Slide 1: Investor Presentation Q3-FY2021
Investor Presentation Q3-FY2021
Slide 2: Cautionary statement
Cautionary statement This presentation does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any securities of Dollarama Inc. and does not constitute or form part of, and under no circumstances is to be construed as, an offering document, such as an offering memora
Slide 3: Cautionary statement
Cautionary statement Presentation of Financial Information All amounts are expressed in Canadian dollars, unless otherwise indicated. Certain values used in this presentation are for illustration purposes only and are based on various factors that may or may not materialize, including past performan
Slide 4: Dollarama Overview
Dollarama Overview MEGA
Slide 5: Dollarama through the years
Dollarama through the years Initial public Introduction offering of $2.50 and Long-term (TSX: DOL) $3.00 price store target Dollarama points Opening of Introduction of 1,700 founded as single- 585 Dollarama 1000th of $3.50 and across Launch of price point retail stores in Launch of Dollarama $4.00 p
Slide 6: Dollarama today
Dollarama today • Largest and only national dollar store chain in Canada • 1,333 corporate-operated stores • Avg. of 10,313 sq. ft. per store • Avg. store annual sales of $3.1 million • Strong value proposition at select fixed price points up to $4 • Broad assortment of everyday goods • ~50% of merc
Slide 7: A simple, growth-oriented business model
A simple, growth-oriented business model We build We focus We solidify on our growing on delivering our brand store network compelling reputation and and our value to our deliver superior low-cost direct customers financial sourcing platform results Backed by seasoned team and disciplined execution
Slide 8: Competitive Advantages
Competitive Advantages
Slide 9: Direct sourcing expertise
Direct sourcing expertise • Longstanding relationships with low-cost supplier network: • Overseas direct sourcing program initiated in 1992 • Well-diversified base of established suppliers • ~50% merchandise sourced directly from over 25 countries (primarily China) • Benefits of direct sourcing: • C
Slide 10: Large network with over 1,300 stores across Canada
Large network with over 1,300 stores across Canada Only dollar store chain with a significant presence in all ten provinces 111 130 40 39 371 532 110 ~2.6x more stores 12711333 than 4 largest pure 1192 3-yr Store Count play competitors Dollarama vs. combined Next 4 Pure Play Competitors ~5.8x larger
Slide 11: Compelling product offering
Compelling product offering • Broad assortment of products across 20+ departments at compelling value • Mix of store brands and General Merchandise Consumables name brands 43% 41% Seasonal • Multiple fixed price points 16% 11
Slide 12: Offering convenience and value
Offering convenience and value • Strong brand recognition and reputation for delivering value • Unrivaled presence across Canada in convenient locations • Destination store appealing to broad customer base • Consistent in-store shopping experience 12
Slide 13: Growth Strategies
Growth Strategies — > e LETTER SIZE } FORMAT LETTRE | MONUMENTS DOG >) 4
Slide 14: Strategies for driving growth and creating value
Strategies for driving growth and creating value • Grow store network in Canada in a disciplined manner • Target of 1,700 Dollarama stores by 2027 • Leverage strengths to stimulate sales • Maintain low-cost operating model • Develop second growth • platform in Latin America • Acquisition of 50.1% in
Slide 15: Significant potential for additional growth in Canada
Significant potential for additional growth in Canada Thousands of People per Dollarama Store Average of 69 net new 38 stores per year over last 28 23 22 10 fiscal years Eastern Canadian market not saturated Western Ontario Quebec Atlantic Dollarama underpenetrated Provinces in Ontario and Western C
Slide 16: Disciplined approach to growth
Disciplined approach to growth • Efficient capital model • $650K in leasehold improvements, fixtures and inventory for new Dollarama store • Quick sales ramp-up • Average sales ramp-up to $2.3M within 2 years • Rapid payback of about 2 years • Low maintenance capex Strong profitability, low capital
Slide 17: Leverage strengths to stimulate Dollarama sales
Leverage strengths to stimulate Dollarama sales • Effective and flexible Industry leading merchandising • Refresh 25-30% of same-store sales merchandise every year 11-year 11-year 11-year • Zonogram by department (vs. 4000 Store CAGR Sales CAGR SSS Average 11.0% fixed planogram) 3500 7.8% 12.0% 5.6%
Slide 18: Maintain low-cost operating model
Maintain low-cost operating model • Continuous in-store • Efficient supply chain productivity improvements • DC, warehouse and • POS systems transportation logistics • Kronos advanced scheduling • NCR point of sale terminals • Lean overhead • WIFI and mobile-driven • operations projects • LED retrof
Slide 19: Dollarcity transaction overview
Dollarcity transaction overview Acquisition of 50.1% interest in Dollarcity ▪ 20181 sales of US$236M, EBITDA2 of US$36.6M (16% EBITDA margin) ▪ Final purchase price of US$92.7M3; upfront payment of US$40M in Q3-FY20, balance of US$52.7M paid in Q3-FY21 ▪ Immediately accretive to DOL EPS (+CA$0.03 pe
Slide 20: Dollarcity, a 'localized' Dollarama
Dollarcity, a ‘localized’ Dollarama MERCHANDISE MIX1 (As at respective year ends) Dec. 31, 20193 Feb. 2, 2020 (based on annual retail value) NUMBER 228 1,291 35% 41% OF STORES 50% 43% CA$427 million SALES CA$3,787 million (US$321 million) 15% 16% PRICE POINT US$0.69-$3.00 General or equivalents in C
Slide 21: Dollarcity's growth trajectory
Dollarcity’s growth trajectory ▪ ‘Localized’ Dollarama concept initially tested and established in El Salvador Target of and Guatemala 600 Dollarcity ▪ Since 2017, network expansion has stores been mainly focused on Colombia, a Guatemala compelling retail market with significant ▪ 64 Dollarcity stor
Slide 22: Dollarama Financial Metrics
Dollarama Financial Metrics
Slide 23: Robust financial performance
Robust financial performance THIRD QUARTER ENDED Y-O-Y FISCAL YEAR ENDED(1) Y-O-Y (in millions of dollars, except per share amounts) NOV. 1, 2020(2) NOV. 3, 2019 GROWTH FEB. 2, 2020 FEB. 3, 2019(3) GROWTH(3) % OF % OF % OF % OF Sales $1,064 SALES $948 SALES 12.3% $3,787 SALES $3,549 SALES 6.7% Gross
Slide 24: Balanced approach to operating margin
Balanced approach to operating margin LTM EBIT Margin (%) 21.8 10.5 8.6 7.6 7.2 7.1 6.8 4.6 3.7 DOL Canadian Tire Couche-Tard North West Metro Loblaw Empire Dollar Dollar General Tree Canadian retailers with product offering US dollar overlap with Dollarama stores Source: Company websites; Walmart C
Slide 25: Strong organic growth with low capital requirements
Strong organic growth with low capital requirements 10% 8% Last Three Fiscal Years Store Count CAGR 6% 4% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cash Flow After Capex(1) Source: Company websites; Walmart Canada figures not available (1) (EBITDA – CAPEX) / EBITDA 25
Slide 26: Strong key metrics growth since IPO
Strong key metrics growth since IPO IAS 17(1) (1) These figures do not reflect the adoption of IFRS 16 - Leases 26
Slide 27: Continuous margin improvement since IPO
Continuous margin improvement since IPO Variable cost structure allows for scaling benefits with top line growth IAS 17(1) (1) These figures do not reflect the adoption of IFRS 16 - Leases 27
Slide 28: Debt structure as at Q3-FY2021
Debt structure as at Q3-FY2021 ▪ 82% fixed rate debt, 18% floating rate debt ▪ $894M available liquidity ($145M cash + $749M undrawn and available credit facility) (1,2,3) ▪ ~2.2% weighted average cost of debt ▪ ~2.4 year weighted average time to maturity 5-Year Fixed $600 2.337% 5-Year Fixed 3.550%
Slide 29: U.S. Commercial Paper Program
U.S. Commercial Paper Program Issuer: Dollarama Inc. - Bloomberg Ticker ("DOL") We intend to shift a portion of borrowings to commercial paper Dollarama L.P. and Dollarama GP Inc., both Guarantors: wholly-owned subsidiaries of the Issuer and utilize the revolving credit facility as a backstop to the
Slide 30: Total shareholder return
Total shareholder return Performance Graph Since January 31, 2011 1250 1150 1050 Dollarama 950 (Total Cumulative Return of a $100 investment) TSX Capped Consumer Discretionary Index 850 750 650 550 450 350 250 150 50 31-Jan-11 31-Jan-12 31-Jan-13 31-Jan-14 31-Jan-15 31-Jan-16 31-Jan-17 31-Jan-18 31-
Slide 31: Disciplined execution of our growth plan
Disciplined execution of our growth plan Disciplined execution of our Canadian growth plan ▪ Target of 1,700 stores in Canada by 2027 ▪ Sustain attractive same-store sales growth ▪ Maintain balanced operating margins Development of our LATAM growth platform ▪ Target of 600 stores in initial three co
Slide 32: ESG
ESG
Slide 33: Dollarama's ESG framework
Dollarama’s ESG framework PRIORITY AREAS OUR PEOPLE OUR PRODUCTS OUR SUPPLY CHAIN OUR OPERATIONS ▪ Fair labour ▪ Product safety ▪ Product sourcing ▪ Energy practices and quality management ▪ Human rights and climate change ▪ Diversity and inclusion ▪ Fair labour ▪ Waste management practices ▪ Data s
Slide 34: ESG priorities overview
ESG priorities overview KEY 2019-2020 ESG PRIORITIES OUR PEOPLE OUR PRODUCTS Promoting a dynamic and inclusive Providing customers with compelling workforce value and a consistent shopping experience ▪ Successfully recruit in support of expanding store network ▪ Maintain a diverse supplier base and
Slide 35: ESG priorities overview
ESG priorities overview KEY 2019-2020 ESG PRIORITIES OUR SUPPLY CHAIN OUR OPERATIONS A three-pronged approach to vendor Minimizing the environmental footprint compliance and engagement of our operations ▪ Maintain vendor adherence and ▪ Continue to measure Scope 1 and 2 GHG compliance with Vendor Co
Slide 36: Thank you
Thank you Te i, ume” Te laand ff a. | nan Bi _ anne” iv
Slide 37: A seasoned board and management team
A seasoned board and management team BOARD OF DIRECTORS OFFICERS Stephen Gunn Nicholas Nomicos Neil Rossy Chair of the Board Managing Director President & Chief Executive Corporate Director Nonantum Capital Partners Officer Joshua Bekenstein Neil Rossy Michael Ross, FCPA, FCA Managing Director Presi