Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Day (July 2021)
112 slides from Alimentation Couche-tard's investor day presentation, Jul 14, 2021
Slide 1: Investor Day 2021
Investor Day 2021 Alimentation Couche-Tard Inc. July 2021
Slide 2: Agenda
The virtual event will take place from 9:00 am ET to approximately 1:00 pm ET Agenda Opening Remarks Alain Bouchard, Founder and Executive Chairman of the Board Opening Remarks and Strategic Overview Brian Hannasch, President and Chief Executive Officer Sustainability and Global People Strategy Ina
Slide 3: 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 4: Non-IFRS Measures
Non-IFRS Measures To provide more information for evaluating the Corporation’s performance, the financial information included in our financial documents and this presentation contains certain data that are not performance measures under IFRS (“non-IFRS measures”), which are also calculated on an ad
Slide 5: Brian Hannasch
BRIAN HANNASCH President and Chief Executive Officer
Slide 6: Building Competitive Advantages in Historic Year
BUILDING COMPETITIVE ADVANTAGES IN HISTORIC YEAR Enhanced convenience Record EBITDA offer with fresh food of $5,061 million and data analytics Strengthened fuel brand, Innovated payment and supply and trading delivery capacity inside capabilities store and forecourt New platform for growth Engaged t
Slide 7: Pride and Gratitude During Pandemic
PRIDE AND GRATITUDE DURING PANDEMIC • Health and safety at forefront of all decision making • Stores remain open and essential to customers • Store team members are frontline heroes • Part of the solution in our communities including 45 million meals donated in North America
Slide 8: Our Mission and Vision Guide Us
OUR MISSION AND VISION GUIDE US Our Mission Our Vision
Slide 9: Ours Is a Uniquely Global Platform
OURS IS A UNIQUELY GLOBAL PLATFORM
Slide 10: Stores, Countries & Employees
~14, 200 / 26 / ~ 124, 000 Stores Countries & Employees territories
Slide 11: North America Footprint
2,111 / 7,150 / ~ 98, 000 = ross oe ited Employees in snown Dea (emai and United States)
Slide 12: Europe and Other Regions
Europe and ‘Other Regions 3, 067 /10 / ~ 26, 000 rah including automated Employees & Hong Kong) Sarwortes
Slide 13: Operational Footprint
rational Footprint ay 1, 894 /14 sore inder licensing Countries & agreements) territories
Slide 14: Core Strengths Define Network
CORE STRENGTHS DEFINE NETWORK • Sell time and convenience (80% of in-store merchandise is consumed within one hour of purchase) Attractive Channel • Development of data analytics enabling pricing, assortment & promotions on local store-by-store basis • Unique scale in fragmented industry Size and Sc
Slide 15: Consumer Trends Transforming Convenience
CONSUMER TRENDS TRANSFORMING CONVENIENCE Speed more important than ever Meet customers where and when they want Localization and personalization increasingly essential Sustainability is rewarded
Slide 16: Uniquely Positioned to Win
UNIQUELY POSITIONED TO WIN Highly Convenient Localized Innovating for Future Strong Offering Scaled and Efficient
Slide 17: Driving Organic Growth with Our Brand Promise
DRIVING ORGANIC GROWTH WITH OUR BRAND PROMISE TO BECOME THE WORLD’S Convenience PREFERRED DESTINATION FOR Fuel CONVENIENCE AND FUEL Food Offer Sourcing Distribution People Brand Innovation / Technology Data and Analytics Network Operations
Slide 18: Acquisitions Fundamental to Growth
ACQUISITIONS FUNDAMENTAL TO GROWTH Revenues • Franchise • Exchange 2004 2005-2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Deals (*) 2 34 7 4 3 4 3 3 1 1 3 Stores 1,706 1,137 2,506 166 1,660 654 442 1,934 27 30 380 Since 2004, Couche-Tard has successfully integrated a total of 65* deals and adde
Slide 19: Strategic Focus for Future Growth
STRATEGIC FOCUS FOR FUTURE GROWTH U.S. Consolidation Asia Pacific Platform Adjacent Retail Innovation We will remain disciplined and focused to drive shareholder value
Slide 20: People and Culture Enable Success
PEOPLE AND CULTURE ENABLE SUCCESS Strong management team and governance Entrepreneurial culture enables speed and innovation Sustainability as lens to the business Commitment to diversity and inclusion Ready for Ready for the the future future with with committed committed and engaged and engaged gl
Slide 21: Ina Strand
INA STRAND Chief People Officer
Slide 22: Please refer to video for Sustainability and Global People Strategy
Please refer to video for Sustainability and Global People Strategy presentation
Slide 23: Deborah Hall Lefevre
DEBORAH HALL LEFEVRE Chief Technology Officer
Slide 24: Please refer to video for Global Technology presentation
Please refer to video for Global Technology presentation
Slide 25: Kevin A. Lewis
KEVIN A. LEWIS Chief Marketing Officer
Slide 26: Living the "K"
LIVING THE “K”
Slide 27: Our Brand Promise Remains Compelling
OUR BRAND PROMISE REMAINS COMPELLING TO BECOME THE WORLD’S Convenience PREFERRED DESTINATION FOR Fuel CONVENIENCE AND FUEL Food Offer Sourcing Distribution People Brand Innovation / Technology Data and Analytics Network Operations
Slide 28: A Glimpse into Our Customer Base
A GLIMPSE INTO OUR CUSTOMER BASE Hard Working Hero Mr. Mobility Working Wonder Woman Fast-Tracked Family
Slide 29: U.S. Rebranding: Unique Opportunity
U.S. REBRANDING: UNIQUE OPPORTUNITY Historical Approach Go-forward Approach
Slide 30: Living the Brand
LIVING THE BRAND Consistently Executing Celebrating the K Connecting to our Consumers
Slide 31: Scale in Marketing and Merchandising
SCALE IN MARKETING AND MERCHANDISING
Slide 32: Driving Traffic Around the World
DRIVING TRAFFIC AROUND THE WORLD Sip & Save – Community Outreach Partnerships Beverage Subscription
Slide 33: Exporting Success: Gamification
EXPORTING SUCCESS: GAMIFICATION Hong Kong: Initial insight Created European BUs Achieving Broad Reach from Gamification 50 million games played in Europe in FY21 Canada: the Engine for New Initiatives U.S. a Fast Follower Partnerships engine for growth 33 million games played in the U.S. in FY21
Slide 34: Scaling "LIFT" Across the Portfolio
SCALING “LIFT” ACROSS THE PORTFOLIO • On average in FY21, approximately 1 in 7 transactions have an upsell associated with them using our proprietary LIFT platform • Media income nearing $20M annually • Forms the backbone of our promotional and content ecosystem • Now scaled in all North American st
Slide 35: Other Scale Activities Across the Globe
OTHER SCALE ACTIVITIES ACROSS THE GLOBE Car Wash Proprietary Categories Proprietary Products
Slide 36: Data-Driven Merchandising
DATA-DRIVEN MERCHANDISING
Slide 37: Our Data and Analytics Journey
OUR DATA AND ANALYTICS JOURNEY Scale to Enterprise Value Accelerate Value Maturity Expand Capabilities Build the Foundation Time
Slide 38: Data-Driven Merchandising: Roadmap
DATA-DRIVEN MERCHANDISING: ROADMAP ~$500M+ Targeted opportunity
Slide 39: Case Study: Localized Pricing
CASE STUDY: LOCALIZED PRICING Goal: Dynamic Pricing Across Clusters Pilot BU 1 for 80%+ SKUs in the Store Pilot BU 2
Slide 40: Case Study: Assortment Optimization
CASE STUDY: ASSORTMENT OPTIMIZATION Develop optimized assortments specific to each planogram variation Optimize item entry and exit to maximize selling performance Optimize item-level facings based Incorporate additional localization on store-level performance to better cater assortments Rationalize
Slide 41: Fresh Food, Fast
FRESH FOOD, FAST 2020 winner
Slide 42: A Comparison of Our Strategy
A COMPARISON OF OUR STRATEGY Traditional Approach Circle K Fresh Food, Fast
Slide 43: Consumer Response Is Encouraging
CONSUMER RESPONSE IS ENCOURAGING St. Louis Pilot Market Results Latest Tracking Study Post-FFF Pre-FFF Introduction 44 67 NPS NPS -100 +100 -100 +100
Slide 44: Fresh Food, Fast: North America
FRESH FOOD, FAST: NORTH AMERICA Revenue ($ Per Store Per Day) Store Count (# Locations) 600 6000 500 5000 400 4000 300 3000 200 2000 100 1000 0 0 FY21 FY21 FY22E FY23E Holiday FY21 FY22E FY23E Holiday Historical
Slide 45: Fresh Food, Fast North America Profitability
FRESH FOOD, FAST NORTH AMERICA PROFITABILITY Financial KPIs FY22 FY23 FY24 $M 700 Revenue Margin 600 EBITDA Gross Margin Rate 36.7% 39.9% 40.7% EBITDA Rate 2.6% 17.8% 25.8% 500 Food Service (excl. Disp Bev) 400 Sales as a % of Total Merch 16.3% 17.8% 20.1% 300 (excl. Cigs / OTP) 200 100 0 FY22E FY23
Slide 46: Our Concept Is Going Global
OUR CONCEPT IS GOING GLOBAL Introduction of Grab and Go – DK & SWE Central Production of Key Items - Europe
Slide 47: Louise Warner
LOUISE WARNER Senior Vice President, Global Fuels
Slide 48: Fuels and Transport Outlook
FUELS AND TRANSPORT OUTLOOK
Slide 49: Transport Energy Outlook: Growing Customer Demand
TRANSPORT ENERGY OUTLOOK: GROWING CUSTOMER DEMAND Global demand for passenger Passenger transport trends transport Factors influencing passenger transport energy use, 2015-18 By sub-sector to 2050 6 By sub-sector, under 5 three scenarios, billion 4 passenger-kilometers 3 2 1 0 Activity Inter-mode Ve
Slide 50: Transport: Total Fleet Growing and Fuel Mix Broadening
TRANSPORT: TOTAL FLEET GROWING AND FUEL MIX BROADENING Electric Vehicles fleet, 2015-2026 U.S. Light Vehicle average age Takeaways • EV fleet is growing quickly, led by China then Europe. Car park also continues to expand. EVs expected to be ~7-12% of the global vehicle fleet by 2030 (~2 billion veh
Slide 51: Transport Fuels Outlook: Positive for Liquid Fuels
TRANSPORT FUELS OUTLOOK: Circle K Market share POSITIVE FOR LIQUID FUELS Oil displacement by mode Oil demand indexes USA Canada Takeaways • Most outlooks indicate oil product demand is at maturity, with impacts of EVs, ICE efficiency and other emerging technologies varying by geography but emerging
Slide 52: Transport Fuels Outlook: U.S. Market
TRANSPORT FUELS OUTLOOK: U.S. MARKET Transportation sector Light-duty vehicle sales Transportation sector consumption by mode by technology/fuel consumption by fuel Takeaways • Demand for transportation energy in U.S. is at maturity and is expected to remain high per capita in global context • Conve
Slide 53: Demand Is Recovering from COVID Down-turn
DEMAND IS RECOVERING FROM COVID DOWN-TURN Fuel demand outlook Travel activity 45 200 40 180 35 160 140 million bpd 30 120 25 100 20 80 15 60 10 40 5 20 0 0 Apr-20 Apr-21 Jan-20 Dec-20 Jan-21 May-20 Aug-20 May-21 Jun-20 Jul-20 Sep-20 Jun-21 Oct-20 Feb-20 Feb-21 Mar-20 Mar-21 Nov-20 USA Canada Europe
Slide 54: Circle K Fuel
CIRCLE K FUEL
Slide 55: Circle K Fuel: Our Global Network
CIRCLE K FUEL: OUR GLOBAL NETWORK Through our unique scalable platform, we have delivered over 23% CAGR gross profit growth from fuel over the last 10 years, including a strong FY21 during COVID Fuel volume Stores selling Average U.S. sold fuel retail margin ~41 million 10,826 gallons per day 79% of
Slide 56: Circle K Role in the Fuels Value Chain
CIRCLE K ROLE IN THE Retail customers: FUELS VALUE CHAIN our reason for being Supply chain: opportunity to deliver more value Bulk fuel customers: participate where it supports our retail operations or supply chains PRODUCTION REFINING CUSTOMER
Slide 57: Circle K Fuel: Unique Scalable Platform for Growth
CIRCLE K FUEL: UNIQUE SCALABLE PLATFORM FOR GROWTH True convenience: Market-leading fuel and mobility products Customer alongside expanding Scale: convenience offer Supply chain synergies within own operations and from suppliers Cost efficient: Advantaged unit cost Global Circle K Supply delivered b
Slide 58: Our Brand Promise Remains Compelling
OUR BRAND PROMISE REMAINS COMPELLING TO BECOME THE WORLD’S Convenience PREFERRED DESTINATION FOR Fuel CONVENIENCE AND FUEL Food Offer Sourcing Distribution People Brand Innovation / Technology Data and Analytics Network Operations
Slide 59: Circle K Fuel Brand
CIRCLE K FUEL BRAND Expanding the Circle K brand across our US fuels network unlocks huge opportunity in fuel • Customers now prefer independent brands with • Increased control means consistent offer across internal and external Customer Operating information and experience can forecourt and backcou
Slide 60: Circle K Fuel Brand: U.S. Rollout in Progress
CIRCLE K FUEL Customer BRAND: U.S. ROLLOUT IN PROGRESS FY21 FY25 22% Circle K 52% 48% Other 78% Rollout 5000 4000 3000 2000 1000 0 End FY22 FY23 FY24 FY25 End FY21 FY25
Slide 61: Circle K Fuel Brand: Denmark Case Study
Customer CIRCLE K Key success factors FUEL BRAND • Launch of Circle K brand and message across both forecourt and store with fuel credibility Learnings from rebranding in Europe has been leveraged as a key focus for U.S. rollout • Rapid network wide rollout plan to reduce cost and execution risk as
Slide 62: Circle K & Musket Partnership
Supply Chain CIRCLE K & MUSKET PARTNERSHIP Circle K Love’s Circle K brand as enabler Partner attributes Partnership opportunity areas • Long-term contracts with oil majors • Culturally aligned: customer • Adoption of sourcing best ending, providing flexibility to focused, low appetite for financial
Slide 63: Control and Flexibility in Supply Chain
Supply CONTROL AND FLEXIBILITY 2025 Chain IN SUPPLY CHAIN AMBITION Deliver EBITDA of $200-300m in global supply chain The Musket-Circle K partnership is only one of our many supply chain savings above FY20 opportunities. We are using the flexibility enabled by our Global Circle base K Fuel brand acr
Slide 64: Retail Fuel Margin: Deep Dive
Fuel Gross Profit (US$million) Model 1000 200 1200 0 600 1400 400 800 Operating FY14Q1 FY14Q2 FY14Q3 FY14Q4 inorganic growth FY15Q1 FY15Q2 FY15Q3 FY15Q4 FY16Q1 FY16Q2 FY16Q3 FY16Q4 Site count ↑50% across same period FY17Q1 USA FY17Q2 FY17Q3 Europe FY17Q4 FY18Q1 FY18Q2 Canada FY18Q3 FY18Q4 FY19Q1 FY1
Slide 65: Retail Fuel Margin: Deep Dive
Operating Model RETAIL FUEL MARGIN: DEEP DIVE Rising cost break-evens for all industry participants underpin fuel margin – ACT will continue to outperform through our scale and cost discipline US fuel margins vs commercial U.S. fuel margins vs labor cost property cost 26 12 24 11.5 26 140 24 130 22
Slide 66: Retail Fuel Margin: Deep Dive
Operating Model RETAIL FUEL MARGIN: DEEP DIVE Industry participants remained rational through the lower-volume COVID period, and we expect this to continue as volumes recover in all markets U.S. volumes vs gross margin Margin outlook 60 5.0% • 2019 net margins (FY20) margins ACT volume/week, % chang
Slide 67: Retail Fuel Margin: Deep Dive
Operating RETAIL FUEL MARGIN: We will continue to out-perform by: Model DEEP DIVE • Scale – our large network creates cost advantage through efficient systems, processes and overheads, Our fuels platform and company operating model provides us as well as underpinning our supply with scale and effici
Slide 68: Future of Our Fuel Offer
Global FUTURE OF OUR FUEL OFFER In parallel with building our EV business, we are using our unique platform to expand our sustainable fuel offer under the Circle K brand Offsets Drop-in low carbon fuels Supply chain In Syracuse and Arizona, under In Norway, Denmark and In California, we have partner
Slide 69: Hans-Olav Høidahl
HANS-OLAV HØIDAHL Executive Vice President, Operations, Europe
Slide 70: Please refer to video for EV/Mobility and European Operations Strategy
Please refer to video for EV/Mobility and European Operations Strategy presentations
Slide 71: Darrell Davis
DARRELL DAVIS Executive Vice President, Development and Construction, North America
Slide 72: Strength of North America Network
STRENGTH OF NORTH AMERICA NETWORK CANADA 2,111 7,150 stores in the U.S. in 47 states 2,111 stores in Canada Great purchasing power Disciplined approach to network review deciding where to invest and divest UNITED Consistency/speed in execution for STATES 7,150 both COOP and full franchise stores ~85
Slide 73: New Store Builds: Key to Double Again Strategy
NEW STORE BUILDS: KEY TO DOUBLE AGAIN STRATEGY 3 types: New-to-Industry (NTI), Raze & Rebuild, Urban sites Rationale for new store build investment: • Continue to improve network • Leads to continued growth for top-tier locations • Strengthens brand presence and awareness • Supports our goal to be a
Slide 74: Growth with New Store Builds
GROWTH WITH NEW STORE BUILDS Site numbers planned FY20 FY21 FY22E FY23E FY24E Traditional Stores 77 76 125 144 167 Urban Stores 7 75 125 150 Where to build • Extensive research completed on where to build sites • Key elements of a good site determined and documented What to build • Utilize Holiday s
Slide 75: New Store Builds Performance
NEW STORE BUILDS PERFORMANCE 205 NTI traditional locations or Raze & Rebuilds completed since 2018 • Builds have exceeded target of 15% ROCE • New sites in both U.S. and Canada have exceeded average Circle K performance 5+ year 7 urban sites opened in FY21 ambition: deliver • Projected to exceed tar
Slide 76: Growth with Remodels
GROWTH WITH REMODELS 4 different remodel plans defined by level of costs Rationale of remodel investment • Build our brand with common look and product offer • Upgrade network of stores • Add profitable programs • Utilize learnings from NTI builds • Support food initiatives • Modernize bathrooms • E
Slide 77: Growth with New Franchise Model
GROWTH WITH NEW FRANCHISE MODEL Background • 115 current North America franchise locations • Program evolving based on learnings from Holiday acquisition • Started new franchise model in FY21 New franchise model site plan:: FY21 FY22E FY23E FY24E Franchise # 15 24 50 80 Rationale for new franchise m
Slide 78: Alex Miller
ALEX MILLER Executive Vice President, Operations, North America, and Global Commercial Optimization
Slide 79: Proud of Our Operational Performance During COVID
PROUD OF OUR OPERATIONAL PERFORMANCE DURING COVID Record Employee Engagement Illness Rate Well Below Societal Average Scores = Sales Growth Covid-19 Illness/100K People 111% 109% 109% 107% US Canada Bottom Lower-Middle Upper-Middle Top Quartile Circle K Country Quartile Quartile Quartile (n=2.107) (
Slide 80: People and Customers
People Customers Friendly,safe Making life easier with and engaged teams a great experience
Slide 81: Challenging Labor Market
CHALLENGING LABOR MARKET Labor is largest operating cost at $2.9B in FY 2021 Wage increases driven by tight labor market and increases to minimum wages Labor market tightening due to factors such as: Add photo of employee/s working Structural Factors Event – Driven Factors using couche-tard photo sh
Slide 82: Candidate Flow Starting to See Signs of Recovery
CANDIDATE FLOW STARTING TO SEE SIGNS OF RECOVERY Candidate Flow 18,000 16,000 • Start of employer 14,000 Branding Campaign 12,000 10,000 8,000 6,000 January February March April May April June May
Slide 83: Engaging and Investing in Our Store Team Members
ENGAGING AND INVESTING IN OUR STORE TEAM MEMBERS Attracting and Retaining Development Diverse Focus Workforce Programs Teams on Safety • New global career • Gamified training • Workforce that • Stated goal pages represents our local to reduce robberies • Content relevance communities by 50% • Menu o
Slide 84: Making Work Easier and Safer Through Operations Excellence
MAKING WORK EASIER AND SAFER THROUGH OPERATIONS EXCELLENCE Eliminate - Automate - Simplify 1/3 Smart U.S. Self Labor Digital Easy reduction Safe Fuel to Full Scheduler Credit Visits administrative Survey Serve Card Clean hours in FY22 Automation ATM Retrievals and Organize What is labor reduction wo
Slide 85: Executing Fresh Food, Fast in Our Stores
Offerand and Store Layout EXECUTING FRESH FOOD, Offer • store layout Focus on day part offer FAST IN OUR STORES • Adaptable to most store sizes • Efficient store layout • Equipment easy to use and pre-programmed for consistency • Kitchen next to register for faster customer service Operationsexcelle
Slide 86: Executing Beverages: America's Thirst Stop
EXECUTING BEVERAGES: AMERICA’S THIRST STOP Strong growth in beverage market share Extensive media investment to position Circle K as America’s Thirst Stop Use leading position to offer first in market and unique flavors to Circle K Hot deals and “LIFT” upsell program to attract customers and build b
Slide 87: Age Restricted Products: Convenience Channel Continues to Lead
AGE RESTRICTED PRODUCTS: CONVENIENCE CHANNEL CONTINUES TO LEAD PRODUCT CATEGORY DOLLAR SHARE BY CHANNEL ACT Strategy in Age Restricted Categories • Capture market share in existing categories • Actively pursue cannabis segment Source: NielsenIQ Connect| Total US Convenience – Total US Drug – Total U
Slide 88: Total U.S. Cannabis Market Comparisons Today and Projections by 2025
TOTAL U.S. CANNABIS MARKET COMPARISONS TODAY AND PROJECTIONS BY 2025 Legal market ’20- 25 CAGR = ~16% Note: Nicotine includes cigarettes, cigars, vapes, smokeless tobacco. Cannabis market includes legal and illicit Source: Euromonitor, BTIG, Cowen – US Cannabis – 2021, Arcview market research, Globa
Slide 89: Current State of Cannabis in U.S.
CURRENT STATE OF CANNABIS IN U.S. LEGAL in some form in 36 U.S. states & D.C. DC ILLEGAL Legend federally Medical and recreational cannabis legal Medical and recreational cannabis legal, not yet available for retail sale Medical cannabis legal Source: BTIG, Cowen US Cannabis collective – April 2021,
Slide 90: Continued Growth in Age Restricted Category
CONTINUED GROWTH IN AGE RESTRICTED CATEGORY Nicotine Products Alcohol Category Lottery/Gaming • Market share gains of ~120 • Market share gain of ~100 • ~80B market in U.S. basis points in Other Tobacco basis points in FY21 Products & Cigarettes • 40% increase in lottery • Capitalizing on momentum o
Slide 91: Strategic Pillars for Cannabis
STRATEGIC PILLARS FOR CANNABIS Lead in Canada Prepare the U.S. Investment • Ownership of 22.4% as of end of June 2021 • Study the current market and opportunities in each • Path to control to 50.1% state with legalized status • 81 operating stores today with pipeline for continued growth • Strong te
Slide 92: Bringing Circle K Fuel to Life
BRINGING CIRCLE K FUEL TO LIFE Radio & Digital Billboard & Opening Events Customer Intercepts Campaign Contest Campaign at Pumps Local Marketing
Slide 93: Enhancing Customer Journey with Queue Line Initiative
ENHANCING CUSTOMER JOURNEY WITH QUEUE LINE INITIATIVE • 1,400 locations currently • 3,600 stores by end FY22 • Turnkey solutions easy to execute • Drive basket growth and impulse buying • At scale will provide material benefits Reasons Queuing Queuing Likeability Buyer Conversion Liked
Slide 94: Claude Tessier
CLAUDE TESSIER Chief Financial Officer
Slide 95: Driving Further Efficiencies Through Cost Optimization Program
DRIVING FURTHER EFFICIENCIES THROUGH COST OPTIMIZATION PROGRAM How We Are Achieving Our Objectives Program Progress Levers Definition PHASE 1 Simplify, standardize, re-engineer and Diagnostics and Business Process Optimization automate end-to-end processes across Opportunity Sizing business units /g
Slide 96: Cost Optimization Program: Key to Offset Cost Pressure and Reinvest
COST OPTIMIZATION PROGRAM: KEY TO OFFSET COST PRESSURE AND REINVEST IN GROWTH Optimizing across broad Ambitious target, good Projected range of categories momentum, concrete results Results In millions ($) Low High 150 projects activated FY23 End $350 $400 (Realized) Construction 5+ Year $400 $450 A
Slide 97: Delivering Strong Topline
in millions of gallons in US$ millions 2011 4,195 2011 6,184 2012 4,613 2012 6,599 2013 6,945 2013 7,602 Merchandise 7,626 7,953 Fuel 2014 2014 2015 8,135 2015 8,276 Merchandiseand 2016 10,502 2016 10,072 FuelVolume 2017 11,793 2017 10,724 CAGR 9.9% CAGR 11.8% and Service 2018 14,525 Volume Sold 201
Slide 98: Long-Standing Cost Discipline
LONG-STANDING COST DISCIPLINE Lean corporate structure Adj. SG&A Expense Growth Y/Y 3.7% Decentralized business units 2.8% 1.9% 2.1% Procurement efficiency 1.7% 1.5% 2.0% Continuous benchmarking 0.2% 1.3% average 0.8% Cost efficient systems -0.9% 2011 -1.2% 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 99: Compounded EBITDA 21% Over the Long Term
COMPOUNDED EBITDA 21%* OVER THE LONG TERM $ 5,061 $ 4,525 $ 3,583 $ 2,980 $ 2,331 $ 2,396 $ 1,876 $ 1,640 $ 1,376 $ 841 $ 647 $ 734 $ 492 $ 485 $ 588 $ 343 $ 439 $ 100 $ 116 $ 122 $ 154 $ 174 • ** • ** 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 100: Impressive EBITDA-to-Free Cash Flow Conversion
IMPRESSIVE EBITDA-TO-FREE CASH FLOW CONVERSION 5,061 4,525 2,299 in US$ millions 2,043 3,583 1,844 2,980 1,269 1,725 1,163 899 608 889 2,396 2,331 807 540 984 884 1,876 1,037 673 809 404 866 1,640 383 614 1,376 148 158 428 1,319 305 1,041 315 930 841 734 563 459 457 289 193 2011 2012 2013 2014 2015
Slide 101: Driving Strong Growth, Free Cash Flow and Returns Since 2018
DRIVING STRONG GROWTH, FREE CASH FLOW AND RETURNS SINCE 2018 19.3% $2.1 billion 18.3% EPS EBITDA Incremental CAGR CAGR EBITDA Grew ROCE $6.2bn from 10.7%* in Cumulative Free FY18 to 15.9% Cash Flow in FY21 •* FY2018 Adjusted for IFRS16
Slide 102: Record of Delivering on Announced Goals
RECORD OF DELIVERING ON ANNOUNCED GOALS Goal Outcome • 50% Organic / 50% M&A (implied 7.5% CAGR for organic and M&A growth Double EBITDA respectively) in 5 Years • FY18 – FY21 Adj. EBITDA growth of 18.9% 15% ROCE • FY21 ROCE of 15.9% <2.25x • FY21 adjusted leverage ratio of 1.32x Adjusted • Investme
Slide 103: Clear Strategy for Capital Allocation
CLEAR STRATEGY FOR CAPITAL ALLOCATION Prioritize re-investment in business 35 - 40% of EBITDA invested in: • Network Development: ~35% • Commercial Programs: ~30% • Stay in Business: ~25% • Emerging Business and Innovation: ~10% Maintain strong balance sheet to support compelling acquisition opportu
Slide 104: Embracing Sustainability Through Recent Financing
EMBRACING SUSTAINABILITY THROUGH RECENT FINANCING Example of green case studies Overview • Issued 30-year $350 million debut green bonds • Aligned with the four core components of the Green Bonds Principles, 2018 • First ever green bonds by a convenience and fuel retailer • Enables us to finance a l
Slide 105: Proven Ability to Integrate Acquisitions
PROVEN ABILITY TO INTEGRATE ACQUISITIONS Winners Compac Food Stores Pump N Shop • Franchise • Exchange Sterling Stores 2004 2005-2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Deals (*) 2 34 7 4 3 4 3 3 1 1 3 Stores 1,706 1,137 2,506 166 1,660 654 442 1,934 27 30 380 Since 2004, Couche-Tard has s
Slide 106: Strong M&A Track Record
STRONG M&A TRACK RECORD Deal Multiple Approx. EBITDA Synergies Promised Synergies Achieved 6.9 x $480mm $150mm - $200mm $200mm+ 7.6 x $220mm $125mm $125mm+ 10.3 x $425mm $150mm - $200mm $215mm+ 8.5 x $190mm $50mm - $60mm $60mm+
Slide 107: Implementation of Initiatives Well Advanced
IMPLEMENTATION OF INITIATIVES WELL ADVANCED EBITDA Range ($ in millions) FY 2023 Estimate 5+ Year Ambition CATEGORY LOW HIGH LOW HIGH Fresh Food Fast $60 $80 $150 $300 Merchandise $150 $210 $210 $330 Pricing/Promo Merchandise Assortment $30 $40 $90 $170 Fuel Initiatives $100 $200 $300 $400 Cost Opti
Slide 108: Other Projects and Market Trends Expected to Affect Performance
OTHER PROJECTS AND MARKET TRENDS EXPECTED TO AFFECT PERFORMANCE Other projects/initiatives • Circle K franchise model • Age restricted products – Nicotine, Alcohol, Lottery and Cannabis • Emerging business and innovation • Gamified training Market trends • Inflation including wage pressure • Market
Slide 109: Confident to Hit Double Again FY23 Strategic Goal
CONFIDENT TO HIT DOUBLE AGAIN FY23 STRATEGIC GOAL Strong momentum Already with key initiatives $3.29 billion EBITDA Billions ** with potential in capital spent of up to $1.0b to $7.0 since FY18 $6.3 $1.4b in FY2023 $6.0 $1.2 $5.0 $4.0 Base organic Favorable $3.0 growth and $4.7 $5.1 fuel margins $2.
Slide 110: Compare Favorably to Industry Peers and Broader Sector
COMPARE FAVORABLY TO INDUSTRY PEERS AND BROADER SECTOR • Over Past Five Years (2016-2020) EBITDA Growth FCF Conversion ROCE (5Y avg) 16.8% 44.4% 13.9%* 16.1% 28.8% 19.2% 3.0% 7.2% 11.3% SPX Retail 3.2% 64.6% 9.6% • *Adjusted for IFRS16
Slide 111: Q&A session
Q&A session
Slide 112: Thank you
Thank you