Dollarama Inc. · TSX:DOL
Dollarama — Investor Presentation (December 2022)
40 slides from Dollarama's investor presentation, Dec 7, 2022
Slide 1: A leading Canadian value retailer
A leading Canadian value retailer Investor Presentation – Q3-FY2023 December 7, 2022
Slide 2: Forward-looking statements
Forward-looking statements This presentation and the accompanying oral presentation contain forward-looking statements about results, levels of activity, performance, goals or achievements of Dollarama and Dollarcity or other future events or developments that may affect Dollarama and Dollarcity whi
Slide 3: Serving Canadians with purpose
Serving Canadians with purpose Our vision To be the leading value retailer in every market in which we operate, providing customers with unsurpassed value for their hard-earned money in a time-pressed world Our purpose To provide Canadians from all walks of life with the best quality and value on ev
Slide 4: A leading Canadian value retailer
A leading Canadian value retailer (TSX: DOL) Recognized brand serving Canadians from all $4.8B 43.6% walks of life LTM revenues LTM gross margin as a % of sales Differentiated concept offering compelling value at multiple, low fixed price points 14.1% 14.3% LTM sales LTM SG&A Consistent shopping exp
Slide 5: A growing reach and international footprint
A growing reach and international footprint 1,462 10 provinces 2,000 corporate-operated Unrivalled Canadian Dollarama store Dollarama stores across presence with locations in all target by 2031 Canada provinces and two territories #1 80% and only national pure of Canadian households play dollar stor
Slide 6: Competitive advantages
Competitive advantages Strong brand Differentiated concept Value proposition Operational excellence 98% brand recognition Broad assortment of products at Superior direct sourcing and Nimble operator with proven across Canada; sought-after multiple, low fixed price points in buying capabilities, supp
Slide 7: Committed to building a sustainable business – Priority areas and highlights
Committed to building a sustainable business – Priority areas and highlights Our people Our products Our supply chain Our operations Promote a dynamic Provide customers with Enhance vendor compliance Minimize environmental and inclusive workforce safe, quality products and engagement footprint and c
Slide 8: Pursuing our sustainability journey – 2022+ goals and initiatives
Pursuing our sustainability journey – 2022+ goals and initiatives Our people Our products Our supply chain Our operations Promote a dynamic Provide customers with Enhance vendor compliance Minimize environmental and inclusive workforce safe, quality products and engagement footprint and climate risk
Slide 9: Clear strategy driving sustainable growth and value creation
Clear strategy driving sustainable growth and value creation 1 2 3 4 Maximize core Profitably grow Scale up Dollarcity Optimize capital allocation business Canadian footprint business in LATAM to drive returns • Maintain compelling • Grow Dollarama store • Grow footprint in the four • Actively manag
Slide 10: A strong core business
A strong core business 10 - Dollarama Investor Presentation Q3-FY2023
Slide 11: A diversified product mix offering compelling value
A diversified product mix offering compelling value Product categories 15% General merchandise Consumables Seasonal 42% $0.87-$5.00 Merchandise 43% sold at low fixed Electronics Cleaning supplies Christmas price points General merchandise Easter Consumables Hardware Confectionery Seasonal Halloween
Slide 12: Effective sourcing and merchandising
Effective sourcing and merchandising Product sourcing expertise and Efficient in-store built-in flexibility merchandising • Strong direct sourcing capabilities, • Clean, bright, compact four-wall reducing costs associated format with consistent offering and with intermediaries and increasing layout
Slide 13: Strong brand recognition and broad customer appeal
Strong brand recognition and broad customer appeal A value retail Serving Canadians shopping destination from all walks of life • Recognized for value for • Appeals to all money and convenience demographics and income ranges • Customers appreciate the breadth and depth • High representation of the p
Slide 14: Enhancing and evolving the service model and customer experience
Enhancing and evolving the service model and customer experience Queue line and check-out process Growing digital footprint to bring optimization additional customer convenience • Optimized queue lines • Online store offering a subset of for increased impulse item displays; products for purchase by
Slide 15: Optimizing processes and gaining efficiencies
Optimizing processes and gaining efficiencies Retail system optimization Time management and training to drive efficiency • Kronos advanced scheduling • POS systems • Mobile apps • NCR POS terminals • “GPS” training program Energy and environmental efficiency Shrink management and loss prevention in
Slide 16: Driving profitable growth in Canada
Driving profitable growth in Canada 16 - Dollarama Investor Presentation Q3-FY2023
Slide 17: Well-balanced, growing store network
Well-balanced, growing store network 1,462 stores in 10 Canadian provinces and 2 territories Head office and logistics Store footprint Store footprint activities centralized in by geography By building type Montreal area 1 1 8% 25% Atlantic Canada 21% 27% Québec Non-mall Ontario Mall 131 116 Western
Slide 18: Efficient and profitable network growth
Efficient and profitable network growth • Strong free cash flow generation to fund $2.6M organic network growth Average annual store sales within 2 years of opening • Efficient capital model requiring an avg. of $650K in leasehold improvements, fixtures and inventory, net of tenant allowance, for a
Slide 19: A robust evaluation process: path to 2,000-store target
A robust evaluation process: path to 2,000-store target Micro Macro Theoretical True potential potential potential potential Assessment of real estate Internal validation of Result of micro and Potential adjusted based on opportunities, population growth and competitive feasibility of assessment reg
Slide 20: Scaling up Dollarcity
Scaling up Dollarcity 20 - Dollarama Investor Presentation Q3-FY2023
Slide 21: Dollarcity, a high-potential LATAM value retailer
Dollarcity, a high-potential LATAM value retailer Compelling growth platform in dynamic LATAM 50.1% US$92.7M markets with appetite for DOL model DOL equity interest Total purchase price1; acquired in Q3-FY2020 immediately EPS Strong local partners and management team after 7-year partnership accreti
Slide 22: A growing footprint in key markets
A growing footprint in key markets Head office in Panama City 395 stores in four countries Store footprint by geography Decentralized logistics operations Guatemala 4% 83 21% Colombia 61 Panama El Salvador El Salvador Guatemala 59% 16% Peru Colombia 234 395 Store network growth (Number of stores)
Slide 23: Long-term target of 850 Dollarcity stores
Long-term target of 850 Dollarcity stores Maintain pace of growth; Build efficient and low-cost operating grow presence in key markets platform to support growth • Entered Colombia in 2017 • Building up logistics platform to support growth plans – decentralized • Entered Peru in May 2021 logistics n
Slide 24: Dollarama vs. Dollarcity
Dollarama vs. Dollarcity DOLLARAMA DOLLARCITY Merchandise mix1 (based on annual retail value For the year ended For the quarter ended For the year ended For the quarter ended for respective latest full fiscal years) Jan. 30, 2022 Oct. 30, 2022 Dec. 31, 2021 Sep. 30, 2022 52% 42% 43% Dollarcity Numbe
Slide 25: Financial metrics
Financial metrics 25 - Dollarama Investor Presentation Q3-FY2023
Slide 26: Robust financial performance
Robust financial performance THIRD QUARTER ENDED Y-O-Y FISCAL YEAR ENDED Y-O-Y (in millions of dollars, except per share amounts) October 30, 2022 October 31, 2021 Growth Jan. 30, 20221 Jan. 31, 20211 Growth Comparable store sales2 10.8% 0.8% 1.7% 3.2% Sales $1,290 % of sales $1,122 % of sales 14.9%
Slide 27: Best-in-class performance on key metrics
Best-in-class performance on key metrics Strong organic growth with low capital Balanced approach to operating margin Return on invested capital2 requirements LTM EBIT margin (%) (%) Growth and cash conversion (%) 23.4 10% Dollarama 20.7% Last three fiscal years store count CAGR Dollar General 11.2%
Slide 28: Strong key metrics growth since IPO
Strong key metrics growth since IPO Store count Sales (Number of stores) ($M) 4,804 4,331 1,421 1,462 3,549 3,787 4,026 1,225 1,291 1,356 3,266 1,095 1,160 2,963 2,650 874 955 1,030 2,331 652 704 785 1,859 2,065 1,420 1,603 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 YTD FY11
Slide 29: Best-in-class margin since IPO
Best-in-class margin since IPO EBITDA margin EBIT margin (%) (%) 30.4% 29.3% 30.2% 23.1% 23.8% 22.9% 22.7% 23.4% 28.1% 29.6% 20.7% 21.8% 21.4% 23.7% 25.3% 18.1% 22.5% 16.3% 17.3% 17.2% 18.4% 19.1% 19.5% 19.8% 14.5% 16.5% 1 2 3 1 2 3 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Slide 30: A balanced approach to capital allocation
A balanced approach to capital allocation Invest in organic growth Return capital to shareholders • New stores (avg. of 70 net new stores opened annually in • Maximize shareholder returns with a focus on value- last 10 fiscal years) enhancing share buybacks (over 40% of public float repurchased sinc
Slide 31: Returning capital to shareholders
Returning capital to shareholders 1121 $5.5B Uses of cash (in millions of dollars) returned to shareholders in 862 share repurchases since FY13 752 Dividends 670 Share repurchases 584 478 1060 506 813 381 331 705 625 $533M 533 187 459 436 327 142 293 returned to shareholders in 13 156 87 dividends s
Slide 32: Actively managed capital structure
Actively managed capital structure 93% $1,365M Debt structure as at Q3-FY20234 fixed rate debt, available liquidity 7% floating rate debt1 ($559M cash + $806M undrawn and available under credit facility)2,3 5-Year Fixed 7.5-Year 3.550% Fixed $500M 5-Year 8-Year 5.165% Fixed Fixed $450M 2.89% 4.0 5.5
Slide 33: Strong track record of shareholder value creation
Strong track record of shareholder value creation Stock performance since October 28, 2012 1,850 1,750 Dollarama 682% (Total Cumulative Return of a $100 investment) 1,650 1,550 TSX Capped Consumer 10-year total 1,450 Discretionary Index shareholder return1 1,350 1,250 1,150 1,050 950 72.7% 850 5-yea
Slide 34: Appendix
Appendix 34 - Dollarama Investor Presentation Q3-FY2023
Slide 35: A seasoned board and management team
A seasoned board and management team Executive officers Neil Rossy President and Chief Executive Officer Board of directors Johanne Choinière Stephen Gunn Nicholas Nomicos Chief Operating Officer Chair of the Board Senior Advisor Corporate Director Nonantum Capital Partners Nicolas Hien Joshua Beken
Slide 36: Dollarama through the years
Dollarama through the years 1992 2004 2009 2011 2012 2013 Dollarama founded Investment by IPO (TSX:DOL) Sale by Bain Capital Introduction of Beginning of as single-price point Bain Capital of remaining equity $2.50 and $3.00 commercial 585 stores in price points partnership with retail chain by Larr
Slide 37: DOL vs. Canadian dollar store landscape
DOL vs. Canadian dollar store landscape Three-year store count Dollarama vs. next four pure play competitors 1 ~6.1x larger than our next largest pure Thousands of people per 1,600 play competitor Dollarama store2 1,462 1,397 1,400 1,333 in Canada 35 1,200 26 22 22 1,000 800 ~2.9x 600 more Dollaram
Slide 38: DOL vs. US pure play dollar stores
DOL vs. US pure play dollar stores DOLLARAMA DOLLAR GENERAL DOLLAR TREE LTM revenues ($ millions) $4,804 US$36,254 US$27,692 LTM EBITDA ($ millions) $1,449 US$4,063 US$2,957 Number of stores 1,462 18,566 16,293 SCALE Average sales / store ($ millions) C$3.4 US$2.0 US$1.7 Average store size (sq. ft)
Slide 39: Dollarcity governance framework
Dollarcity governance framework Dollarama (50.1%) Dollarama board of directors • Majority representation on Dollarcity Board of Directors, with certain strategic and operational decisions subject to 100% stockholder approval under current ownership threshold, such as those decisions related to capit
Slide 40: Thank you
Thank you Dollarama Inc. 5805 Royalmount Ave. Montreal, QC H4P 0A1