North West Company Inc. · TSX:NWC
North West — The North West Company — Shareholder Meeting (2017)
47 slides from North West's shareholder meeting presentation, 2017
Slide 1: 2017 Annual General & Special Meeting of Shareholders
2017 Annual General & Special Meeting of Shareholders
Slide 2: Executive Vice-President & Chief Financial Officer Remarks
Executive Vice-President & Chief Financial Officer Remarks
Slide 3: Consistent Sales Growth
Consistent Sales Growth • 2016 Financial Highlights Canada Sales ($ in millions) International $1,796 $1,844 $1,624 $706 $719 ! 17th consecutive year of growth $582 ! Canadian sales +3.3% ! New store sales ! International sales +1.8% $1,042 $1,090 $1,125 2014 2015 2016
Slide 4: Canada Drives EBITDA Improvement
Canada Drives EBITDA Improvement • 2016 Financial Highlights Canada EBITDA ($ in millions) International $166.5 $151.3 $137.8 $56.8 $53.1 ! Canada +$11.5 million, +11.7% $36.9 ! Top categories gross profit improvements ! Lower share-based compensation $100.9 $109.7 $98.2 ! International +$3.7 millio
Slide 5: Strong Net Earnings Growth
Strong Net Earnings Growth • 2016 Financial Highlights Net Earnings ($ in millions) $77.1 $69.8 ! Net earnings +10.5% $62.9 ! EBITDA improvement ! Partially offset by higher: • Amortization • Interest expense 2014 2015 2016
Slide 6: 2017 Annual General & Special Meeting of Shareholders
2017 Annual General & Special Meeting of Shareholders
Slide 7: Investing to Sustain and Grow
Investing to Sustain and Grow • 2016 Financial Highlights Capital Expenditures & Return on Net Assets CAPEX ($ in millions) Return on Net Assets (%) $76.0 $77.7 ! +$200 million over 3 years ! Top markets & top categories priority $52.3 ! Investing in new technology ! Strong return on net assets 19.5
Slide 8: Investing to Sustain and Grow
Investing to Sustain and Grow • 2016 Financial Highlights 2017 Capital Expenditures ($ in millions) CAPEX North Star Air Ltd. (NSA) $162.0 Roadtown Wholesale Trading Ltd. (RTW) $46.0 ! Continue to sustain and grow Existing Business existing business $36.0 ! Invest in new markets & complimentary busi
Slide 9: Financial Capacity
Financial Capacity • 2016 Financial Highlights Debt, Leverage & Borrowing Capacity Debt Available Capacity ($ in millions) Debt-to-EBITDA $265 ! Available borrowing capacity $189 $265 million $180 ! Low leverage 1.5 1.5 1.4 ! Strong cash flow $201 $225 $229 ! Financial capacity to support growth 201
Slide 10: Superior Shareholder Returns
Superior Shareholder Returns • 2016 Financial Highlights Total Return Performance (% at January 31) NWC TSX Composite 190 ! 13.7% total returns 5-year CAGR ! Share price growth 165 ! 5.8% net earnings 5-year CAGR 140 115 90 2012 2013 2014 2015 2016 2017
Slide 11: Increasing Dividends
Increasing Dividends • 2016 Financial Highlights Dividends Per Share & Yield Dividends Per Share Dividend Yield % (1) $1.20 $1.24 $1.04 $1.12 $1.16 ! 5.3% dividend 5-year $0.96 CAGR ! 4.6% average yield ! Consistent dividend growth 4.8% 4.7% 4.6% 4.8% 4.5% 4.4% 2011 2012 2013 2014 2015 2016 (1) Base
Slide 12: 2017 Annual General & Special Meeting of Shareholders
2017 Annual General & Special Meeting of Shareholders
Slide 13: Top Line Growth Continues
Top Line Growth Continues • 2017 First Quarter Performance Sales ($ in millions) Canada $477 International $439 $414 $204 ! Total sales +$38 million, +8.6% $173 $160 ! Roadtown Wholesale & Trading Ltd. (RTW) acquisition ! Northern Canada sales gains $254 $266 $273 ! New Giant Tiger stores Q1 2015 Q1
Slide 14: Non-comparable Expenses Impact EBITDA
Non-comparable Expenses Impact EBITDA • 2017 First Quarter Performance EBITDA ($ in millions) Canada International $37.6 $34.4 $12.8 $30.1 ! Top-line gains offset by $10.1 non-comparable expenses $10.2 ! EBITDA -$7.5 million $24.3 $24.8 $19.9 Q1 2015 Q1 2016 Q1 2017
Slide 15: Adjusted EBITDA Performance
EBITDA Performance • 2017 First Quarter Performance Adjusted EBITDA ($ in millions) Reported EBITDA Share-based Option Expense $40.2 Acquisition Costs $36.3 $5.8 -$1.3 $4.3 ! Stamp duty paid to BVI government $37.6 $30.1 ! Higher share-based option expense ! Adjusted EBITDA +$3.9 million, +10.5% Q1
Slide 16: Non-comparable Expenses Impact Net Earnings
Non-comparable Expenses Impact Net Earnings • 2017 First Quarter Performance Net Earnings ($ in millions) $17.8 ! Net earnings -$8.7 million $15.7 ! Acquisition costs ! Higher share-based option expense $9.1 Q1 2015 Q1 2016 Q1 2017
Slide 17: Net Earnings Performance
Net Earnings Performance • 2017 First Quarter Performance Adjusted Net Earnings ($ in millions) Reported Net Earnings $19.2 Share-based Option Expense $16.5 Acquisition Costs -$1.3 $5.8 ! Net earnings -$8.7 million $17.8 $4.3 ! Acquisition costs $9.1 ! Higher share-based option expense ! Adjusted ne
Slide 18: Consistent Dividend Growth
Consistent Dividend Growth • 2017 First Quarter Performance Quarterly Dividends ($ per share) $0.32 $0.29 $0.31 ! Track record of increases ! +3.2% vs. Q1 2016 Q1 2015 Q1 2016 Q1 2017
Slide 19: 2017 Annual General & Special Meeting of Shareholders
2017 Annual General & Special Meeting of Shareholders
Slide 20: President & CEO Remarks
ZF, WE ARE Nor TH WEST President & CEO Remarks
Slide 21: Top Stores
“Helping Our Customers Live Better” Deliver Our Vision Superior Customer Offer Positive Community Impact Customer & Community Convenient Reliable Top Stores Employment Partnerships Right Products Best Deals Support Investment Key Work Superior New Markets Top Markets Top Categories 2nd Level Logisti
Slide 22: Retail — Baker Lake
We Are Retail — Baker Lake te 6 BAKER LAKE q wears NORTH WEST
Slide 23: Retail – Baker Lake, NU Site Plan
We Are Retail – Baker Lake, NU Site Plan
Slide 24: Retail – Baker Lake, NU Site Plan
We Are Retail – Baker Lake, NU Site Plan
Slide 25: Retail — Convenience
We Are Retail — Convenience MM, (—-—-————ae——o! 1SSSSSSSSSSSS==21 phe ha || } =I wears NORTH WEST
Slide 26: Retail — Services
We Are Retail — Services MM, | SEASONAL Mpispuay SERVICE/ ig \ omei68 83 83 i ICE wears NORTH WEST
Slide 27: Retail — Fresh
We Are Retail — Fresh i | o VAG wears NORTH WEST
Slide 28: Retail — Grocery
We Are Retail — Grocery CENTRE STORE wears NORTH WEST
Slide 29: Retail – Apparel & Furniture
We Are Retail – Apparel & Furniture
Slide 30: Top Stores
“Helping Our Customers Live Better” Deliver Our Vision Superior Customer Offer Positive Community Impact Customer & Top Stores Convenient Reliable • 20 stores left Employment Partnerships Community • Complete by 2022 Right Products Best Deals Support Investment • $100 million investment Key Work Sup
Slide 31: Top Stores
“Helping Our Customers Live Better” Deliver Our Vision Superior Customer Offer Positive Community Impact Customer & Community Convenient Reliable Top Stores Employment Partnerships Right Products Best Deals Support Investment Key Work Superior New Markets Top Markets Top Categories 2nd Level Logisti
Slide 32: Superior Logistics
We Are Logistics Superior Logistics • Faster • More reliable • At equal or lower cost
Slide 33: Logistics – North Star Advantage
We Are Logistics – North Star Advantage • Control over scheduling, routing & equipment • Leverage store network • Double size within six months
Slide 34: Logistics – North Star Advantage
We Are Logistics – North Star Advantage • Control over scheduling, routing & equipment • Leverage store network • Double size within six months
Slide 35: North Star Advantage
We Are Logistics North Star Advantage
Slide 36: North Star Advantage
We Are Logistics North Star Advantage • DC3 air frame • New avionics and turbo engines • Low operating costs and simple to fly
Slide 37: Top Stores
“Helping Our Customers Live Better” Deliver Our Vision Superior Customer Offer Positive Community Impact Customer & Community Convenient Reliable Top Stores Employment Partnerships Right Products Best Deals Support Investment Key Work Superior New Markets Top Markets Top Categories 2nd Level Logisti
Slide 38: Alaska & South Pacific
We Are International Alaska & South Pacific
Slide 39: Caribbean Growth Focus
We Are International Caribbean Growth Focus
Slide 40: Medium Term Performance Goals
We Are International Medium Term Performance Goals • Growth through acquisition • RTW business improvements • Pass cost savings to customers
Slide 41: Top Stores
“Helping Our Customers Live Better” Deliver Our Vision Superior Customer Offer Positive Community Impact Customer & Community Convenient Reliable Top Stores Employment Partnerships Right Products Best Deals Support Investment Key Work Superior New Markets Top Markets Top Categories 2nd Level Logisti
Slide 42: Healthy Food Options
We Are Community Healthy Food Options • 800 to 1200 items • Lower priced • Reduced sugar, fat or salt • Emphasis on “everyday foods”
Slide 43: Best Value Drink Crystals
We Are Community Best Value Drink Crystals • 498,271 units • Over 30 million servings • 127,000 kg impact
Slide 44: Government Programs
We Are Community Government Programs • Must be indexed • Must address cost of living inequity
Slide 45: Indigenous Language Support
We Are Community Indigenous Language Support • Product shelf tags • 30+ versions • Audio enabled by QR code
Slide 46: Top People Delivers Our Vision
Top Delivers Our People Vision
Slide 47: 2017 Annual General & Special Meeting of Shareholders
2017 Annual General & Special Meeting of Shareholders