Dollarama Inc. · TSX:DOL
Dollarama — Investor Presentation (December 2023)
40 slides from Dollarama's investor presentation, Dec 13, 2023
Slide 1: A leading Canadian value retailer
A leading Canadian value retailer Investor Presentation – Q3-FY2024 December 13, 2023
Slide 2: Forward-looking statements
Forward-looking statements This presentation and the accompanying oral presentation contain forward-looking statements about results, levels of activity, performance, goals or achievements of Dollarama and Dollarcity or other future events or developments that may affect Dollarama and Dollarcity whi
Slide 3: Serving Canadians with purpose
Serving Canadians with purpose Our vision Our purpose Our values To be the leading value To provide Canadians from all Entrepreneurial retailer in every market in walks of life with the best quality which we operate, and value on every dollar they People-focused providing customers with spend and wi
Slide 4: A leading Canadian value retailer
A leading Canadian value retailer (TSX: DOL) Recognized brand serving Canadians from all $5.7B 44.1% walks of life LTM revenues LTM gross margin as a % of sales Differentiated concept offering compelling value at multiple, low fixed price points 19.8% 14.3% LTM sales LTM SG&A Consistent shopping exp
Slide 5: A growing reach and international footprint
A growing reach and international footprint 1,541 10 provinces 2,000 corporate-operated Unrivalled Canadian Dollarama store Dollarama stores across presence with locations in all target by 2031 Canada provinces and two territories #1 85% and only national pure of Canadian households play dollar stor
Slide 6: Competitive advantages
Competitive advantages Strong brand Differentiated concept Value proposition Operational excellence 98% brand recognition Broad assortment of products at Superior direct sourcing and Nimble operator with proven across Canada; sought-after multiple, low fixed price points in buying capabilities, supp
Slide 7: Serving Canadians with Purpose – FY23 ESG Highlights
Serving Canadians with Purpose – FY23 ESG Highlights 4,800+ Ongoing focus 8 of top 10 First limited assurance store employee internal on product safety by our vendors by procurement spend on GHG emissions intensity promotions in FY23 dedicated Compliance team are North American companies obtained fo
Slide 8: Serving Canadians with Purpose – ESG Priority Areas and Goals
Serving Canadians with Purpose – ESG Priority Areas and Goals Our products Our operations Our people and customers Our supply chain and climate strategy Promote a dynamic Provide customers with affordable, Enhance vendor compliance Minimize environmental and inclusive workforce safe and quality prod
Slide 9: Clear strategy driving sustainable growth and value creation
Clear strategy driving sustainable growth and value creation 1 2 3 4 Maximize core Profitably grow Scale up Dollarcity Optimize capital allocation business Canadian footprint business in LATAM to drive returns • Maintain compelling • Grow Dollarama store • Grow footprint in the four • Actively manag
Slide 10: A strong core business
A strong core business Q3 10 - Dollarama Investor Presentation Q3-FY2024 FY2024
Slide 11: A diversified product mix offering compelling value
A diversified product mix offering compelling value Product categories1 15% General merchandise Consumables Seasonal 41% $0.87-$5.00 Merchandise 44% sold at low fixed Electronics Cleaning supplies Christmas price points General merchandise Easter Consumables Hardware Confectionery Seasonal Halloween
Slide 12: Effective sourcing and merchandising
Effective sourcing and merchandising Product sourcing expertise and Efficient in-store built-in flexibility merchandising • Strong direct sourcing capabilities, • Clean, bright, compact four-wall reducing costs associated format with consistent offering and with intermediaries and increasing layout
Slide 13: Strong brand recognition and broad customer appeal
Strong brand recognition and broad customer appeal A value retail Serving Canadians shopping destination from all walks of life • Recognized for value for • Appeals to all money and convenience demographics and income ranges • Customers appreciate the breadth and depth • High representation of the p
Slide 14: Enhancing and evolving the service model and customer experience
Enhancing and evolving the service model and customer experience Queue line and check-out process Growing digital footprint to bring additional optimization customer convenience • Optimized queue lines • Online store offering a subset of products for for increased impulse item displays; purchase by
Slide 15: Optimizing processes and gaining efficiencies
Optimizing processes and gaining efficiencies Retail system optimization Time management and training to drive efficiency • Kronos advanced scheduling • POS systems • Mobile apps • NCR POS terminals • “GPS” training program Energy and environmental Shrink management and efficiency in support of ESG
Slide 16: Driving profitable growth in Canada
Driving profitable growth in Canada Q3 16 - Dollarama Investor Presentation Q3-FY2024 FY2024
Slide 17: Well-balanced, growing store network
Well-balanced, growing store network 1,541 stores in 10 Canadian provinces and 2 territories Head office and logistics Store footprint Store footprint activities centralized in by geography By building type Montreal area 1 1 8% 26% Atlantic Canada 22% 26% Quebec Non-mall Ontario Mall 136 122 Western
Slide 18: Efficient and profitable network growth
Efficient and profitable network growth • Strong free cash flow generation to fund $2.9M organic network growth Average annual store sales within 2 years of opening • Efficient capital model requiring an avg. of $920K in leasehold improvements, fixtures and inventory, net of tenant allowance, for a
Slide 19: A robust evaluation process: path to 2,000-store target
A robust evaluation process: path to 2,000-store target Micro Macro Theoretical True potential potential potential potential Assessment of real estate Internal validation of Result of micro and Potential adjusted based on opportunities, population growth and competitive feasibility of assessment reg
Slide 20: Scaling up Dollarcity
Scaling up Dollarcity Q3 20 - Dollarama Investor Presentation Q3-FY2024 FY2024
Slide 21: Dollarcity, a high-potential LATAM value retailer
Dollarcity, a high-potential LATAM value retailer Compelling growth platform in dynamic LATAM 50.1% US$92.7M markets with appetite for DOL model DOL equity interest Total purchase price1; acquired in Q4-FY2020 immediately EPS Strong local partners and management team after 7-year partnership accreti
Slide 22: A growing footprint in key markets
A growing footprint in key markets Head office in Panama City 480 stores in four countries Store footprint by geography Decentralized logistics operations Guatemala 6% 96 Colombia 68 Panama 20% El Salvador El Salvador Guatemala 60% 14% Peru Colombia 287 480 Store network growth 440 29 (Number of st
Slide 23: Long-term target of 850 Dollarcity stores
Long-term target of 850 Dollarcity stores Maintain pace of growth; Build efficient and low-cost operating grow presence in key markets platform to support growth • Target of 850 Dollarcity stores • Building up logistics platform to in Colombia, Guatemala, El Salvador, support growth plans – decentra
Slide 24: Dollarama vs. Dollarcity
Dollarama vs. Dollarcity DOLLARAMA DOLLARCITY Merchandise mix1 (based on annual retail value For the year ended For the quarter ended For the year ended For the quarter ended for respective latest full fiscal years) Jan. 29, 2023 Oct. 29, 2023 Dec. 31, 2022 Sep. 30, 2023 51% 41% 44% Dollarama Number
Slide 25: Financial metrics
Financial metrics Q3 25 - Dollarama Investor Presentation Q3-FY2024 FY2024
Slide 26: Robust financial performance
Robust financial performance THIRD QUARTER ENDED Y-O-Y FISCAL YEAR ENDED Y-O-Y (in millions of dollars, except per share amounts) Oct. 29, 2023 Oct. 30, 2022 Growth Jan. 29, 2023 Jan. 30, 2022 Growth Comparable store sales 11.1% 10.8% 12.0% 1.7% Sales $1,478 % of sales $1,290 % of sales 14.6% $5,053
Slide 27: Best-in-class performance on key metrics
Best-in-class performance on key metrics Strong organic growth with low capital Balanced approach to operating margin Return on invested capital2 requirements LTM EBIT margin (%) (%) Growth and cash conversion (%) 8% Dollarama 20.5% 24.8 Last three fiscal years store count CAGR Dollar General 8.8% 6
Slide 28: Strong key metrics growth since IPO
Strong key metrics growth since IPO Store count Sales (Number of stores) ($M) 5,701 5,053 1,541 1,421 1,486 4,331 1,291 1,356 3,787 4,026 1,095 1,160 1,225 3,549 955 1,030 2,963 3,266 785 874 2,650 652 704 1,859 2,065 2,331 1,420 1,603 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 F
Slide 29: Best-in-class margin since IPO
Best-in-class margin since IPO EBITDA margin EBIT margin (%) (%) 30.4% 29.3% 30.1% 31.0% 23.1% 23.8% 22.9% 23.6% 24.8% 28.1% 29.6% 20.7% 21.8% 21.4% 22.7% 23.7% 25.3% 18.1% 22.5% 16.3% 17.3% 17.2% 19.1% 19.5% 19.8% 14.5% 16.5% 18.4% 2 2 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY211 FY22
Slide 30: A balanced approach to capital allocation
A balanced approach to capital allocation Invest in organic growth Return capital to shareholders • New stores (avg. of 68 net new stores opened annually in • Maximize shareholder returns with a focus on value- last 10 fiscal years) enhancing share buybacks (over 41% of public float repurchased sinc
Slide 31: Returning capital to shareholders
Returning capital to shareholders 1,121 $6.1B Uses of cash (in millions of dollars) returned to shareholders in 862 share repurchases since FY13 752 753 Dividends 670 Share repurchases 584 478 1060 470 813 381 331 705 689 $605M 625 533 187 414 436 327 142 293 returned to shareholders in 13 156 87 di
Slide 32: Actively managed capital structure
Actively managed capital structure1 100% $1,280M Debt structure as at Q3-FY2024 fixed rate debt available liquidity ($230M cash + $1,050M undrawn and available under credit facility)2 $500M Fixed $450M $375M 5.533% Fixed $375M 5.165% Fixed Fixed 3.51% 4.5 $250M 1.871% $300M Fixed 2.443% weighted ave
Slide 33: Strong track record of shareholder value creation
Strong track record of shareholder value creation Stock performance since October 29, 2013 2150 2050 Dollarama (Total Cumulative Return of a $100 investment) 1950 1850 1750 TSX Capped Consumer Discretionary Index 535% 1650 10-year total 1550 shareholder return1 1450 1350 1250 140% 1150 1050 950 5-ye
Slide 34: Appendix
Q3 FY2024 Appendix 34 - Dollarama Investor Presentation Q3-FY2024
Slide 35: A seasoned board and management team
A seasoned board and management team Executive officers Neil Rossy President and Chief Executive Officer Board of directors Johanne Choinière Stephen Gunn Nicholas Nomicos Chief Operating Officer Chair of the Board Senior Advisor Corporate Director Nonantum Capital Partners Patrick Bui1 Joshua Beken
Slide 36: Dollarama through the years
Dollarama through the years 1992 2004 2009 2011 2012 2013 Dollarama founded as Investment by IPO (TSX:DOL) Sale by Bain Capital of Introduction of $2.50 Beginning of single-price point retail Bain Capital remaining equity stake and $3.00 price commercial partnership 585 stores in points with LATAM v
Slide 37: DOL vs. Canadian dollar store landscape
DOL vs. Canadian dollar store landscape Three-year store count Dollarama vs. next four pure play competitors 1 ~6.4x larger than our next largest pure Thousands of people per 1,800 Q3-F22 Q3-F23 Q3-F24 play competitor Dollarama store2 1,600 1,541 in Canada 1,444 35 1,381 1,400 26 22 22 1,200 1,000
Slide 38: DOL vs. US pure play dollar stores
DOL vs. US pure play dollar stores DOLLARAMA DOLLAR GENERAL DOLLAR TREE LTM revenues ($ millions) $5,701 US$39,036 US$29,680 LTM EBITDA ($ millions) $1,770 US$3,618 US$2,473 Number of stores 1,541 19,726 16,622 SCALE Average sales / store ($ millions) C$3.8 US$2.0 US$1.8 Average store size (sq. ft)
Slide 39: Dollarcity governance framework
Dollarcity governance framework Dollarama (50.1%) • Majority representation on Dollarcity Board of Directors, with certain strategic and operational decisions subject to 100% stockholder approval under current ownership threshold, such as those decisions Dollarama board of directors related to capit
Slide 40: Thank you
Thank you Dollarama Inc. 5805 Royalmount Ave. Montreal, QC H4P 0A1