North West Company Inc. · TSX:NWC
North West — The North West Company — Toronto CFA Society Luncheon (October 2010)
20 slides from North West's conference presentation, Oct 21, 2010
Slide 1: More Growth In Store
rr NorTH WEstT —_ nnineen More Growth In Store
Slide 2: Caution Concerning Forward Looking Statements
Caution Concerning Forward Looking Statements Certain information presented today may constitute forward-looking statements. Such statements reflect the Fund’s current expectations, estimates, projections, and assumptions. These forward-looking statements are not guarantees of future performance and
Slide 3: Why North West?
Why North West? Our expertise in serving “hard to reach” customers; in markets with attractive demographics; with a focus on everyday needs; has created an exceptional “community store” position; led by people with a track record of value creation; and with attractive opportunities “in store”.
Slide 4: Expertise in serving "hard to reach" customers
Expertise in serving “hard to reach” customers,
Slide 5: Expertise in serving "hard to reach" customers
Expertise in serving “hard to reach” customers, % of stores > 2hr drive from Wal-Mart (Giant Tiger > 3km drive) 100% 94 96 92 80% 60% 60 40% 20% 0% Giant Tiger Cost-U-Less AC Value NCR
Slide 6: Expertise in serving "hard to reach" customers
Expertise in serving “hard to reach” customers,
Slide 7: In markets with attractive demographics
In markets with attractive demographics, NWC Canadian Markets NWC International Markets Population Forecast Population Forecast 10 year Annual Growth 2010F-2020F (%) 10 year Annual Growth 2010F-2020F (%) 1.5 1.5 1.28 1.23 1.0 1.0 .96 .80 .70 0.5 0.5 0.0 0.0 Canada Giant Tiger Northern USA NWC Canada
Slide 8: With a focus on everyday needs
With a focus on everyday needs, Sales Blend 4% Food - Grocery 13% Food - Convenience 15% 45% Non Food Grocery & Basics Other General Merchandise Financial Services, Fuel & 23% Pharmacy
Slide 9: Has created an exceptional "community store" position
Has created an exceptional “community store” position, Market Draw (4 week period) 100% 91 92 93 80% 79 60% 40% 20% 0% Cost-U-Less Northern NorthMart AC Value
Slide 10: Has created an exceptional "community store" position
Has created an exceptional “community store” position, Frequency (4 week period) 12 10.8 10 9.1 8 7.4 7.4 6 4.2 4 2.9 2 0 Cost-U-Less Wal-Mart NorthMart Giant Tiger Northern AC Value
Slide 11: Led by people with a track record of value creation
Led by people with a track record of value creation, People Strength Average senior management tenure = 13.0 years Store managers are intrapreneurs Passionate about community retailing Incented to sustain and grow the business
Slide 12: Led by people with a track record of value creation
Led by people with a track record of value creation, Ten Year EBITDA Performance 150,000 8.1% CAGR 130,274 120,000 122,257 106,557 96,369 90,000 85,502 76,606 72,826 72,271 70,535 60,000 63,886 59,956 30,000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 13: Led by people with a track record of value creation
Led by people with a track record of value creation, Ten Year RONA & ROE (%) Performance 29.3 30 28.6 24.9 25 21.7 20 18.0 21.0 16.8 19.7 19.8 16.0 16.2 18.7 15.2 15.8 14.9 15 16.6 14.1 14.8 12.7 13.4 11.6 11.5 10 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 RONA ROE
Slide 14: Led by people with a track record of value creation
Led by people with a track record of value creation, Relative Unit Performance (% at January 31) 300 250 245 215 204 200 180 150 130 148 153 137 132 138 100 104 124 120 100 114 85 50 2005 2006 2007 2008 2009 2010 NWF.UN Retailing Group TSX Composite
Slide 15: With attractive opportunities "in store"
With attractive opportunities “in store” Close perishable profitability gap
Slide 16: Fix Perishables
Fix Perishables Contribution Margin by Food Category 20% 18.2% 14.8% 15% 10% 8.9% 6.7% 5% 4.2% 0% -1.4% -5% Frozen Shelf Fresh Chilled Produce Food Stable Meat Service
Slide 17: With attractive opportunities "in store"
With attractive opportunities “in store” Close perishable profitability gap Build store stability
Slide 18: Increase Store Management Stability
Increase Store Management Stability Tenure in Location 27 0-1 yrs 37 1-2 yrs 2-3 yrs 10 3+ yrs 26
Slide 19: With attractive opportunities "in store"
With attractive opportunities “in store” Close perishable profitability gap Build store stability Raise in-stock performance Invest in supply chain Fix execution gaps
Slide 20: More Growth In Store
rr NorTH WEstT —_ nnineen More Growth In Store
The North West Company — Toronto CFA Society Luncheon (October 2010) on 6ix