Thank you, Howard. Good morning everyone and welcome to Superior Plus' conference call and webcast review our 2020 annual and fourth quarter results.

Our speakers on the call today are Luc Desjardins, President and CEO; and Beth Summers, Executive VP and CFO. Darren Hribar, Senior VP and Chief Legal Counsel is also joining today's call.

This call is being webcast and we encourage listeners to follow along with the supporting presentation, which is also available on our website. For this morning's call, Luc and Beth will begin with their prepared remarks and then we will open up the call for questions.

Before I turn the call to Luc, I'd like to remind you that some of the comments made today may be forward-looking in nature and are based on Superior's current expectations, estimates, judgments, projections, and risks. Further, some of the information provided refers to non-GAAP measures.

Please refer to Superior's annual MD&A posted on SEDAR and Superior's website yesterday for further details on forward-looking information and non-GAAP measures. I would encourage listeners to review the MD&A as it includes more detail on the financial information for 2020 and the fourth quarter as we won't be going over each financial metric on today's call.

This will allow us to move more quickly into the question-and-answer period. I'll now turn the call over to Luc.

Thank you, Rob and good morning everyone. Thanks for joining the call.

We hope everyone is staying safe and healthy. I'd like first to take a moment to thank our employees for their exceptional effort this past year, working in the field, delivering fuel to our customer, working in our chemical plants, and those working remotely supporting our operation.

We have performed well, even in the face of tremendous adversity, and I appreciate your hard work and dedication. Our modified business practice continue with the health and safety of our employees, our customers, local communities, and our first priority.

As our propane distribution and Specialty Chemical businesses were considered essential and critical service and infrastructure in all of the province, territory, and states in which we operate in the US, Canada, and Chile. We have continued to service our customers that have been classified as essential.

We announced the sale of Specialty Chemicals business to Birch Hill yesterday, which represents the final stage to our transition to a pure-play energy distribution company. The purchase price of $725 million represents a multiple of eight times on Specialty Chemicals for 2020.

Pre-IFRS 16, EBITDA was $91 million for the ERCO business this year. Through the structure of the deal and the purchase price adjustment mechanism, Superior also continued to potentially benefit and the chlor-alkali market recovers, also the chlorate, over the next three years.

The proceeds from the sales of Specialty Chemicals will improve our financial flexibility and allow us to accelerate our growth through acquisition strategy. We have demonstrated many times that we can execute on acquisition and integrate the newly acquired businesses into our operating platform quickly, enabling us to extract cost savings and synergies.

Following the success of our 2020 acquisition, with over $285 million in acquisition, we anticipate more than doubling the U.S. propane EBITDA over the next five years, through acquisition, organic growth and cost-saving initiative.

Actually, when we take five years, in my mind, it will come faster. More recently, in the fourth quarter, we completed two retail propane acquisition, one in the Southern California, one in North Carolina.

We have already made three more acquisitions, including two in Canada in 2020. We completed five retail propane distribution acquisition for a total consideration of $286.7 million.

The investment from Brookfield in July provided capital for us to reduce our debt and quickly reinvest in propane acquisition. We continue to see a larger number of acquisition opportunities ranging in size in the Eastern U.S.

and in California. We have improved the business we have acquired of at least 25% using a Superior way operating platform and implementing our modern procurement, sales and marketing initiative, including our industry-leading digital service offering.

Superior is one of the leading North America retail propane acquirer, and we are earning a reputation as the Buyer of Choice for many prospects sellers in this industry. Turning to operational and financial results.

Overall, I'm pleased that our fourth quarter and full year results, we achieved a midpoint of our 2020 adjusted EBITDA guidance, despite challenge of the COVID-19, significantly warmer weather in the first quarter, reduced drilling activity in North America and modestly warmer weather in our fourth quarter. The fourth quarter adjusted EBITDA of $169.8 million was 4% lower than the prior year quarter, primarily due to the decrease in EBITDA from operation.

The full year 2020 adjusted EBITDA of $495.9 million, which was 6% lower than 2020, primarily due to the -- in 2020, primarily due to the decrease in EBITDA from operation. Third quarter EBITDA from operation was $171.7 million, a $16.1 million decrease over the prior year quarter, primarily due to lower results from Specialty Chemical and Canadian propane, partially offset by our results in the U.S.

propane business. The full year 2020 EBITDA from operation was $518.4 million, a $43 million decrease from the prior year, due to impact of COVID-19 and our business partially offset by incremental contribution from acquisition in the U.S.

propane business. We expect the public health measure in place to reduce the spread of COVID to have an impact on our business in 2021 until the vaccine is widely distributed in U.S.

and in Canada. Due to this measure, our commercial customer are operating at very much lower capacity and operating rate, and we have taken action to right-size our business for the lower expected sales volume for the first nine month of the year.

We are, however, well positioned to service our customer once demand recover. We will emerge from the pandemic as much stronger with a better cost structure company and organization poised for the significant growth and increased shareholder value.

The sale of Specialty Chemical business is expected to provide more liquidity for us. We accelerated our strategy of growth to a creative acquisition, primarily in the U.S.

propane market. We are optimistic the economy recovery will take place.

We figure and our forecast in Canada late 2021, and probably back to normal in commercial, industrial in 2022. But in the US business, immediately, because we're more retail consumer-oriented in the state, when, it’s Canada, as you know, our mix is big in industrial, commercial as well as retail.

However, we have a resilient business, and we expect to generate strong free cash flow even in this challenging environment. Now, I'll turn the call over to Beth to discuss the financial results of our 2021 -- and our 2021 guidance.

Beth, over to you.

Thank you, Luc. Good morning, everyone.

Looking at the financial highlights for the fourth quarter and full year 2020, the fourth quarter adjusted EBITDA was $169.8 million, which was $6.9 million lower than the prior year quarter, primarily due to a decrease in EBITDA from operations, partially offset by a decrease in corporate costs and a realized gain on foreign currency hedging contracts compared to a loss in the prior year quarter. The full year 2020 adjusted EBITDA was $495.9 million, which was $28.6 million lower than 2019.

This was primarily due to a decrease in EBITDA from operations, partially offset by a decrease in corporate costs and realized losses on foreign currency hedging contracts. Fourth quarter AOCF before transaction and other costs per share was $0.71 per share, a decrease of $0.12 compared to the prior year quarter due to lower adjusted EBITDA and higher weighted average shares outstanding, partially offset by lower interest expense and cash taxes.

Weighted average shares outstanding increased due to the treatment of the preferred shares on an as converted basis and the impact of additional shares issued under the drift in early 2020. Interest expense decreased due to the lower average debt levels and lower interest rates on variable rate debt.

AOCF before transaction and other costs per share for 2020 was $2.04 per share, $0.28 lower than the prior year, due to a decrease in adjusted EBITDA and an increase in weighted average shares outstanding. This was partially offset by a decrease in interest expense and cash taxes.

From a debt leverage perspective, total debt to adjusted EBITDA, as of December 31, 2020, was 3.5 times, which was at the higher end of the range three times to 3.5 times, which we provided as guidance and 0.2 times lower than the leverage as of December 31, 2019. Turning now to the individual business results.

US propane distribution EBITDA from operations for the fourth quarter was $80.4 million, an increase of $2.2 million compared to the prior year quarter. This was primarily due to higher sales volumes related to acquisitions and higher average unit margins, partially offset by higher operating costs related to the acquisition.

Sales volumes increased 25 million liters, primarily due to incremental, commercial and residential volumes from acquisitions completed in 2020, partially offset by lower commercial distillate volumes. Attributed margins were $0.412 per liter compared to $0.407 per liter in the prior year quarter, primarily due to customer mix, partially offset by the impact of the stronger Canadian dollar on US-denominated gross profit.

Operating costs were higher due to the impact from tuck-in acquisitions, partially offset by the execution of cost-saving initiatives and realized synergies from NGL and other acquisitions. The U.S.

propane EBITDA from operations in 2020 was $206.9 million, modestly lower than 2019, primarily due to lower sales volumes in the first quarter related to significantly warmer weather, partially offset by the incremental contributions from acquisitions completed in 2020 and 2019 and realized synergies related to the NGL acquisition and other acquisitions. U.S.

propane EBITDA from operations in 2021 is anticipated to be higher than 2020, primarily due to the incremental contribution from acquisitions completed in 2020, increased sales volumes related to the expectation that weather will be consistent with the five-year average, cost-saving initiatives and realized synergies from acquisitions completed in the past 24 months. Average weather in areas where we operate, as measured by degree days is anticipated to be consistent with the five-year average.

Canadian propane distribution, EBITDA from operations for the fourth quarter was $65.6 million, a $10 million decrease primarily due to lower gross profit, partially offset by lower operating costs. Gross profit decreased compared to the prior year quarter, primarily due to lower sales volumes related to reduced drilling activity in Western Canada, the impact of COVID-19 on commercial and industrial customers and warmer weather, partially offset by higher reseller volumes.

Operating costs were lower, primarily due to a decrease in volume-related expenses, the benefit from the wage subsidy program and cost savings initiatives. Canadian Propane, 2020 EBITDA from operations was $195 million; $5.8 million lower than 2019, primarily due to a decrease in gross profit.

This was partially offset by a decrease in operating costs. Gross profit decreased primarily due to the drilling – reduced drilling activity in Western Canada and the impact of COVID-19.

Operating costs were lower, primarily due to a decrease in volume-related expenses, the benefit of the CEWS program and cost-saving initiatives. Canadian Propane distribution EBITDA from operations for 2021 is anticipated to be lower than 2020 as the impact of the CEWS program benefit in 2021 is expected to be significantly lower.

Wholesale propane market fundamentals are also expected to be weaker and the impact of COVID-19 is expected to negatively impact commercial and industrial sales volumes and commercial sales volumes in Western Canada are expected to be lower, partially offset by lower volume-related costs and cost savings initiatives. Average weather in Canada as measured by degree days, is anticipated to be consistent with the five-year average.

Turning now to Specialty Chemicals; EBITDA from operations for the fourth quarter was $25.7 million, an $8.3 million decrease compared to the prior year quarter, primarily due to lower gross profit, partially offset by lower operating costs. Specialty Chemicals 2020 EBITDA from operations was $116.5 million, which was $35.4 million lower than 2020, primarily due to decreased gross profit related to the impact of COVID-19, customer curtailment and reduced drilling activity, partially offset by a decrease in operating costs.

Lastly, the corporate results and the adjusted EBITDA and leverage guidance. Corporate costs in the fourth quarter were $1.7 million lower than the prior year quarter.

This was primarily due to a decrease in LTIP expense related to the share price performance. Interest expense was $24.4 million, a decrease of $1.3 million compared to the prior year quarter due to the lower average debt, lower variable interest rates and the impact of the stronger Canadian dollar on U.S.-denominated interest.

Debt was lower, primarily due to the impact of the proceeds from the Brookfield preferred share investment and the impact of the stronger Canadian dollar on U.S.-denominated debt. This was partially offset by acquisitions completed in the third and fourth quarter.

In the fourth quarter, Superior had cash income tax expenses of $0.1 million, a decrease of $5.9 million, compared to the prior year quarter, due to lower provincial taxes and beat taxes in 2020. We are introducing our 2021 adjusted EBITDA guidance range of $370 million to $410 million, which implies a midpoint of $390 million.

Based on the midpoint of our 2021 guidance, this represents a 3% increase compared to the 2020 full year pro forma result, adjusted for the specialty chemicals EBITDA. When also adjusted for the CEWS benefit, this represents an approximate 10-year increase year-over-year.

The increase is primarily due to higher expected EBITDA from operations, partially offset by higher corporate costs. EBITDA from operations in 2021 is expected to be higher, primarily due to an increase in U.S.

propane EBITDA, partially offset by a decrease in Canadian propane EBITDA. The low end of the range accounts for warmer-than-normal weather, reduced economic activity in Western Canada and delays in the economic recovery.

The high end of the range accounts for colder-than-normal weather, stronger wholesale propane market fundamentals and increased drilling activity in Western Canada. With that, I'll turn the call over to Q&A.

Good morning folks. Congratulations on your sale.

Thank you, David.

Just on the sale, what do you -- is there -- what -- like why now? What do you see in the pipeline?

We know there's a big player out there suffering. So, any comment -- just any comment on the, I guess, near-term pipeline?

And also what might be your targeted spend for M&A in 2021?

Good question. So how choppy deals can be, but no doubt, we do have a pipeline that we've never seen since we start looking at chemical sale and energy growth.

We're absolutely excited about this for a couple of reasons. The Chemical sale, we heard that some people thought maybe not at the right full price, but two things come to play.

We're going to have some upside when the Chemical return over the next two years after they own it, so not quarter one this year in that 2020. And then when you look at the pipeline in the states, it's really robust.

It's -- there's some midsize enterprise, there's some small one. As you all know, we don't have in our forecast any acquisition, but we'll make some, of course.

Hard to predict and the numbers and the size, we don't think of the big one, unless they happen. So, it's not something that we -- when we say, we'll acquire over the next five years good growth and two acquisitions, we don't take in consideration, we could do one of the big ones.

Because we never know how that can unfold. So, no doubt, if you take the money from the proceed and pay down debt and had some liquid to acquire.

And then you buy those companies, the sooner, the better and many of them for sale more than ever. You have a better return than if you sold Chemical for more money in three years.

So, it's focused. It's time and energy of everyone to be the best in this industry, which I think from an operation point of view, we have a big edge.

I am convinced the deal we're looking at now will improve or at least 25%, when we buy them. So, you'll end up paying for bigger, midsized enterprise 8.5, 9, and they'll end up at 7 after we put a superior way, our sales and marketing, pricing approach and our efficiency approach.

So, why now? Because the pipeline is big, because we know when we buy them, we're going to improve the bottom-line a lot, 25%.

And then we now a pure-play, which I think the market, investor, Canada US, we've heard over the years, a ton of investor interested in our game, but didn't like the idea of two legs that are -- nothing much in common. So, there's never a best ideal time in the world, but we're getting good value, we're getting some potential good upside as the chlor-alkali market comes back and the chlorate market in late 2021 and 2022.

So, we'll be participating in some upside, we hope. We can never predict how much and when, but it's looking good.

And we thought for the best of our shareholder, this is how we're going to get to be a very different company, if you look three years from now.

Okay. And yes -- no doubt.

I like the upside because Chemical is going to take a little while to recover. Did Brookfield or M&B out of Germany weighing at all?

I'm sure you won't be able to answer that all -- answer that. But obviously, you're now a clean ratable cash flow generator, a pure-play, a very attractive to potential strategic or other financial buyers.

I mean, any -- just any broad comments there, Luc, on that side?

Yes, they didn't play at all the German company to making this happen. They have no say.

We chat with them. I got a call come their CEO and their VP of M&A.

I guess, a month and half ago, and they did confirm that they were going to get over 10%. At that time, all they could say, and we didn't have any discussion since then, was we're -- we have a big enterprise, €14 billion, and we sold some division, me, as a new CEO for two years, he was explaining.

And now we're looking at a couple of businesses that we think are really sharp, and they know what they're doing. And they're the best model in an industry.

And we want to take a position in a few of those companies. And we selected Superior as a great opportunity and it's the first one that they invest in.

So, we understand, they'll take a position. I think it's now 12.5 or more.

We have no idea after that, what their intent is, except, they didn't show any intent to go and make an offer for the enterprise. We heard nothing in that sort.

Yes.

And Brookfield had a bit more influence, because we have a Board member that's with Brookfield. And, absolutely, he liked the play.

He was totally pro for it; he likes the growth in the U.S. So there were -- as a Board member, he was really behind the management to do this.

And he was -- he understood their value. That's what he does for living and it makes sense.

It creates more value perhaps with the energy growth.

Okay. Perfect.

And then I just have a couple of little housekeeping ones, if you don't mind, squeeze them in.

No.

Just corporate costs for this year, I think you said they might be a little higher in 2021? And then, the second question is, just on Texas and the winter storms and all that, how it might have impacted logistics volumes, and actually differentials between Conway and Edmonton?

Yes. A couple of questions there, I'll pass it to Beth.

Sure. So from a corporate cost perspective, I mean, I think the best way to think about them for 2021, is being in a range of, say, sort of $22 million to $27 million or the range of $25 million is maybe a good way to think about it.

Just sort of round it out there, David.

Okay. And why a little --

And we look --

Why a little bit higher, I guess, is the question.

Yes.

Fundamentally, it would be linked back, price expectations from an LTIP perspective. In addition to that --

Okay.

-- you would also have no wage subsidy, being reflected in the numbers.

Right.

Right? So just a couple -- I would point to those as the most obvious ones.

There's other smaller items, as everybody be aware, the insurance market is a little bit more expensive in other items like that as well.

Okay.

-- but just some smaller ones.

Got it. And on the Texas weather, and all that stuff going on, any differential improvement and things like that --

Yes. So --

-- and the logistics volumes and all that?

Sure. So just to cover it off, I mean, what we are seeing in the market is that, the differentials are not as robust.

They're weaker. We did expect that coming into the first quarter from what we saw in 2019 and 2020, where they were quite robust.

What we're seeing now, there's still healthy inventory levels of propane, in particular, in Canada, but also there's still inventory in the U.S., even in light of colder weather. And from a production perspective, just to put it in order, there's still a fair bit of propane production.

On a year-over-year basis, the production levels are virtually the same. And about 20% higher, than you would have seen in 2018 or two years ago.

So there is a fair bit of production in propane. Now the exports are higher, which, overall is, with the cold weather, driving the pricing higher.

However, with all of this to be said, it's impacting pricing, but from an overall differential perspective, it isn't widening our view of opportunities from a differential perspective.

Excellent.

I'll add to that, David --

Sure.

-- your question about the weather, in the Midwest. So we always do forecast with normal weather, but there's certainly an improvement right now, because this particular weather in Midwest is coming East, and that's going to be looking good for us, generally speaking, for the quarter one, because weather it's going to – February and March, I think, will have good months.

And you got easy comps in 4Q. And I certainly, am glad I'm working from home.

Thank you very much. Have a great day.

Thank you. Take care.

Good morning.

Hi, Jacob.

Good morning.

Can you comment on the leverage levels that you're comfortable with now that you're a pure-play energy distribution company? And does – has that changed?

Yes. From our perspective, our targets remain the same.

We're targeting to be between three times and 3.5 times, while we're executing on acquisitions. I mean, of course, if we have a larger acquisition, as we've communicated previously, we're potentially comfortable to go a little bit over the 3.5 times, but then have a line of sight to come down through delivered synergies back down within a 24-month period into that range.

That hasn't changed.

And then when you're looking at the US tuck-in market, how has COVID changed that? Are they more or less expensive?

And maybe just remind us again, how we should be looking at it from a multiple perspective, pre, post-synergy?

Yes. So let's go with the midsize, let's not go with the big one now.

For the moment, until there's something real in the bigger. There isn't.

So – in the midsize, it's a bit of an opportunity, and we have to be careful about the multiple. If you pay 8.5 to even 9 on the midsized enterprise, like mid like $25 million to $50 million EBITDA, you will end up at two times turn.

After we take 18 months, we don't do it in a month or three, no big bang here. And our execution and our Superior way platform and all the different piece of the opportunity brings us to 8.5 becoming 6.5 or 9 becoming 7.

So there's no doubt that, that's a good movie. There's a ton of them.

And COVID what's helping a bit, and that won't show in the multiple is many of them that we're looking at now have a percentage of their business that's commercial. So that has certainly been affected by the tone in North America propane of about 15% less volume on the commercial/industrial side.

So if we're looking at acquisition 9 time, and right now, they're probably equal or -- and the retail consumer do better if they have 20-pound cylinder, but those are the two big players. So we're not looking at that.

And then you have the opportunity with those multiple – by 2022 for them and for us in Canada, commercial industrial comes back. Those businesses would have a 15% lift of commercial, industrial.

And in Canada, that's why I think our job this year has been extraordinary. We're 75% commercial/industrial and 25%, 30%, let's say, residential, 70%, all others.

When as our US business is affected last because they're 90-plus percent residential. So, good opportunity to buy because there EBITDA are affected somewhat because of commercial.

And how long does it take you to realize those synergies?

We usually do it in two summers. Depending on size and GL, it was two summers.

So we don't touch the winter. And then we get going in the summer to install more sensor; to organize our system.

And then if we're not finished by October, we stop and then we'll wait for the following year. It takes two summers for a larger one, a small one, we could do in one summer.

Okay. And just to circle back.

So COVID has really had no impact on what you're paying for the stock in?

No. We'll pay the same multiple, but they probably could do more EBITDA when the full COVID disappears.

Okay. All right.

I leave it there. Thank you very much.

Yes. Thank you, Jacob.

All right.

Okay.

Hi. This is Jieet [ph] from Scotiabank.

Thanks for taking my question.

Hello.

Congrats on – hello.

Yes.

Hi.

Hi. This is Jieet on for Ben.

Thanks for taking my question and congrats on. I just wanted to get a little bit more granular on the M&A opportunities in the pipeline you're seeing, to the extent that you're able to share it.

I'm just trying to understand that opportunity side in that pipeline. Is there maybe more of a strategy to target larger?

I know in the past, you've said you've been agnostic based on the best opportunity available. But with the balance sheet power you now have, is there maybe a desire to go for something larger, or are you still going to continue to focus on the smaller space?

And then just as a small follow-up, is there maybe any regional focus within the U.S. that you have in mind?

Yes. Our regional focus for the moment, we know in two years, is all the East Coast and then all the West Coast.

California, primary, but we could go a bit east of California. We could go, of course, north of California.

Those are the two great markets. So why the -- what we can touch and feel and do and we feel comfortable about is doing mid-size and small one because we become available and we're the primary buyer for many reasons.

First, there's a lot of respect for how we did all the deal we did? How we deal the employees?

How we do the health and safety? And we have a reputation now after all these years that we have an edge on buying.

The most people we talk with they would rather sale to us because of our position, our way to do things and so we have a bit of an edge. The large one -- not that we're not considering them, it's just there's only three mid-size, let's say, $25 million to $30 million.

We're all over that if we can do those. Small, of course, we can add small one, and we pay less, of course.

And we integrate them in a region where we are already a small one. But the large one, we just understand them.

We know they're -- where they're at. We know what we could do with their business if we were the acquirer, and it's again, at least 25% better.

But we don't go there because they're not for sale and we -- there -- and they've had as to happen, and if it was that an event would happen, we will certainly look at it. But we don't – we usually execute everything we promise and we do like we did all these years.

So when we think of a big one and we're not in control of that and we don’t when and how, we just become built a file, understand it, then we know mid-size and small are available, we just go for those.

That’s very helpful. Thank you and congrats, again.

Yes. Good morning, guys.

Again congrats on the sale. Maybe -- I just wanted to dig into the guide a bit.

Luc or Beth, it sounds like Canada is one of the sources of the drag in the guidance. I'm just trying to understand it a bit in the context of weather seems colder thus far, E&P activity is on the rise, along with oil, and we should be lapping some of the COVID comps here fairly quickly.

So I'm just trying to get a sense for how much of the drag is related to the subsidy going away. Just trying to maybe better hot color on that would be great?

Thanks.

Yeah, I'll start, and Beth can add about the subsidy. So no doubt, we're -- you've seen our history, we're not the type to not execute on what we promised.

It's been hard for us to forecast 2021 in Canada more than the state. And we are predicting that for nine months, business as usual, no gain, commercial, industrial will come back.

We hope we're wrong. But the way we see the vaccine in Canada, the way we see the security that government brings into state home, which they should, I guess, we say, hey, we don't know.

So we notice that the next three, four, five, six months, so why don't we just think of quarter four, probably somewhat better, and then 2022 watch out. We're coming back.

Okay. That's helpful.

I was going to say, and yeah, I mean, just adding to that, from an overall or a high level, the -- no wage subsidy, but still facing the headwinds associated with COVID for the portion of the year is your primary driver.

Yeah. Okay.

I appreciate that. Just a follow-up, if I may, is just, Luc, really wanted to think about the synergy targets a little bit as you really start to focus on the U.S.

acquisition inside it. What is it that gives you so much confidence in your ability to extract synergies?

I know you're going to say history. But when you look at the targets you're discussing or even the one you've described recently, is it just the operational aspect of it all?

Is it a technology that you bring to it? Can you just give us a bit more specifics around why you're so confident you can get the synergies?

Yeah. So I call it the three buckets.

So we start -- the industry is not extremely sophisticated, and that gives us an advantage to say, how does that telecom, how those other industry do their sales and marketing, so we develop and spend money still to -- in sales and marketing. So we have professionals that can go to an industrial customer, a commercial customer understand properly how they will use energy, and we help them more than just saying we are propane for sale.

We're not selling a propane commodity. We'll organize it for you.

And I always use the example of Costco and entire. They have 40 people across Canada, looking at all the tanks.

They have too many tanks, and we have to go everyday. Well, time out.

If we digitalize all that, and we put a bigger tank in one area, we can now go to your place two times, maybe three maximum a week versus seven, we can give you, by the minute, exactly how much you have of propane in every tank. So you don't need 40 people to account for that.

And we -- from a billing, from an information, from a fill rate, we just bring a new dimension that Costco will save a lot, simplify their work, their process and we gain from the relationships. When you add glue like that to customers, you end up having -- cutting the decline.

You always have customer loss; we've cut that in more than half. We lose half the customer, everybody in the industry.

We put more glue to the different touch points. And service them with -- when you have those systems in place and the residential, they'll never run out of gas, because we know how much they have propane in each tank.

And they feel they can go to London and spend a month up in the winter, and we'll take care of their tank. I don't even have to think about tank propane and we'll do a dramatic billing or we'll give you a 12 months if you want an average billing, but one big time in the winter.

So, those are sales and marketing. Then we look at the pricing intelligence.

Who is -- what price can you charge if you don't lose the customer? And as always, I said that over the years, he's always tweaking of $0.01 or $0.02, and we have all that glue installed in the different segment and you kick them.

We know if we go over the top on pricing, they'll start to think about their supplier. So, we kind of have an intelligent centralized pricing system in Canada, US that studies that regularly in every region to know, what's the price, what's the market, what's the competitive landscape?

And what can we price to not be heard on their sales. So, that's another intelligent system we've put in place.

Operationally speaking, it's big. I remember, starting the year, we're 80% operating costs; we're around 56% operating cost.

And you know what, with the work we're doing now, there's two projects and works to digitalize our bid dispatching. We'll end up.

I hope, at our Investor Day, we could give you some number, I think we'll end up at the low 50s in the next three years. So, you still gain three points of your total business, that's a lot of money.

So, once you install that in the state, when you have an industry, which we be clear that I've not had the chance to develop, grow, and organize the give cash to shareholder, like the old income trust of Canada and you're just stuck in the box, and then you have all the independent that don't have the scale, the size, or the system, technology, digitalization, professional sales and marketing, pricing intelligence. There are some good regional players.

Don't get me wrong. But as soon as we look at these, let's say, the top three right now and you apply our methodology and our superior way to their business, I can tell you in one, there's only too employ you too many.

And then you look at sales, there's margin opportunity. If you look at the operation, we can save on this and that be more efficient.

And then you look at supply. It doesn't show, are those entity are small regional and all, let's say, mid-size $25 million, $50 million.

They don't have our scale in their storage and their professional team in Calgary and in California can buy from the big supplier and have an edge there because of your size. And then you store properly.

So, when big weather happens -- what happened in the last crisis when the weather was -- I think it’s five years ago, was just over the top, we serviced every customer. Remember, a big, big industrial account that was at a dinner with the bankers, and he said to me, Luc, if you can't service me propane and way up more than its -- if I shut down that plant, it costs me like $1 million a week, and you guys could never, never miss it because we have the scale.

We have the service of the supply. We have the pricing of the services supply.

And we have intelligent people positioning what do we buy? And then we offer customer.

Do you want a one price where the winter coming? We're going to make a few penny more and we'll fix your price and we hedge it.

Who offers all that stuff? That's our game.

I could go on and on forever, so sorry, everyone. That's our game.

We're operators, we execute, that's our game. And we'll keep going.

It's not finished.

I appreciate the color. Thanks Luc.

Thanks and congratulations on the chemical sale. Just a quick question on chemicals.

You mentioned that, obviously, there is some upside. Do you have a -- like, what's your view in terms of -- or outlook for chemicals in 2021?

I know, like, 2020 was obviously a very weak year, but I just want to get a sense of how likely you think it is to get some incremental payments from that price adjustment mechanism going forward?

So I'll let Birch Hill, if you want to call them, tell you how they're going to see the future unfolding. But one thing that we all know and we all know on the call is, basically speaking; the clerical advisor business is at the low end.

And when it comes back, ERCO makes much more -- many 10 million more. And we're all -- I think history will show and it's going to come back.

So, our game of the three years only starts after they sign the check and send us the money, let's say, at end of March, early in April. And when that starts, if you look at 36 months, our sense that we will get some upside on that, or not extraordinary to the rule, but they're positive.

If you look at the history of the last few years, maybe I'll ask Beth to cover that. So she's had the history in front of her, I know.

Yes. Nelson, I think the best way maybe to think about it is, if you look back historically over the last 10 years, the average is roughly 117, if you factor in 2020, which is lower.

You're looking at an average of around 150. So just to give you a sense of historically, the same numbers, how the company would have performed through the cycle.

Okay. Now, that makes sense.

So do you think -- like do you have a sense of how long it would take to kind of get back to the like 2018, 2019 level? I know that was probably more of a peak year in 2018.

But does that look like it's on the horizon?

It's under our horizon, you'll be a better judge than me when and how, but it's coming, it will happen.

Yes. I think, Nelson, maybe the way I'll try to answer that question, is all we can really do is look backwards versus trying to assume we know what will happen from a cyclical perspective going in the future.

But typically, if you look back historically, the cycles have been sort of three years, three-year pieces, sort of, peak to trough and then the three-year cycle occurred. The last cycle was a little longer on a positive side.

I think, it moves sort of into four years. Just to the sense of what historically happened from the cycle.

Okay. And then just one other question for me.

Just a quick one on the carbon tax. So in Canada, it's been increasing for the last few years, and it will be increasing at least through 2030.

Like, I presume it's still early days, but are you seeing any customers like reduce their demand due to the carbon tax? And when the carbon tax becomes a bigger chunk of the bill, what's your expectation?

Are there other -- like are the other -- are customers switching to other alternatives?

Okay. I can -- I'll jump in on that one, and then Luc, if there's anything that you want to add.

We haven't, at this point in time, seeing volume reductions associated with carbon tax. Looking into the future, at some point, perhaps, that will have an impact, as we don't do in the near term.

From a pricing perspective, longer-term, I think our expectation would be – it will become a cost to serve the customers. It may be choppy, how that rolls in to margins and how that does roll through to customers, but longer term, it will become part of the underlying cost base that we would look at a determination pricing for the customer base.

I don't know, if that answers your question to the degree you wanted an answer? If there's another piece that you want to ask about, feel free.

No, I think, that's enough color. I'm just – yes, I think you've answered it in terms of – you haven't seen any volume reductions yet, due specifically to the carbon tax?

No.

No. No.

Okay. Thanks.

I’ll leave it there.

Thanks, guys. Zach Warnock here on for Pat Kenny.

I'd just like to dive into the 2021 guidance. So, if you look at the 2021 EBITDA guidance representing about 10% growth year-over-year, excluding CEWS, but assuming a full year's contribution in 2021 from Rymes and your other tuck-in acquisitions?

That looks more like a growth rate year-over-year in kind of the mid single-digit range. So, I was just curious if going forward, that mid- single-digit annual growth rate is how we should be thinking about your run rate EBITDA growth over, let's say, the next five years as you execute and integrate new acquisitions?

No. I think I've alluded to that earlier question that you're going to have the industrial/commercial market coming back.

So you'll have more internal growth that we've lost with the COVID. And when that comes back and we'll have a good 1.5 years of good growth internal because of that big market coming back, let's say, in 2022 and on.

And then from an acquisition, I don't know if your number was 10%. We're going to more than double in the states in the next – if you look at five.

And so, I know Beth, if anything comes to your mind on how we could predict that?

Yes. I think at the highest level.

Thinking about it from an 8% to 10% range, but it would obviously be choppy, depending on how the acquisition role and are in place and the acquisitions occur. But I think 8% to 10% is a reasonable thought.

Okay. That's great.

And then just one more quick one for me. Moving on to kind of the US tuck-in acquisition strategy and your earlier comment about continuing to want to target the West Coast.

Looking at California, we're kind of seeing that the state might accelerate its push towards 100% renewables by 2030. How are you thinking about the tail risk for your existing business in the state?

And how do these policies potentially impact your willingness to transact on new tuck-in opportunities in the future?

Yes. So a couple of things.

We've done some work to see how energy could unfold in different regions, including California. And when you think of California, I think the three big cities, and then you come a malice or two and you end up being in Valleys all the way through.

So you have a demand on propane on – because it's hard to do electricity and have other share of electricity problem in California, as you all know and people look for alternatives, and then natural gas pipeline not happening. So you say, okay, what else, there's nothing else.

So we're certainly looking down the future to say, what are the more green propane that we could have in our mix, and we will be the first one or we'll be certainly looking into that. So hard to displace propane because some mobile, natural gas that's in the tank and it really has that flexibility and it fits in some area that you just cannot find some those to sit there.

So if you think 10, 15, 20 years, I cannot tell you that, but the next 5, 6, 7 years, we just don't see it. And we see even continuous growth in propane in many areas, overall, not so much, maybe in Midwest, not so much and more co-ops.

That's why we don't go there first. And do we have a good business model?

We would make money in the Midwest. We go where we're going to make quicker, money faster in those two regions.

We see longevity in those products in those regions.

Thanks for the color. I’ll jump back in the queue.

Great. Thanks.

Good morning, Beth and Luc.

Good morning.

Good morning, Joel.

Could we look at the guidance again for 2021? And 2020 was obviously a strange year.

If we look at from a 2019 or 2021 perspective, it seems to be maybe a $20 million EBITDA growth, maybe low to mid-single digits. You're obviously not including new tuck-ins in 2021, but could you just tell me, if that number, right?

And then could you bridge the growth from 2019 to 2021, taking stand-alone, of course, in terms of organic growth, synergy – M&A and then synergies on that M&A?

Yeah. I don't think we've prepared anything with all those buckets.

So I'll address internal growth, and that might have additional point. The internal growth is happening in commercial, we know our customers are taking less, but the new customer and the growth is U.S.

and Canada, 2% to 3%. Residential, we're doing good.

Somebody asked me, I'm glad the question. I think it was Steve answered about what's our game?

Why do we succeed that much? We're growing residential, quite a lot.

I think it's 4% in Canada right now, because of the digital and I guess nobody else is offering that. So we're – and we have that marketing that goes to consumer a different way and touch point on the digital residential customer, good growth.

So we have a good internal growth, certainly more than the industry by a long shot. And we're acquisition – well, what we do every year, $288 million of acquisition last year.

So I don't know about the rest of the bucket, I'll leave it to Beth, because I didn't prepare anything in that regard.

Yeah, yeah, sure. I think – and hopefully, this is helpful.

At the highest level, if you want to think about Canadian propane is going to – is still being impacted in 2020 and significantly by the headwinds from COVID. So as a result of that, we have the growth that Luc's talking about from an organic perspective.

But offsetting that are the headwinds in commercial, industrial and oil and gas. In addition to that in the Canadian propane distribution business, you also have the weaker market fundamentals, looking -- turning back to that three-year average.

So if you want to think about that from a range perspective, you probably are facing pressure in the range of roughly $30 million. Now, offsetting that, from U.S.

perspective, you have the growth from the acquisition over the past period of time and so that growth overall, you're looking at a forecast growth somewhere between that 20% to 25%. So if you want to think about it, maybe in the range of $40 million growth in the U.S.

business. And it's really those offsets that bring you to that 390 basis points from a guidance perspective, if you want to think about it from 2020.

Yeah. Let me add, Joel, to your question, because I think it's good for everyone on the phone.

We're preparing an Investor Day after the ERCO business is behind us. And when it comes to long-term EBITDA target, capital allocation, M&A, synergy, we'll make sure we prepare a ton of detail for all of you to have more response to everything you can think about.

I think that's good. Look, I think it would be helpful to show the growth across the years.

In terms of what you bought…

Yeah.

…organic and then synergies. So my second question is following up on something that Nelson was asking about.

So on the purchase price adjustment mechanism, I appreciate that you're simply giving the average 10 years of $170 million and then $150 million and $170 million whatever. I imagine, when you did this, you calculate an expected value.

Did you go calculate expected regression analysis, and get an internal view of how you think that business will fare over three years? And if you could share, is that expected value at zero?

Is it positive for what you think you'll get a payment down the road?

No. I won't answer that.

But I'll say, for sure, we knew that, we were getting rid of more debt, because they have $112 million in ERCO of U.S. IFRS car lease.

So we're getting rid of more and have more cash to grow. The purchase price, including, how we were reducing the debt and what we do with the proceeds from probably paying less interest, and then acquiring business and having a 25% improvement, we all saw that as good, good, good.

And our Board approved that, because they saw a bigger opportunity. But for us, we were somewhat optimist that three years, the market should come back to more normal.

And it will. And we're not making prediction on that to the market, and I don't intend to, except it looks good for us.

Okay. Thank you very much.

Hello. Thanks for taking my question.

I was just wondering about the dividend. So right now, you pay a monthly dividend.

With increased seasonality in the business, following the sale of specialty chemicals, would you consider switching to a quarterly dividend?

No, never thought of it. But Beth?

Yeah. I think at this point in time, we would -- I mean, we're looking at it and just to leave instructions that it is on a monthly basis.

I mean, that being said, that's the way to be considered, certainly easier administratively, but monthly is how we've done it in the past. So, at this point in time, that would be our intention.

And I mean the reality is that the Board's decision and the timing of the payout. At this point, I mean, we're not anticipating any change to the dividend policy.

Okay. Thank you.

That's everything for me. I’ll turn it back.

Thank you.

Okay. So, just want to get rid of all my Q&A preparation note and that get you to the conclusion.

I want to thank you all employees and management of Superior for a great year and quarter. Certainly, very excited about what the future holds for Superior as a pure-play energy distribution company.

I think this is a big, big change for us. And I've been looking at it for a long time.

We've had the different business we sold over the years, now we're there. Look forward to providing our next strategic plan and Superior Way forward in our upcoming 2021 Investor Day.

Lot of questions I'm sure that you all have. We'll try to respond to all of that in our presentation shortly.

And we'll announce the detail of that event in the coming weeks. Just want to take this moment also as a conclusion to thank the management and employee of ERCO.

They've been with Superior for a long time, more than me and more pan and they're probably in the 20 years or so. They've been a great enterprise more volatility, but good management, they execute on everything so well.

You saw that a big project in Buckingham and its off-plan on cost. They just do it the best way and been around a ton of business from a management point of view, I would put them way up there, and that's in a ton of different industry.

And they're classic. They're super competent, and I wish virtual great, great success with them.

They're getting a good company and a good team. And I want to thank all of the people at ERCO and the management for all those good years that they've been under Superior.

They're just great people and I wish them all a good luck. So on that, I'll move on to the conclusion, and we're hoping to -- wishing and hoping to see you all at the Investor Day in a few months.

Thank you, all.