Slide 1: Q3 2019 highlights
Q3 2019 highlights OCTOBER 28, 2019
Slide 2: 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 3: 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 4: GAAP to non-GAAP reconciliation
GAAP TO NON-GAAP RECONCILIATION* Three Months Ended Nine Months Ended September 30, September 30, (in millions of Canadian dollars, except share and per share information) 2019 2018 2019 2018 Continuing operations Operating loss (12.1) (16.1) (52.8) (71.0) Depreciation and amortization 0.2 2.8 0.7 1
Slide 5: Q3 2019 income statement
Q3 2019 INCOME STATEMENT Three Months Ended Nine Months Ended September 30, September 30, (in millions of Canadian dollars) 2019 2018 2019 2018 Revenue 33.3 42.5 99.0 130.3 Cost of sales Cost of rewards and direct costs 2.2 4.8 6.4 14.2 Depreciation and amortization 0.2 2.8 0.7 10.3 Amortization of
Slide 6: Today's speakers
TODAY’S SPEAKERS JEREMY RABE STEVEN LEONARD Chief Executive Officer Chief Financial Officer © 2019 Aimia. All rights reserved. 6
Slide 7: Agenda
AGENDA Q3 2019 Financial highlights highlights © 2019 Aimia. All rights reserved. 7
Slide 8: Q3 2019 highlights
Q3 2019 highlights JEREMY RABE
Slide 9: Strategic priorities
STRATEGIC PRIORITIES Enhancing substantial assets and investments Strategic Keypriorities Key to accomplishments year accomplishments date Future intentions Continue to improve Transforming our Significantly improved profitability and operating business operating profitability growth trajectory Enha
Slide 10: Loyalty Solutions new wins and pipeline
LOYALTY SOLUTIONS NEW WINS AND PIPELINE Positive momentum in commercial business • Good visibility of 2019 revenue from existing client contracts and healthy pipeline for 2020 • Loyalty Solutions client wins: • New Loyalty Solutions contract win with a Strong renewal rates across the business leadin
Slide 11: Cost structure
COST STRUCTURE Significant progress on cost transformation • 520 FTE at Q3 • New contract with 2019, down from largest IT provider to Cost savings last quarter (560) reduce run-rate on this and a year ago IT spend by 40% in initiatives in 2019 (780) 2020 expected to Headcount Technology • Insourcing
Slide 12: Financial highlights
FINANCIAL highlights STEVEN LEONARD
Slide 13: Q3 2019 financial highlights
Q3 2019 FINANCIAL HIGHLIGHTS* Continuing operations Cost transformation Consolidated reported plan driving (CAD$ M) Q3 2019 Q3 2018 YoY % significantly improved financial Revenue 33.3 42.5 -21.6% results in the third Operating Expenses (42.2) (50.3) 16.1% quarter Distributions from equity-accounted
Slide 14: Loyalty Solutions segment
LOYALTY SOLUTIONS SEGMENT Cost transformation driving improved results (CAD$M) -21.6% YoY 7.4% QoQ Revenue 42.5 36.8 34.7 33.3 31.0 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 78.6(1) Operating -25.3% YoY -19.8% QoQ expenses 41.1 42.7 38.3 30.7(2) Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Adjusted 1.3 (3)
Slide 15: Corporate and Other segment
CORPORATE AND OTHER SEGMENT IT decoupling costs driving operating expense up in Q3 (CAD$M) 25.0% YoY Operating 3.6% QoQ expenses 14.8 11.1 11.5(1) 9.2 8.0 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Adjusted 10.9 EBITDA (5.7) (10.2) (4.7) (5.3) Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 *This presentation
Slide 16: PLM gross billings
PLM GROSS BILLINGS* Strong top line growth of 10% Largest coalition PLM Gross Billings from loyalty units (million USD) loyalty program in Mexico with +9.8% YoY engaged base 63.7 61.3 63.3 59.5 65.9 67.3 55.8 of 6.6 million World class Technology members and Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q
Slide 17: PLM Adjusted EBITDA and distributions
PLM ADJUSTED EBITDA AND DISTRIBUTIONS* Strong Adjusted EBITDA growth of 12% Adjusted EBITDA PLM Adjusted EBITDA(1) (million USD) margin at 31.9% in Q3 2019; +12.6% YoY full year distributions 20.2 19.1 22.0 20.4 21.3 21.5 17.1 expected to total CAD$35 million (2) (2) Q1 2018 (2) Q2 2018 Q3 2018 (2)
Slide 18: Q3 2019 Adjusted EBITDA to Free Cash Flow walk
CONTINUING OPERATIONS Q3 2019 Adjusted EBITDA to Free Cash Flow walk* (CAD$ M) (1) Q3 (11.3) (7.2) 2.6 0.9 1.0 (3.0) - (5.6) 2018 *This presentation contains both IFRS and non-GAAP financial measures. Non-GAAP financial measures are defined and reconciled to the most comparable IFRS measures, if app
Slide 19: Balance sheet
BALANCE SHEET Financial flexibility to execute the strategy (CAD$ M) Movement in available and unrestricted cash and investments* *This presentation contains both IFRS and non-GAAP financial measures. Non-GAAP financial measures are defined and reconciled to the most comparable IFRS measures, if app
Slide 20: Q3 Conclusion
Q3 Conclusion JEREMY RABE
Slide 21: Key takeaways
KEY TAKEAWAYS Tremendous opportunity to create long-term value Crystallized the value of our entire stake in Cardlytics Delivered strong Q3 2019 results On track to deliver AE profitability during 2020 Confident in future business prospects to drive growth *This presentation contains both IFRS and n
Slide 22: Questions
Questions . © 2018 Aimia. All rights reserved. 22
Slide 23: Summary of quarterly results
SUMMARY OF QUARTERLY RESULTS* 2019 2018 2017 (in millions of Canadian dollars, except per share amounts) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Revenue 33.3 31.0 34.7 36.8 42.5 42.8 45.0 47.3 Cost of rewards and direct costs (2.2) (2.2) (2.0) (3.1) (4.8) (5.1) (4.3) (4.1) Gross margin before depreciation and amort
Slide 24: Bridging 2019 improvement in Free Cash Flow
CONTINUING OPERATIONS Bridging 2019 improvement in Free Cash Flow* Transforming the existing loyalty solutions businesses to be simpler, more (78.4)(1) efficient and focused • Net interest income benefit Other on our core • Increased PLM 2019 Free Cash Flow before technologies and distribution Divid
Slide 25: Balance sheet at September 30, 2019
BALANCE SHEET At September 30, 2019 CASH & INVESTMENTS (CAD$ M) Sept 30, 2019 Cash and cash equivalents 182.8 Flexible balance Restricted cash(1) 100.1 sheet with no Short-term investments 86.8 financial Long-term investments in bonds 67.3 indebtedness Cash and Investments 437.0 and attractive capit
Slide 26: Restructuring expenses and payments
CONTINUING OPERATIONS Restructuring expenses and payments (CAD$ M) Restructuring Expenses Restructuring Payments Loyalty Corporate Cont. Disc. Loyalty Corporate Cont. Disc. Reported Reported Solutions and Other operations operations Solutions and Other operations operations Q1 2018 0.2 0.2 0.4 1.0 1
Slide 27: Contact
CONTACT Tom Tran Director, Investor Relations T +1 416 352 3728 E tom.tran@aimia.com
Slide 28: . © 2018 Aimia. All rights reserved.
. © 2018 Aimia. All rights reserved. 28