Loblaw Companies Limited · TSX:L
Loblaw Companies — Investor Presentation (December 2013)
21 slides from Loblaw Companies's investor presentation, December 2013
Slide 1: Investor Presentation December 2013
Investor Presentation December 2013 1
Slide 2: Forward looking statements
Forward looking statements This presentation for Loblaw Companies Limited (“Loblaw”) may contain forward-looking statements about Loblaw’s objectives, plans, goals, aspirations, strategies, prospects and opportunities. It may also contain statements about the proposed acquisition by Loblaw of all of
Slide 3: Canada's largest grocery retailer
Canada’s largest grocery retailer 14+ million customers per week Over 1,000 stores/more than 20 banners #7 retailer1 in North America $32 billion revenue (2012) $2 billion EBITDA (2012) One of Canada’s largest REITs 1.3% growth in same-store sales year to date Two dividend increases in the last 12 m
Slide 4: Superior scale and reach across multiple formats
Superior scale and reach across multiple formats Conventional Discount Emerging 4
Slide 5: Leading with Canada's most trusted brands
Leading with Canada’s most trusted brands Differentiating through innovative control brand products Home to #1 and #2 consumer brands in Canada President’s Choice - 3rd most influential brand in Canada (Ipsos Influence Index 2012) Control brands account for ~30% of retail sales, significantl
Slide 6: Apparel and general merchandise – strong compliments to our core food offering
Apparel and general merchandise – strong compliments to our core food offering “Right Hand Side” strategy focuses on four key areas: apparel, beauty, home, kids Completed ~80 right hand side renovations in 2012 to optimize assortment and square footage – on track for ~50 renovations in 2013 La
Slide 7: Growing financial services segment
Growing financial services segment PC Bank offers no fee accounts and access to 3,800 full service ATM’s across Canada Over one million PC MasterCard applications in 2011 and 2012 ~180 Mobile Shop kiosks address the growing demand for multiple handsets within the home Only retailer to offer
Slide 8: PC Plus – intelligent loyalty rewards program
PC Plus – intelligent loyalty rewards program Original PC Points program has over 2M active members and over $1B rewards redeemed since inception PC Plus is a one-to-one digital engagement platform that identifies and invests in the right customers to drive incremental same-store sales growth
Slide 9: Investing in the customer proposition to drive same-store sales growth
Investing in the customer proposition to drive same-store sales growth Focused on shelf price competitiveness Discount – goal is lowest price Value Conventional – competitive with peers while minding the gap to discount Focus on sourcing Assortment Right assortment for the format Intensi
Slide 10: Increasing the speed of competitiveness
Increasing the speed of competitiveness Focused efforts to reduce operating costs to continue to invest in our customer proposition Administrative costs – reduced office and administrative positions by ~700 in Q4/12 and ~275 in Q4/13 “Speed of change” initiatives – goal to reduce complexity an
Slide 11: Retail network investments
Retail network investments Past 3 years1, 450 stores representing >60% of sales renovated In the final years of a concentrated program of network-wide store updates that began in 2009; will be subsequently returning to an ~8 year cycle Enhance in-store experience – focus on fresh areas of the
Slide 12: Infrastructure renewal
Infrastructure renewal Supply Chain IT Systems Supply chain renewal complete – began Key to implementation is now at the store 2007 level Upgraded physical distribution network, Moving from little data/manual processes increased capacity, and implemented to big data/automation new forecastin
Slide 13: Competitive Environment
Competitive Environment Food Inflation – Consumer Price Index Competitive Footage (STM1) Growth 4% 6% 3.6% 3.3% 3% 4% 2% 1.8% 2% 1% 0.7% Excludes Loblaw 0% 0% Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Last Year Actual Competitive
Slide 14: Solid YTD results in a challenging environment
Solid YTD results in a challenging environment Revenue (Consolidated) Same-store sales (Retail) 1.5% 24,800 24,731 1.0% 1.3% Revenue (CAD $millions) 24,600 24,400 2.5% 0.5% 0.4% 24,200 0.0% -0.2% 24,000 24,139 -0.5% 23,800 23,877 -1.0% 23,600 YTD 2011 YTD 2012 YTD 2013 23,400 YTD 2011 YTD 2012 YTD 2
Slide 15: Q3 Results Summary
Q3 Results Summary Q3 YTD Normalized SSS1 Chg +1.0% +1.5% $ 10,009 24,731 Revenue Chg +1.9% +2.5% $ 657 1,631 Adj. EBITDA2 Chg (0.3)% +4.8% $ 403 1,003 Adj. Operating Income2 Chg (3.6)% +3.7% $ 0.78 1.95 Adj. Basic EPS2 Chg (3.7)% +4.3% In Q3, we lowered our outlook to expect adjusted operating inco
Slide 16: Unlocking the value of Loblaw's real estate
Unlocking the value of Loblaw’s real estate $460M IPO in July 2013 Loblaw has 82.2% effective interest 433 properties spanning 36.2M sq. ft. of gross leasable area across Canada. Loblaw retains a 11M sq. ft. property portfolio that it will vend into the REIT over the next 10 years Unlocks
Slide 17: A combination that transforms the retail landscape in Canada
A combination that transforms the retail landscape in Canada 1 billion customer transactions per year 2,348 stores 1,797 pharmacies 65 million sq. ft. $42 billion revenue $3 billion EBITDA $1 billion free cash flow 17
Slide 18: A unique opportunity to leverage complementary strengths
A unique opportunity to leverage complementary strengths Leading food brands Leading wellness brands PC Financial services Optimum loyalty program Canada’s largest transport network and supply National pharmacy chain infrastructure supply chain network Canada’s largest retail network Associate conce
Slide 19: Annual synergies of $300M by year three
Annual synergies of $300M by year three Run Rate Synergies Synergies phased in evenly over $300 million the first 3 years following closing $100M realised in year 1 $200M realised in year 2 $300M realised in year 3 Marketing Purchasing PC Financial Supply Chain Private Label Optimum and PC IT
Slide 20: The future of Canadian retail
The future of Canadian retail Canada’s most trusted brands, delivered through Canada’s most efficient retail network, reaching our customers across Canada’s most convenient stores. 20
Slide 21: Thank You
Thank You Company reports are available online at www. loblaw.ca 21
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