Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Presentation (September 2021)
42 slides from Alimentation Couche-tard's investor presentation, September 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION Alimentation Couche-Tard September 2021
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and the accompanying oral presentation contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “projected”, “estimate”, “may”, “anticipate”, “believe”
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Size and Scale • Global rebrand initiative permits better leverage of broad scale. • More flexibility to compete compared to small-size operators. • Decentralized model drives accountability and entrepreneurship. Strong Culture • Cost discipline and lean operations are a major
Slide 4: Content
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 4
Slide 5: Company Highlights
COMPANY HIGHLIGHTS Ticker Symbol TSX: ATD.A | ATD.B • Coast-to-coast presence in Canada and located in 46 of 50 U.S. states. • Leading market share across many markets in Europe. • EBITDA CAGR of ~21%1 since 2011 and profitable since IPO in 1986. • Track record of generating shareholder value with a
Slide 6: Global Leader in Fuel & Convenience Retail
GLOBAL LEADER IN FUEL & CONVENIENCE RETAIL Store Count Our People Countries / Territories 14,222 ~124,000 26 incl. int’l licensees globally incl. int’l licensees Fuel Gallons Sold Customers Served1 Cups of Coffee Sold1 ~35 million ~9 million ~750,000 per day per day per day Hot Dogs Sold1 Polar Pop
Slide 7: Revenue and Gross Profit Mix
REVENUE AND GROSS PROFIT MIX Gross Profit 12% 2% Revenue Geographic Mix Product Mix 13% 1% 19% 35% 19% 46% 53% 68% 64% 69% United States Europe & Other Canada Merchandise and Service Fuel Other ~65% of transactions are convenience only, while 25% are fuel only, and 10% are a mix of both. Note: All f
Slide 8: Snapshot of Key Business Metrics
SNAPSHOT OF KEY BUSINESS METRICS Merch. SSS – Europe and Merch. SSS – US1 Other Regions Merch. SSS - Canada1 -0.2% +5.9% -9.6% SS Volume – Europe and SS Volume - US1 Other Regions1 SS Volume - Canada1 Q1 +11.8% +6.3% +10.4% Adj. EBITDA Growth Y/Y Adj. EPS Growth Y/Y Leverage Ratio -0.1% Unchanged 1.
Slide 9: Our Vision and Mission
OUR VISION AND MISSION To become the world’s preferred destination Our Vision for fuel and convenience. To make our customers’ lives a little easier Our Mission every day. 9
Slide 10: Content
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 10
Slide 11: Snapshot of U.S. Fuel & Convenience Industry
SNAPSHOT OF U.S. FUEL & CONVENIENCE INDUSTRY Store Type Population of U.S. Convenience Stores Single Stores Chain Stores 2020 Non-Fuel 2006 150,274 19% 145,119 total total stores stores 175000 150000 Fuel 57,315 57,031 56,836 81% 56,476 57,792 57,612 58,078 56,226 55,401 54,917 54,526 55,611 55,162
Slide 12: Attractive Channel Within Broader Retail
12 2005 $151.1 2006 $163.6 (in billions) 2007 $168.5 2008 $173.9 2009 $182.4 2010 $190.4 2011 $195.0 2012 $199.3 2013 $204.0 2014 $213.5 CAGR 3.6% Industry Inside Sales 2015 $225.8 2016 $233.0 2017 $237.0 Source: NACS State of the Industry Report of 2020 Data. 2018 $242.2 2019 $251.9 2020 $255.6 200
Slide 13: ... and Recession Resilient
… AND RECESSION RESILIENT Industry Inside Sales (in billions) Dot-Com Bubble Great Recession $251.9 $255.6 +5% +8% $242.2 $237.0 $233.0 $225.8 $213.5 $204.0 $199.3 $195.0 $190.4 $182.4 $173.9 $168.5 $163.6 $151.1 $132.1 $116.2 $112.0 $109.3 $104.1 $99.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 14: Expert in Sale of Age-Restricted Products
EXPERT IN SALE OF AGE-RESTRICTED PRODUCTS Product Category Share by Channel 100% 90% Convenience store channel continues to be 86% 80% 85% a leader in sales of age-restricted products. 70% 60% 41% 50% 55% 33% 40% 28% 42% 37% 30% 32% 30% 12% 12% 20% 26% 22% 22% 7% 6% 5% 4% 4% 3% 3% 3% 3% 10% 0% Conve
Slide 15: U.S. National Fuel Margin Trending Higher
U.S. NATIONAL FUEL MARGIN TRENDING HIGHER 2014 - 2020 average: 24.1 cpg While labor costs per hour for top quartile performers were 1.5x that of the bottom quartile, their inside gross 35.2 profit dollars per labor hour were more than double, effectively easing pressure on breakeven. 2008 - 2013 ave
Slide 16: Cost Headwinds Favour Larger Chains
COST HEADWINDS FAVOUR LARGER CHAINS Card Costs to Industry Average Associate Wage $11.49 (in dollars per hour) $11.30 (in billions) $11.8 $11.4 $11.2 $11.2 $11.1 $11.1 $10.74 $10.7 $10.1 $10.0 $9.5 $10.19 $9.0 $9.99 $8.4 $7.6 $7.4 $9.44 $6.6 $9.02 $5.4 $8.76 $8.56 $8.51 $3.8 $8.46 $8.37 $8.27 2008 2
Slide 17: Content
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 17
Slide 18: Competitive Advantages
COMPETITIVE ADVANTAGES • Significant scale and buying power through broad footprint and global brand. • Strong leadership team and decentralized business model. • Long-standing cost discipline embedded in company culture and DNA. • Proven ability to integrate acquisitions. • Well positioned with Nor
Slide 19: Global Footprint with Lots of White Space
GLOBAL FOOTPRINT WITH LOTS OF WHITE SPACE Europe and Canada Other Regions1 2,107 3,066 stores stores United States International2 7,082 1,913 stores stores Core network International licensees Note: Store count as of July 18, 2021. 1 Europe and Other Regions store count includes 344 stores in Hong K
Slide 20: Going Global with Circle K Brand
GOING GLOBAL WITH CIRCLE K BRAND Higher brand awareness and loyalty Unified corporate culture Greater purchasing power Rollout of national promotions Exclusive product launches Private label and product innovation ~88% of stores in the U.S. are operating under the Circle K banner, 95% in Canada, and
Slide 21: Highly Experienced Retail & Fuel Executive Team
HIGHLY EXPERIENCED RETAIL & FUEL EXECUTIVE TEAM Brian Hannasch Claude Tessier Alex Miller Hans-Olav Høidahl President and Chief Financial Officer EVP, Operation, North EVP, Operations, Europe Chief Executive Officer America, and Global Commercial Optimization Darrell Davis Deborah Hall Lefevre Kevin
Slide 22: Long-Standing Cost Discipline
LONG-STANDING COST DISCIPLINE Lean corporate structure Adj. SG&A Expense Growth Y/Y 3.7% Decentralized business units 2.5% 2.1% 1.7% 1.9% 1.5% Procurement efficiency 2.0% 0.2% 1.3% average Continuous benchmarking 0.8% -0.9% -1.2% Cost efficient systems 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 23: Proven Ability to Integrate Acquisitions
PROVEN ABILITY TO INTEGRATE ACQUISITIONS Revenues 2005- 2004 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012- Deals 2 34 7 4 3 4 3 3 0 1 3 Stores 1,706 1,137 2,506 166 1,660 515 442 2,055 0 30 367 Since 2004, Couche-Tard has successfully completed a total of 64 deals, adding ~10,600 stores globall
Slide 24: Norway Laboratory Is a Significant Advantage
NORWAY LABORATORY IS A SIGNIFICANT ADVANTAGE E-mob platform and internal 600 fast chargers now installed in Home and workplace charging capabilities established Norway on more than 90 sites launched in Norway • Recognized as #1 charging destination. • Circle K Bamble in Norway was recognized as “Mos
Slide 25: Impressive EBITDA-to-FCF Conversion
Target Allocation IMPRESSIVE EBITDA-TO-FCF CONVERSION of Capex Network Development 30% 38% 39% 32% 34% 39% 41% 39% 32% 31% 35% 24% of total capex Commercial 5,061 Aiming to deploy 35% to 40% of Programs 2,299 4,525 EBITDA towards capital expenditures 30% in US$ millions 2,043 of total capex 3,583 1,
Slide 26: Efficient Structure Below EBITDA Line
EFFICIENT STRUCTURE BELOW EBITDA LINE EBITDA 100% D&A 27% Net financial expenses 7% Income taxes 13% Net earnings 53% Low cost of debt and global corporate structure permits high conversion of EBITDA to net earnings. Note: All figures based on results for fiscal year ended April 25, 20201 includes t
Slide 27: Solid Balance Sheet and Capacity to Invest
SOLID BALANCE SHEET AND CAPACITY TO INVEST Investment Grade Circle K No transformational acquisition Statoil Fuel & Retail, Topaz, IOL, CST, Cracker Barrel, Credit Rating The Pantry Holiday, Jet Pep Rapid deleveraging after Leverage after SFR 3,042 stores acquired transformational acquisition Strong
Slide 28: Content
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 28
Slide 29: Our Ambition: Double Again
OUR AMBITION DOUBLE AGAIN by making our customers’ lives a little easier every day! Double adjusted EBITDA1, driven by our value creation equation and a focus on organic growth. 1 Earnings before interest, tax, depreciation, amortization, and impairment, adjusted for specific items. 29
Slide 30: Principles for Profitable Growth
PRINCIPLES FOR PROFITABLE GROWTH Aim to deliver an EBIT-based return on capital ROCE employed of more than 15%. Aim to keep our adjusted net debt-to-EBITDA Leverage Ratio ratio below 2.25, allowing for flexibility following significant acquisitions. Capital Aim to maintain a level of capex spending
Slide 31: More Balanced Growth Going Forward
MORE BALANCED GROWTH GOING FORWARD Historical Projected Organic Acquisitions 30% 40% Acquisitions Organic 70% 60% Greater focus on the offering and customer journey is expected to drive higher share of organic growth. 31
Slide 32: Key Focus Areas
KEY FOCUS AREAS Customer Journey Offering Network • Be recognized by our customers • Succeed with food • Continue to grow market share in for a differentiated experience, in • Capture new opportunities the U.S. the way we deliver and • Further develop our retail • Expand to new growth markets. conti
Slide 33: Core Initiatives
CORE INITIATIVES Customer Journey Offering Network • Making Circle K the convenience • Food at scale • U.S. expansion brand of choice • Merchandise pricing, promotion, • Profitable ramp-up of new stores • Customer journey innovation and assortment • Profitable remodels • Customer loyalty • Age-restr
Slide 34: Content
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 34
Slide 35: Increasing Shareholder Value
INCREASING SHAREHOLDER VALUE • Long track record of delivering solid results. • Increasing free cash flow generation. • Rewarding shareholders through a steadily increasing dividend. • Strong focus on reinvesting profitably in our operations and improving the ROCE. 35
Slide 36: Delivering Strong Results
36 in millions of gallons in US$ millions 2011 4,195 2011 6,184 2012 4,613 2012 6,599 2013 6,945 2013 7,602 2014 7,626 2014 7,953 2015 8,135 2015 8,276 2016 10,502 2016 10,072 IFRS 16 lease accounting standard. 2017 11,793 2017 10,724 CAGR 9.9% CAGR 11.8% Fuel Volume Sold 2018 14,525 2018 12,976 201
Slide 37: ... and Rewarding Shareholders Accordingly
… AND REWARDING SHAREHOLDERS ACCORDINGLY Dividend per Share CAGR 26.5% in CAD cents per share 33.25 26.50 22.50 18.50 17.38 6.80 5.00 4.58 13.38 3.17 9.50 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Announced quarterly dividend of CA 8.75¢ in Q1 2022 representing an annualized payment of
Slide 38: Strong Organic Growth Driving Returns
STRONG ORGANIC GROWTH DRIVING RETURNS Return on Capital Employed IAS 17 IFRS 16 avg. 15.4% 19.2% 19.0% 18.1% We have repeatedly proven our ability to 16.2% 15.9% 15.8% 15.0% increase our ROCE 14.1% 13.3% following the integration 12.0% 11.0% of large acquisitions 2011 2012 2013 2014 2015 2016 2017 2
Slide 39: Relative Stock Performance
RELATIVE STOCK PERFORMANCE Note: Stock market performance from August 15, 2011 to August 13, 2021. Source: Bloomberg, based on the closing prices at the end of August 13, 2021, trading day. 39
Slide 40: Financial Highlights
FINANCIAL HIGHLIGHTS in US$ millions, unless otherwise noted 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 CAGR Total revenues 18,543 22,980 35,549 37,962 34,530 34,145 37,905 51,394 59,118 54,132 45,760 9% Gross profit 2,752 2,975 4,607 4,988 5,268 6,082 6,482 8,112 9,195 9,644 10,115 14%
Slide 41: Investment Highlights
INVESTMENT HIGHLIGHTS Size and Scale • Global rebrand initiative permits better leverage of broad scale. • More flexibility to compete compared to small-size operators. • Decentralized model drives accountability and entrepreneurship. Strong Culture • Cost discipline and lean operations are a major
Slide 42: Investor Relations Contact
INVESTOR RELATIONS CONTACT Investor.Relations@couche-tard.com 42
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