Alimentation Couche-tard Inc. · TSX:ATD
Alimentation Couche-tard — Investor Presentation (June 2022)
42 slides from Alimentation Couche-tard's investor presentation, June 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION Alimentation Couche-Tard June 2022
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and the accompanying oral presentation contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “projected”, “estimate”, “may”, “anticipate”, “believe”
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Size and Scale • Global rebrand initiative permits better leverage of broad 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 4: Content: Company Overview
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 4
Slide 5: 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 ~20%2 since 2012 and profitable since IPO in 1986. • Track record of generating shareholder value with average RO
Slide 6: Global Leader in Fuel & Convenience Retail
GLOBAL LEADER IN FUEL & CONVENIENCE RETAIL Store Count Our People Countries / Territories 14,008 ~122,000 24 incl. int’l licensees globally incl. int’l licensees Fuel Gallons Sold Customers Served1 Cups of Coffee Sold1 ~35 million ~9 million ~750,000 per day per day per day Hot Dogs Sold1 Polar Pop
Slide 7: Revenue and Gross Profit Mix
REVENUE AND GROSS PROFIT MIX Gross Profit(1,2) 2% 12% Revenue Geographic Mix Product Mix 13% 1% 26% 19% 21% 47% 51% 66% 72% 69% 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 8: Snapshot of Key Business Metrics
SNAPSHOT OF KEY BUSINESS METRICS Merch. SSS – Europe and Merch. SSS – US1 Other Regions2 Merch. SSS - Canada1 +2.3% +6.2% +0.1% SS Volume – Europe and SS Volume - US1 Other Regions1 SS Volume - Canada1 Q4 (1.7%) +3.7% +4.3% Adj. Diluted EPS Growth Adj. EBITDA Growth Y/Y2 Y/Y2 Leverage Ratio2 +4.7% +
Slide 9: Our Vision and Mission
OUR VISION AND MISSION To become the world’s preferred destination Our Vision for fuel and convenience. To make our customers’ lives a little easier Our Mission every day. 9
Slide 10: Content: U.S. Industry
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 10
Slide 11: Snapshot of U.S. Fuel & Convenience Industry
SNAPSHOT OF U.S. FUEL & CONVENIENCE INDUSTRY Store Type Population of U.S. Convenience Stores Single Stores Chain Stores 2021 Non-Fuel 2006 148,026 21% 145,119 total total stores 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 54,526 58,690 55,611
Slide 12: Attractive Channel Within Broader Retail
12 2005 $151.1 2006 $163.6 2007 $168.5 (in billions) 2008 $173.9 2009 $182.4 2010 $190.4 2011 $195.0 2012 $199.3 2013 $204.0 2014 $213.5 $225.8 CAGR 3.9% 2015 Industry Inside Sales 2016 $233.0 2017 $237.0 Source: NACS State of the Industry Report of 2021 Data. 2018 $242.2 2019 $251.9 2020 $255.6 202
Slide 13: ... and Recession Resilient
… AND RECESSION RESILIENT Industry Inside Sales (in billions) Dot-Com Bubble Great Recession $277.9 +5% +8% $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 2005 2006
Slide 14: 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% 47% 30% 40% 37% 30% 32% 30% 13% 27% 11% 20% 22% 6% 4% 15% 3% 3% 2% 10% 2% 2% 2% 1% 0% Conve
Slide 15: U.S. National Fuel Margin Trending Higher
U.S. NATIONAL FUEL MARGIN TRENDING HIGHER 2014 - 2021 average: 24.9 cpg 35.2 30.9 2008 - 2013 average: 17.2 cpg cents per gallon 24.8 24.0 22.4 21.8 20.4 19.9 19.0 18.1 18.5 18.4 16.3 13.1 CAGR 4.2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Rising breakeven point for sing
Slide 16: Cost Headwinds Favour Larger Chains
16 2004 $3.8 2005 $5.4 2006 $6.6 (in billions) 2007 $7.6 2008 $8.4 2009 $7.4 2010 $9.0 2011 $11.1 2012 $11.2 2013 $11.2 2014 $11.4 2015 $10.0 2016 $9.5 Card Costs to Industry 2017 $10.1 Source: NACS State of the Industry Report of 2021 Data. 2018 $11.1 2019 $11.8 2020 $10.7 2021 $13.5 2008 $8.37 200
Slide 17: Content: Competitive Advantages
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 17
Slide 18: 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. • Well positioned with Nor
Slide 19: Global Footprint with Lots of White Space
GLOBAL FOOTPRINT WITH LOTS OF WHITE SPACE Europe and Canada Other Regions1 2,083 3,072 stores stores United States International2 7,011 1,842 stores stores Core network International licensees Note: Store count as of April 24, 2022. Includes 987 automats 1 Europe and Other Regions store count includ
Slide 20: 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 21: Highly Experienced Retail & Fuel Executive Team
HIGHLY EXPERIENCED RETAIL & FUEL EXECUTIVE TEAM Brian Hannasch Claude Tessier Alex Miller Hans-Olav Høidahl President and Chief Financial Officer EVP, Operations, North EVP, Operations, Europe Chief Executive Officer America, and Global Commercial Optimization Ed Dzadovsky Kevin Lewis Ina Strand Aar
Slide 22: Long-Standing Cost Discipline
LONG-STANDING COST DISCIPLINE Lean corporate structure Normalized Growth of Expenses1 9.4% Decentralized business units Procurement efficiency 3.7% 2.1% 2.5% Continuous benchmarking 1.5% 2.0% 0.2% 0.8% 2.0% average Cost efficient systems -0.9% -1.2% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 23: Proven Ability to Integrate Acquisitions
PROVEN ABILITY TO INTEGRATE ACQUISITIONS Revenues 2005- 2004 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012- Deals 2 34 7 4 3 4 3 3 0 1 3 4 Stores 1,706 1,137 2,506 166 1,660 515 442 2,055 0 30 367 91 Since 2004, Couche-Tard has successfully completed a total of 68 deals, adding ~10,700 stor
Slide 24: Norway Laboratory Is a Significant Advantage
NORWAY LABORATORY IS A SIGNIFICANT ADVANTAGE E-mob platform and internal 1,086 fast chargers now installed in Home and workplace charging capabilities established Europe on more than 256 sites launched in Norway • Recognized as #1 charging destination. • 686 fast chargers now installed in Norway on
Slide 25: Impressive EBITDA-to-FCF Conversion
Target Allocation IMPRESSIVE EBITDA1-TO-FCF2 CONVERSION of Capex Network Development 38% 39% 32% 34% 39% 41% 39% 32% 32% 32% 24% 35% of total capex 5,244 Commercial 5,061 Aiming to deploy 35% to 40% of Programs 2,203 EBITDA towards capital expenditures 2,447 4,446 in US$ millions 30% 2,244 of total
Slide 26: Efficient Structure Below EBITDA Line
EFFICIENT STRUCTURE BELOW EBITDA LINE EBITDA1 100% D&A2 29% Net financial expenses 5% Income taxes 14% Net earnings 51% Low cost of debt and global corporate structure permits high conversion of EBITDA to net earnings. 1 Please refer to page 40 for more information on these performance measures not
Slide 27: Solid Balance Sheet and Capacity to Invest
SOLID BALANCE SHEET AND CAPACITY TO INVEST Investment Grade Credit Rating BBB / Baa2 S&P / Moody’s Leverage Ratio2,3 Q4/22 1.39 below 2.25 target Incremental Balance Sheet Capacity4 ~ $10 billion incremental debt Repurchased more than 46 million shares for $1.88 billion during fiscal 2022. 1 Pro for
Slide 28: Content: Our Ambition
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 28
Slide 29: Our Ambition: Double Again
OUR AMBITION DOUBLE AGAIN by making our customers’ lives a little easier every day! Double adjusted EBITDA1, driven by our value creation equation and a focus on organic growth. 1 For additional information on these performance measures not defined by IFRS, please refer to the section « Non-IFRS mea
Slide 30: 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 Ratio 1 ratio below 2.25, allowing for flexibility following significant acquisitions. Capital Aim to maintain a level of capex spendi
Slide 31: 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. 31
Slide 32: Key Focus Areas
KEY FOCUS AREAS Customer Journey Offering Network • Be recognized by our customers • Succeed with food • Continue to grow market share in for a differentiated experience, in • Capture new opportunities the U.S. the way we deliver and • Further develop our retail • Expand to new growth markets. conti
Slide 33: 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 34: Content: Increasing Shareholder Value
CONTENT Company U.S. Industry Competitive 1 Highlights 2 Overview 3 Advantages Increasing 4 Our Ambition 5 Shareholder Value 34
Slide 35: 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. 35
Slide 36: Delivering Strong Results...
DELIVERING STRONG RESULTS… (1,2) (1,2) Note: Starting in fiscal 2020, revenue and gross profit figures include impact from transition to IFRS 16 lease accounting standard 1 Please refer to page 40 for more information on these performance measures not defined by IFRS 2 For additional information on
Slide 37: ... and Rewarding Shareholders Accordingly
… AND REWARDING SHAREHOLDERS ACCORDINGLY Announced quarterly dividend of CA 11¢ in Q4 2022 representing an annualized payment of 44¢ per share. 37
Slide 38: Strong Organic Growth Driving Returns
STRONG ORGANIC GROWTH DRIVING RETURNS 1 Return on Capital Employed IAS 17 IFRS 16 avg. 14.8% 19.2% We have repeatedly proven our ability to 16.2% 15.9% 15.8% 15.4% 15.0% increase our ROCE 14.1% 13.3% following the integration 12.0% of large acquisitions 11.0% 2013 2014 2015 2016 2017 2018 2019 2020
Slide 39: Relative Stock Performance
RELATIVE STOCK PERFORMANCE 10-Year Stock Performance vs. Key Indices Alimentation Couche-Tard S&P 500 S&P/TSX Composite 800% 700% 633.5% 600% 500% 400% 300% 200% 188.9% 100% 65.2% 0% -100% Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17
Slide 40: Financial Highlights
FINANCIAL HIGHLIGHTS in US$ millions, unless otherwise noted 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGR Total revenues 22,980 35,549 37,962 34,530 34,145 37,905 51,394 59,118 54,132 45,760 62,810 11% Gross profit1 2,975 4,607 4,988 5,268 6,082 6,482 8,112 9,195 9,644 10,115 11,005 1
Slide 41: Investment Highlights
INVESTMENT HIGHLIGHTS Size and Scale • Global rebrand initiative permits better leverage of broad 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 42: Investor Relations Contact
INVESTOR RELATIONS CONTACT Jean-Philippe D. Lachance Vice President, Investor Relations & Treasury Investor.Relations@couche-tard.com 42
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