ALIMENTATION COUCHE-TARD ANNOUNCES ITS RESULTS FOR ITS THIRD QUARTER OF FISCAL YEAR 2024

• Net earnings attributable to shareholders of the Corporation were 623.4 million, or $0.65 per diluted share for the third quarter of fiscal 2024 compared with $737.4 million, or $0.73 per diluted share for the third quarter of fiscal 2023. Adjusted net earnings attributable to shareholders of the Corporation¹ were approximately $625.0 million compared with $741.0 million for the third quarter of fiscal 2023. Adjusted diluted net earnings per share¹ were $0.65, representing a decrease of 12.2% from $0.74 for the corresponding quarter of last year.
• Total merchandise and service revenues of $5.0 billion, an increase of 1.6%. Same-store merchandise revenues² decreased by 1.5% in the United States, by 0.3% in Europe and other regions¹, and by 1.2% in Canada.
• Merchandise and service gross margin¹ decreased by 0.1% in the United States to 33.1%, increased by 1.9% in Europe and other regions to 39.2%, and increased by 1.9% in Canada to 34.2%.
• Same-store road transportation fuel volumes decreased by 0.8% in the United States, by 1.9% in Europe and other regions, and increased by 0.2% in Canada.
• Road transportation fuel gross margin¹ of 43.19¢ per gallon in the United States, a decrease of 3.66¢ per gallon, US 8.56¢ per liter in Europe and other regions, an increase of US 0.55¢ per liter, and CA 12.99¢ per liter in Canada, an increase of CA 0.47¢ per liter. Notwithstanding the modest decline from previous levels, fuel gross margins¹ remained healthy throughout the network.
• Growth of expenses for the third quarter of fiscal 2024 was 3.1%, while normalized decrease in expenses¹ was 1.6%, as disciplined cost control more than compensated the inflationary pressures.
• Strong network growth with the addition of 2,175 sites from TotalEnergies SE in Europe, for a total cash consideration of approximately €3.4 billion ($3.8 billion) and 112 sites from MAPCO in the United States, for a total cash consideration of $468.6 million.
• Successful issuance of Canadian-dollar-denominated senior unsecured notes in the amount of CA $500.0 million ($371.7 million), and subsequent to the end of the quarter, successful issuance of US-dollar-denominated senior unsecured notes of $1.5 billion and Euro-denominated senior unsecured notes of €1.35 billion ($1.45 billion).

LAVAL, QC, March 20, 2024 /PRNewswire/ - For its third quarter ended February 4, 2024, Alimentation Couche-Tard Inc. ("Couche-Tard" or the "Corporation") (TSX: ATD) announces net earnings attributable to shareholders of the Corporation of $623.4 million, representing $0.65 per share on a diluted basis, compared with $737.4 million for the corresponding quarter of fiscal 2023, representing $0.73 per share on a diluted basis. The results for the third quarter of fiscal 2024 were affected by pre-tax acquisition costs of $5.6 million and by a pre-tax net foreign exchange gain of $5.4 million. The results for the comparable quarter of fiscal 2023 were affected by pre-tax acquisition costs of $2.7 million and by a pre-tax net foreign exchange loss of $1.6 million. Excluding these items, the adjusted net earnings attributable to shareholders of the Corporation¹ were approximately $625.0 million, or $0.65 per share on a diluted basis for the third quarter of fiscal 2024, compared with $741.0 million, or $0.74 per share on a diluted basis for the corresponding quarter of fiscal 2023, a decrease of 12.2% in the adjusted diluted net earnings per share¹. This decrease is primarily driven by lower road transportation fuel gross margin¹ in the United States and softness in traffic as a portion of our customers remains impacted by challenging economic conditions, partly offset by the favorable impact of the share repurchase program and the contribution from acquisitions, which amounted to approximately $27.0 million. All financial information presented is in US dollars unless stated otherwise.

"As we continue to navigate near term headwinds, especially in the United States, we remain focused on providing value and ease for our customers with a growing selection of private label options, continued rollout of our Inner Circle loyalty program, and reoccurring Fuel Day promotions. All of these offerings are providing meaningful rewards and compelling value, especially for our more cash-strapped customers. However, as our business is extremely diversified around the globe, we feel very good about its proven resilience and our continued focus on our strategy of building on our key points of differentiation with our customers and maximizing the advantages of our scale," said Brian Hannasch, President and Chief Executive Officer of Alimentation Couche-Tard.

"We are pleased this quarter with the significant growth of our network. In January, we closed on the acquisition of certain European retail assets from TotalEnergies, and welcomed four new countries, nearly 22,000 team members, and 2,175 sites into the Couche-Tard family. We have a strong track record of successful integrations and realization of synergies and are pleased of how the transition is progressing. We have identified local leadership, opened our first Circle K branded location in Berlin, and are working closely with our new, but highly engaged teams. We are also advancing nicely on the integration of our 112 MAPCO sites, and we continue to grow our pipeline of new to industry locations," concluded Brian Hannasch.

Filipe Da Silva, Chief Financial Officer, added: "Our commitment to disciplined operational cost control has led to a normalized decrease in expenses¹ of 1.6%, a performance that is notably better than the weighted average of inflation affecting our business operations. This standout achievement in the quarter highlights our commitment to financial prudence and operational excellence, even amid widespread economic challenges. A key highlight of our capital structure initiatives this quarter was the issuance of new CA $500.0 million 5-year unsecured notes. Following the end of the quarter, we also priced private debt offerings denominated in both US dollars and Euros, achieving combined totals of $1.5 billion and €1.35 billion, respectively, across several tranches. These carefully planned financial actions strengthen our capital structure and set us on a firm path to execute our 10 For the Win strategy successfully."

The Corporation announced today that Daniel Rabinowicz has decided to retire from the Company's Board of Directors effective March 20, 2024. "On behalf of the Board of Directors, I would like to thank Daniel for his immeasurable contributions to Couche-Tard over the course of his over 10-year tenure, including serving as a member of the Human Resources and Corporate Governance Committee. The Company has benefited greatly from his vast expertise and insights, and we wish him all the best in his retirement", said Alain Bouchard, Founder and Executive Chairman of Alimentation Couche-Tard's Board of Directors.

Significant Items of the Third Quarter of Fiscal 2024

• During the third quarter and first three quarters of fiscal 2024, we repurchased 3.1 million and 21.3 million shares, for amounts of $175.9 million and $1.1 billion, respectively.
• On January 25, 2024, we issued Canadian-dollar-denominated senior unsecured notes totaling CA $500.0 million ($371.7 million) with a coupon rate of 4.60%, an effective rate of 4.74%, and maturing on January 25, 2029. The $369.4 million net proceeds from the issuance were used to partially repay outstanding indebtedness under our acquisition facility.
• Subsequent to the end of the quarter, on February 12, 2024, we issued US-dollar-denominated senior unsecured notes totaling $1.5 billion, consisting of a $900.0 million tranche with a coupon rate of 5.27% and maturing in 2034, as well as a $600.0 million tranche with a coupon rate of 5.62% and maturing in 2054. We also issued Euro-denominated senior unsecured notes totaling €1.35 billion ($1.45 billion), consisting of a €700.0 million ($754.0 million) tranche with a coupon rate of 3.65% and maturing in 2031, as well as a €650.0 million ($700.2 million) tranche with a coupon rate of 4.01% and maturing in 2036. We used the net proceeds from these issuances to repay outstanding indebtedness under our acquisition facility.

Acquisition of certain European retail assets from TotalEnergies SE

• On December 28, 2023 and January 3, 2024, we closed the acquisition of 2,175 sites from TotalEnergies SE for a total cash consideration of approximately €3.4 billion ($3.8 billion), including preliminary adjustments, and subject to post closing adjustments. The retail assets included in the transaction cover 1,191 sites located in Germany, 562 sites in Belgium, 378 sites in the Netherlands, and 44 sites in Luxembourg, of which 1,492 sites are company-owned and 683 sites are dealer-owned. For the same sites included in the transaction, 19% are company-operated and 81% are dealer-operated. The transaction comprises 100% of TotalEnergies SE's retail assets in Germany and the Netherlands, as well as a 60% controlling interest in the Belgium and Luxembourg entities (together "Circle K Belgium SA").
• From December 28, 2023 and January 3, 2024, the acquired sites' results, balance sheet and cash flows are included in our consolidated financial statements. The earnings attributable to Circle K Belgium SA's other shareholders are presented as Net earnings attributable to non-controlling interest.
• We expect that our synergies¹ associated with the acquisition of certain European retail assets from TotalEnergies SE will reach €170.0 million ($187.0 million) over the 5 years following the transaction. These synergies¹ should mainly result from improvements in the convenience activities as well as from reductions in operating, selling, general and administrative expenses.
• In relation with the acquisition of 60% of Circle K Belgium SA, we entered into a shareholder's agreement with TotalEnergies Marketing Belgium SA, which holds the remaining 40% ownership interest in this entity. This shareholder's agreement entitled each of the parties, at their sole discretion after a period of two years following the closing of the transaction, to sell their ownership interests to the other party. As a result, a redemption liability of $251.0 million, representing the present value of the estimated redemption amount as at January 3, 2024, was recorded to Other long-term financial liabilities on the consolidated balance sheet, with an equivalent amount reclassified from Retained earnings. Subsequent to the initial recognition of the redemption liability, the effects of its discounting and any changes to the gross redemption amount are recorded to Retained earnings. As at February 4, 2024, the redemption liability amounted to $250.2 million.
• In order to finance the acquisition of certain European retail assets from TotalEnergies SE and the related acquisition costs, we entered into a new credit agreement consisting of a non-revolving credit facility of an aggregate maximum amount of $1.75 billion and €1.5 billion (the "acquisition facility"). As at February 4, 2024, a total amount of $3.0 billion was outstanding and the weighted average effective interest rate of the outstanding indebtedness under the acquisition facility was 5.78%. Subsequent to the end of the quarter and following the issuance of senior unsecured notes, this acquisition facility was fully repaid.
• Prior to the acquisition, to mitigate the currency fluctuation risk associated with the Euro, we entered into Euro / US dollar currency forward contracts with financial institutions for a portion of the consideration, representing €1.9 billion. In relation with the closing of the transaction, the currency forwards were settled for net proceeds of $16.6 million.

Other Changes in our Network during the Third Quarter of Fiscal 2024

• On November 1, 2023, we closed the acquisition of 112 company-owned and operated convenience retail and fuel sites operating under the MAPCO brand and located in the states of Alabama, Georgia, Kentucky, Mississippi and Tennessee, in the United States. The acquisition also includes surplus properties and a logistics fleet. The transaction was settled for a consideration of $468.6 million, subject to post closing adjustments, and was financed using our available cash and our United States commercial paper program.
• We acquired 17 company-operated stores, reaching a total of 27 company-operated stores acquired through various transactions since the beginning of fiscal 2024. We settled these transactions using our available cash.
• We completed the construction of 16 stores and the relocation or reconstruction of 2 stores, reaching a total of 60 stores since the beginning of fiscal 2024. As of February 4, 2024, another 39 stores were under construction and should open in the upcoming quarters.

Summary of changes in our store network

The following table presents certain information regarding changes in our store network over the 16–week period ended February 4, 2024⁽¹⁾:

Exchange Rate Data

We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in the United States.

The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:

For the analysis of consolidated results, the impact of the translation of our foreign currency operations into US dollars is defined as the impact from the translation of our Canadian, European, Asian, and corporate operations into US dollars. Variances of our foreign currency operations into US dollars are determined as being the difference between the corresponding period results in local currencies translated at the current period average exchange rate and the corresponding period results in local currencies translated at the corresponding period average exchange rate.

Summary Analysis of Consolidated Results for the Third Quarter and First Three Quarters of Fiscal 2024

The following table highlights certain information regarding our operations for the 16 and 40-week periods ended February 4, 2024 and January 29, 2023, and the results analysis in this section should be read in conjunction with this table. The results from our operations in Europe and Asia are presented together as Europe and other regions.

Revenues

Our revenues were $19.6 billion for the third quarter of fiscal 2024, down by $433.1 million, a decrease of 2.2% compared with the corresponding quarter of fiscal 2023, mainly attributable to a lower average road transportation fuel selling price, lower aviation fuel volume sold as a result of a change in business model, as well as softness in traffic as a portion of our customers is impacted by challenging economic conditions, while being partly offset by the contribution from acquisitions and the net positive impact of approximately $144.0 million from the translation of our foreign currency operations into US dollars.

For the first three quarters of fiscal 2024, our revenues decreased by $3.9 billion, or 7.1%, compared with the corresponding period of fiscal 2023, mainly attributable to a lower average road transportation fuel selling price, lower aviation fuel volume sold as a result of a change in business model, while being partly offset by the contribution from acquisitions and the net positive impact of approximately $128.0 million from the translation of our foreign currency operations into US dollars.

Merchandise and service revenues

Total merchandise and service revenues for the third quarter of fiscal 2024 were $5.0 billion, an increase of $78.4 million compared with the corresponding quarter of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $16.0 million. The remaining increase of approximately $62.0 million, or 1.2%, is primarily attributable to the contribution from acquisitions, which amounted to approximately $167.0 million, partly offset by softness in traffic. Same-store merchandise revenues decreased by 1.5% in the United States, by 0.3% in Europe and other regions[5] and by 1.2% in Canada, all impacted by constraints on discretionary spending due to challenging economic conditions, as well as the continuous decline in the cigarettes category, partly offset by the growth in the other tobacco products category.

For the first three quarters of fiscal 2024, the growth in merchandise and service revenues was $323.7 million compared with the corresponding period of fiscal 2023. The translation of our foreign currency operations into US dollars had a net negative impact of approximately $2.0 million. Same-store merchandise revenues remained stable in the United States, and increased by 0.7% in Europe and other regions¹ and by 2.1% in Canada.

Road transportation fuel revenues

Total road transportation fuel revenues for the third quarter of fiscal 2024 were $14.3 billion, a decrease of $382.2 million compared with the corresponding quarter of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $116.0 million. The remaining decrease of approximately $498.0 million, or 3.4%, is attributable to a lower average road transportation fuel selling price, which had a negative impact of approximately $1.4 billion, and softness in traffic, while being partly offset by the contribution from acquisitions, which amounted to approximately $1.1 billion. Same-store road transportation fuel volumes decreased by 0.8% in the United States and by 1.9% in Europe and other regions. During the quarter, fuel demand remained unfavorably impacted by challenging macroeconomic conditions. Same store road transportation fuel volume increased by 0.2% in Canada.

For the first three quarters of fiscal 2024, the road transportation fuel revenues decreased by $3.8 billion compared with the corresponding period of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $98.0 million. Same-store road transportation fuel volumes decreased by 0.6% in the United States, by 1.5% in Europe and other regions, and increased by 3.1% in Canada.

The following table shows the average selling price of road transportation fuel of our company-operated stores in our various markets for the last eight quarters. The average selling price of road transportation fuel consists of the road transportation fuel revenues divided by the volume of road transportation fuel sold:

Other revenues

Total other revenues for the third quarter of fiscal 2024 were $249.4 million, a decrease of $129.3 million compared with the corresponding quarter of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $13.0 million. The remaining decrease of approximately $142.0 million, or 37.5%, is primarily driven by lower aviation fuel volume sold as a result of a change in business model and lower average selling prices of our other fuel products, which had a minimal impact on gross profit¹.

For the first three quarters of fiscal 2024, total other revenues were $517.5 million, a decrease of $408.4 million compared with the corresponding period of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $32.0 million. The remaining decrease of approximately $440.0 million, or 47.5%, is mainly attributable to similar factors as those of the third quarter.

Gross profit¹

Our gross profit was $3.4 billion for the third quarter of fiscal 2024, up by $41.0 million, or 1.2%, compared with the corresponding quarter of fiscal 2023, mainly attributable to the contribution from acquisitions, as well as the net positive impact of the translation of our foreign currency operations into US dollars of approximately $12.0 million, partly offset by lower road transportation fuel gross profit and softness in traffic.

For the first three quarters of fiscal 2024, our gross profit increased by $172.9 million, or 1.9%, compared with the first three quarters of fiscal 2023, mainly attributable to the contribution from acquisitions, organic growth in our convenience activities, and the net positive impact of the translation of our foreign currency operations into US dollars of approximately $3.0 million, while being partly offset by lower road transportation fuel gross margins¹.

Merchandise and service gross profit

In the third quarter of fiscal 2024, our merchandise and service gross profit was $1.7 billion, an increase of $52.5 million compared with the corresponding quarter of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $5.0 million. The remaining increase of approximately $48.0 million, or 2.9%, is primarily attributable to the contribution from acquisitions, which amounted to approximately $75.0 million, while being partly offset by softness in traffic. Our merchandise and service gross margin¹ decreased by 0.1% in the United States to 33.1%, increased by 1.9% in Canada to 34.2%, mainly due to pricing initiatives, and increased by 1.9% in Europe and other regions to 39.2%, mainly due to a change in product mix.

During the first three quarters of fiscal 2024, our merchandise and service gross profit was $4.7 billion, an increase of $186.6 million compared with the first three quarters of fiscal 2023. The translation of our foreign currency operations into US dollars had a net negative impact of $1.0 million. Our merchandise and service gross margin¹ increased by 0.3% to 34.0% in the United States, by 1.2% in Europe and other regions to 39.3% and by 1.0% in Canada to 33.8%.

Road transportation fuel gross profit

In the third quarter of fiscal 2024, our road transportation fuel gross profit was $1.7 billion, a decrease of $16.6 million compared with the corresponding quarter of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $7.0 million. The remaining decrease of approximately $24.0 million, or 1.4%, was mainly driven by the decline in road transportation fuel gross margin¹ in the United States, partly offset by the impact from acquisitions, which amounted to approximately $83.0 million. In the United States, our road transportation fuel gross margin¹ was 43.19¢ per gallon, a decrease of 3.66¢ per gallon, mostly driven by the volatility of the global fuel market, while in Canada, it was CA 12.99¢ per liter, an increase of CA 0.47¢ per liter. In Europe and other regions, our road transportation fuel gross margin¹ was US 8.56¢ per liter, an increase of US 0.55¢ per liter. Notwithstanding the modest decline from previous levels, fuel gross margins¹ remained healthy throughout our network.

During the first three quarters of fiscal 2024, our road transportation fuel gross profit was $4.5 billion, a decrease of $21.9 million compared with the first three quarters of fiscal 2023. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $5.0 million. The road transportation fuel gross margin¹ was 47.22¢ per gallon in the United States, US 8.94¢ per liter in Europe and other regions, and CA 13.27¢ per liter in Canada.

The road transportation fuel gross margin¹ of our company-operated stores in the United States and the impact of expenses related to electronic payment modes for the last eight quarters, were as follows:

The road transportation fuel gross margin¹ of our network in Europe and other regions and in Canada for the last eight quarters, were as follows:

Generally, road transportation fuel margins can be volatile from one quarter to another but tend to be more stable over longer periods. In Europe and other regions, fuel margin volatility is impacted by a longer supply chain due to a more integrated model. In Europe and other regions and in Canada, expenses related to electronic payment modes are not as volatile as in the United States.

Other revenues gross profit

In the third quarter and first three quarters of fiscal 2024, other revenues gross profit were $53.6 million and $124.0 million, an increase of $5.1 million and $8.2 million, respectively, compared with the corresponding periods of fiscal 2023. The translation of our foreign currency operations into US dollars had no significant impact on gross profit for the third quarter and first three quarters of fiscal 2024.

Operating, selling, general and administrative expenses ("expenses")

For the third quarter and first three quarters of fiscal 2024, expenses increased by 3.1% and 2.9%, respectively, compared with the corresponding periods of fiscal 2023. Normalized decrease in expenses[7] was 1.6%, and normalized growth of expenses¹ was 0.9%, respectively, as shown in the table below:

Normalized decrease in expenses¹ for the third quarter of fiscal 2024 was mainly driven by the continued strategic efforts to control our expenses, including labor efficiency in our stores. Our control of expenses is evidenced by our normalized decrease in expenses¹ as disciplined cost control more than compensated the inflationary pressures, the impact of costs from rising minimum wages, as well as incremental investments to support our strategic initiatives.

Normalized growth of expenses¹ for the first three quarters of fiscal 2024 was mainly driven by the impact of costs from rising minimum wages, inflationary pressures, and incremental investments to support our strategic initiatives, while being partly offset by the continued strategic efforts to control our expenses, including labor efficiency in our stores. Our control of expenses is evidenced by our normalized growth of expenses¹ remaining lower than the average inflation observed throughout our network.

Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA¹") and adjusted EBITDA¹

During the third quarter of fiscal 2024, EBITDA stood at $1.5 billion, a decrease of $21.4 million, or 1.4%, compared with the corresponding quarter of fiscal 2023. Adjusted EBITDA for the third quarter of fiscal 2024 decreased by $18.5 million, or 1.2%, compared with the corresponding quarter of fiscal 2023, mainly due to lower road transportation fuel gross profit¹ and softness in traffic as a portion of our customers is impacted by challenging economic conditions, while being partly offset by the contribution from acquisitions, which amounted to approximately $65.0 million, lower expenses, as well as the translation of our foreign currency operations into US dollars, which had a net positive impact of approximately $6.0 million.

During the first three quarters of fiscal 2024, EBITDA stood at $4.5 billion, an increase of $15.0 million, or 0.3%, compared with the first three quarters of fiscal 2023. Adjusted EBITDA for the first three quarters of fiscal 2024 increased by $19.1 million, or 0.4%, compared with the first three quarters of fiscal 2023, mainly attributable to the contribution from acquisitions, as well as organic growth in our convenience operations, partly offset by lower road transportation fuel gross profit¹. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $2.0 million.

Depreciation, amortization and impairment ("depreciation")

For the third quarter of fiscal 2024, our depreciation expense increased by $74.3 million compared with the third quarter of fiscal 2023. The translation of our foreign currency operations into US dollars had no significant impact on depreciation. This increase is mainly driven by the impact from investments made through acquisitions, the replacement of equipment, as well as the ongoing improvement of our network.

For the first three quarters of fiscal 2024, our depreciation expense increased by $131.3 million compared with the first three quarters of fiscal 2023. The translation of our foreign currency operations into US dollars had a net favorable impact of approximately $2.0 million. The remaining increase of approximately $133.0 million, or 11.7%, is mainly attributable to similar factors as those of the third quarter, while being partly offset by the impact of the impairment on our investment in Fire & Flower Holdings Corp. of $23.9 million in the comparable year.

Net financial expenses

Net financial expenses for the third quarter and first three quarters of fiscal 2024 were $130.3 million and $248.0 million, respectively, an increase of $47.8 million and $40.3 million, respectively, compared with the corresponding periods of fiscal 2023. A portion of the variation is explained by certain items that are not considered indicative of future trends, as shown in the table below:

The remaining variation of the third quarter and first three quarters of fiscal 2024 is mainly driven by higher average short-term and long-term debt in connection with our recent acquisitions, as well as higher interest rates, partly offset by higher interest revenue.

Income taxes

The income tax rate for the third quarter and first three quarters of fiscal 2024 was 22.0% and 22.6%, respectively, compared with 21.9% for the corresponding periods of fiscal 2023. These increases mainly stem from the impact of a different mix in our earnings across the various jurisdictions in which we operate.

Net earnings attributable to shareholders of the Corporation and adjusted net earnings attributable to shareholders of the Corporation¹

Net earnings attributable to shareholders of the Corporation for the third quarter of fiscal 2024 were $623.4 million, compared with $737.4 million for the third quarter of fiscal 2023, a decrease of $114.0 million, or 15.5%. Diluted net earnings per share stood at $0.65, compared with $0.73 for the corresponding quarter of the previous fiscal year. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $5.0 million on net earnings attributable to shareholders of the Corporation for the third quarter of fiscal 2024.

Adjusted net earnings attributable to shareholders of the Corporation for the third quarter of fiscal 2024 were approximately $625.0 million, compared with $741.0 million for the third quarter of fiscal 2023, a decrease of $116.0 million, or 15.7%. Adjusted diluted net earnings per share¹ were $0.65 for the third quarter of fiscal 2024, compared with $0.74 for the corresponding quarter of fiscal 2023, a decrease of 12.2%.

For the first three quarters of fiscal 2024, net earnings attributable to shareholders of the Corporation stood at $2.3 billion, a decrease of $143.5 million, or 5.9%, compared with the first three quarters of fiscal 2023. Diluted net earnings per share stood at $2.35, compared with $2.38 for the previous fiscal year. The translation of our foreign currency operations into US dollars had a net positive impact of approximately $5.0 million on net earnings attributable to shareholders of the Corporation for the first three quarters of fiscal 2024.

Adjusted net earnings attributable to shareholders of the Corporation for the first three quarters of fiscal 2024 stood at $2.3 billion, a decrease of $199.0 million, or 8.1%, compared with the first three quarters of fiscal 2023. Adjusted diluted net earnings per share¹ were $2.32 for the first three quarters of fiscal 2024, compared with $2.41 for the first three quarters of fiscal 2023, a decrease of 3.7%.

Dividends

During its March 20, 2024 meeting, the Board of Directors declared a quarterly dividend of CA 17.5¢ per share for the third quarter of fiscal 2024 to shareholders on record as at April 1, 2024, and approved its payment effective April 15, 2024. This is an eligible dividend within the meaning of the Income Tax Act (Canada).

Non-IFRS Accounting Standards Measures

To provide more information for evaluating the Corporation's performance, the financial information included in our financial documents contains certain data that are not performance measures under IFRS^® Accounting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"), which are also calculated on an adjusted basis to exclude specific items. Those performance measures are called "Non-IFRS Accounting Standards measures". We believe that providing those Non-IFRS Accounting Standards measures is useful to management, investors, and analysts, as they provide additional information to measure the performance and financial position of the Corporation.

The following Non-IFRS Accounting Standards financial measures are used in our financial disclosures:

• Gross profit;
• Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA") and adjusted EBITDA;
• Adjusted net earnings attributable to shareholders of the Corporation;
• Interest-bearing debt.

The following Non-IFRS Accounting Standards ratios are used in our financial disclosures:

• Merchandise and service gross margin and Road transportation fuel gross margin;
• Normalized growth of (decrease in) operating, selling, general and administrative expenses;
• Growth of (decrease in) same-store merchandise revenues for Europe and other regions;
• Adjusted diluted net earnings per share;
• Leverage ratio;
• Return on equity and return on capital employed.

The following capital management measure is used in our financial disclosures:

• Net interest-bearing debt/total capitalization.

Supplementary financial measures are also used in our financial disclosures and those measures are described where they are presented.

Non-IFRS Accounting Standards financial measures and ratios, as well as the capital management measure, are mainly derived from the consolidated financial statements, but do not have standardized meanings prescribed by IFRS Accounting Standards. These Non-IFRS Accounting Standards measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS Accounting Standards. In addition, our definitions of Non-IFRS Accounting Standards measures may differ from those of other public corporations. Any such modification or reformulation may be significant. These measures are also adjusted for the pro forma impact of our acquisitions and impacts of new accounting standards, if they are considered to be material.

Gross profit. Gross profit consists of revenues less the cost of sales, excluding depreciation, amortization and impairment. This measure is considered useful for evaluating the underlying performance of our operations.

The table below reconciles revenues and cost of sales, excluding depreciation, amortization and impairment, as per IFRS Accounting Standards, to gross profit:

Please note that the same reconciliation applies in the determination of gross profit by category and by geography presented in the section "Summary Analysis of Consolidated Results".

Merchandise and service gross margin. Merchandise and service gross margin consists of Merchandise and service gross profit divided by Merchandise and service revenues, both measures are presented in the section "Summary Analysis of Consolidated Results". Merchandise and service gross margin is considered useful for evaluating how efficiently we generate gross profit by dollar of revenue.

Road transportation fuel gross margin. Road transportation fuel gross margin consists of Road transportation fuel gross profit divided by total volume of road transportation fuel sold. For the United States and Europe and other regions, both measures are presented in the section "Summary Analysis of Consolidated Results". For Canada, this measure is presented in functional currency and the table below reconciles, for road transportation fuel, Revenues and Cost of sales, excluding depreciation, amortization and impairment, as per IFRS Accounting Standards, to gross profit and the resulting road transportation fuel gross margin. This measure is considered useful for evaluating how efficiently we generate gross profit by gallon or liter of road transportation fuel sold.

Normalized growth of (decrease in) operating, selling, general and administrative expenses ("normalized growth of (decrease in) expenses"). Normalized growth of (decrease in) expenses consists of the growth of (decrease in) Operating, selling, general and administrative expenses adjusted for the impact of the changes in our network, the impact from changes in accounting policies and adoption of accounting standards, the impact of more volatile items over which we have limited control including, but not limited to, the net impact of foreign exchange translation, electronic payment fees excluding acquisitions, and acquisition costs, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. This measure is considered useful for evaluating our ability to control our expenses on a comparable basis.

The tables below reconcile growth of Operating, selling, general and administrative expenses to normalized growth of (decrease in) expenses:

Growth of (decrease in) same-store merchandise revenues for Europe and other regions. Same-store merchandise revenues represent cumulative merchandise revenues between the current period and comparative period for those stores that were open for at least 23 days out of every 28-day period included in the reported periods. Merchandise revenues are defined as Merchandise and service revenues excluding service revenues. For Europe and other regions, the growth of (decrease in) same-store merchandise revenues is calculated based on constant currencies using the respective current period average exchange rate for both the current and corresponding period. In Europe and other regions, same-store merchandise revenues include same-store revenues from company-operated stores, as well as CODO and DODO stores which are not included in our consolidated results. This measure is considered useful for evaluating our ability to generate organic growth on a comparable basis in our overall European and other regions store network.

The tables below reconcile Merchandise and service revenues, as per IFRS Accounting Standards, to same-store merchandise revenues for Europe and other regions and the resulting percentage of growth (decrease):

Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA") and adjusted EBITDA. EBITDA represents net earnings plus income taxes, net financial expenses, and depreciation, amortization and impairment. Adjusted EBITDA represents the EBITDA adjusted for acquisition costs, the impact from changes in accounting policies and adoption of accounting standards, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. These performance measures are considered useful to facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program, share repurchases, and payment of dividends.

The table below reconciles net earnings, as per IFRS Accounting Standards, to EBITDA and adjusted EBITDA:

Adjusted net earnings attributable to shareholders of the Corporation and adjusted diluted net earnings per share. Adjusted net earnings attributable to shareholders of the Corporation represents net earnings attributable to shareholders of the Corporation adjusted for net foreign exchange gains or losses, acquisition costs, the impact from changes in accounting policies and adoption of accounting standards, impairment on goodwill, investments in subsidiaries, joint ventures and associated companies, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends, such as the reclassification adjustment of gain on forward starting interest rate swaps, and the impact of the non-controlling interests on the items mentioned previously. Please note that the changes in the composition of this measure relating to the net earnings attributable to shareholders of the Corporation and the impact of the non-controlling interests on the items mentioned previously are to reflect the impact of the addition of non-controlling interests during the quarter. These measures are considered useful for evaluating the underlying performance of our operations on a comparable basis.

The table below reconciles net earnings attributable to shareholders of the Corporation, as per IFRS Accounting Standards, with adjusted net earnings attributable to shareholders of the Corporation and adjusted diluted net earnings per share:

Interest-bearing debt. This measure represents the sum of the following balance sheet accounts: Short-term debt and current portion of long-term debt, Long-term debt, Current portion of lease liabilities and Lease liabilities. This measure is considered useful to facilitate the understanding of our financial position in relation with financing obligations. The calculation of this measure of financial position is detailed in the "Net interest-bearing debt/total capitalization" section below.

Net interest-bearing debt/total capitalization. This measure represents the basis for monitoring our capital and is considered useful to assess our financial health, risk profile, and ability to meet our financing obligations. It also provides insights into how our financing obligations are structured in relation with our total capitalization. 

The table below presents the calculation of this performance measure:

Leverage ratio. This measure represents a measure of financial condition considered useful to assess our financial leverage and our ability to cover our net financing obligations in relation to our adjusted EBITDA and pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE for the 53–week period ended February 4, 2024. Please note that the change in the composition of this measure relating to the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE is, as described in the opening remarks of this section, to reflect the impact of acquisitions deemed material in our ability to cover our net financing obligations for the period where the financing obligations related to the acquisition are included in net interest-bearing debt.

The table below reconciles net interest-bearing debt and adjusted EBITDA, for which the calculation methodologies are described in other tables of this section, as well as the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE, with the leverage ratio:

Return on equity. This measure is considered useful to assess the relationship between our profitability and our net assets and it also provides insights into how efficiently we are using our equity to generate returns for our shareholders. Average equity attributable to shareholders of the Corporation is calculated by taking the average of the opening and closing balance for the 53-week periods.

The table below reconciles net earnings attributable to shareholders of the Corporation, as per IFRS Accounting Standards, with the ratio of return on equity:

Return on capital employed. This measure is considered useful as it provides insights into our ability to generate returns from the total amount of capital invested in our operations and it also helps in assessing our operational efficiency and capital allocation decisions. Earnings before interest and taxes ("EBIT") represents net earnings plus income taxes and net financial expenses. Capital employed represents total assets less short-term liabilities not bearing interest, which excludes the short-term debt and current portion of long-term debt and current portion of lease liabilities. Average capital employed is calculated by taking the average of i) the opening balance of capital employed for the 53-week periods and pro forma adjustments and ii) the ending balance of capital employed for the 53-week periods. Please note that the change in the composition of this measure relating to the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE is, as described in the opening remarks of this section, to reflect the impact of acquisitions deemed material in our ability to generate returns from the total amount of capital invested in our operations on a comparable basis given that the capital employed related to the acquisition is included in the ending balance of capital employed, but not in the opening balance of capital employed, and that the associated EBIT is not reflected throughout the 53–week period ended February 4, 2024.

The table below reconciles net earnings, as per IFRS Accounting Standards, to EBIT with the ratio of return on capital employed, including the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE:

Profile

Couche-Tard is a global leader in convenience and mobility, operating in 29 countries and territories, with more than 16,700 stores, of which approximately 13,100 offer road transportation fuel. With its well-known Couche-Tard and Circle K banners, it is one of the largest independent convenience store operators in the United States and it is a leader in the convenience store industry and road transportation fuel retail in Canada, Scandinavia, the Baltics, as well as in Ireland. It also has an important presence in Poland as well as Hong Kong Special Administrative Region of the People's Republic of China and has recently expanded to Belgium, Germany, Luxembourg and the Netherlands. More than 150,000 people are employed throughout its network.

For more information on Alimentation Couche-Tard Inc., or to consult its audited annual Consolidated Financial Statements, unaudited interim condensed consolidated financial statements and Management Discussion and Analysis, please visit: https://corpo.couche-tard.com.

Forward-looking statements

The statements set forth in this press release, which describes Couche-Tard's objectives, projections, estimates, expectations, or forecasts, may constitute forward-looking statements within the meaning of securities legislation. Positive or negative verbs such as "believe", "can", "shall", "intend", "expect", "estimate", "assume", and other related expressions are used to identify such statements. Couche-Tard would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results, or the measures it adopts, could differ materially from those indicated in or underlying these statements, or could have an impact on the degree of realization of a particular projection. Major factors that may lead to a material difference between Couche-Tard's actual results and the projections or expectations set forth in the forward-looking statements include the effects of the integration of acquired businesses and the ability to achieve projected synergies, the impact of the changing circumstances surrounding both the repercussions of the COVID-19 pandemic and the ongoing military conflict between Ukraine and Russia, fluctuations in margins on motor fuel sales, competition in the convenience store and retail motor fuel industries, exchange rate variations, and such other risks as described in detail from time to time in the reports filed by Couche-Tard with securities authorities in Canada and the United States. Among other things, our synergies objective is based on our comparative analysis of organizational structures and current level of spending across our network as well as on our ability to bridge the gap, where relevant. Our synergies objective is also based on our assessment of current contracts in the geographical areas of operations and how we expect to be able to renegotiate these contracts to take advantage of our increased purchasing power. In addition, our synergies objective assumes that we will be able to establish and maintain an effective process for sharing best practices across our network. Finally, our objective is also based on our ability to integrate acquired business. An important change in these facts and assumptions could significantly impact our synergies estimate as well as the timing of the implementation of our different initiatives. Unless otherwise required by applicable securities laws, Couche-Tard disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information in this release is based on information available as of the date of the release.

Webcast on March 21, 2024 at 8:00 A.M. (EDT)

Couche-Tard invites analysts known to the Corporation to ask their questions to its management on March 21, 2024, during the question and answer period of the webcast.

Financial Analysts, Investors, media and any individuals interested in listening to the webcast on Couche-Tard's results, which will take place online on March 21, 2024, at 8:00 A.M. (EDT) can do so by either accessing the Corporation's website at https://corpo.couche-tard.com/ and by clicking in the "Investors/Events & Presentations" section or by using the following link https://emportal.ink/4a2SbBh to join the conference call without the assistance of an operator. An automated system will automatically return the call to grant you access to the conference call.

Another option could be to access the conference call through an operator by dialing 1-888-390-0549 or the international number 1-416-764-8682, followed by the access code 02403180#.

Rebroadcast: For individuals who will not be able to listen to the live webcast, a recording of the webcast will be available on the Corporation's website for a period of 90 days.

SOURCE Alimentation Couche-Tard Inc.