NWC: RBC Elements™: Q1/26 Preview - Wildfires and Settlement Updates

Research evidence excerpt

NWC: RBC Elements™: Q1/26 Preview - Wildfires and Settlement Updates

140 communities served by NWC, we estimate that 1 is currently 2026 644.9E 675.5E 669.5E 722.5E

Prev. 655.8E 679.0E 672.6E 725.6E under an evacuation order versus 14 last year.

All values in CAD unless otherwise noted. • Looking for an update on in-market settlement payments. Concurrent

with Q4/25 results in April, management reiterated that while the Priced as of prior trading day's market close, EST (unless otherwise noted).

volume of FNCFS settlement payments continued to trend higher, the

pace remained modest relative to the more meaningful ramp anticipated

later in 2026. As of May 31st, the settlement admin reported that

110k claims have been filed (48k incremental claims in the last six

months), which we believe could translate to $4B+ in compensation

being disbursed through F2026. We will look for an update from

management on whether in-market settlement payments continue to

ramp and the extent to which sales capture rates are tracking in line with

internal expectations – an area where we see potential for upside as fuel

surcharges increase the cost of outshopping.

• Higher FNCFS program funding is officially flowing in Ontario. On May

29th, the Ontario Final Agreement (OFA) to reform FNCFS programs in

the province was officially implemented following its approval on March

30th, with higher funding now flowing under the new framework. With

Q4/25 results, management reiterated that funding for select FNCFS

programs declined YoY pending the finalization of an agreement and that

the OFA was expected to be an incremental tailwind to SSS.

• Summary of Q1/26 expectations. For Q1/26, we forecast: (i)

consolidated revenues and adjusted EBITDA of $645MM (+0.6% YoY)