Canadian Tire Corporation, Limited · TSX:CTC
Canadian Tire — CIBC World Markets 2010 Retail and Consumer Conference
23 slides from Canadian Tire's conference presentation, Feb 23, 2010
Slide 1: Canadian Tire Corporation
Canadian Tire Corporation February 2010
Slide 2: Forward-looking Information
F Forward-looking d l ki IInformation f i This disclosure contains statements that are forward-looking forward looking. These forward forward-looking looking statements relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can g
Slide 3: Core CTR Business and Four Supporting Businesses
C Core CTR B Business i and dFFour S Supporting i B Businesses i CTR Financial Services Mark’s Petroleum PartSource 479 stores >5 million 378 stores 272 gas bars 87 stores MasterCard accounts Canadian Tire Retail Canadian Tire Mark’s Work Canadian Tire PartSource is a is one of Canada’s Canada s Fin
Slide 4: Core Assets
C Core A Assets Store Networks – Canadian Tire Retail: approximately 400 new or rebuilt stores since 1994 – Mark’s: approximately 280 stores built, upgraded or acquired since 2002 – Petroleum: 2/3 of sites now upgraded or rebranded – PartSource: now has close to 100 sites, including 10 Hub stores
Slide 5: Strategic and Operational Strengths
S Strategic i and dOOperational i lSStrengths h One of Canada’s most trusted brands Loyal customer base across all of our businesses Products and service offering targeted at the needs (not just wants) of everyday Canadian families at competitive prices Financial Services one of the best run
Slide 6: 2010 Strategic Priorities
2010 S Strategic i PPriorities i ii Optimize the significant investments made in store and supply chain infrastructure and drive sustainable, long-term earnings growth Build the strength of the core Canadian Tire Retail business and brand – Improve overall customer service – Leverage industry-le
Slide 7: 2010 Initiatives
2010 IInitiatives ii i Key areas of focus in 2010 will build on the momentum of programs and initiatives begun i 2009 in 2009: Continue roll-out of capital-light CTR Smart and Small Market stores Refocus and align core automotive assets with single focus for growing market share Improving the
Slide 8: Growth Initiatives
Growth Initiatives Initiative Future Impact / Rationale Real estate projects Focused growth and upgrade of network to strengthen brand and generate returns, including CTR capital-light formats •Canadian Tire Retail stores (Smart and Small Market stores) •Petroleum P t l sites it •Mark’s stores •Part
Slide 9: CTR Small Market Store
CTR S Smallll M Market k S Store Before Identified 100+ underserved markets Opportunity to generate $5-$9 million in retail sales per store, mostly incremental Low-cost building – great use of outdoor space; intense merchandising Mark’s Work Wearhouse within each store and Petroleum Gas Bar
Slide 10: CTR Smart Store
CTR S Smart S Store Drive growth and improve sales productivity by reallocating space to high growth and ‘cornerstone’ categories (eg. storage & organization, sports & recreation) Added traffic-driving businesses (eg. pet foods, food test) Improved customer experience – navigation, navigation
Slide 11: Building our Cornerstone Automotive Business
B ildi our C Building Cornerstone A Automotive i B Business i Key competitive advantage, central to our brand image and our single most promising business opportunity Aligned all our automotive resources under one common strategy and leadership: PartSource, Petroleum, automotive hard parts, acce
Slide 12: Improving the Customer Experience at CTR
I Improving i the h C Customer E Experience i at CTR Clear definition of desired in-store customer experience Infrastructure and processes – strengthened corporate support team – operational excellence program – focus on in-stock Measurement tools, programs and practices – New core audit, cust
Slide 13: CTR Focused on Being Priced Right
CTR Focused F d on Being B i Priced P i d Ri Right h Key benefits of CTR change program include being priced right and flyer optimization New pricing tools and processes allow for easier and more effective price management – integration of competitive shopping data – pricing ‘rules’ embedded into
Slide 14: Driving Customer Loyalty
Di i C Driving Customer L Loyalty l Canadian Tire ‘Money’ is one of Canada’s most popular loyalty programs, offering greater value to our customers who shop at our stores, fill up at our gas bars and use our credit cards Build capabilities to capture, capture analyze and apply customer insights
Slide 15: Centralizing Key Support Functions
C Centralizing li i K Key S Support F Functions i Aligned key corporate functions across the Company under single points of leadership, including communications, legal, real estate, human resources, information technology and finance Designed to decrease operating costs and improve operating eff
Slide 16: Mark's Clothes That Work
M k’ Cl Mark’s Clothes h ThThat W Work k New “Clothes That Work” testing ground concept store in Edmonton Growing number of innovations engineered that make “Clothes That Work” Continued focus on growing share in women’s apparel, including more fashionable assortments with a focus on premium f
Slide 17: Mark's Supply Chain and Operations Capabilities
M k’ S Mark’s Supply l Ch Chain i and dOOperations i C Capabilities bili i Work underway on R-6, a major IT infrastructure project to enhance Mark’s supply chain and operations capabilities R-6 stands for the 6Rs of retailing (Right product; Right price; Right quantities; Right channel; Right lo
Slide 18: Financial Services - Risk Management Competencies
Fi Financial i lSServices i - Risk Ri k M Management C Competencies i We have been on a journey over the last three years: – New technologies – Conservative credit limits – Reduced near prime exposure Action to manage future credit risk exposure: – Third party review of the entire risk managemen
Slide 19: Managing Portfolio Profitability
M Managing i P Portfolio f li PProfitability fi bili The Financial Services Business Model: (Approximate Percentages of 2009 Average Receivables) Gross yield including insurance 25.1% Provision cost -8.3% Funding cost -4.1% y y and other Loyalty -2.2% Operating expenses -6.9% = 3.6% ROR During norma
Slide 20: Financial Services Year Key Metrics
Fi Financial i lSServices i 10 Y Year K Key M Metrics i Operating leverage has driven consistent performance during a period of significant growth 1999A 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A Credit Card(1) Sales ($B) 2.1 2.6 3.3 4.7 6.0 7.2 8.1 9.1 10.4 11.1 11.4 GAAR(2) ($B)
Slide 21: Q4 2009 Consolidated Highlights
Q4 2009 C Consolidated lid d HiHighlights hli h ($ in millions except per share Q4 2009 Q4 20081 Change FY 2009 FY 20081 Change amounts) Retail sales2 2,993.0 3,219.6 (7.0)% 10,020.9 10,614.4 (5.6)% Gross operating revenue 2,437.7 2,587.8 (5.8)% 8,686.5 9,121.3 (4.8)% EBITDA3, 4 248.7 276.8 (10.1)%
Slide 22: Financial Flexibility as at Q4 2009
Fi Financial i l Fl Flexibility ibili as at Q4 2009 Financing Source Amount Available Description Committed bank lines of credit $1 17 billion $1.17 • Provided by 10 domestic and international financial institutions • Supports the $800 million commercial paper program • No amounts were drawn on the
Slide 23: Outlook 2010
O l k 2010 Outlook Roll Roll-out out of 2 new capital capital-light light CTR store formats Continued network expansion at Mark’s and PartSource 2010 Capex in the range of $280 million to $300 million B By end d off 2010, 2010 key k productivity d ti it expenditures dit will ill h have made
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