Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Day (January 2018)
133 slides from Alimentation Couche-tard's investor day presentation, January 2018
Slide 1: Investor Day Presentation
ALIMENTATION COUCHE-TARD INC. INVESTOR DAY PRESENTATION January 2018
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Slide 3: Agenda
AGENDA • Introductions – Mathieu Descheneaux, Vice-President, Finance • Opening Message – Alain Bouchard, Founder and Executive Chairman of the Board • Company Update – Brian Hannasch, President and Chief Executive Officer • Financial Update – Claude Tessier, Chief Financial Officer • Break • Inside
Slide 4: Forward-Looking Information and Cautionary Language
FORWARD-LOOKING INFORMATION AND CAUTIONARY LANGUAGE 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
Slide 5: Forward-Looking Information and Cautionary Language
FORWARD-LOOKING INFORMATION AND CAUTIONARY LANGUAGE 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
Slide 6: Opening Message
ALIMENTATION COUCHE-TARD INC. OPENING MESSAGE Alain Bouchard, Founder and Executive Chairman of the Board
Slide 7: A Bit of History
A BIT OF HISTORY Alain Bouchard Richard Fortin Jacques D'Amours Réal Plourde
Slide 8: Our Company Timeline
OUR COMPANY TIMELINE Acquisition of the assets Acquisition of The Pantry Inc., a of Johnson Oil Company, leading convenience store operator Inc., owner of 225 Bigfoot in the southeastern United States. stores, all located in the Global Circle K brand is launched U.S. Midwest Acquisition of 278 Esso-
Slide 9: Couche-Tard: Engaged in the Future
COUCHE-TARD: ENGAGED IN THE FUTURE ALAIN BOUCHARD FOUNDER AND EXECUTIVE CHAIRMAN OF THE BOARD
Slide 10: An Open Door on New Technologies
AN OPEN DOOR ON NEW TECHNOLOGIES
Slide 11: Listening to New Generations
LISTENING TO NEW GENERATIONS
Slide 12: Norway: Our Laboratory for Innovation
NORWAY: OUR LABORATORY FOR INNOVATION
Slide 13: New Markets: Turning Toward Asia and Europe
NEW MARKETS: TURNING TOWARD ASIA AND EUROPE MEXICO HONDURAS COSTA RICA
Slide 14: Continuing the Growth Journey
CONTINUING THE GROWTH JOURNEY
Slide 15: Brian Hannasch
BRIAN HANNASCH
Slide 16: Company Update
ALIMENTATION COUCHE-TARD INC. COMPANY UPDATE Brian Hannasch President and Chief Executive Officer
Slide 17: Who We Are
ALIMENTATION COUCHE-TARD INC. WHO WE ARE
Slide 18: Executive Management Team Here Today
EXECUTIVE MANAGEMENT TEAM HERE TODAY Alain Bouchard Brian Claude Tessier Jacob Schram Founder and Hannasch Chief Financial Group President, Executive Chairman President & Officer European of the Board Chief Executive Operations Officer
Slide 19: Executive Management Team Continued
EXECUTIVE MANAGEMENT TEAM CONTINUED Darrell Davis Kevin Lewis Senior Vice Chief Marketing Officer President, Operations
Slide 20: Executive Management Team Continued
EXECUTIVE MANAGEMENT TEAM CONTINUED Hans-Olav Høidahl Jørn Madsen Executive Vice- Executive Vice- President, President, Central & Scandinavia Eastern Europe
Slide 21: How We Grow
ALIMENTATION COUCHE-TARD INC. HOW WE GROW
Slide 22: Industry Context
INDUSTRY CONTEXT Investor Day Jan 2018
Slide 23: Meeting the Market Challenge
MEETING THE MARKET CHALLENGE
Slide 24: Our Competitive Advantages
OUR COMPETITIVE ADVANTAGES Proven ability Scale & Buying Cost structure Decentralized to integrate Power and culture model companies and cultures Norway Proven capacity Strong balance Laboratory to transform and sheet and innovate capacity to invest
Slide 25: Our Network – North America
OUR NETWORK – NORTH AMERICA Our North America Network – close to 10,000 stores
Slide 26: Our Network - Europe
OUR NETWORK - EUROPE NORWAY RUSSIA SWEDEN ESTONIA DENMARK Our European LATVIA Network – over 2,750 sites IRELAND LITHUANIA POLAND
Slide 27: Our Network - Worldwide
OUR NETWORK - WORLDWIDE Central / South Asia America United Arab China Mexico Emirates Approximately Honduras Guam 1,800 stores under licensing Hong Kong agreements Costa Rica Macau Vietnam Philippines worldwide Malaysia Indonesia
Slide 28: Growing by the Numbers
GROWING BY THE NUMBERS r Investor Day Jan 2018
Slide 29: Our Growth: Store Count
OUR GROWTH: STORE COUNT 2015 8,500 2016 10,600 2017 12,500 2018 15,000 Investor Day Jan 2018
Slide 30: Our Growth: Great Employees
OUR GROWTH: GREAT EMPLOYEES 2015 2016 2017 2018 100,000 105,000 120,000 125,000 Investor Day Jan 2018 ,
Slide 31: Our Growth: Food and Drink
OUR GROWTH: FOOD AND DRINK 2018: Over 2.5 million servings (coffee, cold dispensed beverages, and hot dogs alone)
Slide 32: Our Growth: Fuel Liters
OUR GROWTH: FUEL LITERS Investor Day Jan 2018 2016 103,699,000 2017 155,548,000 2018 186,658,000 Ed
Slide 33: Our Growth: Customer Count
OUR GROWTH: CUSTOMER COUNT Investor Day Jan 2018
Slide 34: Our Growth: New Sites
OUR GROWTH: NEW SITES Our goal is to complete the construction, relocation or reconstruction of approximately 100 stores per year.
Slide 35: Our Network of Brands
OUR NETWORK OF BRANDS Investor Day Jan 2018
Slide 36: Creating a Global Circle K Brand
CREATING A GLOBAL CIRCLE K BRAND
Slide 37: Our Global Brand Story
ALIMENTATION COUCHE-TARD INC. OUR GLOBAL BRAND STORY
Slide 38: The World's Preferred Destination for Convenience & Fuel
ALIMENTATION COUCHE-TARD INC. THE WORLD’S PREFERRED DESTINATION FOR CONVENIENCE & FUEL Our Values Our Mission Brand Pillars EASY VISITS LET’S MAKE IT EASY PRODUCTS FAST AND FOR FRIENDLY PEOPLE SERVICE ON THE GO
Slide 39: Super Global, Super Local
OUR MANAGEMENT PHILOSOPHY SUPER GLOBAL SUPER LOCAL
Slide 40: Strategic Vision & Priorities: Working at Two-Clock Speed
STRATEGIC VISION & PRIORITIES: WORKING AT TWO-CLOCK SPEED LOOKING TO THE FUTURE FOCUSING ON THE CORE BUSINESS To enhance companyTo remain value, weaare growth company focusing on: for • Key Categories of Foodthe and shareholders Fuel we must find the • Growing Customer baserecipe for the future • Le
Slide 41: Core Strategic Initiatives
CORE STRATEGIC INITIATIVES Executing Our Growing the Food Journey Digital Mobility Brand Vision Global Network
Slide 42: A Disciplined Convenience Store Operator and Integrator
A DISCIPLINED CONVENIENCE STORE OPERATOR AND INTEGRATOR Broad Geographic Track Record of Highly Superior Product Attractive Sector Footprint with Leading Disciplined Growth and Offerings Dynamics Market Positions Debt Reduction Powerful Financial Attractive Synergy Disciplined Management Proven Capa
Slide 43: Financial Update
ALIMENTATION COUCHE-TARD INC. FINANCIAL UPDATE Claude Tessier, Chief Financial Officer
Slide 44: Our Four Pillars of Value Creation – The Equation
OUR FOUR PILLARS OF VALUE CREATION – THE EQUATION Value Drivers Protect Value & Enable Growth Capital Structure & Organic Growth Acquisitions Cost Discipline Value Creation Financial Discipline
Slide 45: Organic Growth
ORGANIC GROWTH Customer Focus Key Digital Categories Network Innovation Development Organic Growth Branding Execution Continuous Private Label Improvement
Slide 46: Organic Growth
ORGANIC GROWTH Same-store Merchandise Revenue Same-Store Road Transportation Fuel Growth Volume Growth 10% 8% 10% 8% 6% 6% 4% 4% 2% 2% 0% 0% 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 -2% US Europe Canada US Europe Canada
Slide 47: Organic Growth – Strong Merchandise and Service Margins
ORGANIC GROWTH – LEADING TO STRONG MERCHANDISE AND SERVICE MARGINS IN ALL GEOGRAPHIES Europe 42.4% Organic Growth United Canada States 33.8% 33.2%
Slide 48: Proven Track Record of Successful Acquisitions
PROVEN TRACK RECORD OF SUCCESSFUL ACQUISITIONS Acquisitions Garvin oil Compac Food Stores Winners Sterling Stores Pump N Shop 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Stores 75 46 107 1,890 1,706 45 421 70 47 326 2,506 166 1,660 515 442 Acquired
Slide 49: Acquisitions
ACQUISITIONS Identify the right opportunities Strike the right deal at Deleverage the right price Acquisitions Reverse Secure synergies acquired and learnings talent Realization of Swift and available efficient synergies integration
Slide 50: Exceptional Deleveraging Track Record
EXCEPTIONAL DELEVERAGING TRACK RECORD Acquisitions The Pantry, Topaz Circle K No Transformational Acquisition Statoil Fuel & Retail and IOL stores 2,453 Stores Acquired 1,017 Stores Acquired 2,299 Stores Acquired 2,269 Stores Acquired $804M Leverage post Adj. Net Debt / Adj. Rapid deleveraging Acqui
Slide 51: Delivering on Synergies Through Our Acquisitions
DELIVERING ON SYNERGIES THROUGH OUR ACQUISITIONS Acquisitions Statoil Fuel and Retail • Target: $150M - $200M • Realized: >$200M CST Brands Inc • Initial target for the first 36 months: $150M –$200M The Pantry • Q2 2018 run rate: $84M • Target: $125M • Realized: >$125M
Slide 52: Our Four Pillars of Value Creation – The Equation
OUR FOUR PILLARS OF VALUE CREATION – THE EQUATION Organic Acquisitions Growth
Slide 53: Cost Control – Part of Our DNA
COST CONTROL – PART OF OUR DNA Disciplined Culture Optimization of Shared Continuous Services Benchmarking Strategy Sharing of AI, Robotics Cost Discipline Best Practices Scalable Organization, Cost Efficient Systems & Systems Processes Economies of Scale
Slide 54: Cost Control – Part of Our DNA
COST CONTROL – PART OF OUR DNA Year-over-year expense growth 1.9% 1.5% 0.2% 0.8% 0.2% 2012 2013 2014 2015 2016 2017 (1) -0.9% 5-year Average : +0.7% (1) Adjusted for the estimated impact of the 53rd week.
Slide 55: Capital Structure & Financial Discipline
CAPITAL STRUCTURE & FINANCIAL DISCIPLINE Competitive cost of debt Rapid delevera- Well spread ging after maturities acquisitions Capital Structure & Financial Access to Disposal of Discipline liquidities – non-core Cash and assets credit facilities Careful Dividend allocation of growth capital
Slide 56: Strong Capital Structure & Financial Discipline
STRONG CAPITAL STRUCTURE & FINANCIAL DISCIPLINE Free Cash Flow PF Adjusted Leverage Ratio (in million dollars US) 2.88:1 Average Cost Investment of Debt Grade Credit 3.2% (1) Profile +17 % CAG 1,145 979 1,065 865 890 Capital Structure & 614 Financial Discipline Free Cash Flow 404 Attractive Debt mat
Slide 57: Adjusted Leverage Ratio
ADJUSTED LEVERAGE RATIO Pro Forma 12-24 Holiday Months Acquisition Target 3.25x 2.60x Balance sheet capacity: $2.3 billion
Slide 58: Strong and Scalable Free Cash Flow Conversion
STRONG AND SCALABLE FREE CASH FLOW CONVERSION 81 1,065 890 Capital Structure & 95 Financial 979 Discipline 865 102 85 614 2,396 360 2,331 351 1,876 63 145 77 1,640 279 104 404 1,376 79 7 172 172 87 65 841 56 807 899 50 91 563 457 459 289 2011 2012 2013 2014 2015⁽¹⁾ 2016⁽²⁾ 2017 EBITDA Business dispo
Slide 59: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION Capital Capital Expenditures Allocation Structure & Financial Discipline 27% 23% Income 39% 40% Income producing producing 73% 78% 34% 38% 2016 2017 Development Commercial Programs Maintenance Continuous improvement in capital allocation efficiency
Slide 60: A History of Sustainable Top-Line Growth
RESULT OF THE VALUE CREATION EQUATION: A HISTORY OF SUSTAINABLE TOP-LINE GROWTH Value Creation Merchandise & Service Sales (millions of US dollars) +10% CAG 10,724 10,072 7,596 7,953 8,276 6,599 2012 2013 2014 2015 2016 2017 CAG: Five-year compounded annual growth - fiscal 2017 over fiscal 2012
Slide 61: Road Transportation Fuel Volume Growth
RESULT OF THE VALUE CREATION EQUATION: A HISTORY OF SUSTAINABLE TOP-LINE GROWTH Value Creation Road Transportation Fuel Volume (millions of gallons) +21% CAG 11,793 10,502 7,626 8,135 6,945 4,613 2012 2013 2014 2015 2016 2017 CAG: Five-year compounded annual growth - fiscal 2017 over fiscal 2012
Slide 62: A History of Strong Financial Performance
RESULT OF THE VALUE CREATION EQUATION : A HISTORY OF STRONG FINANCIAL PERFORMANCE Value Creation Gross Profits +17% CAG 6,082 6,482 4,988 5,268 4,610 Free Cash Flow (2) 2,975 2012 2013 2014 2015 2016 2017 +17% CAG 1,065 979 EBITDA 865 890 614 +23% CAG 2,331 2,396 404 1,640 1,876 1,376 2012 2013 2014
Slide 63: Adjusted Diluted EPS and Return on Equity Growth
RESULT OF THE VALUE CREATION EQUATION : ADJUSTED DILUTED NET EARNINGS PER SHARE AND RETURN ON EQUITY GROWTH Adjusted Diluted Net Value Return on Equity Creation Earnings per Share +22% CAG 2.08 2.21 27.0% 24.9% 1.79 22.0% 21.5% 22.6% 22.5% 1.35 1.11 0.81 2012 2013 2014 2015 2016 2017 2012 2013 2014
Slide 64: Dividend Growth
RESULT OF THE VALUE CREATION EQUATION : DIVIDEND GROWTH Value Creation Dividends Paid – US Millions 160 145 +24 % CAG 104 87 65 50 56 2012 2013 2014 2015 2016 2017 2018 Q2 LTM
Slide 65: Stock Value Growth
RESULT OF THE VALUE CREATION EQUATION : STOCK VALUE GROWTH Value Creation 5-Year Relative Stock Performance 340% +295% 220% 100% +29% -20% Variance ACT stock price (%) Variance TSX index (%) Source: FACTSET. January 15, 2018.
Slide 66: US Tax Reform
US TAX REFORM vestor Jan 2018
Slide 67: New Lease Accounting Standard
NEW LEASE ACCOUNTING STANDARD • Increase in Total Assets – Property and equipment • Increase in Total Liabilities – Debt Balance sheet • Limited impact on Net Adjusted Debt to EBITDAR ratio • Decrease in Rent Expense – Increase in EBITDA P&L • Increase in Depreciation and Financial Expense • Limited
Slide 68: Set to Generate Unprecedented Free Cash Flow
SET TO GENERATE UNPRECEDENTED FREE CASH FLOW EBITDA > $150M-$200M $50-$60M in Acquisitions $3.0B Pro in CST Holiday reverse Forma CST and synergies synergies synergies Holiday Recent 3-5% reduction Organic Growth restructuring of in consolidated & Network term loan tax rate Development
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Slide 70: Inside the Store
ALIMENTATION COUCHE-TARD INC. INSIDE THE STORE Kevin Lewis, Chief Marketing Officer
Slide 71: An Introduction
AN INTRODUCTION Who I am ~100 day observations World’s biggest startup Super-global, super-local is real At the center of a revolution in convenience Cohesive, committed team Not taking success for granted
Slide 72: Unique Opportunity to Leverage Our Brand, Scale and Scope in Marketing
UNIQUE OPPORTUNITY TO LEVERAGE OUR BRAND, SCALE AND SCOPE IN MARKETING Customer insight and Marketing Merchandising analytics Product Creation • Brand development • Assortment planning • Consumer behavior • “Famous For” • Skyfall rollout • Promo management • Personalization and • Private Brand Local
Slide 73: Becoming Famous For…
BECOMING FAMOUS FOR… Create real differentiation Leverage our scale and scope (do it right, once) Be locally relevant Balance innovation and getting the basics right Drive incremental visits, revenue and profitability We are in the early days of our journey
Slide 74: Leveraging Global Presence: Introducing Seasonal Car Wash
LEVERAGING GLOBAL PRESENCE: INTRODUCING SEASONAL CAR WASH Warrenville, Illinois Södertälje, Sweden
Slide 75: Customizing the Assortment: Simply Great Coffee
CUSTOMIZING THE ASSORTMENT: SIMPLY GREAT COFFEE Quebec City Charleston, SC Latvia
Slide 76: Building Multi-Local Food Platforms
BUILDING MULTI-LOCAL FOOD PLATFORMS Bakery Hot Dog Charlotte, NC Quebec, Canada Sweden Tampa, FL
Slide 77: Open Challenge: Unlocking Global Food Excellence
OPEN CHALLENGE: UNLOCKING GLOBAL FOOD EXCELLENCE Ireland Estonia Norway We are working hard to crack the code in North America
Slide 78: Private Brands
PRIVATE BRANDS Global portfolio with local relevance Drive product differentiation Reinforce value Generate additional gross margin Provide supplier leverage
Slide 79: Focus on Traffic
FOCUS ON TRAFFIC Branding and communications Insights and analytics Segmentation Prioritization Shifting customer demographics Resurgent competitors Redefinition of convenience Targeting Personalization Changing habits and tastes
Slide 80: M&A
ALIMENTATION COUCHE-TARD INC. M&A Brian Hannasch, President and Chief Executive Officer Darrell Davis, Senior Vice President, Operations Alex Miller, Senior Vice President, Operations & Global Fuels
Slide 81: Darrell
DARRELL
Slide 82: Alex Miller
ALEX MILLER
Slide 83: How We Do M&A - Our Strategy
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Slide 84: Proven Track Record of Successful Acquisitions
PROVEN TRACK RECORD OF SUCCESSFUL ACQUISITIONS Garvin oil Compac Food Stores Winners Sterling Stores Pump N Shop 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Stores 75 46 107 1,890 1,706 45 421 70 47 326 2,506 166 1,660 515 442 Acquired
Slide 85: Acquisitions Roadmap
ACQUISITIONS ROADMAP Strike the Identify the Secure Swift and Realization of Reverse right deal at right acquired efficient available synergies and Deleverage the right opportunities talent integration synergies learnings price
Slide 86: M&A
ALIMENTATION COUCHE-TARD INC. M&A Darrell Davis, Senior Vice President, Operations
Slide 87: The Pantry Transaction Summary & Overview
THE PANTRY TRANSACTION SUMMARY & OVERVIEW Transaction Summary • Acquired 100% of the outstanding shares of The Pantry, on March 16, 2015, representing a total enterprise value of US $2.2 billion • Fully funded transaction with our revolving credit facility and cash on- hand Strategic & Financial Imp
Slide 88: The Pantry - Integration Strategy and Areas of Focus
THE PANTRY- INTEGRATION STRATEGY AND AREAS OF FOCUS Portfolio Growth & Talent Review Rationalization Competitiveness Cost Reductions Synergies Business Units Labor Changes Best Practices Rebranding
Slide 89: CST Brands Transaction Summary & Overview
CST BRANDS TRANSACTION SUMMARY & OVERVIEW Transaction Summary • Acquired 100% of the outstanding shares of CST Brands Inc. (“CST”), on June 28, 2017, representing a total enterprise value of US $4.4 billion or approximately US, $4.2 billion excluding the value of CST’s equity participation in CrossA
Slide 90: CST Brands - Integration Strategy and Areas of Focus
CST BRANDS - INTEGRATION STRATEGY AND AREAS OF FOCUS Portfolio Best Practices Talent Review Rationalization Business Units Labor Changes Rebranding Cost Reductions Procurement Focus
Slide 91: M&A
ALIMENTATION COUCHE-TARD INC. M&A Alex Miller, Senior Vice President, Operations & Global Fuels
Slide 92: Holiday Is a Top Performer in Upper Midwest
HOLIDAY IS A TOP PERFORMER IN UPPER MIDWEST COMPANY OVERVIEW Corporate Great geographical fit Franchise Newport Terminal AK 26 / 0 Great Strategic Fit 522 stores (374 COCO, 148 Franchise) GTC (3.5M pop) is a stronghold with 159 COCO stores WA ~5300 retail employees 3/0 Present in 10 states,
Slide 93: Holiday Acquisition to Deliver Material Synergies
HOLIDAY ACQUISITION TO DELIVER MATERIAL SYNERGIES ACT Proven Track Record of Delivering Direct Holiday Best in Class Retailer Brings Multiple Synergies – Expect $50-$60M in Synergies with the Areas to Deliver Reverse Synergies Holiday Acquisition Fully committed, dedicated cross resource team Global
Slide 94: M&A – Growing Our Platform
ALIMENTATION COUCHE-TARD INC. M&A – GROWING OUR PLATFORM Brian Hannasch, President and Chief Executive Officer
Slide 95: Growing Our Platform
GROWING OUR PLATFORM Investor Day Jan 2018 =n =
Slide 96: Deborah Hall Lefevre
DEBORAH HALL LEFEVRE Bon 2
Slide 97: Digital/Technology
ALIMENTATION COUCHE-TARD INC. DIGITAL/TECHNOLOGY Deborah Hall Lefevre, Chief Information Officer
Slide 98: About Me
ABOUT ME Investor Day Jan 2018
Slide 99: Digital is Creating New Ways to Live, Work and Play
Digital is creating new ways to LIVE, WORK AND PLAY
Slide 100: 100 Million Customers Will Shop in Augmented Reality by 2020
100 million customers will shop in augmented reality by 2020
Slide 101: Renault Uses Virtual Reality to Test Drive New Designs
Renault uses virtual reality to test drive new designs without any physical prototypes
Slide 102: Robotic Process Automation Software
DIGITAL A Robotic Process Automation Software Robot costs ~1/3 of an offshore employee
Slide 103: More Conversations with Robots Than with Spouse by 2020
By 2020 the average person will have more conversations with robots than with their spouse.
Slide 104: Our Digital Future
OUR DIGITAL FUTURE Deliver industry-leading digital programs …that win with customers, increase visits, drive overall value. Execute with focus and cost consciousness …targeting only the best ideas Create new ways of working …across all functions and geographies to deliver a global digital strategy
Slide 105: Our Business Is Digital
OUR BUSINESS IS DIGITAL Employee Experience Customer Experience & & Value Proposition Brand Promise Construction Operations Network, Procurement Warehousing Logistics & & Format & Sales & Service maintenance HSE Concept Convenience Backbone Stem Front-end Make it easy to Define right quality and del
Slide 106: We Will Unleash the Power of Data
WE WILL UNLEASH THE POWER OF DATA Greater understanding of customer behaviors More accurate demand predictions Optimized pricing, assortment, and product placement
Slide 107: Our Next Gen Retail Tech Is All About Making It Easy
OUR NEXT GEN RETAIL TECH IS ALL ABOUT MAKING IT EASY Easy access to Easy visits Easy tools customer insight Cloud enabled Mobile Hardware independent Internet of forecourt payments software Things App payment at In-store app Centralized Location based forecourt payment management marketing
Slide 108: Our Digital Future Is Bright
OUR DIGITAL FUTURE IS BRIGHT Digital everything Consistent operations, «ticking along» Standardization and super Tech ecosystem and Data local too focused on speed and agility
Slide 109: We Are Already Uniquely Positioned to Win
WE ARE ALREADY UNIQUELY POSITIONED TO WIN…. SCALE IN A FRAGMENTED INDUSTRY INDUSTRY TALENT LEARNING ORIENTATION & GROWTH MINDSET
Slide 110: Fuel
ALIMENTATION COUCHE-TARD INC. FUEL Alex Miller, Senior Vice President, Operations & Global Fuels
Slide 111: Positive Outlook for Liquid Fuel Demand
POSITIVE OUTLOOK FOR LIQUID FUEL DEMAND OECD COUNTRIES MODERATELY IMPACTED BY NATURAL GAS & ELECTRIC Worldwide light-duty vehicle energy consumption Worldwide plug-in electric vehicles as percent of light-duty vehicle stock Quadrillion Btu Percent 60 55 electricity natural gas Low PEV Penetration ca
Slide 112: Fuel Margins Have Minimal Correlation to Fuel Price
FUEL MARGINS HAVE MINIMAL CORRELATION TO FUEL PRICE MARGINS ARE GROWING US Road Transportation Fuel Margins (1) •Growing margins, with some volatility in the US •Minimal correlation between Fuel price and Margin •Margins impacted by: 17.0 21.7 20.2 22.9 Competition 18.8 18.1 18.6 Volatility 2012
Slide 113: Sizeable Fuel Operation
SIZEABLE FUEL OPERATION 17.5 Bn Pick-up at Delivery to 6.000 daily 11.400 Gallons 300 deliveries stores sold Terminals
Slide 114: Sourcing: Continuous Focus on Lowering Cost of Goods
SOURCING: CONTINUOUS FOCUS ON LOWERING COST OF GOODS MINIMIZE RISK AND WORKING CAPITAL Market Commercial Structure Access Excellence Fuel fully integrated Advanced market Consolidate and globally with focused knowledge enabled leverage our large sourcing team, through reach, shorts via structured ca
Slide 115: Logistics: Continuous Focus on Cost Leadership
LOGISTICS: CONTINUOUS FOCUS ON COST LEADERSHIP THROUGH OPERATIONAL EXCELLENCE Logistics unit Run Outs *) Days in Stock *) costs *): - 4% - 32% - 3% Centralized and fully integrated Leading IT solutions capitalizing Scalable, flexible and low capital Leveraging scale through Operations teams in low c
Slide 116: Winning with Fuel
WINNING WITH FUEL: • Forecourt Execution & Amenities • Differentiated Premium Fuels • Loyalty Alliances & Partners • Deliver on Speed, Easy Visit • Payment Development
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Slide 118: Norway as a Laboratory
ALIMENTATION COUCHE-TARD INC. NORWAY AS A LABORATORY Jacob Schram, Group President, European Operations
Slide 119: Fossil Cars Less Than 50% of 2017 Car Sales in Norway
FOSSIL CARS LESS THAN 50% OF 2017 CAR SALES IN NORWAY BEV% of total car sales1 (percent) Shares of total car sales2 (percent) Top 15 sold cars in Norway 20172 22 1. Volkswagen e-Golf, EV 20 2. BMW i3, EV 18 3. Toyota Rav 4, hybrid Battery 4. Tesla Model X, EV 16 Hybrid electric 14 cars and 5. Mitsub
Slide 120: EV Incentives in Norway Exempt VAT and Purchase Tax
IN NORWAY, EVS HAVE FOR LONG BEEN EXEMPT FROM VAT AND PURCHASE TAX, WHICH ON AVERAGE ACCOUNTS FOR ~50% OF THE VEHICLE COST INCENTIVES Free circulation, EV purchase Circulation tax e.g. tolls, incentives exemptions parking USA () () () AMERICA NORTH Canada () () Norway Netherlands Sweden
Slide 121: Fossil and EVs at Future Equivalent Price Have Initiated Norway as a Laboratory
FOSSIL AND EVS AT FUTURE EQUIVALENT PRICE HAVE INITIATED NORWAY AS A LABORATORY
Slide 122: Norway as a Laboratory Looks for New Income and New Ways to Run the Business
NORWAY AS A LABORATORY LOOKS FOR NEW INCOME AND NEW WAYS TO RUN THE BUSINESS PEOPLE & CONSTRUCTION & NETWORK FORMAT & SYSTEMS WAREHOUSING ORGANIZATION MAINTENANCE CONCEPT KPIS AND PROCUREMENT LOGISTICS OPERATIONS & HSE REPORTING MARKETING SALES & SERVICE CATEGORY SHARED SERVICE COOPERATION WITH ROBO
Slide 123: We Run Our Business on Two Clock Speeds
WE RUN OUR BUSINESS ON TWO CLOCK SPEEDS FUTURE BUSINESS CURRENT BUSINESS
Slide 124: An EV/AV Scenario Holds Opportunities for Circle K
AN EV/AV SCENARIO HOLDS OPPORTUNITIES FOR CIRCLE K FAST-CHARGING STATIONS HOME DELIVERY FRESH FOOD TO GO LOYALTY and 1:1 HOME & WORK CHARGING READY TO COOK MEALS COMMUNICATION FOODTRUCKS SNACKING EXPERT AUTOBUTLER FUTURE BUSINESS CURRENT BUSINESS
Slide 125: We Will Expand Our Convenience Thinking
WE WILL EXPAND OUR CONVENIENCE THINKING TO CAPTURE NEW BUSINESS OPPORTUNITIES On the go At site At home
Slide 126: We Explore New Formats and Concepts in Norway
WE EXPLORE NEW FORMATS AND CONCEPTS IN NORWAY AS A LABORATORY ILLUSTRATION BUSINESS IDEAS CONCEPT 1 CONCEPT 3 CONCEPT 4 CONCEPT 2
Slide 127: Our Network and Sites Are Well Positioned for Future Opportunities
OUR NETWORK AND SITES ARE WELL POSITIONED FOR FUTURE OPPORTUNITIES – THE LAST MILE TOWARDS THE CUSTOMER CAR WASH FRESH FOOD TO GO FORECOURT CHARGING
Slide 128: The On the Go Segment Could Represent New Business Opportunities
THE ON THE GO SEGMENT COULD REPRESENT NEW BUSINESS OPPORTUNITIES FOR CIRCLE K TOMORROW AND IN THE FUTURE ILLUSTRATION TOMORROW: STAND ALONE STORES IN THE FUTURE: STORE ON WHEELS
Slide 129: The Norwegian Charging Market Gives Us Opportunities
THE NORWEGIAN CHARGING MARKET GIVES US OPPORTUNITIES AT SITE, BUT ALSO AT HOME FORECAST 2025 % OF CHARGING* 76% HOME AT SITE 9% 6% WORKPLACE DESTINATION/ 9% STREET * Source: Norwegian EV association 2016 and Circle K analysis
Slide 130: Final Thoughts
ALIMENTATION COUCHE-TARD INC. FINAL THOUGHTS Brian Hannasch, President and Chief Executive Officer
Slide 131: Looking Ahead
LOOKING AHEAD TSe- 7 OmilesPLUS Power and acceleration Investor Day Jan 2018
Slide 132: June 14, 2018
132 June 14, 2018
Slide 133: Q&A
ALIMENTATION COUCHE-TARD INC. Q&A
Alimentation Couche-Tard — Investor Day (January 2018) on 6ix