Slide 1: Aimia - Inspiring Loyalty
/\IMI/A\ INSPIRING LOYALTY
Slide 2: Q2 2015 Highlights
Q2 2015 HIGHLIGHTS August 14, 2015
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: Rupert Duchesne, Group Chief Executive
RUPERT DUCHESNE GROUP CHIEF EXECUTIVE
Slide 6: David Johnston, Group Chief Operating Officer
DAVID JOHNSTON GROUP CHIEF OPERATING OFFICER
Slide 7: Simplifying, Focusing & Growing the Business
SIMPLIFYING, FOCUSING & GROWING THE BUSINESS A new line of business structure will be in place from January 2016, with three operating divisions aimed at focusing the business for growth: • Global Loyalty Solutions • Americas Coalitions • International Coalitions This change will: • Sharpen our comm
Slide 8: Aeroplan Financial Card Trends
AEROPLAN FINANCIAL CARD TRENDS A reshaped financial cardholder base: • Gross Billings from financial cards increased by 18% compared to the second quarter of 2013 • Improving purchase volume, up by 4.2% and 1.2% compared to the first six months of 2013 and 2014 Success of Distinction program: • Memb
Slide 9: David Adams, Executive Vice-President and CFO
DAVID ADAMS EXECUTIVE VICE-PRESIDENT AND CFO
Slide 10: Financial Highlights in Q2 2015
FINANCIAL HIGHLIGHTS IN Q2 2015 Adjusted Free Cash Gross Billings (3) EBITDA Flow $605.3M (2) (1) $61.8M $59.2M (8.2%) in c.c. (2) 10.2% margin (1) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please r
Slide 11: Q2 2015 Gross Billings by Activity
Q2 2015 GROSS BILLINGS BY ACTIVITY ($ IN MILLIONS) $648.1 ($22.1) ($10.7) ($10.0) $605.3 EMEA Loyalty Canada Loyalty Units Units Proprietary Loyalty & Other Consolidated: (6.6)%; (8.2)% in c.c.(1) 2014 Reported 2015 Reported (1) Constant Currency excludes the translation effect of foreign operations
Slide 12: Consolidated Adjusted EBITDA and Margin
CONSOLIDATED ADJUSTED EBITDA AND MARGIN +$3.0 million 12% $70 $60 Adjusted EBITDA (mln CAD) 10% 10.1% 10.2% $50 8% 8.7% 8.8% EBITDA Margin % 9.1% $40 6% $30 4% 5.3% $20 2% $10 $33 $59 $64 $60 $52 $62 0% $0 Q1 2014* Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015* *Excludes the $100.0 million TD payment rece
Slide 13: Q2 2015 Consolidated AEBITDA
Q2 2015 CONSOLIDATED AEBITDA ($ IN MILLIONS) $107.5 $45.7 ($2.5) $2.3 $1.1 $0.7 $1.5 US & Corporate Stock Lower Canada EMEA APAC based operating compensation expenses across regions $58.7 Adjustment to Card Migration Provision $10.0M distributions Canada from equity- accounted investments 2014 2015
Slide 14: Aeroplan Accumulation & Redemption Pattern
AEROPLAN ACCUMULATION & REDEMPTION PATTERN Miles Accumulated y/y% 17.9% 15.4% 14.8% 10.5% -0.2% 7.4% 8.7% -2.9% 2.7% 3.6% -10.0% -10.5% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Burn/earn for the quarter Miles Accumulated Miles Accumulated excluding all promotional miles excluding promotional miles Miles
Slide 15: Free Cash Flow
FREE CASH FLOW* ($ IN MILLIONS) $213.6 $153.1 $205.9(2) $83.4(1) $64.4 $59.2 $20.4(3) Free Cash Flow $87.8 $82.9 $88.2 excluding one $47.4 offs is $36 ($18.1) ($23.7) million above ($39.7) ($44.2) last year Q2 2014 Q2 2015 1H 2014 1H 2015 Cashflow from Operations, One-time Item Capex excluding one-t
Slide 16: Balance Sheet at June 30, 2015
BALANCE SHEET AT JUNE 30, 2015 DEBT Interest June CASH & INVESTMENTS $ millions Rate Maturing 30, 2015 June $ millions 30, 2015 Revolving Facility(1) Apr. 23, 2019 - Cash and cash equivalents 456 Senior Secured Notes 3 6.95% Jan. 26, 2017 200.0 Restricted cash 24 Senior Secured Notes 5 4.35% Jan. 22
Slide 17: Capital Allocation
CAPITAL ALLOCATION Common Dividends ($ per common share) Common Share Buy Back ($million except price/share) 5 years of consecutive increases in quarterly dividends Repurchased more than $530 million dollars of common shares between full year 2010 to August 2015 Dividend Yield: 5.7%** $12.57* $13.60
Slide 18: 2015 Guidance
2015 GUIDANCE* 2015 Guidance 2015 Guidance (in millions of (1) 2014 Normalized (As provided on (As updated on Canadian dollars) Feb 27, 2015) Aug 14, 2015)(2) Between Between Gross Billings $2,586.6 $2,560 and $2,610 $2,460 and $2,510 Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA $216.4 margin of
Slide 19: Thank You
AIMIA INSPIRING LOYALTY
Slide 20: Appendix
APPENDIX
Slide 21: Q2 2015 Consolidated Gross Billings
Q2 2015 CONSOLIDATED GROSS BILLINGS ($ IN MILLIONS) $648.1 ($22.2) ($15.9) ($4.6) $605.3(1) Canada EMEA US & APAC Consolidated: (6.6)%; (8.2)% in c.c.(1) Consolidated: +17.0% growth; 12.1% in c.c.(1) Canada: +22.4%; EMEA: +12.7%; -1.2% in c.c.(1) US & APAC: +5.2%; 0.0% in c.c.(1) Consolidated +60.1%
Slide 22: 1H 2015 Consolidated Gross Billings
1H 2015 CONSOLIDATED GROSS BILLINGS ($ IN MILLIONS) $1,365.3 ($100.0) ($27.3) ($19.6) ($17.8) $1,200.5(1)(2) TD Payment Canada US & EMEA APAC Consolidated: +17.0% growth; 12.1% in c.c.(1) Consolidated: Canada: +22.4%; (12.1)%; (13.7)% EMEA: +12.7%; in c.c. -1.2% (1) (1) in c.c. US & APAC: +5.2%; 0.0
Slide 23: Q2 2015 Adjusted EBITDA to Free Cash Flow Bridge
Q2 2015 ADJUSTED EBITDA TO FREE CASH FLOW* BRIDGE ($ IN MILLIONS) $4.5 ($4.2) $40.5 ($2.4) ($23.7) ($17.3) $61.8(1) $59.2 Non-cash Items Adjusted Change in Stock-based Cash Net cash Capex Working capital Free Cash EBITDA FRC compensation taxes interest paid and other Flow Q2 2014: $58.7 $73.8 $5.2 $
Slide 24: 1H 2015 Adjusted EBITDA to Free Cash Flow Bridge
1H 2015 ADJUSTED EBITDA TO FREE CASH FLOW* BRIDGE ($ IN MILLIONS) $14.3 ($11.8) ($44.2) $113.6(1) ($4.4) $6.8 Non-cash items ($9.9) $64.4 Adjusted Change in Stock-based Cash Net cash Capex Working capital Free Cash EBITDA FRC compensation taxes interest paid and other Flow 1H 2014: $190.4 $85.9 $6.9
Slide 25: Q2 2015 Financial Highlights – Canada
Q2 2015 FINANCIAL HIGHLIGHTS – CANADA Three months ended June 30, (in millions of Canadian dollars) 2015 2014 Reported Reported % Gross Billings Aeroplan 316.1 327.3 -3.4% Proprietary Loyalty 47.6 55.6 -14.4% Intercompany eliminations (20.7) (17.7) n.m. 343.0 365.2 -6.1% Total revenue Aeroplan 278.9
Slide 26: 1H 2015 Financial Highlights – Canada
1H 2015 FINANCIAL HIGHLIGHTS – CANADA Six months ended June 30, (in millions of Canadian dollars) 2015 2014 Reported Reported % Gross Billings Aeroplan 611.9 722.7 -15.3% Proprietary Loyalty 100.9 110.9 -9.0% Intercompany eliminations (42.2) (35.7) n.m. 670.6 797.9 -16.0% Total revenue Aeroplan 594.
Slide 27: Aeroplan Revenue
AEROPLAN REVENUE Q2 2015 Q2 2014 ($ in millions) Miles Revenue 239.2 227.3 Breakage Revenue 29.5 27.9 Other Revenue 10.2 16.1 Total Revenue 278.9 271.3 27
Slide 28: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER CIBC Other Other CIBC 19.5% 15.3% 22.8% 14.2% Sainsbury’s Sainsbury’s 19.5% Air Air Canada Q2 2014 Canada Q2 2015 20.2% $491.1M 13.6% $458.3M 12.4% AMEX AMEX TD 11.5% 11.9% 19.2% TD 19.9% 28
Slide 29: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER Other CIBC Other CIBC 19.7% 14.9% 23.1% 14.3% Sainsbury’s Sainsbury’s 19.4% Air Air Canada 1H 2014 Canada 1H 2015 20.8% $939.8M* 14.0% $903.5M 12.9% AMEX AMEX TD 11.5% 12.1% 18.2% TD 19.1% * Excludes the $100.0 million upfront TD Payment rec
Slide 30: Foreign Exchange Rates
FOREIGN EXCHANGE RATES Q2 2015 Q2 2014 % Change Average Average Period Average Average Period Average Average Period quarter YTD end rate quarter YTD end rate quarter YTD end rate £ to $ 1.8823 1.8794 1.9417 1.8350 1.8293 1.8154 2.6% 2.7% 7.0% AED to $ 0.3347 0.3359 0.3363 0.2969 0.2984 0.2902 12.7%