Slide 1: Aimia: Inspiring Loyalty
/\IMI/A INSPIRING LOYALTY
Slide 2: Q2 2016 Highlights
Q2 2016 HIGHLIGHTS August 11, 2016
Slide 3: Forward-Looking and Cautionary Statements
FORWARD-LOOKING AND CAUTIONARY STATEMENTS Forward-looking statements are included in this presentation. These forward-looking statements are typically identified by the use of terms such as “outlook”, “guidance”, “target”, “forecast”, “assumption” and other similar expressions or future or condition
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Aimia uses the following non-GAAP financial measures which it believes provides investors and analysts with additional information to better understand results as well as assess its potential. GAAP means generally accepted accounting principles in Canada and represents In
Slide 5: Q2 2016 Overview and Highlights
Q2 2016 OVERVIEW AND HIGHLIGHTS RUPERT DUCHESNE
Slide 6: Q2 2016 Financial Highlights
Q2 2016 FINANCIAL HIGHLIGHTS* (in millions of Canadian dollars and YoY (%) variance) Q2 2016 Q2 2015 Gross Billings: Aeroplan back to Gross $560.7 $605.3 growth. Lower Billings (7.4%) Nectar issuance (1) impacted by Adjusted (7.6%) in c.c. phasing of EBITDA: Cost Operating reduction benefits. $163.5
Slide 7: Q2 2016 Returns to Shareholders
Q2 2016 RETURNS TO SHAREHOLDERS* TTM Normalized FCF per Common Share(1) Quarterly Dividend per Common before Dividends Paid and FCF Yield(2) Strong FCF Share and FCF Payout Ratio(3) generation $1.20 12.0% underpins $0.22 150.0% 119% 130.0% $1.00 10.0% significant FCF $0.20 99% 110.0% 10.2% yield and
Slide 8: Q2 2016 Gross Billings and Operational Highlights
Q2 2016 GROSS BILLINGS AND OPERATIONAL HIGHLIGHTS (in millions of Canadian dollars and Q2 operational highlights YoY variance (%) ) Americas Coalitions Growing financial card base driving 3% $378.3 increase in financial cards Gross 68% of total 0.6% Billings and supporting full year outlook Gross Bi
Slide 9: Q2 2016 Progress on Simplify and Focus
Q2 2016 PROGRESS ON SIMPLIFY AND FOCUS Early 2016: June 2016: July/August 2016: Exited Nectar Exited the Completed the sale Italia and LATAM Cardlytics UK card- Enhancement presence linked marketing Services to Sigma Q2 progress made business for a non- Capital for a cash on simplifying the cash con
Slide 10: Drivers Impacting Gross Billings and Redemptions
DRIVERS IMPACTING GROSS BILLINGS AND REDEMPTIONS Canadian Household Consumption Expenditure Final (HCE)* 3.0% GBP weakness and USD/CAD volatility 2.5% 2.3% 2.3% 2.3% 2.2% 2.1% driving lower International 2.0% Coalitions Gross 1.8% 1.8% 1.5% Billings and Aeroplan travel 1.0% patterns Q2 15A Q3 15A Q4
Slide 11: 2016 Guidance Updated for FX and Opex Progress
2016 GUIDANCE UPDATED FOR FX AND OPEX PROGRESS* (in millions of Canadian dollars) Gross Billings Adjusted EBITDA Free Cash Flow before Capital Expenditures Dividends Paid 2,300 - Stable 2,350 Around 190-210 Above 9.5% 190 - 220 9% 70-80 75 - 85 165. 2016 2016 2016 (1) 2016 2016 (1) 2016 2016 2016 (1
Slide 12: Consolidated Financials
CONSOLIDATED FINANCIALS TOR LØNNUM
Slide 13: Q2 2016 Consolidated Gross Billings
Q2 2016 CONSOLIDATED GROSS BILLINGS (in millions of Canadian dollars) Aeroplan growth offset by Loyalty Phasing of Nectar Cycling 2015 client Services campaigns wind-down offsetting growth with new $2.3 ($43.5) platforms $605.3 Americas Coalitions ($3.8) $560.7 International Coalitions Global Loyalt
Slide 14: Progress on Operating Expenses
PROGRESS ON OPERATING EXPENSES* (in millions of Canadian dollars) $166.6(1) ($2.1) ($1.2) $0.0 $0.2 $163.5(2) Reduction of International Global Other Americas card Coalitions Loyalty Coalitions migration Solutions provision Operational Nectar Italia efficiencies exit and other $120.9 including opera
Slide 15: Q2 2016 Consolidated Adjusted EBITDA
Q2 2016 CONSOLIDATED ADJUSTED EBITDA* (in millions of Canadian dollars) $7.0(1) ($9.1) $61.8(1) ($0.9) ($4.2) Americas International Global $54.6(2) Coalitions Coalitions Loyalty Corporate Solutions Consolidated: (11.7)% growth; (11.7)% in c.c.(3) ; Americas Coalitions: 12.9% in c.c.(3); Internation
Slide 16: Free Cash Flow in Line with Seasonal Patterns
FREE CASH FLOW IN LINE WITH SEASONAL PATTERNS* Normalized Free Cash Flow before Dividends Paid (in millions of Canadian dollars) (1) (3) (4) $59.2 (7) (9) $49.1 (5) (6) (8) Lower Q2 FCF (2) reflective of lower Gross Billings Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 *This slide c
Slide 17: Q2 2016 Capital Expenditures: Areas of Focus
Q2 2016 CAPITAL EXPENDITURES: AREAS OF FOCUS (in millions of Canadian dollars) Global product Investments for future development and growth at Aeroplan including enterprise-related 1:1 personalization shared services Corporate capabilities 22% Americas 31% decrease vs 2015 Coalitions mainly attribut
Slide 18: Financial Position at June 30, 2016
FINANCIAL POSITION AT JUNE 30, 2016 (in millions of Canadian dollars) As of June 30, 2016 Available cash greater than $100 Cash + Restricted Cash + Investments c. $680 million builds capacity to repay Reserves + Restricted Cash + Working Capital ($550) to ($580) 2017 debt maturity Available Cash c.
Slide 19: Divisional Performance
DIVISIONAL PERFORMANCE DAVID JOHNSTON
Slide 20: Aeroplan Gross Billings
AEROPLAN GROSS BILLINGS (in millions of Canadian dollars) +2% 350.0 35.0 $316.1 $321.0 300.0 30.0 Total Gross Aeroplan Gross Billings (billion miles) Miles Issued Billings up $5 (million CAD) 250.0 25.0 +4.1% million; YoY Growth Gross Billings 200.0 20.0 from financial +7.4% cards up $7 YoY Growth m
Slide 21: Aeroplan Financial Card Trends
AEROPLAN FINANCIAL CARD TRENDS One month average actives (Aeroplan TD + CIBC credit cardholders) 2013-2016 CAGR = 3% Active base up 4% YTD(1) as a result of strong card acquisitions 2010 to 2013 CAGR = 1% and lower attrition TD and CIBC financial cards account for over a quarter of Consolidated Gros
Slide 22: Aeroplan Redemption and Unit Cost Trends
AEROPLAN REDEMPTION AND UNIT COST TRENDS Favourable cost per mile trend Redemption YoY% and Cost Per Mile 5.0% 1.1 4.9% 1.08 3.0% 1.06 3.6% Unit cost 1.05 1.05 1.06 2.1% 1.04 trending down; 1.0% 1.04 1.02 higher -0.7% -1.0% -1.3% 1.01 1.02 redemption 1 expenses driven -3.0% -3.6% 0.98 by miles redee
Slide 23: Aeroplan Burn/Earn Ratio
AEROPLAN BURN/EARN RATIO Seasonally normal burn earn Burn/Earn Improving accumulation trend 110% trends towards 105% inverse of 102% breakage over 98% 100% time 95% 90% 89% (inverse of 11% breakage) 83% 84% 85% 80% 75% 70% 65% 60% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 20
Slide 24: Building Aeroplan Growth Around Long Term Contracts
BUILDING AEROPLAN GROWTH AROUND LONG TERM CONTRACTS % of Consolidated Gross Billings FY 2015 15% TD (10 year) 11% CIBC (10 year) CIBC (10 year) 10% Air Canada (15 year) 8% AMEX (>5 year) AMEX (4 year) Total % of Gross Billings FY 2015 2003 2014 44% 2020 Contracts Relationships typically run with key
Slide 25: International Coalitions Gross Billings
INTERNATIONAL COALITIONS GROSS BILLINGS (in millions of Canadian dollars) (25)% 250.0 30.0 200.0 25.0 Variability in $174.2 Sainsbury’s 20.0 issuance 150.0 $130.7 driving 15.0 fluctuations in 100.0 International 10.0 Coalitions (32.7)% 50.0 YoY Billings 5.0 0.0 0.0 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1
Slide 26: Timing of 2016 Sainsbury's Campaigns
TIMING OF 2016 SAINSBURY’S CAMPAIGNS H1 2016 points issuance impacted by phasing of campaigns and program accumulation changes Higher level of bonusing in H2 2016 expected ahead of Christmas holiday with 3 major H1 H2 campaigns scheduled actual points issuance 2015 actual and forecast points issuanc
Slide 27: Global Loyalty Solutions Gross Billings
GLOBAL LOYALTY SOLUTIONS GROSS BILLINGS (in millions of Canadian dollars) (7)% Expanding 80 footprint with 70 existing clients and winning new 60 $55.6 business on $51.8 Global Platforms Gross Billings 50 40 30 Included $4m 20 impact from transition out of 10 UK reward 0 business with Q1 2015 Q2 201
Slide 28: Conclusion
o 4 CONCLUSION 2 o ¢ o 4 INSPIRING LOYALTY
Slide 29: 2016 Guidance Updated for FX and Opex Progress
2016 GUIDANCE UPDATED FOR FX AND OPEX PROGRESS* (in millions of Canadian dollars) Gross Billings Adjusted EBITDA Free Cash Flow before Capital Expenditures Dividends Paid 2,300 - Stable 2,350 Around 190-210 Above 9.5% 190 - 220 9% 70-80 75 - 85 165. 2016 2016 2016 (1) 2016 2016 (1) 2016 2016 2016 (1
Slide 30: Aimia: Inspiring Loyalty
AIMIA INSPIRING LOYALTY
Slide 31: Appendix
APPENDIX INSPIRING LOYALTY
Slide 32: Why Invest in Aimia?
WHY INVEST IN AIMIA? Pure play marketing and loyalty analytics company in the data-driven digital marketing space in established markets Strong retail, financial and travel coalition brands reaching 39 million consumers Strong track record of cash generation underpinned by long term contracts Delive
Slide 33: Expected Returns to Shareholders in 2016
EXPECTED RETURNS TO SHAREHOLDERS IN 2016* Normalized FCF per Common Share(3) Annual Dividend per Common Share before Dividends Paid and FCF Yield(4) Strong FCF and Payout Ratio(5) generation $1.40 20.0% underpins $0.85 150.0% 18.0% 130.0% $1.20 significant FCF $0.80 16.0% >2015 yield and a $0.75 110
Slide 34: H1 2016 Consolidated Gross Billings
H1 2016 CONSOLIDATED GROSS BILLINGS* (in millions of Canadian dollars) $1,200.5 ($8.3) ($57.0) Americas Coalitions ($2.3) $1,133.7 International Global Coalitions Loyalty Solutions Consolidated: (5.6)% growth; (6.9)% in c.c.(1) Americas Coalitions: (1.8)% in c.c.(1; International Coalitions: (18.5)%
Slide 35: H1 2016 Consolidated Adjusted EBITDA
H1 2016 CONSOLIDATED ADJUSTED EBITDA* (in millions of Canadian dollars) $113.6(1) $2.4 ($9.9) ($5.3) $103.2 $2.4 Americas Coalitions International Global Corporate Coalitions Loyalty Solutions Consolidated: (9.2)% growth; (10.0)% in c.c.(2) Americas Coalitions: 2.3% in c.c.(2); International Coaliti
Slide 36: Q2 2016 Adjusted EBITDA to Free Cash Flow Bridge
Q2 2016 ADJUSTED EBITDA TO FREE CASH FLOW BRIDGE* (in millions of Canadian dollars) $19.0 $2.5 $0.5 ($2.4) ($14.4) $54.6 ($15.6) $44.2 Non-cash items 81% Free cash flow conversion Adjusted Change in Stock-based Cash Net cash Capex Working Free Cash EBITDA FRC compensation taxes interest paid capital
Slide 37: H1 2016 Gross Billings to Free Cash Flow Walk
H1 2016 GROSS BILLINGS TO FREE CASH FLOW WALK* (in millions of Canadian dollars) H1 2016 H1 2015 Gross Billings $1,133.7 $1,200.5 Less: Cost of rewards and direct costs ($700.8) ($777.1) Less: Operating expenses (excluding share-based ($322.7) ($317.4)(1) compensation and impairment charges) Add: Di
Slide 38: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER* Other CIBC Other CIBC 18.4% 16.0% 19.5% 15.3% Sainsbury’s Air Sainsbury’s Canada Q2 2015 20.2% Q2 2016 14.3% Air Canada 13.6% 14.5% $458.3M $419.1M AMEX AMEX TD 11.5% TD 12.4% 19.9% 24.4% *This slide contains non-GAAP financial measures. Pl
Slide 39: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER* Other CIBC Other CIBC 17.9% 15.4% 19.7% 14.9% Sainsbury’s Air Sainsbury’s Canada Air Canada H1 2015 20.8% 14.4% H1 2016 18.1% 14.0% $903.5M $844.3M AMEX AMEX TD 11.5% 12.2% TD 19.1% 22.0% *This slide contains non-GAAP financial measures. Pl
Slide 40: Q2 2016 Financial Highlights – Americas Coalitions
Q2 2016 FINANCIAL HIGHLIGHTS – AMERICAS COALITIONS* Three Months Ended June 30, (in millions of Canadian dollars) 2016 2015 Reported Reported % Gross Billings Aeroplan 321.0 316.1 1.6% Loyalty Services & Other 76.6 80.6 -5.0% Intercompany eliminations (19.3) (20.7) n.m. 378.3 376.0 0.6% Total revenu
Slide 41: H1 2016 Financial Highlights – Americas Coalitions
H1 2016 FINANCIAL HIGHLIGHTS – AMERICAS COALITIONS* Six Months Ended June 30, (in millions of Canadian dollars) 2016 2015 Reported Reported % Gross Billings Aeroplan 615.1 611.9 0.5% Loyalty Services & Other 156.2 168.2 -7.1% Intercompany eliminations (41.7) (42.2) n.m. 729.6 737.9 -1.1% Total reven
Slide 42: Aeroplan Revenue
AEROPLAN REVENUE (in millions of Canadian Q2 2016 Q2 2015 dollars) Miles Revenue 255.1 239.2 Breakage Revenue 31.5 29.5 Other Revenue 9.0 10.2 Total Revenue 295.6 278.9 42
Slide 43: Benefits to Air Canada
BENEFITS TO AIR CANADA 4x 5x $180M • Since 2009, • Gross Billings • About 30% of Gross Billings from financial flights are Market from our financial cards not Fare Flight card partnerships associated with Reward tickets, have grown four frequent flyers translating into times faster than are five tim
Slide 44: Balance Sheet
BALANCE SHEET DEBT Interest Jun CASH & INVESTMENTS Jun $ millions Rate Maturing 30, 2016 $ millions 30, 2016 Revolving Facility(1) Apr. 23, 2020 - Cash and cash equivalents 352 Senior Secured Notes 3 6.95% Jan. 26, 2017 200.0 Restricted cash 20 Senior Secured Notes 5 4.35% Jan. 22, 2018 200.0 Short-
Slide 45: Foreign Exchange Rates
FOREIGN EXCHANGE RATES Q2 2016 Q2 2015 % Change Average Average Period Average Average Period Average Average Period quarter YTD end rate quarter YTD end rate quarter YTD end rate £ to $ 1.8500 1.9096 1.7419 1.8823 1.8794 1.9417 -1.7% 1.6% -10.3% AED to $ 0.3508 0.3624 0.3540 0.3347 0.3359 0.3363 4.
Slide 46: New Divisional Disclosure Comparable
NEW DIVISIONAL DISCLOSURE COMPARABLE* Year ended December 31, 2015 (in millions of Canadian dollars) Global Americas International Operating Segments Loyalty Corporate Eliminations Consolidated Coalitions Coalitions Solutions Gross Billings from the sale of Loyalty Units 1,201.3 631.4 - - - 1,832.7
Slide 47: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION Three months Six months Variance % ended June 30, ended June 30, (in millions of Canadian dollars, except per share 2016 2015 2016 2015 Q2 YTD information) Operating income (loss) -17.1 23.3 -26 49.5 ** ** Depreciation and amortization 15.2 13.1 28.1 25.4 16 10.6 Amor
Slide 48: Accounting: Key Things to Remember
ACCOUNTING: KEY THINGS TO REMEMBER* Gross Billings from the sale of Loyalty Units: Revenue Recognition: Recognize upon redemption of Loyalty Units Recognize upon issuance of Loyalty Units Key indicator of top line growth Breakage Recognition: Recognize upon redemption of Loyalty Units Liabil