Empire Co Ltd Class A · TSX:EMP.A
Empire Co Ltd Class A — Investor Presentation (March 2021)
25 slides from Empire Co Ltd Class A's investor presentation, March 2021
Slide 1: Investor Presentation March 2021
Investor Presentation March 2021 Katie Brine, Director Finance, Investor Relations Email: katie.brine@sobeys.com
Slide 2: Disclaimers
Disclaimers Forward-Looking Information This presentation contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize the Company’s financial position and understand management’s expectations regarding the Company’s strategic priorities, objective
Slide 3: CEO's Direct Reports
CEO’s Direct Reports Michael Medline President & Chief Executive Officer Pierre Vivek Mike Sarah Michael Simon Sandra Doug Danielle Mohit St-Laurent Sood Venton Joyce Vels Gagné Sanderson Nathanson Amirault Grover Chief Related Discount E-commerce Chief Chief Marketing General Chief of Staff, Operat
Slide 4: Empire Company Limited – Who are we?
Empire Company Limited – Who are we? • Canadian company headquartered in Stellarton, Nova Scotia. Quick Facts – Empire(1) Share price (CAN$)(2) $38.49 • Key businesses include food retailing and related real estate through wholly- 52-Week High(2) $40.87 owned subsidiary Sobeys Inc. and a 41.5% equit
Slide 5: Investment Profile
Investment Profile ▪ Second largest grocery retailer in Canada. ▪ Relevant and valuable partnerships. ▪ Crombie REIT – Empire’s largest landlord, 41.5% owned. +7% Annual ▪ Ocado Group plc – exclusive partnership in Canada for online grocery delivery and curbside pickup services, through Dividend Gro
Slide 6: Corporate Responsibility Fiscal 2020 Achievements
Corporate Responsibility Fiscal 2020 Achievements Taking actions guided by our commitment to positively impact People and the Planet, and to serve Products that nurture the diverse needs of Canadian families, both today and in the future. People Planet Products Strive to create a more diverse and Co
Slide 7: Key Achievements – Last twelve months
Key Achievements – Last twelve months 2020 March – Announced partnership with Infarm to grow and harvest a range of fresh produce in select Sobeys, Safeway and Thrifty Foods stores. June • Announced full year results reflecting growth in market share and profits. • Successfully completed Project Sun
Slide 8: Successful Completion of Project Sunrise
Successful Completion of Project Sunrise In the fourth quarter of fiscal 2017, the Company launched Project Sunrise, a three-year transformation. As of the fourth quarter of fiscal 2020, Project Sunrise was successfully completed, exceeding management’s initial expectations of $500 million in net be
Slide 9: Project Sunrise – Exceeded 3 Year Target
Project Sunrise – Exceeded 3 Year Target Significant Shareholder Returns $26 Sales ($B) +3.0% CAGR(1) • Increase in stock price of over 100% since January 2017. $25 • February 28th 2020 – the Canadian environment began to be impacted by the COVID-19 pandemic. $24 • Foundation has been set with the c
Slide 10: Project Horizon
Project Horizon New three-year growth strategy for core business expansion and e-commerce acceleration. Management targeting an incremental $500 million in annualized EBITDA, driving an improvement in EBITDA margin of 100 basis points by fiscal 2023. To be achieved through: Benefits are expected to
Slide 11: Ontario Market
Ontario Market Significant Growth Opportunity The Company is focused on increasing its market share in urban markets through a three- pronged approach of introducing an industry leading grocery e-commerce platform to Canadians, rapidly growing the number of Farm Boy locations in Ontario; and soon ad
Slide 12: Project Horizon – Voilà
Project Horizon – Voilà Your groceries delivered. Just like that. The Company is accelerating its plans to win Canadian grocery e-commerce. ▪ Powered by Ocado Group plc’s (“Ocado”) industry-leading technology, Voilà fills orders through its automated Customer Fulfilment Centres (“CFC”). ✓ Robots ass
Slide 13: Project Horizon Voilà and Ocado Solutions
Project Horizon Voilà and Ocado Solutions With more than 15 years at the forefront of innovation and success in grocery e-commerce, Ocado has partnered exclusively in Canada with Empire on our end-to-end e-commerce solution, Voilà. Key facts: ▪ Empire’s e-commerce sales growth (compared to last year
Slide 14: Project Horizon – FreshCo Expansion Progress
Project Horizon – FreshCo Expansion Progress FreshCo Expansion to Western Canada Empire expects to convert up to 25% of its 255 Safeway and Sobeys full-service format stores in Western Canada to its FreshCo discount format. The Company has now confirmed 37 of 65 locations in Western Canada – over ha
Slide 15: Capital Expenditure
Capital Expenditure Capital Expenditure (1) Fiscal 2020: ▪ Invested $575 million including renovations, construction of new stores, construction of e-commerce fulfillment centre & construction of FreshCo locations in Western Canada. ▪ Outlook: In fiscal 2021, capital spending expected to be between
Slide 16: Longo's and Grocery Gateway – Key Investment Highlights
Longo’s and Grocery Gateway – Key Investment Highlights 1 Aligned with Project Horizon Strategic Priorities 2 Enhances Empire’s Presence in Urban Markets in Toronto 3 Differentiated Specialty Grocery Retailer 4 Strong Online Grocery Offering in the GTA 5 Unique Private Label Offering 6 Retention of
Slide 17: Financial Results – Annual
Financial Results – Annual Trailing 12 Months Fiscal F2021 F2020 F2019 F2018 F2017 52 weeks 52 weeks 52 weeks 52 weeks 52 weeks (1)(2) (1) 30-January-21 2-May-20 4-May-19 5-May-18 6-May-17 Sales $28,360.7 $26,588.2 $25,142.0 $24,214.6 $23,806.2 Same store sales growth, excluding fuel N/A 5.7% 2.7% 0
Slide 18: COVID-19 Update
COVID-19 Update The novel coronavirus (“COVID-19” or “pandemic”) began to impact the Company in February 2020 and has resulted in restrictions by government authorities, and the encouragement for Canadians to practice public health measures. This has continued to lead to increased safety protocols i
Slide 19: Appendices A – E
E M P It RE Appendices A-E COMPANY LIMITED
Slide 20: Appendix A – Overview of Longo's
Appendix A – Overview of Longo’s ▪ Founded in 1956 by three brothers, Longo’s is a specialty grocery retailer, focused on providing customers with high quality fresh products, and offers a range of locally sourced meats and produce. ▪ Longo’s operates in the Greater Toronto Area (“GTA”), Canada’s la
Slide 21: Appendix A – Longo's Transaction Overview
Appendix A – Longo’s Transaction Overview ▪ Empire has agreed to purchase 51% of Longo’s, for $357 million. ▪ The acquisition is based on a total enterprise value of $700 million. ▪ Longo’s shareholders can receive up to $125 million of the initial consideration in Empire non-voting Class A shares.
Slide 22: Appendix B – Geographic Profile
Appendix B – Geographic Profile National scale and presence, operating over 1,500 stores in all 10 provinces, as well as more than 350 retail fuel locations. West Total Canada = 1,965 416 Atlantic 464 98 230 48 40 727 94 Voilá 358 32 Quebec Alberta – Curbside pickup now Ontario Ontario available, CF
Slide 23: Appendix C – Financial Results – 12 Quarter Review
Appendix C – Financial Results – 12 Quarter Review Fiscal Fiscal Fiscal Fiscal 2021 2020(1) 2019 2018 Q3 F21 Q2 F21 Q1 F21 Q4 F20 Q3 F20 Q2 F20 Q1 F20 Q4 F19 Q3 F19 Q2 F19 Q1 F19 Q4 F18 Jan. 30 Oct. 31 Aug 1 May 2 Feb. 1 Nov. 2 Aug. 3 May 4 Feb. 2 Nov. 3 Aug. 4 May 5, 2021 2020 2020 2020 2020 2019 2
Slide 24: Appendix D – Voilà Timeline
Appendix D – Voilà Timeline January 22, 2018: December 10, 2020: ▪ Sobeys signs agreement with Ocado to bring world’s leading ▪ Location of CFC #3 announced in Calgary, Alberta; will deliver to online grocery delivery solution to Canada. customers in the first half of 2023. ▪ Central Fulfilment Cent
Slide 25: Appendix D – Voilà Network
Appendix D – Voilà Network ▪ In early March, Voilà opened its first spoke location in Etobicoke, Ontario. ▪ Spokes are cross-dock facilities that allow us to get closer to customers and improve efficiencies at the CFCs. (example: improving key efficiency metrics such as drops per van.) For customers