Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Presentation (November 2022)
48 slides from Alimentation Couche-tard's investor presentation, Nov 23, 2022
Slide 1: Investor Presentation
ALIMENTATION COUCHE-TARD INVESTOR PRESENTATION November 2022 1
Slide 2: 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 3: Investment Highlights
INVESTMENT HIGHLIGHTS • Global rebrand initiative permits better leverage of broad scale. Size and Scale • More flexibility to compete compared to small-size operators. • Decentralized model drives accountability and entrepreneurship. Strong Culture • Cost discipline and lean operations are a major
Slide 4: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages Increasing 4 Our Ambition 5 Shareholder Value Alimentation Couche-Tard | Investor Presentation 4
Slide 5: Company Highlights
COMPANY HIGHLIGHTS Ticker Symbol TSX: ATD Coast-to-coast presence in Canada and located in 47 of 50 U.S. states. Leading market share across many markets in Europe. EBITDA1 CAGR of ~20%2 since 2012 and profitable since IPO in 1986. Track record of generating shareholder value with average RO
Slide 6: Global Leader in Fuel & Convenience Retail
GLOBAL LEADER IN FUEL & CONVENIENCE RETAIL Store Count Our People Countries / Territories 14,008 ~122,000 24 incl. int’l licensees globally incl. int’l licensees Fuel Gallons Sold Customers Served1 Cups of Coffee Sold1 ~35 million ~9 million ~750,000 per day per day per day Hot Dogs Sold1 Polar Pop
Slide 7: Revenue and Gross Profit Mix
REVENUE AND GROSS PROFIT MIX Gross Profit(1,2) 2% 12% Revenue Geographic Mix Product Mix 1% 13% 26% 19% 21% 47% 51% 66% 72% 69% United States Europe & Other Canada Merchandise and Service Fuel Other ~65% of transactions are convenience only, while 25% are fuel only, and 10% are a mix of both. Note:
Slide 8: Investment Highlights
INVESTMENT HIGHLIGHTS Merch. SSS – US1 SS Volume – US1 Net Earnings Growth Y/Y3 +5.6% (1.9%) +16.6% Adj. EBITDA Growth Y/Y2,3 Merch. SSS – Europe and Other SS Volume – Europe and Other Regions2 Regions1 Diluted EPS Growth Y/Y3 +13.9% Q2 +2.9% (6.3%) +21.5% Leverage Ratio2 Merch. SSS – Canada1 Adj. D
Slide 9: Our Vision and Mission
OUR VISION AND MISSION To become the world’s preferred destination for convenience and Our Vision mobility. Our Mission To make our customers’ lives a little easier every day. Alimentation Couche-Tard | Investor Presentation 9
Slide 10: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages Increasing 4 Our Ambition 5 Shareholder Value Alimentation Couche-Tard | Investor Presentation 10
Slide 11: Snapshot of U.S. Fuel & Convenience Industry
SNAPSHOT OF U.S. FUEL & CONVENIENCE INDUSTRY Store Type Population of U.S. Convenience Stores Single Stores Chain Stores 2021 Non-Fuel 2006 148,026 21% 145,119 total total stores stores 175000 Fuel 150000 79% 57,315 57,031 56,836 56,476 57,792 57,612 58,078 56,226 55,401 54,917 54,526 58,690 55,611
Slide 12: Attractive Channel Within Broader Retail
2005 $151.1 2006 $163.6 Source: NACS State of the Industry Report of 2021 Data. 2007 $168.5 (in billions) 2008 $173.9 2009 $182.4 2010 $190.4 Alimentation Couche-Tard | Investor Presentation 2011 $195.0 2012 $199.3 2013 $204.0 2014 $213.5 CAGR 3.9% 2015 $225.8 Industry Inside Sales 2016 $233.0 2017
Slide 13: … and Recession Resilient
… AND RECESSION RESILIENT Industry Inside Sales (in billions) Dot-Com Bubble Great Recession $277.9 +5% +8% $255.6 $251.9 $242.2 $237.0 $233.0 $225.8 $213.5 $204.0 $199.3 $195.0 $190.4 $182.4 $173.9 $168.5 $163.6 $151.1 $132.1 $116.2 $112.0 $109.3 $104.1 $99.8 1999 2000 2001 2002 2003 2004 2005 2006
Slide 14: Expert in Sale of Age-Restricted Products
EXPERT IN SALE OF AGE-RESTRICTED PRODUCTS Product Category Share by Channel 100% 90% 95% Convenience store channel continues to be 88% 80% a leader in sales of age-restricted products. 70% 60% 50% 41% 53% 36% 40% 47% 30% 37% 30% 32% 30% 13% 20% 27% 11% 22% 6% 10% 4% 15% 3% 3% 2% 2% 2% 2% 1% 0% Conve
Slide 15: U.S. National Fuel Margin Trending Higher
U.S. NATIONAL FUEL MARGIN TRENDING HIGHER 2014 - 2021 average: 24.9 cpg 35.2 30.9 2008 - 2013 average: 17.2 cpg cents per gallon 24.8 24.0 22.4 21.8 20.4 19.9 19.0 18.1 18.5 18.4 16.3 13.1 CAGR 4.2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Rising breakeven point for sing
Slide 16: Cost Headwinds Favour Larger Chains
COST HEADWINDS FAVOUR LARGER CHAINS Card Costs to Industry Average Associate Wage $13.5 (in billions) (in dollars per hour) $12.80 $11.8 $11.4 $11.2 $11.2 $11.1 $11.1 $10.7 $10.1 $10.0 $11.49 $9.5 $11.30 $9.0 $8.4 $10.74 $7.6 $7.4 $6.6 $10.19 $9.99 $5.4 $9.44 $9.02 $3.8 $8.76 $8.56 $8.51 $8.46 $8.37
Slide 17: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages Increasing 4 Our Ambition 5 Shareholder Value Alimentation Couche-Tard | Investor Presentation 17
Slide 18: Competitive Advantages
COMPETITIVE ADVANTAGES Significant scale and buying power through broad footprint and global brand. Strong leadership team and decentralized business model. Long-standing cost discipline embedded in company culture and DNA. Proven ability to integrate acquisitions. Well positioned with Nor
Slide 19: A Global Family of Merchants
A GLOBAL FAMILY OF MERCHANTS 24 COUNTRIES SITES TOTAL ~14,300 OUR UNITED-STATES 7,008 CANADA 2,287 EUROPE AND OTHER REGIONS1 3,072 INTERNATIONAL2 1,935 Core network International licensees Note: Store count as of October 9, 2022. Includes 979 automats 1 Europe and Other Regions store count includes
Slide 20: Going Global with Circle K Brand
GOING GLOBAL WITH CIRCLE K BRAND Higher brand awareness and loyalty Unified corporate culture Greater purchasing power Rollout of national promotions Exclusive product launches Private label and product innovation ~91% of stores in the U.S. are operating under the Circle K banner, 97% in Canada, and
Slide 21: Highly Experienced Retail & Fuel Executive Team
HIGHLY EXPERIENCED RETAIL & FUEL EXECUTIVE TEAM Brian Hannasch Claude Tessier Alex Miller Hans-Olav Høidahl President and Chief Financial Officer EVP, Operations, North EVP, Operations, Europe Chief Executive Officer America, and Global Commercial Optimization Ed Dzadovsky Kevin Lewis Ina Strand Aar
Slide 22: Long-Standing Cost Discipline
LONG-STANDING COST DISCIPLINE Lean corporate structure Normalized Growth of Expenses1 9.4% Decentralized business units Procurement efficiency 3.7% 2.1% 2.5% Continuous benchmarking 1.5% 2.0% 0.2% 0.8% 2.0% average Cost efficient systems -0.9% -1.2% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 23: Proven Ability to Integrate Acquisitions
PROVEN ABILITY TO INTEGRATE ACQUISITIONS Revenues 2005- 2004 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012- Deals 2 34 7 4 3 4 3 3 0 1 3 4 Stores 1,706 1,137 2,506 166 1,660 515 442 2,055 0 30 367 91 Since 2004, Couche-Tard has successfully completed a total of 68 deals, adding ~10,700 stor
Slide 24: Norway Laboratory Is a Significant Advantage
NORWAY LABORATORY IS A SIGNIFICANT ADVANTAGE E-mob platform and internal Over 1,250 fast chargers now installed Home and workplace charging capabilities established in Europe on more than 280 sites launched in Norway − Recognized as #1 charging destination. − More than 700 fast chargers now installe
Slide 25: Impressive EBITDA to Free Cash Flow Conversion
Target Allocation IMPRESSIVE EBITDA TO FREE CASH FLOW1 CONVERSION of Capex Network Development 35% 38% 39% 32% 34% 39% 41% 39% 32% 32% 32% of total Capex 23% Commercial Programs 5,244 5,061 Aiming to deploy 35% to 40% of EBITDA1 towards 30% 2,203 Purchase of property and equipment, intangible 4,446
Slide 26: Efficient Structure Below EBITDA Line
EFFICIENT STRUCTURE BELOW EBITDA LINE 1 EBITDA 100% 2 D&A 29% Net financial expenses 5% Income taxes 14% Net earnings 51% Low cost of debt and global corporate structure permits high conversion of EBITDA to net earnings. 1 Please refer to the “Non-IFRS Measures” section of this presentation for addi
Slide 27: Solid Balance Sheet and Capacity to Invest
SOLID BALANCE SHEET AND CAPACITY TO INVEST Investment Grade Credit Rating BBB / Baa2 S&P / Moody’s Leverage Ratio2,3 Q2/23 1.20 below 2.25 target Incremental Balance Sheet Capacity4 ~ $10 billion incremental debt Repurchased almost 5 million shares for ~$205 million during the second quarter of fisc
Slide 28: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages Increasing 4 Our Ambition 5 Shareholder Value Alimentation Couche-Tard | Investor Presentation 28
Slide 29: Our Ambition: Double Again
OUR AMBITION DOUBLE AGAIN by making our customers’ lives a little easier every day! Double adjusted EBITDA1, driven by our value creation equation and a focus on organic growth. 1 Please refer to the “Non-IFRS Measures” section of this presentation for additional information on performance measures
Slide 30: Principles for Profitable Growth
PRINCIPLES FOR PROFITABLE GROWTH Aim to deliver an EBIT-based return on capital ROCE1 employed of more than 15%. Aim to keep our adjusted net debt-to-EBITDA Leverage Ratio1 ratio below 2.25, allowing for flexibility following significant acquisitions. Capital Aim to maintain a level of Capex spendin
Slide 31: More Balanced Growth Going Forward
MORE BALANCED GROWTH GOING FORWARD Projected Historical Organic Acquisitions 30% 40% Acquisitions Organic 70% 60% Greater focus on the offering and customer journey is expected to drive higher share of organic growth. Alimentation Couche-Tard | Investor Presentation 31
Slide 32: Key Focus Areas
KEY FOCUS AREAS CUSTOMER JOURNEY OFFERING NETWORK • Be recognized by our customers for • Succeed with food • Continue to grow market share in a differentiated experience, in the • Capture new opportunities the U.S. way we deliver and continuously • Further develop our retail • Expand to new growth m
Slide 33: Core Initiatives
CORE INITIATIVES CUSTOMER JOURNEY OFFERING NETWORK • Making Circle K the convenience • Food at scale • U.S. expansion brand of choice • Merchandise pricing, promotion, • Profitable ramp-up of new stores • Customer journey innovation and assortment • Profitable remodels • Customer loyalty • Age-restr
Slide 34: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages Increasing 4 Our Ambition 5 Shareholder Value Alimentation Couche-Tard | Investor Presentation 34
Slide 35: Increasing Shareholder Value
INCREASING SHAREHOLDER VALUE Long track record of delivering solid results. Increasing free cash flow generation. Rewarding shareholders through a steadily increasing dividend. Strong focus on reinvesting profitably in our operations and improving the ROCE. Alimentation Couche-Tard | Investo
Slide 36: Delivering Strong Results…
DELIVERING STRONG RESULTS… (1,2) (1,2) Note: Starting in fiscal 2020, revenue and gross profit figures include impact from transition to IFRS 16 lease accounting standard 1 Please refer to the “Non-IFRS Measures” section of this presentation for additional information on performance measures not def
Slide 37: … and Rewarding Shareholders Accordingly
… AND REWARDING SHAREHOLDERS ACCORDINGLY Announced quarterly dividend of CA 14¢ in Q2 2023 representing an annualized payment of CA 56¢ per share. Alimentation Couche-Tard | Investor Presentation 37
Slide 38: Strong Organic Growth Driving Returns
STRONG ORGANIC GROWTH DRIVING RETURNS 1 Return on Capital Employed IAS 17 IFRS 16 avg. 14.8% 19.2% We have repeatedly proven our ability to 16.2% 15.9% 15.8% 15.4% 15.0% increase our ROCE 14.1% 13.3% following the integration 12.0% of large acquisitions 11.0% 2013 2014 2015 2016 2017 2018 2019 2020
Slide 39: Relative Stock Performance
RELATIVE STOCK PERFORMANCE 10-Year Stock Performance vs. Key Indices ATD S&P/TSX Composite S&P 500 1100% 1000% 900% 800% 685.8% 700% 600% 500% 400% 300% 200% 189.3% 100% 64.9% 0% Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 Ma
Slide 40: Financial Highlights
FINANCIAL HIGHLIGHTS in US$ millions, unless otherwise noted 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGR Total revenues 22,980 35,549 37,962 34,530 34,145 37,905 51,394 59,118 54,132 45,760 62,810 11% 1 Gross profit 2,975 4,607 4,988 5,268 6,082 6,482 8,112 9,195 9,644 10,115 11,005
Slide 41: Investment Highlights
INVESTMENT HIGHLIGHTS Size and Scale • Global rebrand initiative permits better leverage of broad scale. • More flexibility to compete compared to small-size operators. • Decentralized model drives accountability and entrepreneurship. Strong Culture • Cost discipline and lean operations are a major
Slide 42: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 42
Slide 43: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 43
Slide 44: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 44
Slide 45: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 45
Slide 46: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 46
Slide 47: Investor Relations Contact
INVESTOR RELATIONS CONTACT Jean-Philippe D. Lachance Vice President, Financial Planning & Analysis, Investor Relations and Treasury Investor.Relations@couche-tard.com Alimentation Couche-Tard | Investor Presentation 47
Slide 48: Thank You
THANK YOUE FUTURE Alimentation Couche-Tard | Investor Presentation 48
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