Financial Data and Key Metrics Changes - The company reported record full year net revenue of $920 million, a 1.3% increase compared to the prior year [14] - Q4 2024 net revenue reached a record $257.7 million, a 3.7% increase year-over-year [11] - Gross profit for the full year was $240 million, reflecting a 26% growth compared to the prior year [14] - Q4 gross profit was $68.8 million, a 20% increase year-over-year, resulting in a gross margin of 26.7% [12] - Free cash flow for the full year was positive at $8.9 million, representing a $70 million improvement compared to 2023 [16] Business Line Data and Key Metrics Changes - The cannabis segment achieved a combined business growth of 16.5%, driven by the Indiva acquisition [11] - Liquor segment revenue was impacted by a market slowdown, with a decline of 3.4% in Q4 compared to the same period last year [21] - Cannabis retail reported Q4 net revenue of $83.2 million, a 10.7% increase year-over-year, and full year revenue of $311.7 million, a 7.5% growth [22][23] - Cannabis operations segment net revenue reached $37.1 million in Q4, with a 42% growth compared to the prior year [25] Market Data and Key Metrics Changes - The liquor retail segment faced a decline in same-store sales, with expectations for flat revenue in 2025 [42] - The cannabis market is experiencing strong momentum, with the company gaining market share and expanding distribution points [28][30] Company Strategy and Development Direction - The company is focused on long-term growth through strategic initiatives, including the acquisition of Endiva, positioning it as the largest manufacturer of infused edibles in Canada [7][29] - The company plans to continue building its infrastructure in Canada while exploring opportunities in core US markets [49] - The company aims to achieve $100 million in annualized free cash flow within the next three years [38] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in liquor sales across North America, with expectations for a flat revenue outlook in 2025 [42] - The company remains optimistic about the long-term potential of its US investments despite current operational challenges [48] - Management emphasized the importance of operational improvements and cost efficiencies to drive future profitability [32] Other Important Information - The company ended the year with $218 million in unrestricted cash and zero outstanding debt, providing a competitive advantage for capital allocation [8] - The company announced its application for listing on the Canadian Stock Exchange, which will provide additional flexibility for growth [7] Q&A Session Summary Question: Outlook for liquor retail segment given weak same-store sales - Management acknowledged a slowdown in liquor sales across North America and anticipates flat revenue for 2025, with a long-term growth rate of 1-1.5% expected [42][44] Question: Performance of US investments and potential need for additional capital - Management indicated that while there are operational challenges, they see opportunities for improvement and are focused on capital deployment in Canada and core US markets [48][49] Question: Rationale behind CSE listing application - Management stated that the listing creates optionality for future growth, but emphasized that they are not currently positioned to engage in plant-touching activities [53]

Forward-looking statements Certain statements contained in this presentation may constitute forward-looking information and statements. All statements in this presentation, other than statements of historical fact, that address events or developments concerning SNDL Inc. ("SNDL" or the "Company") that SNDL expects to occur are "forward-looking information and statements". Forward-looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan" ...

Management Highlights [CEO Commentary & Strategic Actions](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Actions) The CEO expressed satisfaction with record Q4 and full-year 2024 results, exceeding the company's commitment to achieve break-even free cash flow - The company achieved continued progress in Q4 and full-year 2024, setting new records and **exceeding its commitment to achieve break-even free cash flow for the full year**[4](index=4&type=chunk) - Strategic initiatives include the privatization of Nova Cannabis Inc, acquisition of Indiva Inc, approval for the Parallel license transfer, and share repurchases[5](index=5&type=chunk)[15](index=15&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[33](index=33&type=chunk) - The company has applied to list on the Canadian Securities Exchange (CSE), expected to be effective in April 2025, offering greater shareholder flexibility[7](index=7&type=chunk) - A target has been set to achieve **$100 million in annual positive free cash flow** within the next three years[8](index=8&type=chunk) [Total Company Financial Performance](index=1&type=section&id=Total%20Company%20Financial%20Performance) SNDL achieved record full-year net revenue, gross profit, and gross margin in 2024, along with positive full-year cash flow and free cash flow - The company reported **record full-year net revenue, gross profit, and gross margin**, along with positive cash flow and free cash flow[1](index=1&type=chunk) - The Q4 operating loss was primarily impacted by a **negative valuation adjustment of CAD 65.7 million** on the SunStream portfolio and a **CAD 15 million impairment** on Spiritleaf intangible assets[6](index=6&type=chunk) Key Financial Metrics for Q4 and Full-Year 2024 | Metric (thousands of CAD) | Q4 2024 | Q4 2023 | % Change | Full-Year 2024 | Full-Year 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 257,679 | 248,450 | 3.7 % | 920,448 | 909,006 | 1.3 % | | Gross Profit | 68,799 | 57,336 | 20.0 % | 240,331 | 190,415 | 26.2 % | | Operating Loss | (76,089) | (85,017) | 10.5 % | (103,811) | (163,171) | 36.4 % | | Change in Cash and Cash Equivalents | (44,617) | (6,942) | -543 % | 23,318 | (84,545) | 128 % | | Gross Margin | 26.7 % | 23.1 % | 3.6 pp | 26.1 % | 20.9 % | 5.2 pp | | Adjusted Operating Loss | (60,472) | (27,094) | -123 % | (86,144) | (98,028) | 12 % | | Free Cash Flow | 11,625 | 1,383 | 741 % | 8,872 | (60,883) | 115 % | BUSINESS SEGMENT HIGHLIGHTS [Liquor Retail](index=3&type=section&id=Liquor%20Retail) As Canada's largest private liquor retailer, the segment saw increased operating income despite lower revenue, driven by strategic cost and margin management - SNDL is Canada's largest private liquor retailer, operating **165 stores** as of March 17, 2025[17](index=17&type=chunk) - Net revenue declined in Q4 and full-year 2024, with same-store sales decreasing by **3.5%** and **4.6%** respectively, due to weaker market demand[18](index=18&type=chunk) Liquor Retail Segment Financial Metrics | Metric (thousands of CAD) | Q4 2024 | Q4 2023 | % Change | Full-Year 2024 | Full-Year 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 154,080 | 159,493 | -3.4 % | 555,259 | 578,895 | -4.1 % | | Gross Profit | 38,236 | 38,396 | -0.4 % | 139,706 | 137,286 | 1.8 % | | Gross Margin | 24.8 % | 24.1 % | 0.7 pp | 25.2 % | 23.7 % | 1.4 pp | | Operating Income | 12,325 | 10,120 | 21.8 % | 34,781 | 24,655 | 41.1 % | | Adjusted Operating Income | 12,325 | 10,120 | 21.8 % | 34,781 | 24,655 | 41.1 % | [Cannabis Retail](index=3&type=section&id=Cannabis%20Retail) As a leading Canadian cannabis retailer, the segment achieved dynamic net revenue growth and significantly improved adjusted operating income for the year - SNDL is one of Canada's largest private cannabis retailers, operating **185 stores** as of March 17, 2025[19](index=19&type=chunk) - Net revenue grew dynamically in Q4 and for the full year, with same-store sales increasing by **6.3%** and **3.5%** respectively, driven by the Value Buds brand[25](index=25&type=chunk) - Q4 operating income was impacted by a **CAD 15 million impairment** on Spiritleaf intangible assets, though adjusted operating income improved significantly[25](index=25&type=chunk) Cannabis Retail Segment Financial Metrics | Metric (thousands of CAD) | Q4 2024 | Q4 2023 | % Change | Full-Year 2024 | Full-Year 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 83,170 | 75,152 | 10.7 % | 311,689 | 289,980 | 7.5 % | | Gross Profit | 20,490 | 20,045 | 2.2 % | 78,827 | 73,690 | 7.0 % | | Gross Margin | 24.6 % | 26.7 % | -2.0 pp | 25.3 % | 25.4 % | -0.1 pp | | Operating Income | (8,997) | (849) | -959.7 % | (1,742) | 4,840 | -136.0 % | | Adjusted Operating Income | 6,003 | (849) | 807.1 % | 13,258 | 4,840 | 173.9 % | [Cannabis Operations](index=4&type=section&id=Cannabis%20Operations) The Cannabis Operations segment reported significant improvements in revenue and profitability, driven by increased distribution and operational efficiencies - Net revenue growth was driven by increased provincial board and B2B distribution, consumer innovation, and operational efficiency[26](index=26&type=chunk) - The acquisition of Indiva contributed **CAD 7.5 million in revenue** from November 4 to December 31, 2024[26](index=26&type=chunk) - Improved gross profit and operating income were attributed to **enhanced scale efficiencies and productivity measures**[26](index=26&type=chunk) Cannabis Operations Segment Financial Metrics | Metric (thousands of CAD) | Q4 2024 | Q4 2023 | % Change | Full-Year 2024 | Full-Year 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 37,092 | 26,044 | 42.4 % | 109,470 | 87,071 | 25.7 % | | Gross Profit | 10,073 | (1,105) | 1011.6 % | 21,798 | (20,561) | 206.0 % | | Gross Margin | 27.2 % | -4.2 % | 31.4 pp | 19.9 % | -23.6 % | 43.5 pp | | Operating Income | 4,391 | (65,749) | 106.7 % | 2,663 | (112,744) | 102.4 % | | Adjusted Operating Income | 4,439 | (7,715) | 157.5 % | 3,091 | (52,728) | 105.9 % | [Investments](index=4&type=section&id=Investments) The investment portfolio reported a negative operating income in Q4 due to valuation adjustments, though a key milestone was achieved with the Parallel license transfer approval - As of December 31, 2024, the cannabis-related investment portfolio had a book value of **CAD 449.1 million**, with **CAD 413.1 million** invested in SunStream Bancorp Inc[26](index=26&type=chunk) - The portfolio generated a **negative operating income of CAD 63.7 million** in Q4 2024, including a **CAD 65.7 million negative valuation adjustment** for the SunStream portfolio[26](index=26&type=chunk) - The negative valuation adjustment was due to increased US industry risk, unfavorable Florida cannabis ballot results, and deteriorating performance of Parallel and Skymint[26](index=26&type=chunk) - On February 4, 2025, the Florida Department of Health **approved the license transfer for Parallel**, a significant milestone in its restructuring process[26](index=26&type=chunk) - On March 17, 2025, the company announced the purchase of **4,350,000 common shares of High Tide**, representing a 5.4% ownership stake[27](index=27&type=chunk) Financial Statements [Condensed Consolidated Statement of Loss and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Loss%20and%20Comprehensive%20Loss) The statement shows a significant reduction in net loss for 2024, with improvements in both gross profit and operating loss compared to the previous year Condensed Consolidated Statement of Loss and Comprehensive Loss (thousands of CAD) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Revenue | 920,448 | 909,006 | | Cost of Sales | 680,117 | 718,591 | | Gross Profit | 240,331 | 190,415 | | Investment Revenue | 15,551 | 5,259 | | Share of Loss of Equity-Accounted Investees | (65,459) | 6,758 | | Sales and Marketing | 12,004 | 15,045 | | Research and Development | 346 | 324 | | Depreciation and Amortization | 54,250 | 60,216 | | Share-Based Compensation | 20,037 | 15,400 | | Restructuring Costs | 2,667 | 19,573 | | Asset Impairment, Net | 17,317 | 54,967 | | Loss on Disposal of Assets | 370 | 353 | | Operating Loss | (103,811) | (163,171) | | Other Expenses, Net | (1,798) | (8,845) | | Loss Before Income Taxes | (105,609) | (172,016) | | Income Tax Credit | 9,405 | — | | Net Loss from Continuing Operations | (96,204) | (172,016) | | Net Loss from Discontinued Operations | — | (4,535) | | Net Loss | (96,204) | (176,551) | | Comprehensive Loss | (62,851) | (189,322) | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) The statement details the company's assets, liabilities, and equity, showing a decrease in total assets and liabilities alongside an increase in cash and cash equivalents Condensed Consolidated Statement of Financial Position (thousands of CAD) | Item | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 218,359 | 195,041 | | Restricted Cash | 19,815 | 19,891 | | Inventories | 127,919 | 129,060 | | Equity-Accounted Investees | 413,124 | 538,331 | | Goodwill | 124,248 | 119,282 | | **Total Assets** | **1,349,242** | **1,473,164** | | **Liabilities** | | | | Accounts Payable and Accrued Liabilities | 56,275 | 68,210 | | Lease Liabilities (Current) | 34,256 | 30,537 | | Lease Liabilities (Non-Current) | 118,017 | 136,492 | | **Total Liabilities** | **215,886** | **243,824** | | **Shareholders' Equity** | | | | Share Capital | 2,346,728 | 2,375,950 | | Accumulated Deficit | (1,323,965) | (1,260,851) | | **Total Shareholders' Equity** | **1,133,356** | **1,212,069** | | **Total Liabilities and Shareholders' Equity** | **1,349,242** | **1,473,164** | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The statement shows a shift to positive cash flow from operating and investing activities in 2024, resulting in an overall increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (thousands of CAD) | Item | Full-Year 2024 | Full-Year 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 54,914 | (16,648) | | Net Cash from Investing Activities | 17,763 | (24,817) | | Net Cash from Financing Activities | (49,359) | (43,080) | | Change in Cash and Cash Equivalents | 23,318 | (84,545) | | Cash and Cash Equivalents, End of Period | 218,359 | 195,041 | Non-IFRS Measures [Adjusted Operating Income (Loss)](index=9&type=section&id=Adjusted%20Operating%20Income%20(Loss)) This non-IFRS metric provides a clearer view of underlying operational profitability by excluding certain non-recurring or non-cash items - Defined as operating income (loss) less restructuring costs, goodwill and intangible asset impairments, and asset impairments triggered by restructuring activities[42](index=42&type=chunk) Reconciliation of Adjusted Operating Loss to Operating Loss (thousands of CAD) | Segment | Q4 2024 Operating Loss | Q4 2024 Adjusted Operating Loss | Full-Year 2024 Operating Loss | Full-Year 2024 Adjusted Operating Loss | | :--- | :--- | :--- | :--- | :--- | | Liquor Retail | 12,325 | 12,325 | 34,781 | 34,781 | | Cannabis Retail | (8,997) | 6,003 | (1,742) | 13,258 | | Cannabis Operations | 4,391 | 4,439 | 2,663 | 3,091 | | Investments | (63,724) | (63,724) | (50,013) | (50,013) | | Corporate | (20,084) | (19,515) | (89,500) | (87,261) | | **Total** | **(76,089)** | **(60,472)** | **(103,811)** | **(86,144)** | [Gross Margin](index=9&type=section&id=Gross%20Margin) This supplementary financial measure is calculated by dividing gross profit by net revenue to assess the profitability of sales - Gross margin is a supplementary financial measure calculated by dividing gross profit by net revenue[45](index=45&type=chunk) [Free Cash Flow](index=9&type=section&id=Free%20Cash%20Flow) This non-IFRS metric assesses the company's ability to generate positive cash flow by excluding cash used for non-operational items - Defined as the total change in cash and cash equivalents less cash used for share repurchases, dividends, changes in debt instruments, and net cash for acquisitions/dispositions[47](index=47&type=chunk) Reconciliation of Free Cash Flow to Change in Cash (thousands of CAD) | Item | Q4 2024 | Q4 2023 | Full-Year 2024 | Full-Year 2023 | | :--- | :--- | :--- | :--- | :--- | | Change in Cash and Cash Equivalents | (44,617) | (6,942) | 23,318 | (84,545) | | Adjustments: | | | | | | Common Share Repurchases | 13,219 | — | 13,219 | 1,536 | | Change in Long-Term Investments | 5,033 | 8,325 | (67,309) | 25,821 | | Acquisitions, Net of Cash Acquired | 37,990 | — | 39,644 | (3,695) | | **Free Cash Flow** | **11,625** | **1,383** | **8,872** | **(60,883)** | [Same Store Sales](index=10&type=section&id=Same%20Store%20Sales) This non-IFRS metric evaluates retail sales trends by focusing on revenue generated from existing stores, excluding the impact of openings and closures - Same-store sales represent revenue from existing retail locations in comparable periods, excluding the impact of store openings and closures[50](index=50&type=chunk)[51](index=51&type=chunk) Company Information & Disclosures [About SNDL Inc.](index=5&type=section&id=About%20SNDL%20Inc.) SNDL is a vertically integrated cannabis company and Canada's largest private liquor and cannabis retailer, deploying capital across the North American cannabis sector - SNDL Inc is Canada's largest vertically integrated cannabis company and the largest private liquor and cannabis retailer[31](index=31&type=chunk) - Retail banners include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf, and Superette[31](index=31&type=chunk) - The investment portfolio aims to deploy strategic capital across the North American cannabis industry through direct and indirect investments and partnerships[31](index=31&type=chunk) [Equity Position](index=5&type=section&id=Equity%20Position) The company maintains a strong balance sheet with significant unrestricted cash and investments, no outstanding debt, and an active share repurchase program - As of December 31, 2024, the company had **CAD 667.6 million** in unrestricted cash, marketable securities, and investments, with **no outstanding debt** and a net book value of **CAD 1.1 billion**[33](index=33&type=chunk) - The company repurchased **10,764,107 common shares** over the last six months at an average price of $1.81 per share[33](index=33&type=chunk) [Forward-Looking Information Cautionary Statement](index=5&type=section&id=Forward-Looking%20Information%20Cautionary%20Statement) This release contains forward-looking statements subject to risks and uncertainties, which are not guarantees of future performance and are based on current expectations - The press release contains forward-looking statements regarding operational goals, strategic initiatives, financial performance, and regulatory changes[32](index=32&type=chunk) - These statements are based on management's current expectations and are subject to known and unknown risks that may cause actual results to differ materially[34](index=34&type=chunk) - The company disclaims any intention or obligation to update or revise any forward-looking statements, except as required by applicable law[34](index=34&type=chunk) [Conference Call & Webcast](index=1&type=section&id=Conference%20Call%20%26%20Webcast) SNDL held a conference call and webcast on March 18, 2025, to discuss its Q4 and full-year 2024 financial and operational results - The company held a conference call and webcast on **Tuesday, March 18, 2025, at 10:00 a.m. ET**[2](index=2&type=chunk)[30](index=30&type=chunk) - Links were provided to access the live webcast and a replay of the event[31](index=31&type=chunk)

Core Insights - SNDL Inc. reported record full-year net revenue, gross profit, and gross margin for 2024, alongside positive cash flow and free cash flow [1][4][6] - The company achieved a net revenue of CAD 920.4 million for the full year, reflecting a growth of 1.3% year-over-year, and CAD 257.7 million for the fourth quarter, a 3.7% increase [6][10] - Gross profit reached CAD 240.3 million for the full year, up 26.2% from the previous year, with a gross margin of 26.1% [6][11] - The company is focused on long-term growth and shareholder value, with plans to list its shares on the Canadian Securities Exchange in April 2025 [5][8] Financial Performance - The operating loss for the fourth quarter was CAD 76.1 million, influenced by a negative valuation adjustment of CAD 65.7 million related to the SunStream portfolio [6][10] - Cash flow was negative by CAD 44.6 million in Q4 2024, but positive for the full year at CAD 23.3 million [6][10] - Free cash flow was positive at CAD 11.6 million for Q4 and CAD 8.9 million for the full year [6][11] Business Segments - Liquor Retail segment reported a decline in net revenue of 3.4% for Q4 and 4.1% for the full year, while Cannabis Retail grew by 10.7% in Q4 and 7.5% for the year [13][18] - Cannabis Operations saw a significant revenue increase of 42.4% in Q4 and 25.7% for the full year, driven by operational efficiencies and consumer innovation [22][26] - The company completed the acquisition of Nova Cannabis Inc. and Indiva Inc., enhancing its position in the cannabis market [7][26] Strategic Initiatives - SNDL is committed to enhancing its operational performance and financial discipline, with a strong balance sheet featuring CAD 218.4 million in unrestricted cash as of December 31, 2024 [6][8] - The company repurchased 10.8 million common shares at an average price of USD 1.81 per share, reflecting its strategy to manage share float [7][26] - SNDL aims to generate CAD 100 million in positive annual free cash flow within the next three years [8]

Company Overview - SNDL Inc. is a public company traded on Nasdaq under the symbol "SNDL" [2] - It is the largest private-sector liquor and cannabis retailer in Canada, operating retail banners such as Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf, and Firesale Cannabis [2] - SNDL is a licensed cannabis producer and one of the largest vertically integrated cannabis companies in Canada, focusing on low-cost biomass sourcing, premium indoor cultivation, product innovation, and low-cost manufacturing facilities [2] Financial Results Announcement - SNDL will release its fourth quarter and full year 2024 financial results for the period ended December 31, 2024, before market opens on March 18, 2025 [1] - Following the financial results release, SNDL will host a conference call and webcast at 10:00 a.m. EDT (8:00 a.m. MDT) on the same day [1]

Core Viewpoint - The marijuana industry is facing volatility due to political uncertainties regarding federal cannabis laws, particularly under the Trump administration, which lacks support for legalization [1][3][2] Industry Overview - Investor confidence in marijuana stocks is heavily influenced by the political landscape, with a hostile federal environment potentially deterring investment and reducing capital flow into the sector [2][3] - Despite the challenges, there is optimism in the industry as demand for legal cannabis continues to grow, with many companies showing profitability [4] Company Highlights - **Jushi Holdings Inc.**: A vertically integrated cannabis company involved in cultivation, processing, and retail. The company supports the legalization of adult-use cannabis in Pennsylvania, emphasizing the importance of extending protections from the regulated medical market to the adult-use market [5][7][8] - **SNDL Inc.**: Engages in the production and sale of cannabis products in Canada, operating through various segments. Recently announced a partnership with HYTN Innovations Inc. to explore commercial manufacturing agreements for vape cartridges [9][10][11]

Core Insights - SNDL Inc. has appointed Phil McBride as Chief Information Officer and Navroop Sandhawalia as President of the Liquor Division, aiming to enhance execution capabilities and drive growth strategy [1][2]. Group 1: Leadership Appointments - Phil McBride brings over 25 years of experience in consumer-packaged goods, financial services, and retail, with a focus on digital transformation and data analytics [2][3]. - Navroop Sandhawalia, who has been with SNDL since October 2023, has significantly improved performance management and operational efficiency within the liquor business [3]. Group 2: Company Overview - SNDL is the largest private-sector liquor and cannabis retailer in Canada, operating multiple retail banners including Ace Liquor and Spiritleaf [4]. - The company is also a licensed cannabis producer, specializing in low-cost biomass sourcing and indoor cultivation, with a diverse cannabis brand portfolio [4].

Core Viewpoint - SNDL Inc. has announced the renewal of its share repurchase program, allowing the company to repurchase up to C$100 million of its outstanding common shares, which aims to return value to shareholders [1][2]. Share Repurchase Program Details - The new Share Repurchase Program will commence on November 21, 2024, and will expire on November 20, 2025, with a maximum repurchase limit of approximately 13.2 million shares, representing 5% of the issued and outstanding shares at the start of the program [3][6]. - The company has the discretion to repurchase shares through various means, including open market purchases and privately negotiated transactions, based on market conditions and regulatory requirements [2][4]. - The actual number of shares repurchased and the timing will be determined by the company, and there is no obligation to repurchase a minimum number of shares [4][5]. Current Share Repurchase Status - Under the current share repurchase program, which began on November 21, 2023, SNDL aimed to repurchase up to C$100 million or 13.1 million shares, and as of November 14, 2024, the company had repurchased 727,829 shares at a weighted average price of approximately US$1.97 per share [6]. Company Overview - SNDL is the largest private-sector liquor and cannabis retailer in Canada, operating various retail banners and is a licensed cannabis producer with a diverse brand portfolio [7]. - The company focuses on low-cost biomass sourcing, indoor cultivation, and product innovation within the cannabis industry, aiming to deploy strategic capital through investments and partnerships [7].

Disclaimer Forward-looking statements Certain statements contained in this presentation may constitute forward-looking information and statements. All statements in this presentation, other than statements of historical fact, that address events or developments concerning SNDL Inc. ("SNDL" or the "Company") that SNDL expects to occur are "forward-looking information and statements". Forward-looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipa ...

Financial Data and Key Metrics - Net revenue in Q3 2024 reached $236.9 million, a marginal decline compared to the prior year, driven by the Liquor retail segment, while the Cannabis segment posted an 8% growth [11] - Gross profit increased by $14.4 million or 30% year-over-year, with a record gross margin of 26.6%, up 610 basis points [11] - Free cash flow was positive at $9.2 million in Q3 2024, bringing year-to-date free cash flow to a negative $2.8 million, with expectations to meet or exceed full-year guidance [13] - Cash balances increased from $183 million on June 30 to $263 million on September 30, 2024, with no outstanding debt [9] Business Segment Performance Cannabis Segment - Combined Cannabis segment revenue grew 8% year-over-year, with Cannabis Retail contributing $5.6 million and Cannabis Operations contributing $4.1 million in net revenue growth [15] - Cannabis Operations achieved a record gross margin of 21.2%, driven by productivity initiatives and increased provincial board and B2B distribution [25][26] - Cannabis Retail saw a 7.4% increase in net revenue, driven by same-store sales growth, new store openings, and incremental revenue from Dutch Love stores [24] Liquor Retail Segment - Net revenue declined by $7.2 million or 4.8% year-over-year, impacted by market softness across North America [22] - Gross margin improved by 100 basis points to 25.6%, with operating income growing by $3.5 million or 42.5% compared to the prior year [23] Market and Strategic Initiatives - The company launched a restructuring program aimed at reducing corporate overheads, enhancing efficiency, and realizing annualized savings of over $20 million [7] - The acquisition of Indiva positions the company as a leader in the Canadian infused edibles category, with expected margin accretion [7][46] - The privatization of Nova ensures full benefit of cash flow and earnings potential for SNDL shareholders [35] Management Commentary on Industry and Outlook - The company remains focused on growth, profitability, and people, with strong momentum in the Cannabis segment and margin improvements across all segments [28][29] - Management expects continued margin expansion in Cannabis Operations, driven by productivity initiatives and automation [37][40] - The company is exploring opportunities for facility consolidation and monetization of noncore real estate to bolster cash balances [46] Other Important Information - The company achieved $15 million in productivity improvements in Q3, largely from Cannabis Operations, and $5 million in overhead savings [30] - Data licensing in Cannabis and Liquor Retail segments reached $4 million, a 6% increase from the previous quarter [30] - The company launched a strategic talent review and community engagement initiatives, emphasizing employee well-being and recognition [32] Q&A Session Summary Question: Nova Acquisition Rationale - The acquisition of the remaining minority stake in Nova ensures SNDL shareholders benefit fully from the cash flow and earnings potential of the retail business [35] Question: Cannabis Operations Margin Improvement - Margin improvements in Cannabis Operations are driven by productivity initiatives, including labor and automation efficiencies, with expectations for further expansion [37][40] Question: Capital Allocation and Share Repurchases - Capital allocation priorities include growth in Canadian retail and potential investments in U S assets, with ongoing share repurchases at discounted valuations [42][43] Question: Indiva Acquisition and Facility Consolidation - The Indiva acquisition is expected to be margin accretive, with plans for facility consolidation and monetization of noncore real estate [46][47] Question: Retail Environment and Illicit Market Pressures - The company acknowledges ongoing pressures from the illicit market but remains focused on convenience and value to compete effectively in the legal market [49][50]