Thank you for standing by, and welcome to the Premium Brands Holdings Corporation Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. Please be advised that today's conference is being recorded. Our presenters on today's call will be George Paleologou, CEO and President of Premium Brands, and Will Kalutycz, CFO of Premium Brands. I would now like to hand the conference over to George Paleologou. Please go ahead, sir. Thank you, Cheryl. Good morning, everyone. Welcome to our 2020 fourth quarter conference call. With me here today is our CFO, Will Kalutycz. Our presentation today will follow the deck that was posted on our website this morning. Hopefully, you all have had a chance to access it. For those of you that don't have it, you can access it by clicking on the link off our press release issued this morning. On slide five. We're now on slide five, which outlines certain key highlights. Will Kalutycz will walk you through our financial results shortly. In early 2021, we closed the acquisition of Clearwater Seafoods in a historic partnership with a coalition of Mi'kmaq First Nations. I will be expanding on our seafood platform later on in the presentation. I will also be updating you on our progress at our sandwich and U.S. protein platforms. 2020 was a difficult year for all of us. COVID-19 challenged us in ways that were unimaginable just a year ago. Despite the challenges, we enter 2021 stronger, larger, and more resilient. We're very excited about where we're at, and we're very optimistic about our future prospects as our various platforms reach or exceed the billion-dollar mark. I will now pass it to our CFO, Will Kalutycz, who will update you on our financial results for the quarter and the year. Will. Thanks, George, and good morning, everyone. Before discussing our results for the quarter, I would like to caution you that to the extent we make forward-looking statements during our presentation, our forecasts and assumptions are subject to change and actual results may vary. Please see our 2020 and fourth quarter 2020 MD&A filings, both of which can be found on the SEDAR website, www.sedar.com, for details on some of the factors that could cause our actual results to differ from our current expectations. Turning to our results for the fourth quarter. Please turn to slide seven. Just starting with a discussion on our revenue for the quarter. Total sales for the quarter were CAD 1.056 billion. That was up about CAD 97 million or 10% from 2019, the fourth quarter of 2019. Major drivers of our growth in the quarter were, first off, acquisitions, which contributed about CAD 44.3 million to our growth. That was followed by the success in our protein group of our meat snack, dry cured, and cooked meat strategies, and in particular the traction we're gaining in the U.S. with our meat snack category initiatives in general and our meat sticks initiatives specifically. Our sandwich platform had a very good quarter, showing growth on a variety of new initiatives, as well as with legacy customers. Finally, our seafood and distribution groups also had solid performances as they leveraged recent investments in new capacity, namely our new Saco Lobster processing facility and our new distribution facilities in Toronto and Quebec. On the negative side of things, COVID continued to have a major impact on our business. We estimate it to be about CAD 53 million for the quarter. That consisted of about CAD 71 million of lost food service, airline, and cruise line business, partially offset by stronger than normal retail sales of about CAD 19 million. Our organic growth for the quarter was 5.2%. This was within our long-term targeted range of 4%-6%, but below our original expectations for the year due solely to the challenges of COVID. In the presentation, we've shown some normalization for COVID. We estimate the COVID normalized sales for us would've been at CAD 1.1 billion, representing a 15.6% increase. In terms of organic growth, a normalized run rate of about 10%, which would have been in line with our expectations at the beginning of the year. Turning to slide eight, looking at revenue for the year. Our sales came in at CAD 4.068 billion. That was up from 2019 by roughly CAD 420 million or 11.5%. Despite the challenges of COVID, our sales for the year actually came within the original guidance we gave back in March 2020 of roughly CAD 3.975 billion-CAD 4.75 billion. If you exclude new acquisitions that we completed in the quarter or post our announcement of our guidance last year, that would have given us sales of just a little over CAD 4 billion. Still within our original guidance range. We're very happy with that considering the challenges that many of our businesses faced with COVID. Normalizing for COVID for the year, we have sales of about CAD 4.3 billion, COVID impact of a little over CAD 200 million, and that would have given us organic sales growth for the year of about 11.6%, or in total growth of 17.3%. Interestingly, the most heavily impacted quarter was the second quarter due to COVID. The impact there was about CAD 132 million on our sales. If you turn to slide nine, this slide shows you the normalization of our growth rates by quarter. The solid line is our actual growth rates, these are all organic volume growth rates, and the dotted line is our normalized growth rates. You can see the dramatic impact in the second quarter. By the third quarter, our growth rates were getting almost in line to the normalized level with food service, cruise line, and airlines being the continuing impacts. In the fourth quarter with some of the lockdowns, you can see that spread widened a little bit because of the impact on our food service businesses, but still nowhere near the impact that we saw in the second quarter. Overall, you can see the dotted line really was a continuation of the trends that we went into 2020 with prior to COVID impacting our business. With a lot of that growth being driven by a number of recent, both organic and acquisition investments. The new plants I mentioned earlier in our distribution and seafood groups, our new sandwich plant in Phoenix, as well as several strategic acquisitions such as El Birdos in the meat snack category, Ready Seafood in the lobster category, and Concord Meats in the cooked protein category. Turning to slide 10, discussing our EBITDA performance. For the quarter, we came in at CAD 87.7 million in EBITDA. That was up CAD 12.6 million for 2019 fourth quarter, or roughly a 17% increase. There are eight major drivers in the improvement in our EBITDA, five of them positive, three of them negative. On the positive side of the ledger, organic sales growth was by far the biggest driver of our improved EBITDA. After that, we had some really solid efficiency gains in our protein group. Roughly CAD 5 million- CAD 6 million driven by automation and continuous improvement. We saw a little bit of commodity benefit in the quarter, largely due to some favorable dynamics around seafood, where there was some demand destruction in the category that in the food service segment that created some favorable commodity prices that our businesses were able to leverage when they took those products into the retail channel. Acquisitions was a bit of a driver of the EBITDA growth as well. Finally, COVID-related costs was actually a positive in the quarter, unlike the last two quarters, where we continued to see a negative impact on our margins, gross margins as a result of thank you bonuses, additional PPE, and production inefficiencies. That was more than offset by marketing cost savings and reduced travel costs. Overall, the COVID cost impact was a favorable CAD 3 million for the quarter, CAD 2.9 million for the quarter. The negative impacts on our EBITDA for the quarter, the largest was by far additional infrastructure spending, both in plant overhead and in SG&A overhead. That was about CAD 8 million-CAD 9 million in the quarter. A significant portion of that being investments being made for the future of our business, for our future growth initiatives. There's some sales deleveraging benefit to be had there. Wage inflation was another factor in the quarter. It was about a CAD 5 million impact on the quarter. We do expect that number to start falling in 2021 as we're starting to lap some of the wage inflation, wage increases we put through towards the beginning of 2020. Finally, discretionary compensation was up for the quarter as well. Overall, a very solid quarter, even before normalizing for COVID. Once we normalize for the COVID impact in the quarter, which we estimate the sales impact to be about CAD -10.6 million, offset by the CAD 2.9 positive in cost benefits that I mentioned earlier, that would give us a normalized EBITDA for the quarter of about CAD 20 million, representing a 27% increase from last year. Turning to slide eight talking about our EBITDA for the year. For the year, we came in at CAD 312.6 million in EBITDA, about a CAD 5 million increase from 2019 or about 1.6%. That was below our guidance for the year, which had a fairly wide range because of the unknown impacts of ASF and the range was about CAD 320 million to CAD 360 million. Slightly below the bottom end of that range. Certainly, once you normalize for COVID, and in fact, if you just normalize for the impacts of COVID on the second quarter of the year, which was about CAD 50 million, our normalized EBITDA would have been about CAD 340 million for just Q2. With that, you see we're nicely in the targeted range of our original guidance, despite COVID having a major impact on our businesses for the third and fourth quarter of the year. Again, a good solid year driven by a lot of organic growth and with the one major negative being the impact of COVID. Turning to slide 12, our adjusted earnings for the quarter increased nicely to CAD 36.4 million for the quarter, up CAD 6.1 million or 20% from 2019. The major driver of that was our EBITDA growth, and that was offset by some increased depreciation, taxes and roughly for the year, about CAD 10 million in COVID-related costs to additional PPE inefficiencies in plants, thank you bonuses, and a variety of other similar costs, partially offset by reduced marketing and traveling costs. On an EPS perspective, we came in at CAD 0.86 for the quarter versus CAD 0.79 last year, so a nice increase there as well. Similarly, normalizing for COVID, we would have been close to about CAD 1 per share for the quarter. Turning to slide 13, our adjusted earnings trends. For the year, we came in at CAD 122.7 million, roughly flat over 2019. Again, with the major impact there being COVID and particularly in the second quarter of the year. Normalizing for COVID, our earnings for the quarter would have been about CAD 165 million, representing a CAD 42 million increase or roughly 34% increase. On an EPS basis, our EPS for the year came in at CAD 3.06. That was down about CAD 0.25 from 2019 or about 7.6%. Again, COVID being the major factor and particularly the second quarter of the year. In addition to that, we did raise a significant amount of equity in 2020 that did create some dilution as a lot of that capital had yet to be put to work by the end of the year. We'll talk more about that when we look at the balance sheet and some of our capital allocation decisions. Turning to slide 14, capital allocation. During the quarter, we invested about CAD 75 million in acquisitions and project CapEx. The one acquisition completed in the quarter was Allseas Seafood, which was about CAD 61 million. Then a range of capital projects, major capital projects. Our Piller's, Brantford meat snack capacity expansion, dry cured meats expansion is going very well. CAD 1 million spent on that in the quarter. Our Harvest Meats snack capacity expansion, which was completed in the quarter, we spent half a million on. We launched our new cooking line in Montreal for Concord. That's proceeding well and is on track, but in the early days. Then our sandwich group completed both their new panino line as well as a second-generation automated sandwich line in the quarter. Those are completed on track and are running exceptionally well. George will talk a bit more about them in a bit. Our most recently announced expansion of our Stuyver's Artisan Bakery which is proceeding well on plan but in early days still. Subsequent to the quarter, we've allocated about CAD 555 million of capital, the vast majority of that being to acquisitions. The three acquisitions we show there is Clearwater, which was most of that capital, roughly CAD 450 million. The acquisition of Distribution Côte-Nord, which is a food service distribution business in Quebec, which fit very nicely with our Viandex business. We also acquired Starboard Seafood, which is an Ontario and Quebec seafood distribution business. We also announced three larger CapEx projects. One was the expansion of our Hempler's Premium Processed Meat Snack facility in Ferndale, Washington. That's about a CAD 26 million project. The expansion of our Coborn's smokehouse capacity to help support their meat snack growth initiative. That was about a CAD 5 million project. Finally, our sandwich group is adding two additional automated lines, third-generation automated lines, which are an improvement from the second generation we just implemented. Similar efficiencies, more flexibility built into the line, and that's about a CAD 23 million project. Lots of good stuff in the pipeline. As most of you who are familiar with our company, our expected internal rate of returns on all of these investments is either 15% or greater, so these should be significant contributors to our earnings and cash flow in future quarters. Turning to slide 15, our return on net assets. Just sort of walking through the line, the green line is a free cash flow, the red line, our five-year average RONA, and the gold line, our actual RONA by year. We show a couple of targets. The blue line is our 15% target RONA, and the black line is our weighted average cost of capital of about 11%. For 2020, our RONA was 10.2%, so below our target and slightly below our weighted average cost of capital. Three main factors contributed to this. By far, COVID, the impacts of COVID, and recent capital expenditures that are works in progress. I'll come back to those and normalize for those on a later slide. Also, over the last two to three years, we've made some significant investments in both acquisitions and capital projects. 2020 was a key year. They showed tremendous traction. They're just gaining traction, and we expect, as their longer-term business plans play out, that we will not only get back to that 15% target, but will exceed that 15% target. Turning over to slide 16, is just the normalization I referred to earlier. Our actual RONA for 2020 was about 10.2%. We show on this slide the COVID impact of about CAD 50 million and the capital projects under construction, which was about CAD 15 million. Normalizing for that, our RONA for the year would've been 12.4%, which is above our weighted average cost of capital, but still below our 15% target. On a five-year rolling average, we normalize to be at about 14.1%, so not far off from our long-term target. Turning to slide 17, talking about liquidity, our balance sheet. We finished the year in an incredibly strong position. We had almost CAD 900 million of excess credit capacity at the end of the year, that compares to about CAD 700 million at the end of the third quarter. That was driven by an equity issuance we completed during the quarter. Our total debt-to-EBITDA ratio was 2.2:1, down from 3.0:1 at the end of the third quarter. Our senior debt-to-EBITDA ratio, which is the critical metric that we use in managing our balance sheet, was down to 0.6:1 from 1.4:1 at the end of Q3. Now, normalizing for those capital allocations that I outlined on an earlier slide, which roughly the CAD 600 million of announced acquisitions and projects that are actually hitting the ground right now, our senior debt-to-EBITDA ratio would be about 1.9, which is still well below our targeted long-term range of 2.5: 3:1. Our total debt-to-EBITDA ratio would be about 3.2:1, again, well below our long-term targeted range of 4: 4.5:1. Turning to slide 18, free cash flow. Our total free cash flow for the year was a record CAD 188.8 million. We declared a record number of dividends, roughly CAD 92 million. That resulted in a payout ratio of just a little under 49%, 48.7%. Our free cash flow per share for the year came in at CAD 4.87. That was down about 2% from 2019, again, driven primarily by COVID, but also, we did raise a significant amount of equity during the year, which hadn't gotten put to use until 2021. That also impacted our free cash flow per share. The final comment I want to make, we did announce with our fourth quarter results a 10% increase in our dividend, bringing the annual dividend rate to CAD 2.54 per share. With that, I will pass the presentation back to George. Thank you, Will. We're now on slide 20. As you can see, our seafood platform has grown a lot over the past 10 years, both organically and by acquisition. Our run rate, including our share of Clearwater Sales, is about CAD 1.2 billion-CAD 1.4 billion. This positions us as a top 20 seafood company globally and the only vertically integrated player in North America. Slide 21 demonstrates our vertical integration across the board with unparalleled access to some of the best wild seafood species in the world. We're uniquely positioned to bring seafood solutions to our customers by leveraging our ocean-to-plate capabilities. Slide 22. In addition to Clearwater, as Will said, we were pleased to recently welcome the Allseas and Starboard teams to our ecosystem. We're ready to disrupt and innovate the seafood space in North America by leveraging our access to best-in-class products, combined with our expertise in packaging and branding. On slide 22, we provide you with some examples of value-added seafood products like our salmon and tuna skewers to be launched this year, which leverage our proprietary skewing technology. Slide 23 outlines our various priority initiatives as we begin to work closer with Clearwater and its management team. The pictures show examples of value-added products that will make it easier for consumers to enjoy these healthy and great-tasting proteins. The seafood chowder soup in the middle is made by our company, Global Gourmet, using clams purchased from Clearwater, while the lobster grill cheese sandwich shown on this slide will be assembled by our sandwich group. We believe that all three products shown here in this slide will not only be popular in North America, but also in Europe and Asia. The case for seafood consumption in North America is very compelling. Demographics and health, and wellness are already driving exciting sales growth in this category. For example, in 2020, sales of frozen seafood in retail in North America were up 71%. 59% of consumers that ate seafood twice a week said that they do so because they're trying to eat healthier and to boost their immune systems. I should also note that seafood consumption per capita in North America trails those of other developed countries. For example, the average North American eats 16 lbs per year as compared to 25 lbs in France, 36 lbs in Norway, and 39 lbs in South Korea. We believe strongly that this gap will narrow over the next few years, and we also believe that the pandemic has accelerated this trend. Our innovation and value-add efforts plan to focus on making it easier for consumers to enjoy seafood. Our branding and innovation efforts will focus on seafood nutrition, meal ideas, transparency, and sustainability while emphasizing our unique ocean-to-plate capabilities. We're now on slide 24. Our U.S. protein platform made tremendous progress through 2020, and is well positioned for growth in the future. Slide 25. We made great progress in diversifying our sales in categories other than jerky. Our meat stick sales in the U.S. grew by 45% in 2020 to $52 million U.S. For 2021, we're budgeting sales of meat sticks in the U.S. to exceed $100 million U.S., driven by innovation and new launches focusing on younger Hispanic consumers under the well-known Takis brand, which is under license. We also launched several authentic Germanic stick products under the newly acquired and iconic Bavarian Meats brand. The very popular and best-in-class Bavarian Meats Landjaeger has potential to be rolled out nationally in the future. As the pictures show on slide 25, we're also excited to continue to launch Italian-themed charcuterie trays and cooked chicken skewers in snack format, leveraging our best-in-class proprietary skewing technology. Slide 26. Our sandwich platform finished with another year of record sales despite severe demand destruction in QSR during the second quarter of 2020. As you can see on slide 27, the sandwich division assembles much more than sandwiches. More specifically, we're pleased to see that our investments in charcuterie and panino assembly are starting to gain traction in all channels. We also invested in capacity to produce single-serve meals at our Burnsville facility in Minnesota. During 2020, we launched a number of plant-based breakfast sandwiches with a number of QSR customers. Sales of these products are projected to reach CAD 100 million in 2021. As Will mentioned earlier, we are investing in two generation three assembly lines that will combine automation with operational flexibility. The new lines will be in operation in Q4 2021. This platform finished the year very strongly, delivering record sales for the year despite COVID-related demand destruction in Q2 2020. Slide 28. As you can see, our acquisition pipeline remains active and robust. We expect to continue to bring more companies under the PB umbrella in the future as we execute our various growth and value creation strategies. Slide 29. We're very proud of our progress over the past year in this very relevant and important area. As the slide shows, at Premium Brands, we're committed to all stakeholders and not just our shareholders. We also recognize that being good to all stakeholders is not just about managing risks, but it is also good for our business. We're committed to our ESG action plan and roadmap, and we look forward to reporting and updating you on our progress in the near future. Cheryl for the Q&A segment of the presentation. Cheryl? Thank you. If you would to ask a question please press star one on your telephone keypad. Our first question comes from George Doumet. Please go ahead. Your line is open. Yeah. Good morning, guys. Congrats on a solid quarter. I know it's early days. I just want you to talk on how the integration's going at Clearwater. Maybe share with us the low-hanging synergies. Maybe quantify some of the more ambitious longer-term ones that you guys plan on capturing. Yeah. George, first of all, there's no such thing as integration, right? This is not a situation where we are going to integrate Clearwater. Clearwater is a great company. It is very well-run, and it is world-class in harvesting and processing at sea, resulting in exceptional quality products. On slide 23 of the presentation, I outlined the four areas that we're working with them in terms of, as you say, low-hanging fruit. First of all, of course, is to leverage the PB distribution business, particularly in Canada. This will enable us to create programs, branding, and take advantage of the ocean-to-plate opportunities and solutions we will be able to give to our customers. Secondly, we are working to develop branding and packaging formats, as I mentioned earlier, to make it easier for consumers to enjoy these amazing proteins. Thirdly, we have a focus on value added. I gave you three examples of value-added products that we are either marketing currently, developing, or doing the R&D on. Again, we're getting good traction on all of them. Thirdly, operational synergies, particularly in lobster. We have a very large business in lobster, based in the U.S., and obviously we're working with Clearwater to find ways to optimize our supply chain, to optimize the various opportunities that we see in the lobster space. Again, this is not an integration play for us. Clearwater is an exceptional company. They do what they do very well. Again, by combining Clearwater and the Premium Brands seafood assets, you've got the only vertically integrated company in this space in North America, and we're excited with that. Yeah. Thanks for that, George. Maybe just staying on the topic of seafood. I did find it interesting that on slide eight, you guys have put together your combined discussions with a pretty sizable company. Can you maybe talk about certain areas within the seafood complex that you feel like you'd like to fill in or expand in or maybe have a presence in? Yeah. Our perspective, George, is we look at the seafood space generally on a species by species basis. Ultimately we want to be in a position where we have significant market share in each area that we're in each species we're in. That effectively being vertically integrated, being able to develop value-added branded products in conjunction with Clearwater, of course, and our partners, the Mi'kmaq First Nations. A good example of that is lobster, of course. In lobster now we're by far the biggest player in North America. I think we probably have 30%, 35% market share in that space. We have a similar vision with regards to some other species as well. Okay. Thanks. I understand that you guys don't want to give any guidance for 2021 because of all the uncertainty around the pandemic, but it seems that there's a lot of CapEx initiatives here that we're undertaking. I'm just wondering, is it fair to assume that maybe the organic growth for this year would be anywhere between kind of a historical 4%-6% range and this year's 11% ex COVID? Yeah. George, again, a lot of that CapEx that we announced, that won't start benefiting us until 2022, 2023. In terms of this year, we've got two major headwinds going into the year. One is COVID, the continuing impacts of COVID. Clearly, it'll be a challenge in the year first quarter, which last year in the first quarter, COVID was actually a positive impact on our sales. We also have the translation of our U.S. operations. Our U.S. operations are growing quite significantly, Last year we had an exchange rate of about 134- 135. This year we're probably looking at 127, 128. Where those factors play out are going to be the big determinators. Outside of them, if it had been a normal situation, yeah, we would've expected sort of similar growth rates that we expected for 2020, sort of in that high single-digit, low double-digit range. It's just the uncertainty around those two factors, and particularly on our food service and the exchange that we're not at this point giving any specific guidance. Okay. Those are my questions. Thanks. Thank you. Our next question comes from Martin Landry. Please go ahead. Your line is open. Hi. Good morning, everyone. A follow-up on the Clearwater acquisition synergies. It was helpful for you to walk through some of the initiatives. I'd like to get maybe a bit more details on the timing of the realization of these synergies. The majority of these synergies, are they to be realized near-term, or are they more longer-term in nature? I think that the four I mentioned, Martin, are basically part of our long-term plan. Really, as I mentioned earlier, the businesses are very complementary. They don't overlap each other. They're very complementary. Clearwater was basically a best-in-class harvester of amazing wild shellfish species and a processor at sea, then a seller of these products in container loads around the world. We're more on the distribution and the value-added side. Again, we're excited to have access to supply, of course. Globally, there is more demand for wild seafood than supply. Access to supply is very, very important in the process of developing value-added products, which I gave you some examples today. Again, this is a long-term plan. We're really excited. We're having excellent discussions with the Clearwater management team. I hosted our first seafood summit. It was a two-day event. We've identified a number of areas to work together to leverage the vertical integration that we have to provide best-in-class seafood products to customers and consumers. That's all we could say at this point, Martin. Okay. That's helpful. Last earnings call, you talked about labor shortage being a challenge and that it prevented you from capturing some sales opportunities. Wondering how that's evolved and if it had any impact on Q4 sales? Yeah. Similar trends, Martin, as in the third quarter. I would say that as in the U.S., they've rolled out vaccinations. The situation with labor has become a little bit easier. For us, we're eagerly waiting for vaccinations in Canada as well, and again, we're doing better in the U.S. across the board with regards to managing our labor challenges. It's part of the reason why the U.S. part of our business had a pretty good quarter in the fourth quarter. Not as good in Canada. As I said, we're anxious to get the vaccinations and get on with things. The only thing I’d add to that, Martin, is the fourth quarter is a slower quarter for us seasonally, so you’re not pushing the production facilities as hard. The volumes are much smaller. There’s a natural sort of easing off on the labor requirements because of that. That also helped to address the issue. Okay. My last question was on wondering if you can talk about your innovation pipeline. We like numbers, so I don't know if you can discuss the number of new SKUs that you expect to launch this year across all your platforms, and then how that would compare with previous years? Again, all I could say, Martin, is that innovation is part of the PB DNA. This is something that is ingrained in our various meetings with our different teams. As you know, we're a very diversified company, and we expect all of our companies to be driving innovation. Innovation is what keeps us, obviously, ahead of the game and what's given us traction. All I could say is that we've got an amazing, exciting pipeline of innovative products, and I look forward to updating your notes. I did mention some on our call today, and I will do so obviously on future conference calls. 2020 was a year where one of the impacts of COVID was an inability to do a lot of new product innovation. A lot of retailers just put things on hold, stuck to sort of core legacy listings. There's a backlog of opportunities in our pipeline right now, and that whole process is just starting to get somewhat normalized. Yeah, like George says, it's a very full pipeline right now of things that'll be coming out in 2021. Okay. That's good to hear. Thank you. Thank you, Martin. Thank you. Our next question comes from David Newman. Your line is open. Morning, George and Will. Congrats on the Q4 and excellent traction. Thank you, David. I guess my first question would be, the pandemic's weighed, but you've been very nimble, and you were able to win new business. Maybe just talk about the magnitude of that and how much you expect to stick around and let's say we have a second half recovery, what the delta might be just related to that. How much do you think you can carry forward? Maybe some examples, too. You're talking about in the retail channel then, David? Yeah. You've done a lot, right? You have the school programs and things of that nature. How much of this incremental business, new business that you won because of COVID might actually stick around? I talked a little bit earlier on George's question in terms of our go-forward outlook. We've been very conservative in that number in the sense that when we talk about the COVID impact on our business, we do sort of net a lot of the retail growth off that we see as unusual. All those numbers are kind of the core long-term strategies we've been pursuing investing in. To the extent that we are able to retain some of this new business that has kind of been a result of gaining traction in certain areas from COVID, that is upside. We are not counting on it. We are hopeful that we can continue to keep it. It certainly created new opportunities. That would be even greater numbers than what I mentioned earlier. Okay. The second one, just margins look good in the quarter posted or, and normalized. If you take into consideration sort of raw materials a little bit more benign, labor, it sounds like things are easing off and you're automating a few things. Your fixed capital and just the scale, you set a target of like 2023 of 10%. Is there a kind of a roadmap forward in terms of what you anticipate the progression will be toward that target? Yeah. Sales deleveraging is a significant component of that expansion. This year, if you normalize for the impact of COVID, we would've been at about 9.1%. Not far off. Roughly to get to that 10%, it's probably 2/3 sales deleveraging and a third other factors. Okay, good. Then for 2021, you're calling for a better year, but if you strip out just M&A, what areas are you really starting to see come together overall? I mean, it looks like you've invested for a number of years. If I look back on Premium Brands' history, there's been a year where this gestation period where you invest, you develop new programs, and then you kind of hit your stride and it goes. It seems to me like you're kind of in that zone again where you've invested a lot, and then you're sort of hitting your stride. Maybe sort of talk about other than M&A, where you're seeing you're kind of hitting critical mass. Oh, yeah. No, absolutely. The sandwich group is the best example, right? We built the Phoenix facility back at the end of 2017, early 2018, and it's taken some time to gain traction there, but that group is just hitting it out of the park now and you saw it in the fourth quarter, the sandwich group was a major contributor to our growth. That's a great example where it's taken some time to gain traction as they've entered new channels like retail, C-store, and that traction's just gaining hold. The unfortunate part is in that group, it is hidden a bit by their loss of the airline business. The airline was a nice piece of profitable, substantial business for the group. That's one example. Another, which is our GTA initiative. In 2018, 2019, we built that new 100,000 sq ft distribution facility to expand our strategy around the food service, expanding our seafood distribution into other proteins using the model we used in Western Canada. That has continued to make good progress despite its core food service business being so hard hit. Once we start seeing the food service element coming back, you're really gonna see the traction of that investment. Another one is our investment in the C&C facility, our French seafood business in Quebec. Again, despite the impact on its core food service business, it has started to gain amazing traction in the retail channel, leveraging that new capacity, and then once the food service business comes online, you're gonna see that traction accelerate. Finally, the last one I would point out is the Saco facility for the Ready Seafood Group. That's been a tremendous win this past year, and that, again, is despite COVID. Cruise line business has historically been a big customer of their processed products, and that entirely evaporated in 2020. Lots of things that were growth drivers in 2020 despite COVID, and as that veil comes off, that hindrance comes off, you should see that continue to accelerate in 2021. You're absolutely right in your comment, David, about we've made those investments. We're leveraging now to get the benefits, the returns, the cash flow, all that stuff going. 2020 was the year we expected that to happen. Obviously, for reasons we all know it didn't, and now 2021 is in our gunsight, but we'll see how it flows with COVID. Again, great question, David. I would add to that another example would be our U.S.-based protein platform. The acquisition of Oberto's was transformational to that platform. It was mainly a beef jerky company, a national beef jerky brand. Today they're a lot more than that. I gave you some numbers in terms of our growth in the stick area and charcuterie and others. Again, there's been a lot of innovation taking place there. We found them many capacity solutions, some tuck-in acquisitions. Again, they're evolving very nicely now and they're accelerating their growth. Again, the thing about Premium Brands is that we think about the long term. We don't buy a business to sell it three years from when we buy it. That's not our style. We buy and we invest in it. Sometimes it takes three to five years for us to get to critical mass and to get the returns that we're expecting. There's many areas. Distribution is another one, David. Again, we've invested in being the number one coast-to-coast protein distributor in Canada, and that takes time and effort, and we built facilities to do that. We're just about there now. That's another area where we expect to see progress, particularly when food service comes back. Perfect. Great run through. Thanks, guys. Appreciate it. Thank you, David. Thanks, David. Thank you. Our next question comes from John Zamparo. Please go ahead. Your line is open. Thanks. Good morning, guys. I wanted to start with the plant-based space. If I'm not mistaken, you were maybe a bit more cautious on this in the past, but it sounds like your thinking has evolved on this subject. Just would like to get a sense of where do you see this going for PBH over the next couple of years, either on M&A or organic investments. On one observation in the presentation, that CAD 100 million you cited on plant-based sales, does that include your largest customer or would that be an incremental opportunity to that? No, that includes all of our customers. John? Okay, understood. Broadly, is this an area you'd like to invest in more or do you feel you have sufficient assets in place to address the plant-based category? Again, John, ultimately, we allocate capital and we make investments in areas where we think we can generate a return for our shareholders. We understand that the plant protein space will grow. It is a trend, and it seems to be growing. There seems to be a lot of players and a lot of capital entering this space. We made a conscious decision not to invest in capacity to make these products. We believe that was the right thing to do given the amount of capital that's chasing this category. Having said that's not to say that we don't leverage on our expertise in certain areas and take advantage of selling and marketing opportunities. That's what we're doing. I think if you sort of look at the evolution of Premium Brands, we tend to be very cautious with our capital. Once we develop this segment, let's say we develop it to CAD 200 million-CAD 300 million, that's not to say that we won't feel comfortable to go buy somebody that gives us capacity. That's the way we view the segment at this time, John. Okay, that's very helpful. Thanks. Then a few housekeeping questions, starting with Clearwater. I know you're booking the interest for the subordinated debt this year, there's the one-year interest holiday on a payment basis. Does that mean interest is accrued and paid one year later every year, do you essentially receive two years' worth of payments in 2022? Just wondering what the difference is on accounting versus cash basis for that. Yeah. It's the latter, John. It's not a holiday in the sense of forgiveness. The interest is payable. We're just deferring it in the first year, and then it becomes due in the second year. You're right. In the second year, we'll get two interest payments. Again, I think we've talked about this in the past. We are a patient long-term shareholder in Clearwater, and it will depend on their ability and uses and needs of capital on how we will draw that interest payment out. Ultimately it is due in the year two. Okay, that's great. Thanks. What's the obligation of the Mi'kmaq First Nations group when it comes to purchasing the stake of your CAD 450 million of subordinated debt? I get there's some variability depending on what the free cash flow is at the Clearwater level. Is there a minimum amount they have to repurchase from you, either from their licensing payments or their management fee per year? Essentially, the cash flow they're receiving from the structure of our transaction and the license fee associated with our transaction, the excess cash flow from that, they are obligated and they want to participate in the sub-debt or buy the sub-debt. Got it. Okay, thanks. Last one for me. Did you see any impact from ASF in Q4? Is there any anticipated impact for 2021? Yeah. When we talked Q4 last year, that was the big cloud on the horizon that was causing us concern, and it really hasn't been the issue that we were concerned about for 2020. In terms of Q4, we did have some pork and beef commodity challenges. They were North American based. They were problems with labor in these big facilities and their inability to value add products to the specifications that we require. That was creating some inflation. Yeah, no, ASF was not much of a factor. Maybe a little bit on beef as a substitute protein, because China has been importing more beef. 2020, ASF is still out there. It's still an unknown. China has done an incredible job in growing their production levels, and they're much more sophisticated in how they manage their hog production. We don't expect it to be, but it's still a factor out there. Okay. That's very helpful. That's all for me. Thank you. Thank you, John. Thank you. Our next question comes from Stephen MacLeod. Please go ahead. Your line is open. Thank you. Good afternoon, guys. Hey, Stephen. Hey, Steve. Lots of great color on the call so far, and certainly in the slide deck, so thank you. I just had a few follow-up questions that I wanted to ask about. You talked a lot about your five strategic initiatives and gave some great color on the slides, each sort of on its way or at CAD 1 billion plus. I know you gave a little bit of color on the seafood platform. Can you just give a little bit of color around where you are at in terms of sales for some of the other platforms when you think about those five strategic initiatives? Well, again, we mentioned five, Stephen. Our Canadian protein platform is already there, above CAD 1 billion in sales. All value added, by the way. Of course, we have sandwiches, and we expect our sandwich group, again, we call it a sandwich group, but it's really our assembly group. As I've shown on the slide, we're making a lot of progress in assembling other products other than just sandwiches. We expect that platform to reach that level in 2021. Our distribution business in Canada, that exceeds CAD 1 billion now across the board. It includes our seafood distribution companies and our other protein distribution companies. That platform continues to grow. We spoke about our U.S. protein business, which is about halfway there, I would say. It includes three main businesses, Oberto, Hempler's, and Isernio's, all based in Washington State with a national reach in terms of marketing programs and brands. Again, we're getting exceptional traction there. Again, our seafood group, as I mentioned earlier, in terms of if you take our seafood group and you add our share of the Clearwater revenues, we're about CAD 1.2 billion-CAD 1.4 billion in revenue. Okay, that's great. Thank you. I know you stopped short of giving 2021 guidance and understand you've already given some color on the outlook, but can you just talk a little bit about how you expect kind of the cadence of growth in 2021, with Q1 being a difficult comp and then Q2 being less so, being an easier comp, and then how you think the back half of the year might evolve with food service and things like that opening back up? Yeah. Our working assumption, Steve, is Q1 sort of is a continuation of the Q4 trend. We do expect to continue to show year-over-year sales growth given a lot of the stuff happening, particularly in our Specialty Foods group. Certainly an acceleration of growth in Q2 just from the normalization from COVID. We do also expect a slow opening over the quarter, too, as vaccinations are executed on and you see some reopening of the economy. Q3, we continue to expect some COVID impact, again, even lesser than from Q2. Our expectation is by Q4, we should be in a fairly normalized environment with the one major exception being airlines. We don't see a recovery from that until well into 2022, possibly 2023. Okay. That makes sense. Thanks, Will. Maybe just finally, with respect to a couple modeling questions, can you give a little bit of color around your expected tax rate for the year? With these most recent acquisitions that you did, Starboard and Distribution Côte-Nord, could you give a little bit of color around, I think you gave revenues in the MD&A, but maybe a little bit of color around margins? I assume both of those businesses will sit in the distribution business. Is that right? Yeah. In terms of tax rates, no major changes at this point from what we've given in our prior guidance. Off the top of my head, I think it was 27%-29%, something around that range. We should continue to be within that range. There's so many moving parts in that, Steve, and depending on where the income falls, in which jurisdiction, because we have quite a wide range of tax rates. That should be a fair assumption going forward. In terms of the margins on the recent acquisitions, both Allseas and Starboard are typical seafood type margins in line or maybe a little bit higher than our Premium Food Distribution margins, and Distribution Côte-Nord is exactly the same as well. Same as PFD or same as? Yeah, PFD. Yeah. They're all PFD acquisitions. Right. Okay. They're all sort of a little bit above the average for the group. They've all kind of got niches in their business that give them one step up. Okay. They're a bit higher than the PFD business, is what you're saying? Yeah. Yeah. Okay. Well, that's great. Thanks so much. That's all for me. Thank you. Thank you. Our next question comes from Vishal Shreedhar. Your line is open. Hi. Thanks for taking my questions. Hey, Vishal. Good afternoon. Just a little bit of a follow-up on some of that color you gave on how you think the year is going to unfold. In Q4, you hypothesized that maybe that's going to look more normalized next year. The way to think about it, we take your normal expectations for organic growth, and then we add the amount of sales that you lost to the COVID on top, or are there capacity constraints or other reasons why you're going to gain back the sales lost in this current Q4 that you printed, plus the normal run rate of the economy or your business? No, it should be the former, Vishal. When you go back to that chart that showed the normalization of the growth rates, the reality is that's lost food service business primarily. We expect that to come back and then by Q4 to be above that as the traction of these different initiatives come into play. Okay. Yeah. That makes sense. Just switching gears here, there were media reports that there was an outbreak in some of your facilities, I think particularly in Toronto, which led to temporary closures. Just wondering how material are the impact of these closures, and are those all behind us at this current moment? The major one, again, it was a terrible situation. It's been addressed. Thank goodness the facilities are back up and running and the outbreaks have been dealt with. In terms of the impact, though, not much of an impact. It impacted our Belmont business, which is a burger business, and 80% of their sales are in the summer months, so minimal impact on them because of the timing of the outbreak relative to the seasonality of the business. The other one was on our Concord business, and although not as seasonal, it was a sort of a similar factor as well as they were able to access sister company capacity. Again, not a material factor. Okay. With respect to the Clearwater acquisition, just on the deferred interest, when you defer it, does that not show up as a benefit on the P&L, or do I record that in the P&L and just record? Yeah, it will be in the P&L. We will be creating, starting in the first quarter, a new segment. We'll be calling it Investment Income. That will include the interest and management fees from Clearwater, as well as we've always had some interest income from non-controlled income interests that have been netted in the corporate expense. We'll move that into that. That will be recognized, and it will be segregated in that segment. Okay. You recognize even though it's deferred in the P&L, and then in the cash flow statement, will get kind of double up in the following year, if that's the way it works out. Correct. Got it. Maybe just lastly, if you can give us some thoughts on the acquisition market. You've obviously provided us some color on that, but in terms of the quality of the deals that you've been shown and if there's any changes that COVID has precipitated on that front. Yeah, Vishal, no changes really. Again, the type of acquisitions we look for are generally in the pipeline for a long time. There's a lot of conversations that take place between us and the owners, and I would say that the activity is normal for us. We look at a lot of opportunities. We probably get to look at possibly a deal a week, but we kind of tend to buying companies that we know, that we built a relationship with over the years. When the sellers decide to sell, they come to us. We've shown you the schedule, of course, and it shows that there's a lot going on and a lot in our pipeline. We've got an extensive M&A group here at corporate, and they're extremely busy right now. Thank you for that color. Thank you. Our next question comes from Derek Lessard. Please go ahead. Your line is open. Yeah, thanks. Good afternoon, gentlemen, and congratulations on a great quarter. I guess most of my questions have been answered. The one I do have is, I was wondering if there's any difference between profitability or the margin profile between food service and retail channels. Well, it depends, Derek. You have to look within the segment and the type of products they're selling. If you're looking in our Premium Food Distribution segment and you're looking at our food service businesses that have pivoted from their traditional fine dining customers to the retail segment, that's definitely lower margin business. As, I think it was David asked earlier, we do hope to keep some of that business post the pandemic on the basis that it still provides critical mass to their distribution network. It's profitable business, it's definitely lower margin business. If you compare that retail business or their food service business with the retail business in our specialty food business, no, that's a higher margin business by all means. There also are other costs associated with that business in terms of marketing and those types of costs. Net net in those businesses, you end up a little bit more ahead than you would in food service or QSR? Well, net net, if you look at it on a global basis, really our Specialty Food segment is primarily focused on retail and our Premium Food Distribution segment mainly focused on food service, as a really rough gauge. You can compare the EBITDA margins in those two segments. Okay. Yeah, that's helpful. Maybe just one last one. Obviously, 2020 was a pretty big year for you, or huge year in terms of M&A. I know you said the pipeline is busy, is full, and everyone's working hard on deals, but I was just wondering how you're thinking about it in terms of strategic-ness, and is 2021 more of an integration year for you guys or is it full steam ahead? Derek, it depends on the platform, right? I think in the case of seafood, of course, we're very busy with the large deal we've done and a couple of other deals we've announced recently. We look forward to extracting and optimizing the vertically integrated platform that we've created. Probably you shouldn't be expecting massive transactions in the seafood space. There'll be some tuck-ins, there'll be some add-ons, et cetera, in general terms, we're going to be working on optimizing the vertically integrated entity that we created. With regards to the other platforms, they all have their own plans, they all have their own expansion initiatives organically and by acquisition. Don't be surprised if we make an acquisition in one of the other platforms that's relatively on the bigger side. Okay. Actually maybe one final one for me. Thanks for that, George. In terms of capacity in the sandwich business, are you guys bumping up against any, given the growth, are you bumping up against any capacity constraints? It depends on the items. Again, we refer to it as a sandwich division or sandwich platform, Derek, for legacy reasons. I would say on the sandwich side, we're probably about three years away from needing to add another facility to the group based on how we project our sales to grow. Again, we've built capacity and, again, we're in good shape and we're getting more out of the new lines, more productivity out of the new automated lines that we're investing in, as we've told you guys today. With regards to some of the other products that we make, we might have to add capacity in those in the future. Okay. Thank you. Thank you. Our next question comes from Sabahat Khan. Please go ahead. Great. Thanks, good afternoon. Just a quick follow-up on the question earlier around Clearwater and the rolling of the interest payment. I guess with this new segment where you will be reflecting the interest and the management fee, is there any addition to corporate overhead or anything or is it just a flow through on an annualized basis of CAD 52 a year and obviously cash coming in the year after? Yeah, no, it's the latter, Saba. It's just the interest and management fees. Okay, great. Just looking ahead, I have a couple questions on the sandwich you said earlier. As you think about demand ramping up, I guess, what are you hearing from both the retail as well as the food service, by food service I mean the restaurant customers on that? Are you seeing sort of a sequential pickup in demand as you're planning for the next year? Is there any difference between the restaurant channel versus the initiatives in retail for that platform in terms of the demand that you're seeing? Can you please repeat the question? You broke up and I couldn't hear it, Sabahat. Sorry. No problem. Just on the sandwiches platform, just in terms of your conversations you're having with your retail and restaurant customers, is there any difference in the recovery you're seeing across the channels? How are you generally seeing the demand set up for 2021 as the food service and just eating out improves as a channel? Yeah. In regards to sandwiches, the demand is very, very strong. What we're being told from our customers in general is that we will need to allocate them more capacity for 2021. A lot of it, Sabahat, is driven by the fact that a lot of QSR is doing really well in their drive-throughs. When a consumer basically goes to a drive-through, he's more likely to purchase a handheld sandwich. That's kind of benefited the sales in that category to all of our QSR customers. Again, I don't know when things are going to open up, but the consumer that goes to a drive-through tends to be more likely to buy a handheld sandwich, breakfast sandwich, let's say, and coffee, than the consumer that walks in the store. That's driving a lot of growth in that segment. Okay. I know you don't talk about specific customers. If we just look at your restaurant customers or quick service customers for sandwiches, what would you say demand is directionally as we exit 2020 relative to a year ago? Are we closer to normalization or are you expecting a big recovery through this year to get that back to runway levels? Again, Sabahat, it really depends on the customer. Let's say we have a customer that has a lot of downtown stores. They're not doing that well, right? For the reasons that you know, of course. If we've got a customer that has a lot of stores in suburbia and no stores downtown, they're doing extremely well. It just depends on the geography and the location. It's a very different world today than we know, and a lot of it is driven by some of the trends and events that you already know. Generally, if they've got airport kiosks, they're very slow for reasons that we know. If they've got downtown stores, they're not doing well. Suburbia and cottage country are doing amazing. It's just things that are logical. Okay. Thanks for the color. Thanks, Sabahat. Thank you. This concludes the Q&A portion. I'll now turn the call back to George Paleologou for closing remarks. I'd like to thank everybody for attending today. Back to you, Cheryl. Thank you very much, ladies and gentlemen. This concludes our call. You may now disconnect.