Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Presentation (September 2023)
65 slides from Alimentation Couche-tard's investor presentation, September 2023
Slide 1: Investor Presentation
ALIMENTATION COUCHE-TARD INVESTOR PRESENTATION September 2023 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and the accompanying oral presentation (“the presentation”) contain forward-looking statements within the meaning of the securities laws in Canada. Any statement in this presentation that is not a statement of historical fact may be deemed to be a forward
Slide 3: A History of Entrepreneurship & Growth
A HISTORY OF ENTREPRENEURSHIP & GROWTH 2012 2016 2022 Alain Bouchard 2001 Expansion into Europe Expansion in Ireland 2020 Started EV journey Our Founder Entry into U.S. Acquired Statoil Fuel & Canada Grow into Asia in NA & Retail, a leading Acquired Topaz, a leader in Ireland Acquired Circle K Launc
Slide 4: Values We Live By
VALUES WE LIVE BY We work together to make it easier for We treat the business as our own. We our customers and colleagues. We stay seek out problems, act quickly to solve humble and celebrate shared them, and deliver better results. We take successes. We have fun and care for responsibility, and wh
Slide 5: 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 6: Recent Highlight - ACT to Host 2023 Analyst and Investor Conference on October 11th
RECENT HIGHLIGHT - ACT TO HOST 2023 ANALYST AND INVESTOR CONFERENCE ON OCTOBER 11TH ➢ What: 2023 Analyst and Investor Conference ➢ When: 8 a.m. PT (11 a.m. EDT) on Wednesday, October 11, 2023 ➢ Where: Phoenix, Arizona or webcast on the Events & Presentations - Couche-Tard Corpo page of Couche-Tard’s
Slide 7: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 7
Slide 8: 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 ~15%2 since 2013 and profitable since IPO in 1986. ➢ Track record of generating shareholder value with average RO
Slide 9: Global Leader in Fuel & Convenience Retail
GLOBAL LEADER IN FUEL & CONVENIENCE RETAIL Store Count Our People Countries / Territories 14,468 ~128,000 25 incl. int’l licensees globally incl. int’l licensees Fuel Gallons Sold Customers Served Business Units ~37 million ~8.5 million 27 per day per day globally Sites Offering Fresh Food Fast Site
Slide 10: Revenue and Gross Profit Mix
REVENUE AND GROSS PROFIT MIX Revenue 12% 2% Geographic Mix Gross Profit(1,2) 24% Product Mix 12% 1% 21% 17% 49% 49% 71% 66% 74% 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. Not
Slide 11: Investment Highlights
INVESTMENT HIGHLIGHTS Merch. SSS - US1 SS Volume - US1 Net Earnings Growth Y/Y3 +2.1% +0.7% (4.4%) Adj. EBITDA Growth Y/Y2,3 Merch. SSS - Europe and Other Regions 2 SS Volume - Europe and Other Regions 1 Diluted EPS Growth Y/Y3 +0.7% Q1- +2.7% (1.5%) 0.0% FY’24 Leverage Ratio 2,4 Merch. SSS - Canada
Slide 12: 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 12
Slide 13: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 13
Slide 14: Snapshot of U.S. Fuel & Convenience Industry
SNAPSHOT OF U.S. FUEL & CONVENIENCE INDUSTRY Population of U.S. Convenience Stores Store Type Single Stores Chain Stores 2022 150,174 2006 total Non-Fuel 145,119 stores 21% total 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 59,751 54,526 58,690
Slide 15: Attractive Channel Within Broader Retail
2005 $151.1 2006 $163.6 2007 $168.5 Source: NACS State of the Industry Report of 2022 Data. 2008 $173.9 2009 $182.4 2010 $190.4 (in billions) 2011 $195.0 2012 $199.3 Alimentation Couche-Tard | Investor Presentation 2013 $204.0 2014 $213.5 2015 $225.8 CAGR 4.2% 2016 $233.0 Industry Inside Sales 2017
Slide 16: ... and Recession Resilient
… AND RECESSION RESILIENT Industry Inside Sales (in billions) Dot-Com Bubble Great Recession $302.9 +5% +8% $277.9 $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 20
Slide 17: ACT Performance During Past Recessions
(10.0%) 5.0% 10.0% 15.0% 20.0% 25.0% - (5.0%) (30.0%) (20.0%) (10.0%) 10.0% 20.0% - Q2-FY04 Q2-FY04 Q3-FY04 Q3-FY04 Q4-FY04 Q4-FY04 Q1-FY05 Q1-FY05 Q2-FY05 Q2-FY05 Q3-FY05 excluding service revenues. Q3-FY05 Q4-FY05 Q4-FY05 Q1-FY06 Q1-FY06 Q2-FY06 Q2-FY06 Q3-FY06 Q3-FY06 Q4-FY06 Q4-FY06 Q1-FY07 Q1-F
Slide 18: Total RTF Gross Profit Dollars Strongly Correlated to OpEx
TOTAL RTF GROSS PROFIT DOLLARS STRONGLY CORRELATED TO OPEX 1, 2 3 Fuel Gross Profit $ OpEx $2,500.0 $2,000.0 In millions of USD $1,500.0 $1,000.0 $500.0 $- Total RTF Gross Profit dollars help offset increases in Operating Expenses 1 Please refer to the “Non-IFRS Measures” section of this presentatio
Slide 19: 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% 41% 50% 53% 36% 31% 46% 40% 37% 30% 32% 29% 13% 26% 10% 20% 22% 6% 4% 3% 3% 15% 10% 2% 2% 2% 2% 0% 0% Conve
Slide 20: U.S. National RTF Margin Trending Higher
U.S. NATIONAL RTF MARGIN1 TRENDING HIGHER 2020 - 2022 average: 36.6 cpg 43.6 2008 - 2013 average: 17.2 cpg 2014 - 2019 average: 22.2 cpg 35.2 cents per gallon 30.9 24.8 24.0 22.4 21.8 20.4 19.9 18.5 18.4 19.0 18.1 16.3 13.1 CAGR 6.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 21: US C-Store RTF Breakeven Gross Margin
US C-STORE RTF BREAKEVEN GROSS MARGIN (CPG)1,2 60.0 56.0 52.0 48.0 44.0 40.0 36.0 32.0 28.0 24.0 +10.4 20.0 16.0 +8.8 12.0 8.0 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 ACT B/E US c-store bottom quartile B/E US c-store bottom quartile actual Fuel breakeven margins have increased and the spread betwe
Slide 22: Cost Headwinds Favour Larger Chains
COST HEADWINDS FAVOUR LARGER CHAINS Card Costs to Industry Average Associate Wage $19.5 (in billions) (in dollars per hour) $14.18 $12.80 $13.5 $11.8 $11.4 $11.2 $11.2 $11.49 $11.1 $11.1 $10.7 $11.30 $10.1 $10.0 $9.5 $10.74 $9.0 $8.4 $10.19 $7.6 $9.99 $7.4 $6.6 $9.44 $5.4 $9.02 $8.76 $8.56 $3.8 $8.5
Slide 23: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 23
Slide 24: 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. ➢ Solid balance sheet and
Slide 25: A Global Family of Merchants
A GLOBAL FAMILY OF MERCHANTS 25 COUNTRIES SITES TOTAL 14,421 OUR UNITED-STATES 7,055 CANADA 2,184 EUROPE AND OTHER REGIONS1 3,098 INTERNATIONAL2 2,084 Core network International licensees Note: Store count as of July 23, 2023. Includes 986 automats 1 Europe and Other Regions store count includes 388
Slide 26: 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 27: Highly Experienced Retail & Fuel Executive Team
HIGHLY EXPERIENCED RETAIL & FUEL EXECUTIVE TEAM Brian Hannasch Filipe Da Silva Alex Miller Hans-Olav Høidahl President and Chief Financial Officer Chief Operating Officer EVP, Operations, Europe Chief Executive Officer Ed Dzadovsky Kevin Lewis Ina Strand Aaron Brooks Louise Warner Chief Technology O
Slide 28: Cost Optimization & Efficiencies
COST OPTIMIZATION & EFFICIENCIES Optimizing costs across broad range of categories Alimentation Couche-Tard | Investor Presentation 28
Slide 29: Proven Ability to Integrate Acquisitions
PROVEN ABILITY TO INTEGRATE ACQUISITIONS Revenues 2005- 2004 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2012- Deals 2 34 7 4 3 4 3 3 0 1 3 4 5 Stores 1,706 1,137 2,506 166 1,660 515 442 2,055 0 30 367 91 345 Since 2004, Couche-Tard has successfully completed a total of 73 deals, adding ~
Slide 30: Uniquely Positioned to Win
UNIQUELY POSITIONED TO WIN Highly Convenient ➢ Strong core capabilities and customer value ➢ Adapt to evolving consumer demands Localized ➢ Complete localized pricing across network and work on data-driven assortment and promotion Innovating for future ➢ EV charging solutions ➢ Frictionless technolo
Slide 31: Remarkable Cash Generation Capability
Target Allocation REMARKABLE CASH GENERATION CAPABILITY of Capex Network Development 39% 32% 34% 39% 41% 39% 32% 32% 32% 31% 35% 23% of total Capex Commercial 5,762 Programs 5,244 Aiming to deploy 35% to 40% of EBITDA1 towards 2,378 5,061 purchase of property and equipement, intangible assets 30% 2,
Slide 32: Efficient Structure Below EBITDA to Net Earnings
EFFICIENT STRUCTURE BELOW EBITDA1 TO NET EARNINGS 1 EBITDA 100% 2 D&A 26% Net financial expenses 5% Income taxes 15% Net earnings 54% 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 presentat
Slide 33: Solid Balance Sheet and Capacity to Invest
SOLID BALANCE SHEET AND CAPACITY TO INVEST Circle K No transformational acquisition Statoil Fuel & Retail, Topaz, IOL, CST, Cracker Barrel, Investment Grade The Pantry Holiday, Jet Pep Credit Rating Rapid deleveraging after Leverage after SFR 3,387 stores acquired transformational acquisition Strong
Slide 34: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 34
Slide 35: 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 36: More Balanced Growth Going Forward
MORE BALANCED GROWTH GOING FORWARD Historical Projected 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 36
Slide 37: 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 38: Update on Core Initiatives
UPDATE ON CORE INITIATIVES CUSTOMER JOURNEY OFFERING NETWORK • Solid progress expanding Circle K fuel • Fresh Food, Fast ~4,978 stores at the end • Strong rollout on New-to-Industry(NTI) brand in North America in FY23 with of Q1-FY24 with plans for broad expansion with a total of 127 (including 22 R
Slide 39: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 39
Slide 40: EV Transition
EV Transition ➢ Developments in Scandinavia; participation in several value pools ➢ Key learnings ➢ North America remains the world’s largest market for internal combustion engines, and despite regulatory attention, energy transition for transportation is only at a formative stage ➢ The co-existence
Slide 41: Developments in Scandinavia
DEVELOPMENTS IN SCANDINAVIA Number of chargers(1) Number of home and workplace chargers(1) 1,571 10,100 977 7,349 738 600 4,648 1,099 FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023 Number of sites with chargers(1) Circle K application users 324 310,000 272,547 191 142 159 108,116 35,218 FY2
Slide 42: Key Learnings
KEY LEARNINGS ➢ Longer dwell times in relation to chargers have led to an increase in traffic in our stores and ultimately a positive lift in sales ➢ Positive incremental impact of installing additional chargers on our sites ➢ Increased engagement with customers as evidenced by the increase in Circl
Slide 43: Scaling in Europe and Penetrate North America
SCALING IN EUROPE AND PENETRATE NORTH AMERICA Steady network expansion in Scandinavia EU Invest to achieve > 25% market share Explore B2B possibilities Build a team and operating platform N.A Execute transit charging pilots Collaborate with other fuel retailers Announced rollout of 200 sites across
Slide 44: Our Location in Bamble, Norway
OUR LOCATION IN BAMBLE, NORWAY Recognized as “most important store of 2020” by ShopTalk LIVE Alimentation Couche-Tard | Investor Presentation 44
Slide 45: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 45
Slide 46: Sustainability
SUSTAINABILITY ➢ ESG journey ➢ Our sustainability framework ➢ Our external commitments ➢ Celebrating our progress in sustainable practices Alimentation Couche-Tard | Investor Presentation 46
Slide 47: ESG Journey
ESG JOURNEY Alimentation Couche-Tard | Investor Presentation 47
Slide 48: Our Sustainability Framework
OUR SUSTAINABILITY FRAMEWORK Following our 2019 decision to elevate sustainability to a business lens, we have continued to develop our Environmental, Social and Governance (ESG) Sustainability Framework. This is how we approach sustainability and categorize all aspects of our sustainability work an
Slide 49: Our External Commitments
OUR EXTERNAL COMMITMENTS For more information on ACT’s company officers, please visit Report & Indexes - Couche-Tard Corpo Alimentation Couche-Tard | Investor Presentation 49
Slide 50: Celebrating Our Progress in Sustainable Practices
CELEBRATING OUR PROGRESS IN SUSTAINABLE PRACTICES Awarded by the world’s Celebrating our second year Scoring among the highest with an AA rating as most trusted providers of receiving this award, which a leader within our industry in managing the business sustainability recognizes companies that hav
Slide 51: Content
CONTENT 1 Company Highlights 2 U.S. Industry Overview 3 Competitive Advantages 4 Our Ambition 5 EV Transition 6 Sustainability Increasing Shareholder 7 Value Alimentation Couche-Tard | Investor Presentation 51
Slide 52: 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 53: Delivering Strong Results...
DELIVERING STRONG RESULTS… (1,2) Merchandise and Service Revenues Merchandise and Service Gross Profit CAGR 8.6% CAGR 8.6% 17,283 5,939 16,604 5,662 15,873 in US$ millions in US$ millions 5,315 14,666 14,505 5,006 4,968 12,976 4,469 10,724 3,682 10,072 3,431 8,276 7,953 2,806 7,602 2,699 2,596 2013
Slide 54: ... and Rewarding Shareholders Accordingly
… AND REWARDING SHAREHOLDERS ACCORDINGLY Dividend per Share CAGR 26.6% in CAD cents per share 53.00 41.75 33.25 26.50 22.50 6.80 18.50 17.38 5.00 13.38 9.50 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Announced quarterly dividend of CA 14¢ in Q1 2024 representing an annualized payment of
Slide 55: Strong Organic Growth Driving Returns
STRONG ORGANIC GROWTH DRIVING RETURNS 1 Return on Capital Employed IAS 17 IFRS 16 avg. 15.4% 19.2% 17.5% We have repeatedly 16.2% 15.9% 15.8% 15.4% proven our ability to 15.0% 14.1% 13.3% increase our ROCE 12.0% following the integration of large acquisitions 2014 2015 2018 2019 2020 2023 2016 2017
Slide 56: Relative Stock Performance
RELATIVE STOCK PERFORMANCE 10-Year Stock Performance vs. Key Indices Alimentation Couche-Tard S&P/TSX Composite S&P 500 700% 600% 625.4% 500% 400% 300% 200% 166.8% 100% 56.8% 0% Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug
Slide 57: Financial Highlights
FINANCIAL HIGHLIGHTS in US$ millions, unless otherwise noted 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CAGR Total revenues 35,549 37,962 34,530 34,145 37,905 51,394 59,118 54,132 45,760 62,810 71,857 7% Gross profit1 4,607 4,988 5,268 6,082 6,482 8,112 9,195 9,644 10,115 11,005 12,052 1
Slide 58: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 58
Slide 59: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 59
Slide 60: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 60
Slide 61: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 61
Slide 62: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 62
Slide 63: Non-IFRS Measures
NON-IFRS MEASURES Alimentation Couche-Tard | Investor Presentation 63
Slide 64: Investor Relations Contact
INVESTOR RELATIONS CONTACT Jean-Philippe D. Lachance Vice President, Investor Relations and Treasury Investor.Relations@couche-tard.com Alex Limosani Senior Analyst, Investor Relations Investor.Relations@couche-tard.com Alimentation Couche-Tard | Investor Presentation 64
Slide 65: Thank You
THANK YOU Alimentation Couche-Tard | Investor Presentation 65
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