Dollarama Inc. · TSX:DOL
Dollarama — Investor Presentation (December 2021)
40 slides from Dollarama's investor presentation, Dec 8, 2021
Slide 1: A leading Canadian value retailer
A leading Canadian value retailer Investor Presentation – Q3-FY2022 December 8, 2021
Slide 2: Forward-looking statements
Forward-looking statements This presentation and the accompanying oral presentation contain forward-looking statements about results, levels of activity, performance, goals or achievements of Dollarama and Dollarcity or other future events or developments that may affect Dollarama and Dollarcity whi
Slide 3: Serving Canadians with purpose
Serving Canadians with purpose Our vision Our purpose Our values To be the leading value To provide Canadians from all Entrepreneurial retailer in every market in walks of life with the best quality which we operate, and value on every dollar they Customer-focused providing customers with spend and
Slide 4: A leading Canadian value retailer
A leading Canadian value retailer (TSX: DOL) Recognized brand serving Canadians from all $4.0B 43.8% walks of life FY21 FY21 gross margin revenues as a % of sales Differentiated concept offering compelling value at multiple price points up to $4.00 6.3% 16.2% FY21 sales FY21 SG&A Consistent shopping
Slide 5: A growing reach and international footprint
A growing reach and international footprint 1,397 10 provinces 2,000 corporate-operated Unrivalled presence, Dollarama store Dollarama stores across conveniently located in target by 2031 Canada all Canadian provinces #1 80% and only national pure of Canadian households play dollar store chain withi
Slide 6: Competitive advantages
Competitive advantages Strong brand Differentiated concept Value proposition Operational excellence 98% brand recognition Broad assortment of products at Superior direct sourcing and Nimble operator with proven across Canada; sought-after multiple price points up to $4.00 buying capabilities, suppor
Slide 7: Committed to building a sustainable business
Committed to building a sustainable business – Priority areas and highlights Our people Our products Our supply chain Our operations Promote a dynamic Provide customers with Enhance vendor compliance Minimize environmental and inclusive workforce safe, quality products and engagement footprint and c
Slide 8: Pursuing our sustainability journey
Pursuing our sustainability journey – 2021+ goals and initiatives Our people Our products Our supply chain Our operations Promote a dynamic Provide customers with Enhance vendor compliance Minimize environmental and inclusive workforce safe, quality products and engagement footprint and climate risk
Slide 9: Clear strategy driving sustainable growth and value creation
Clear strategy driving sustainable growth and value creation 1 2 3 4 Maximize core Profitably grow Scale up Dollarcity Optimize capital allocation business Canadian footprint business in LATAM to drive returns • Maintain compelling • Grow Dollarama store • Grow footprint in the four • Actively manag
Slide 10: A strong core business
A strong core business 10 - Dollarama Investor Presentation Q3-FY2022
Slide 11: A diversified product mix offering compelling value
A diversified product mix offering compelling value Product categories 14% General merchandise Consumables Seasonal 42% $0.82-$4.00 Merchandise 44% sold at ten low fixed Electronics Cleaning supplies Christmas price points General merchandise Easter Consumables Hardware Confectionery Seasonal Hallow
Slide 12: Effective sourcing and merchandising
Effective sourcing and merchandising Product sourcing expertise and Efficient in-store built-in flexibility merchandising • Strong direct sourcing capabilities, • Clean, bright, compact four-wall reducing costs associated format with consistent offering and with intermediaries and increasing layout
Slide 13: Strong brand recognition and broad customer appeal
Strong brand recognition and broad customer appeal A value retail Serving Canadians shopping destination from all walks of life • Recognized for value for • Appeals to all money and convenience demographics and income ranges • Customers appreciate the breadth and depth • High representation of the p
Slide 14: Enhancing the service model and customer experience
Enhancing the service model and customer experience Queue line optimization Self check-outs • Optimized for increased • Roll out in higher traffic impulse item displays stores to accelerate • In over 1,225 stores; part transaction processing of new store plans • Now in 285+ stores Check-out counter
Slide 15: Optimizing processes and gaining efficiencies
Optimizing processes and gaining efficiencies Retail systems optimization Time management and training • POS systems • Kronos advanced scheduling • NCR POS terminals • Mobile apps • “GPS” training program Environmental efficiency Shrink management and • LED retrofits loss prevention • HVAC system up
Slide 16: Driving profitable growth in Canada
Driving profitable growth in Canada 16 - Dollarama Investor Presentation Q3-FY2022
Slide 17: Well-balanced, growing store network
Well-balanced, growing store network 1,397 stores in 10 Canadian provinces Head office and logistics Store footprint Store footprint activities centralized in by geography By building type Montreal area 8% 24% Atlantic Canada 21% 28% Québec Non-mall Ontario Mall 114 114 Western Canada 145 40 41 40%
Slide 18: Efficient and profitable network growth
Efficient and profitable network growth • Strong free cash flow generation to fund $2.4M organic network growth Average annual store sales within 2 years of opening • Efficient capital model requiring an avg. of $650K in leasehold improvements, fixtures and inventory, net of tenant allowance, for a
Slide 19: A robust evaluation process: path to 2,000-store target
A robust evaluation process: path to 2,000-store target Micro Macro Theoretical True potential potential potential potential Assessment of real estate Internal validation of Result of micro and Potential adjusted based on opportunities, population growth and competitive feasibility of assessment reg
Slide 20: Scaling up Dollarcity
Scaling up Dollarcity 20 - Dollarama Investor Presentation Q3-FY2022
Slide 21: Dollarcity, a high-potential LATAM value retailer
Dollarcity, a high-potential LATAM value retailer Compelling growth platform in dynamic LATAM 50.1% US$92.7M markets with appetite for DOL model DOL equity interest Total purchase price1; acquired in Q3-FY2020 immediately EPS Strong local partners and management team after 7-year partnership accreti
Slide 22: A growing footprint in key markets
A growing footprint in key markets Head office in Panama City 312 stores in 4 countries $1.6M Decentralized logistics operations Average store Guatemala annual sales 72 57 Panama El Salvador Colombia 180 312 Store footprint Store network growth 3 (Number of stores) 264 by geography 228 180 <1.0% P
Slide 23: Long-term target of 600 Dollarcity stores
Long-term target of 600 Dollarcity stores Maintain pace of growth; Build efficient and low-cost operating grow presence in key markets platform to support growth • Target of 600 Dollarcity stores • Building up logistics platform to in Colombia, Guatemala support growth plans – decentralized and El S
Slide 24: Dollarama vs. Dollarcity
Dollarama vs. Dollarcity DOLLARAMA DOLLARCITY Merchandise mix1 For the year ended For the quarter ended For the year ended For the quarter ended (based on annual retail value for respective latest full fiscal years) Jan. 31, 2021 Oct. 31, 2021 Dec. 31, 20203 Sep. 30, 20213 52% Number of stores 1,356
Slide 25: Financial metrics
Financial metrics 25 - Dollarama Investor Presentation Q3-FY2022
Slide 26: Robust financial performance
Robust financial performance THIRD QUARTER ENDED Y-O-Y FISCAL YEAR ENDED Y-O-Y (in millions of dollars, except per share amounts) Oct. 31, 20211 Nov. 1, 20201 Growth Jan. 31, 20212 Feb. 2, 20203 Growth Comparable store sales4 0.8% 7.1% 3.2% 4.3% Sales $1,122 % of sales $1,064 % of sales 5.5% $4,026
Slide 27: Best-in-class performance on key metrics
Best-in-class performance on key metrics Strong organic growth with low capital Balanced approach to operating margin Return on invested capital2 requirements LTM EBIT margin (%) (%) Growth and cash conversion (%) 10% 22,0 Dollarama 19.4% Last three fiscal years store count CAGR 8% Dollar General 12
Slide 28: Strong key metrics growth since IPO
Strong key metrics growth since IPO Store count Sales (Number of stores) ($M) 1 397 1 291 1 356 1 225 4 026 4 210 1 095 1 160 3 549 3 787 955 1 030 2 963 3 266 874 785 2 650 652 704 2 331 1 859 2 065 1 420 1 603 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22-YTD FY11 FY12 FY13 FY14 F
Slide 29: Best-in-class margin since IPO
Best-in-class margin since IPO EBITDA margin EBIT margin (%) (%) 30,4% 29,3% 23,1% 23,8% 22,9% 28,1% 28,9% 20,7% 21,8% 21,4% 22,0% 22,5% 23,7% 25,3% 16,3% 17,3% 17,2% 18,1% 19,1% 19,5% 19,8% 14,5% 16,5% 18,4% 2 2 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 1 FY22-LTM FY11 FY12 FY13 FY14
Slide 30: A balanced approach to capital allocation
A balanced approach to capital allocation Invest in organic growth Return capital to shareholders • New stores (avg. of 70 net new stores opened annually in • Maximize shareholder returns with a focus on value- last 10 fiscal years) enhancing share buybacks (over 37% of public float repurchased sinc
Slide 31: Returning capital to shareholders
Returning capital to shareholders $4.7B Uses of cash (in millions of dollars) 862 returned to shareholders in 786 752 share repurchases since FY13 670 Dividends 584 Share repurchases 478 813 381 331 705 741 625 $471M 187 436 533 returned to shareholders in 327 142 293 dividends since FY12 156 13 87
Slide 32: Actively managed capital structure
Actively managed capital structure 89% $897M Debt structure as at Q3-FY2022 fixed rate debt, available liquidity 11% floating rate debt1 ($97M cash + $800M undrawn and available under credit facility)2,3 5-Year Fixed 3.550% 5-Year 8-Year $500M Fixed Fixed 2.4% 4.3 5.5-Year 1.871% $375M 7-Year Fixed
Slide 33: Strong track record of shareholder value creation
Strong track record of shareholder value creation Stock performance since January 31, 2011 1450 1350 843.4% 1250 Dollarama 10-year total 1150 TSX Capped Consumer Discretionary shareholder return1 Index (Total Cumulative Return of a $100 investment) 1050 950 71.7% 850 5-year total 750 650 shareholder
Slide 34: Appendix
Appendix 34 - Dollarama Investor Presentation Q3-FY2022
Slide 35: A seasoned board and management team
A seasoned board and management team Executive officers Neil Rossy President and Chief Executive Officer Board of directors Johanne Choinière Stephen Gunn Nicholas Nomicos Chief Operating Officer Chair of the Board Managing Director Corporate Director Nonantum Capital Partners Nicolas Hien Joshua Be
Slide 36: Dollarama through the years
Dollarama through the years 1992 2004 2009 2011 2012 2013 Dollarama founded Investment by IPO (TSX:DOL) Sale by Bain Capital Introduction of Beginning of as single-price point Bain Capital of remaining equity $2.50 and $3.00 commercial 585 stores in price points partnership with retail chain by Larr
Slide 37: DOL vs. Canadian dollar store landscape
DOL vs. Canadian dollar store landscape Three-year store count Dollarama vs. next four pure play competitors 1 ~6.0x larger than our next largest pure Thousands of people per 1 600 play competitor Dollarama store2 1 397 1 400 1 333 in Canada 1 271 36 1 200 27 22 22 1 000 800 ~2.8x 600 more Dollaram
Slide 38: DOL vs. US pure play dollar stores
DOL vs. US pure play dollar stores DOLLARAMA DOLLAR GENERAL DOLLAR TREE LTM revenues ($ millions) C$4,209.5 US$33,983.5 US$26,008.5 LTM EBITDA ($ millions) C$1,215.8 US$3,921.0 US$2,624.4 Number of stores 1,397 17,915 15,966 SCALE Average sales / store ($ millions) C$3.1 US$1.9 US$1.6 Average store
Slide 39: Dollarcity governance framework
Dollarcity governance framework Dollarama (50.1%) Dollarama board of directors • Majority representation on Dollarcity Board of Directors, with certain strategic and operational decisions subject to 100% stockholder approval under current ownership threshold, such as those decisions related to capit
Slide 40: Thank you
Thank you Dollarama Inc. 5805 Royalmount Ave. Montreal, QC H4P 0A1