Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Q2 FY2024 Earnings Presentation
70 slides from Alimentation Couche-tard's earnings presentation, December 2023
Slide 1: Q2-FY24 Investor Presentation
Q2-FY24 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation may constitute forward looking statements within the meaning of securities laws of Canada, including Couche-Tard’s financial outlook and related EBITDA ambition. Any statement in this presentation that is not a statement of historica
Slide 3: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 4: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 5: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 6: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 7: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 8: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 9: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 10: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 11: Non-IFRS Measures
Non-IFRS Measures Q2-24 ACT Investor Presentation
Slide 12: Company Highlights
Company Highlights Q2-24 ACT Investor Presentation
Slide 13: A Storied History of Entrepreneurship & Dynamic Growth
A Storied History of Entrepreneurship & Dynamic Growth Alain Bouchard, 2001 2012 2016 2020 2022 Jacques D’Amours, Entry into U.S. Expansion into Europe Expansion in Ireland & Canada Grow into Asia Started EV journey in NA Richard Fortin, Acquired Bigfoot stores Acquired Statoil Fuel & Retail, Acquir
Slide 14: Spanning Continents and Bridging Markets
Spanning Continents and Bridging Markets 25 Countries3 OUR SITES and 25 TOTAL 14,425 Business Units3 UNITED-STATES 7,034 CANADA 2,175 EUROPE AND OTHER REGIONS1 3,112 INTERNATIONAL2 2,104 Core network International licensees Coast-to-coast presence in Canada and located in 47 of 50 U.S. states and le
Slide 15: Our Executive Leadership Team
Our Executive Leadership Team Brian Hannasch Alex Miller Kevin Lewis Ina Strand Filipe Da Silva Ed Dzadovsky Hans-Olav Høidahl Suzanne Poirier President and Chief Operating Officer Chief Growth Officer Chief People Officer Chief Financial Officer Chief Technology EVP, Operations, SVP, Operations Chi
Slide 16: Global Retailer in Fuel and Convenience
Global Retailer in Fuel and Convenience ~14,400 stores globally ~4,800 sites offering Fresh Food, Fast ~8.5 million customers served per day ~35 million gallons of fuel sold per day ~6,400 sites offering Circle K Fuel ~128,000 employees Note: All figures as of April 30, 2023, unless otherwise noted
Slide 17: Revenue and Gross Profit Mix
Revenue and Gross Profit1 Mix Geographic Mix Product Mix 13% Revenue 2% 24% 1% 12% Gross Profit1,2 21% 17% 50% 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 Note:
Slide 18: Latest Highlights
Latest Highlights Merch. SSS – US1 SS Volume – US1 Net Earnings Growth Y/Y3 (0.1%) (1.5%) +1.1% Adj. EBITDA Growth Y/Y2,3 Q2-2024 +1.8% Merch. SSS – Europe and SS Volume – Europe and Other Diluted EPS Growth Y/Y3 Other Regions2 Regions1 +7.6% (0.2%) (0.9%) Leverage Ratio2,4 1.52 Merch. SSS – Canada1
Slide 19: Our Vision and Our Mission
Our Vision and Our Mission To become the world’s preferred Our Vision destination for convenience and mobility. To make our customers’ lives a little Our Mission easier every day. Q2-24 ACT Investor Presentation
Slide 20: 10 for the Win Compelling Investment Opportunity
10 for the Win Ticker Compelling Investment Opportunity Symbol TSX: ATD Mastering the Customer Journey Untapped organic growth and Offering Sustainability of fuel gross margins Advantaged Fuel Gross Margins Low-Cost Operator; Generating synergies1 between Financial discipline & cost efficiencies 30%
Slide 21: Industry Overview
Industry Overview Q2-24 ACT Investor Presentation
Slide 22: The Dynamic Momentum of Convenience
The Dynamic Momentum of Convenience United States Canada Europe $326.4 $9.4 $260.9 Revenues in billions USD Revenues in billions USD Revenues in billions USD $8.1 $286.5 $228.1 2022 2027 2022 2027 2022 2027 Source: Nielsen IQ 1 5-year CAGR % Q2-24 ACT Investor Presentation
Slide 23: Fragmented U.S. Market Provides Consolidation Opportunities
Fragmented U.S. Market Provides Consolidation Opportunities Chain Size Single Stores Chain Stores 2006 2022 145,119 150,174 Total stores Total stores 175,000 150,000 500+ 21% 57,315 57,031 56,836 56,476 57,792 57,612 56,226 55,401 58,078 54,917 59,751 54,526 58,690 55,611 55,162 54,492 55,308 125,00
Slide 24: Attractive Channel Within Broader Retail
2005 $151.1 2006 $163.6 2007 $168.5 2008 $173.9 2009 $182.4 2010 $190.4 2011 $195.0 Source: NACS State of the Industry Report of 2022 Data. 2012 $199.3 2013 $204.0 2014 $213.5 2015 $225.8 billions) CAGR 4.2% 2016 $233.0 2017 $237.0 2018 $242.2 2019 $251.9 Industry Inside Sales (in Q2-24 ACT Investor
Slide 25: Recession Resilient
(30.0%) (25.0%) (20.0%) (15.0%) (10.0%) - (5.0%) 10.0% 15.0% 5.0% (15.0%) (10.0%) (5.0%) - 10.0% 15.0% 20.0% 25.0% 5.0% Q1-FY04 Q1-FY04 Q2-FY04 Q2-FY04 Q3-FY04 Q3-FY04 Q4-FY04 Q4-FY04 Q1-FY05 Q1-FY05 Q2-FY05 Q2-FY05 Q3-FY05 Q3-FY05 Q4-FY05 Q4-FY05 Q1-FY06 Q1-FY06 Q2-FY06 Q2-FY06 Q3-FY06 Q3-FY06 Q4-F
Slide 26: Total RTF Gross Profit Dollars Strongly Correlated to OpEx
Total RTF Gross Profit Dollars Strongly Correlated to OpEx $2,500.0 1,2 3 Fuel Gross Profit $ OpEx $2,000.0 $1,500.0 $1,000.0 $500.0 $- Q1-FY04 Q2-FY04 Q3-FY04 Q4-FY04 Q1-FY05 Q2-FY05 Q3-FY05 Q4-FY05 Q1-FY06 Q2-FY06 Q3-FY06 Q4-FY06 Q1-FY07 Q2-FY07 Q3-FY07 Q4-FY07 Q1-FY08 Q2-FY08 Q3-FY08 Q4-FY08 Q1-F
Slide 27: 10 For the Win
10 FOR THE WIN Q2-24 ACT Investor Presentation
Slide 28: The Lighthouses Guiding Our Voyage
The Lighthouses Guiding Our Voyage To Be The Most Trusted Brand in Convenience and Mobility Winning Offer Winning Fuel Winning the Customer Winning Growth NTIs, R&R, RELO Win in Food B2C value proposition Build fans through loyalty M&A Own Thirst B2B value proposition Digital experience TotalEnergie
Slide 29: Win in Food
Win in Food 1 Winning Offer Win in Food • Convenience food market is > $700B across North America & Europe 1 The opportunity • 59% of fast-food customers consider purchasing a meal from a c-store2 • Expand share of stomach • Fresh Food, Fast in ~5,000 sites globally over and above other food Recent
Slide 30: Own Thirst
Winning Offer Own Thirst 1 Own Thirst • #1 reason customers visit us and growing The opportunity • We service multiple thirst occasions across competitive channels • Recent progress Expanded capacity with more than 3,000 sites installed with new cooler solution • Consumer recognition as one stop for
Slide 31: Private Brands
Private Brands 1 Winning Offer Private Brands • The opportunity Boost wallet share and profit by optimizing distribution, growing product lines, and entering new categories • Merged global beverage teams into a single "Thirst Team" Recent progress for unified strategy and scale. • Current sales pene
Slide 32: Leveraging Scale Advantages
Leveraging Scale Advantages ACT perspective on industry margins • Macro-economic trends persist, margins rising with business costs ACT will continue to outperform industry • Outcomes for market participants will differ based on location of • Advantaged geographies and locations networks and company
Slide 33: Circle K Fuel – Strengthened Network and Value Chain
Circle K Fuel – Strengthened Network and Value Chain Fuel Gallons Sold1 US Fuel CPG1,4 13.5 billion 47.51 Stores offering fuel / Our Fleet % of total network2,3 ~600 trucks, ~10,800 / ~88% ~1,100 drivers Circle K Fuel Branded Stores2 Number of B2B customers >60 million transactions ~6,400 per year 1
Slide 34: US RTF Performance – Understanding The Fundamentals
US RTF Performance – Understanding The Fundamentals 50 1.45 40.0 47.5 45 +3.9 43.6 1.40 36.0 US RTF Gross Margin1 (cpg) 1.35 40 US RTF Gross Margin1 (cpg) 32.0 CPI (2009 base year) 1.30 35 28.0 1.25 30 1.20 24.0 25 1.15 20.0 20 1.10 14.5 +1.4 16.0 15 1.05 13.1 12.0 10 1.00 FY2009 FY2010 FY2011 FY201
Slide 35: B2C – Delivering on our Customer Promise
B2C – Delivering on Winning Fuel our Customer Promise 1 B2C value proposition Achievements FY24+ Initiatives • National Fuel Days and events • Ongoing surprise and delight celebrations • First US fuel marketing campaign • Direct relationships through • Forecourt first initiatives Inner Circle and Ex
Slide 36: B2B – Circle K Fuel Enables Future Opportunity with Enterprises
B2B – Circle K Fuel Enables Future 1 Winning Fuel Opportunity with Enterprises B2B value proposition Global scale leveraging Europe capability FY24+ Initiatives and US Growth opportunity US growth • Upside by driving awareness of Circle K network and offer • Direct relationships with Business custom
Slide 37: Fuel Supply Chain – Enabling Outperformance
Fuel Supply Chain – 1 Winning Fuel Enabling Outperformance Fuel Supply Chain Value through scale and targeted control FY24+ Initiatives • One of the largest independent fuel supply chains in the • Continue to expand flexibility in sourcing relationships and world, enabled by the Circle K fuel brands
Slide 38: Our Membership Programs Bring “Easy” to Life
Our Membership Programs Bring Winning the Customer “Easy” to Life 1 Build fans through loyalty For consumers For ACT ✓ Benefits across the entire offer 1 Acquire valuable customer data Value (Fuel, Merchandise and Services) to deliver insights, prioritize customers and personalize experiences ✓ Tier
Slide 39: Europe Inner Circle - Accelerated Rollout
Inner Circle - Accelerated Rollout Fueled by FY2028 Promising Early Successes Ambition ~200 million in EBITDA1 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 1H FY25 United States ~400 stores ~1,900 stores ~3,000 stores ~4,000 stores ~1,000 stores ~1,400 stores ~2,600 stores Europe Expected to be rolled out in ~4,
Slide 40: A View Into Our Present Future
A View Into Our Present Future 1 Winning the Customer Digital Experience Q2-24 ACT Investor Presentation
Slide 41: Operations First
Operations First 1 Winning the Customer Operations First People Customers People-Friendly, safe and engaged teams Making life easier with a great experience Our goal is to increase: Our goal is to improve: • Retention • Customer wait time • Engagement • Store cleanliness • Diversity & Inclusion • Te
Slide 42: The Foundation (Fit to Serve)
The Foundation (Fit to Serve) Building A World Class Cost Structure For Agility ~$50 million FY2028 FY2028 Ambition ~$250 Ambition + $350mm - $400mm $800mm of of cash and cash million EBITDA4 equivalents generation7 ~$50 million ~$800 million ~$200 ~$200 million million ~$400 million ~$200 ~$200 mil
Slide 43: Fit to Serve
Fit to Serve Merch COGS1 Goods Not For Resale General & Administrative Expenses (Operating Income) • Leverage global scale / enhance margin • Leverage scale globally to reduce per • Find and reduce repetitive tasks • Drive customer-led negotiations unit spend • Optimize labor by capitalization on gl
Slide 44: Growth Model – Disciplined, Strategic and Ambitious
Growth Model – Disciplined, FY2028 Winning Growth Strategic and Ambitious 1 Ambition NTIs, R&R, RELO ~300 million • Fragmented industry where scale matters to 500 million in EBITDA1 • Ability to leverage scale and operating model to all forms of growth; Strong balance sheet and organizational abilit
Slide 45: Accretive M&A Fuels Financial Breakthroughs
Accretive M&A Fuels Winning Growth Financial Breakthroughs 1 M&A * Combined pre-close EBITDA1 of ~$640mm (synergies2 expected to reach ~$185mm over 3 years or ~$240mm over 5 years) * Proposed acquisition; expected to close in calendar 2023. 1 EBITDA, which refers to earnings before interest, taxes,
Slide 46: M&A Strategy
M&A Strategy FY2028 Ambition $1.1B EBITDA from new M&A Our Competitive Advantage Our Approach opportunities1 We are experts in closing and integrating M&A around the globe 1 Consolidating the US market remains a priority • ~73% of our current network has been sourced from M&A • ACT is #2 in the mark
Slide 47: Proven Ability to Integrate Acquisitions
Proven Ability to Integrate Acquisitions Fiscal 2005- 2004 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Year 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, addin
Slide 48: Solid Balance Sheet and Capacity to Invest
Solid Balance Sheet and Capacity to Invest Statoil Fuel & Retail, The Topaz, IOL, CST, Cracker Barrel, Holiday, Jet Circle K No transformational acquisition Pantry Pep Strong credit metrics for several 3,387 stores acquired Rapid deleveraging after Leverage after SFR lower years transformational acq
Slide 49: TotalEnergies – Leading Network in Continental Europe
TotalEnergies – Leading Network in Winning Growth Continental Europe 1 TotalEnergies • 2,200 prime locations in Key European markets Natural • Retail operations in scope include Fuel, Shop and Wash sales expansion • EV operations on site and new DC charging opportunities in scope of ACT’s • B2B card
Slide 50: Transformative Synergies
Transformative Synergies FY2028 Ambition $0.7B EBITDA1 from Revised TotalEnergies synergies3 proposed Synergy Capture Synergy Assessment per Region represent 37% acquisition of pre-close Timeline Revised EBITDA2 170 120 35% Germany BeNeLux 65% FY27 FY29 Synergies Initially Disclosed Synergies Revise
Slide 51: Ready to Lead the Electric Vehicle Transition
Ready to Lead the Winning Growth Electric Vehicle Transition 1 E-Mobility • Circle K is a leader in most of its European markets • Our leading convenience & service offer will provide the EV customer with a charging experience beyond charging alone • We excel in operational efficiency, driving top p
Slide 52: Our Location in Bamble, Norway
Our Location in Bamble, Norway Recognized as “most important store of 2020” by ShopTalk LIVE Q2-24 ACT Investor Presentation
Slide 53: The Preferred Destination for Charging On-the-Go
The Preferred Destination for Charging On-the-Go Position CK as the Mobility Partner of Choice for B2B 1000+ 700+ 550+ 10k Total charging stalls Partner Charging Office and Active Workplace Combined B2B Fuel Home Charging Total Home Units Reimbursement in Europe Stalls Guest Charging Units and EV Ca
Slide 54: Strong Contribution to Convenience Business
Strong Contribution to Convenience Business Traffic to store post EV charger installation on site EV customer vs. ICE1 customer2 Incremental number Average merchandise Average merchandise of store visits revenue lift & service gross profit3 lift +11% +15% +8% +27% % of active in-store % of active ca
Slide 55: Spotlight on Each Lighthouse’s Contribution
Spotlight on Each Lighthouse’s Contribution Winning Offer Winning Fuel Winning the Customer Winning Growth NTIs, R&R, RELO Win in Food B2C value proposition Build fans through loyalty M&A Own Thirst B2B value proposition Digital experience TotalEnergies Private Brands Fuel supply chain Operations Fi
Slide 56: Our Five Focus Areas
Our Five Focus Areas Win in Food & Gain Share Digital Own Thirst in Fuel Acceleration Fast, Friendly Lowest Cost & In-Stock Operator Q2-24 ACT Investor Presentation
Slide 57: The ACT Path
The ACT Path $10B EBITDA1 1 EBITDA 1 Net Earnings $10,000 $8,900 from organic growth including TotalEnergies $5,762 $5,061 $5,244 $4,525 $3,583 $2,980 $3,091 $2,396 $2,705 $2,683 $2,331 $2,354 $1,100 from new M&A $1,876 $1,834 $1,376 $1,640 $1,191 $1,209 $1,671 $930 $573 $812 2013 2014 2015 2016 201
Slide 58: 10 for the Win!
10 for the Win! • Our North Star is to be the most trusted brand in convenience and mobility • After our Double Again achievement – there were some additional opportunities left and we developed our 10 For The Win strategy building upon the lighthouse strategy; goal of reaching 10B$1 in EBITDA1, fro
Slide 59: 10 for the Win – Compelling Investment Opportunity
10 for the Win – Compelling Investment Opportunity Mastering the Customer Journey Untapped organic growth and Offering Sustainability of fuel gross margins Advantaged Fuel Gross Margins Low-Cost Operator; Generating synergies1 between Financial discipline & cost efficiencies 30% to 60% of the pre-cl
Slide 60: ACT A Responsible Retailer – ESG Ambitions
ACT A Responsible Retailer – ESG Ambitions 10% greater 100% of our than global packaging will legislation on be recyclable renewable fuel or reusable Zero Harm for 30% of our sites people, to be carbon customers, neutral employees and suppliers Equitable representation, opportunities and pay Q2-24 A
Slide 61: ACT A Responsible Retailer
ACT A Responsible Retailer ✓ Fuel: EV charging in Europe and N. America, renewable fuel expansion attracts new customers ✓ Energy: Lower consumption in Europe, Energy Management System in 3,000 N. American locations ✓ Packaging and waste: 40M single-use cups eliminated, food waste converted to incom
Slide 62: Celebrating Our Progress in Sustainable Practices
Celebrating Our Progress in Sustainable Practices Awarded by the world’s Celebrating our second Scoring among the highest most trusted providers of year receiving this with an AA rating as a leader business sustainability award, which recognizes within our industry in ratings! The European companies
Slide 63: Increasing Shareholder Value
Increasing Shareholder Value Q2-24 ACT Investor Presentation
Slide 64: Recent Financial Highlights and Stock Performance
Recent Financial Highlights and Stock Performance in US$ millions FY2018 FY2019 FY2020 FY2021 FY2022 FY20231 5-year CAGR Total Revenues $51,394 $59,118 $54,132 $45,760 $62,810 $71,857 6.9% Total Gross Profit3 $8,112 $9,195 $9,644 $10,115 $11,005 $12,052 8.2% EBITDA3 $2,980 $3,583 $4,525 $5,061 $5,24
Slide 65: A Cash Generation Powerhouse
A Cash Generation Powerhouse Net Earnings EBITDA1 Net CapEx1 Free Cash Flow1 $5,762 $3,091 $2,378 $1,542 $1,376 $614 $573 $457 FY2013 FY2023 FY2013 FY2023 FY2013 FY2023 FY2013 FY2023 1 Please refer to the “Non-IFRS Measures” section of this presentation for additional information on performance meas
Slide 66: Optimizing Capital Allocation for Strategic Priorities and Measurable Returns
Optimizing Capital Allocation for Strategic Priorities and Measurable Returns Target of 15% Return Aiming to reinvest 35-40% Our leverage ratio1 comfort on Capital Employed of EBITDA1 zone is 2.25x (ROCE)1 • ~31% of CapEx as a % of • 17.5% ROCE1 as at April 30, • Leverage ratio1 of 1.49x EBITDA1 for
Slide 67: Balanced Maturity Curve with Effective Financing Cost
Balanced Maturity Curve with Effective Financing Cost Leverage Ratio1,2 ACT Senior Unsecured Notes - Debt Maturity Profile2,5 1.49 $1,000 Share Repurchases FY2023 Principal in millions of USD ~ 52 million shares / ~ $2.3 billion $800 Weighted Average Coupon Rate on Outstanding Debt2 $600 $1,000 3.34
Slide 68: Historical Financial Highlights
Historical Financial Highlights in US$ 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 7.3% Gross profit1 4,607 4,988 5,268 6,082 6,482 8,112 9,195 9,644 10,115 11
Slide 69: Investor Relations Contact
Investor Relations Contact Jean-Philippe D. Lachance, CFA Vice President, Investor Relations and Treasury Investor.Relations@couche-tard.com Alex Limosani, CFA Senior Analyst, Investor Relations Investor.Relations@couche-tard.com Q2-24 ACT Investor Presentation
Slide 70: Thank you!
Thank you!
Alimentation Couche-Tard — Q2 FY2024 Earnings Presentation on 6ix