Slide 1: Aimia - Inspiring Loyalty
/\IMI/A\ INSPIRING LOYALTY
Slide 2: Q2 2014 Highlights
Q2 2014 HIGHLIGHTS August 13, 2014
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Forward-looking statements are included in the following presentation. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “wo
Slide 4: Rupert Duchesne, Group CEO
RUPERT DUCHESNE GROUP CHIEF EXECUTIVE
Slide 5: Overall Q2 2014 Highlights
OVERALL Q2 2014 HIGHLIGHTS A strong quarter with a double digit increase in Gross Billings, up 13.6%, boosted by Canadian Gross Billings up 12.4% and a favourable currency impact driving a 22.6% EMEA increase Guidance for Free Cash Flow and capital expenditures updated, with Free Cash Flow of $2
Slide 6: Membership Growth at Aeroplan
MEMBERSHIP GROWTH AT AEROPLAN Aeroplan Active Membership Base Thousands of 12-month Active Members • The first six months has demonstrated significant membership growth, with new +3% members up 3% in the first six months of 2014 – driven by market share gains in financial cards +11% 4.97 • Goal cont
Slide 7: Financial Services Momentum YTD 2014
FINANCIAL SERVICES MOMENTUM YTD 2014 • 25% lift in active co-branded • Spend per card indicating credit cards to 1.5 million base of premium cardholders and higher • Net new cards acquired spend per card among taking AMEX base up by tenured cardholders almost 30% YoY Aeroplan Spend Per Card Active C
Slide 8: Better Flight Rewards: Value and Certainty
BETTER FLIGHT REWARDS: VALUE AND CERTAINTY Members are embracing the certainty and value offered by the program > We issued 1.6 million flight rewards in 2013, more than any other loyalty program in Canada, and continue to provide unrivalled value in business class > Members continue to take advanta
Slide 9: Benefits to Air Canada from Transformation
BENEFITS TO AIR CANADA FROM TRANSFORMATION Moving to a More Balanced Split Between Classic Rewards and Aligned Outcomes For Market Fare Flight Rewards Credit Card Acquisitions Increases Yield To Air Canada Significant Increase In Added Value for Volume Of Rewards Altitude Members Market Fare Flight
Slide 10: Room for Strong Growth in Canada
ROOM FOR STRONG GROWTH IN CANADA Loyalty Currently Capturing Only 50% Goals of Total Household Expenditures • Market share leadership • Outstanding member Aimia Market satisfaction and engagement Penetration Opportunity (2013) • Exceptional value delivered 1.3 3.0 to key partners • Top line growth a
Slide 11: David Adams, EVP and CFO
DAVID ADAMS EXECUTIVE VICE-PRESIDENT AND CFO
Slide 12: Aimia Performance: Q2 and YTD 2014
AIMIA PERFORMANCE: Q2 AND YTD 2014 Q2 2014 Gross Adjusted Free Cash (1) Billings EBITDA Flow $648.1M $58.7M $153.1M (2) +13.6% 9.1% margin +72.4% YTD 2014 Gross Adjusted Free Cash (1) Billings EBITDA Flow $1,365.3M $190.4M $213.6M (2) +20.6% 13.9% margin +169.7% (1) Free cash flow before common and
Slide 13: Q2 2014 Gross Billings Growth by Region
Q2 2014 GROSS BILLINGS GROWTH BY REGION ($ MILLIONS) $0.7 $648.1 $36.5 $40.3 US & APAC $570.6 EMEA Canada Consolidated: +13.6% growth; +8.1% in c.c.(1) Canada: +12.4%; EMEA: +22.6%; +6.3% in c.c.; US & APAC: +0.8%; (4.6%) in c.c. 2013 Reported 2014 Reported (1) Constant Currency (c.c.) compares resu
Slide 14: Q2 2014 Gross Billings Growth by Activity
Q2 2014 GROSS BILLINGS GROWTH BY ACTIVITY ($ MILLIONS) $30.7 $0.7 $648.1 $46.1 $570.6 Proprietary Loyalty EMEA Loyalty & Other Canada Loyalty Units Units Consolidated Loyalty Units: +18.5% growth; Canada Loyalty Units: +17.0% growth; EMEA Loyalty Units: +21.3% growth Proprietary Loyalty & Other +0.4
Slide 15: Aeroplan Accumulation & Redemption
AEROPLAN ACCUMULATION & REDEMPTION ACCUMULATION PATTERN REDEMPTION PATTERN 17.9% 15.4% 10.4% 9.6% 6.9% 8.2% 4.6% 2.9% 1.5% 2.1% 0.5% -2.3% -4.5% -8.9% Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Accumulation with Accumulation without Redemption Redemption at 2013 promotional miles pr
Slide 16: Q2 2014 Consolidated AEBITDA
Q2 2014 CONSOLIDATED AEBITDA ($ MILLIONS) $102.0 $(18.5) $3.7 $2.0 $(26.6) US & Canada EMEA APAC $0.5 $(3.0) $(1.4) $58.7 VAT Club Premier Corporate Stock impact (PLM) based distribution compensation 2013 2014 Reported Reported 16
Slide 17: Drivers of Free Cash Flow
DRIVERS OF FREE CASH FLOW* ($ MILLIONS) $213.6 $153.1 $88.8 Including Including one off one offs $171.2 of $83.4 $79.2 $253.3 of $205.9 million million $100.0 $99.5 -$11.2 -$18.1 -$20.3 -$39.7 Q2 2013 Q2 2014 1H 2013 1H 2014 Cash flow from Operations Capital Expenditures * Free Cash Flow before Divi
Slide 18: 2014 Guidance
2014 GUIDANCE* Guidance 2014 Target 2013 (updated on May 13, 2014)(1) (updated on August 13, 2014) Gross Billings $2,366.4 million Between 7% and 9% growth No Change (constant currency)(2) Adjusted EBITDA $350.5 million(3) Adjusted EBITDA margin of No Change approximately 12%(2) Free Cash Flow $268.
Slide 19: Thank You
AIMIA INSPIRING LOYALTY
Slide 20: Appendix
APPENDIX
Slide 21: Attractive Dividend Record
ATTRACTIVE DIVIDEND RECORD Quarterly Dividends Per Common Share(1) $0.20 $0.18 $0.16 $0.14 $0.12 $0.10 $0.170 $0.180 $0.08 $0.150 $0.160 $0.06 $0.125 $0.04 $0.02 $0.00 2010 2011 2012 2013 2014 (1) Quarterly dividends paid in June each year. 21
Slide 22: YTD 2014 Consolidated Gross Billings Growth
YTD 2014 CONSOLIDATED GROSS BILLINGS GROWTH ($ MILLIONS) $17.8 $1,365.3(2) $65.9 $49.8 $100.0 US & $1,131.7 EMEA APAC Canada TD Contribution Consolidated: +20.6% growth; 15.3% in c.c.(1) Canada: +26.3%; EMEA: +14.9% US & APAC: +10.8% Consolidated +60.1% growth 2013 Reported 2014 Reported (1) Constan
Slide 23: YTD 2014 Consolidated AEBITDA
YTD 2014 CONSOLIDATED AEBITDA ($ MILLIONS) $100.0 ($66.5) $3.9 ($1.7) $0.5 ($24.0) US & EMEA Club Premier ($6.6) $0.8 $190.4 $184.0 Canada (PLM) APAC distribution VAT TD Stock Impact Corporate Contribution based compensation 2013 2014 Reported Reported 23
Slide 24: Q2 Adjusted EBITDA to Free Cash Flow Bridge
Q2 ADJUSTED EBITDA TO FREE CASH FLOW BRIDGE ($ MILLIONS) $75.6 ($1.9) ($18.1) ($40.2) $153.1 $73.8 $5.2 $58.7 Non-cash items Adjusted Change in Stock based Impact of Cash Taxes Net Cash Capital Working VAT Free Cash EBITDA FRC excluding compensation Breakage on Interest expenditures capital and Flow
Slide 25: YTD Adjusted EBITDA to Free Cash Flow Bridge
YTD ADJUSTED EBITDA TO FREE CASH FLOW BRIDGE ($ MILLIONS) $22.5 ($17.0) $73.4 ($39.7) ($108.8) $85.9 $6.9 $213.6 $190.4 Non-cash items Adjusted Change in Stock based VAT impact Cash Taxes Harmonized Net Cash Capital Working Free Cash EBITDA FRC compensation sales tax on Interest expenditures capital
Slide 26: Q2 2014 Financial Highlights – Consolidated
Q2 2014 FINANCIAL HIGHLIGHTS – CONSOLIDATED Three months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance % Reported Reported Breakage VAT Adjusted Reported Adjusted Gross Billings 648.1 570.6 570.6 13.6% 13.6% Gross Billings from the sale of Loyalty Units 491.1 414.3 414.3 18.5%
Slide 27: YTD 2014 Financial Highlights – Consolidated
YTD 2014 FINANCIAL HIGHLIGHTS – CONSOLIDATED Six months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance % Reported Reported Breakage VAT Adjusted Reported Adjusted Gross Billings(1) 1,365.3 1,131.7 1,131.7 20.6% 20.6% Gross Billings from the sale of Loyalty Units(1) 1,039.8 827.6
Slide 28: Canada Performance
CANADA PERFORMANCE Q2 2014 Gross Billings Q2 2014 Highlights • Gross Billings up 12.4% over last year to $365.2 13% million driven by higher Gross Billings from sale of Loyalty Unit offset in part by lower client activity in Proprietary Loyalty and Other Canada $365.2M • Gross Billings from Loyalty
Slide 29: Q2 2014 Financial Highlights – Canada
Q2 2014 FINANCIAL HIGHLIGHTS – CANADA Three months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance % Reported Reported Breakage Adjusted Reported Adjusted Gross Billings 365.2 324.9 324.9 12.4% 12.4% Gross Billings from the sale of Loyalty Units 316.6 270.5 270.5 17.0% 17.0% Reve
Slide 30: Q2 2014 Financial Highlights – Canada
Q2 2014 FINANCIAL HIGHLIGHTS – CANADA Three months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance Reported Reported % Gross Billings Aeroplan 327.3 282.6 15.8% Proprietary Loyalty 55.6 63.6 -12.6% Intercompany eliminations (17.7) (21.3) n.m. 365.2 324.9 12.4% Total revenue Aerop
Slide 31: YTD 2014 Financial Highlights – Canada
YTD 2014 FINANCIAL HIGHLIGHTS – CANADA Six months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance % Reported Reported Breakage Adjusted Reported Adjusted Gross Billings(1) 797.9 632.0 632.0 26.3% 26.3% Gross Billings from the sale of Loyalty Units(1) 701.2 527.1 527.1 33.0% 33.0%
Slide 32: YTD 2014 Financial Highlights – Canada
YTD 2014 FINANCIAL HIGHLIGHTS – CANADA Six months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance Reported Reported % Gross Billings Aeroplan2 722.7 551.2 31.1% Proprietary Loyalty 110.9 121.8 -8.9% Intercompany eliminations (35.7) (41.0) n.m. 797.9 632.0 26.3% Total revenue Aero
Slide 33: EMEA Performance
EMEA PERFORMANCE Q2 2014 Gross Billings Q2 2014 Highlights 12% • Gross Billings up 22.6% to $197.8 million driven by favorable currency impact, as well as the Loyalty Units and the Analytics and Insights and Proprietary 15% Loyalty businesses EMEA $197.8M • Adjusted EBITDA decreased to $19.9 million
Slide 34: Q2 2014 Financial Highlights – EMEA
Q2 2014 FINANCIAL HIGHLIGHTS – EMEA Three months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance % Reported Reported VAT Adjusted Reported Adjusted Gross Billings 197.8 161.3 161.3 22.6% 22.6% Gross Billings from the sale of Loyalty Units 174.5 143.8 143.8 21.3% 21.3% Revenue fro
Slide 35: YTD 2014 Financial Highlights – EMEA
YTD 2014 FINANCIAL HIGHLIGHTS – EMEA Six months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance % Reported Reported VAT Adjusted Reported Adjusted Gross Billings 384.8 335.0 335.0 14.9% 14.9% Gross Billings from the sale of Loyalty Units 338.6 300.5 300.5 12.7% 12.7% Revenue from
Slide 36: US & APAC Performance
US & APAC PERFORMANCE Q2 2014 Gross Billings Q2 2014 Highlights • Gross Billings up 0.8% to $85.2 million from favourable currency, increase business in APAC offset in part by the reduced rewards fulfillment US & volumes in the U.S APAC • Adjusted EBITDA improved by $2.0 million to $85.2M $(4.3) mil
Slide 37: Q2 2014 Financial Highlights – US & APAC
Q2 2014 FINANCIAL HIGHLIGHTS – US & APAC Three months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance Reported Reported % Gross Billings 85.2 84.5 0.8% Gross Billings from the sale of Loyalty Units - - - Revenue from Loyalty Units - - - Revenue from proprietary loyalty services 9
Slide 38: YTD 2014 Financial Highlights – US & APAC
YTD 2014 FINANCIAL HIGHLIGHTS – US & APAC Six months ended June 30, (in millions of Canadian dollars) 2014 2013 Variance Reported Reported % Gross Billings 182.9 165.1 10.8% Gross Billings from the sale of Loyalty Units - - - Revenue from Loyalty Units - - - Revenue from proprietary loyalty services
Slide 39: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER Other Partner A Other Partner A 22.1% 14.2% 24.8% 33.7% Partner B Q2 2013 Q2 2014 19.5% $414.3M Air $491.1M Air Canada Canada 13.1% 14.1% Partner B Partner D Partner D 11.9% Partner C 17.2% 10.2% 19.2% 39
Slide 40: Gross Billings from Sale of Loyalty Units by Major Partner
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER Partner A Partner A 14.3% Other Other 32.4% 25.4% 23.1% Partner A Partner B 1H 2013 1H 2014* 19.4% $827.6M Air $939.8M Canada Air 12.9% Canada 14.4% Partner B Partner D Partner C Partner D 17.8% 12.1% 18.2% 10.0% * Excludes the $100.0 millio
Slide 41: Balance Sheet at June 30, 2014
BALANCE SHEET AT JUNE 30, 2014 AVAILABLE CASH DEBT Annual June Interest June $ millions 30, 2014 $ millions Rate Maturing 30, 2014 Cash and cash equivalents 748.1 Revolving Facility(1) Apr. 23, 2018 - Restricted cash 28.6 Senior Secured Notes 2 7.90% Sept. 2, 2014 150.0 Short-term investments 71.6 S
Slide 42: Foreign Exchange Rates
FOREIGN EXCHANGE RATES Q2 2014 Q2 2013 % Change Average Average Period Average Average Period Average Average Period Quarter YTD End Quarter YTD End Quarter YTD End £ to $ 1.8350 1.8293 1.8154 1.5710 1.5679 1.5992 16.8% 16.7% 13.5% AED to $ 0.2969 0.2984 0.2902 0.2785 0.2764 0.2862 6.6% 8.0% 1.4% US