Canadian Tire Corporation, Limited · TSX:CTC
Canadian Tire — Q2 2010 Earnings Presentation
18 slides from Canadian Tire's earnings presentation, Aug 12, 2010
Slide 1: Second Quarter Financial Results
2010 S Second dQQuarter t FiFinancial i l Results R lt August 12, 2010 1
Slide 2: Forward-looking Information
F Forward-looking d l ki IInformation f i This document contains forward-looking information that reflects management’s current expectations related to matters such as future financial performance and operating results of the Company. Forward-looking statements are provided for the purposes of provi
Slide 3: Forward-looking Information Continued
F Forward-looking d l ki IInformation f i C Continued i d For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, p , please p refer to the “Risk Factors” section of our Annual Information Form for fiscal 2
Slide 4: Stephen Wetmore
Stephen Wetmore President and Chief Executive Officer 4
Slide 5: Strategic Update
S Strategic i UUpdate d Continued progress on strategic direction – Improved cash flow, liquidity and balance sheet position – Increased focus on improving retail profitability and productivity Design of customer-centric retailing strategies underway will: – Significantly contribute to growing t
Slide 6: Q2 Business Performance Highlights
Q2 Business B i P Performance f Highlights Hi hli h Positive results in core CTR categories – consistent with long-term aspirations, excellent performance at Financial Services, offset by weak automotive results – Automotive negatively impacted by continued softness in the Canadian automotive indu
Slide 7: Q2 Business Highlights Continued
Q2 Business B i Hi Highlights hli h C Continued i d – Mark’s solid POS growth and store sales • Benefitted from improving employment markets and economic conditions in Western Canada – Financial Services strong second quarter • Business continues to exceed performance expectations 7
Slide 8: Mike Arnett
Mike Arnett President, Canadian Tire Retail 8
Slide 9: CTR Performance Highlights
CTR P Performance f Hi Highlights hli h Retail sales 1 1.3% 3% increase over prior quarter reflects strong sales in strategic growth businesses Early summer weather in April and May contributed to year-over-year growth in “backyard” backyard categories - including gardening gardening, patio furn
Slide 10: Dean McCann
Dean McCann President, Canadian Tire Financial Services 10
Slide 11: Financial Services Earnings Highlights
Fi Financial i lSServices i E Earnings i Hi Highlights hli h Adjusted pre-tax pre tax earnings increased 36 36.5% 5% reflecting higher credit card interest and reduced loan loss provisioning Gross operating revenue up 2.1% largely due to increase in credit card interest earned from higher averag
Slide 12: Getting Back to Targeted ROR
G i Back Getting B k to T Targeted d ROR Q2 2010 Q Q1 2010 Q Q2 2009 Q Target g Revenues 25.18% 25.18% 24.93% 25.6% Variable expenses 14.15% 14.59% 13.28% 13.9% G Gross margin i 11 03% 11.03% 10 59% 10.59% 11 65% 11.65% 11 7% 11.7% Operating expenses (OPEX) 6.77% 6.70% 7.00% 6.7% - 7.2% Return on re
Slide 13: Marco Marrone
Marco Marrone Chief Financial Officer & Executive V.P., Finance 13
Slide 14: Consolidated Highlights
C Consolidated lid d HiHighlights hli h ($ in millions except per share amounts) Q2 10 Q2 09 Change Retail sales 2,860.1 2,789.1 2.5% Gross operating revenue 2,414.1 2,324.8 3.8% EBITDA 264 1 264.1 250 1 250.1 5 6% 5.6% Earnings before income taxes 173.6 152.4 13.9% Net earnings 119.9 103.7 15.6% Ad
Slide 15: Cash Position and CAPEX
Cash Position and CAPEX Cash and Cash Equivalents $1.05 billion vs. $1.44 billion in Q2 2009 – Due to decrease in cash generated by financing activities – No long-term debt issuance in 2010 – Portion of cash on hand earmarked for $300 million medium term note maturing in October 2010 Alternative
Slide 16: Financial Ratios
Fi Financial i lRRatios i A att As A att As July 3, 2010 July 4, 2009 Long-term debt (including current portion of LTD g and long-term deposits) p ) $2.67 billion $ $2.77 billion $ Book value per share $47.51 $43.92 Retail return on invested capital (on a rolling 12- month basis)1 7.4% 8.9% For the
Slide 17: Other Items
O h Items Other I Other Mark’s Q2 inventory shrink expense higher than recent experience, but within industry norms - inventory processes undergoing review Corporate expenses in line with expectations expectations, opportunities exist to drive further reductions Q2 2010 statutory tax rate 31.0
Slide 18: Questions and Answers
> cananian/4 Nay Us Questions and Answers