SNDL Inc (SNDL) 2025 Q1 法說會逐字稿

Good morning and welcome to SNDL's first quarter 2025 financial results conference call. This morning, SNDL issued a press release announcing their financial results for the 2025 first quarter ended on March 31, 2025. This press release is available on the company's website at sndl.com and filed on EDGAR and SEDAR+ as well. The webcast replay of the conference call will also be available on the sndl.com website.

早安，歡迎參加 SNDL 2025 年第一季財務業績電話會議。今天上午，SNDL 發布了一份新聞稿，宣布了截至 2025 年 3 月 31 日的 2025 年第一季財務業績。新聞稿可在公司網站 sndl.com 上查閱，並可在 EDGAR 和 SEDAR+ 上備案。電話會議的網路直播重播也將在 sndl.com 網站上提供。

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

SNDL 也發布了一份補充投資者介紹。除了電話會議演示之外，我們今天還將在其 sndl.com 網站上進行審查。參加今天早上電話會議的有執行長 Zach George 和財務長阿爾貝托帕雷德羅 (Alberto Paredero)。

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. 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.

在我們開始之前，我想提醒投資者，今天的電話會議中討論的某些事項或對問題的回答可能構成前瞻性陳述。實際結果可能與預期結果有重大差異。可能影響結果的風險因素詳細說明在公司的財務報告和 SEDAR+ 和 EDGAR 上提供的其他公開文件中。

Additionally, all financial figures mentioned are in Canadian dollars unless otherwise indicated. We will now make prepared remarks and then we'll move on to the analyst questions. I would now like to turn the call over to Zack George. Please go ahead.

此外，除非另有說明，所有提及的財務數據均以加幣為單位。我們現在將發表準備好的發言，然後繼續回答分析師的問題。現在我想把電話轉給扎克喬治。請繼續。

Good morning and welcome to SNDL's Q1 2025 financial and operational results conference call. We are pleased to see that during the first quarter of 2025, we continue to break new records, making further progress in operational and efficiency improvements and achieving success with our cannabis business.

早安，歡迎參加 SNDL 2025 年第一季財務與營運績效電話會議。我們很高興地看到，在2025年第一季度，我們繼續打破新的記錄，在營運和效率改進方面取得了進一步的進展，並在大麻業務上取得了成功。

Our cannabis segments continue to show strong momentum, achieving steady year on year revenue gains for the 13th consecutive quarter. We continue growing well above the market average, not only thanks to our strategic inorganic investments, but also due to a winning formula that drives organic growth ahead of the market.

我們的大麻部門持續呈現強勁勢頭，連續第 13 個季度實現年比穩定成長。我們的成長速度持續遠高於市場平均水平，這不僅得益於我們策略性的無機投資，還得益於推動有機成長領先於市場的成功模式。

Achieving a new all-time high gross margin record of 27.6% in a quarter affected by lower revenue seasonality leverage was particularly inspiring. We are very pleased with how our teams consistently raised the bar, executing well-planned productivity initiatives and efficiency improvements across all areas of our business.

在受到營收季節性槓桿率較低影響的季度中，創下 27.6% 的歷史新高毛利率尤其令人鼓舞。我們非常高興看到我們的團隊不斷提高標準，在業務的各個領域執行精心策劃的生產力計劃和效率改進。

We are particularly encouraged by the progress made integrating the accretive Indiva business while in identifying additional synergies that exceed our initial estimates, laying the foundation for further improvements in the coming quarters.

我們對整合增值業務 Indiva 所取得的進展感到特別鼓舞，同時我們發現了超出我們最初估計的額外協同效應，為未來幾季的進一步改善奠定了基礎。

Free cash flow was marginally negative at minus $1 million. Despite seasonal pressures from the year's lowest revenue quarter and the need to rebuild inventory levels following the holiday demand peak, these improvements in cash generation are underpinned by ongoing operational enhancements and disciplined working capital management.

自由現金流略為負值，為-100萬美元。儘管今年收入最低的季度帶來了季節性壓力，並且需要在假期需求高峰後重建庫存水平，但現金產生的改善是由持續的營運改進和嚴格的營運資本管理所支撐的。

Delivering quarterly financial performance improvements and reliability is crucial to us. We owe this to our shareholders, our partners, and ourselves. However, our work does not end there. Unlike many other players in the industry, our strong balance sheet enables us to focus on building robust long-term strategic foundations.

實現季度財務表現的改善和可靠性對我們來說至關重要。這是我們對我們的股東、我們的合作夥伴以及我們自己應盡的責任。然而，我們的工作並未結束。與業內許多其他參與者不同，我們強大的資產負債表使我們能夠專注於建立穩健的長期策略基礎。

In recent months, we announced additional share buybacks, acquired a minority stake in high tide, and announced the arrangement agreement to acquire 32 cannabis retail stores from 1 CM. Today, we're announcing that our board of directors has initiated a formal strategic review to evaluate SNDL's exposure to US multi-state licensed cannabis enterprises and our current exchange listing status. I would like to elaborate further on this last point.

最近幾個月，我們宣布了額外的股票回購，收購了 High Tide 的少數股權，並宣布了從 1 CM 收購 32 家大麻零售店的安排協議。今天，我們宣布，我們的董事會已啟動正式的策略審查，以評估 SNDL 對美國多州許可大麻企業的曝光度以及我們目前的交易所上市狀況。我想進一步闡述最後一點。

We are in a unique position within our industry which allows us to take the driver's seat when exploring additional strategic corporate transactions. We possess both the capability and expertise to successfully close a variety of opportunities, giving us the flexibility to pursue alternative strategic paths.

我們在產業內擁有獨特的地位，這使得我們在探索其他策略性企業交易時能夠佔據主導地位。我們擁有成功掌握各種機會的能力和專業知識，使我們能夠靈活地尋求其他策略路徑。

On an ongoing basis, we diligently review numerous opportunities on both sides of the border with the overarching objective of maximizing shareholder value. For this reason, the board is evaluating whether to maintain our current equity market listings which restrict us from operating US assets, or transition to an alternative structure that would grant us the regulatory flexibility to actively manage a broader North American cannabis platform.

我們持續認真審查邊境兩側的眾多機會，首要目標是實現股東價值最大化。因此，董事會正在評估是否維持目前的股票市場上市（限制我們經營美國資產），或過渡到替代結構，使我們擁有監管靈活性，從而積極管理更廣泛的北美大麻平台。

This shift could potentially enable the consolidation of licensed cannabis businesses across multiple US states. I want to make clear that while we have begun exploring various options, no conclusions have been reached, and no decisions have been made. There is no assurance that any transaction or listing change will result from the strategic review.

這一轉變可能會促進美國多個州的大麻許可業務的整合。我想明確指出的是，雖然我們已經開始探索各種選擇，但尚未得出結論，也沒有做出任何決定。無法保證戰略評估將導致任何交易或上市變更。

The company does not intend to provide further updates unless or until the board approves a specific course of action or determines that additional disclosure is warranted. Moving back to our short-term results, I want to hand the call over to Alberto for more insights on our first quarter of financial performance.

除非董事會批准具體行動方案或確定有必要進行額外揭露，否則公司不打算提供進一步的更新資訊。回到我們的短期業績，我想將電話交給 Alberto，以便他能更了解我們第一季的財務表現。

Thank you, Zack. Our team is prouder than ever to showcase the operational progress we continue to make. Let's move on to our first quarter of financial highlights. I want to remind everyone that the amounts discussed today are denominated in Canadian Dollars unless otherwise stated.

謝謝你，扎克。我們的團隊比以往任何時候都更自豪地展示我們不斷取得的營運進展。讓我們繼續了解第一季的財務亮點。我想提醒大家，今天討論的金額均以加幣計價，除非另有說明。

Certain figures referred to during this call are non-GAAP and Non-IFRS measures. For definitions of these measures, please refer to SNDL's management discussion and analysis document. We continue to see improvements year over year in net revenue, gross profit, gross margin, and free cash flow.

本次電話會議中提到的某些數字是非公認會計準則和非國際財務報告準則衡量標準。有關這些措施的定義，請參閱 SNDL 的管理討論和分析文件。我們持續看到淨收入、毛利、毛利率和自由現金流逐年改善。

Net revenue in the first quarter of 2025 reached $205 million, a 3.6% increase compared to Q1 of last year. This was driven by a combined cannabis business growth of 16.8%, which included contributions from our recent Indiva acquisition, partly offset by declines in our liquor retail segment.

2025年第一季淨收入達2.05億美元，較去年第一季成長3.6%。這是由大麻業務綜合成長 16.8% 所推動的，其中包括我們最近收購 Indiva 的貢獻，但部分被我們酒類零售部門的下滑所抵消。

Gross profit of $56.6 million reflects a $6.2 million increase, or 12.4% growth year over year, resulting in 220 basis points improvement in growth margin. This translates to another quarter of record gross margin, reaching 27.6%.

毛利為 5,660 萬美元，比去年同期增加 620 萬美元，成長 12.4%，導致成長利潤率提高 220 個基點。這意味著本季的毛利率再創歷史新高，達到 27.6%。

Adjusted operating income for the quarter amounted to negative $9 million, partially impacted by a loss of $4.5 million from the SunStream portfolio, driven by a negative valuation adjustment as a consequence of the reduction in the bond market price of cannabis.

本季調整後的營業收入為負 900 萬美元，部分受到 SunStream 投資組合損失 450 萬美元的影響，而損失是由於大麻債券市場價格下跌導致的負面估值調整。

Year over year we see a decline of $4.6 million as the negative adjustment from the SunStream portfolio in 2025 compared to a positive one of $9.1 million in 2024. This creates a swing of $13.6 million year over year from the SunStream portfolio that was partially offset by ongoing operational improvements. Free cash flow was marginally negative for the quarter at minus $1.1 million.

與去年同期相比，我們預計 2025 年 SunStream 投資組合的負調整將下降 460 萬美元，而 2024 年則為正調整 910 萬美元。這使得 SunStream 投資組合的變動較上年同期增加了 1,360 萬美元，但持續的營運改善部分抵消了這一變動。本季自由現金流略為負值，為-110萬美元。

Despite seasonal impacts on revenue and the associated buildup of working capital, representing an improvement from the same quarter of 2024. Our historical quarterly performance evolution shows a clear upward trend indicative of our continuous focus on growth and efficiency improvements. The only anomaly is the adjusted operating income, impacted by the SunStream portfolio value adjustment just as just explained.

儘管季節性因素對收入及相關營運資本的累積產生影響，但與 2024 年同期相比有所改善。我們的歷史季度業績變化呈現出明顯的上升趨勢，顯示我們持續關注成長和效率的提升。唯一的異常是調整後的營業收入，正如剛才所解釋的那樣，受到 SunStream 投資組合價值調整的影響。

Looking at the contributions from each segment across our main financial KPIs, we noticed how the net revenue decline in liquor is impacting the overall consolidated results despite the strong growth from both can segments. The revenue elimination from cannabis is related to the cells from the cannabis operation segment into our own retail. This elimination is increasing as a result of our cannabis business growth.

透過查看每個部門對我們主要財務 KPI 的貢獻，我們注意到，儘管兩個罐裝飲料部門都實現了強勁增長，但酒類淨收入的下降對整體合併業績產生了影響。大麻收入的消除與大麻營運部門的細胞進入我們自己的零售有關。隨著我們的大麻業務的成長，這種消除量正在增加。

In terms of gross profit, liquor retail shows a small decline in the first quarter as a result of the lower revenue. Cannabis retail and particularly cannabis operations continue to drive increases in gross profit with contributions of $1.3 million and $6 million perspectively.

從毛利來看，第一季酒類零售由於收入減少，毛利略有下滑。大麻零售，特別是大麻業務持續推動毛利的成長，預計貢獻額分別為 130 萬美元和 600 萬美元。

Adjusted operating income shows the improvement from our operating and corporate segments being upset by the year over year impact of the SunStream evaluation, which was positive in 2024 and negative in 2025. Free cash flow for the first quarter of 2025 remains marginally negative at minus $1.1 million.

調整後的營業收入表明，我們的營運和公司部門的改善受到 SunStream 評估的同比影響，2024 年為正值，2025 年為負值。2025 年第一季的自由現金流仍為負 110 萬美元。

However, this represents a $5.3 million improvement compared to the same period in the previous year, primarily driven by enhanced earnings and working capital management. Examining the year over year drivers of free cash flow in greater detail, we observed that the change in SunStream valuation impacts net income but is reversed through non-cash outbacks.

然而，與去年同期相比，這一數字提高了 530 萬美元，主要原因是獲利能力和營運資本管理的提高。透過更詳細地研究自由現金流的逐年驅動因素，我們發現 SunStream 估值的變化會影響淨收入，但會透過非現金支出而逆轉。

Inventory changes in the first quarter remain consistent with the prior year, while improvements in other working capital are primarily driven by accounts payable. Additionally, capital in the first quarter is slightly lower compared to the previous year. Nearing free cash flow break even in the first quarter is encouraging, especially considering the seasonality of our business, which consistently drives the stronger cash flows in the second half of the year.

第一季的庫存變動與上年保持一致，而其他營運資本的改善主要由應付帳款推動。此外，第一季的資本支出與去年同期相比略有下降。第一季接近自由現金流收支平衡是令人鼓舞的，特別是考慮到我們業務的季節性，這持續推動了下半年更強勁的現金流。

Focusing on our operating segments, liquor retail recorded net revenue of $109.5 million in the first quarter, reflecting a reduction of $6.6 million or a 5.7% decline. Compared to the prior year, this quarter was impacted by one less day in February and the fifth in Eastern timing, which contributed an unfavorable impact of approximately four percentage points.

專注於我們的營運部門，酒類零售第一季的淨收入為 1.095 億美元，減少 660 萬美元，降幅為 5.7%。與前一年相比，本季受到 2 月少一天、東部時間少五天的影響，造成約 4 個百分點的不利影響。

As a result, the normalized underlying revenue decline for the quarter is closer to 2%, represented a slight improvement compared to the trends observed last year. Despite the net revenue decline, the gross profit reduction was mitigated by an improved gross margin, which reached 25.4%, a 60-basis point increase compared to Q1 of the previous year.

因此，本季標準化基礎收入下降接近 2%，與去年的趨勢相比略有改善。儘管淨收入下降，但毛利率的提高彌補了毛利潤的下降，毛利率達到 25.4%，與去年第一季相比增加了 60 個基點。

Operating income of $2 million shows a marginal decline compared to the prior year, as the reduction in SD&A expenses were upset by the lower gross profit, as well as the lapping of a $0.9 million impairment reversal from the prior year. Cannabis retail delivers strong financial performance in both top and bottom lines, despite being impacted by one fewer working day in the fifteen eastern timing.

200 萬美元的營業收入與前一年相比略有下降，因為 SD&A 費用的減少受到毛利下降的影響，以及去年 90 萬美元的減損撥回。儘管受到東部時間 15 日少一個工作日的影響，大麻零售在營收和利潤方面均表現強勁。

Net revenue for Q1 2025 reached $77.5 million, an 8.7% increase compared to the prior year. This growth was primarily driven by a 5.2% increase in same store sales and contributions from new store openings. The revenue growth supported a $1.3 million increase in gross profit, despite a 40 basis points decline in gross margin compared to the same period last year.

2025 年第一季淨收入達 7,750 萬美元，比上年增長 8.7%。這一成長主要得益於同店銷售額成長 5.2% 以及新店開幕帶來的貢獻。儘管毛利率與去年同期相比下降了 40 個基點，但營收成長仍支持毛利增加 130 萬美元。

However, this represents an improvement in the gross margin trend as the 25.3% reported for Q1 2025 exceeds both the average margin and the exit margin of 2024. Both adjusted and unadjusted operating income rose by over $6 million year over year, reaching $5.2 million in Q1 2025. This improvement was driven by revenue growth and enhanced SD&A efficiency, while benefiting from lapping a fixed asset impairment reported in Q1 of the previous year.

不過，這代表著毛利率趨勢有所改善，因為 2025 年第一季報告的 25.3% 超過了 2024 年的平均利潤率和退出利潤率。調整後和未調整後的營業收入均年增 600 多萬美元，到 2025 年第一季達到 520 萬美元。這一改善是由收入成長和 SD&A 效率的提高所推動的，同時受益於去年第一季報告的固定資產減損的彌補。

Our cannabis operation segment continues to deliver the largest P&L improvements. Net revenue for the first quarter of 2025 was $34.3 million, reflecting an $11.9 million, or 53% growth compared to the prior year. This includes a $10.2 million conservation from India.

我們的大麻業務部門持續實現最大的損益改善。2025 年第一季淨收入為 3,430 萬美元，比上年增長 1,190 萬美元，成長 53%。其中包括來自印度的價值 1,020 萬美元的保護款項。

Gross profits achieved a significant increase compared to the prior year, driven by a 12.4% points expansion in gross margin, which reached 26.8%. These improvements are mainly driven by our productivity program and initial synergies from the Indiva acquisition.

毛利較前一年大幅成長，毛利率上升12.4個百分點，達26.8%。這些改進主要得益於我們的生產力計劃和收購 Indiva 帶來的初步協同效應。

Adjective operating income for the first quarter came in at a positive $2.4 million, marking a $1.3 million improvement year over year. This growth was achieved despite lapping at $1.8 million bad debt reversal reported in the first quarter of 2024. Now I will hand it over to Zach for additional insights into our strategic priorities.

Adjective 第一季的營業收入為正 240 萬美元，比去年同期增加了 130 萬美元。儘管 2024 年第一季報告的壞帳逆轉金額高達 180 萬美元，但仍實現了這一增長。現在我將把話題交給札克，讓他進一步了解我們的策略重點。

Thank you, Alberto. As expected during 2025, we remain focused on our three strategic pillars which are essential to our long-term success growth, profitability, and people. Starting with growth, our cannabis retail segment is outperforming the market. As previously mentioned, this segment reported net revenue growth of 8.7% in the first quarter of 2025, significantly ahead of the market.

謝謝你，阿爾貝托。正如預期的那樣，在 2025 年，我們將繼續專注於對我們的長期成功、成長、獲利能力和人才至關重要的三大策略支柱。從成長開始，我們的大麻零售部門表現優於市場。如前所述，該部門報告 2025 年第一季淨收入成長 8.7%，大幅領先市場。

Our performance is bolstered by strong same store sales growth of 5.2% during the period, reflecting not only excellence in execution, but more importantly, the trust our consumers continue to place in us. The combination of robust same store sales growth and new store openings has resulted in an additional 0.3% points of year-on-year market share gains.

我們的業績得益於期內同店銷售額 5.2% 的強勁成長，這不僅反映了卓越的執行力，更重要的是，反映了消費者對我們的持續信任。同店銷售額的強勁增長和新店開業相結合，使市場份額同比額外增長了 0.3%。

The acquisition of 1 CM announced after the quarter's end is not only another key milestone, but also demonstrates our strategic commitment to expanding our cannabis retail footprint. We anticipate closing this transaction by the end of the third quarter.

本季結束後宣布的對 1 CM 的收購不僅是另一個重要里程碑，也顯示了我們擴大大麻零售足跡的策略承諾。我們預計將在第三季末完成這筆交易。

We are enthusiastic about this acquisition, not only for the exposure it provides to new store formats and shopper insights, but also for its potential to drive substantial incremental organic growth. Our cannabis operations segment hosted a strong 53% revenue growth in the first quarter, as we continue gaining distribution points and leveraging the incremental platform provided by the acquisition of Indiva during the fourth quarter of 2024.

我們對此次收購充滿熱情，不僅因為它為新店鋪模式和購物者洞察提供了曝光機會，還因為它有可能推動大幅的增量有機成長。我們的大麻業務部門在第一季實現了 53% 的強勁收入成長，這得益於我們繼續獲得分銷點並利用 2024 年第四季度收購 Indiva 所提供的增量平台。

Under our profitability priority, we are pleased to report continued improvements in free cash flow generation, specifically $5.3 million better than the same quarter in 2024. This progress is driven by contributions from both income growth and effective working capital management.

在我們的獲利重點下，我們很高興地報告自由現金流產生持續改善，具體比 2024 年同期增加 530 萬美元。這項進步得益於收入成長和有效的營運資本管理。

Incremental productivity improvements of $3 million during Q1, primarily from our cannabis operation segment through procurement, manufacturing, and cultivation efficiencies have contributed to the new gross margin record previously mentioned. Data licensing revenue contributed another $4.5 million in the quarter, further supporting gross margin expansion.

第一季度，我們的大麻業務部門透過採購、製造和種植效率的提高，增加了 300 萬美元的生產率，這為前面提到的新的毛利率記錄做出了貢獻。數據授權收入在本季又貢獻了 450 萬美元，進一步支持了毛利率的擴大。

We also achieved $4 million in overhead savings in Q1, driven primarily by the results of the restructuring program that was announced last July. On this last point, restructuring program continues to be executed according to plan, delivering $4 million in savings during the first quarter. This achievement corresponds to an annualized run rate of $17 million or 85% of our planned target.

我們還在第一季節省了 400 萬美元的管理費用，這主要得益於去年 7 月宣布的重組計劃的結果。關於最後一點，重組計劃繼續按計劃執行，第一季節省了 400 萬美元。這項成就相當於年化運作率 1,700 萬美元，也就是我們計畫目標的 85%。

Last but not least, our people remain our greatest competitive advantage, and we are committed to continuing investment in their development while creating a work environment that fosters engagement and enables all team members to contribute and grow to their full potential.

最後但同樣重要的一點是，我們的員工仍然是我們最大的競爭優勢，我們致力於繼續投資於他們的發展，同時創造一個促進參與的工作環境，使所有團隊成員都能做出貢獻並充分發揮他們的潛力。

Under our strategic talent development process, we are pleased with the progress and enhancements made to our annual performance review cycle. This initiative gave our organization an opportunity to step back, and both individually and collectively reflect on what we did well during the year and the lessons we learned to help us raise the bar in the future. This is a key component of our continuous improvement mindset.

在我們的策略人才發展流程中，我們對年度績效評估週期所取得的進展和改進感到滿意。這項措施讓我們的組織有機會回顧過去，無論是個人還是集體，反思我們在這一年中做得好的地方以及我們學到的經驗教訓，以幫助我們在未來提高標準。這是我們持續改進思維的關鍵組成部分。

Following the engagement survey conducted in the fourth quarter of 2024, we hosted several focus groups with our teams to develop actionable strategies targeting the biggest opportunities to further enhance our employee experience and engagement. During the quarter, we successfully transitioned all legacy Indiva employees to our consolidated HR platform, facilitating the seamless integration of this business into the SNDL family.

在 2024 年第四季進行敬業度調查之後，我們與團隊組織了幾次焦點小組討論，制定可行的策略，抓住最大的機會，進一步提升員工體驗和敬業度。在本季度，我們成功地將所有原有的 Indiva 員工轉移到我們的合併人力資源平台，促進了該業務與 SNDL 家族的無縫整合。

Finally, we received very positive feedback from our employees regarding the distribution of an annual total compensation letter. This letter summarizes the individual compensation components achieved during 2024, along with merit adjustments and incentive targets for 2025.

最後，我們收到了員工對年度總薪酬信函分發的非常正面的回饋。這封信總結了 2024 年期間實現的個人薪酬組成，以及 2025 年的績效調整和激勵目標。

This initiative aligns employee incentives with both individual contributions and overall company performance, while also showcasing the competitiveness of our total compensation philosophy. As we conclude, I would like to take a moment to reflect on the progress our team has made. We continue to seize new opportunities, tackling challenges head on while laying down a strong foundation for the future.

這項措施將員工激勵與個人貢獻和公司整體績效結合起來，同時也展現了我們整體薪酬理念的競爭力。最後，我想花點時間回顧我們團隊的進步。我們不斷抓住新機遇，迎接挑戰，為未來奠定堅實的基礎。

We are thrilled with this progress and remain confident in our ability to successfully navigate the complexities of our industry. Once again, I would like to thank our entire team for their contributions and our shareholders for their continued trust. I will now hand the call back to the operator for the analyst Q&A session.

我們對這項進展感到非常興奮，並對我們成功應對行業複雜性的能力充滿信心。我再次感謝我們整個團隊的貢獻以及股東的持續信任。我現在將把電話交回給接線員，進行分析師問答環節。

(Operator Instructions)

（操作員指示）

Frederico Yokota Gomes, ATB Capital Markets Inc.

Frederico Yokota Gomes，ATB 資本市場公司

Thank you. Good morning. Thanks for taking my questions. Zach, maybe, just speaking more broadly here, if you I guess, if you indeed decide to enter the US market directly. Just curious, what's the strategy that you think would make sense here given the current state of the industry and what would be the differentiators that SNDL could bring to the US market, what would be your competitive advantage and how you would plan to explore that. Thanks.

謝謝。早安.感謝您回答我的問題。札克，​​也許，只是在這裡更廣泛地談談，如果你真的決定直接進入美國市場。只是好奇，考慮到當前的行業狀況，您認為什麼策略是合理的，SNDL 可以為美國市場帶來什麼差異化因素，您的競爭優勢是什麼，您計劃如何探索這些優勢。謝謝。

Good morning, Fred, and thanks for the question. Just as a preface, you just want to make clear that this decision is under review by our Board of Directors, so no decision has been made. But your question directly in terms of how would we enter and what would our competitive advantages be?

早安，弗雷德，謝謝你的提問。只是作為前言，你只是想明確表示，這個決定正在接受我們董事會的審查，所以還沒有做出任何決定。但您的問題直接是關於我們如何進入以及我們的競爭優勢是什麼？

Please recall that we have two exposures through credit investments in our SunStream vehicle that are subject to current restructuring activity. We believe that those restructurings are going to be completed in the coming months. And so in terms of the notion of entering the United States, we have existing capital exposure with previously committed investments that would take us there.

請記住，我們透過 SunStream 工具中的信貸投資獲得了兩項風險敞口，這些風險敞口受當前重組活動的影響。我們相信這些重組將在未來幾個月內完成。因此，就進入美國市場而言，我們現有的資本風險和先前承諾的投資可以讓我們實現這一目標。

So, it's not as if we would be looking at some imminent large cash outlay or issuance of shares to do so. Those enterprises are, in existence today, and we do have exposure that will be, would be converted from, senior credit into a mix of equity and other instruments and in terms of competitive advantage, look,

因此，我們並不會考慮立即進行大額現金支出或發行股票來實現這一目標。這些企業目前仍然存在，我們確實擁有一些敞口，這些敞口將從優先信貸轉換為股權和其他工具的組合，就競爭優勢而言，

the fact that we've lived through and weathered a very deep cycle in the federally legal Canadian landscape where we've seen overcapitalization, excess infrastructure build out which then drove massive oversupply in the market and where the even at the margin, the failure or lack of payment of excise taxes by certain

事實上，在加拿大聯邦法律框架下，我們已經經歷了一個非常深的周期，我們看到了資本過剩、基礎設施建設過剩，這導致了市場供應過剩，甚至在邊際上，某些企業未能或沒有繳納消費稅

companies was used to fund discounting behavior which drove a very aggressive, race to the bottom in terms of product pricing which then in turn drove, very challenging margin profiles for, businesses up and down the supply chain.

公司曾為折扣行為提供資金，這引發了產品定價的激烈競爭，進而導致供應鏈上下游企業的利潤率面臨極大挑戰。

We believe that we've learned significantly from that cycle and developed strength and a skill set which is very applicable in many different international markets including US state markets which are in various states of play as in terms of being medical, recreational, or both.

我們相信，我們從這個週期中學到了很多東西，並發展了實力和技能，這些實力和技能非常適用於許多不同的國際市場，包括處於醫療、娛樂或兩者不同狀態的美國各州市場。

So the discipline that we've had to learn in terms of labor management and everything from our real estate exposure to our state of automation in terms of manufacturing in our vertical model, it gives us a very clear view as to which strategies will be successful in, markets outside of Canada and while it would be very difficult to say this in many other industries in this specific case, I believe that the Canadian experience is actually a massive asset imported to these other markets.

因此，我們必須學習勞動力管理方面的紀律，以及從房地產投資到垂直模式製造的自動化狀態等各個方面，這讓我們非常清楚地知道哪些策略會在加拿大以外的市場取得成功，雖然在這種特定情況下，在許多其他行業中很難這麼說，但我相信加拿大的經驗實際上是引進這些其他市場的巨大資產。

So not only do we have the talent and we've built the capabilities, but we have the balance sheet and capital base to exploit these opportunities. So, right now we're considering this. The board is working to make the right decision for the long term for shareholders, and we'll certainly update you and our investors when a decision is made.

因此，我們不僅擁有人才和能力，而且擁有利用這些機會的資產負債表和資本基礎。所以，現在我們正在考慮這個問題。董事會正在努力為股東的長期利益做出正確的決定，一旦做出決定，我們一定會向您和我們的投資者通報最新情況。

Thank you. I appreciate that. Second question on your, cannabis retail platform. Just curious about the [DM&A] outlook there. You obviously recently announced the acquisition of additional stores there. But are you looking at making further acquisitions of a similar size, do you have a good pipeline of opportunities, in Canada for retail?

謝謝。我很感激。第二個問題是關於大麻零售平台。只是好奇那裡的 [DM&A] 前景。您最近顯然宣佈在那裡收購更多商店。但是，您是否正在考慮進行類似規模的進一步收購，您是否在加拿大零售業擁有良好的機會？

Yeah, I really appreciate the question. The answer is yes. While we are still focused internally on optimization, and we believe that we have quite a bit of running room in terms of margin improvement and free cash flow improvement, we are very active in terms of evaluating both organic and inorganic, growth in our Canadian retail network.

是的，我非常感謝你的提問。答案是肯定的。雖然我們仍然專注於內部優化，我們相信在利潤率提高和自由現金流改善方面我們有相當大的運行空間，但我們在評估加拿大零售網路的有機和無機增長方面非常積極。

As we stated over the last several quarters, capital deployment to build out a dominant retail footprint is a top priority for our board and management team, that has not changed, and second to that, as we talked about was the potential to invest in core markets in the US.

正如我們在過去幾個季度中所說的那樣，資本部署以建立主導的零售足跡是我們董事會和管理團隊的首要任務，這一點沒有改變，其次，正如我們所討論的，還有在美國核心市場投資的潛力。

So, just speaking maybe more specifically about opportunities, we are engaged and continue to receive unsolicited inbounds from certain parties that are retail operators in Canada. We're also still doing careful site work to position new door openings in key locations, and there are also a number of both sort of medium sized and larger scale portfolios that we are watching very carefully and engaged in constructive conversation.

因此，也許更具體地談論機會，我們正在參與並繼續收到來自加拿大某些零售商的主動聯繫。我們仍在進行細緻的現場工作，在關鍵位置定位新的門洞，我們正在非常仔細地觀察一些中型和大型投資組合，並進行建設性的對話。

These things can take some time to come to fruition and given the fact that we expect the 1 CM transaction to close sometime late in Q3, we have a really important window to focus on internal improvement and efficiency while we await the sort of next leg of growth that should position us for a very strong Q4.

這些事情可能需要一些時間才能實現，鑑於我們預計 1 CM 交易將在第三季度末完成，我們有一個非常重要的窗口來專注於內部改進和效率，同時等待下一輪增長，這將使我們在第四季度表現非常強勁。

Thank you. And then just final question for me, just you could comment on the roll out of your loyalty program in retail, what is it that you expect to get out of that program and how can you help your operations, your margins, your sales and your strategy in Canada. Thanks.

謝謝。然後對我來說只是最後一個問題，您能否評論一下您在零售業推出的忠誠度計劃，您希望從該計劃中獲得什麼，以及您如何幫助您在加拿大的營運、利潤、銷售和策略。謝謝。

You want to answer?

你想回答嗎？

Yeah, hypothetical, this is Alberto. So actually we're very excited about the potential our loyalty program can offer, starting with, giving us a platform to communicate effectively with our consumers, and giving them as well the possibility to leverage a stronger value from, their loyalty to us, and, in every, purchase opportunity, they can certainly leverage that, and be rewarded accordingly.

是的，假設，這是 Alberto。因此，實際上，我們對我們的忠誠度計劃所能提供的潛力感到非常興奮，首先，它為我們提供了一個與消費者進行有效溝通的平台，並讓他們有機會從對我們的忠誠中獲得更大的價值，並且在每一個購買機會中，他們當然可以利用這一點，並獲得相應的獎勵。

So, I would say it's both the advantage that it provides to our consumers, particularly those that are the most loyal, as well as I said, an opportunity to create a direct communication channel with them. And, make sure that they understand what type of offers, promotional activity, or new product, launches that we have in our retail locations.

因此，我想說，這不僅為我們的消費者（特別是最忠誠的消費者）提供了優勢，也為他們提供了與他們建立直接溝通管道的機會。並且，確保他們了解我們在零售店提供哪些類型的優惠、促銷活動或新產品發布。

We have as well the potential and we're actually working on expanding that loyalty program across our different banners, and that is not only within cannabis, but it has as well the potential to expand in our liquor network.

我們也有潛力，實際上我們正在努力將忠誠度計劃擴展到我們不同的品牌，這不僅在大麻領域，而且它也有潛力擴展到我們的酒類網絡。

Great, thank you very much. I'll be back with you.

太好了，非常感謝。我會回來陪你。

Yewon Kang, Canaccord

加拿大商業銀行（Canaccord）Yewon Kang

Hi, good morning and thank you for taking my question. Just one from me here. In recent days, following the federal elections in Canada, there seems to have been a bit of a renewed sense of optimism towards the government implementing the set of regulatory recommendations that have been previously brought forth by the standing finance committee with obviously the most topical one being the recommended tax reform to move towards the 10% ad value and rate.

你好，早安，謝謝你回答我的問題。我這裡就一個。最近幾天，隨著加拿大聯邦選舉的舉行，人們似乎對政府實施常設財政委員會先前提出的一系列監管建議抱持新的樂觀態度，其中最受關注的顯然是建議的稅收改革，將廣告價值和稅率調整為 10%。

Could you share any insights on how you guys are thinking about the path towards this reform and if you believe that the ongoing trade war has any sort of impact on how the government is viewing the cannabis industry? Thanks.

您能否分享您對這項改革道路的看法，以及您是否認為正在進行的貿易戰對政府對大麻產業的看法產生了任何影響？謝謝。

Good morning and thank you so much for the question. It's a great question. Look, I would say that we don't want to go too far beyond cautious optimism. I think excise reform has been, obviously a really hot topic for Canadian operators. We're not convinced that material change is going to happen in the near term.

早安，非常感謝您的提問。這是一個很好的問題。聽著，我想說我們不想走太遠，只能保持謹慎樂觀。我認為消費稅改革顯然是加拿大業者非常熱門的話題。我們不相信短期內會發生實質的變化。

I would say that we are seeing some degree of very positive and constructive regulatory reform whether you're looking at some of the retail regulations across provinces on packaging restrictions. We also expect milligram limits on edibles to shift this year, which will likely be a boon for that for that category.

我想說的是，無論你是否關注各省關於包裝限制的一些零售法規，我們都看到了一定程度的非常積極和建設性的監管改革。我們也預計今年食品的毫克限制將發生變化，這對該類別來說可能是一個福音。

So we are seeing, important marginal reform that's happening, but the notion that we are months away from all seeing excise tax rates drop and that this will be some big boon for the industry. We're not quite prepared to make that call just yet. So, no other particular insights beyond what you're hearing and reading, in the industry and media today.

因此，我們看到，重要的邊際改革正在發生，但我們距離看到消費稅率下降還有幾個月的時間，這將對產業產生巨大的利多。我們還沒有做好做出這項決定的準備。因此，除了您今天在行業和媒體上聽到和讀到的內容之外，沒有其他特別的見解。

And in terms of trade disputes, not going to put words in Mark Carney's mouth, so to speak. I think he's got a number of priorities that are seen as significantly more important than the $5 billion cannabis industry in Canada. But I'm sure that the liberal government will continue with many of the same approaches and policies that it has in previous administrations.

至於貿易爭端，我可不會把話都塞到馬克·卡尼嘴裡。我認為他有許多優先事項，這些事項比加拿大價值 50 億美元的大麻產業重要得多。但我確信自由黨政府將繼續推行前幾屆政府的許多做法和政策。

But importantly, when you reference the trade war, I think gratuitously I should just mention that we are not expecting or experiencing any material disruption or business from this dueling and uncertain tariff dynamic that's in play. Our real exposure there, we had approximately 5% of sales in our liquor business coming from US products.

但重要的是，當你提到貿易戰時，我認為我應該毫無必要地提一下，我們並沒有預期或經歷這種不確定的關稅動態所帶來的任何實質中斷或業務中斷。我們在那裡的實際曝光度是，我們的酒類業務銷售額中約有 5% 來自美國產品。

So, when you look at products like Kentucky Bourbon, for example, you may see shifts in terms of presence on shelf in the Canadian landscape, but we were also in the midst of working new, working towards very new and expanded private label options to better reach consumers and deliver value and so this is in no way sort of an excuse for our teams or leadership in terms of performance.

因此，例如，當您查看肯塔基波本威士忌等產品時，您可能會看到其在加拿大貨架上的存在情況發生了變化，但我們也在努力開發新的、擴展的自有品牌選擇，以更好地接觸消費者並提供價值，因此這絕不是我們團隊或領導層在績效方面的藉口。

And then on the cannabis side, there are some modest exposures through potential inflation dynamics with packaging specifically, but we don't see that having a material impact on the business that would, result in material, materially impaired, margins or anything like that. So, as an industry, particularly being, based in Canada, we are going to fare reasonably well relative to many others in terms of potential disruption from trade-related disputes.

然後在大麻方面，特別是包裝方面，潛在的通膨動態會帶來一些適度的風險，但我們認為這不會對業務產生重大影響，不會導致利潤率大幅下降或類似情況。因此，作為一個行業，特別是作為一個立足於加拿大的行業，我們在應對貿易爭端可能帶來的干擾方面相對於其他許多行業來說，表現得相當好。

Thank you.

謝謝。

(Operator Instructions).This concludes the question-and-answer session. I would like to turn the conference back over to Zach George for any closing remarks.

（操作員指示）。問答環節到此結束。我想將會議交還給扎克喬治 (Zach George) 來做結束語。

Thank you, [Michelle], and thank you all for joining us today. We appreciate your time and look forward to updating you on our progress in the near future. Thank you.

謝謝你，[米歇爾]，也謝謝大家今天加入我們。我們感謝您的時間，並期待在不久的將來向您通報我們的進展。謝謝。

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

今天的電話會議到此結束。您可以斷開線路。感謝您的參與並祝您有個愉快的一天。