North West Company Inc. · TSX:NWC
North West — Shareholder Meeting (2016)
60 slides from North West's shareholder meeting presentation, 2016
Slide 1: Top Work, Top Results: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 2: Caution Concerning Forward Looking Statements
Caution Concerning Forward Looking Statements Certain information presented today may constitute forward-looking statements, including information on the potential BVI acquisition. Such statements reflect the Company’s current expectations, estimates, projections, and assumptions. These forward-look
Slide 3: Chairman Remarks
Top Work, Top Results Chairman Remarks
Slide 4: 2015 Recap
2015 Recap Giant Tiger Coupon
Slide 5: Chairman Remarks
Top Work, Top Results Chairman Remarks
Slide 6: Victor Tootoo
Nort West COMPANY Victor Tootoo
Slide 7: Frank J. Coleman
oltekhy NortTH WEstT COMPANY Frank J. Coleman
Slide 8: Wendy F. Evans
eo: NortTH WEstT COMPANY Wendy F. Evans
Slide 9: Stewart Glendinning
Nort West COMPANY . \ Stewart Glendinning a")
Slide 10: Robert J. Kennedy
obeeth, NortH West COMPANY Robert J. Kennedy
Slide 11: Annalisa King
NortTH WEstT OIA Annalisa King
Slide 12: Vi Konkle
NortTH WEstT Vi Konkle
Slide 13: Gary Merasty
Gary Merasty
Slide 14: Eric L. Stefanson
obeeth, NortH West COMPANY Eric L. Stefanson
Slide 15: Edward Kennedy
obeeth, NortH West COMPANY Edward Kennedy
Slide 16: H. Sanford Riley
NortTH WEstT H. Sanford Riley
Slide 17: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 18: Financial Statements
Financial Statements 1. Receive Audited Financial Statements
Slide 19: Ordinary Resolutions: Appointment of Directors
Ordinary Resolutions 2. Appointment of Directors
Slide 20: Ordinary Resolutions: Appointment of Auditors
Ordinary Resolutions 3. Appointment of Auditors
Slide 21: Ordinary Resolutions: Advisory Resolution on Executive Compensation
Ordinary Resolutions 4. Advisory Resolution on Executive Compensation
Slide 22: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 23: Executive Vice-President and CFO Remarks
Top Work, Top Results Executive Vice-President and Chief Financial Officer Remarks
Slide 24: Strong Sales Growth
Strong Sales Growth • 2015 Financial Highlights Canada Sales ($ in millions) International $1,796 $1,624 $1,543 ! 16th consecutive year of growth ! Strong same store food sales ! International sales +21.3% ! Positive foreign exchange impact
Slide 25: International Drives EBITDA Improvement
International Drives EBITDA Improvement • 2015 Financial Highlights Canada EBITDA ($ in millions) International $151.3 $138.3 $137.8 ! International +$16.2 million, +43.7% ! Positive foreign exchange impact ! Canada –$2.7 million, –2.6% ! Cost-U-Less and Giant Tiger deliver largest gains
Slide 26: International Leads Net Earnings Growth
International Leads Net Earnings Growth • 2015 Financial Highlights Net Earnings ($ in millions) ! Sales growth ! Gross profit rate improvement ! Partial offset by higher expenses
Slide 27: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 28: Investing to Sustain and Grow
Investing to Sustain and Grow • 2015 Financial Highlights Capital Expenditures & Return on Net Assets CAPEX ($ in millions) $90.0 $76.0 ! Top market store renovations ! Top category investments $43.2 $52.3 ! Replace core retail technology 2013 2014 2015 2016 Forecast
Slide 29: Investing to Sustain and Grow
Investing to Sustain and Grow • 2015 Financial Highlights Capital Expenditures & Return on Net Assets CAPEX ($ in millions) $90.0 ! Top market store renovations Return on Net Assets (%) $76.0 ! Top category investments $43.2 $52.3 ! Replace core retail technology ! Track record of results 20.0 18.4
Slide 30: Low Leverage, Additional Debt Capacity
Low Leverage, Additional Debt Capacity • 2015 Financial Highlights Debt Undrawn Capacity Debt, Leverage & Undrawn Capacity Debt-to-EBITDA ($ in millions) ! Stable debt-to-EBITDA 1.3 1.5 1.5
Slide 31: Low Leverage, Additional Debt Capacity
Low Leverage, Additional Debt Capacity • 2015 Financial Highlights Debt Undrawn Capacity Debt, Leverage & Undrawn Capacity Debt-to-EBITDA ($ in millions) ! Stable debt-to-EBITDA ! Short-term increase in leverage 1.3 1.5 1.5
Slide 32: Low Leverage, Additional Debt Capacity
Low Leverage, Additional Debt Capacity • 2015 Financial Highlights Debt Undrawn Capacity Debt, Leverage & Undrawn Capacity Debt-to-EBITDA ($ in millions) ! Stable debt-to-EBITDA ! Short-term increase in leverage 1.3 1.5 1.5 ! Increased capacity by $100 million in Q1-16 ! Financial capacity to suppor
Slide 33: Long-term Superior Shareholder Returns
Long-term Superior Shareholder Returns • 2015 Financial Highlights NWC Total Return Performance (% at January 31) TSX Composite 190 ! 20.2% annual total return in 2015 ! 3.4% increase in dividends 165 ! NWC 5-year CAGR 12.8% 140 ! 25.0% increase in dividends since 2011 115 100 90 2011 2012 2013 2014
Slide 34: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 35: Top Line Growth Continues
Top Line Growth Continues • 2016 First Quarter Performance Canada Sales ($ in millions) International $439 $414 $376 ! Total sales +$25 million, +6.0% ! Food sales +4.6% ! Positive foreign exchange impact
Slide 36: International Drives EBITDA Performance
International Drives EBITDA Performance • 2016 First Quarter Performance Canada EBITDA ($ in millions) International $37.6 $34.4 $30.2 $10.1 $12.8 ! International EBITDA +$2.7 million $6.4 ! Canada EBITDA +1.9% ! Positive foreign exchange impact $23.8 $24.3 $24.8 Q1 2014 Q1 2015 Q1 2016
Slide 37: Continued Net Earnings Growth
Continued Net Earnings Growth • 2016 First Quarter Performance Net Earnings ($ in millions) $17.8 $15.7 ! EBITDA growth ! Lower effective tax rate $12.7 ! 13.3% increase in Net Earnings Q1 2014 Q1 2015 Q1 2016
Slide 38: Dividend Growth
Dividend Growth • 2016 First Quarter Performance Quarterly Dividends ($ per share) ! Track record of growth ! Potential for future increase
Slide 39: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 40: President & CEO Remarks
Top Work, Top Results President & CEO Remarks
Slide 41: 2015 Milestones
2015 Milestones • Top Category plans in action • 11 Top Markets completed • Top People launched • International share gains • Giant Tiger agreement
Slide 42: 2016 Environment
2016 Environment • Canadian budget is a positive
Slide 43: 2016 Environment
2016 Environment • Canadian budget is a positive • U.S. still driving tourism
Slide 44: 2016 Environment
2016 Environment • Canadian budget is a positive • U.S. still driving tourism • Low oil = net positive
Slide 45: 2016 Environment
2016 Environment • Canadian budget is a positive • U.S. still driving tourism • Low oil = net positive • Acquisition opportunities
Slide 46: 2016-18 Performance Drivers
2016-18 Performance Drivers Top People • Diversity = enterprising roles • Store focused • From recruitment to management tools
Slide 47: Top Categories: Incremental Sales
Top Categories Pharmacy Incremental Sales - Millions Deli/HMR Tim Hortons Center Store Perishable Convenience Financial Furnishings Services Motorsports Sporting Goods Incremental GP - Millions
Slide 48: Top Categories: Convenience
Top Categories Convenience • Extended hours/C-store assortment • Store within store • Stand alone
Slide 49: Top Categories: Food Service
Top Categories Food Service • Tim Hortons • Proprietary • Other branded
Slide 50: Top Categories: Pharmacy
Top Categories Pharmacy • OTC • In-store pharmacy • Remote dispensing • Telepharmacy support
Slide 51: Top Categories: Big Ticket
Top Categories Big Ticket • Furniture • Motorized • Dedicated staff and space
Slide 52: Top Markets
Top Markets Work Flow Space Category Allocation Re-Sizing Local Product & Store Store Market Service Recruitment Structure Re-launch Opportunity Offer Design Construction
Slide 53: Top Markets
Top Markets • 2016-17 pace is slower • This enables: • Construction efficiencies • Best practice iterations • More capital for other projects
Slide 54: Other Key Investments
Other Key Investments • Logistics
Slide 55: Other Key Investments
Other Key Investments • Logistics • IT system investment
Slide 56: Other Key Investments
Other Key Investments • Logistics • IT system investment • New stores
Slide 57: RiteWay Acquisition
RiteWay Acquisition Pro COMPANY er ( BRitewWa Caribbean te ) ie te Way Food Markets s British Virgin Islands G t. Thomas. ® — rand Cayman St. Croix St. Maarten | | eee Curacao Barbados
Slide 58: RiteWay Acquisition
RiteWay Acquisition • Nine stores • =50% increase in region sales • Major presence in Road Town, BVI
Slide 59: Strength through diversity; acceleration of top programs
• Strength through diversity • Acceleration of top programs • New growth through logistics, IT and stores
Slide 60: Top Work, Top Results: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders