Slide 1: Proprietary and confidential. © 2018 Aimia. All rights reserved.
Proprietary and confidential. © 2018 Aimia. All rights reserved. 1
Slide 2: Forward-Looking and Cautionary Statements
FORWARD-LOOKING AND CAUTIONARY STATEMENTS Forward-looking statements are included in this presentation. These forward-looking statements are identified by the use of terms such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would",
Slide 3: 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 4: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION* Three Months Ended Nine Months Ended September 30, September 30, (in millions of Canadian dollars, except per share information) 2018 2017 2018 2017 Operating income (loss) 2.3 (18.3) (1.5) (54.4) Depreciation and amortization 12.8 9.1 40.4 28.2 Amortization of Accum
Slide 5: Q3 2018 Income Statement
Q3 2018 INCOME STATEMENT Three Months Ended Nine Months Ended September 30, September 30, (in millions of Canadian dollars) 2018 2017 2018 2017 Revenue 372.7 350.5 1,154.1 1,114.2 Cost of sales Cost of rewards and direct costs 218.1 201.8 686.8 643.4 Depreciation and amortization 12.8 9.1 40.4 28.2
Slide 6: ROIC Reconciliation
ROIC RECONCILIATION* Twelve Months Ended, September 30, (in millions of Canadian dollars unless otherwise noted) 2018 2017 Calculation of adjusted operating income after taxes Operating loss (6.2) (144.2) Depreciation, amortization & impairment charges 215.0 236.8 Operating income excluding deprecia
Slide 7: Q3 2018 vs 2017 Financial Summary
Q3 2018 VS 2017 FINANCIAL SUMMARY Three Months Ended September 30, Coalitions ILS Consolidated 2017 YoY % (excl. Other (excl. Other 2018 2017 2018 2017 2018 2017 Businesses) (1) YoY % Businesses) (1) Gross Billings 323.7 336.5 39.5 42.6 362.8 380.4 378.7 -4.6% -4.2% Total revenue 338.9 313.7 34.2 35
Slide 8: Q3 2018 Highlights
Q3 2018 HIGHLIGHTS November 14, 2018 Proprietary and confidential. © 2018 Aimia. All rights reserved. 8
Slide 9: Today's Speakers
TODAY’S SPEAKERS Jeremy Rabe Chief Executive Officer Mark Grafton Chief Financial Officer . © 2018 Aimia. All rights reserved. 9
Slide 10: Q3 Financial Highlights
Q3 FINANCIAL HIGHLIGHTS Mark Grafton Proprietary and confidential. © 2018 Aimia. All rights reserved. 10
Slide 11: Q3 and 9M 2018 Highlights
Q3 AND 9M 2018 Highlights* (CAD$ M) (1)Variance vs Q3 2017 consolidated results excluding Other Businesses. Other Consolidated (excl. Other Businesses)(1) Businesses include the results of the U.S. Channel and Q3 2018 YoY % 9M 2018 YoY % Employee Loyalty (“CEL”) business, the New Zealand business an
Slide 12: Solid Performance
SOLID PERFORMANCE Across investments and operating business INVESTMENTS OPERATING BUSINESSES Valuable investments and strong COALITIONS operating businesses INSIGHTS & LOYALTY SOLUTIONS . © 2018 Aimia. All rights reserved. 12
Slide 13: Cardlytics
CARDLYTICS Cardlytics' share price performance since IPO AIMIA OWNS $30.00 4,000,000 3.0M $25.00 3,500,000 Cardlytics $20.00 $25.04 3,000,000 2,500,000 shares $15.00 $13.37 Sep 28th close $18.28 2,000,000 Nov 12th $10.00 First close 1,500,000 MARKET VALUE trading day 1,000,000 $5.00 AT SEPT 30TH: 50
Slide 14: Club Premier
CLUB PREMIER AIMIA OWNS Club Premier financial track record 215.5 48.9% of PLM 163.1 183.2 180.8 PLM owns 43.8 48.1 77.5 63.7 Club Premier, Strategic World class the leading FY 2015 Technology FY 2016 FY 2017partnerships 9M 2018 Gross Billings from loyalty units (USD million) AE (USD million) coalit
Slide 15: Coalitions Gross Billings
COALITIONS Gross Billings* (CAD$ M) Reduced (3.8)% YoY contribution in the financial sector and $336.5 decreases in $323.7 non-air travel 15.5 and retail sector 16.4 at Aeroplan driving lower sale of loyalty units, 321.0 partially offset 307.3 by 6% increase in loyalty services and other Gross Billi
Slide 16: Insights and Loyalty Solutions Gross Billings
INSIGHTS AND LOYALTY SOLUTIONS Gross Billings* (CAD$ M) 60.0 (7.3)% YoY Recurring loyalty 50.0 $42.6 platforms now $39.5 account for 40.0 40% of ILS Gross Billings 30.0 31.9 30.5 20.0 10.0 10.7 9.0 0.0 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 * THIS SLIDE CONTAINS NON-GAAP FINANCIAL M
Slide 17: Coalitions OPEX and Adjusted EBITDA margin
COALITIONS OPEX and Adjusted EBITDA margin* (CAD$ M, except percentages) Operational (1)(2) Coalitions OPEX and AE margin (normalized) efficiencies due mainly to lower 9M 2017 AE margin: 17.5% 9M 2018 AE margin: 20.7% headcount 180 28.0% driving lower 160 23.0% OPEX in the 140 20.0% 19.5% quarter an
Slide 18: ILS OPEX and Adjusted EBITDA margin
INSIGHTS & LOYALTY SOLUTIONS OPEX and Adjusted EBITDA margin* (CAD$ M, except percentages) Operational ILS OPEX and AE margin (normalized) (1)(2) efficiencies due mainly to lower 180 40.0% headcount 9M 2017 AE margin: (14.5)% 9M 2018 AE margin: (20.2)% 160 20.0% driving lower 140 0.0% OPEX in the qu
Slide 19: 9M 2018 GB to FCF - Continuing operations
9M 2018 GB to FCF - Continuing operations*(1) Positive FCF generation in the quarter (CAD$ M) (709.5) 1,087.7 (299.8) $14.2 (0.1) (6.0) (18.9) $15.0 82.6 Gross Billings Cost of rewards OPEX before Distribution from Cash Net cash Capex Working capital Free Cash and direct costs share-based equity-acc
Slide 20: Coalitions - Aeroplan
COALITIONS - AEROPLAN Actual and forecast redemption volumes Redemption volume (billion miles) 30.0 Redemption 9M 2017: 3.5% YoY 9M 2018: 7.7% YoY levels tracking 25.0 within the range of 20.0 outcomes assumed in 15.0 2018 guidance 10.0 9.6% 7.7% 5.5% 5.0 YoY YoY YoY 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 21: Raising 2018 AE margin guidance
Q3 2018 Raising 2018 AE margin guidance* CAD$ M 2017(1) 2018 guidance The guidance is based on current expectations around redemption expense at Aeroplan and is on an IFRS 15 basis and assumes Aimia includes the Coalitions Around Aeroplan program until December 31, 2018. The $1,341 Gross Billings(2)
Slide 22: Strategic Update
STRATEGIC UPDATE Jeremy Rabe Proprietary and confidential. © 2018 Aimia. All rights reserved. 22
Slide 23: Aeroplan Transaction update
AEROPLAN Transaction update Air Canada, The Toronto-Dominion Bank Canadian Imperial Bank of Aimia continues Commerce, Visa Canada Corporation (collectively, the Consortium) to progress and Aimia Inc. entered into an agreement in principle for the acquisition of Aimia's Aeroplan loyalty business on A
Slide 24: Loyalty Services Pedigree
LOYALTY SERVICES Pedigree Working with leading blue chip clients across 500M 1BN+ 200+ 140M different verticals global transactions and interactions program messages delivered clients members around the world per month annually Recognized as a global We scored top marks in the latest Forrester Loyal
Slide 25: Loyalty Services Clients around the world
LOYALTY SERVICES Clients around the world Working with leading blue chip clients across different verticals, our loyalty platforms and marketing services help clients create a unique customer journey and experience . © 2018 Aimia. All rights reserved. 25
Slide 26: Key Q3 2018 Takeaways
KEY Q3 2018 TAKEAWAYS • Ongoing progress towards finalizing the Aeroplan transaction • Continuing to focus on delivering flexibility, value and an improved member experience to its 5 million engaged Aeroplan members Making progress • Customer focused realignment of loyalty around strategic services
Slide 27: Q&A
Q&A Proprietary and confidential. © 2018 Aimia. All rights reserved. 27
Slide 28: Solid Performance
SOLID PERFORMANCE Strong across operating business and investments OPERATING BUSINESSES INVESTMENTS COALITIONS Within the Coalitions segment, Aimia Purchase intelligence leader As the loyalty program for owns and operates the Aeroplan partnering with more than 2000 AirAsia, AirAsia BIG Loyalty Progr
Slide 29: 9M 2018 Gross Billings
9M 2018 GROSS BILLINGS* (in millions of Canadian dollars and reported YoY variance (%) ) Gross Billings (1) AIR MILES MIDDLE EAST down 3.4% on $31.3 a year to date 3% of total Gross Billings INSIGHTS & LOYALTY SOLUTIONS basis $121.8 11% of total Gross Billings ILS AND ISS $90.5 8% of total Gross Bil
Slide 30: Q3 2018 GB to FCF - Continuing operations
Q3 2018 GB to FCF - Continuing operations*(1) Positive FCF generation in the quarter (CAD$ M) $362.8 ($225.0) ($98.5) $5.4 $0.7 $1.0 ($8.1) ($0.8) $37.5 Gross Billings Cost of rewards OPEX before Distribution from Cash Net cash Capex Working capital Free Cash and direct costs share-based equity-acco
Slide 31: Q3 2018 AE to FCF - Continuing operations
Q3 2018 AE to FCF - Continuing operations*(1) (CAD$ M) ($14.1) $3.3 $1.0 ($8.1) $0.7 ($0.8) $55.5 $37.5 Adjusted Change in Stock-based Cash Net cash Capex Working capital Free Cash EBITDA FRC compensation taxes interest (continuing and other Flow received operations) (continuing operations) Q3 2017:
Slide 32: 9M 2018 AE to FCF - Continuing operations
9M 2018 AE to FCF - Continuing operations*(1) (CAD$ M) ($74.1) $3.6 ($0.1) ($6.0) ($18.9) $15.0 $163.1 $82.6 Adjusted Change in Stock-based Cash Net cash Capex (continuing Working capital Free Cash EBITDA FRC compensation taxes interest paid operations) and other Flow (continuing operations) 9M 2017
Slide 33: Q3 2018 Adjusted EBITDA trends
Q3 2018 Adjusted EBITDA trends* (CAD$ M) (1) Consolidated results excluding Other Businesses normalized to exclude restructuring expenses. Other Consolidated excluding Other Businesses AE margin % Businesses include the results of the U.S. Channel and Employee Loyalty (normalized)(1) (“CEL”) busines
Slide 34: Free Cash Flow Before Dividends Paid
FREE CASH FLOW BEFORE DIVIDENDS PAID – CONTINUING OPERATIONS*(1) (CAD$ M) Significant growth in FCF 33.5% YoY generation in the quarter 37.5 28.1 (1) Consolidated results excluding Other Businesses. Other Businesses include Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 the results
Slide 35: Building financial flexibility
Q3 2018 Building financial flexibility CASH & INVESTMENTS (CAD$ M) Sept 30, 2018 (1) As of Sept 30, 2018, Aimia had a $208.0 million revolving credit facility maturing on April 23, 2020. Interest Cash and cash equivalents 273.9 rates on this facility are tied to the Corporation’s credit ratings and
Slide 36: Aeroplan Accumulation pattern
AEROPLAN Accumulation pattern Miles accumulated y/y% Reduced miles FY 2016: 2.4% FY 2017 1.8% accumulation Ex-promo: 1.7% Ex-promo: 3.3% mostly due to lower active 4.8% cards 3.9% 3.3% 2.0% -4.2% -5.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 Miles accu
Slide 37: Aeroplan Redemption and unit cost trends
AEROPLAN Redemption and unit cost trends Mileage burn and unit cost Favourable cost per mile trend Average unit cost in Q3 2018 up year 15.0% 1.00 13.0% 0.98 0.98 over year from 11.0% unfavourable 9.0% impact of 7.0% 5.5% 5.0% 4.2% 4.7% foreign 3.0% exchange and 1.0% product mix -1.0% -3.0% -5.0% Q1
Slide 38: Aeroplan Redemption trends
1-Jan-18 8-Jan-18 (CAD$ M) 15-Jan-18 22-Jan-18 29-Jan-18 5-Feb-18 12-Feb-18 19-Feb-18 AEROPLAN 26-Feb-18 5-Mar-18 12-Mar-18 19-Mar-18 26-Mar-18 2-Apr-18 9-Apr-18 16-Apr-18 Redemption trends 23-Apr-18 30-Apr-18 7-May-18 14-May-18 21-May-18 28-May-18 YTD Sept 2018 4-Jun-18 11-Jun-18 18-Jun-18 25-Jun-1
Slide 39: Aeroplan Burn/earn ratio
AEROPLAN Burn/earn ratio Burn/earn ratio Improving accumulation trend 9M 2016: B/E 88% 9M 2017: B/E 89% 9M 2018: B/E 100.0% 120% 110% 100% 96% 90% 86% 84% 80% 70% 60% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 . © 2018 Aimia. All rights reserved. 39
Slide 40: Aeroplan Revenue
AEROPLAN Revenue CAD$ M Q3 2018 Q3 2017 Miles Revenue 287.7 265.4 Breakage Revenue 34.5 32.9 Other Revenue 10.2 9.1 Total Revenue 332.4 307.4 . © 2018 Aimia. All rights reserved. 40
Slide 41: Aeroplan Cost of rewards trends
AEROPLAN Cost of rewards trends (CAD$ M) Incremental redemption 9M 2016: $612 9M 2017: $632 9M 2018: $679 expense up $47 million (or 7% YTD in 9M 2018) 200 216 192 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 . © 2018 Aimia. All rights reserved. 41
Slide 42: Q3 2018 Financial Highlights
Q3 2018 FINANCIAL HIGHLIGHTS* Coalitions (1) Before depreciation and Periods ended Sept 30, Three months ended amortization. CAD$ M 2018 2017 Reported Reported Gross Billings Aeroplan 317.1 329.9 Loyalty Services & Other 8.8 9.1 Intercompany eliminations (2.2) (2.5) Total revenue Aeroplan 332.4 307.
Slide 43: Gross Billings by major partner
Q3 2018 FINANCIAL HIGHLIGHTS Gross Billings from sale of loyalty units by major partner Other Other CIBC Other 11.6% CIBC CIBC 13.8% 20.0% 19.8% Air Air Canada Sainsbury’s Canada 19.6% 20.4% Air Canada Q3 2017 Q3 2018 $331.7 $316.3 TD TD AMEX 32.1% AMEX AMEX 31.3% TD 16.7% 14.7% . © 2018 Aimia. All
Slide 44: Foreign Exchange Rates
FOREIGN EXCHANGE RATES Q3 2018 Q3 2017 % Change AVERAGE AVERAGE PERIOD END AVERAGE AVERAGE PERIOD END AVERAGE AVERAGE PERIOD END QUARTER YTD RATE QUARTER YTD RATE QUARTER YTD RATE £ to $ 1.7026 1.7386 1.6804 1.6407 1.6662 1.6686 3.8% 4.3% 0.7% AED to $ 0.3557 0.3503 0.3513 0.3414 0.3559 0.3390 4.2%
Slide 45: Accounting: Key things to remember
ACCOUNTING: Key things to remember* Gross Billings from the sale of Loyalty Units: Revenue Recognition: Recognize upon issuance of Loyalty Units Recognize upon redemption of Loyalty Units Key indicator of top line growth Breakage Recognition: Liabilities Recognition: Recognize upon redemptio
Slide 46: Contact
CONTACT Karen Keyes Senior Vice President / Investor Relations T +1 647 459 3506 E karen.keyes@aimia.com Proprietary and confidential. © 2018 Aimia. All rights reserved. 46
Slide 47: Proprietary and confidential. © 2018 Aimia. All rights reserved.
Proprietary and confidential. © 2018 Aimia. All rights reserved. 47