Slide 1: Aimia - Inspiring Loyalty
/\IMI/A\ INSPIRING LOYALTY
Slide 2: Q3 2015 Highlights
Q3 2015 HIGHLIGHTS November 13, 2015
Slide 3: Forward-Looking and Cautionary Statements
FORWARD-LOOKING AND CAUTIONARY STATEMENTS Forward-looking statements are included in this presentation. These forward-looking statements are typically identified by the use of terms such as “outlook”, “guidance”, “target”, “forecast”, “assumption” and other similar expressions or future or condition
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Aimia uses the following non-GAAP financial measures which it believes provides investors and analysts with additional information to better understand results as well as assess its potential. GAAP means generally accepted accounting principles in Canada and represents In
Slide 5: Rupert Duchesne, Group Chief Executive
RUPERT DUCHESNE GROUP CHIEF EXECUTIVE
Slide 6: David Johnston, Group Chief Operating Officer
DAVID JOHNSTON GROUP CHIEF OPERATING OFFICER
Slide 7: Progress with Credit Card Partners: TD & CIBC
PROGRESS WITH CREDIT CARD PARTNERS: TD & CIBC Aeroplan sale of loyalty units indexed at Q4/13 122% 120% 116% 115% 113% 104% 100% 100% (1) Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 (3) TD + CIBC AMEX (2) TD + CIBC accounted for 29% of Consolidated Gross Billings at Q3 2015 (1) E
Slide 8: Aeroplan Campaigns in Market: TD
AEROPLAN CAMPAIGNS IN MARKET: TD 8
Slide 9: Aeroplan Campaigns in Market: CIBC
AEROPLAN CAMPAIGNS IN MARKET: CIBC 9
Slide 10: "Behind Your Plan" Aeroplan Campaign
“BEHIND YOUR PLAN” AEROPLAN CAMPAIGN 10
Slide 11: A More Challenging Starting Point: AMEX
A MORE CHALLENGING STARTING POINT: AMEX Aeroplan sale of loyalty units indexed at Q4/13 122% 119% 111% 108% 107% 108% 104% 100% (1) Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 (3) TD + CIBC AMEX (2) AMEX accounted for 13% of Consolidated Gross Billings at Q3 2015 (1) Excludes the
Slide 12: Sainsbury's Use of Bonusing
SAINSBURY’S USE OF BONUSING 12
Slide 13: 2016 Business Planning
2016 BUSINESS PLANNING • Good progress towards new divisional structure and establishment of Global Loyalty Solutions • Healthy sales pipeline for Aimia Loyalty Platform; new win with Optus announced today • Focus on reallocation of capital to higher margin parts of the business • $20 million of ann
Slide 14: David Adams, Executive Vice-President and CFO
DAVID ADAMS EXECUTIVE VICE-PRESIDENT AND CFO
Slide 15: Financial Highlights in Q3 and YTD 2015
FINANCIAL HIGHLIGHTS IN Q3 AND YTD* 2015 Q3 2015 YTD 2015 Gross $580.3 million $1,780.8 million Billings (8.4%) or (12.3%) in c.c.(1) (10.9%) or (13.2%) in c.c.(1) Adjusted $49.1 million $162.2 million EBITDA(2) 8.5% margin 9.1% margin Free cash $59.0 million $123.4 million +4.8% YoY ** flow(3) Free
Slide 16: Q3 2015 Consolidated AEBITDA
Q3 2015 CONSOLIDATED AEBITDA ($ IN MILLIONS) ($17.5) AE AE margin ($1.1) margin $3.0 8.5% ($4.7) $3.6 $1.1 $0.8 7.9% Canada Stock Club Corporate Severance EMEA US & based Premier Expense(1) APAC compensation distribution $63.9 $46.1 $49.1 2014 2015 2015 Reported Reported Adjusted (1) Severance expen
Slide 17: Consolidated Adjusted EBITDA and Margin
CONSOLIDATED ADJUSTED EBITDA AND MARGIN FY 2014: 8.1%(1) YTD 2015: 9.1%(2)(3) 12% $70 $60 Adjusted EBITDA (mln CAD) 10% 10.1% 10.2%(2) 9.1% c. 9.0%(3) $50 8% 8.7% 8.8% AEBITDA Margin % 8.5%(3) $40 6% $30 5.3%(1) 4% $20 2% $10 $32.6(1) $58.7 $63.9 $60.0 $52.1 $61.8(2) $49.1(3) 0% $0 Q1 Q2 Q3 Q4 Q1 Q2
Slide 18: 2015 Guidance
2015 GUIDANCE* 2015 Guidance 2015 Guidance (in millions of (1) 2014 Normalized (As provided on (As updated on Canadian dollars) Aug 14, 2015)(2) Nov 13, 2015)(2) Between Between Gross Billings $2,586.6 $2,460 and $2,510 $2,400 and $2,460 Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA $216.4 margin
Slide 19: What's Changed Since Q2 2015
WHAT’S CHANGED SINCE Q2 2015 ($ IN MILLIONS) $220 to $220 to ($30) to $240 ($25) $40 $240 ($40) ($15) ($10) $180 to $190 U.S. Lower Gross working Nectar One-off Increased Italia tax Billings capital capital redemption refunds and expenditures YTD FCF: spike stable redemptions • $144 million includin
Slide 20: 2016 Gross Billings Growth Expectations
2016 GROSS BILLINGS GROWTH EXPECTATIONS 2016 Expectations: $150(1) Modest Gross Billings growth based on: • Aeroplan growth • Nectar will be >2015 broadly stable $2,400 to Gross $2,366 $2,537(2) $2,460 Billings • Continued transition to higher 2013A 2014A 2015E* 2016E* margin platform services outsi
Slide 21: Drivers of AEBITDA to FCF Conversion
DRIVERS OF AEBITDA TO FCF CONVERSION • Expected 2015 margin of 9% with double digit growth in Adjusted EBITDA in 2016 >75% • >75% AEBITDA to FCF conversion conversion historically after 83% to 86% conversion normalizing for one-offs Adjusted • Taxes paid or received a key EBITDA swing factor • Ongoi
Slide 22: Free Cash Flow per Common Share
FREE CASH FLOW PER COMMON SHARE $225 million or 0.25(3) 16.7 million Net tax 0.53(3) refunds common shares bought back Normalized with surplus FCFPS cash since November 2014 $0.73 to $0.43(1) $0.79(2) 2014A 2015E* 2016E* Weighted Avg. Share Count: 173.5 162.8 (4) ~158.0(4) * Please refer to slide 3
Slide 23: Dividend per Common Share
DIVIDEND PER COMMON SHARE Over 80% of cumulative Free Cash Flow returned to shareholders since 2008 $0.17 $0.18 $0.19 2013A 2014A 2015E* Quarterly common dividend * Please refer to slide 3 for a description of the assumptions made with respect to and related to the 2015 guidance and 2016 expectation
Slide 24: Rupert Duchesne, Group Chief Executive
RUPERT DUCHESNE GROUP CHIEF EXECUTIVE
Slide 25: Thank You
AIMIA INSPIRING LOYALTY
Slide 26: Q3 2015 Consolidated Gross Billings
Q3 2015 CONSOLIDATED GROSS BILLINGS ($ IN MILLIONS) ($36.5) ($21.8) ($11.3) $16.6 Canada Gross-to-net EMEA US & APAC(2) impact Consolidated: (8.4)%; (12.3)% in c.c.(1) Consolidated: +17.0% growth; 12.1% in c.c.(1) Canada: +22.4%; EMEA: +12.7%; -1.2% in c.c.(1) US & APAC: +5.2%; 0.0% in c.c.(1) Conso
Slide 27: YTD 2015 Consolidated Gross Billings
YTD 2015 CONSOLIDATED GROSS BILLINGS ($ IN MILLIONS) ($100.0) ($63.8) ($39.6) $16.6 ($30.9) TD Canada(2) EMEA US & Gross-to-net Contribution APAC(3) impact Consolidated: (10.9)%; Consolidated: +17.0% (13.2)% growth; 12.1% inin (1) (1) c.c. c.c. Canada: +22.4%; EMEA: +12.7%; -1.2% in c.c.(1) US & APA
Slide 28: Q3 2015 Gross Billings by Activity
Q3 2015 GROSS BILLINGS BY ACTIVITY ($ IN MILLIONS) ($30.9) ($19.0) ($11.3) $8.3(2) EMEA Loyalty Units Canada Loyalty Proprietary Gross-to-net Units Loyalty impact & Other Consolidated: (8.4)%; (12.3)% in c.c.(1) $633.2 $580.3 2014 Reported 2015 Reported (1) Constant Currency excludes the translation
Slide 29: YTD 2015 Gross Billings by Activity
YTD 2015 GROSS BILLINGS BY ACTIVITY ($ IN MILLIONS) ($100.0) ($56.7) ($29.5) ($0.6)(3) ($30.9) TD EMEA Loyalty Proprietary Contribution Canada Loyalty Gross-to-net Units Loyalty & Units(2) impact Other Consolidated: (10.9)%; (13.2)% in c.c.(1) $1,998.5 $1,780.8 2014 2015 Reported Reported (1) Consta
Slide 30: Q3 2015 Financial Highlights – Canada
Q3 2015 FINANCIAL HIGHLIGHTS – CANADA Three months ended September 30, (in millions of Canadian dollars) 2015 2014 Reported Reported % Gross Billings Aeroplan 307.0 327.6 -6.3% Proprietary Loyalty 44.5 58.7 -24.2% Intercompany eliminations (19.5) (17.8) n.m. 332.0 368.5 -9.9% Total revenue Aeroplan
Slide 31: YTD 2015 Financial Highlights – Canada
YTD 2015 FINANCIAL HIGHLIGHTS – CANADA Nine months ended September 30, (in millions of Canadian dollars) 2015 2014 Reported Reported % Gross Billings Aeroplan 918.9 1,050.3 -12.5% Proprietary Loyalty 145.4 169.6 -14.3% Intercompany eliminations (61.7) (53.5) n.m. 1,002.6 1,166.4 -14.0% Total revenue
Slide 32: Aeroplan Revenue
AEROPLAN REVENUE Q3 2015 Q3 2014 ($ in millions) Miles Revenue 236.9 233.9 Breakage Revenue 29.2 28.6 Other Revenue 9.6 11.2 Total Revenue 275.7 273.7 32
Slide 33: Aeroplan Accumulation & Redemption Pattern
AEROPLAN ACCUMULATION & REDEMPTION PATTERN Miles Accumulated y/y% 17.9% 15.4% 14.8% 7.4% 8.7% 10.5% 2.7% 3.6% -0.2% -2.9% -5.0% -10.0% -10.5% -9.7% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Burn/earn for the quarter Miles Accumulated Miles Accumulated excluding all promotional miles excluding promot
Slide 34: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER CIBC Other Other CIBC 20.8% 20.9% 16.2% 15.1% Sainsbury’s Sainsbury’s 17.9% Air 15.5% Air Canada Q3 2014 Canada Q3 2015 12.7% $472.4M 13.4% $422.5M AMEX AMEX TD 12.7% TD 20.8% 12.6% 21.4% 34
Slide 35: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER Other CIBC Other CIBC 20.2% 15.3% 22.3% 14.6% Sainsbury’s Sainsbury’s 18.9% Air Air Canada 9M 2014 Canada 9M 2015 19.1% 12.8% $1,412.2* 13.8% $1,326.0M AMEX AMEX TD 12.3% 11.8% 19.1% TD 19.8% * Excludes the $100.0 million upfront TD Payment
Slide 36: Q3 2015 Adjusted EBITDA to Free Cash Flow Bridge
Q3 2015 ADJUSTED EBITDA TO FREE CASH FLOW* BRIDGE ($ IN MILLIONS) $1.2 ($6.8) $25.9 ($10.3) $22.9 ($20.0) Non-cash Items $46.1 $59.0 Adjusted Change in Stock-based Cash Net cash Capex Working capital Free Cash EBITDA FRC compensation taxes interest paid and other Flow Q3 2014: $63.9 $59.0 $2.3 ($22.
Slide 37: YTD 2015 Adjusted EBITDA to Free Cash Flow Bridge
YTD 2015 ADJUSTED EBITDA TO FREE CASH FLOW* BRIDGE ($ IN MILLIONS) $13.0(1) ($22.1) $7.5 $8.0 ($64.2) $22.0 Non-cash Items $159.2(1) $123.4 Adjusted Change in Stock-based Cash Working capital Net cash Capex Free Cash EBITDA FRC compensation taxes and other interest paid Flow YTD 2014: $254.2 $145.0
Slide 38: Capital Allocation
CAPITAL ALLOCATION Common Dividends ($ per common share) Common Share Buy Back ($million except price/share) 5 years of consecutive increases in quarterly dividends Repurchased approximately $550 million dollars of common shares between full year 2010 to September 2015 Dividend Yield: 6.5%** $13.39*
Slide 39: Balance Sheet at September 30, 2015
BALANCE SHEET AT SEPTEMBER 30, 2015 DEBT Interest Sept CASH & INVESTMENTS $ millions Rate Maturing 30, 2015 Sept $ millions 30, 2015 Revolving Facility(1) Apr. 23, 2019 - Cash and cash equivalents 468 Senior Secured Notes 3 6.95% Jan. 26, 2017 200.0 Restricted cash 28 Senior Secured Notes 5 4.35% Ja
Slide 40: Foreign Exchange Rates
FOREIGN EXCHANGE RATES Q3 2015 Q3 2014 % Change Average Average Period Average Average Period Average Average Period quarter YTD end rate quarter YTD end rate quarter YTD end rate £ to $ 2.0248 1.9284 2.0334 1.8171 1.8252 1.8117 11.4% 5.7% 12.2% AED to $ 0.3557 0.3425 0.3650 0.2961 0.2976 0.3037 20.