Ben Wood

Ben Wood asked for an update on the last 12-month EBITDA contribution from CEFCO relative to internal plans, the expected composition of new store growth (new-to-industry vs. acquisitions) over the next 12 months, and the potential returns on these different growth avenues. He also inquired about the latest thinking on the wing test and the timing for a broader rollout.

Answer

Steve Bramlage, Chief Financial Officer, stated that Fikes (CEFCO) is on plan and consistent with pro forma assumptions, providing healthy EBITDA accretion this fiscal year, though not yet EPS accretive due to interest. He noted that full synergy realization, particularly from inside the stores, will depend on remodel timing. Darren Rebelez, Chairman, President, and Chief Executive Officer, explained that store growth typically aims for a 50/50 split between new-to-industry and M&A, with flexibility to adjust. He confirmed consistent mid-teens return expectations for both NTIs and acquisitions. Regarding wings, Mr. Rebelez indicated that menu refinements and procedural gaps are largely resolved, with new flavor profiles being validated in expanded test stores, moving closer to a broader rollout.

Ben Wood from Wilsons Advisory asked for clarification on the 2026 production guidance, questioning if a reference to 'copper equivalent' signaled a greater emphasis on zinc. He also sought confirmation on the remaining budget for the ventilation project.

Answer

CEO Michael James McMullen clarified that while the guidance now incorporates zinc due to the Polymetals agreement, the outlook has not become more conservative and, in fact, has upside risk from the Merrin mine. He confirmed the ventilation project's budget of approximately AUD 42 million is still on track, noting that the cost per meter of development has been decreasing as activity ramps up.

Ben Wood from BMO Capital Markets asked for an update on the services business's EBITDA contribution, whether natural/organic success is attracting conventional customers, and the status of the simplified supplier fee structure rollout.

Answer

CEO Sandy Douglas confirmed services and brands continue to outgrow the company and are a meaningful part of profitability. He noted that while the trend to healthier products is broad, UNFI's main focus is improving the overall supplier experience through its new programs, which are well into their rollout and are a key strategic priority.