North West Company Inc. · TSX:NWC
North West — The North West Company — Shareholder Meeting (2016)
39 slides from North West's shareholder meeting presentation, 2016
Slide 1: Top Work, Top Results: 2016 Annual General Meeting of Shareholders
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 2: Executive Vice-President and Chief Financial Officer Remarks
Top Work, Top Results Executive Vice-President and Chief Financial Officer Remarks
Slide 3: Strong Sales Growth
Strong Sales Growth • 2015 Financial Highlights Sales ($ in millions) Canada International $1,796 $1,624 $1,543 ! 16th consecutive year of growth ! Strong same store food sales ! International sales +21.3% ! Positive foreign exchange impact
Slide 4: International Drives EBITDA Improvement
International Drives EBITDA Improvement • 2015 Financial Highlights EBITDA ($ in millions) Canada International $151.3 $138.3 $137.8 ! International +$16.2 million, +43.7% ! Positive foreign exchange impact ! Canada –$2.7 million, –2.6% ! Cost-U-Less and Giant Tiger deliver largest gains
Slide 5: International Leads Net Earnings Growth
International Leads Net Earnings Growth • 2015 Financial Highlights Net Earnings ($ in millions) ! Sales growth ! Gross profit rate improvement ! Partial offset by higher expenses
Slide 6: Top Work, Top Results
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 7: Investing to Sustain and Grow
Investing to Sustain and Grow • 2015 Financial Highlights Capital Expenditures & Return on Net Assets CAPEX ($ in millions) $90.0 $76.0 ! Top market store renovations ! Top category investments $43.2 $52.3 ! Replace core retail technology 2013 2014 2015 2016 Forecast
Slide 8: Investing to Sustain and Grow
Investing to Sustain and Grow • 2015 Financial Highlights Capital Expenditures & Return on Net Assets CAPEX ($ in millions) $90.0 Return on Net Assets (%) $76.0 ! Top market store renovations ! Top category investments $43.2 $52.3 ! Replace core retail technology ! Track record of results 20.0 18.4
Slide 9: Low Leverage, Additional Debt Capacity
Low Leverage, Additional Debt Capacity • 2015 Financial Highlights Debt Undrawn Capacity Debt, Leverage & Undrawn Capacity Debt-to-EBITDA ($ in millions) ! Stable debt-to-EBITDA 1.3 1.5 1.5
Slide 10: Low Leverage, Additional Debt Capacity
Low Leverage, Additional Debt Capacity • 2015 Financial Highlights Debt Undrawn Capacity Debt, Leverage & Undrawn Capacity Debt-to-EBITDA ($ in millions) ! Stable debt-to-EBITDA ! Short-term increase in leverage 1.3 1.5 1.5
Slide 11: Low Leverage, Additional Debt Capacity
Low Leverage, Additional Debt Capacity • 2015 Financial Highlights Debt Undrawn Capacity Debt, Leverage & Undrawn Capacity Debt-to-EBITDA ($ in millions) ! Stable debt-to-EBITDA ! Short-term increase in leverage 1.3 1.5 1.5 ! Increased capacity by $100 million in Q1-16 ! Financial capacity to suppor
Slide 12: Long-term Superior Shareholder Returns
Long-term Superior Shareholder Returns • 2015 Financial Highlights NWC Total Return Performance (% at January 31) TSX Composite 190 ! 20.2% annual total return in 2015 ! 3.4% increase in dividends 165 ! NWC 5-year CAGR 12.8% 140 ! 25.0% increase in dividends since 2011 115 100 90 2011 2012 2013 2014
Slide 13: Top Work, Top Results
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 14: Top Line Growth Continues
Top Line Growth Continues • 2016 First Quarter Performance Sales ($ in millions) Canada International $439 $414 $376 ! Total sales +$25 million, +6.0% ! Food sales +4.6% ! Positive foreign exchange impact
Slide 15: International Drives EBITDA Performance
International Drives EBITDA Performance • 2016 First Quarter Performance EBITDA ($ in millions) Canada International $37.6 $34.4 $30.2 $10.1 $12.8 ! International EBITDA +$2.7 million $6.4 ! Canada EBITDA +1.9% ! Positive foreign exchange impact $23.8 $24.3 $24.8 Q1 2014 Q1 2015 Q1 2016
Slide 16: Continued Net Earnings Growth
Continued Net Earnings Growth • 2016 First Quarter Performance Net Earnings ($ in millions) $17.8 $15.7 ! EBITDA growth ! Lower effective tax rate $12.7 ! 13.3% increase in Net Earnings Q1 2014 Q1 2015 Q1 2016
Slide 17: Dividend Growth
Dividend Growth • 2016 First Quarter Performance Quarterly Dividends ($ per share) ! Track record of growth ! Potential for future increase
Slide 18: Top Work, Top Results
Top Work, Top Results 2016 Annual General Meeting of Shareholders
Slide 19: President & CEO Remarks
Top Work, Top Results President & CEO Remarks
Slide 20: 2015 Milestones
2015 Milestones • Top Category plans in action • 11 Top Markets completed • Top People launched • International share gains • Giant Tiger agreement
Slide 21: 2016 Environment
2016 Environment • Canadian budget is a positive
Slide 22: 2016 Environment
2016 Environment • Canadian budget is a positive • U.S. still driving tourism
Slide 23: 2016 Environment
2016 Environment • Canadian budget is a positive • U.S. still driving tourism • Low oil = net positive
Slide 24: 2016 Environment
2016 Environment • Canadian budget is a positive • U.S. still driving tourism • Low oil = net positive • Acquisition opportunities
Slide 25: 2016-18 Performance Drivers
2016-18 Performance Drivers Top People • Diversity = enterprising roles • Store focused • From recruitment to management tools
Slide 26: Top Categories: Incremental Sales and Gross Profit
Top Categories Pharmacy Deli/HMR Incremental Sales - Millions Tim Hortons Center Store Perishable Convenience Financial Furnishings Services Motorsports Sporting Goods Incremental GP - Millions
Slide 27: Top Categories: Convenience
Top Categories Convenience • Extended hours/C-store assortment • Store within store • Stand alone
Slide 28: Top Categories: Food Service
Top Categories Food Service • Tim Hortons • Proprietary • Other branded
Slide 29: Top Categories: Pharmacy
Top Categories Pharmacy • OTC • In-store pharmacy • Remote dispensing • Telepharmacy support
Slide 30: Top Categories: Big Ticket
Top Categories Big Ticket • Furniture • Motorized • Dedicated staff and space
Slide 31: Top Markets
Top Markets Work Flow Space Category Allocation Re-Sizing Local Product & Store Store Market Service Recruitment Structure Re-launch Opportunity Offer Design Construction
Slide 32: Top Markets
Top Markets • 2016-17 pace is slower • This enables: • Construction efficiencies • Best practice iterations • More capital for other projects
Slide 33: Other Key Investments
Other Key Investments • Logistics
Slide 34: Other Key Investments
Other Key Investments • Logistics • IT system investment
Slide 35: Other Key Investments
Other Key Investments • Logistics • IT system investment • New stores
Slide 36: RiteWay Acquisition
RiteWay Acquisition ee COMPANY er ( BRitewWa Caribbean te ) ie te Way Food Markets s British Virgin Islands G t. Thomas. ® — rand Cayman St. Croix St. Maarten | | eee Curacao Barbados
Slide 37: RiteWay Acquisition
RiteWay Acquisition • Nine stores • =50% increase in region sales • Major presence in Road Town, BVI
Slide 38: Strength through diversity
• Strength through diversity • Acceleration of top programs • New growth through logistics, IT and stores
Slide 39: Top Work, Top Results
Top Work, Top Results 2016 Annual General Meeting of Shareholders