SNDL Inc (SNDL) 2024 Q2 法說會逐字稿

Good morning, and welcome to SNDL's second-quarter 2024 financial results conference call.

早安，歡迎參加 SNDL 2024 年第二季財務業績電話會議。

This morning, SNDL issued a press release announcing their financial results for the 2024 second quarter ended on June 30, 2024. This press release is available on the company's website at sndl.com. And filed on EDGAR and SEDAR as well.

今天上午，SNDL 發布新聞稿，宣布截至 2024 年 6 月 30 日的 2024 年第二季財務業績。本新聞稿可在公司網站 sndl.com 上取得。並在 EDGAR 和 SEDAR 上提交了申請。

The webcast replay of the conference call will also be available on the sndl.com website. SNDL has also posted a supplemental investor presentation in addition to the conference call presentation we will be reviewing today on its sndl.com website.

電話會議的網路直播重播也將在 sndl.com 網站上提供。除了我們今天將在其 sndl.com 網站上審查的電話會議簡報外，SNDL 還發布了補充投資者簡報。

Presenting on this morning's call, we have Zach George, Chief Executive Officer; and Alberto Paredero, Chief Financial Officer.

在今天早上的電話會議上，我們有執行長 Zach George；和財務長阿爾貝托·帕雷德羅。

Before we start, I would like to remind investors that certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated.

在開始之前，我想提醒投資者，今天電話會議中討論的某些事項或可能對問題的回答可能構成前瞻性陳述。實際結果可能與預期有重大差異。

Risk factors that could affect results are detailed in the company's financial reports and other public filings that are made available on SEDAR and EDGAR. Additionally, all financial figures mentioned are in Canadian dollars unless otherwise indicated.

可能影響結果的風險因素詳見該公司的財務報告以及 SEDAR 和 EDGAR 上提供的其他公開文件。此外，除非另有說明，所有提到的財務數據均以加幣為單位。

We will now make prepared remarks and then we'll move on to analyst questions. I would now like to turn the call over to Zach George. Please go ahead.

我們現在將發表準備好的評論，然後我們將轉向分析師問題。我現在想把電話轉給扎克喬治。請繼續。

Welcome to SNDL's Q2 2024 financial and operational results conference call. We are pleased to see that the second quarter confirms the increased profitability we reported in the first quarter and material progress on our path of continuous improvement.

歡迎參加 SNDL 2024 年第二季財務與營運績效電話會議。我們很高興看到第二季度證實了我們在第一季度報告的盈利能力的提高以及我們在持續改進道路上取得的重大進展。

We maintained strong momentum in our cannabis segments, reporting consistent revenue improvement in Cannabis over the last 10 quarters. While we noticed a slowdown in revenue from our liquor segment, we still posted greater margins and greater gross profit dollars on a year-over-year basis, and we have additional tools at our disposal to battle through this volatility.

我們在大麻領域保持強勁勢頭，過去 10 個季度大麻收入持續成長。儘管我們注意到酒類部門的收入放緩，但我們仍然實現了同比更高的利潤率和更高的毛利，並且我們擁有其他工具可以應對這種波動。

We are pleased to report an all-time record gross margin of 25.5%, with all segments contributing to gross profit and gross margin growth compared to the same quarter of 2023. Our cannabis operations segment achieved positive gross profit for the second quarter in a row.

我們很高興地報告，毛利率創歷史新高，達到 25.5%，與 2023 年同季相比，所有業務部門都對毛利和毛利率成長做出了貢獻。我們的大麻業務部門連續第二季實現正毛利。

Operating income also showcased a significant improvement, not only on a consolidated basis but also supported by growth in all segments, driven by gross margin improvements and strong cost discipline in SG&A management. Importantly, none of these results include the benefit of the recently announced plan to reduce corporate overhead by more than $20 million, which we expect to begin to impact results in Q3.

營業收入也顯示出顯著的改善，不僅是在綜合基礎上，而且受到毛利率改善和 SG&A 管理中嚴格的成本紀律的推動，所有部門的增長都得到了支持。重要的是，這些結果均不包括最近宣布的將公司管理費用減少超過 2000 萬美元的計劃帶來的好處，我們預計該計劃將開始影響第三季度的業績。

SNDL remains steadfast in its commitment to driving long-term profitable growth. We continue to grow our substantial retail platform; are making significant strides towards manufacturing excellence; and are involved in four different restructuring processes, two on each side of the border that may result in accretive M&A or some other type of liquidity event.

SNDL 仍然堅定地致力於推動長期獲利成長。我們繼續發展我們龐大的零售平台；正在朝著卓越製造邁出重大步伐；並涉及四個不同的重組流程，邊界兩側各有兩個，可能會導致併購或其他類型的流動性事件。

Our unique approach to the deployment of credit capital is also likely to result in the significant repatriation of cash. We currently expect approximately $130 million in principal repayments to occur in the second half of this year with about $90 million of that having been received in the last two weeks from both Ascend and Jushi.

我們獨特的信貸資本配置方法也可能導致大量現金回流。我們目前預計今年下半年將償還約 1.3 億美元的本金，其中約 9,000 萬美元是在過去兩週內從 Ascend 和 Jushi 收到的。

It is also worth noting that this quarter, we have provided transparency and an update on our material credit exposures in Canada and the US. This information can be found in the investor presentation available on our website. I also want to provide some context for the delay in closing our US restructuring efforts under SunStream.

另外值得注意的是，本季我們提供了有關加拿大和美國重大信貸風險的透明度和最新資訊。這些資訊可以在我們網站上的投資者簡報中找到。我還想提供一些有關 SunStream 下推遲完成美國重組工作的背景資訊。

It is clear from our dealings with local regulators across Canada and the US that the industry continues to face many regulatory obstacles, bureaucracy, and inefficiency. From the selective and inconsistent enforcement of excise taxes in Canada, which effectively penalizes participants who pay all of their excise obligations to provincial regulatory officials leaking confidential information to competitors or Florida state regulators recently delaying the parallel reorganization being, quote, unable to locate parts of our documentation that were submitted months ago, there are multiple examples of the need for more efficient professional regulatory bodies.

從我們與加拿大和美國當地監管機構的交往中可以清楚地看出，該行業仍然面臨許多監管障礙、官僚主義和低效率。加拿大對消費稅的選擇性和不一致的執行，實際上懲罰了那些向競爭對手洩露機密資訊的省級監管官員或佛羅裡達州監管機構支付了所有消費稅義務的參與者，最近推遲了並行重組，引用，無法在找到部分我們幾個月前提交的文件中，有多個例子顯示需要更有效率的專業監管機構。

At SNDL we have the skill, resources, and determination to overcome all of these challenges. We will persevere in our efforts, partnering with regulatory authorities to continue advancing this agenda and improving the regulatory framework. We expect to provide further updates on our US restructuring in the next 90 days or sooner if and when we have clarity.

在 SNDL，我們擁有克服所有這些挑戰的技能、資源和決心。我們將堅持努力，與監管機構合作，繼續推進這項議程並完善監管框架。如果情況明朗，我們預計將在未來 90 天內或更早提供有關美國重組的進一步最新資訊。

I will now pass the call to Alberto for a deeper dive into our Q2 financial results.

我現在將致電阿爾貝托，以更深入地了解我們第二季度的財務業績。

Thank you, Zach. I'd also remind you all that amounts discussed today are denominated in Canadian dollars, unless otherwise stated. Certain amounts referred to on this call are non-GAAP and non-IFRS measures. For definitions of these measures, please refer to SNDL's management discussion and analysis documents.

謝謝你，扎克。我還想提醒大家，除非另有說明，今天討論的金額均以加幣計價。本次電話會議中提到的某些金額是非 GAAP 和非 IFRS 衡量標準。有關這些措施的定義，請參閱SNDL 的管理層討論和分析文件。

Looking at our Q2 2024 financial highlights, we continue to see significant improvements in operating income and free cash flow, as in the first quarter, despite the revenue headwinds impacting our liquor segment.

縱觀 2024 年第二季的財務亮點，我們繼續看到營業收入和自由現金流與第一季一樣顯著改善，儘管收入逆風影響了我們的酒類部門。

Net revenue in the second quarter of 2024 reached $228.1 million, a $3.8 million or 1.6% decline year on year. This decline was driven by our liquor retail segment as our combined cannabis business posted a healthy 9.2% growth.

2024年第二季淨收入達2.281億美元，年減380萬美元或1.6%。這一下降是由我們的酒類零售部門推動的，因為我們的合併大麻業務實現了 9.2% 的健康成長。

Gross profit of $58.2 million represents a $6.2 million increase or 12% growth year on year and a material 310 basis points of gross margin improvement with positive contributions from all segments. This translates into another quarter of record gross margin reaching 25.5%.

毛利達到 5,820 萬美元，年增 620 萬美元，成長 12%，毛利率大幅提高 310 個基點，所有部門都做出了積極貢獻。這意味著毛利率又創歷史新高，達到 25.5%。

As in the first quarter, the second quarter gross margin increased. Income contributions from our investment segment and disciplined management of corporate overhead led to significant year-on-year improvements in adjusted operating income and free cash flow of 82% and 70% respectively. These two metrics were yet again close to breakeven in the quarter.

與第一季一樣，第二季毛利率有所上升。我們的投資部門的收入貢獻和嚴格的企業管理費用管理導致調整後營業收入和自由現金流分別較去年同期顯著提高 82% 和 70%。本季這兩項指標再次接近損益兩平。

As mentioned last quarter, we only adjust operating income for restructuring-related write-offs and intangible asset impairments. Specifically, in the second quarter of 2024, we adjusted operating income by removing $0.2 million expenses related to restructuring charges, while in the same quarter of 2023, there was an adjustment to remove a $4 million restructuring expense.

如上季所提到的，我們僅調整與重組相關的沖銷和無形資產減損的營業收入。具體來說，在 2024 年第二季度，我們透過取消與重組費用相關的 20 萬美元費用來調整營業收入，而在 2023 年同一季度，我們進行了調整，取消了 400 萬美元的重組費用。

When looking at the quarterly historical traction of main financial KPIs, we noticed the quarter-on-quarter improvement in net revenue, a 15% growth between the second and the first quarter of 2024 to be precise, although still declining compared to the same quarter of 2023. Where we're seeing significant improvements both quarter on quarter and compared to the previous years is in gross profit, where the second quarter represents a 15% quarter-on-quarter increase and a 12% growth compared to the same quarter of 2023.

在查看主要財務 KPI 的季度歷史牽引力時，我們注意到淨收入環比改善，準確地說，2024 年第二季度與第一季度相比增長了 15%，儘管與同季度相比仍有所下降2023年。我們看到毛利較上季和前幾年都有顯著改善，第二季較上季成長 15%，與 2023 年同季相比成長 12%。

Both adjusted operating income and free cash flow are very close to breakeven at very similar levels when compared to the first quarter of 2024. Clearly, the first half of 2024 represents a significant improvement compared to the same half in previous years. And the second quarter is the confirmation of the profitability improvement we posted in the previous quarter.

與 2024 年第一季相比，調整後的營業收入和自由現金流都非常接近盈虧平衡，水準非常相似。顯然，2024 年上半年與往年同期相比有了顯著改善。第二季確認了我們上一季公佈的獲利能力改善。

As we look at the contributions from each segment, we can see how the net revenue decline in liquor is impacting the overall consolidated results despite a good performance from cannabis. When we had the $4.2 million net revenue growth from cannabis retail, the $4 million from cannabis operations, and the small negative of $0.9 million in the corporate segment related to the revenue elimination for the cannabis operation sales into our own retail, will come to a total of $7.3 million or 9.2% growth in cannabis.

當我們查看每個細分市場的貢獻時，我們可以看到儘管大麻表現良好，但酒類淨收入下降如何影響整體合併績效。當我們的大麻零售淨收入成長420 萬美元時，大麻業務帶來的400 萬美元淨收入成長，以及與大麻業務銷售到我們自己的零售中的收入消除相關的企業部門90 萬美元的小負數，將達到大麻總計 730 萬美元，成長 9.2%。

In terms of gross profit, all segments are contributing to growth. Even liquor retail shows positive gross profit in the quarter despite the softness in revenue, and the cannabis operations segment is showing a strong $4.4 million improvement as a result of our productivity initiatives, altogether adding up to $6.3 million or 12% growth in gross profit.

從毛利來看，各個板塊都在為成長做出貢獻。即使收入疲軟，酒類零售業在本季度也顯示出正的毛利，而由於我們的生產力舉措，大麻業務部門的毛利大幅增長了440 萬美元，總計達到630 萬美元，毛利增長了12 %。

On the next page, we're seeing a material improvement in adjusted operating income driven by cannabis operations as well as our investment segment. The $10 million contribution from our investment segment is a combination of $3.2 million in investment income and a $5.2 million improvement in asset valuation from our SunStream portfolio in the second quarter of 2024, compared to $1.5 million losses in the same period of 2023.

在下一頁，我們看到大麻業務和投資部門推動的調整後營業收入出現實質改善。我們投資部門的 1,000 萬美元貢獻包括 320 萬美元的投資收入和 2024 年第二季 SunStream 投資組合的資產估值提高了 520 萬美元，而 2023 年同期的損失為 150 萬美元。

Free cash flow also saw a significant improvement in Q2 2024 versus the same period of 2023 as a result of our improvement in profitability but also a more disciplined approach to working capital management, partly offset by lapping onetime cash proceeds in the second quarter of 2023 related to asset divestments.

與2023 年同期相比，2024 年第二季的自由現金流也出現了顯著改善，這是由於我們盈利能力的提高，以及對營運資本管理採取了更加嚴格的方法，但部分被2023 年第第二季相關的一次性現金收益所抵銷。

As we did last quarter, we would like to share some insights into the drivers of free cash flow in the second quarter. Both quarters were similar in terms of actual reported free cash flow with a small improvement from negative $6.4 million in Q1 to negative $5.6 million in Q2. There are, however, some differences in the composition of these numbers.

正如我們上季度所做的那樣，我們想分享一些關於第二季度自由現金流驅動因素的見解。兩季的實際報告自由現金流量相似，略有改善，從第一季的負 640 萬美元增至第二季的負 560 萬美元。然而，這些數字的組成存在一些差異。

Net income, noncash add-backs and CapEx and these payments are very similar in both quarters. The differences are in the working capital components. In the first quarter of 2024, we reported an inventory increase of $5.8 million, while in the second quarter we recorded a reduction of $2.3 million.

兩個季度的淨利潤、非現金追加和資本支出以及這些支出非常相似。差異在於營運資金組成部分。2024 年第一季度，我們的庫存增加了 580 萬美元，而第二季度我們的庫存減少了 230 萬美元。

This is in contrast with material historical increases in inventory during the first semester of previous years as illustrated in the right-hand side graph of page 7, clear evidence of the progress made by our operational teams in optimizing inventory levels. At the same time, we're seeing the opposite dynamic in the other working capital changes that were impacted in the second quarter of 2024 by the annual payments of our management incentive and insurance payments.

這與前幾年上半年庫存的歷史性成長形成鮮明對比，如第 7 頁右側圖表所示，清楚地證明了我們的營運團隊在優化庫存水準方面取得的進展。同時，我們在 2024 年第二季度受到管理層激勵和保險付款年度支付影響的其他營運資金變化中看到了相反的動態。

These two annual elements account for cash outflow of $10 million in the second quarter. We're encouraged by these results in the second quarter as it keeps us on track to demonstrate our ability to deliver positive free cash flow for the full-year 2024.

這兩項年度要素導致第二季現金流出 1,000 萬美元。我們對第二季的這些結果感到鼓舞，因為它使我們能夠證明我們有能力在 2024 年全年實現正的自由現金流。

Tuning into each one of the three operating segments, let's start with liquor retail. Net revenue in the second quarter of 2024 for this segment was $140.6 million, a decline of $11 million or 7% compared to the prior year. This decline was driven by a shift in Easter timing between March and April when compared to 2023, but mostly due to market slowdown as you are probably seeing being reported by most liquor manufacturers in North America.

讓我們從酒類零售開始，逐一討論這三個營運部門。該部門 2024 年第二季的淨收入為 1.406 億美元，比上年減少 1,100 萬美元，即 7%。與 2023 年相比，這一下降是由 3 月至 4 月復活節時間的變化造成的，但主要是由於市場放緩，正如您可能看到北美大多數酒類製造商所報告的那樣。

We believe this is not indicative of the structural challenges in the industry, but due to short-term consumption dynamics. Despite these macro headwinds, we continue to expand gross margin, reaching 25.4% in the second quarter, an improvement of 210 basis points compared to last year.

我們認為，這並非顯示該產業面臨結構性挑戰，而是由於短期消費動態所致。儘管存在這些宏觀阻力，我們的毛利率繼續擴大，第二季達到 25.4%，比去年提高了 210 個基點。

This was achieved through multiple initiatives, including a 10% growth of our margin-accretive private label, procurement productivity, and data sales monetization. As a result of this margin expansion, the segment's gross profit and operating income delivered low single-digit growth versus the same quarter of 2023.

這是透過多項措施實現的，包括我們的利潤增值自有品牌、採購生產力和數據銷售貨幣化成長 10%。由於利潤率擴張，該部門的毛利和營業收入與 2023 年同季相比實現了較低的個位數成長。

Moving to cannabis retail, we saw net revenue in Q2 2024 of $76.1 million, which is a 6% increase versus Q2 2023 mainly driven by same-store sales growth of 2.4%, supported by double-digit growth in Ontario as well as the expansion of our data sales program and new store openings.

轉向大麻零售，我們看到2024 年第二季度的淨收入為7610 萬美元，與2023 年第二季度相比增長了6%，主要是由於同店銷售增長2.4%，受到安大略省兩位數增長以及擴張的支持我們的數據銷售計劃和新店開業。

Data sales are the main factor contributed to the 60 basis points of gross margin improvement for the segment, enabling an 8.5% gross profit growth compared to Q2 2023. Adjusted operating income increased by $1.6 million or 67% growth compared to the prior year, driven by the gross profit improvement.

數據銷售是該部門毛利率提高 60 個基點的主要因素，與 2023 年第二季相比，毛利成長了 8.5%。在毛利改善的推動下，調整後營業收入較前一年增加 160 萬美元，成長 67%。

Finally, looking at our cannabis operations segment, this is where we see once more of the largest improvements both in terms of growth and profitability. In the second quarter of 2024, the segment delivered net revenue of $25 million, a 19% increase year over year.

最後，看看我們的大麻業務部門，我們再次看到成長和獲利能力方面取得最大進步的地方。2024 年第二季度，該部門實現淨收入 2,500 萬美元，年增 19%。

All of this growth is organic and driven by provision Board and business-to-business distribution increases. As already reported in the first quarter, the biggest improvement from this segment is in profitability, driven by a holistic productivity program.

所有這些成長都是有機的，是由撥備董事會和企業對企業分配的增加所推動的。正如第一季已經報導的那樣，該領域最大的進步是在整體生產力計劃的推動下，盈利能力得到了提高。

In the second quarter of 2024, the segment posted positive gross profit of $3.2 million, an improvement of $4.4 million compared to Q2 2023. As a result, the gross margin of the segment improved from a negative 5.8% in Q2 2023 to a positive 12.7% in Q2 2024.

2024 年第二季度，該部門實現毛利 320 萬美元，比 2023 年第二季增加 440 萬美元。因此，該部門的毛利率從 2023 年第二季的負 5.8% 改善至 2024 年第二季的正 12.7%。

Adjusted operating income was negative by $1.9 million compared to a loss of $11 million in the prior year. The slightly negative number is mainly driven by a $1.3 million fixed asset impairment related to cannabis legacy facility.

調整後營業收入為負 190 萬美元，而前一年為虧損 1,100 萬美元。這一小幅負數主要是由於與大麻遺留設施相關的 130 萬美元固定資產減損所致。

In summary, a solid quarter with record gross margin and a significant improvement in profitability and free cash flow compared to the previous year and broadly in line with the improvements reported in the first quarter. Let's also keep in mind that at June 30, 2024, the company had $183 million of unrestricted cash, an additional $601 million in marketable securities and investments, and no outstanding debt.

總而言之，本季表現穩健，毛利率創歷史新高，獲利能力和自由現金流較上年顯著改善，與第一季報告的改善情況基本一致。我們還請記住，截至 2024 年 6 月 30 日，該公司擁有 1.83 億美元的非限制性現金，另有 6.01 億美元的有價證券和投資，並且沒有未償債務。

By thanking all our team members at SNDL for their passion and contributions to these results, I would like to pass the call back to Zach to share a few more operational highlights for the quarter.

感謝 SNDL 的所有團隊成員對這些結果的熱情和貢獻，我想將電話轉給 Zach，分享本季更多營運的亮點。

Thanks, Alberto. Beyond our financial performance, I would also like to share a few highlights of our progress towards our strategic priorities: growth, profitability, and people, as each of these pillars is fundamental to our long-term success.

謝謝，阿爾貝托。除了我們的財務表現之外，我還想分享我們在實現策略重點方面取得的一些進展的亮點：成長、獲利能力和人員，因為這些支柱中的每一個都是我們長期成功的基礎。

Starting with growth, it is great to see our cannabis segment not only continue to deliver net revenue growth as highlighted in the financials, but also gain market share. In fact, our latest reading shows an impressive 0.5 percentage point gain in retail share through quality execution, the ramp-up of 2023 store openings, and the recent expansion into British Columbia.

從成長開始，很高興看到我們的大麻部門不僅繼續實現財務數據中強調的淨收入成長，而且還獲得了市場份額。事實上，我們的最新數據顯示，透過高品質執行、2023 年開店數量的增加以及最近向不列顛哥倫比亞省的擴張，零售份額實現了令人印象深刻的 0.5 個百分點的增長。

This last point is actually another highlight as during the second quarter, we launched the Value Buds banner into British Columbia with the rebranding of three stores acquired in the Dutch Love transaction. Not only is our cannabis retail segment making strong progress, but our Cannabis operations segment is rapidly gaining strength, confirming our focus on manufacturing excellence and the elimination of exposure to noncompetitive cultivation.

最後一點實際上是另一個亮點，因為在第二季度，我們在不列顛哥倫比亞省推出了 Value Buds 橫幅，並對 Dutch Love 交易中收購的三家商店進行了品牌重塑。我們的大麻零售部門不僅取得了強勁進展，而且我們的大麻業務部門也在迅速增強實力，證實了我們對卓越製造和消除非競爭性種植的關注。

Our continuous focus on quality and innovation enabled the expansion of approximately 40 new SKUs available for provincial boards, enabling 19% organic revenue growth from this segment in the second quarter. I have never been as excited as I am today about our branded product line, much of which will hit the market this fall.

我們對品質和創新的持續關注，為省級委員會提供了約 40 個新的 SKU，使第二季度該細分市場的有機收入增長了 19%。我從來沒有像今天這樣對我們的品牌產品線如此興奮，其中大部分產品將於今年秋天上市。

Anecdotally, in June, SNDL became the first LP to exceed $1 million in one month through the OCS flow-through program. Additionally, in Ontario, SNDL is the only top 20 LP to have reduced the number of SKUs in Q2 on a year-over-year basis and still outpace OCS category dollar growth in the same period. The team also recently launched a three-in-one disposable vape that quickly became a top seller for us.

有趣的是，今年 6 月，SNDL 透過 OCS 流通計畫成為第一個一個月內超過 100 萬美元的 LP。此外，在安大略省，SNDL 是唯一一家在第二季度同比減少 SKU 數量的前 20 家 LP，但同期仍超過 OCS 類別美元增長。團隊最近也推出了三合一一次性電子煙，很快就成為我們的暢銷產品。

Finally, despite the market contraction that impacted our liquor segment during the second quarter, our focus on offering quality products at affordable prices to our customers enabled us to increase liquor private label sales by 10% at accretive margins.

最後，儘管第二季市場萎縮影響了我們的酒類細分市場，但我們專注於以實惠的價格向客戶提供優質產品，這使我們能夠將酒類自有品牌銷售額增加10%，並增加利潤。

Moving on to profitability, we continue exploring options to improve margin, operating income and ultimately free cash flow. To this point, during the second quarter, we delivered productivity improvements of $7 million in our cannabis operations segment through procurement and cultivation efficiencies.

談到獲利能力，我們繼續探索提高利潤率、營業收入和最終自由現金流的方案。到目前為止，在第二季度，我們透過採購和種植效率提高了大麻業務部門的生產力 700 萬美元。

In the second quarter, we achieved over $4 million in data licensing revenue from our cannabis and liquor retail segments. Compared to the second quarter of 2023, our SG&A expenses were reduced by $4 million. As stated, we recently announced a restructuring program that will allow us to deliver over $20 million in annualized savings going forward, some of which will start being realized immediately in the third quarter of 2024.

第二季度，我們的大麻和酒類零售部門實現了超過 400 萬美元的數據授權收入。與 2023 年第二季相比，我們的 SG&A 費用減少了 400 萬美元。如前所述，我們最近宣布了一項重組計劃，該計劃將使我們能夠在未來實現超過 2000 萬美元的年度節省，其中一些將在 2024 年第三季立即開始實現。

Zooming in on the restructuring announcement, this project focuses on corporate overhead spending as we look for ways to materially improve efficiency and reduce costs. In this regard, several opportunities were identified impacting both people and non-people costs.

重點關注重組公告，該專案重點關注企業管理費用，因為我們正在尋找大幅提高效率和降低成本的方法。在這方面，我們發現了一些影響人員和非人員成本的機會。

Starting with people, we identified opportunities to improve organizational alignment by combining the cannabis retail and cannabis operations segments under Tyler's leadership. Through the strategic plan review we initiated a few months ago, we also identified the opportunity to increase focus on our must-win initiatives and markets, better leverage technology and process automation, as well as streamline and delayer the organization.

從人開始，我們透過在泰勒的領導下合併大麻零售和大麻營運部門來確定改善組織協調的機會。透過我們幾個月前啟動的策略計劃審查，我們還發現了機會，可以更加關注我們必須獲勝的計劃和市場，更好地利用技術和流程自動化，以及簡化和推遲組織。

While approximately 60% of the over $20 million in savings will be delivered through people-related cost reductions, 40% will be achieved by optimizing non-people expenses, such as rationalizing our office footprint, adjusting insurance coverage and rates, or implementing efficient zero-based budgeting policies to reduce discretionary spending.

雖然超過2000 萬美元的節省中約60% 將透過與人員相關的成本削減來實現，但40% 將透過優化非人員支出來實現，例如合理化我們的辦公室佔地面積、調整保險範圍和費率，或實施高效率的零成本減少可自由支配支出的預算政策。

We have started immediately with the implementation of several of these initiatives which will allow us to deliver $5 million in absolute savings in 2024 between July and December, ramping up to $18 million in the 12 months of 2025 and achieving ongoing annualized savings of over $20 million by the second half of next year.

我們已立即開始實施其中幾項舉措，這將使我們能夠在2024 年7 月至12 月之間實現500 萬美元的絕對節省，在2025 年的12 個月內增加到1,800 萬美元，並實現持續的年化節省超過2,000 萬美元到明年下半年。

Last but not least is our people priority. We are convinced that to be the best company in our industry, we need to attract and retain the best talent, creating engagement and alignment through a performance culture and developing each team member to their full potential.

最後但並非最不重要的是我們的人民優先。我們堅信，要成為業界最好的公司，我們需要吸引和留住最優秀的人才，透過績效文化創造敬業度和一致性，並充分發展每個團隊成員的潛力。

To this point, during the second quarter, we kicked off what we call the strategic talent review process. This is not a one-off exercise but a structured way to focus on talent development, capability building, and succession planning.

至此，在第二季度，我們啟動了所謂的策略人才審核流程。這不是一次性的活動，而是一種專注於人才發展、能力建構和繼任計畫的結構化方法。

We have also launched several community engagement initiatives, offering all of our team members the possibility to participate in sessions around mental and physical well-being or psychological safety, to name a few. We also started the development of a recognition framework that will allow us to recognize and display a lot of the great work done by our teams across the entire organization.

我們還發起了多項社區參與計劃，為我們所有的團隊成員提供了參與有關身心健康或心理安全等會議的可能性。我們也開始開發一個認可框架，該框架將使我們能夠認可和展示整個組織的團隊所做的許多出色工作。

Finally, we've also approved a review of our compensation philosophy focusing on ensuring competitive, fair, equitable, aligned, and transparent compensation strategies and policies. I would like to take this opportunity to thank our entire organization for their hard work and the passion they demonstrate every day and our shareholders for their trust.

最後，我們也批准了對我們的薪酬理念的審查，重點是確保有競爭力、公平、公正、一致和透明的薪酬策略和政策。我想藉此機會感謝我們整個組織的辛勤工作和每天所表現出的熱情，以及股東的信任。

I will now pass the call back to the operator for Q&A.

我現在將把電話轉回給接線員進行問答。

(Operator Instructions) Yewon Kang, Canaccord Genuity.

（操作員說明） Yewon Kang，Canaccord Genuity。

Hi. Thank you for the question. So my first one here is regarding the cannabis operations segment. Just noticed that the adjusted operating income dip back into negative territory for the quarter after generating a positive income last quarter. So could you just provide some color on any of the puts and takes that happened throughout the quarter that led to this?

你好。謝謝你的提問。所以我的第一個問題是關於大麻業務部門的。剛剛注意到，在上季度產生正收入後，本季調整後的營業收入又回落至負值區域。那麼，您能否對整個季度發生的導致這種情況的看跌期權和看跌期權提供一些資訊？

Two factors, one of them impacting Q1. There was a onetime benefit of some bad debt collections, north of $3 million. And in the second quarter, specifically, we have about a $1.1 million impairment charges related to our fixed assets that came with the cannabis acquisition a couple of years ago. That has been held for sale, but we didn't find as good placement for the asset. Therefore, we decided to take an impairment in the second quarter, $1.3 million, specifically.

有兩個因素，其中之一影響第一季。一些壞帳追收帶來了一次性收益，超過 300 萬美元。具體來說，在第二季度，我們有大約 110 萬美元的減損費用，這些減損費用與幾年前收購大麻時產生的固定資產有關。該資產已被出售，但我們沒有找到該資產的良好安置位置。因此，我們決定在第二季提列 130 萬美元的減損。

Got it. Thank you. And just on the second question here, it's regarding the liquor retail segment. Obviously, so there's some softness in the revenues on a year-over-year basis.

知道了。謝謝。關於第二個問題，是關於酒類零售領域的。顯然，營收年減。

Can you comment on any trends that you're seeing from the consumer spending environment that is leading to softer revenues recorded in this segment? And any of the initiatives that you guys have in place within the retail segment to address the softening of the consumer environment here? Thanks.

您能否評論一下您從消費者支出環境中看到的導致該細分市場收入疲軟的任何趨勢？你們在零售領域採取了哪些措施來解決這裡消費環境的疲軟問題？謝謝。

Yeah. Absolutely. So this time, the answer was this is a global phenomenon. It's not something that is happening specifically in Canada or in our businesses. As you read probably input from different manufacturers or different data sources, everything is pointing.

是的。絕對地。所以這一次，答案是這是一個全球現象。這並不是加拿大或我們企業特有的事情。當您閱讀可能來自不同製造商或不同資料來源的輸入時，一切都是有道理的。

But across North America specifically, there are single-digit declines. In most markets. Obviously, there are certain segments like beers that are declining even more and some other like wine, that may be a little bit more resilient. But overall, we're seeing the market in the first few months of this year really having this slowdown.

但具體到北美地區，出現了個位數的下降。在大多數市場。顯然，啤酒等某些細分市場的下滑幅度甚至更大，而葡萄酒等其他細分市場可能更具彈性。但總體而言，我們看到今年前幾個月的市場確實出現了放緩。

It's important to highlight that despite the revenue softness that we see in the market that obviously is impacting ourselves as well as retailers, we are managing to expand gross profit by 1% absolute dollars. So we believe that the strategy that we have deployed to deal with this type of macroeconomic context is working for us as the absolute bottom line is still growing.

需要強調的是，儘管我們看到市場上的收入疲軟顯然對我們自己以及零售商產生了影響，但我們仍設法將毛利擴大 1%（絕對美元）。因此，我們相信，我們為應對這種宏觀經濟環境而部署的策略對我們來說是有效的，因為絕對底線仍在成長。

And we still believe that there is long-term growth potential in this segment and in the category. Immediately, what we're seeing is the short-term impact is driven by the consumer sentiment and the impact of inflation over the last few years post-COVID starting to have the bigger impact on disposable income with our consumers.

我們仍然相信該細分市場和該類別具有長期成長潛力。我們立即看到的是，短期影響是由消費者信心和疫情後過去幾年通膨的影響所驅動的，這些影響開始對消費者的可支配收入產生更大的影響。

There is as well a certain dynamic that if you analyze the information over the last three, four years, obviously, there was a significant market expansion in 2020 when in-home consumption driven by COVID pandemic increased significantly. Actually, the stores that we're operating today, where we're seeing that at that point in time, they had an 11% growth in revenue in 2020.

還有一個一定的動態，如果你分析過去三四年的信息，很明顯，2020 年市場出現了顯著擴張，受新冠疫情推動的家庭消費大幅增加。實際上，我們現在營運的商店在當時的情況下，2020 年的收入成長了 11%。

In 2021, they were virtually flat or just growing about 1%, so maintaining that trend. And in 2022, we saw already the first correction with a decline of 6%. '23 was flat, and then in '24 we're seeing this additional 4%, 5% correction.

2021 年，它們幾乎持平或僅增長 1% 左右，因此保持了這一趨勢。2022 年，我們已經看到了第一次調整，下降了 6%。 23 年持平，然後在 24 年我們看到了額外的 4%、5% 修正。

That is still taking the market to similar levels, slightly higher still than the pre-COVID consumption levels. So that's what we're saying that there is an element as well of correction based on the COVID dynamics, but we're not concerned about long-term performance of the categories. We believe that the long-term outlook still remains around 1% to 2% underlying growth.

這仍使市場達到類似水平，仍略高於新冠疫情前的消費水準。這就是我們所說的，有基於新冠疫情動態的修正因素，但我們並不擔心這些類別的長期表現。我們認為長期前景仍保持在 1% 至 2% 左右的基本成長。

Obviously, we'll continue exploring all options to increase traffic which is the main driver of the slowdown. We are uniquely positioned in our opinion to compete in this type of environment. We do have a very attractive private label with a very broad offering across multiple categories.

顯然，我們將繼續探索增加流量的所有選項，這是造成經濟放緩的主要驅動因素。我們認為，在這種環境中競爭，我們處於獨特的地位。我們確實擁有一個非常有吸引力的自有品牌，在多個類別中提供非常廣泛的產品。

And our private label, it's an offering of quality products at affordable prices that really resonates with consumers at this point in time. That's why, as you heard Zach saying before, we're seeing double-digit growth of our private label revenue in the period despite market softness.

我們的自有品牌以實惠的價格提供優質產品，在此時真正引起消費者的共鳴。這就是為什麼，正如您之前聽到扎克所說的那樣，儘管市場疲軟，但在此期間我們的自有品牌收入仍實現了兩位數的增長。

Obviously, we're getting as well promotional activities, tactics, and leveraging our attractive real estate and breadth of portfolio to continue driving that traffic. More to come on that basis, but I said we're not concerned for the long run.

顯然，我們也在進行促銷活動、策略，並利用我們有吸引力的房地產和廣泛的投資組合來繼續推動流量。在此基礎上還會有更多內容，但我說過，從長遠來看，我們並不擔心。

Thank you. I'll hop back into the queue.

謝謝。我會跳回隊列。

Frederico Gomes, ATB Capital Markets.

Frederico Gomes，ATB 資本市場。

Hi. Good morning. Thanks for taking my questions. First question is on capital allocation.

你好。早安.感謝您回答我的問題。第一個問題是關於資本配置。

Just curious to talk about your capital allocation plans, just given the principal repayments that you're expecting in the second half of this year, as you mentioned, $130 million, quite substantial.

只是想談談您的資本配置計劃，正如您所提到的，您預計今年下半年的本金償還額為 1.3 億美元，相當可觀。

So any plans in terms of investing that money either in the US with additional credit investments or growth investments in Canada. Maybe just any color there. Thanks.

因此，有任何計劃將這筆錢投資在美國，並進行額外的信貸投資或加拿大的成長投資。也許只是任何顏色。謝謝。

Good morning, Frederico, and thank you for the question. We are working on those priorities. And as discussed, we're still looking at meaningfully growing our cannabis retail network in Canada and are also eyeing a number of accretive investments in the US as well while also acknowledging that our valuation is undemanding right now.

早安，弗雷德里科，謝謝你的提問。我們正在努力解決這些優先事項。正如所討論的，我們仍在考慮有意義地發展我們在加拿大的大麻零售網絡，並著眼於在美國進行一些增值投資，同時也承認我們目前的估值並不高。

And so there are other opportunities to return capital to shareholders as well. So really trying to balance our growth objectives with maximizing the accretive use of capital.

因此，還有其他機會向股東返還資本。因此，我們確實在努力平衡我們的成長目標與最大化資本的增值利用。

Thank you. And then on the cannabis operations, just a couple of questions here. First, in terms of the EU GMP certification that you are pursuing, I'm just curious if there's any timeline there for that?

謝謝。關於大麻業務，這裡只有幾個問題。首先，就你們正在尋求的歐盟 GMP 認證而言，我只是好奇是否有任何時間表？

And second, with the Indiva process ongoing, I noticed that you have five facilities in Canada right now. Can you anticipate with that closing, is there any additional consolidation in terms of your footprint of facilities that you expect to pursue?

其次，隨著 Indiva 流程的進行，我注意到你們現在在加拿大有五個工廠。您能否預計，隨著交易的結束，您希望追求的設施足跡方面是否會有任何額外的整合？

Yeah, I'll take the second question first, Frederico, and maybe pass the mic to Alberto, but you're absolutely right. Regardless, we don't have a certain outcome with Indiva at this point, so we're not going to speculate. But even with our existing footprint, we do have some excess real estate, and we'll be looking to monetize that and make use of that capital with much better returns than we would have in their current form.

是的，我會先回答第二個問題，弗雷德里科，也許會把麥克風傳給阿爾貝托，但你是絕對正確的。無論如何，我們目前還沒有與 Indiva 取得確定的結果，因此我們不打算進行猜測。但即使我們現有的足跡，我們確實有一些多餘的房地產，我們將尋求將其貨幣化，並利用這些資本，獲得比我們目前形式更好的回報。

And so whether we plan to drop additional liabilities through excess office leases into 2025 or monetize some of the excess noncore real estate we have, that will be another story for us in terms of our path on capital efficiencies.

因此，無論我們計劃在2025 年通過超額辦公租賃來減少額外負債，還是將我們擁有的一些過剩非核心房地產貨幣化，就我們的資本效率之路而言，這對我們來說將是另一個故事。

Yeah. We still have multiple synergies that could come as a result of that potential transaction. So yes, we would anticipate some rationalization. It's a little bit too early to say. There's still a few more months to go through this process.

是的。該潛在交易可能會帶來多種協同效應。所以，是的，我們預計會有一些合理化。現在說還太早。這個過程還有幾個月的時間。

And as soon as we -- if the transaction gets completed, obviously, we will then come with some additional updates on where we're seeing those opportunities. And in terms of certification, to answer your question, we are working actively through it, and we're expecting it in the next few months before the end of this year.

顯然，一旦交易完成，我們就會提供一些關於我們在哪裡看到這些機會的額外更新。在認證方面，為了回答您的問題，我們正在積極開展工作，預計將在今年年底前的幾個月內完成。

Okay, perfect. I'll hop back in the queue. Thanks.

好的，完美。我會跳回到隊列中。謝謝。

Thank you. This concludes the question-and-answer session. I would now like to turn the conference back over to Zach George for any closing remarks.

謝謝。問答環節到此結束。現在我想將會議轉回扎克·喬治發表閉幕詞。

Thank you, operator. Thanks to all for joining our call today. We look forward to updating you on our progress in the near future. Thank you.

謝謝你，接線生。感謝大家今天加入我們的電話會議。我們期待在不久的將來向您通報我們的最新進展。謝謝。

Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

謝謝。今天的電話會議到此結束。您可以斷開線路。感謝您的參與，祝您有個愉快的一天。