Aimia Inc. · TSX:AIM
Aimia — Q4 2013 Earnings Presentation
39 slides from Aimia's earnings presentation, Feb 26, 2014
Slide 1: Inspiring Loyalty
/\IMI/A\ INSPIRING LOYALTY
Slide 2: Q4 2013 Highlights
Q4 2013 HIGHLIGHTS February 26, 2014
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Forward-looking statements are included in the following presentation. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “wo
Slide 4: Rupert Duchesne, Group Chief Executive
RUPERT DUCHESNE GROUP CHIEF EXECUTIVE
Slide 5: A Year of Outstanding Accomplishments
A YEAR OF OUTSTANDING ACCOMPLISHMENTS • A very good year on an underlying basis across our regions • Achieved or surpassed our guidance on all metrics • Strong Aeroplan base for growth in place, with seamless operational transition to renewed Aeroplan program and transformational new agreements with
Slide 6: Continued Growth in Annual Dividends
CONTINUED GROWTH IN ANNUAL DIVIDENDS Annual Common Dividends ($ millions) Dividends Per Common Share +6.3%(1) +7.9%(1) $0.67 $115.7 $0.63 $108.8 $0.58 $102.3 FY 2011 FY 2012 FY 2013 FY 2011 FY 2012 FY 2013 (1) Compounded annual growth rate. 6
Slide 7: David Adams, Executive Vice-President and CFO
DAVID ADAMS EXECUTIVE VICE-PRESIDENT AND CFO
Slide 8: Strong Underlying Performance in 2013
STRONG UNDERLYING PERFORMANCE IN 2013 • Gross Billings up 4.5% on a constant currency basis and regional Gross Billings in line with our guidance • Adjusted EBITDA+4.5% of $350.5 million(1), excluding +4.5% conveyance items • FCF above our guidance at $268.1(2) million, excluding conveyance items 1)
Slide 9: Driven by a Positive Q4 Finish
DRIVEN BY A POSITIVE Q4 FINISH • Gross Billings up 4.3% on a constant currency basis, with Gross Billings from Loyalty Units up 5.5% • Adjusted EBITDA+4.5% of $88.9 million(1), excluding +4.5% conveyance items • Strong fourth quarter FCF at $120.4(2) million, excluding conveyance items 1) Adjusted E
Slide 10: Q4 2013 Gross Billings Growth
Q4 2013 GROSS BILLINGS GROWTH ($ MILLIONS) $8.8 $658.1(1) $22.5 $10.8 $615.1 US & APAC Canada EMEA Consolidated: +7.0% growth; +4.3% in c.c.(2) EMEA: +5.2% in c.c.(2) Canada: +3.2% US & APAC: +5.3% in c.c.(2) 2012 Reported 2013 Reported (1) Variance related to intercompany eliminations of $0.9 milli
Slide 11: Q4 2013 AEBITDA
Q4 2013 AEBITDA ($ MILLIONS) $4.2 $1.8 $(2.5)(2) $(3.3) $118.2 $(4.5) US & Canada Stock $(12.9) EMEA APAC based Corporate $(12.1) compensation Breakage $88.9(1) Impact PLM (24.8)% 2012 2013 Reported Adjusted (1) Adjusted EBITDA was adjusted to exclude the $150.0 million payment to CIBC and the card
Slide 12: Canada Performance
CANADA PERFORMANCE FY 2013 Gross Billings Q4 2013 Highlights • Gross Billings from Loyalty Units were up 3.8%, 16% with Aeroplan Miles issuance up 2.1% • Strong promotional activity and conversion Canada campaigns in Financial Services and non-air travel $1,300.1M plus new financial card acquisition
Slide 13: EMEA Performance
EMEA PERFORMANCE FY 2013 Gross Billings Q4 2013 Highlights 11% • Gross Billings from Loyalty Units were up 8.5% on a constant currency basis, with Sainsbury’s and EBay continuing to drive growth in Nectar UK EMEA • Air Miles Middle East issuance up 4.9%; Middle $704.1M East redemptions slowed follow
Slide 14: US&APAC Performance
US&APAC PERFORMANCE FY 2013 Gross Billings Q4 2013 Highlights • Gross Billings were up 5% on a constant currency basis, including the first quarter of EIM like for like growth US & • Growth with new and existing clients in APAC APAC drove net new business $362.7M • US rewards fulfillment volumes wer
Slide 15: Full Year 2013 Operating Expenses
FULL YEAR 2013 OPERATING EXPENSES $11.4 $6.9 $908.9 $22.5 $19.1 $33.8 $48.8 Currency Share Goodwill impact based $200.0(1) Aeroplan EIM impairment + other compensation $50.0 marketing operating VAT & professional expenses fees $150.0 $566.4 Conveyance items $142.5 million 2012 2013 Reported Reported
Slide 16: Free Cash Flow
FREE CASH FLOW Free Cash Flow (1) ($ millions) $299.5 $268.1(3) $197.6 $120.4(3) $77.1 $12.4 Q4 2011 Q4 2012 Q4 2013 FY 2011 FY 2012 FY 2013 Free Cash Flow Free Cash Flow Free Cash Flow / Common Share (2) $1.73 $1.55(3) $1.10 $0.70(3) $0.45 $0.07 Q4 2011 Q4 2012 Q4 2013 FY 2011 FY 2012 FY 2013 (1) F
Slide 17: Balance Sheet at December 31, 2013
BALANCE SHEET AT DECEMBER 31, 2013 AVAILABLE CASH DEBT Annual December Interest December $ millions 31, 2013 $ millions Rate Maturing 31, 2013 Cash and cash equivalents 449.1 Revolving Facility(1) Apr. 23, 2016 - Restricted cash 33.7 Senior Secured Notes 2 7.9% Sept. 2, 2014 150.0 Short-term investm
Slide 18: Investing in Support of Our Strategy
INVESTING IN SUPPORT OF OUR STRATEGY Established Markets Emerging Markets Coalition Proprietary Analytics & Insights 18
Slide 19: 2014 Outlook
2014 OUTLOOK* CANADA EMEA US & APAC AND CORPORATE (-) Slightly softer household spend (+) Improving UK economy with (+) Improved US consumer spend impacting spend per card slightly softer grocery sector environment and healthy economic outlook in APAC (+) Aeroplan growth driven by new (+) Expected t
Slide 20: 2014 Guidance
2014 GUIDANCE* 2013 2014 Guidance 7% to 9% growth Gross Billings $2,366.4 million (constant currency)(1) Adjusted EBITDA margin of Adjusted EBITDA $350.5 million(2) approximately 12.0%(1) Free Cash Flow before dividends Target range of $230 to $250 million $268.1 million(3) (1)(4) paid Capital expen
Slide 21: Thank You
AIMIA INSPIRING LOYALTY
Slide 22: Appendix
APPENDIX
Slide 23: Full Year 2013 Gross Billings Growth
FULL YEAR 2013 GROSS BILLINGS GROWTH ($ MILLIONS) $47.5 $7.6 $2,366.4(1) $64.3 $2,243.0 US & APAC Canada EMEA Consolidated: +5.5% growth; +4.5% in c.c.(2) EMEA: +7.4% in c.c.(2) US & APAC: +13.4% in c.c.(2) Canada: +0.6% 2012 Reported 2013 Reported (1) Variance related to intercompany eliminations o
Slide 24: Full Year 2013 AEBITDA Growth
FULL YEAR 2013 AEBITDA GROWTH ($ MILLIONS) $20.8 $(9.0) $24.0 $(1.7) $(6.9) $(49.9) $(11.2) $403.1 PLM Stock Canada VAT $(18.7) EMEA U.S & based $350.5(1) APAC compensation Breakage impact Corporate 2012 2013 Reported Adjusted (1) Adjusted EBITDA was adjusted for the CIBC payment of $150.0 million a
Slide 25: Bridging Full Year AEBITDA to Free Cash Flow
BRIDGING FULL YEAR AEBITDA TO FREE CASH FLOW ($ MILLIONS) FY 2013 $49.9 $(9.8) $(31.2) $19.4 $(6.0) $(18.8) $350.5(1) $(31.5) $(54.4) $268.1(2) Non-cash items Adjusted Stock Based Impact of Change in Non-Cash VAT Working Cash Taxes Net Cash Capital Free Cash EBITDA Compensation Breakage on FRC excl.
Slide 26: Full Year 2013 Consolidated Financial Highlights
FULL YEAR 2013 CONSOLIDATED FINANCIAL HIGHLIGHTS* YEARS ENDED DECEMBER 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Breakage VAT Impairment Reported Conveyance Adjusted Reported items Gross Billings - - - 2,366.4 - 2,366.4 2,243.0 Gross Billings from the sale of Lo
Slide 27: Full Year 2013 Financial Highlights – Canada
FULL YEAR 2013 FINANCIAL HIGHLIGHTS – CANADA* YEARS ENDED DECEMBER 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Conveyance Breakage Reported Adjusted Reported items Gross Billings - 1,300.1 - 1,300.1 1,292.6 Gross Billings from the sale of Loyalty Units - 1,085.8 -
Slide 28: Full Year 2013 Financial Highlights – Canada
FULL YEAR 2013 FINANCIAL HIGHLIGHTS – CANADA* Years Ended December 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Breakage Reported Conveyance Adjusted Reported Adjustment Items Gross Billings Aeroplan - 1,133.2 - 1,133.2 1,135.0 Proprietary Loyalty - 247.3 - 247.3 2
Slide 29: Full Year 2013 Financial Highlights – EMEA
FULL YEAR 2013 FINANCIAL HIGHLIGHTS – EMEA* YEAR ENDED DECEMBER 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported VAT Reported Reported Gross Billings - 704.1 639.9 Gross Billings from the sale of Loyalty Units - 625.6 548.6 Revenue from Loyalty Units - 625.3 528.4 Reve
Slide 30: Full Year 2013 Financial Highlights – US & APAC
FULL YEAR 2013 FINANCIAL HIGHLIGHTS – US & APAC* YEAR ENDED DECEMBER 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Impairment Reported Reported Gross Billings 362.7 315.2 Gross Billings from the sale of Loyalty Units - - Revenue from Loyalty Units - - Revenue from p
Slide 31: Q4 2013 Financial Highlights – Canada
Q4 2013 FINANCIAL HIGHLIGHTS – CANADA* Three months ended December 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Conveyance Breakage Reported Adjusted Reported Items Gross Billings - 347.0 - 347.0 336.2 Gross Billings from the sale of Loyalty Units - 289.4 - 289.4 2
Slide 32: Q4 2013 Financial Highlights – Canada
Q4 2013 FINANCIAL HIGHLIGHTS – CANADA* Three Months Ended December 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Reported Adjusted Reported Breakage Adjustment 2013 Conveyance Items 2013 2012 Gross Billings Aeroplan - 300.9 - 300.9 291.3 Proprietary Loyalty - 68.1 -
Slide 33: Q4 2013 Financial Highlights – EMEA
Q4 2013 FINANCIAL HIGHLIGHTS – EMEA* Three months ended December 31, (in millions of Canadian dollars) 2013 2012 Reported Reported Gross Billings 200.0 177.6 Gross Billings from the sale of Loyalty Units 175.3 150.8 Revenue from Loyalty Units 271.1 223.7 Revenue from proprietary loyalty services 6.0
Slide 34: Q4 2013 Financial Highlights – US & APAC
Q4 2013 FINANCIAL HIGHLIGHTS – US & APAC* Three months ended December 31, (in millions of Canadian dollars) 2013 2012 Items included in 2013 reported Impairment Reported Reported Gross Billings 111.0 102.3 Gross Billings from the sale of Loyalty Units - - Revenue from Loyalty Units - - Revenue from
Slide 35: Aeroplan Key Metrics
AEROPLAN KEY METRICS Cost Per Mile Cost Per Mile Redeemed (cents/mile) Redeemed (cents/mile) 0.85 0.81 104.4% 25.0 110.0% Miles Redeemed (billions) Burn / Earn Ratio (%) 84.3% 20.0 79.1% 90.0% 71.2% 70.0% 15.0 50.0% 10.0 21.4 21.4 Avg. Selling Price Avg. Selling Price 17.5 17.4 17.9 18.3 17.0 30.0%
Slide 36: Aeroplan Revenue Breakdown
AEROPLAN REVENUE BREAKDOWN THREE MONTHS ENDED DECEMBER 31, Breakage (in $ millions) 2013 2012 Adjustment Breakage % 11% 18% Miles revenue 200.8 219.9 Breakage revenue 24.6 47.8 (19.2) Other 11.5 12.5 Total Revenue 236.9 280.2 (19.2) YEARS ENDED DECEMBER 31, Breakage (in $ millions) 2013 2012 Adjustm
Slide 37: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER 4Q 2013 30.3% 21.6% 10.6% 13.4% 24.1% $464.7M 4Q 2012 33.1% 18.9% 9.5% 15.1% 23.4% $429.5M 3Q 2013 33.6% 19.3% 10.1% 13.8% 23.2% $419.1M 3Q 2012 35.1% 17.5% 9.1% 15.1% 23.2% $398.9M 2Q 2013 33.7% 17.2% 10.2% 14.1% 24.8% $414.2M 2Q 2012 34.4%
Slide 38: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER 23.1% 34.0% 24.5% 32.1% FY 2012 FY 2013 $1,628.4M $1,711.4M 15.7% 14.0% 17.4% 19.2% 9.8% 10.2% Partner A Partner B Partner C Air Canada Other 38
Slide 39: Foreign Exchange Rates
FOREIGN EXCHANGE RATES Q4 2013 Q4 2012 % Change Average Average Period Average Average Period Average Average Period quarter YTD end rate quarter YTD end rate quarter YTD end rate £ to $ 1.6975 1.6111 1.7633 1.5914 1.5839 1.6099 6.7% 1.7% 9.5% AED to $ 0.2855 0.2803 0.2911 0.2698 0.2721 0.2713 5.8%