Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Presentation (June 2023)
68 slides from Alimentation Couche-tard's investor presentation, June 2023
Slide 1: Investor Presentation
ALIMENTATION COUCHE-TARD INVESTOR PRESENTATION June 2023 1
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: A History of Entrepreneurship & Growth
A HISTORY OF ENTREPRENEURSHIP & GROWTH 2012 2016 2022 Alain Bouchard 2001 Expansion into Europe Expansion in Ireland 2020 Started EV journey Our Founder Entry into U.S. Acquired Statoil Fuel & Canada Grow into Asia in NA & Retail, a leading Acquired Topaz, a leader in Ireland Acquired Circle K Launc
Slide 4: Values We Live By
VALUES WE LIVE BY We work together to make it easier for We treat the business as our own. We our customers and colleagues. We stay seek out problems, act quickly to solve humble and celebrate shared them, and deliver better results. We take successes. We have fun and care for responsibility, and wh
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS • Global rebrand initiative permits better leverage of broad scale. Size and 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 6: Recent Highlight - ACT Acquires Big Red Stores
RECENT HIGHLIGHT - ACT ACQUIRES BIG RED STORES ➢ A successful company originally founded in 1997 that has grown mainly organically by opening new sites over the years ➢ All 45 sites are company-owned, company- operated sites of which real estate is owned for 44 sites and leased for 1 site ➢ The netw
Slide 7: Recent Highlight - ACT Acquires True Blue Car Wash
RECENT HIGHLIGHT - ACT ACQUIRES ALL OF THE MEMBERSHIP INTERESTS OF TRUE BLUE CAR WASH LLC ➢ True Blue currently operates 65 car washes conveniently located in high-traffic areas in Arizona, Texas, Illinois, and Indiana with a strong pipeline of future NTI sites planned and under development ➢ Couche
Slide 8: Synergistic Opportunities with Our Car Wash Business
GREAT SYNERGISTIC OPPORTUNITIES WITH OUR CAR WASH BUSINESS Incremental Fuel Volume ➢ Car Wash Membership base (currently > 180,000) will receive unique fuel discounts based on membership class Incremental Merchandise Sales ➢ An increase in basket size resulting from higher traffic from fuel customer
Slide 9: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 9
Slide 10: Company Highlights
COMPANY HIGHLIGHTS Ticker Symbol TSX: ATD ➢ Coast-to-coast presence in Canada and located in 47 of 50 U.S. states. ➢ Leading market share across many markets in Europe. ➢ EBITDA1 CAGR of ~15%2 since 2013 and profitable since IPO in 1986. ➢ Track record of generating shareholder value with average RO
Slide 11: Global Leader in Fuel & Convenience Retail
GLOBAL LEADER IN FUEL & CONVENIENCE RETAIL Store Count Our People Countries / Territories 14,468 ~128,000 24 incl. int’l licensees globally incl. int’l licensees Fuel Gallons Sold Customers Served Business Units ~37 million ~8.5 million 27 per day per day globally Sites Offering Fresh Food Fast Site
Slide 12: Revenue and Gross Profit Mix
REVENUE AND GROSS PROFIT MIX Gross Profit(1,2) 12% 1% Revenue Geographic Mix Product Mix 17% 12% 2% 24% 21% 49% 66% 49% 74% 71% 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. Not
Slide 13: Investment Highlights
INVESTMENT HIGHLIGHTS Merch. SSS - US1 SS Volume - US1 Net Earnings Growth Y/Y3 +3.3% +0.8% +40.4% Adj. EBITDA Growth Y/Y2,3 Merch. SSS - Europe and Other Regions 2 SS Volume - Europe and Other Regions 1 Diluted EPS Growth Y/Y3 +16.7% Q4 +3.0% (2.4%) +47.8% Leverage Ratio2 Merch. SSS - Canada1 SS Vo
Slide 14: Our Vision and Mission
OUR VISION AND MISSION To become the world’s preferred destination for convenience and Our Vision mobility. Our Mission To make our customers’ lives a little easier every day. Alimentation Couche-Tard | Investor Presentation 14
Slide 15: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 15
Slide 16: Snapshot of U.S. Fuel & Convenience Industry
SNAPSHOT OF U.S. FUEL & CONVENIENCE INDUSTRY Population of U.S. Convenience Stores Store Type Single Stores Chain Stores 2022 150,174 2006 total Non-Fuel 145,119 stores 21% total stores 175000 Fuel 150000 79% 57,315 57,031 56,836 56,476 57,792 57,612 58,078 56,226 55,401 54,917 59,751 54,526 58,690
Slide 17: Attractive Channel Within Broader Retail
2005 $151.1 2006 $163.6 2007 $168.5 Source: NACS State of the Industry Report of 2022 Data. 2008 $173.9 2009 $182.4 2010 $190.4 (in billions) 2011 $195.0 2012 $199.3 Alimentation Couche-Tard | Investor Presentation 2013 $204.0 2014 $213.5 2015 $225.8 CAGR 4.2% 2016 $233.0 Industry Inside Sales 2017
Slide 18: ... and Recession Resilient
… AND RECESSION RESILIENT Industry Inside Sales (in billions) Dot-Com Bubble Great Recession $302.9 +5% +8% $277.9 $255.6 $251.9 $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 20
Slide 19: ACT Performance During Past Recessions
(10.0%) - (5.0%) 5.0% 10.0% 15.0% 20.0% 25.0% Q2-FY04 (30.0%) (20.0%) (10.0%) - 10.0% 20.0% Q3-FY04 Q4-FY04 Q2-FY04 Q1-FY05 Q4-FY04 Q2-FY05 Q3-FY05 Q2-FY05 Q4-FY05 Q1-FY06 excluding service revenues. Q4-FY05 Q2-FY06 Q3-FY06 Q2-FY06 Q4-FY06 Q1-FY07 Q4-FY06 Q2-FY07 Q3-FY07 Q2-FY07 Q4-FY07 Q1-FY08 Q4-F
Slide 20: Total RTF Gross Profit Dollars Strongly Correlated to OpEx
TOTAL RTF GROSS PROFIT DOLLARS STRONGLY CORRELATED TO OPEX $2,500.0 1, 2 3 Fuel Gross Profit $ OpEx $2,000.0 $1,500.0 $1,000.0 $500.0 $- Q1-FY04 Q2-FY04 Q3-FY04 Q4-FY04 Q1-FY05 Q2-FY05 Q3-FY05 Q4-FY05 Q1-FY06 Q2-FY06 Q3-FY06 Q4-FY06 Q1-FY07 Q2-FY07 Q3-FY07 Q4-FY07 Q1-FY08 Q2-FY08 Q3-FY08 Q4-FY08 Q1-
Slide 21: Expert in Sale of Age-Restricted Products
EXPERT IN SALE OF AGE-RESTRICTED PRODUCTS Product Category Share by Channel 100% 90% 95% Convenience store channel continues to be 88% 80% a leader in sales of age-restricted products. 70% 60% 41% 50% 53% 36% 31% 46% 40% 37% 30% 32% 29% 13% 26% 10% 20% 22% 6% 4% 3% 3% 15% 10% 2% 2% 2% 2% 0% 0% Conve
Slide 22: U.S. National RTF Margin Trending Higher
U.S. NATIONAL RTF MARGIN1 TRENDING HIGHER 2020 - 2022 average: 36.6 cpg 43.6 2008 - 2013 average: 17.2 cpg 2014 - 2019 average: 22.2 cpg 35.2 cents per gallon 30.9 24.8 24.0 22.4 21.8 20.4 19.9 18.5 18.4 19.0 18.1 16.3 13.1 CAGR 6.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 23: US C-Store RTF Breakeven Gross Margin
US C-STORE RTF BREAKEVEN GROSS MARGIN (CPG)1,2 60.0 56.0 52.0 48.0 44.0 40.0 36.0 32.0 28.0 24.0 +10.4 20.0 16.0 +8.8 12.0 8.0 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 ACT B/E US c-store bottom quartile B/E US c-store bottom quartile actual Fuel breakeven margins have increased and the spread betwe
Slide 24: Cost Headwinds Favour Larger Chains
COST HEADWINDS FAVOUR LARGER CHAINS Card Costs to Industry Average Associate Wage $19.5 (in billions) (in dollars per hour) $14.18 $12.80 $13.5 $11.8 $11.4 $11.2 $11.2 $11.49 $11.1 $11.1 $10.7 $11.30 $10.1 $10.0 $9.5 $10.74 $9.0 $8.4 $10.19 $7.6 $9.99 $7.4 $6.6 $9.44 $5.4 $9.02 $8.76 $8.56 $3.8 $8.5
Slide 25: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 25
Slide 26: 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. ➢ Solid balance sheet and
Slide 27: A Global Family of Merchants
A GLOBAL FAMILY OF MERCHANTS 24 COUNTRIES SITES TOTAL 14,468 OUR UNITED-STATES 7,070 CANADA 2,261 EUROPE AND OTHER REGIONS1 3,101 INTERNATIONAL2 2,036 Core network International licensees Note: Store count as of April 30, 2023. Includes 983 automats 1 Europe and Other Regions store count includes 39
Slide 28: 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 ~91% of stores in the U.S. are operating under the Circle K banner, 97% in Canada, and
Slide 29: Highly Experienced Retail & Fuel Executive Team
HIGHLY EXPERIENCED RETAIL & FUEL EXECUTIVE TEAM Brian Hannasch Filipe Da Silva Alex Miller Hans-Olav Høidahl President and Chief Financial Officer1 Chief Operating Officer EVP, Operations, Europe Chief Executive Officer Ed Dzadovsky Kevin Lewis Ina Strand Aaron Brooks Louise Warner Chief Technology
Slide 30: Long-Standing Cost Discipline
LONG-STANDING COST DISCIPLINE Lean corporate structure Normalized Growth of Expenses1 9.4% Decentralized business units 8.3% Procurement efficiency 3.7% 2.1% 2.5% Continuous benchmarking 1.5% 2.0% 0.2% 0.8% 2.9% average Cost efficient systems -1.2% 2014 2015 2016 2017 2021 2022 2023 2018 2019 2020 A
Slide 31: Cost Optimization & Efficiencies
COST OPTIMIZATION & EFFICIENCIES Optimizing costs across broad range of categories Alimentation Couche-Tard | Investor Presentation 31
Slide 32: Proven Ability to Integrate Acquisitions
PROVEN ABILITY TO INTEGRATE ACQUISITIONS Revenues 2005- 2004 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2012- Deals 2 34 7 4 3 4 3 3 0 1 3 4 5 Stores 1,706 1,137 2,506 166 1,660 515 442 2,055 0 30 367 91 345 Since 2004, Couche-Tard has successfully completed a total of 73 deals, adding ~
Slide 33: Uniquely Positioned to Win
UNIQUELY POSITIONED TO WIN Highly Convenient ➢ Strong core capabilities and customer value ➢ Adapt to evolving consumer demands Localized ➢ Complete localized pricing across network and work on data-driven assortment and promotion Innovating for future ➢ EV charging solutions ➢ Frictionless technolo
Slide 34: Impressive EBITDA to Free Cash Flow Conversion
Target Allocation IMPRESSIVE EBITDA TO FREE CASH FLOW1 CONVERSION of Capex Network Development 39% 32% 34% 39% 41% 39% 32% 32% 32% 31% 35% 23% of total Capex Commercial 5,762 Programs 5,244 Aiming to deploy 35% to 40% of EBITDA1 towards 2,378 5,061 purchase of property and equipement, intangible ass
Slide 35: Efficient Structure Below EBITDA Line
EFFICIENT STRUCTURE BELOW EBITDA LINE 1 EBITDA 100% 2 D&A 26% Net financial expenses 5% Income taxes 15% Net earnings 54% Low cost of debt and global corporate structure permits high conversion of EBITDA to net earnings. 1 Please refer to the “Non-IFRS Measures” section of this presentation for addi
Slide 36: Solid Balance Sheet and Capacity to Invest
SOLID BALANCE SHEET AND CAPACITY TO INVEST Circle K No transformational acquisition Statoil Fuel & Retail, Topaz, IOL, CST, Cracker Barrel, Investment Grade The Pantry Holiday, Jet Pep Credit Rating Rapid deleveraging after Leverage after SFR 3,387 stores acquired transformational acquisition Strong
Slide 37: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 37
Slide 38: Principles for Profitable Growth
PRINCIPLES FOR PROFITABLE GROWTH Aim to deliver an EBIT-based return on capital ROCE1 employed of more than 15%. Aim to keep our adjusted net debt-to-EBITDA Leverage Ratio1 ratio below 2.25, allowing for flexibility following significant acquisitions. Capital Aim to maintain a level of Capex spendin
Slide 39: 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. Alimentation Couche-Tard | Investor Presentation 39
Slide 40: 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 41: Update on Core Initiatives
UPDATE ON CORE INITIATIVES CUSTOMER JOURNEY OFFERING NETWORK • Solid progress expanding Circle K fuel • Fresh Food, Fast ~4,860 stores at the end • Strong rollout on New-to-Industry(NTI) brand in North America in FY23 with of FY23 with plans for broad expansion with a total of 127 (including 22 R&R
Slide 42: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 42
Slide 43: EV Transition
EV Transition ➢ Developments in Scandinavia; participation in several value pools ➢ Key learnings ➢ North America remains the world’s largest market for internal combustion engines, and despite regulatory attention, energy transition for transportation is only at a formative stage ➢ The co-existence
Slide 44: Developments in Scandinavia
DEVELOPMENTS IN SCANDINAVIA Number of chargers(1) Number of home and workplace chargers(1) 1,571 10,100 977 7,349 738 600 4,648 1,099 FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023 Number of sites with chargers(1) Circle K application users 324 310,000 272,547 191 142 159 108,116 35,218 FY2
Slide 45: Key Learnings
KEY LEARNINGS ➢ Longer dwell times in relation to chargers have led to an increase in traffic in our stores and ultimately a positive lift in sales ➢ Positive incremental impact of installing additional chargers on our sites ➢ Increased engagement with customers as evidenced by the increase in Circl
Slide 46: Scaling in Europe and Penetrate North America
SCALING IN EUROPE AND PENETRATE NORTH AMERICA Steady network expansion in Scandinavia EU Invest to achieve > 25% market share Explore B2B possibilities Build a team and operating platform N.A Execute transit charging pilots Collaborate with other fuel retailers Announced rollout of 200 sites across
Slide 47: Our Location in Bamble, Norway
OUR LOCATION IN BAMBLE, NORWAY Recognized as “most important store of 2020” by ShopTalk LIVE Alimentation Couche-Tard | Investor Presentation 47
Slide 48: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 48
Slide 49: Sustainability
SUSTAINABILITY ➢ ESG journey ➢ Our sustainability framework ➢ Our external commitments ➢ Celebrating our progress in sustainable practices Alimentation Couche-Tard | Investor Presentation 49
Slide 50: ESG Journey
ESG JOURNEY Alimentation Couche-Tard | Investor Presentation 50
Slide 51: Our Sustainability Framework
OUR SUSTAINABILITY FRAMEWORK Following our 2019 decision to elevate sustainability to a business lens, we have continued to develop our Environmental, Social and Governance (ESG) Sustainability Framework. This is how we approach sustainability and categorize all aspects of our sustainability work an
Slide 52: Our External Commitments
OUR EXTERNAL COMMITMENTS For more information on ACT’s company officers, please visit Report & Indexes - Couche-Tard Corpo Alimentation Couche-Tard | Investor Presentation 52
Slide 53: Celebrating Our Progress in Sustainable Practices
CELEBRATING OUR PROGRESS IN SUSTAINABLE PRACTICES Awarded by the world’s Celebrating our second year Scoring among the highest with an AA rating as most trusted providers of receiving this award, which a leader within our industry in managing the business sustainability recognizes companies that hav
Slide 54: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 54
Slide 55: 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. Alimentation Couche-Tard | Investo
Slide 56: Delivering Strong Results
DELIVERING STRONG RESULTS… (1,2) Merchandise and Service Revenues Merchandise and Service Gross Profit CAGR 8.6% CAGR 8.6% 17,283 5,939 16,604 5,662 15,873 in US$ millions in US$ millions 5,315 14,666 14,505 5,006 4,968 12,976 4,469 10,724 3,682 10,072 3,431 8,276 7,953 2,806 7,602 2,699 2,596 2013
Slide 57: ... and Rewarding Shareholders Accordingly
… AND REWARDING SHAREHOLDERS ACCORDINGLY Dividend per Share CAGR 26.6% in CAD cents per share 53.00 41.75 33.25 26.50 22.50 6.80 18.50 17.38 5.00 13.38 9.50 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Announced quarterly dividend of CA 14¢ in Q4 2023 representing an annualized payment of
Slide 58: Strong Organic Growth Driving Returns
STRONG ORGANIC GROWTH DRIVING RETURNS 1 Return on Capital Employed IAS 17 IFRS 16 avg. 15.4% 19.2% 17.5% We have repeatedly 16.2% 15.9% 15.8% 15.4% proven our ability to 15.0% 14.1% 13.3% increase our ROCE 12.0% following the integration of large acquisitions 2014 2015 2018 2019 2020 2023 2016 2017
Slide 59: Relative Stock Performance
RELATIVE STOCK PERFORMANCE 10-Year Stock Performance vs. Key Indices Alimentation Couche-Tard S&P/TSX Composite S&P 500 700% 600% 567.0% 500% 400% 300% 200% 168.8% 100% 58.1% 0% Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun
Slide 60: Financial Highlights
FINANCIAL HIGHLIGHTS in US$ millions, unless otherwise noted 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CAGR Total revenues 35,549 37,962 34,530 34,145 37,905 51,394 59,118 54,132 45,760 62,810 71,857 7% Gross profit1 4,607 4,988 5,268 6,082 6,482 8,112 9,195 9,644 10,115 11,005 12,052 1
Slide 61: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 61
Slide 62: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 62
Slide 63: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 63
Slide 64: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 64
Slide 65: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 65
Slide 66: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 66
Slide 67: Investor Relations Contact
INVESTOR RELATIONS CONTACT Jean-Philippe D. Lachance Vice President, Investor Relations and Treasury Investor.Relations@couche-tard.com Alimentation Couche-Tard | Investor Presentation 67
Slide 68: Thank You
THANK YOUE FUTURE Alimentation Couche-Tard | Investor Presentation 68
Alimentation Couche-Tard — Investor Presentation (June 2023) on 6ix