When we look back at the prior year quarter 3, things the situation was very volatile. And so we saw some record margins last And so this year, things have tamped down a bit. Speaker 400:28:26And also when during periods of increased commodity prices, we tend to see our margins get squeezed a bit. From a volume perspective, while we were slightly negative on the same store sales volume perspective, we actually to the industry benchmarks for the quarter, and we did see some C store margin improvement as well. And so we're bullish on our position in the retail business. We have converted as noted in the commentary a number of sites are backcourt to on the run and we're seeing some really good lift from that as well. Speaker 500:29:00Okay, thanks. And maybe this one is for you as well, Donna. But I think you did mention in your prepared remarks The lubricants business is something that you see as it could be a key driver of USA growth over the course of the near term Can you just share what exactly is specific about that line of business that gives you the optimism to, I guess, see further growth in the U. S. Going forward? Speaker 500:29:25Yes. Speaker 400:29:25So the customers that we provide our lubricants to, they're very selective about the lubricants. They're critical to their operations, the machinery and the equipment that they run is critical to the to the time of their operations. And so we find that the combined business of lubricants and fuel, it improves the stickiness of our relationships with them and we really see that as potential upside for future growth. Speaker 500:29:55That's great. Thank you very much. Operator00:30:04Thank you. Your next question is from Ivan Francheska from TD Securities. Please ask your question. Speaker 700:30:13Good morning. So first question, just on the international business. The nonfuel revenues and gross profit was roughly flat year over year. Can you talk a bit about what's preventing growth in that? Speaker 200:30:34Yes. Good morning and thanks for the question. Look, we're really delighted with the growth that we've seen in the international business. When you step back and look at to performance. And to your point, it has been largely fuel driven as that team continues to find new opportunities to grow our market share and underpin the recent success with more new business. Speaker 200:30:59We're quite bullish on the business going forward here. With respect to the non fuel, the structure of that market is somewhat different to the Canadian and U. S. Markets to where in a lot of markets, we're not Parkland as A supplier is not allowed to participate in the backcourt margin. So Our non fuel margin in that business is smaller on a percentage basis than our Canadian and U. Speaker 200:31:30S. Business. And hence, The team there has done a great job in terms of executing, but it is more difficult to grow that given that the structure of the market. Speaker 700:31:45Great. Thanks. And just a final question. On the corporate segment, if I look at the MG and A expense, it seems to be quite a bit higher than what you recorded in Q2. Could you maybe explain the sequential swing in that number? Speaker 200:32:11Yes. Pardon me. Sorry, I'll ask Marcel to comment on the MG and A. Speaker 300:32:18Yes. No, what you see quarter over quarter in the corporate segment is some timing of expenditure and some provisioning as we kind of go in here towards the end of the year. So that's there. There's nothing happening in there. As you may recall in Q2 At the end of Q2, we did reorganize and cut a number of rolls out of it for which we took some provisioning. Speaker 300:32:42So as we go into Q3, we're looking to kind of normalize those costs and take some additional one offs. Speaker 700:32:50So is the Q3 level kind of a good indicator of what it should be going forward? Speaker 300:32:58Yes. I think on I think if you take on a year to date basis and where we are, that's probably a good run rate and it will come down a bit as we as I said, we take some costs down. Speaker 700:33:10Okay. Thank you very much. Operator00:33:33There are no further questions at this time. Please proceed. Speaker 200:33:39Great. Well, thank you for joining us. We look forward to seeing you at our up and coming Investor Day. Operator00:33:53Thank you. Ladies and gentlemen, your conference call has now ended. Thank you all for joining. You may all disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallParkland Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report Parkland Earnings HeadlinesCIBC Cuts Parkland (TSE:PKI) Price Target to C$43.00April 20 at 1:25 AM | americanbankingnews.comCanaccord Genuity Group Cuts Parkland (TSE:PKI) Price Target to C$42.00April 20 at 1:25 AM | americanbankingnews.comNow I look stupid. Real stupid... I thought what happened 25 years ago was a once- in-a-lifetime event… but how wrong I was. Because here we are, a quarter of a century later, almost to the exact day, and it’s happening again. April 20, 2025 | Porter & Company (Ad)ATB Capital Cuts Parkland (TSE:PKI) Price Target to C$45.00April 20 at 1:25 AM | americanbankingnews.comFY2025 EPS Estimates for Parkland Lowered by Atb Cap MarketsApril 19 at 2:45 AM | americanbankingnews.comRaymond James Lowers Parkland (TSE:PKI) Price Target to C$45.00April 19 at 1:27 AM | americanbankingnews.comSee More Parkland Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Parkland? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Parkland and other key companies, straight to your email. Email Address About ParklandParkland (TSE:PKI) Corp distributes and markets fuels and lubricants. Refined fuels and other petroleum products are among the variety of offerings the company delivers to motorists, businesses, consumers, and wholesalers in the United States and Canada. Parkland operates through several subsidiaries that are either company owned-and retailer-operated, dealer-owned and dealer-operated, or dealer-cosigned and dealer-operated. A variety of brands enable Parkland to market and distribute its petroleum products to a range of markets.View Parkland ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 8 speakers on the call. Operator00:00:00Good morning. My name is Jenny, and I will be your conference operator today. At this time, I would like to welcome everyone to the Parkland Third Quarter Analyst Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:38Thank you. I would now like to turn the conference over to Valerie Roberts, Director, Investor Relations for Parkland. Please go ahead. Speaker 100:00:48Thank you, operator. With me today on the call are Bob Espie, President and CEO Marcel Tunisin, Chief Financial Officer and Donna Sanker, President, Parkland USA. This call is webcast, and I encourage listeners to follow along with the supporting slides. We will go through our prepared remarks and then open it up for questions from the investment community. Please limit yourself to one question and a follow-up if necessary. Speaker 100:01:09And if you have other questions, reenter the queue. We would ask analysts to follow-up directly with the Investor Relations team afterwards for any detailed modeling questions. During our call today, we may make forward looking statements related to to the Q1 of 2019. Risk factors applicable to our business are set out in our annual information form and management's discussion and analysis. We will also be discussing non GAAP and other financial measures, which do not have any standardized meanings prescribed by IFRS. Speaker 100:01:45These measures are identified and defined in Parkland's continuous disclosure documents, which are available on our website or on SEDAR. Please refer to these documents as they identify factors which may cause actual results to differ materially from any forward looking statements. Dollar amounts discussed in today's call are expressed in Canadian dollars unless otherwise noted. I will now turn the call over to Bob. Speaker 200:02:06Thank you, Val, and good morning, everyone. We appreciate you joining us today. I want to start off by thanking the Parkland team for another excellent quarter, delivering record results well ahead of plan. These include record adjusted EBITDA both in the quarter year to date, to record earnings and earnings per share and record refinery utilization and co processing volumes. Collectively, they demonstrate the quality of the business we have created, our ability to drive shareholder value. Speaker 200:02:41We are doing exactly what we said we would do, advancing our strategy, serving our customers and executing consistently on organic growth and synergies. Each part of our business has contributed to our record performance. This gives me unwavering confidence that we will continue to deliver the ambitious targets we set for ourselves. With that, let's move to Slide 3. We are building tremendous operational momentum by executing on the strategy we outlined at our 2021 Investor Day. Speaker 200:03:15This included doubling our business by growing adjusted EBITDA from $1,000,000,000 to $2,000,000,000 by 2025. One of the highlights of my role is visiting our frontline customer facing teams. Without exception, they are focused on safely servicing our customers and on growing our businesses. I continue to be impressed by the team's ability to drive organic growth, capture synergies and deliver the cost efficiencies. Their accomplishments have enabled us to increase 2023 adjusted EBITDA guidance, while at the same time lowering capital expenditures. Speaker 200:03:51We believe we will exceed our revised adjusted EBITDA guidance this year. We have also accelerated our $2,000,000,000 ambition by a full year from 2025 to 2024. For some time, we have been laying the foundation to deliver $2,000,000,000 of adjusted EBITDA in 2024. The outstanding work of our team gave us confidence to share this target with our shareholders. Lastly, we have over delivered on our 2020 to deleveraging commitment 3 months ahead of schedule. Speaker 200:04:23Our leverage is now within our target range and we will continue to drive this lower. Let's turn to slide 4. You'll recall that we entered the year with 3 priorities. 1st, to capture synergies and cost efficiencies 2nd, to drive organic growth and third, to optimize our portfolio by divesting non core assets. I'd like to take a couple of minutes to outline examples of what we achieved last quarter. Speaker 200:04:51We continue to make progress on our synergy capture and efficiencies. A great example is the terminals we acquired from Vopak. As you know, we have a strong retail and commercial market presence in Eastern Canada, where we acquired these terminals. These assets provide us with significant optionality to source and receive local supply, as well as import supply. This flexibility positions us to secure lowest cost product, Which we can reliably provide to our retail and commercial customers. Speaker 200:05:24We see the impact of owning these terminals and others like them in our margins. Shifting to the middle column where you see a picture of our recently opened standalone site in Montreal. This is a great example of bringing together our brands and marketing programs to continue to deliver strong and consistent organic growth. This site unites our On the Run brand M and M frozen food offer and is home to the launch of our Bites On the Run by M and M fresh food offer. We are eager to see how this new food offer performs in our pilot sites, and I'm excited to see how sales evolve. Speaker 200:06:03Lastly, let me touch on divestments. In the last column, we will recycle proceeds from this and other non core assets $500,000,000 of disposition proceeds by the end of 2025. These sales will not compromise our adjusted EBITDA growth targets. With that, I'll pass to Marcel and move to Slide 5. Speaker 300:06:31Thank you, Bob, and good morning, everyone. Parkland delivered an incredible quarter and set several new performance records. We delivered an adjusted EBITDA of $585,000,000 which is up $257,000,000 from last year. During the 1st 9 months of this year, we delivered $1,450,000,000 of adjusted EBITDA. This is up $285,000,000 from last year despite an approximate $100,000,000 impact from the refinery turnaround in the Q1. Speaker 300:07:06Canada delivered 3rd quarter adjusted EBITDA of $206,000,000 which is 47% higher than last year. This increase reflects higher fuel unit margins, which were driven by our supply and integrated logistics capability and favorable market conditions. We also saw the benefit of our Husky and Krevie acquisitions completed in 2022. Our KPIs highlight the impact of our consistent execution and organic growth investments. We grew company owned same store fuel volumes by 4.2% in the quarter. Speaker 300:07:45Our Journey Rewards program continues to drive to the forecourt and into our convenience stores. Food and company same store sales growth excluding cigarettes was 3.5% and we delivered gross margins of over 34%. Our C store performance was driven by sales of packaged beverages and center of store products such as candy and salty snacks, which grew at over 10%. As noted in Q2, Cigarette sales have normalized, while they are lower margin products, they remain an important traffic driver for our stores. Our international segment delivered adjusted EBITDA of $170,000,000 in Q3. Speaker 300:08:29This is up 63% from last year. We delivered organic growth with higher volumes in our wholesale business, strong fuel unit margins driven by our supply advantage and the consolidation of the remaining 25% of Seoul. We see continued activity in the tourism sector, which we benefit from. Industrial activity in Guyana and Suriname continues to ramp up with the significant offshore oil discoveries. These also drive further economic growth and energy use. Speaker 300:09:00We are positioned to win in these fast growing markets. Our USA segment has rebounded from a challenging Q3 last year. The team delivered an adjusted EBITDA of $52,000,000 in the quarter. This is up $70,000,000 year over year. We delivered cost savings and benefited from to strong commercial fuel margins. Speaker 300:09:23Across the U. S. And in our markets, industry retail fuel volumes were down. However, we successfully outperformed industry benchmarks. We have confidence in the future of our USA segment. Speaker 300:09:38Our refining business generated an adjusted EBITDA of $188,000,000 which is up nearly 40% from last year. The Burnaby team operates and optimizes this asset exceptionally well. We delivered a composite utilization of 103%, reflecting record co processing volumes of 2,600 barrels per day. This enabled us to take advantage of a very strong crack environment during the quarter, which added approximately $50,000,000 of incremental adjusted EBITDA in the quarter. We feel confident in our Q4 results. Speaker 300:10:14However, I will highlight that KRAX pulled back in early October and we assume normalized margins going forward. And as always, we have come off a seasonally high driving period and expect that to be reflected in our Q4 retail results. During the Q3, we delivered $230,000,000 of net earnings resulting in a record earnings per share for Parkland. Cash flow from operations was $528,000,000 in the 3rd quarter and almost $1,400,000,000 year to date. Once again, this fully funded our capital program, including $57,000,000 of growth CapEx as well as other financial obligations. Speaker 300:10:57As a reminder, Parkland has increased dividends consistently for 11 years and our payout ratio was 32% over the past 12 months. During the quarter, we also repaid $160,000,000 of debt on our credit facility And we lowered our leverage ratio to 2.9 times. This is a big milestone as we have now achieved our 2023 leverage ratio target a quarter earlier than expected. I will continue to reduce this to the low end of our 2 to 3 times range by the end of 2025. Our trailing 12 months adjusted EBITDA is now at $1,900,000,000 which includes the benefits of favorable refinery margins. Speaker 300:11:42We're well positioned to achieve our 2024 guidance of $2,000,000,000 without further acquisitions. Growth will come from organic investments we have already made, synergies from acquisitions we've already done and cost savings from organization changes implemented last quarter. We have assumed normalized refinery margins into our financial forecasts. A significant part of our 2024 growth will come from our USA segment where we've already made great improvements. And with that, I would like to move to Slide 6 and pass the call to Donna to discuss our USA business. Speaker 400:12:19Thanks, Marcel, and good morning, everyone. It's a pleasure to be here with you today. The map on Slide 6 shows the current footprint of our U. S. Business. Speaker 400:12:28We selected these markets purposefully. They have great demographics with steady population growth, are demand resilient and have inherent supply inefficiencies. Simply put, in these markets, fuel demand exceeds local supply and fuel needs to be imported from other regions. These dynamics play to Parkland's core strengths and create opportunity for us. Our U. Speaker 400:12:53S. Footprint is located in the Pacific Northwest, to Rockies and Upper Midwest regions. This is a natural and adjacent extension of our Canadian supply and logistics capabilities. In these regions, diesel imports come from Canada via rail or truck, and we have considerable expertise in both. Gasoline is typically imported from the South using the same distribution infrastructure as our diesel imports. Speaker 400:13:19There are tremendous synergies in serving both Canada and the U. S. And our skills and capabilities position us to win. In the past 5 years, we have invested approximately 1 point to $7,000,000,000 to buy 20 companies. These were primarily in the Pacific Northwest and Rockies markets. Speaker 400:13:37However, we also seized an opportunity to build a position in the highly populated rapidly growing Florida market. To this place to supply and logistics strengths we have fine tuned in our neighboring international business. The result is a U. S. Business comprising over 650 retail and 45 commercial card lock sites as well as several terminals and bulk plants. Speaker 400:14:02Together, they enable us to serve customers with the fuels, lubricants and convenience products on which they depend. Similar to our Canadian and International segments, our U. S. Business is underpinned by our supply advantage. This includes strategic infrastructure assets such as to trucks, railcars, storage terminals and pipelines as well as supply and trading capabilities. Speaker 400:14:25These give us a powerful competitive advantage in the markets we serve. By executing a thoughtful strategy, we have developed a compelling growth platform in the U. S. Let's move to Slide 7. I became President of our U. Speaker 400:14:39S. Business in January of this year. Upon my arrival, I saw tremendous opportunity to create a focused, fit for purpose organization that can drive full value from the platform we have created. I started with the leadership team, bringing in proven Parkland operational leaders as well as some external talent. We streamlined our organization and structured it around our retail and commercial lines of business. Speaker 400:15:05This provides clear accountabilities, enables greater focus on our customers and has resulted in a lower cost structure. We have also been focused on completing the integration of the 20 companies we acquired, including the rollout of best practices, to process and tools throughout the business. In our retail business, we are building out our category management and merchandising capabilities, and we are beginning to see the impact of this through positive same store sales growth and higher margins. We have also rebranded approximately 35 backcourts to On the Run. Results from these conversions have shown a 17% lift in store sales and a 23% increase in store margin year to date. Speaker 400:15:48To recent consumer research in the Florida market highlighted that our On the Run convenience store brand is clearly resonating with customers as it's scored among the most preferred. We serve a diverse group of commercial customers spanning the construction, to Automotive, Mining, Agriculture, Industrial and Marine Industries. During peak season, We serve 7 cruise ships a day out of the Port of Miami alone. In addition to supplying gasoline and diesel to our commercial customers, We have seen significant growth in our lubricants business and believe there are future opportunities to grow this segment. As I mentioned earlier, our retail and commercial business are underpinned by our supply advantage. Speaker 400:16:32We will continue to optimize this advantage to achieve the lowest cost of product, reliably serve our customers and enhance margins. 2023 has been a year of transformation. We are hitting our stride operationally and are beginning to see the impact of the steps we've taken with adjusted EBITDA approaching the levels we expect. Looking forward, we have ambitious growth plans and targets for our U. S. Speaker 400:16:57Business. We expect to grow 2024 adjusted EBITDA by approximately 25 percent to between CAD230 1,000,000 to CAD250 1,000,000 and I believe there's more potential in 2025 and beyond. These targets are supported by detailed plans and proven strategies that we to taking from other parts of the Parkland business. These include strategic pricing tools and capabilities that leverage technology to drive better margins, to fleet optimization and delivery efficiency measures that ensure we effectively utilize our logistics assets, high grading our portfolio through divestment of a series of non core retail assets, taking a rigorous approach to retail site labor using site to sales data and transactions to determine staffing levels, disciplined cost management, a relentless focus on growing our retail and commercial to our customer bases and strengthening our retail brands loyalty and food offerings. As you can tell, I am very excited and optimistic to the Q1 of 2019. Speaker 400:18:06With that, I will pass back to Bob for his final comments. Speaker 200:18:10Thank you, Donna, and congratulations to you and the team. We have built a tremendous business and platform for growth in the U. S. We entered this year determined to prove the strength of our strategy, our business and our execution capabilities. By staying disciplined, I believe we have demonstrated the power of our platform. Speaker 200:18:32Our record performance to date Demonstrates our team's continued focus on organic growth and synergies. I'm confident we will continue to build momentum in the final few months of the year to to Finish 2023 Strong. Parkland is a remarkable business. Over the past 5 years, the company has been transformed. We have developed industry leading brands, capabilities and customer relationships across our retail and commercial lines of business, and we have advanced our supply and logistics expertise to maximize our margins. Speaker 200:19:07We are a resilient business operating in diverse markets. We have a long runway of growth opportunities in our conventional business and as consumer demand for renewable energy increases, We are positioned to play a leading role. Having accelerated delivery of our key targets, the question many of you have been asking is what's next for Parkland? We will answer that during our Investor Day on November 14. Specifically, we will provide details on the continued execution of our strategy. Speaker 200:19:38We will share our new targets we have set for ourselves. We will discuss our go forward capital allocation framework, and we will outline our plan to to deliver enduring growth and value. With that, we'll turn it back to the operator for questions. Operator00:19:56Thank you. Ladies and gentlemen, we will now begin the question and answer session. Questions will be taken in the order Your first question is from Ben Isaacson from Scotiabank. Please ask your question. Speaker 500:20:32Thank you very much and good morning and congrats on the great quarter. Bob, we've seen GM and Ford pulling back on their EV ambitions. Exxon and Chevron have both just doubled down on oil with the acquisitions of Pioneer and Hess. In North America, unsold EV inventory is at an all time high. What do you think about that? Speaker 500:20:54And does that lead you to rethink the pace of your investment into the EV transition? Thanks. Speaker 200:21:03Yes. Good morning, Ben, and thanks for the question. It's interesting. As Parkland, we're focused on what our on the needs of our customers. And we recognize that we need to provide cheap and reliable energy independent of what to the customer wants. Speaker 200:21:23That being said, we continue to invest in our base business and make sure that our customers to have the cheap energy that they're used to getting from us. With respect to the EV our EV plans, I mean, look, there. We do see these continuing to penetrate markets. As we've said, it happens at to different paces in different markets depending on the level of depending on the regulatory environment and the degree of subsidies. We are continuing to roll out our BC pilots. Speaker 200:22:01We're close to having that completed. And the value of that is the information that we gain on how the consumer interacts not only with the charger, but with our sites and how we can continue to grow our basket size with that customer. So it doesn't change our plans. Again, we're committed to the pilot and but at the same time, we'll continue to invest in our base business to make sure that we can continue to service our customers. Speaker 500:22:31That makes sense. And just a quick follow-up. In Canada, you guys called out softness in the food business tied to inflationary pressure. Same store sales growth was still positive, but it was just lower than it was a year ago. Can you just give us a little bit more color into the categories or maybe the regions That you're seeing that pressure and now we're a month into Q4. Speaker 500:22:51Are you still seeing that same level or are things getting worse or perhaps getting a Speaker 200:22:55little bit better? Thank you. Yes. We one of the things we really like about the convenience business, its resilience through economic cycles and we continue to see the segment perform strong relative to other food channels. I would say specifically the reference to food is M and M's and the frozen food category, which we've seen Although we were up year over year, it wasn't quite as robust as our convenience business. Speaker 200:23:29But that being said, the business continues to In terms of what we're seeing, I mean, look, I think we're seeing the consumer be a bit more cautious than they've been. Again, that convenience segment has proven resilient through various economic cycles. But we see, like I say cautious consumer a little more measured on gasoline volume. We'll see them come to fill up less but more often. But generally the business is holding in and you see it in the overall on metrics and the fact that we've been able to deliver industry leading same store sales growth. Speaker 500:24:13Thank you. Appreciate your time. Operator00:24:21Thank you. Your next question is from Steve Hansen from Raymond James. Please ask your question. Speaker 600:24:28Oh, yes. Good morning, everyone. Thanks for the time. Congrats on hitting your leverage targets earlier than planned. It does raise some obvious questions about future capital allocation priorities, and I'm not trying to steal any thunder from the Investor Day, but to the degree you can, how do you feel about the prospects of additional tools being executed here. Speaker 600:24:48I'm thinking buybacks in particular. I know it was referenced that you'll look to get the lower end of the range for next year. I'm just trying to understand if any other policies or priorities might come into the mix going forward. Thanks. Speaker 300:25:01Good morning, Steve, and thank you for the question. It's Marcel here. If we look at the interest rate environment, it continue to be elevated, Right. And so if you look at overall and our balance sheet, we are aiming for that lower end of the range by the end of 2025 and have a more conservative balance Going forward, so that continues to be priority for us. But given that we're now within the range, we'll We also look at additional means to kind of deploy capital within our business. Speaker 300:25:33And we'll talk more about that in 2 weeks at our Investor Day. Appreciate the Speaker 500:25:37today. Speaker 600:25:38Appreciate the comments. Thanks. And just one quick follow-up. There's been some pretty extensive press in the last couple of weeks on all the offshore success taking place in Guyana and you referenced that in your remarks. I'm just curious on how much visibility you think you have into growing That offshore business down there, specifically around Guyana and Suriname over the next 3 to 5 years. Speaker 600:25:58Do you plan on expanding existing services? Just continue to support what you're doing today. Just any color around the growth plans there would be helpful. Thanks. Speaker 200:26:07Yes. Good morning, Steve. It's So Bob Espie. Look, we're fortunate to be in that market. The team has done a remarkable job in meeting to demand and demand growth. Speaker 200:26:21We facilitated that through some investment in the market in storage capacity. As we've talked about in the past, one of our strategic pillars is our supply and our ability to supply difficult markets. And The additional supply along with our shipping capability in that market has allowed us to continue to to meet demand and meet the pace of growth. We expect that to continue. Currently, I believe production is to. Speaker 200:26:53About 350,000 barrels a day out of Guyana, targeting up to 1,500,000 barrels a day And there'll be a lot of energy required to bring that to market. And we do have the leading position in the markets And we'll continue to leverage that to grow in that market quite nicely. So expect a nice tailwind from that business. Speaker 600:27:19Appreciate the time. Thanks. Operator00:27:25Thank you. Your next question is from Luke Cannon from Canaccord Genuity. Please ask your question. Speaker 500:27:33Yes, thanks. Good morning and congratulations on the results. I wanted to dig into the U. S. Business if we can. Speaker 500:27:40It was mentioned that that market was a little bit more competitive and that resulted in slightly lower volume. So Bob, just curious to know if you can talk about what exactly you're seeing there from a competitive perspective and what your strategic reaction has been to try and recapture to share the market. Speaker 200:27:58Sure. We're really fortunate to have Donna here with us today and I'll have Donna answer that question. Speaker 400:28:05Good morning, Luke. This is Donna. So yes, we saw the industry soften a bit, particularly the fuel margins. When we look back at the prior year quarter 3, things the situation was very volatile. And so we saw some record margins last And so this year, things have tamped down a bit. Speaker 400:28:26And also when during periods of increased commodity prices, we tend to see our margins get squeezed a bit. From a volume perspective, while we were slightly negative on the same store sales volume perspective, we actually to the industry benchmarks for the quarter, and we did see some C store margin improvement as well. And so we're bullish on our position in the retail business. We have converted as noted in the commentary a number of sites are backcourt to on the run and we're seeing some really good lift from that as well. Speaker 500:29:00Okay, thanks. And maybe this one is for you as well, Donna. But I think you did mention in your prepared remarks The lubricants business is something that you see as it could be a key driver of USA growth over the course of the near term Can you just share what exactly is specific about that line of business that gives you the optimism to, I guess, see further growth in the U. S. Going forward? Speaker 500:29:25Yes. Speaker 400:29:25So the customers that we provide our lubricants to, they're very selective about the lubricants. They're critical to their operations, the machinery and the equipment that they run is critical to the to the time of their operations. And so we find that the combined business of lubricants and fuel, it improves the stickiness of our relationships with them and we really see that as potential upside for future growth. Speaker 500:29:55That's great. Thank you very much. Operator00:30:04Thank you. Your next question is from Ivan Francheska from TD Securities. Please ask your question. Speaker 700:30:13Good morning. So first question, just on the international business. The nonfuel revenues and gross profit was roughly flat year over year. Can you talk a bit about what's preventing growth in that? Speaker 200:30:34Yes. Good morning and thanks for the question. Look, we're really delighted with the growth that we've seen in the international business. When you step back and look at to performance. And to your point, it has been largely fuel driven as that team continues to find new opportunities to grow our market share and underpin the recent success with more new business. Speaker 200:30:59We're quite bullish on the business going forward here. With respect to the non fuel, the structure of that market is somewhat different to the Canadian and U. S. Markets to where in a lot of markets, we're not Parkland as A supplier is not allowed to participate in the backcourt margin. So Our non fuel margin in that business is smaller on a percentage basis than our Canadian and U. Speaker 200:31:30S. Business. And hence, The team there has done a great job in terms of executing, but it is more difficult to grow that given that the structure of the market. Speaker 700:31:45Great. Thanks. And just a final question. On the corporate segment, if I look at the MG and A expense, it seems to be quite a bit higher than what you recorded in Q2. Could you maybe explain the sequential swing in that number? Speaker 200:32:11Yes. Pardon me. Sorry, I'll ask Marcel to comment on the MG and A. Speaker 300:32:18Yes. No, what you see quarter over quarter in the corporate segment is some timing of expenditure and some provisioning as we kind of go in here towards the end of the year. So that's there. There's nothing happening in there. As you may recall in Q2 At the end of Q2, we did reorganize and cut a number of rolls out of it for which we took some provisioning. Speaker 300:32:42So as we go into Q3, we're looking to kind of normalize those costs and take some additional one offs. Speaker 700:32:50So is the Q3 level kind of a good indicator of what it should be going forward? Speaker 300:32:58Yes. I think on I think if you take on a year to date basis and where we are, that's probably a good run rate and it will come down a bit as we as I said, we take some costs down. Speaker 700:33:10Okay. Thank you very much. Operator00:33:33There are no further questions at this time. Please proceed. Speaker 200:33:39Great. Well, thank you for joining us. We look forward to seeing you at our up and coming Investor Day. Operator00:33:53Thank you. Ladies and gentlemen, your conference call has now ended. Thank you all for joining. You may all disconnect.Read morePowered by