Video, which will be followed by a short Q&A session to address any questions related or adjacent to the video. The team will provide a quick business update before we all transfer to Webex for our main Q&A period with the full management team. In addition to Lino, Max, and Kai, joining us today are Gaétane Wagner, Chief Human Resources Officer, Martin Gagnon, Chief Acquisition and Strategic Development Officer, Carl Colizza, President and COO, North America and Dairy Division USA, Lyne Castonguay, Deputy President and COO, Dairy Division USA, Tom Atherton, President and COO, Dairy Division U.K., Marcelo Cohen, President and COO, Dairy Division Argentina, Frank Guido, President and COO, Dairy Division Canada, and Richard Wallace, President and COO, Dairy Division Australia. Before we begin, I remind you this webcast is being recorded and will be available on our website. Please also note that some of the statements provided during this event are forward-looking. Such statements are based on assumptions that are subject to risks and uncertainties. We refer you to our cautionary statements regarding forward-looking information in our annual report, press release, and filings. Please treat any forward-looking information with caution, as our actual results could differ materially. We do not accept any obligation to update this information, except as required under securities legislation. I'll now hand it over to Lino to kick things off. Thanks, Annik. Good morning to you all, and thank you for joining us today. Although we would much prefer to host you in person, we're happy still to be able to connect with you remotely. This past June, for the first time in our history, we unveiled a four-year Global Strategic Plan to the market. It was developed from the bottom up with each of our divisions and builds upon our strong foundations and the many lessons learned throughout the pandemic. Over the past five to seven years, our business has expanded and become more diversified and more complex. We've entered different geographies and ventured into different product categories. As we continued to grow our business, we felt it was important to share our plans with the market. Historically, our business has grown primarily through acquisitions, but we have also continuously invested in different platforms through CapEx allocations to drive organic growth over the years. Since the rate of our CapEx spend will be above historical trends to support our new plan, we felt it would be appropriate to inform the market about how, and more importantly, why we are spending this money and the expected return attached to it. We believe this will help investors better understand our plans and our ambitions throughout the next four years. A recent example of optimizing our network through strategic investments would be the multi-year projects we undertook in Canada. Today, we will be showcasing these efforts with a plant overview video. It will take you through the recent cheese capacity expansions at our St-Léonard and Saskatoon facilities and provide a closer look at our new state-of-the-art fluid milk and dairy alternative beverage facility in Port Coquitlam, B.C. This is a good way for us to illustrate the approach we intend to replicate in some of our other divisions as part of our strategic plan. The objective of Project UPS St-Léonard was to install a new retail mozzarella cheese production line. This CAD 58.4 million investment represents an important milestone to meet the growing demand of our customer. With the UPS project, we are now in an excellent position to increase our market share with modern state-of-the-art facilities and improve in performance and yield. The biggest challenge of the Project UPS St-Léonard was the construction of a new line within the plant. We did that while we were in operation with the existing equipment. Because there was not only one line, but we had multiple lines that came in at once. We had packaging, we had our new cheese vats coming in, we had the tunnels coming in, we had robots coming in, and they were all in different places in the plant, so all the equipment before it came in needed to be swapped, then analyzed before we start any work to make sure there was no listeria or anything like that. Because we took the proper measures on every aspect and we had a good team that worked together, I mean, the engineers worked with production worked with QA worked with the mechanics, and made sure that everybody knew where they were standing and what they had to do, and we did not have any issues in terms of quality because of the construction. Our volumes were going up at a drastic rate. Year-over-year, we were getting 10, 15% more volume. The retail line on the specialty plant is more the small formats, 500 grams, 700 grams, and 1 kg. That's where the human aspect gets really hard to continue the packaging manually and producing manually. That's where the whole company as a whole came together and said, "If we want to continue in this business and watch it grow. Year-over-year, we have to make some capital investment to the plant to be able to keep up with the demand. [Non-English content] When we start the process for the cheese making, we get our standardized milk into the vats. From the vats, we have our coagulation. Once that's done, we transfer over to the tunnels. The tunnels is where the cheese gets matured and we extract the whey. Once the cheese is ready and has matured and achieved its desired pH level, it gets sent to the molding. From the molding, it goes down into the brine. On average, depending on the product that we're doing, it could spend anywhere between 1.5 hours to 4.5 hours into the brine. From the brine, you will go to the packaging, and from the packaging, it will go into the palletizing. Every department now has its own room. That makes it easier for us to control the product at every step in the process. In changing our equipment, it gave us the opportunity to modify 34 positions that were at risk in terms of health and safety. It's going to be a really positive change for our employees in terms of health and safety, which is one of our top priorities at Saputo. [Non-English content] On a food safety aspect, we have one day to work on gaskets, pumps, machinery, maintenance, which we don't today. Today, it's on a seven days a week, 24 hours a day. Once it breaks, you stop, you get it fixed, start up again. The back line is we installed three robots. There's 1 for the industrial line, the five pounds, and the four box, which we use for the shred line. The other robot is the retail line where we're putting blocks into the boxes, whereas before it was placed manually into the box. From that point on, it goes to the palletizer, which also is a robot that's putting the boxes on a pallet. It's all automated completely. In the back, once the project is all completed, there's going to be one pallet of finished goods coming out of the line every minute, every 60 seconds. What's fun is a lot of the employees that were putting the product in boxes today became operators. They have more of a responsibility, and they love being involved in the project because it helps us find the solutions to get the project working as quickly as possible. My role and responsibility, it changed because I don't deal as much anymore with production issues. It's more of, is everybody trained? Is everybody at their place? Is everybody happy? How's it going and how can we make it better? It's great, every day you're looking at getting bigger, better, and stronger in your production. [Non-English content] The good news of the project is there's no job loss for Saputo employees. We even had to hire some temporary employees to allow our employees to get the training on the new positions. There are some temporary employees that could become permanent employees at Saputo in the next month. It's really good news for us. We have to work as a team more, because before I used to be all alone. I used to set up the orders all by myself. I had a different style machine that would build the pallets for us. Now I have a partner, another operator, and we work, like I said, as a team. My job is a whole lot lighter and a whole lot better. I have one employee that actually had the detail robot, and he felt really intimidated, and it was really one of his colleagues that was an operator that told him, "Listen, you need to learn to love your machine. Until you don't love your machine, you'll never learn." He goes, "You can get taught everything you want, but if you don't commit yourself to it, you won't learn." Today he's one of our best operators. For Saint-Léonard, the building stayed as is. What we did there is that we increased the piping, the inlet and the outlet piping of our neutralization basin. We are doing the groundwork now to improve pH compliance in fiscal year 2022, which is great. It's true that I enjoy coming to work because each day is different. I have people around me who also teach me a lot of things. I feel good. I feel like who also teach me a lot of things. I feel good. I feel like who also teach me a lot of things. I feel good. I feel like I'm working as a team. I feel like a team, like a small family. I love the people I work with. I love the team that I have. I actually love every team that I ever had here at Saputo. I've worked in different departments, and in every department, you meet new people, you get to know them, and you discover that no matter where you go in Saputo, you always find a family. The UPS project stands for Ultimate Plant Setup. The main objective of this project was to increase our capacity to produce cheddar and mozzarella cheese to support our growth in those two important product categories. Thus was born UPS Saskatoon project, which will allow us to double our production capacity and to replace obsolete equipment at the end of its expected life. In fact, the old cheese line was installed in 1991. This project represent an investment of CAD 92 million for the Canadian division, and it's one of the most important investment in the recent years. We went from 35 people in the group to 38. It's amazing what technology can do, but it's also reminding us the fact that we do need the human element to make sure we're creating a quality product. In the design of the plant, apparently, the business had in mind the comfort of the people on one hand, and productivity and efficiencies on the other. What we have here is a world-class cheese plant. We've become more automated. The employees are happy about it. The ingredients we're putting in, we're capturing more of that into our cheese now, which all results into increased yield. The vats in these plants were specially designed for yields improvements. The design of them is a hot water cooking design, which is always gentler on the curd and will keep you from breaking it up anymore, and a nice gentle cook, and that all contributes to the yield in the vat. You have your eight TH Vat. That goes right to the roof. You have the draining matting conveyor one, two, and then at the end there, you have the salting conveying belt. You have your curd distribution. That blows the cheese up to the top of the block formers right here in the middle. From the block formers, the cheese is sent up to the collator, where 16 blocks are turned into a 640-pound block, and then the cheese is conveyed on the conveying line and into the vacuum chambers, where the cheese is vacuumed for 45 minutes. The cheese comes out of the vacuum chamber and over to the 640 packaging line. Our cheese is then shipped to Calgary Riverway or to our plant in Tavistock, Ontario. We made good cheese. It just wasn't as efficient anymore as the new equipment coming out. A lot of the automation and the programming as well. Way more efficient. I would say it's very efficient, automated as well, with a human factor in it. We used to do a batch style before where it was 1 vat at a time, and it was kind of a batch, and they followed each other, but there was always a little space in between them. Now we've gone to a continuous where things just flow steady for 19 and a half hours. We have more automation on screen, so the same amount of people can manage twice the amount of work because of our programming on the TH Vat especially. It makes the job of the operator beautiful. It makes their job simple. Right on every screen, it is possible to see the whole of the plant right from the silos down to the warehouse on a single screen. We wanted to standardize all our processes, so to make them easier to run, to allow people to be more productive in their roles. All our sanitizer stations look exactly the same. Here we have our digest one and two for the red hose, and we have our center deck, which is a sanitizer hose for the yellow, and blue for water. They can visually see it. They visually know that red is the digest, the soaps. They visually know that the yellow hose is the sanitizer. It's easier, less mistakes can happen because we have standardized processes like that. There is two locations. If you're walking from the outside, there is a small area in the main entrance from the cheese side. We change our shoes, and when you go in, they have another room to give you proper protective equipment to go into the cheese floor. The other side is from the main plant to the cheese side. We will need to have a disposable smock and a separate boot cover to cover ourself before we can enter the cheese plant. We have the metal detector. It's as like a physical hazard. If we have any cheese blocks have potential metal contaminants, first, it will show the reading here, and then when the cheese block comes here, this rejection bar will push that block away. We won't pack those contaminated cheese blocks into our 640 cheese box. This is our bander. Both hands need to be on, and they need to stay pressed while it lowers, thus making the equipment hurt-proof. We are looking at a safety system. It's a pull cord safety system for the conveyors and turntables. This gives the operator the ability, if something bad happens, for them to yank on this cord and everything stops. In this new plant, we built the 640 boxing line so that the boxes are conveyed on conveyor belts. They are no longer pushed and pulled by people. We had an assessor come in and take a look to see what is the amount or the weight that an employee would lift in a shift, in a 12-hour shift, and it was the equivalent of lifting a standard car. That has reduced the opportunity for repetitive strain. We have three large windows in the plant that supply natural light. It's a very bright environment. We will do a light intensity test. For this new plant, it's now four times higher compared to our old cheese plant. The noise reduction in the plant alone, it's a very quiet plant. As you can see that this is a really quiet area of the plant. My decibel readings are not going above 80 in this new facility. 85 decibels is at the point where you need hearing protection. Anything lower, you do not. Mentally, I think they feel better when they come to work. It's dark when most of them come to work, and then the sun comes up. They just feel better. CI is a continuous improvement. Yeah. That's our daily management system. We've had some employees that make some suggestions. They've had to go through three or four screens in order to get some information that they thought it would just be easier if they could all access it all on the same screen. The next time the operators were on shift, they were quite pleased. They were happy to see that we've taken their suggestion and we've run with it, and they were able to make their job a little easier. They feel very empowered, right? That makes them feel that they own part of that equipment. In fiscal year 2020, we completed phase I of the project, which included upgrading our discharge piping, along with installing an oil water separator. In fiscal year 2021, phase II of the project, which has been completed, we installed a wastewater monitoring building. Looking into the future, phase III would entail the installation of an EQ tank and a flocculator, and phase IV would include the installation of a DAF and sludge tanks. What I have here is a set of employees with high morale. Every day on my way to work, I drive by the location and I can see the new facility, and it makes you so proud to see it. It is a very forward-thinking plant company as well. It's an environment that fosters growth in your skill or whatever you intend to go into. The company encourages and supports that. I enjoy what I do, so I want to keep doing it for a while yet. Saputo definitely is a really awesome company to work with. That's why I was always want to join Saputo. I have a great sense of pride. I'm happy I got to be part of one of the biggest projects that the Canadian division has ever done. What we have here is the Saputo culture at play. First, putting the people first, listening to the people, and then designing the people's interests and desires. It's a win-win situation for us as employees here. For me as a manager and the plant manager for this facility, it's a challenge. I know that it's going to end up adding very positively to the bottom line and to shareholders' value, which is very critical. The Project BIG consists of the construction of a new fluid milk plant in PoCo, with the main objective of replacing our Burnaby plant that is at the end of its life cycle, since that plant was built beginning of the '60s and presents daily food safety challenges. This new plant will allow us the development of new products. We are already planning the implementation of a line dedicated to the production of plant-based beverages. The cost of equipment and leasehold improvement represent an investment of CAD 119 million for the Canadian division. The addition of the plant-based beverage line represents an additional investment of CAD 31 million in that facility. These are record investment for a new plant designed according to the highest standards of food safety, health and safety, and efficiency. In Burnaby, there is no production for plant-based. Plant-based will be new for us. Seems to be quite a growing industry. More and more people I run into are going to plant-based. It's a really good decision, the market going that way, so we need to follow the demands of the customer. We're only one of three plants in North America for Saputo that are going to be producing it. It's always nice when the business is growing. You feel good about the company when they're expanding into new things. Behind me, this is where we start excavating the ground end of April, early May 2019. This is where we all begin, right behind me. The input of everybody that's on the floor that's been gathered and bring back to their supervisors to make sure that they can do their job more efficiently. All of those things have been incorporated into the design of this new plant. We've been doing plant trials on milk for 5 or 6 weeks. It's a lot of equipment that has to be smart and talk to each other all the way from receiving through to the warehouse. There's a lot of people involved, a lot of companies involved, a lot of techs involved to make that happen. The product flow is very important for this new plant. We really want to do a straight line and avoid any cross-contamination. A higher volume can go through there. If you think about processing milk and how long it's in line, say that maybe isn't heat treated or cool treated, the milk will spend considerably less time in the line. The other thing that's really different about this plant is that all the different processing areas are segregated. We've been to the extent of segregating the employees to make sure that we're accomplishing that. Some opportunities to collapse that segregation will be communication screens in every welfare area to ensure we're all kept in the loop on current information at all times. We do have an area outside that we've designated for employees to gather. I'm excited about this. It's right at the front of the site. There's going to be some picnic tables and landscaped area for everybody to congregate on. We're also segregating the way that the trash and recycling will be handled inside the plant to make sure they don't cross each other between raw areas and pasteurized area. That same thing with services and utilities, having them hidden in the interstitial. The staff come in a separate door with a separate welfare area, with a separate change room, with a separate food area, uniform area. That won't require us to have foot foamers and other things that create wet. Our goal is to keep the floor dry. The floor is not a drain, so we need to make sure every product or water needs to be trapped through a pipe and going directly to a drain. In our plant today, it's a very manual process to go through pasteurization. Our pasteurizers come out, and they blend, and they take connectors, and they change lines very physically, very manually, with a lot of C clamps. In the new plant, it's all smart valves. They will press a button, and the smart valve will change the line, change the mix, and the historians built into the equipment will keep the records that they would in the past have written down. Things have been designed, and the top process in regards to access to equipment was to make sure that everything was body height for the maintenance crew to be able to access it easily. You can see here the height of the valves are right height for it to get serviced. It's proper height, so our mechanic doesn't need to go in the ladder. There is a connection are really accessible. We provided some access platform to be able to serve all the valves. Where Anthony is, he has a lot more accessibility to serve the 2 first row on that side, and on my side, I can serve easily these ones. I'm standing on the main pick line. For me, when I consider efficiencies, I consider the overall footprint that's required to move the goods and the number of touches required on the product between manufacturing and delivery to the customer. In this layout, we have reduced our footprint considerably. We've actually eliminated an entire conveyor. This machine here, this is the game changer. This is a depalletizer. This machine allows us to take any full pallet multiple of product that we produce in this building, and instead of pulling it onto that conveyor, we can drop it on this depalletizer and have it run through into our secondary palletizer. In the same footprint, or actually slightly smaller, we've increased our output by upwards of 25%. We've used the space to optimize storage to ensure the plant can run as efficiently as possible and are not tied to the fluctuations that occur on a daily basis between Saputo and our customers because we don't want to interrupt that supply. After that, we've optimized it to make it as efficient as possible to move the goods. This setup is safer than the previous. It's safer in that we have clean travel paths for our equipment, which allows us to put some nice controls in place. In addition to that, we've eliminated hydraulics in most of our equipment. In eliminating the hydraulics, you eliminate that health and safety risk that goes with it, along with the food safety risk as well. I'm proud of this layout and how it's coming together. There is four things in the bundle. Efficient boiler for steam production. There is a condensing economizer for capturing energy from the stack of the boiler to transfer back to potable water. There is thermosiphon heat recovery to the ammonia refrigeration plant, and there is automatic blow-off heat recovery that we'll be using for the feed water inside the boiler. Energy emissions is something that we always look at. From this plant to that plant, we're going with energy efficient equipment, energy efficient lighting, energy efficient heating, as well as looking at the waste management part and putting in a state-of-the-art treatment facility. The two most important pieces of equipment in this building are the flocculator and the DAF, which is a dissolved air flotation unit. All of the water from the lift station will be pumped to this screen. It allows wastewater to flow through, all while the coarse particles remain behind. After this, it'll go to the EQ basin, or the equalization basin, which is actually underground. That's going to be used to basically homogenize and balance and equalize all the wastewater that's coming from the plant. Its ultimate goal is to remove total suspended solids, fats, oils, and greases. These fats, oils, and grease, when they're captured and concentrated, it becomes kind of a thick sludge. That sludge is very rich in organics. These will be hauled offsite in order to be used for animal feed. We'll be capturing rainwater from what's generated from the roof to be able to store it and use that as makeup and be evaporated back. We are decreasing the amount of potable water usage that's required to be able to operate the plant. Being in Vancouver for the last two years for this project, I definitely know that was a very good idea to capture water with the amount of days of rain that we're having. It's just amazing to see what we can do to make our dairy facilities more environmentally friendly and the impact that it has on the world. This is a state-of-the-art site. It's going to be clean, it's going to be safe, it's going to be easily accessible. This project basically is essentially an opportunity to overhaul our infrastructure and making sure that we meet our customer promise with regards to meeting our customers' needs and meeting our customers' expectations. There's space for growth in the plant, and I think when you look at how long plants operate in North America, I think 50, 60, 70 years is not unusual for a plant. Very excited. Yeah. People are chomping at the bit would be a good description. It's very exciting. Having a brand new building, state-of-the-art technology, it's going to be very exciting to work on. The drivers are just thrilled about the prospect of not having to back in to the bay. It just makes things more efficient, more streamlined. The extra technology and the ease of use is going to help out a lot, make everything run a lot faster and smoother. Employees are excited about the changes here that we're implementing. I'm quite impressed. It's big, and it's beautiful. I said to my kids, "I package the milk. I do that milk. You're drinking the product that I'm packaging. There's a number of benefits to work at this site and to attract employees and retain employees in the PoCo Equipment facility. It's going to be a milestone in Canada for quite some time. We hope you enjoyed the video. We'll now open the floor to your questions for the next 20 minutes. Please use the questions and answers box on your screen to submit your questions. I will read them out for the group. Similar questions will be combined to avoid repetition. As a reminder, we ask that you keep your questions related to the plant overview video. We'll have ample time to discuss other topics later on. If we're unable to answer all of your questions in the allocated time, we'll cover them during the next Q&A period. We'll wait a few more seconds to see if we get any questions in. Our first question is from Michael Van Aelst. With no labor reductions, can you provide some breakdown of where the savings or returns are coming from? Yeah, as you would've seen in the video, there's an increased level of automation, so what we're actually able to handle, process, and get out the building is increased. It's really an efficiency gain, predominantly in our production and our warehousing operation. Yeah. I'll add to that, Frank, if you don't mind. What you have seen in the video is that we have increased capacity at each of those locations. Saskatoon, St-Leonard, and PoCo will be driving more volume through their facilities. More volume with the same or equivalent headcount, that makes for a more efficient operation. In addition, we can't discount the fact that it allowed us to optimize our network, which means that there were plants within the Saputo system in Canada that were shuttered because of the increased capacity that we've built into these facilities and into these projects. All right. Our next question is from Irene Nattel. Good morning. I understand that all of the upgrades, new builds are state-of-the-art, but how do you think about ongoing CapEx going forward? Ongoing CapEx is defined by each of those divisions. Because we are talking about the Canadian Division, I'll ask Frank to talk about further CapEx for his Canadian Division, and then we can get into the strat Plan a little bit later on, as we talk to the other divisions. Frank, why don't you continue on Canada? Yeah. Perfect. Thank you. With respect to the new buildings, obviously new equipment, highly automated, the level of CapEx spend attached to those facility will be at a lower run rate. The balance of the network, I would say projected CapEx beyond the strategic capital spend will be in line with historical trends. She just wanted to clarify that what she meant was going forward to maintain state-of-the-art. Yes. Our next question comes from Peter Sklar, "How does the capital plan you have described in the videos differ from ongoing upgrades and capital spend? Similar question, maybe more clarity, please. The capital spend, as I said earlier, the capital spend attached to the new buildings will be at a slightly lower run rate, obviously, because there's a greater degree of automation and the equipment is new. As I stated earlier, the balance of the facilities that are, I guess, at different stages in their useful life are more in line with historical capital spend we have. Over and above that, we've got a projected capital spend attached to our strategic initiatives in Canada that are expected to drive the EBITDA growth we're forecasting in the Canadian division. Maybe a more general question as well, Peter Sklar asks, "What is your financial criteria for the CapEx? Do you have a hurdle rate for financial returns? Thanks. Yeah. In terms of capital spend, we do look at it from various angles. Certainly, there's the maintenance CapEx that typically does not provide a significant ROI on those. It's more of a maintenance of the operation, replacement of obsolete equipment, and stay-in-business type of initiatives. Relative to ROI per se, that's the other bucket. We're looking at it for payback that are typically relatively short in nature, anywhere from two to three year type payback. Obviously, within the rollout of our Strat Plan that has been developed over four year, that's pretty much the payback period we're looking at. We're not looking at it from a rate perspective, more from a payback metric, if you will. That's it. We have a question from Mark Petrie, "What are the next projects in Canada? Are there other similar opportunities? Yeah, we have a similar opportunity to look at our specialty cheese platform in Canada, which is one of our strategic pillars to look to drive the same level of automation and efficiencies that we've seen in the three projects that we posted on here today. Christopher Li asks, "Do you expect the plant upgrades to drive higher margin% as a result of improved efficiency? Thanks. Short answer is yes to that one. Michael Van Aelst asks, "How will the startup costs tied to the BC plant be recorded? Will they detract from earnings initially, and if so, will they be disclosed and backed out of adjusted EBITDA? The answer is no, we will not backtrack or extract those startup costs out of the EBITDA. We've had startup costs for the last few months, starting previous quarter. Those would not significantly impact the run rate of EBITDA generation from our Canadian operation. I think on this particular project, we had the luxury of running our Burnaby site in parallel, so that'll minimize the disruption as we move over to the new Port Coquitlam facility. The questions, I know Vishal, Patricia, you submitted questions, but they were quite similar, so please let me know if you have any other questions. We'll wait an extra 30 seconds or so, and if we don't have any further questions at this stage, we'll move on to our next section. Mark Petrie asks, "How many more plants will be fitted with plant-based capabilities? I'll have Carl speak to it because it's a more North American view we have on plant-based, so it touches not just Canada, but the United States as well. From a beverage perspective, right now we feel very comfortable with the network we have. We can service East Coast, West Coast, and Central U.S. and Canada quite well. As a priority, we feel very comfortable with the potential we have today in the existing plants, as well as utilizing some of our brick and mortar should those opportunities arise to further our investments in beverage. We will be also taking a look at the cheese sector quite strongly. We have a recent acquisition in Bute Island, so in the U.K., and we feel very strongly about the growth in this category and the need to have manufacturing in the North American territory. I expect that over the coming months, that plan will be formalized, and we'll be able to see further investments in plant-based, specifically cheese, both for size reduction, so the product cutting for the retail markets and the food service markets, as well as make over time. Now I'm going to ask Kai to speak a little bit about the regulatory environment for plant-based products, how a product is able to be traded through different jurisdictions, geographies. It does influence a little bit where we invest our funds in plant-based products. Maybe just talk about regulations and. Sure borders. As we're talking about North America, obviously there are regulatory restrictions as it pertains to the movement of dairy goods. In the plant-based category, obviously, it's a different set of assumptions. For us, what we're doing is we're starting our plant-based cheese strategy, leveraging our Bute Island platform, and we'll be looking at an import strategy while we figure out the best technology, while we optimize our recipe for the very important U.S. market. In terms of where those capabilities and that capacity will be moving forward, Carl, together with the team, will be looking at where do we have that access to talent, where do we position ourselves and leverage the infrastructure that we have, whether it's being attached to an existing facility or whether it's building a greenfield site. Those are all things that'll be evaluated over the coming year. It is our intent to have local capability and capacity in North America to produce plant-based cheeses. We have a couple questions from Irene. First off about duplication costs. If you're running duplicate facilities, presumably costs will come down and contribution go up. Then the other question relates Port Coquitlam, yeah. Yeah, Carl, that's specific to Poco as we're running duplication. Carl, maybe just talk about duplication costs and forward-looking opportunities that we see to reduce those expenses. Yeah. Our first priority was to make sure that we serviced our customers and continued to provide our consumers with our products. Certainly, we do have duplication costs today in operating both our Burnaby facility and our Port Coquitlam. We've managed to make the best of it in the environment that we're in today in order to provide the right kind of training. This has really provided us the opportunity to train our teammates who are coming over from our Burnaby site, have the comfort that we will have skilled operators and our Saputo team in our new location. We do expect that both from a manufacturing and from a warehousing operation, those duplication costs will taper off. From a warehousing perspective, I would say that's already been minimized, and manufacturing over the coming weeks and months will also be eliminated here. Irene's second question was, can you please remind us when you will start the specialty cheese project? Yeah. The specialty cheese project is part of our new strategic pillars moving forward that was part of the strategic priorities we announced for the organization. Work has actually already been initiated in terms of developing the business case, so that'll take us to likely the end of the fiscal year to come forward with a recommendation. That's the timing, then implementation shortly thereafter. If you have any more questions, you can submit them now. We'll take a quick pause, and then if there's no further questions, we'll move on. All right. It doesn't look like we have more questions at this stage, so we'll move on to the business update. Before the group proceeds to answer your questions about the broader business, Kai, Maxime, and I want to provide a quick update to frame our discussions. When the pandemic struck 18 months ago, we thought it would last a couple of weeks or months. Yet here we are today, still dealing with COVID. I'm proud of the way we've responded, despite not knowing how it would affect our sales or our operations. Going into the pandemic, we had a rock-solid foundation and a rock-solid balance sheet, and we knew we wanted to do the right thing for our employees, for our patron farmers, and for the community. Once we got over the initial hump and understood the evolving needs and expectations of our customers and consumers, we thought we had found a new normal. Now that businesses and economies are ramping up again, despite the emergence of the Delta variant, we're faced with a different set of challenges. Exiting this latest wave of the pandemic is proving to be the most difficult part so far. Most of the short-term issues we're experiencing are not unique to Saputo or unique to our industry, and I'll ask Kai to tell you a bit more about what we're seeing across our businesses, as well as the initiatives we're deploying under our Global Strategic Plan. Thanks, Lino. The Q1 results for our Canadian and Argentinian platforms were pretty much in line with our expectations, and both these divisions continue to perform well. On the flip side, the U.K., Australia, and the U.S. were more heavily impacted by pandemic-related challenges. As Q2 progresses, the U.S. business is where we're seeing the most significant headwinds. Let's start there. First off, it's looking like the food service recovery in the U.S. may be longer than expected, and it could take up to 12 more months to fully recover. The situation continues to be volatile and remains in flux. On the retail side, demand remains strong, but two major headwinds around labor and supply chain are making it difficult for us to maintain our full supply. Right now, we're well below the optimal staffing levels required to run our facilities. We're not yet seeing the benefits from the back-to-school transition or the expiration of government subsidy programs, as we had initially assumed. We have deployed a large number of initiatives to encourage retention, like higher pay, referral bonuses, shift flexibility, and partnerships with local community colleges, but to little avail. Another reality we're contending with is that in the rural areas where we operate, vaccination levels tend to be lower than that of the general population, allowing the Delta variant to take hold. These labor challenges do not appear to be going away anytime soon. We suspect they could persist for a year or more, but we're tackling this issue head-on with some of our strategic initiatives. We're prioritizing network optimization initiatives in those facilities where we hopefully have access to a deeper and stronger talent pool for the longer term. Focusing on a less-is-more approach, we are in the process of reducing the number of SKUs we produce. This will allow us to reduce complexity in our operations, both from a manufacturing and supply chain perspective. Longer term, as part of our plan, we'll also be looking to increase automation in some of our facilities. The issues related to labor extend to our supply chain in the U.S., leading to fewer trucks on the road and challenges in our third-party warehouses, which results in lower service levels at higher costs. Supply chain difficulties also extend to our export activities. There is a shortage of containers and vessels, although conditions appear to be improving, it remains difficult to find vessels to get our products to market, due in part to COVID-related port closures. When it comes to the inflationary pressures related to input costs like transportation, warehousing, and packaging, we have deployed multiple phases of price increases in the U.S. to mitigate the impact, with a right to further pass through additional increases as required. Cost recovery initiatives have also been successfully implemented in Canada, the U.K., and Australia. Keep in mind that it can take anywhere from 60 to 90 days for these increases to take effect. We discussed the negative U.S. market factors in Q1. We're seeing a more positive trend in the last few weeks in relation to the spread, the block barrel relationship, and block pricing. Conditions continue to be challenging in both the U.K. and Australia, we're making progress. In the U.K., retail remains strong, at levels below last year's pantry loading conditions. We had challenges relative to our ingredients business in previous quarters in relation to an exclusive arrangement that hampered our ability to diversify our customer and market mix. We have since worked diligently to reach a more flexible arrangement. In Australia, we're working through the tail end of the unfavorable export contract pricing we locked in last year. Similarly to U.S. export volumes, challenges persist on the transport side to get products from Australia to Asia Pacific. The team continues to mitigate delays and constraints where possible. We're hoping the situation improves over the coming weeks, as they're slowly reopening some of those key COVID-impacted ports. Commodity prices are on the rise, and we're seeing strong demand on both the domestic and export side. We're also moving beyond the challenges of our latest ERP implementation. From a raw material standpoint, we're continuing to leverage our three-pronged approach, sourcing milk from our patron base, third-party milk brokers, and by leveraging toll manufacturing. Shifting to our four-year Global Strategic Plan and the strides we've been making since June. I'll call out a few key initiatives per pillar during this presentation, but we have our divisional presidents with us today specifically to take your questions and to allow you to get first-hand commentary on the progress they're making in their respective divisions. We've been very busy when it comes to strengthening our core business. We entered into a long-term exclusive partnership with Hochland to expand distribution of Cathedral City into Germany, and we continue to increase distribution in North America as well. In the U.S., we have plans to maximize our string cheese assets to support our market-leading Frigo Cheese Heads brand. Also in the U.S., our new filling production line is now up and running, and we're manufacturing aseptic nutritional products sold in the retail market under a customer's well-known brand. Exciting news coming out of Canada as well this week. As part of our e-commerce strategy, we launched an innovative B2C platform called Nibbl. This platform will offer and showcase our specialty cheese products in a new and convenient way. When it comes to our accelerating product innovation pillar, we welcomed U.K.-based Bute Island Foods. We intend to leverage the team's wealth of knowledge in dairy alternative cheese to drive innovation and support our aspirations of growing into a leadership position in this space. We also expect our mozzarella alternative to be available in the U.S. later this calendar year under the Vitalite brand, and in Canada by early calendar 2022. On the dairy alternative beverage side, we are focused on supporting existing players through co-packing arrangements, and we continue to secure new business across North America. Relative to increasing the value of our ingredients portfolio, the Bio riginal acquisition allows us to move up the value chain with new production capabilities and value-added ingredients, such as goat WPC 55 and organic lactose. As the largest goat cheese manufacturer in North America, we now have the ability to have a strong vertical integration. Our optimizing and enhancing operations strategic pillar is expected to drive the largest contribution to growth throughout the plan. In Canada, the PoCo plant is now open, and fluid dairy production started last month, as you saw in the plant overview video. Plant-based beverage production is still slated to begin later this fall. Over in the U.S., the execution of our cheese network optimization plan is well underway. In Australia, we're accelerating continuous improvement projects aimed at maximizing our yield per liter of milk processed, with a specific focus on the recovery of byproducts. We have create enablers to fuel investments. The outlook for our ERP rollout remains unchanged. Once the implementation is complete within the legacy SCUSA business, we should see more synergies as our merged U.S. platform starts operating under a single system. Before I pass it on to Max, I am very excited to share that Leanne Cutts is officially joining our team this week in the role of President and Chief Operating Officer for International and Europe. She brings a different set of skills to the table, with extensive international and marketing experience, all of which should complement and strengthen the expertise of our leadership group. Over to you, Max. Thanks, Kai. As you know, with our Global Strategic Plan, we're targeting a high single-digit adjusted EBITDA CAGR over the four-year period to reach CAD 2.125 billion by the end of fiscal 2025. Approximately 44% higher than where we ended fiscal 2021. We've been very clear in saying that our progress may not be linear and that we expect the benefits to be more significant in the second half, once our planned operational efficiencies kick in. For the four-year period of our plan, our teams, our initiative, and our efforts calls for growth every year. While we continue to push for growth in year one, there's no getting around the fact that it'll be tough to get there with the current market condition we're seeing, and that have all been over the news, particularly due to the labor factor. The miss we had in Q1 and the slower than anticipated recovery in Q2 make it very challenging to show growth this fiscal year. The recovery we expected in Q2 is taking more time to materialize. That said, we remain focused on deploying our initiative as planned and controlling all of the elements within our power. Most importantly, despite current condition, we're still very bullish about our ability to achieve our four-year target. I'll let Lino conclude a few thoughts on M&A. Thanks, Max. Since our IPO in 1997, we've invested over CAD 9 billion to complete 36 acquisitions, each with their own strategic rationale, be it to enter a new market increase production capacity, complement our product offering with well-known brands, or simply to gain expertise in a niche product, just to name a few. Focusing on the last few months specifically, we've been quite active materializing strategic acquisitions that will serve as accelerators to our Global Strategic Plan. The first two transactions that came to fruition in May were Bute Island Foods and the Reedsburg facility. It's important to remember that both these businesses were considered in the development of our Global Strategic Plan. Therefore, their expected contributions are embedded in our organic growth targets. In July, we welcomed U.K.-based Wensleydale Dairy Products, and we followed this up with the acquisition of Carolina Aseptic and Carolina Dairy, formerly operated by AmeriQual, earlier this month. By complementing our network in the U.S. and bringing new innovative capacity and capabilities in-house, these latest businesses will expand our presence in attractive and growing market segments, including aseptic formats, nutritional beverages, and dairy snacking through long-term strategic customer partnerships. The incremental post-acquisition profitability we expect to derive over time through organic growth for these businesses will contribute to strengthening our core business. Looking ahead, we still have the appetite and financial agility to pursue additional accretive acquisitions, and our pipeline remains full. We're evaluating all types of files at the moment, some small and some large. Our areas of focus include cheese, value-added ingredients, and products for the retail segment in the U.S. We could also have an interest in dairy alternative assets, provided there is a strategic fit and they are under the right conditions. From a geographical standpoint, our regions of interest include the U.S. and Europe, as both these regions offer plentiful opportunities for further synergies with our current operations. Latin America and Oceania also represent interesting avenues. Ultimately, we're positioning ourselves to be where the raw material is, with access to talent and where there is the best infrastructure to produce the highest quality product at the lowest cost. On that note, we'll take a short 5-minute break, and then we invite you to transfer to Webex if you wish to participate in the interactive Q&A period. Instructions are now on your screen, and we've also included the direct link in the chat. We look forward to taking your questions. Welcome back, everyone. The rest of our time today until 12:00 P.M. Eastern Time will be focused on answering your questions. We want this session to be as interactive as possible, but we also want to make sure everything runs smoothly. There's just a few housekeeping items to cover before we dive in. We ask all participants to stay muted with cameras off, except when called upon to speak. Questions can be submitted in writing via the chat, or you can use the Raise Your Hand function to ask your question and interact with us live on camera. To raise your hand, click on the Participants button and hover over your name. You should see an icon that looks like a hand. Once you've asked your question, please lower your hand by clicking on the icon again, since this doesn't happen automatically. I will act as moderator and read out the written questions. For live questions, please wait for my cue before unmuting and activating your camera. For those joining over the phone, I won't be able to see your name or if you have a question, but I'll check in with you periodically. In the interest of fairness, please limit yourself to two questions at most and stay concise. Questions can be directed to any member of our team. Some of them are joining us remotely with questionable bandwidth, so you may not see them on screen at all times, but we promise they're there. Lastly, for those who have chosen to remain on the previous webcast platform, please note that you are in a listen-only mode. You must join the Webex meeting if you wish to ask a question. All right, we did already get a question in from Irene. "Sounds like FY 2022 will be more challenging. Results likely below expectations three to six months ago. Are you still confident in your FY 2025 target? Thank you, Irene, for that question. I wish we would've been live. It would've been a much more interactive process. It will, but it's just because she had submitted it during the previous chat. Okay. I wanted to make sure. If you want to open your camera, Irene, please do. Yes, Irene, so that we can have a more interactive discussion relative to your question. There we go. Irene. Thank you for the question. I will tell you from a high-level perspective, we're extremely optimistic about our fiscal 2025 targets. We knew that a lot of the heavy lifting would be in year one of our Strat Plan. That means that the contracts given to our suppliers for equipment and installation would happen in year one, which by the way, continues to happen despite COVID. We also did expect that access to labor, access to talent would be more plentiful, especially in the U.S., than what we're uncovering here in September. Our expectation was that once the kids go back to school, and once the subsidy programs from the government would subside, that there would be somewhat of a rush of people trying to find employment. That is unfortunately not happening. The lack of labor is creating some difficulty, number one, in operations in terms of us being able to fill the orders that we have. It is not a question of demand not being there. It is a question of not having the talent to run all of our facilities at the highest output levels, which means, unfortunately, that our order fill rates have dropped from our historical levels of 99.8% down to about 91% in the U.S. These are challenges that the U.S. business is faced with. To compound that challenge, we're also having difficulty finding our third-party logistics providers to pick up our products at the docks once we manufacture them and deliver them on time to our customers. This is something that the entire U.S. consumer goods industry is facing, not exclusive to Saputo. We thought that as talent comes back to their facilities and their routes, that transport would have eased up. It hasn't. Then, of course, to make matters worse, when we don't deliver on time, or at all to our customers, then we're faced, in some instances, with some penalties, which we're trying to negotiate with our customers. That is what we're seeing in the short term. The short term, as far as I'm concerned, is a hump that we have to get over. This whole pandemic opening up of the economies, I believe is something that will be short term in nature. Perhaps might last another 12 months. We're hopeful that'll be sooner than that. It doesn't take away from the value of the strat plan that we've put together. I'll point to a little bit of what we've accomplished in Canada with the infrastructure improvements with PoCo, with the increased capacity in Saint Leonard, with the increased capacity in Saskatoon. The ability for us to right-size the network in Canada today is paying dividends for us. That's one of the reasons why our Canadian platform isn't as impacted as some of the other geographies that we operate in. I believe that the four-year strat plan will derive those same benefits in the U.S. as what we're seeing in Canada and in other geographies where there is a rollout of CapEx allocation to increase our efficiencies and increase our ability to produce a higher quality product at an even lower cost. Again, the short and simple answer about our level of optimism for the strat plan, the increase in EBITDA, the 44% increase in EBITDA, is unwavering. We believe that we will deliver on that number after we've executed the projects and the plans that are really fundamental and really in Saputo's nature and character to be able to deliver. Max, maybe some comments on that? Yes. Relative to the CAD 654 million, just want to put in perspective a couple of big pieces. We talked about 30% of that number being revenue generated. This is volume-based. This is our growth on a per capita consumption that we want to beat year after year. When you do, let's say, a 4% on where we were in FY 2021, that's going to bring you to about CAD 17 billion in sales. CAD 17 billion, that's CAD 2 billion more. The EBITDA of 30%, this is what it comes from, and this, let's say, you could quantify it at CAD 200 million kind of thing. That leaves us with CAD 454 million to achieve. The second bucket is relative to our optimization of our operation, which is going to be close to half of that CAD 450 million. Probably in the range of CAD 45 million. That's another CAD 200 million relative to the operation optimization projects that we have, which we know the biggest piece is in the U.S. Once we remove the piece from a revenue perspective and the optimization of our operation, that leaves us with sort of a CAD 250 million, which we quantify a similar or more or less similar contribution for the other pillars that we have, which is the strengthening of our core business, bringing value to our ingredient portfolio, innovation, as well as the enabler, and the enabler being the lowest contributor. Our ability to generate that CAD 654 million big piece comes from the volumes that we were looking to grow above per capita consumption and the operation optimization initiatives. Thank you. That's all very helpful. Just a couple of follow-up questions, if I may. I guess first of all, the question is relative to the competitive set? Do you think that you have been equally, more, or less impacted by what's going on? Have others seen service levels fall? Are you sustaining or losing market share, do you think? That would be the first follow-up. The second one would be, if this goes on for another 12 months, are you still confident in that CAD 2.154 billion? Yeah. Let me answer the second question first. Even if this goes on for the next 12 months, we're still very confident in the number because we know that the foundations that we're building in the U.S. are going to drive profitability for us very much like what we've seen in Canada. It's a question of execution, not a question of hope. I'm very optimistic about our U.S. team being able to execute effectively. It's stuff that we've done before. Today, the U.S. team has the CapEx allocation to be able to invest, similarly to what Canada has done, but at much larger scale. Yes, whether this opening up of the economy shortfall in labor continues for 12 months or shorter, we still believe in our Global Strategic Plan for 2025. Going to your first question, I'll ask Lyne to speak in more detail relative to what she's seeing in the competitive landscape, and perhaps maybe talk about our 91% order fill rates, how that fares relative to what the industry is delivering on. Great morning. Good morning, Irene. I would say a couple of things. One, the pandemic does not discriminate, so when we talk about service levels, certainly, although we're not proud of what we are seeing now, we do hear from the industry that our competitors are going through similar challenges. Staffing and supply chain challenges, for the most part, are what we're all faced with in the U.S. I would say from that perspective, we're competing with ourselves here because we want to go back to our historic levels, and so we want to make sure that we provide those great levels, and we're focusing on improving that. From a service level perspective, to answer your question, I would say we're hearing that our competitors are having similar challenges. From a market share perspective, in the U.S., we're very proud that we are maintaining and slightly growing in some areas. Despite the challenges and the ebbs and flows of the pandemic, we are continuing to maintain and slightly grow our share. That's great news as well. Yeah. Maybe, Lyne, if you could, I'm going to ask a question segueing on Irene's point. If we are seeing growth in certain areas, why are we not seeing equal profitability growth? I'm sure that's on the minds of a lot of our investors as well. Maybe just talk about, beyond the labor, just some of the other headwinds we're facing from a cost perspective. Perfect. I would say, so specific to the U.S., there are a couple of areas that we are impacted more so. One, I would say around market or dairy commodities. That is definitely an area that has been putting some pressures on us, and that's somewhat out of our control. Supply chain costs and availability has definitely put a lot of pressure on us. Because of that, and because we're striving to hit our service levels, we actually have incurred costs to redistribute or resupply in different parts of the country. That's added some cost to us. We've seen inflationary pressures from raw materials like packaging and stuff like that. Those are things that are putting a tremendous amount of pressure on our bottom line. We are continuing to focus on the things that we can control, and we're continuing to focus on staffing levels, because those are all things that we are trying to do to offset the pressures that we're seeing on our costs. Irene, if you don't mind, I'm going to ask Kai to give a little bit of the similar overview for the rest of the geographies, because we focused a lot, in your answer, on the U.S. There are other challenges and slash opportunities that we're seeing in the other geographies, which I'd like Kai to speak to. Thanks, Lino. When you look at the other geographies, we have to talk about food service, first of all, as the Delta variant takes hold, and obviously it's impacted a lot of the different markets. The great thing for us in the U.K., starting there, is that obviously it's a predominantly retail business, so we're kind of shielded from that volatility that's being experienced there from a food service perspective. On the ingredient side, we've talked about in previous calls around the recovery in our ingredients business. The great news is that our first-pass quality is right up there, close to 100%. We're able to meet the specs required by our infant formula partners. We are seeing a recovery from a volume standpoint, albeit at the expense of lower prices. When we flip down to Australia, again, food service is a much smaller percentage of our overall business there. Retail continues to be very strong for us there. Export, as we've called out, we've worked through the old contracted volumes, and we have kind of overcome those hiccups in relation to our ERP implementation, the container shortage availability, that situation is improving now with the third largest port in the world and outside of Shanghai slowly reopening. We're seeing increased velocity on the container side there, and those are at the new contracted pricing, which is in line with the GDT pricing, which is much more favorable than what we had tail end of last calendar year. Last division on the international side would be Argentina. Food service has been impacted, but the great thing about that platform is that we have a lot of flexibility in terms of the product portfolio, but also in terms of where that milk goes. For Australia, for Argentina, that have a big export component to their business, their focus has always been on generating the highest variable rate of return per liter of milk. For Argentina, they are the largest exporter. We are the largest exporter in that country, so we have the flexibility to take that milk and produce products for key markets like Russia, key markets like Brazil, Chile, and so on. That is in a nutshell on the international side. Perhaps Frank can talk to the Canadian landscape. Sure can. A couple of things in terms of we're seeing similar inflationary pressures as the rest of the world. We did take pretty decisive and progressive action to go to market with a price increase. We started conditioning the marketplace in late June that it was coming. We did take an out of cycle rotation to cover our inflationary pressures, and that starts to kick in September, October timeframe. We've also been very clear to the marketplace around we reserve the right to come back if that pressure doesn't subside. These are increases that are out of our normal February price increase rotation. On the service level front, similar challenges, although we're a couple of percentage points off our 99.5% historical fill rate, in and around the 96%, 97%. Similar challenges with access to labor. There's a couple things we've done that I guess are different and are helping us a little bit in the situation. We've made some tough choices around high complexity, low margin SKUs and taken them out of the portfolio and focused more on executing the ones that have a greater volume, greater profitability attached to them. The other thing I'll call out is our labor challenge is different depending on the region of the country we're talking about. Where we're not having a challenge with labor, we've actually picked up people out of one region and moved them to another, and have done some cross-training and have really focused on getting product out the door in regions where there's a labor challenge and high demand. Those are just some of the examples around where we're trying to be very nimble and creative about how we continue to serve the customer. Thank you. All right. We have Mark Petrie that would like to ask a question. Go ahead, Mark. Yeah, good morning. I guess I just wanted to ask about the U.S. segment mostly. It's displayed a lot of volatility in its margin rate even before the pandemic, if we take a step back over maybe looking at the last five years. Some of that obviously is explained by what you disclose as market factors, but there's still substantial swing from period to period even when the volumes are pretty stable or growing slightly. Can you just maybe talk about that dynamic a little bit more? Are there a lot of commodity factors that are not included in how you calculate market factors? What else would help explain that volatility, again, pre-pandemic? Thanks for the question, Mark. It's Carl. Keep in mind that, and we've shared this with the markets before, but the ingredients side of the business has had a volatile number of years prior to the pandemic, and that really has a lot to do with sort of the commoditization of some of the products that we manufactured in our ingredient side. Things like WPC80, lactose, sweet whey powder and so forth. I'll say that really the WPC80, when we first got into it, was a value-added ingredient. Today's standard WPC80 is highly commoditized, and we saw that impact our results pre-pandemic. It's also one of the reasons why in our strat plan moving forward, we have a pillar that is designed and focused on adding value to our ingredients, investing in areas where products are going to, specific to customer needs. There is a heavy emphasis both in capital as well as resources aimed at bringing back the value and the contribution that the ingredient side, the whey side of our business brings to the U.S. Given the uncertainty in those sort of ingredient markets and the volatility there and the sort of opaqueness of pricing and all that kind of stuff, do you think that as you take these steps, that will reduce the volatility in your profitability, or do you think it will potentially add? Are there other steps you can take either with regard to customer mix or channel mix or maybe hedging to reduce volatility over the course of time? They're all great questions, Mark. I won't speculate on what the markets will be. We are taking steps to ensure that the portfolio of products that we have is more robust, that we better understand the end users as far as where they're heading. By end users, that might mean specifically investing in resources, being more connected to the end user. A lot of what it is we do today is being an ingredients provider. Then you go back to the basics and you take a look at what it is we offer, we have an incredible amount of raw material. We're in a position of strength when it comes to all the raw materials we have in whey. It's a question of taking that and capitalizing on that opportunity. Whether it's technology, whether it's the right partnerships, whether it's investing. By partnerships, it could be about a co-manufacturing contract, much like we do in way of our cheese and/or fluid businesses, as well as being better connected with the end user. All of that is part of the investments and the focus that we're putting into our business today. In fact, it goes beyond that in the U.S. as well. I'll ask Max to add a bit more color there as well. Yeah. Hi, Mark. Relative to pre-pandemic impact to our U.S. margin, I will point you maybe to two specific elements. One relative to the distribution and logistics freight that following some regulation that change, we've been quite vocal as to the impact of those regulation, and costs onto our business, maybe two or three years ago. That's one. The other one, also relative to our Dairy Foods ERP implementation, where we've struggled at some point, and we had to pause, and that creates some additional challenge to our operation. Just to complement what before the pandemic, those were elements to be in the mix in terms of our margin impact. Okay. Helpful. Sorry, one last piece maybe, Mark. We did communicate this in the past. The changes in the Federal Milk Marketing Order, so the pricing of milk in California versus the rest of the country, that was a material change for us. We've navigated through that. That was all pre-pandemic and created a lot of volatility in the price of milk, specifically, for Saputo Cheese USA. Could I just ask on a slightly separate topic, although maybe somewhat connected, could you expand on the potential of SKU reduction? How far are you in that process? Is that a U.S.-specific initiative, or is it other regions, and what channels? Do you think that presents sort of revenue customer risk, or is it simply about efficiency gains? Thanks. Thanks, Mark. I'll speak to the U.S. We are well down the path of SKU reduction and simplification. We are about 15%-20% in our SKU reductions. We're making great progress. We're looking at formats, we're looking at how we can be more efficient with the volumes and our throughput in our plants. Right now, the team is down the road. We're very far down this road, actually. It's helping us. We're starting to see some benefits of that to help us. In the last few weeks, we are starting to see some improvements in our numbers on service levels. Actually, we were at literal over 93 yesterday, we're seeing some good impacts, and that's really driven by that. It's helping us with efficiencies, making sure we're utilizing the right products in the right place for our customers. Definitely, we're down that road in the U.S., and perhaps Frank, if you want to talk to Canada? Yep. Sure can. We've gone through a couple of rounds of SKU rationalization over the past, call it 6-12 months. We run an integrated business planning process, which we actually review the velocity, margin, waste, complexity on a quarterly basis and come up with a list of SKUs that really don't meet hurdle rates, and then we look to actively remove them from the portfolio. Typically, it doesn't have a very material impact to the revenue because they're low volume, low margin, but it does have a very meaningful impact to overall complexity reduction, which is allowing us to get more out of our plants today, despite some of the labor challenges you've been hearing about most of the morning. It's an active process and we expect it's going to continue to be an active process as we move forward. Mark, I would add that obviously in the other divisions, we also follow the same rigor, but the greatest opportunities are going to lie in both the U.S. and Canadian divisions when it comes to SKU rationalization. Is that because it's mostly in food service, or what channel are these mostly in? It's across the board. We're looking at it across all channels of business, all segments for us. Same in Canada, typically, this may sound a bit odd, but the customer's actually open-minded to the conversation because they know that reduction in complexity means they get ultimately a better service level in a very challenging environment. They're not tough sells to get executed in the marketplace, Mark. Okay. Thank you very much. All right, up next we have Vishal Shreedhar. Vishal, you can go ahead and activate your camera if you'd like. Hi. Thanks for taking my question and hosting this information session. In the past, management used to provide context, and they still do on the acquisition strategy, indicating strategic fit was the first thing that it looked at and valuation multiple an important factor, but not necessarily the deciding factor. If investors look at acquisition contribution, or we try to look at acquisition contribution, it doesn't seem to be what it was once upon a time. I am wondering if management's looking at acquisitions differently, and when you make the new acquisitions, if we should see the contribution kick in like we did once upon a time, with the synergies coming in and those contributing significantly. Yeah. I'll ask Martin to talk about our strategic rationale for acquisitions, and then I'll have Max talk a little bit about the uplift on EBITDA following acquisitions. All right. Thanks. Hi, Vishal. Well, from a strategy perspective, the M&A strategy as an approach is the same that it has been over the years for us. We remain very selective and focused, in our approach. We've got a very thorough due diligence process involving the different divisions, having cross-functional teams with the right corporate service involved in due diligence and building the plan from the ground up. That's the basis of the plan we're building for each acquisition. That's on the basis on which we assign value to each of the projects that we're looking at. In terms of overall strategy, as Lino mentioned in its business update, for us it's very clear, the geographies are still very clear. We look at expanding in the core geographies in which we currently operate in. We also have interest in growing in certain other geographies in Latin America and Oceania, furthermore in Europe and the U.S.A. That's also something that hasn't changed over the course of the last little while. From a core pillar perspective, we're looking, obviously to add to our cheese capabilities, looking to add value to our ingredient portfolio. The recent Reedsburg acquisition is one great example of that, where we're actually looking at leveraging some of the goat whey byproduct that we generate through our business and add value to those. This is still very much the case. We're looking also at dairy alternative selectively. In broad strokes, this is what we're looking at. From a contribution from past acquisition, I think I'll turn it over to Max, who's going to be better able to answer that part. Okay. Hi, Vishal. Yes, aside from the strategic value of all acquisition, whether it's big or small, EBITDA attracting higher margin, obviously when we're looking at small acquisition, there's a component of capital avoidance that has to be part of the mix. Sometimes some acquisition were made, or has been made to avoid us building our own infrastructure. Obviously, when we're talking small acquisition, the impact on the earnings per share perspective tends to be minimal. Whereby when we look at bigger acquisition, obviously strategic value is there, is continue part of the analysis, the EBITDA generating higher margin, of course, but then there's the EPS accretion that we would be looking at. Dairy Crest, for instance, would be a great example on that front. Looking at EPS growth, mid to high single digit type of expectation on EPS, when we're talking about smaller acquisition, there's various elements to complement the base business that we have, and there's the capital avoidance as well. Okay, appreciated. Just to follow up on that, when we're looking at the return on capital, and the pressure that we've seen over the last few years, would that be due to the acquisition and the higher multiples being paid for acquisitions, or is that more of some of the other challenges that you've highlighted, the market shifts in whey and so on and so forth? From an acquisition perspective, our hurdle rate hasn't changed, so we're still using internal hurdle rates that are the same. I don't think it comes from the higher multiples that we've observed in selective case. In other cases, the acquisition multiples that we've paid are very much in line with past acquisition multiples. Of course, if we're looking at Tier 1 retail branded business, you are commanding higher multiples in the current market. You look at some of the recent acquisitions we've made, those multiples were really very much in line with the historical multiples that we have paid, but the hurdle rates remain the same. The other factor is the cost of capital that has decreased so much. If you look, for instance, at our theoretical WACC today, that we don't use as a metric when we do acquisition, but it's literally below 6%. I think all those factors, I don't think the decrease in return has come from higher multiples we've paid in the market. Maybe Max you want to provide more color? I definitely agree with you, Martin. I would say some of the performance that we've seen the last few years impacted our return on capital, return on equity, all those ratio, this is the foundation of why we came up with the organic strat plan over the next four years to build up or bring back to the level that would be more in line with our expectation. Okay. Maybe just another one here, and you've been asked similar questions kind of with a similar flavor, but on the volume growth side, if you look at Saputo's history, most of the growth that has come from acquisitions in terms of the volumes and organic growth that, call it maybe market over the long term. When you look at the volume growth, your competitors are the same, sometimes irrational competitors, sometimes some of these co-ops, they don't make decisions based on their financial discipline in the interim. How comfortable do you feel with these volume growth numbers, given that the past really hasn't shown it and the competition set is what it is? Yeah. Vishal, the activity that you speak to in terms of competitive natures, that's really more what we've seen in Canada and in the United States to a lesser degree. In Argentina, we have been growing well beyond per capita consumption because we have access to the raw material, and we have the ability to be able to sell that not just domestically, but also into the international markets. The same thing could be said for our U.K. platform. We embarked on a project where we're increasing the plant's capacity and perhaps maybe Tom can speak to it a little bit in more detail as to where we are on that journey. When we first acquired the business, we were processing about 500 million liters of milk. Today, we're well beyond that, and the growth has been in exceedance of where the markets are going. I'll speak to Australia. The real challenging thing in Australia is access to raw material, not so much access to markets because 50% of its volume is sold domestically, which we're doing quite well in. The other 50% is sold internationally, we don't have access to the raw material because of the decline in production just in that country from 11 billion liters of milk down to probably something like 8.5 or 9 billion liters of milk. What you're referring to in terms of market competition, is more related to Canada, United States. I will ask Lyne and Frank to speak to that in a minute. I'll ask Tom to talk a bit about our evolution in the U.K. since we've acquired the business. Okay. Thanks, Lino. Morning, Vishal. Lino described it well. We're two years into that journey with three or four more to go. There's good milk availability, within an existing type pool. We can match the whey growth to the cheese growth, so we get that return as well. Most importantly, I think is finding markets for the product. Our sort of market leading brand in the U.K. is, most of our sales are U.K. based, but that's based on offering a point of difference to consumers. I think that's even more true in some of the other markets we're now starting to get into, whether that be, the U.S. with the help from Lyne's team or the new deal with Hochland. For us, it's going back to that value-added branded model, and I think by pivoting from a very U.K.-centric business, to some of those other markets where cheddar is sold, we think we can offer a point of difference and drive organic growth. I would agree with what Lino said. I think we do see those organic growth opportunities, certainly in Cathedral City. Yeah. Since we're talking division by division, I'll ask the other presidents to talk about as well, competitive environment, access to raw material. Why don't we start, continue on with Frank in Canada. Perfect. Thank you. In terms of access to raw material, that's historically not been an issue in Canada. There's a plentiful supply of milk. As a business, we've been very aggressive in expanding the focus on our brands and, I'm pleased to say in many of our cheese platforms, we're seeing market share growth and we're expecting that to continue. I guess just from an overall strategic perspective, the piece I'm most excited and most encouraged about is, if you look at our strat plan over the next two years, a lot of that profit expansion and enhancement comes from the inside controllable. Really optimizing our operation, whether it's our plant manufacturing or our supply chain network. There's still plenty of opportunities to add. I'd say less reliant on the market and revenue, more reliant on inside the house execution, which we've got an exceptional track record of having executed in the past. Many of the investments that we shared in the earlier section of the presentation on the 3 plant expansions, those are starting to come to fruition now and really start the profit expansion moving forward. I'm excited about where we're pacing from an overall profitability outlook standpoint in Canada, despite some very challenging market conditions. We'll take it over to the U.S., in terms of market competition, access to raw material. The volume and the demand remain strong in the U.S. That's a great thing. We have access to milk, and so no challenges there either, just like in Canada. Where we are seeing some variability is in our portfolio, in our segment portfolio, be it food service, retail, et cetera. The portfolio mix varies by segment. I would say we are focusing on the categories right now that obviously drive efficiencies, given the challenges that we've talked about prior, from a labor perspective and from a supply chain perspective. We're focusing on categories where we actually can have output and can deliver to our customers. Efficiencies in production is what we're looking for, obviously, and we're doing that to optimize our profitability as well. That's really the focus in the U.S. Yeah. Since we're on a trend here going division by division, I'll ask Marcelo just to talk about access to raw material and how we are structured as a business to be able to be the home for many farmers. Our balance sheet is solid. Our checks are always clearing at the bank, and so we provide some certainty to dairy farmers, and that's really been a blessing to the farming community, and has allowed us to increase our capacity to be able to collect milk and process. Marcelo? If you could put your camera on, please, Marcelo. Thank you. Yes. Thank you, Lino. You did a very good summary that in Argentina is open the market. Yes. We are working with time of payment and the farmers has a good relation with Saputo due to what we did in the 18 years that we are here. The Argentina market is open. Yes, you can deal with the farmers. Our growth in this year was a growth like organic growth. Remember that we have 1.2 million liters when Saputo bought the company, and now we are 3 times, yes, this volume. If possible, and I think that we continue doing the same in the next years. Yes. In the last years, we are growing more than the Argentina production, except 1 year that we have weather condition in our area, but again, we can continue growing like this. That is the target that we have. Yeah. Thank you, Marcelo, and we'll finish it off with Richard in Australia. Maybe just give us a little bit of insight as to what you're seeing relative to milk collection and organic growth there, please. Yeah, thanks, Lino, as you mentioned before, Lino, milk has declined over the years, if you look at the past five years in the Australian industry, the milk pool has gone from about 9.5 billion liters down to 8.5 billion liters over that period of time. It has stabilized over the last couple of years, but it is now largely fairly flat. While we did get off to a slow start to the season, due to a wet start to the season, the Dairy Australia outlook is forecasting somewhere between a 0%-2% increase for the current year. Because of this, there is very intense competition for raw milk, hence I think you may have heard before, but this is why we have a three-pronged approach with our milk supply where we target on-farm milk intake to grow that as number one. Number two, we purchase third-party milk. Number three, we continue to grow our toll manufacturing opportunities, looking for opportunities there. By having this three-pronged approach, this ensures sustainable milk supply for us going forward. Vishal, I hope that gives you a little bit of visibility as to our level of optimism to hit the volume targets that we set for ourselves in the strat plan. Irrespective of what we're seeing in different markets, I think we're finding some mitigating ways to increase per capita consumption growth by more than close to double anyways. We're still very optimistic about our plans to grow organic growth. Of course, there'll be continued growth coming through M&A activity as well. Thank you, Lino. All right. We have some questions that came in from Peter Sklar through the chat. The first one being relative to the U.S. business. He says, "Last time you spoke, you seemed to suggest that Saputo would de-emphasize the food service channel and focus on the retail channel and brand development. Is that an accurate statement, and can you provide an update on that strategy?" His second question, "The obvious hole in your global footprint is the European continent. Can you provide an update on your thinking regarding the continent? Thank you for the question. I think it's important that we look back at the U.S. market, and we're most definitely not abandoning the food service sector. What we did emphasize the last time around is that we're taking a look at our entire portfolio, in order to take some volatility out of our overall financial performance, it was important for us to also invest in the retail sector, because the retail sector does have some nuances and different pricing models. It's more of a fixed price kind of model. Therefore, if you have strong brands and you've got a product offering that appeals to the consumer base on the retail side, you have that benefit. I'll use the word natural hedge for us, but it's an investment that's required, that's why it is an important element in our multi-year plan, our strategic plan. We are going to further invest in our brands and diversifying our product portfolio. The food service sector remains a very important and a very strong component of our U.S. business. Europe, maybe, Martin, you can talk to what we're seeing? Yeah, for sure. In terms of Europe, well, Tom Atherton talked about our intentions to sell our U.K.-made cheese in some of the key markets there, including Germany. That's one way of addressing Continental Europe. Yes, when we did announce the acquisition of Dairy Crest, we made it clear that it was a platform acquisition and that we intended to grow further and look at Continental Europe, and go at it in a more meaningful way. We've looked at some opportunities there, especially in the northern part of Europe. Germany remains a very attractive market as well, where we could set our eyes to. To this day, it's been more a question of timing and opportunity, but we still have intentions to establish ourselves in Continental Europe, and M&A could certainly play a part in that. All right. Now we have a question from Michael Van Aelst. Go ahead, Michael. Hi. Thanks for doing this. I guess I wanted the first question to be very, I guess, simple and direct. It doesn't sound like you're very confident anymore in growing EBITDA this year. If that's true, why keep that as part of your strategic plan? Well, the plan is an all-inclusive plan, right? We have plan for CapEx, we have initiatives that are going on right now that's going to generate savings. We feel, despite all the challenges that we have today, our action are derived from the Strat Plan. We're all focused on those. To remove this year, I'll say, "Well, we'll start the plan next year." No, we started the plan, we're into it, and we're pushing the best we can. Is it going to be generating growth in FY 2022 vs. FY 2021? Tough call. Tough. Very tough, very difficult. Yet, we are into it. We are planning our efforts, our people, our effort into the plan. We feel that's the right way to go, and it'll position us stronger at the end of the four-year, regardless of the element that are impacting our business at this time. Are you keeping that bullet in your presentation to keep the management team motivated and pointing in the right direction and working through this year? Or do you still think there's the potential to see EBITDA growth this year? Yeah. If I look at the Strat Plan itself, it is an opportunity for all of our divisions to be on the same platform, shooting for the same goals. Despite the challenges we're seeing in the U.S. platform, that doesn't preclude any of the other divisions from seeing growth in their EBITDA, in their own geography. It's not because collectively, there might be limited opportunity for growth versus last year's EBITDA number. That doesn't mean that the other divisions cannot deliver on growth. Understand that the largest platform we operate in is the U.S., so it is going to have an impact on our collective number. Does not take away at all from our focus on our four-year Strat Plan, especially that orders have to be filled for equipment and technologies. Installations have to happen. They would happen in the early days of the Global Strategic Plan, regardless of whether we saw growth or didn't see growth or anticipate growth in any one of those geographies. You need to have a starting point. We've triggered this process. We are not going to abandon the process. The good thing is that our balance sheet is clean. We've got the financial flexibility to spend the CapEx CAD. We're not abandoning at all our ideas or our plans for creating value within our business. Okay. If the labor force does not return to normal, I'm assuming the supply chain will over time, but let's say the labor force does not return to normal. How long would it take for you to normalize your fill rates, your production, move it to alternative geographies, and normalize your margins through those actions, your price increases and whatnot, in that scenario? Because the greatest impact is in the U.S., I'm going to ask Carl and Lyne to talk about that first, and then maybe as a general comment, Kai, maybe you can speak to it as well. It is our number one priority right now, and that is stabilizing our workforce. We are very active. There are tactics that we're utilizing today, and it's not all wage-related. I don't want to get into what is or isn't driving folks to the employment market, but I'll tell you that we recognize that it's going to be tough, not just today, but in the short to medium term, and accordingly, we're taking action. Some of those actions include what Lyne referenced earlier in and around SKU rationalization, simplifying our business, focusing in on the things that are winning horses for us. Let's not forget that our multi-year plan, our STRAT plan, has a large emphasis on optimizing our network. In fact, in many ways, the reason we are not giving up on our STRAT Plan is that there's even more motivation, more justification to accelerate components of it, specifically the Network Optimization. Without getting into the details, I would even tell you that we've broadened the scope of that Network Optimization Plan. We're looking at areas where we can increase the level of automation in order to minimize some of the impacts that we're seeing. We're taking a look at geographically where we operate. Part of our plan, and I've said this before, it's becoming increasingly difficult to operate facilities in rural America, in rural areas. Just the availability of talent. That is absolutely part of our thought process and where it is we will land once we finalize our Network Optimization. There's no, I'll say, sacred cows out there. We're looking at absolutely everything and making sure that we position ourselves appropriately to supply our customer needs and demands for today and tomorrow. Yeah. I guess Kai's answer is going to be very similar, but maybe just a bit of color on the rest of the world. Sure. As I was writing notes to the response, Carl was rambling them all off, so I was crossing them off. It's good to see that our teams are aligned in terms of our thought process. I would just add that, making those tough decisions, I would stress that not only in the U.S., but we've talked about Australia, if the milk situation doesn't improve, we have to take a long, hard look at our asset footprint and look for opportunities to rationalize those assets. That's been part of our DNA throughout our history, doing more with less, simplifying our business, and it'll continue to be a big part of our game plan as we move forward. Even though you didn't give a timeline on all these objectives, whether it's to rationalize your SKUs over a certain time or bring in more automation by a certain date, but over the four-year plan, if the labor situation does not improve, can you still hit that four-year target? I'm going to ask our U.S. team members to answer that because the bulk of the benefits will come from them, and you'll hear from them their level of optimism, because I don't think you want to hear that from me. Well, I'll answer it this way. People are the backbone of our business. It is our job to make sure that we continue to attract the best talent, and retain them. Our HR team has done a phenomenal job in these difficult times. Accordingly, I'm not going to sit here and sugarcoat it. In absence of people, it's going to be tough, but we feel very confident that the plan we have in place and the initiatives that we're putting forward is a combination of reducing the, I'll say, net amount of people hours against the total kilos and total liters of product that we're going to put out to the markets. Accordingly, there are things that are, I'll use the word, people agnostic. Okay. That is about where we increase the margin and the categories that we focus in on. I'll tell you that I'm confident that over that four-year plan and what Saputo has to offer, we'll attract the people and allow us to retain them. In terms of the other divisions, as we've called out, we don't have the level of the gaps when it comes to the labor required to run our facility. The issue, the challenge is specific to the U.S. Perhaps Gaétane could provide some more color around some of our efforts and just the current situation. Good morning. Yeah, there's been a lot of effort put behind talent in the past few months and few years, I would say. If we look at from a global standpoint, we worked on our employer branding to make sure as we go to the market, that we go with a certain strategy. We also worked on our social media, to make sure that we have everything we need. Our applicant tracking system, we were losing so many people because our system was archaic. That's it. We also strengthened the team because honestly, it's an expertise that we need in this area. We didn't leave it to the generalists to go find people, so we really hired some experts. That's from a global standpoint. Now, at the division level, there was a lot of initiatives that were put in place. Some of them Kai talked about, whether it's making some adjustments. We have plants where the wages were low, and we had a plan to catch up, but we accelerated that plan to make sure we're able to attract. We worked on schedule, because as we hire new people, quite often, they're the ones who have to be available 24 hours per day, seven days a week, and so on. How can we work on that to make it more attractive for our people? We looked at other initiatives, whether it's bonus referrals or retention bonuses, attendance bonuses, partnership with the local colleges to find resources, and so on. In some areas, we even work with immigration, so we brought some immigrants to the country in some of our plants. We also work with our retirees. Some of our retirees that we keep now work on a few days a week and also are staying with the organization. Most and foremost, I think we are continuing to work on our culture because that's definitely key. Just the way we handled the COVID really made a huge difference in the organization, whether protecting our people, making sure that we bring some financial stability, or even just the way we took care of them. The other piece that I'm hoping is with the mandatory vaccination in the U.S., that's going to reduce our level of absenteeism, because 70%-80% of our cases are in the U.S., so brings a lot of absenteeism. As we go with the mandated vaccination in the U.S. as part of the executive order, that should also help at least from making sure we reduce the absenteeism and getting a higher pool of talent available or accessible to the organization. All right. Thank you. Last question is just on your plan to add value to your ingredients. I don't think you've ever told us which ingredients you were looking into specifically, but I don't know if you're willing to share that or if that's too competitive. Either way, what's your level of confidence, or how do you get confidence that by the time you put the capacity in place and get these products up and running, that others aren't doing the same thing in the background, and that your runway of these being value-added versus being commoditized doesn't get shortened? It's a good question. I won't get into all the specifics of which specific ingredients we're looking at other than maybe sharing a few things. It's both in the bovine as well as in the goat space. Again, I'm going to emphasize specifically in North America on the goat side, we, I'll use the word probably have the greatest amount of goat whey that is generated in North America. Accordingly, we are just now beginning to truly add value to those whey solids. Historically, we didn't necessarily handle the drying aspect of that, and the acquisition we recently made of the former Bio Original facility in Reedsburg is a great stepping stone. We're already materializing on our strategy and have a long runway on that front. On the bovine side of things, yes, there are a number of global competitors, including other parts of our own operations. The key remains that it's about making sure that we work with the right global partners. We have an incredible amount of waste solids that are readily available, if you like, and we're ready to make the investments that are required. A lot of this requires incremental dollars in tools and assets. We have a group of individuals that are focused on this, and we're quite confident that we're expanding our markets to that of beyond just traditional ingredients. We're looking at areas that are, whether it's sports nutrition in greater detail, whether that is infant formula or so forth, which we didn't necessarily play in the largest of scales before. Yeah, we're also seeing some ramp-up in value in other geographies, other platforms. Maybe I'll ask Tom to talk about how we're creating more value on the byproduct side, which unfortunately, coming out of the gates after the acquisition, we didn't quite materialize for reasons that preceded us. Maybe Tom, you want to go into some detail? Yes, absolutely. Thanks, Lino. There are probably two major value-added ingredient streams for us. The byproduct would be the demineralization of whey. That CapEx has all happened. I would really cross to what I said about cheese. This is about creating points of difference in global infant formula markets, right? Traceability is really important, so a dedicated milk field becomes very important. We're only making cheddar, so you get a nice, consistent stream of whey. We want to be seen as a quality premium customer in that market. The CapEx is mainly standard. That, by the way, is a barrier to entry, right? If you're going to invest in the sort of filtration required to strip the minerals out of whey, it's a big investment. You need a big cheese plant, and there's not much new investment going down. I think, for us, the challenge has been both COVID and globally, we've seen a lot of disruption in infant formula markets. We see it from all of the players in those sectors, predominantly in China. I think it has been exacerbated by government reactions there to the COVID crisis and what it's done to birth rates. If you look at most forecasts globally over the next few years, you'd see infant formula growth projections across both Africa and Latin America as well. For us, we've done all the things we can control. We're now able to contract with various partners across the globe to make sure that we're accessing the right piece of the market. Certainly, in the same way we used to get a premium for our sweet whey, we want to do exactly the same on demineralized whey. I think the other one is galactooligosaccharide, or GOS, which is this prebiotic. We're carving out really strong niches there in organic sector of the market or high concentration levels of GOS as well, and we've got some really nice contracts based on, again, that quality or doing stuff that other people maybe struggle to do. Yeah. That GOS technology, we've acquired that through some different M&A activity, specifically in the U.K. as well as in Australia, among other products. Maybe I'll have Richard in Australia talk about the other products beyond GOS, where we're creating value in an ingredient market. Thanks, Lino. Yeah, in Australia, we certainly have done a lot in the past and continue looking at commodities, how we value-add our commodities. This is specifically setting up particular recipes, and we have a lot of value add in our milk and whey powders, including our premium skim. We also look at higher value milk components. We're into products such as lactoferrin, as Lino mentioned, the galactooligosaccharides. By doing all these sorts of products, it makes them different from the standard commodities. Our focus continually, looking forward, is just adding value to these commodities that demand a premium. We also leverage the Australian origin where we can, and we're looking to further expand on these with tailor-made formulations, going forward also for our infant and adult nutrition products as well. The key is, really, we're able to leverage our global supply platform, and we've got these capabilities in all the geographies. Our customers, if you look at China as an example, are looking for assured supply and food safety, high-quality products. We're able to leverage our global supply platform. At the same time, we have some products that are in great demand but in limited supply. To Carl's earlier example around the goat whey, we have WPC 55, which is in high demand. We'll leverage that product to penetrate the customer with other products to sell some of our other more commoditized items. Yes, you can have this product, but you're also going to have to load up on all the other items. We take advantage of the global supply platform, and it's going to be a big part of our Strat Plan as we move forward. All right. Just a quick time check. We have about just under 15 minutes left. We did get a question in through the chat from Stephen Boland from Odlum Brown. Can you give a sense of the profitability of the plant-based beverage co-packing business relative to the rest of your business? How do you see the competitive environment for non-dairy cheese, particularly in retail, unfolding? What's to prevent this from becoming a very competitive category? Yeah. I'll ask Carl to get into that. I'll say that the plant-based space in way of beverage is already very competitive. Okay? We knew that when we first entered the ring. The key was to ensure that in some of the markets, specifically in North America, where your traditional fluid milk consumption is declining, was to maximize the use of our brick-and-mortar and the assets that we have. They're not 100% compatible, but very compatible in nature. We needed to make some investments, and we're satisfied with the overall EBITDA margin that we are earning from that beverage space. On the cheese side, it's a lot more, I'll say, fragmented and in development. There's a lot more, I'll say, IP, intellectual property, involved. The products that are on the market have a whole host of different performance, if you like, and characteristics, and we really feel this is an area where we can make a difference with the kind of quality of the product that we are going to bring to the market, the performance characteristics, and accordingly, the margin expectations are greater than that of beverage. Just some further color. When we look at our beverage space, we're not focusing on branded activities. It's largely toll manufacturing opportunities. We ensure, we guarantee a margin. There's overhead absorption. That's really the focus there. When we look at the dairy alternative cheese, we are currently producing a product off the coast of Scotland, putting it on a container, shipping it all the way to the U.S., and overland transportation, and we're still able to generate a nice, healthy margin. Once we have the assets on the ground to have the capacity and capability to produce plant-based cheeses in the U.S., which is our aspiration, we feel quite confident that our aspiration to become the market leader in that space is very doable within the four years. All right. Christopher Li, I see you have your hand up, so please go ahead. Hi, everyone. Can you hear me okay? Yes, Chris, we can hear you well. Sorry. Thanks for hosting this. I just have maybe a few numbers questions, if I may. With Q2 almost over, can you give us a sense of how EBITDA is trending relative to Q1 in fiscal 2022? The challenge that we've seen in Q1 remain pretty much the whole quarter right now. We're mid to late September, so we don't have cost of milk, say, in the U.S., all that, but I would tell you that the trend that we've seen in Q1 remained, for the most part, in Q2. Okay. That is helpful. Maybe related to that is obviously understanding that it will be challenging for EBITDA growth for the entire year, because first half is so tough. Is it still realistic to assume that you will see some growth in the back half of the year as some of the pricing and other initiatives start to have a more meaningful contribution in the second half of the year? Yeah, the answer is yes. When we look at the Q3 of last year, that was one of our record quarters, and that included favorable market conditions coming out of the U.S. to a record quarter of CAD 30+, CAD 34 million, if I recall. Assuming those are out of the picture, we would still believe that the initiative that undertook starts to pay in Q3. We do expect Q3 to be better than Q2 and Q1. As it relate to Q4, we are going to get into an overlap of a weak quarter. Q4 was a weak quarter. We do expect to be able to recover in that quarter as well. Okay, that's helpful. The other question I have is just conceptually, can you help us think about how we should think about the impact of lower fill rates? How does it impact your revenues and EBITDA? I'm thinking, is it as simple as if you were doing, let's say, CAD 100 worth of sales when your fill rate was close to 100%, if it's now down to 91%, then you're doing CAD 91 of sales and that's sort of the impact on sales and then there's impact on EBITDA. Is that kind of as simple as that? The variability of fuel does impact our results, it's not always one for one because not all of our volume is necessarily delivered, and therefore, a direct cost impact to us. Specifically in the U.S., we have a business that does swing from pickup, so a customer picking up the order, and us delivering and, I'll use the word, our customers will try to maximize their return as well, and when things are favorable, they'll look to go to pickup and vice versa. It's not a one for one from that perspective. Certainly the inflation that we've seen on the total logistics side, including that of the fill rates versus our more recent history, had had a negative impact. Thanks for that. My last question is, from an M&A perspective, have the current industry challenges resulted in a more favorable valuation as some of your competitors are obviously also struggling as well? Thank you. From an M&A perspective in terms of valuation, as I mentioned earlier, sizable branded retail businesses are still commanding fairly high multiples. We did see a weakening in multiples when it comes to B2B business models or, I would call it second-tier brands in the market. Yes, we're starting to see a bit of weakening in terms of the multiples on that front. Great. Thanks, everyone, and best of luck. Thanks, Chris. All right. We have about five minutes left. I know we do have one person that joined over the phone, so I just wanted to check and see maybe if ever you did have a question, you can go ahead now. No? No question? Okay. We, as I said, we have about five minutes left if anybody has any last questions. All right. If there's no further questions, then. Maybe I'll make Yep. Please. Yeah. If you don't mind, Annik, I'll make just a final statement here. The last couple of years have been really exceptional. When I think back to March of 2020, going into the pandemic, I can say that I'm extremely proud of the way that we managed the situation going into the pandemic, that we took care of our employees, as Gaétane had indicated. I think speaks to the Saputo values and the Saputo culture. We did at the time talk about putting purpose over profit in the uncertainty of a pandemic. We had no idea how deep or how wide this pandemic would be, nor did we have any visibility on how long it would last. We felt it was right for us to do the right thing Coming out of that pandemic, and by no means am I saying that we're out of the woods yet, but as the markets open up and people get back to some sort of normalcy in their lives, despite the fact that there are variants, this is proving to be more challenging than even going into the pandemic. We are approaching this with the same vigor and the same discipline as we had going into the pandemic. Now, we need to recognize that there are certain things that are within our control, and of course, we have to avoid the self-inflicted wounds. Our team is really focusing on the things that we can control and not the things that we cannot control. We need to understand that it's been a difficult environment for our employees as well, the frontline workers. Our primary focus right now is the mental health of the entire team, whether that would be the senior leadership group or the frontline workers we have in our facilities. We will take the right decisions. That doesn't mean that we're giving up hope in terms of driving profitability for ourselves. I think the Strat Plan is only further strengthening our resolve and our optimism that we are building solid foundations for generations to come. The markets are turbulent and the future is uncertain, I feel very good about the certainty and the value that we are creating for our stakeholders, which are our employees, our customers, and our shareholders. I just wanted to end on that note with a little bit of optimism that the sun will come out, and we will all feel much better about ourselves and the results and the value that we will be generating in short order. Thanks, Lino, and thanks again for taking part in today's event. We will be sending a post-event survey through shortly. We would appreciate and welcome any feedback. Have a great day, everyone.