Q4 2022 Superior Plus Corp Earnings Call
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Good day, and thank you for standing by and walk you through the superior plus 2022 fourth quarter and full year results conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the session.
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Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Rob Doran Vice President of capital markets. Please go ahead.
Thank you Victor good morning, everyone and welcome to Superior Pluses conference call and webcast to review.
Our 2020 to annual and fourth quarter results.
On the call today from severe plus our new president and CEO , Beth Summers executive VP, and CFO and Darren Hribar, Senior Vice President and Chief Legal Officer.
This morning's call Luc and Beth will begin with their prepared remarks, and then we'll open up the call for questions.
Listeners are reminded that some of the comments made today maybe forward looking in nature and are based on superior as current expectations estimates judgments projections and risks.
Further some of the information provided refers to non-GAAP measures. Please refer to superiors continuous disclosure documents available on SEDAR and Superior's website yesterday for further details dollar amounts discussed on today's call are expressed in Canadian dollars unless otherwise noted I'll now turn the call.
Over to Luke.
Well, thank you Rob and good morning, everyone. Thanks for joining the call to discuss our 2020 to a new one in the fourth quarter results I'm pleased to say, we've achieved a record fourth quarter posting adjusted EBITDAR of $182 6 million were also achieved full year adjusted EBITDA of 449.
8 million, which was $51 4 million increase in <unk>, 2021 and above the midpoint of our 2022.
Adjusted EBITDA guidance range.
I'm, so proud of the superior team and their ability to achieve these results and unprecendented year that saw challenges related to the continued public health restrictions earlier this year rising inflation and labor costs in a volatile commodity pricing environment.
Our financial and operational results are a testament of our resilient business model and the propane distribution businesses and our superior way forward strategic initiatives.
You saw US close eight acquisition in 2022 for a total of 519 million and announced a transformative acquisition of <unk>.
Propane acquisition were complete 2022 we're geographically diverse including business in U S northeast Southeast Upper Midwest, and California, and we also had one small acquisition in Ontario, Canada.
In March 2022, we closed the acquisition of Thompson, Kiva, which provide us with a platform for its country growth and attractive, California Western U S market.
The acquisitions completed in 2020 to increase our customer base and do your Western Canada, and we expect to generate significant synergies from these acquisitions consistent with our historical experience of improving propane distribution business, we acquire so.
Maybe im repeating myself, a little bit here, but over 20 deal and each of those 20 company, we were required to improve their bottom line by 25%.
So the <unk> acquisition announced in December 2022 has the complementary high growth low carbon fuels compressed natural gas renewable natural gas and hydrogen to superior extensive distribution platform.
Two the use of mobile storage of Nib, MSU, So taras delivers low cost and low carbon intensity energy alternatives towards customer surcharges I may Sue our third changeable between Sanjay RMG Argo, Jim Gibbons, our Torrance flexibility to service its customer gross north.
America as they transition away from diesel and other just to.
So tourists provides a virtual pipeline to its customer that do not have any frustrate you are in place are required backup to support the existing infrastructure.
I'm 20, 218 to 2022, so terrorists has more than doubled its adjusted EBITDA driven by continued volume and efficiency improvement and the benefits from diversification to their end user customer segments.
I'm also happy to share that <unk> is in its best month in December 'twenty, two I need to I'll need to be surpassed by another record month in January 2023.
So timing is business is starting the year well and we expect they will achieve adjusted EBITDA in the range of 140 to 150 million during the year of 2023.
Shareholders.
Voted in favor of our acquisition.
So there is no fiduciary out related to the deal and we are only awaiting regulatory approval in Canada.
In the U S. The 30 days of waiting period required under H S. Our filing has expired. So we are only waiting for the regulatory approval in Canada, but more importantly, while we are awaiting approval from the Canadian regulator, all economy benefits being generated barca retirees business is that growing.
To us.
Including the full year result of this our diverse business and our 2023 adjusted EBITDA guidance range.
185 million to 635 million because of the cash generated in the business as ours based on their terms and their arrangement agreement.
We're excited to welcome to experience certain high risk management team and to the superior family and to continue to grow the combined companies after close.
<unk> is a high growth business, we expect to generate attractive financial return, including double digit accretion to superior distributable cash flow per share and 2023.
Superior expects to achieve $1 9 billion acquisition target.
The close of <unk> acquisition, which is three years ahead of our expectation superior also expect to achieve the superior way forward EBITDA from operation target range 700 to 750 million by the end of 2024.
Which is down two years ahead of expectation.
I will now turn the call over to Beth to discuss financial results in more details. Thank you Luc and good morning, everyone. As Luc mentioned superior's fourth quarter adjusted EBITDA of $182 6 million was a record for us in the fourth quarter and was an increase of $44 million compared to the prior year quarter primary.
Due to higher EBITDA from operations, partially offset by higher corporate costs and a realized loss on foreign currency hedging contract compared to a guy a gain in the prior year quarter. The full year of 2022, adjusted EBITDA was $449 8 million, which was $51 4 million higher than the.
<unk> 2021, primarily due to an increase in EBITDA from operations, partially offset by higher corporate costs and a realized loss on foreign currency hedging contract compared to a gain in the prior year.
The fourth quarter earnings from continuing operations was 63 million, an increase of $49 2 million compared to the prior year quarter. The primary driver for the higher earnings with higher gross profit and a gain on derivatives and foreign currency translation of borrowings compared to a loss in the prior year quarter, partially offset by.
Higher SBA income taxes, and finance expense full year net loss from continuing operations of $87 9 million decreased by $105 1 million compared to the prior year, primarily due to a loss on derivatives and foreign currency translation of borrowings and higher SG&A.
Partially offset by higher gross profit lower finance expense and lower income tax expense.
Turning now to the individual business results.
U S propane adjusted EBITDA for the fourth quarter was $116 7 million, an increase of $36 8 million compared to the prior year quarter, primarily due to the impact of acquisitions completed in the current year and to a lesser extent increased prices to offset inflation and the impact of the weaker Canadian dollar.
On the translation of U S denominated transactions.
Adjusted EBITDA in 2022 for U S propane with $284 9 million, an increase of $58 7 million compared to 2021, primarily due to the impact of acquisitions completed in the current and prior year and to a lesser extent higher unit margins the impact of the weaker Canadian dollar.
On the translation of U S denominated transactions.
And the increased costs due to inflation.
Canadian propane adjusted EBITDA was $58 3 million. This was an increase of $4 7 million compared to the prior year quarter, primarily due to higher prices to offset the impact of inflation.
Full year adjusted EBITDA in 2022 for Canadian propane was $144 8 million a decrease of $15 4 million compared to 2021, primarily due to the impact of the Skus benefit recorded in the prior year lower sales of carbon offset credits and inquiry.
<unk> costs due to higher commodity prices and inflation, partially offset by higher sales volumes and unit margins.
Wholesale propane adjusted EBITDA was $22 7 million, an increase of $13 1 million compared to the prior year quarter. This was primarily due to the impact of the Kita acquisition.
Full year adjusted EBITDA in 2022 for wholesale propane with $48 7 million, an increase of $25 2 million compared to 2021.
This was primarily due to the impact of the <unk> acquisition and to a lesser extent stronger propane wholesale market fundamentals compared to the prior year.
Turning to corporate results, the adjusted EBITDA guidance and leverage.
Corporate administrative costs for the fourth quarter were $11 million, an increase of $6 4 million compared to the prior year quarter, primarily due to higher insurance costs professional fees, the impact of inflation and higher incentive plan costs.
Superior realized a loss on foreign currency hedging contract, a $4 1 million compared to a gain of $3 7 million in the prior year quarter due to lower average hedge rates relative to changes in exchange rates.
On a full year basis corporate administrative costs were $25 9 million, an increase of $1 8 million compared to 2021. This is primarily due to higher self insured insurance claims partially offset by lower incentive plan costs due to the decline in superior share price.
Compared to the prior year.
For 2022 superior realized a loss on foreign currency hedging contracts of $2 7 million this compared to a gain of $12 6 million in the prior year due to lower average hedge rates relative to changes in exchange rates.
Superior total net debt to adjusted EBITDA leverage ratio for the trailing 12 months ended December 31, 2022 with four one times.
Or just slightly above our target range of three five times to four times.
The higher average leverage ratio was primarily due to the impact of higher U S. CAD rate on U S denominated debt.
Superior is maintaining its targeted leverage ratio at three and a half to four times, while it continues to focus on integrating acquisitions and executing on the superior way forward initiatives.
Including achievement of the anticipated organic growth in this third tariff business.
Superior expects to be in the target range of three and a half to four times at the close of the acquisition of <unk> terrorists.
As Liz mentioned, we achieved our 2022 adjusted EBIT guidance range of 425 million to 465 million with adjusted EBITDA of $449 8 million coming in above the midpoint of that range.
This extends our streak of achieving the adjusted EBITDA guidance, we set each year and demonstrates the resiliency of our business.
For 2023, we're introducing our pro forma adjusted EBITDA guidance range of 585 million to 635 million based on the midpoint of the 2023 pro forma adjusted EBITDA guidance range. This is a 36% increase compared to the full year 2022.
Adjusted EBITDA of $449 8 million.
The increase was due to the expected contribution from the <unk> acquisition, the first quarter contribution from camp Keven corals acquisitions completed in 2022.
Being partially offset by the warmer weather experienced at the start of 2023.
The 2023 pro forma adjusted EBITDA guidance range includes estimated full years through terrorist adjusted EBITDA in the range of $140 million to $150 million.
This guidance assumes average weather for the remainder of 2023 to be consistent with the five year average.
As for our capital allocation priorities in 2023 and going forward. There's two terrorists acquisition presents us with a great opportunity to invest capital in high organic growth.
We will continue to evaluate M&A targets in the propane space, but growth Capex for so tourists is currently our view of the near term priority.
We also have the ability to repurchase shares through the normal course issuer bid we announced in 2022, if that opportunity generate the appropriate level of returns we're focused on creating long term shareholder value and we'll only allocate capital to our most accretive opportunities with that I'll turn the call over to Q&A.
As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
Okay.
One moment for our first question.
Our first question will come from the line of Ben Isaacson from Scotiabank. Your line is open.
Thank you very much and good morning, everyone and congrats on the quarter.
Just a question on your guidance if you strip out the.
<unk>.
The acquisition, where you've called for $140 million to $150 million of adjusted EBITDA can you talk about the change from 'twenty two to 'twenty three for the rest of the business how much of that is the normalization of volume due to weather how much of that is that growth and then how much of that is.
The realization of synergies from some of the smaller acquisitions that you've made.
Sure.
Okay.
I'm just kind of the rates are a minute.
Yeah, Yeah, Yeah, I can so what I'll do is at a high level here, just sort of call out some of the pieces.
So the first one and maybe I'll talk about it from a division perspective.
So if you think about the U S propane division.
On a year over year basis.
Basically think of it as sort of a 20% to 25.
Million increase and that's being driven by sort of the impact of the M&A. So you've got the kiva and the corals acquisition. So youre going to have Q1, but there is a weather impact or there was some headwinds from a weather perspective in January and think of that in sort of a 10.
$10 million to $15 million range. So you have a bit of an offset there as well from.
From a Canadian propane perspective, well theres going to be sort of volume and margin growth in that business and a little bit from the Nick Robert acquisition.
What you are seeing on a year over year basis, as we're expecting you would have seen in the disclosure carbon credit sales. So from a carbon credit sale perspective, we would anticipate some lower carbon credit sales moving into 2023 versus 2022 as well as there'll be no.
No wage subsidy or this huge benefit on a year over year basis. So net overall think of that as you know our neck.
Negative headwind on that business in and around a range of say around $5 million.
Those are really I'm going to say sort of the key changes that would take you in the base business from that.
'twenty two.
449 that you would've seen pulls up in that range, yes, well don't fly the rest of our business, you've got ups and downs, so they're running rates with normal weather, let's say, there's six of them.
It would be $6 20 to 625 wasn't for the start of the year with such warm weather.
Perfect and then just a follow up on that one for the for the Big acquisition that you made in December .
On your slide deck at the time you talked.
You talked about.
The virtual pipeline, providing you with Optionality can you talk about what that could look like that optionality and and can you also just remind us what the synergies are from this acquisition. Thank you.
Yeah, I'll start with the synergy and best we will talk about the.
A question on the.
No there really not much synergy.
This is a division with it.
<unk> is selling to industrial they can take the equipment and you see our CNR or orange. So theres. The flexibilities you could have different.
Liquid that goes into those.
It was trailer so which is great because you can move them their mobile.
You can use different products. Overall this is a business that has a fantastic management team.
Very good assets, it's a pretty new industry with big growth and we intend to run it totally separately.
What we like to do is spend we will doing in 2023 for sure and I hope that even after me it's always the priority because I always said in my career, probably done over 100 deals.
And there's nothing more profitable than internal growth.
So compared to acquisition, we make acquisition and the <unk>.
Let's say in the eight multiple and after we've done our superior execution, we get down to six.
It's worthwhile and it is good but when you look at the internal growth a better return than that.
Grid business will be run totally separately same management team and we're there to help and support them in their growth so not much synergy in that regard.
Great. Thank you, Brian Freeman option.
Yeah, just to answer the Optionality portion of the question are.
Are you referring to the.
Optionality to the customer and the ability to move to a lower carbon fuels using the virtual pipeline where.
Primarily they would be using distillate is now or are you talking about it from a capital allocation perspective in the business.
The first one the first one oh, okay, yeah, so I mean fundamentally where.
The virtual pipeline provides that lower carbon options. So we're in particular with diesel being used for generating energy et cetera. What it does is it allows the customer to now use either renewable natural gas in the instances where that's available.
Sure.
Or natural gas.
Which is lower carbon intensity than diesel which is typically what it's replacing and then on top of that there's also opportunities from a hydrogen perspective as well as we go forward.
Well if there is anything but thank you sound like you want Im happy to answer Okay. Thank you.
One moment for our next question.
And our next question comes from the line of Gary Ho from discharge desk Jardine's capital markets. Your line is open.
Thanks, and good morning, maybe more of a high level question just on the CEO announcement, the wording from the press release identified internal growth operational improvement and executing accretive tuck in acquisitions. So it feels like the larger platform type deals, we're not mentioned and I know you've completed several larger ones.
Recently, including Securities.
Reading into that correctly strategy will be more inward focused organic growth and smaller tuck ins that that makes sense.
I think for the short term.
Makes sense, because we want to allocate more of the overall capital two third terrace.
And then we still intend to do some small tuck him to touch him up.
Talked earlier about a turn we buy the small tuck in their own six seven would be the high number that we would pay and there is often the return to our more than 25% improvement in more in the 30 to 35 range of improvement of the.
Small tuck in so we intend to do small tuck in 2023, and then terrace more capital for that internal growth opportunity.
What happens after that.
Good way to.
If you look at 'twenty, three or 'twenty four 'twenty five.
On the question of four time leverage we don't want to go over that so we'll be able to of course, there is a lot of opportunity in the propane and the.
Days and some in Canada.
We intend to continue to do that but it always thinking and conservation what sort of leverage ratio. So I can tell you more specifically 23 just days after that remains to be seen but yes with them in time to continue to do propane acquisition.
We're really creative as well.
Okay, maybe just follow on to that to make sure I understand so outside of the growth Capex essentially slowing down M&A may not lead to ability to kind of pay down debt quicker is that an increased emphasis grips.
Okay.
Oh, Yeah, I mean, I think we'll always look at it and make a decision on how we want to allocate capital. So it drives the highest shareholder returns and the reality is there'll be times when it makes sense to pay down debt.
Net overall.
I think we're at Luke's comments coming from on the 2023 is when you look at it as we've sort of discussed we're towards the top end.
All of our three five to four times so in looking at all of the financial metrics.
It just we have to be more prudent and focused on where we're going to allocate that capital as you move out and as the synergies are delivered any M&A transactions that we've completed and they start rolling through it frees up more free cash.
The organic growth delivers more free cash there is more room to look at more and more potential acquisitions or frankly more potential internal in our organic growth as I said before we'll always look at it and allocate the capital to the highest returns, but as you start moving out in the future year as the business as always.
And we've talked about as those acquisitions are fully integrated and the synergies realized it we very quickly de lever the business. So it provides that opportunity to continue to grow or allocate that capital either to internal growth to M&A transactions to potentially share buybacks.
Or frankly, reducing debt.
Okay.
And then just one more question just on the can.
Can you give us an update on the closing of the transaction, especially in the Canadian.
<unk> Bureau side maybe.
Maybe on a more narrow range than first half of 'twenty three that you've disclosed and as a related question the lock up.
Instrument and largest shareholders and heavy chatted with them their intention to hold on their stock. After the lockup that's been a bit of an overhang for investors that bucket.
Maybe I'll start with one one point then I'll ask you a bit.
And Darren is there are two single officer to add some detail if necessary but.
The U S business, we're good to go let's say, 80% of their business and more girls. There. So very pleased about that Canadian it's a work in progress and it's hard to predict the day. They are asking question and we wanted to be.
Very straight to giving them alder and so they have so I'll turn to them for use with lawyers and discussion on a regular basis. So I will turn to him for the risk sure. Thanks Luca.
Yes, I think as.
As we've said in the U S. The waiting period.
Under the HSR Act expired February 13th week.
We've got a final order so the only thing really.
The only condition left to closing is receipt of.
Approval from the Canadian competition Bureau, their review is still ongoing and.
And we expect it may need some additional time to conclude that review, which is why we.
<unk> extended the expected timing to the first half of 2023.
Our view on that I think again I guess, we would say look the businesses are highly complementary not in the same product market. So we expect we will be able to to get that regulatory clearance in the first half of 2023.
But the reason we pushed it out is we think the bureau is going to likely need a little more time to get there.
Okay.
The feedback on the lockup.
Yes go ahead.
Yeah, I mean, I'll I'll jump in on the lock up and just sort of walk through at the highest level. So at the highest level of roughly 45% is subject to lock up and that split by roughly 30% 36% of that would be.
After six months and then roughly 9% would be after three months and then the rest of that would be tradable on day one.
Okay, Alright, those are my questions. Thanks very much.
Thank you one moment for our next question.
And our next question comes from the line of Nelson <unk> from RBC capital markets. Your line is open.
Great Thanks, and congrats on a strong quarter.
On capital allocation I think the in the <unk>.
M DNA the guidance is for.
$200 million to $240 million for I guess maintenance Capex nonrecurring capex and.
And Lisa can you provide a breakdown of that and also how much of that 200 to 240.
It is going to <unk>.
Yes, yes, okay. So.
First of all no. So maybe the best way to split it into the broad categories first so the two to two four do you think of the maintenance capex in the range of $75 million to $80 million and so that would be split roughly 30 million Canada.
And these are rough ranges, but 25 in the U S. And then sitars maintenance Capex would be roughly <unk> 15.
For 2023 finish.
And then as you look at capital leases.
Those in roughly $30 million to $40 million range and then looking at the growth in non recurring that's the 105 to sort of 115. So sitars of that think of that and this is for the nine months going forward that sort of $40 million to $50 million.
And then Canada is sort of in the 20 range the U S and about a $40 million range.
That's full year.
Okay.
So just to clarify so the actual amount invested so that 40 to 54 so tourists.
The nine months so for the full year would obviously be a bit higher than that right.
Yeah, I think of it for the full year in the range of a $100 million yeah yeah.
It's obviously, depending when that capex when youre thinking it for the full year and maybe that's the best way to think about it in the full year, because it's going to depend when in particular, the deliveries of the MF use occur right.
Call it $100 million for the year.
Okay, all right that's fair.
100, just for the.
The trucks and trailers and before Lisa.
Before maintenance Capex, yes.
Yeah.
Okay, that's great.
And then the next question is.
Uh huh.
I think Luke you mentioned that <unk> operates under.
On a standalone basis.
And there is limited synergies, but I guess longer term.
Do you see.
I guess, you'll be retiring soon so probably not.
But.
But do you see the benefits of putting the two together in terms of I guess the tariffs is headquartered in Calgary most of their operations in the U S. And then superior pluses headquartered in Toronto.
So I guess from a corporate perspective.
There should be some synergies there.
No.
We have a division with SCL in Calgary, we have a division with the U S business and wherever the Canadian business located in Mississauga.
Ontario that business, who will be located in Calgary.
It's.
<unk> North America business and we have division that are located are spread out between North America. So I, probably forgot one thing on synergy.
I'm a strong believer that you don't want that.
80% of their business in the states with Big Industrial company, but those big industrial company and the replacing.
Diesel, but those big industrial company also use propane. So I think we're on time and within the next year as we work together, we will look at helping each other to sell more product.
As you know a superior Canada I don't know if there's any big industrial company. We don't do business with is we're probably all of them and what <unk> is replacing is mainly diesel.
Can we take those accounts and those relationship and say Hey service team.
Introduce you to those big industrial customer in Canada, and see if we can replace the diesel with your product 100%. So there are some synergy I thought the question was more of a cost synergy.
Theres not that much tariff nothing but on the growth synergy absolutely we're going to touch base with all of their customer in the states. We don't have the middle East Big Industrial as you know today, which we do in the states is like 90 plus percent residential.
And then in Canada, where big industrial we're at pretty much and kind of doing big industrial and want to make sure that those contact relationship develop more internal growth business for both businesses and that will happen I'm very convinced.
Okay. That's useful so it's more on the cross selling side, where you see the the value add.
And then just one last question.
Just one last question.
In terms of like installation and stuff and wage.
Pressures I guess, you've been through the worst of it by now but are you still seeing any how.
How is the labor market in terms of sort of.
Finding seasonal drivers.
Can you just touch base on on wages.
Many times during Covid and doing all the a lot of people you know changing position these days.
There are a lot of exposure.
And I think we're lucky I think we're lucky because we have over 85% of our employees are responding that were at least 85% 100 happy to work with us the way we treat them when we would communicate that we have them participate in the business.
Very high quality.
Killed sure in values that we've built and what we've learned from <unk> would be multi time, we met in travel with them in the same it's just a perfect fit them filter value very human.
So we're lucky.
I always add to that from a truck drivers in there.
Paint business.
There are small truck and the driver it goes out during the day those as things come back home visit.
Hard covers that have.
The larger truck and larger miles that they do and they go away from home.
Which is much harder so.
I wouldn't say it's easy.
What they're trying to redo at winter time gets very rough and many time in many areas, but it's.
Don't have real difficulty of finding good truck drivers and once they work for us there with.
I would call.
A lot of our employee our kind of life or.
They are well treated they love to work with superior.
I appreciate our success in their communication style and it's really.
I'm very proud and very pleased of the overall thousands of employees appreciate working here and we want to treat them very well and they deserve it.
Great. Thanks for the color there.
So all of one April .
One moment for your next question.
Okay.
Our next question comes from the line of Steven Hansen from Raymond James Your line is open.
Mr Hanson.
Good morning, everyone.
Just a quick one again to go back to the previous owner had been spending quite aggressively on the fleet to grow the top line I think logically.
If I'm not mistaken that included a large inflow of new units in the back half of last year. So you spoke briefly look earlier to the capex profile going forward, but I just wanted to get a sense for what kind of untapped utilization you have available today with the units that came in last year, how quickly do you need to replenish.
Or add new units, a year and ultimately what kind of organic growth do you think it's sustainable.
Over the next couple of years for the top line for this business or maybe from an EBITDA perspective.
Yeah, that'd be pleased that the <unk>.
Next call.
Probably won't be here, but.
We're pleased that we could then vibe Curtis who is the president and his team so that they can make.
A lot of those specific question, so I think from organic growth.
And correct me bit Darrin, if you think the numbers not exactly what we've talked about but we certainly think them to at least 10% royalty year internal growth.
Hope it could be more.
From your question first question on Capex, I think we're continuing to spend as much of the spend in the past.
If not more with the $100 million in 2023.
So I think we're not slowing down their progress and their opportunity to develop new business.
If more cash flow comes in I think we hopefully can push more their way, but for the moment on the budget and where we stand today it looks more like a $100 million, but anything else you think I Miss or yeah. I mean, I think what I would add is you know along your question for the new units that came in weather.
They're being utilized and whether there.
Whether they are ramped up.
Beauty of the business is that there is much more demand.
For mobile storage units than there is supply so for those units there very quickly.
Being being used being used to supply customers and frankly generating that EBITDA. So as you look at it I think with that business, it's really more getting the msu's produce purchased and then they can quickly be generated.
To generate EBITDA and so from that perspective, they would all be being utilized and again from a sales perspective, there there's more customers than theirs Msu's mhm.
Oh, that's great and maybe just to follow up and maybe this is too far into the weeds for now, but I'll just ask anyways, just around sort of the hub and spoke strategy as it relates to <unk> are they in all the regions. They need to be look you had referenced in cross selling earlier I'm just trying to get a sense for whether this is.
Density Densification strategy at this point.
The ability to reap incremental high margin return opportunities as opposed to sort of greenfield new hubs, there might be a little bit less.
Margin accretive.
Or are they in that strategy.
Like I said of evolution I guess.
Yes.
I'll answer from what we know.
Bruce.
Sensor with next quarter, the real people that knows that.
Very well can answer more specifically my understanding is there is such a growth in December three and those three products that we've talked about that we can supply that the number of hubs will continue to grow and there'll be more I think.
Our intent is to have three to four more hubs every year.
And if you look at.
They've done a big study with Mackenzie that shows the growth in those three product and I won't give you the number because they are totally.
Billions of billions of growth in those industries. So they're in the best position in North America to be the.
The one that goes.
With their position and their teams that they built and the equipment they've already put in place. So I would say three to four hubs continuously.
For years to come in.
Continue to grow and I don't see that if theres, one thing and the results can help having a good year I think we can grow more than 10%, we say that because we wanted to become server, Dave I'm not giving you other number than what we are sure about but there is drilled there that could be in the 15% a year for sure.
Sure.
That's great I appreciate the color it sounds like a great addition.
And as a reminder, star one one for questions Star one one.
One moment.
And I'm not showing any further questions in the queue I'd like to turn the call back over to Luke Deja, Dan President and CEO for closing remarks.
So I'll wrap up this call I would like to take this opportunity to thank all of you for being there for all to 12 years, you've followed this company and many of you following us and supporting superior.
Has it been a pleasure and privilege to share with you. This incredible journey of growth and the transformation of superior, which we've gone through over the years. Many of you remember multi business. We have now we focus energy Big time North America.
I am proud of all the employees and the work that's been accomplished we have a super great management team.
I'm confident that I'm, leaving this company an exceptional position to pursue its growth.
When I mentioned my appreciation to everyone and every stakeholders team employee management board everybody Thats really worked hard to make this situation happened over the years.
And I really have told that two people internally in the last four or five months.
And that would be more in the last three with the <unk> deal. When you think of our platform with number of customer we have which in the $1 billion and then you think of the terrorists.
Bring us a new entry with internal growth I mean, I'm, leaving this company in better shape than it was.
Even as we ended up just being in propane there was good and we built and we improve every business 25% now we're just going to the next level.
And this is the transformation that is happening in the.
We're very very proud of everybody I'm very pleased that I am leaving with this new gained a new opportunity for Super Great Canadian company. So with that wish you all the best Thank you for your support and hopefully the.
The question was luthier retiring I don't know what the retiring is I will not retire I'll be working.
Not at the same pace as a full CEO , but doing something of a scale of to keep busy because I love business and this is my passion.
And in my life. So wish you all the best Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
Yes.
The conference will begin shortly two reasons lower Johan during Q&A, you can dial one one.
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