Slide 1: Aimia
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* Years ended December 31, Variance % 2018 over (in millions of Canadian dollars , except per share information) 2018 2017 2017 Continuing operations Operating loss (134.7) (110.1) (22.3) Depreciation and amortization 13.7 7.4 85.1 Amortization of Accumulation Partners
Slide 5: FY 2018 Income Statement
FY 2018 INCOME STATEMENT Years Ended December 31, (in millions of Canadian dollars) 2018 2017 Revenue $ 167.1 $ 232.1 Cost of sales Cost of rewards and direct costs 17.3 21.6 Depreciation and amortization 13.7 7.4 Amortization of accumulation partners' contracts, customer relationships and technolog
Slide 6: Financial Summary FY 2018 vs 2017
FINANCIAL SUMMARY* FY 2018 VS 2017 FY 2018 FY 2017 YOY % Continuing Continuing Continuing operations operations operations Consolidated Aeroplan - (excluding Consolidated Aeroplan - (excluding YOY % (excluding segmented Discontinued Continuing Other other segmented Discontinued Continuing Other othe
Slide 7: Q4 2018 highlights
Q4 2018 highlights MARCH 28, 2019
Slide 8: Today's Speakers
TODAY’S SPEAKERS JEREMY RABE MARK GRAFTON Chief Executive Officer Chief Financial Officer © 2019 Aimia. All rights reserved. 8
Slide 9: Agenda
AGENDA 2018 STRATEGY FINANCIAL highlights update highlights © 2019 Aimia. All rights reserved. 9
Slide 10: 2018 highlights
2018 highlights JEREMY RABE
Slide 11: 2018 Highlights
2018 HIGHLIGHTS ► Beat 2018 guidance through a challenging year, and significantly reduced operating expenses ► Aeroplan sale transaction completed, with higher than expected gross proceeds at $497 million ► Redeemed and repaid all financial indebtedness post A strong Aeroplan sale transaction; stro
Slide 12: Exceeded 2018 Guidance
EXCEEDED 2018 GUIDANCE* (CAD$ M) FY 2018 2018 Guidance(1) Coalitions Gross Billings $1,317.8 Around $1.3 billion Strong Q4 results Coalitions delivering Adjusted EBITDA % (pre-restructuring) 22.4%(2) Above 19% 2018 guidance Coalitions Free Cash Flow (pre-tax basis) 172.3(3) Between $155 and $175
Slide 13: Strategy update
STRATEGY update JEREMY RABE
Slide 14: Strategy Update
STRATEGY UPDATE Returning capital to ► Since November 2018, the Board's special committee of common shareholders independent directors (the “Special Committee”) has while retaining undertaken a thorough and comprehensive review on a range of strategic alternatives for the company sufficient financia
Slide 15: Evaluation of Wide Range of Options
EVALUATION OF WIDE RANGE OF OPTIONS Process included consideration of a wide range of strategic options Wind- Further Pure Sector- Open- down sales of organic focused ended major assets growth investment investment strategy strategy Aimia to evolve its positioning within the growing loyalty and trav
Slide 16: Building on Existing Assets
BUILDING ON EXISTING ASSETS Opportunity Platforms Network Finances Well-established Top provider Unparalleled Ready-to-use and well-positioned with recognized experience, expertise, capital available in loyalty and travel technology platforms partnerships on the balance sheet Existing positions: Rec
Slide 17: Aimia Will Pursue Consolidation Opportunities within Loyalty and Travel
AIMIA WILL PURSUE CONSOLIDATION OPPORTUNITIES within loyalty and travel Loyalty Marketing Services $900bn Loyalty Solutions Other Verticals businesses Travel & Tourism $2.3TN Travel Vertical Loyalty Other Loyalty Solutions sub-sectors Sectors for Aimia consolidation Lower Capital Intensity Higher Ca
Slide 18: Loyalty Today
LOYALTY TODAY Vast and growing market with a large number of players Loyalty continuing to experience double digit growth based on strong underlying trends ► Loyalty memberships at 4 billion in North America alone Money going in and start-up factor continues to add complexity but no obvious consolid
Slide 19: Travel Market Today
TRAVEL MARKET TODAY Travel & tourism ~10% of global GDP Travel continuing to experience double digit growth based on strong underlying trends ► Growing global discretionary spending METASEARCH ► International travel departures up from 0.6 billion to 1.3 billion BUSINESS TRAVEL ► Preference to spend
Slide 20: Three Pronged Strategy to Growing Earnings
THREE PRONGED STRATEGY to growing earnings Aimia will evolve its positioning within the growing loyalty and travel markets and focus on growing earnings by: Travel Loyalty ► maximizing the performance Loyalty Solutions of the company’s existing investments businesses investments within travel loyalt
Slide 21: Sector-Focused Capital Allocation Process
SECTOR-FOCUSED CAPITAL ALLOCATION PROCESS The company’s sector focus will 1 differentiate it as a Identifying buyer and should deliver stronger a growing sub-sector with 2 returns. fragmented competition Acquiring A disciplined 4-step process building a company and prepare it to act 3 from an existi
Slide 22: Sound and Disciplined Investment Process
SOUND AND DISCIPLINED INVESTMENT PROCESS is a core competency for successful acquisitions Value creation plan Deal implementation negotiation Evaluation Value and creation plan Sourcing analysis Filtering INVESTMENT COMMITTEE Phase ► Advisory along the investment process ► Approval of deal execution
Slide 23: Growing Earnings Over Time
GROWING EARNINGS OVER TIME Profitable services businesses New with strong recurring revenue platform Revenue additions bases trade on strong growth AE multiples beyond Higher 2020 investment Bolt-on distributions EBITDA including Existing business synergies profitability including lower 2018 Adjuste
Slide 24: Improving the Performance of Existing Travel Loyalty Assets
IMPROVING THE PERFORMANCE of existing travel loyalty assets “Aimia’s renewed focus Driving improved future shareholder returns on providing strategic ► PLM distributions to increase to $37 million in 2019, support to Club Premier including special Q1 2019 distribution of $19 million strengthens our
Slide 25: Understanding the Loyalty Solutions Offering Today
UNDERSTANDING THE LOYALTY SOLUTIONS OFFERING TODAY Loyalty LOYALTY SOLUTIONS MARKET by service by geography Solutions industry is 7% 3% Marketing 6% South estimated at 7% America USD$2B and 9% 21% Strategy Aimia is expected to Design Middle uniquely East and grow at 21% 15% Africa positioned to CAGR
Slide 26: Synergies Possible with Bolt Ons
SYNERGIES POSSIBLE WITH BOLT ONS TYPE OF SYNERGY RATIONALE ► Better optimization of client delivery resources with larger pool of employees People ► Diversity of workforce increases likelihood of having the ‘right people for the job’ and enables full- service solutions for global clients ► Technolog
Slide 27: Financial highlights
FINANCIAL highlights MARK GRAFTON
Slide 28: Q4 2018 Financial Highlights
Q4 2018 FINANCIAL HIGHLIGHTS* Continuing operations Normalized Q4 2018 Q4 2017 YoY % Strong Q4 results Gross Billings $52.4 $54.0 (3.0)% delivering 2018 guidance Revenue $36.8 $47.3 (22.2)% (1) Normalized operating expenses calculated as Operating total operating expenses before share-based compensa
Slide 29: FY 2018 Loyalty Solutions Revenue and Adjusted EBITDA
FY 2018 LOYALTY SOLUTIONS Revenue and Adjusted EBITDA* Aimia's leading (CAD$ M) LOYALTY UNITS (AIR MILES MIDDLE EAST COALITION) loyalty technology INSIGHTS & LOYALTY SOLUTIONS $12.5 platforms and AIMIA $129.9 78% of total revenue solutions offering Revenue LOYALTY SERVICES AND OTHER require further
Slide 30: Continuing Operations Operating Expenses
CONTINUING OPERATIONS Operating expenses* The company is Normalized operating expenses(1) (CAD$ M) targeting OPEX reduction in 2019 OPEX by segments OPEX by nature driven by a more Severance efficient service Corporate delivery model, IT initiatives, and Canadian LS Real Other Estate reduction in to
Slide 31: Continuing Operations Operating Expenses
CONTINUING OPERATIONS Operating expenses* Operational efficiencies Normalized operating expenses(1) (CAD$ M) Excludes $4 due mainly to reduced million non- Q4 2018: $53.2 (-6.8% YoY) headcount were the recurring benefit FY 2018: $209.3 (-30.7% YoY) main drivers of lower OPEX in the quarter 89.2 92.3
Slide 32: PLM Gross Billings
PLM Gross Billings* Established PLM Gross Billings from loyalty units coalition loyalty (million USD) FY 2018 $244.1 (+13.3% YoY) program FY 2017 $215.5 in Mexico with 58.6 63.7 61.3 63.3 engaged base of 53.3 57.0 55.8 46.6 6.1 million members World class Technology and strong Gross Billings growth
Slide 33: PLM Adjusted EBITDA and Distributions
PLM Adjusted EBITDA and distributions* Adjusted EBITDA PLM Adjusted EBITDA (million USD) FY 2018: $78.4 (+1.2% YoY) margin at 32.1% Ex-$10m breakage impact (+14.1% YoY) in 2018, including one- FY 2017 $77.5 time of US$10 million 10.0 in Q4 2018 from 21.2 20.9 22.7 21.6 19.0 19.4 breakage rate 16.4 1
Slide 34: Improving Existing Business Performance
IMPROVING EXISTING BUSINESS PERFORMANCE Transforming the existing Path towards profitability will result in improvement over time loyalty solutions businesses to Profitable be simpler, during 2020 Adjusted EBITDA more efficient loss and FCF Successful outflow to narrow execution on the and focused C
Slide 35: 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 (78.5)(1) efficient and focused • Net interest income benefit Other on our core • Increased PLM 2019 Free Cash Flow before technologies and distribution Divid
Slide 36: Pro Forma Cash and Investments
PRO FORMA CASH AND INVESTMENTS Strong financial Aimia’s pro forma unrestricted consolidated cash and investments (million CAD) position with around Includes $100 million $600 million post set aside for expected CRA re-assessment of Disposal of 2.2% stake Aeroplan transaction; $35 million in Fractal
Slide 37: Aimia Tax Assets
AIMIA TAX ASSETS No capital gains tax Operating and capital tax losses will be available for Aimia to utilize in the future subject to certain conditions being met payable on Aeroplan There are complex rules governing the utilization of tax losses which sale; transaction will differ from country to
Slide 38: Conclusion
CONCLUSION JEREMY RABE
Slide 39: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Aimia has developed ► Approval of a substantial issuer bid (“SIB”) of up to a disciplined set of $150 million of its outstanding common shares for principles to guide its cancellation capital allocation and investments; ► SIB expected to formally commence by mid-April
Slide 40: Conclusion
CONCLUSION Leading loyalty and ► Evolving our positioning as an operator and travel consolidator consolidator in the growing travel and loyalty that provides strong sector and a plan to return Aimia’s existing business to profitability during 2020 earnings growth and returns above its ► Adding value
Slide 41: Questions
QUESTIONS . © 2018 Aimia. All rights reserved. 41
Slide 42: Contact
CONTACT Karen Keyes Senior Vice President / Investor Relations T +1 647 459 3506 E karen.keyes@aimia.com
Slide 43: Appendix
. © 2018 Aimia. All rights reserved. 43
Slide 44: FY 2018 vs 2017 Financial Summary: Reconciliation to Continuing Operations
FY 2018 VS 2017 FINANCIAL SUMMARY Reconciliation of segmented info to continuing operations* Years Ended December 31, (in millions of Canadian dollars) 2018 2017 2018 2017 2018 2017 Consolidated segmented information Aeroplan Program Continuing operations Gross Billings from the sale of Loyalty Unit
Slide 45: Q4 2018 vs 2017 Financial Summary: Reconciliation to Continuing Operations
Q4 2018 VS 2017 FINANCIAL SUMMARY Reconciliation of segmented info to continuing operations* Three Months Ended December 31, (in millions of Canadian dollars) 2018 2017 2018 2017 2018 2017 Consolidated segmented information Aeroplan Program Continuing operations Gross Billings from the sale of Loyal
Slide 46: Summary of Quarterly Results
SUMMARY OF QUARTERLY RESULTS 2018 2017 (in millions of Canadian dollars, except per share amounts) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Gross Billings from the sale of Loyalty Units 16.7 9.0 10.6 10.5 11.5 10.7 13.1 11.2 Gross Billings from Loyalty Services and Other 35.7 38.9 39.1 40.7 42.5 42.1 54.8 76.6 Total
Slide 47: Continuing Operations Gross Billings
CONTINUING OPERATIONS Gross Billings* Gross Billings fell Revenue & Gross Billings (CAD$ M) 3% YoY in Q4 2018 FY 2017 included $45M of Gross Billings for business disposals driven by transition in the ILS client base Gross Billings FY 2018: $201.2 (-23.4% YoY) towards recurring revenue technology 87
Slide 48: Continuing Operations Adjusted EBITDA and Free Cash Flow
CONTINUING OPERATIONS Adjusted EBITDA and Free Cash Flow* Full year Adjusted Adjusted EBITDA (million CAD)(1) FY 2017: $(78.7) FY 2018: $(57.0) (+27.6% YoY) EBITDA and Free Cash Flow improved -8.2 -7.5 -9.4 significantly; Q4 2018 -15.3 -16.1 Adjusted EBITDA fell -25.7 Includes $4M non- -24.1 -29.5 Y
Slide 49: FY 2018 Adjusted EBITDA to Free Cash Flow Walk
CONTINUING OPERATIONS FY 2018 Adjusted EBITDA to Free Cash Flow walk* Full year Adjusted (CAD$ M) EBITDA and Free Cash Flow improved significantly over Reduced financial prior year period indebtedness Reduced IT development spend at ISS (57.0) (0.2) 0.2 6.1 Includes $11.8M in rent prepayment (11.5)
Slide 50: Pre-Aeroplan Transaction Balance Sheet
PRE-AEROPLAN TRANSACTION BALANCE SHEET At December 2018 CASH & INVESTMENTS (CAD$ M) Dec 31, 2018 (1) As of Dec 31, 2018, Aimia had a $208.0 million revolving credit facility maturing on April 23, 2020. Interest Cash and cash equivalents 311.9 rates on this facility were tied to the Corporation’s cre
Slide 51: Restructuring Expenses and Payments
CONTINUING OPERATIONS Restructuring expenses and payments (CAD$ M) Restructuring expenses Restructuring payments Continuing Continuing Coalitions ILS Non-core Disc ops Reported Coalitions ILS Non-core Disc ops Reported ops ops Q1 2017 0.3 0.4 0.2 0.9 0.4 1.3 0.3 0.4 1.3 2.0 1.7 3.7 Q2 2017 3.7 1.1 -
Slide 52: Reconciliation of Operating Expenses
CONTINUING OPERATIONS Reconciliation of operating expenses 2017 2018 CAD $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total operating expenses (93.9)(2) (88.7)(2) (71.7) (55.4) (51.6) (72.8) (50.3) (93.4) Of which: share-based compensation (3.8) 8.4 (2.2) - 2.0 (2.0) (2.6) (3.5) Of which: impairments - - - - - (8.0)
Slide 53: Cardlytics
CARDLYTICS Cardlytics' share price performance since IPO AIMIA OWNS $30.00 3,500,000 3.0M Cardlytics $25.00 Mar 27th 3,000,000 close First shares trading day 15.99 2,500,000 $20.00 13.37 Average 18.15 MARKET VALUE 2,000,000 AT MAR 27th $15.00 (1) 1,500,000 C$63.8M $10.00 10.83 1,000,000 Dec 31st clo
Slide 54: Cash Investments
CASH INVESTMENTS Cash balances Cash and investments $554.8 million (million CAD at December 31, 2018) invested in stable, investment-grade 19.0 and highly liquid corporate and 69.0 government bonds with maturities Investments in corporate extending to 2021; and government bonds: average yield to 311