North West Company Inc. · TSX:NWC
North West — The North West Company — Investor Presentation (October 2006)
30 slides from North West's investor presentation, October 2006
Slide 1: Investor Meetings October 2006
Investor Meetings October 2006
Slide 2: Cover from 2005 Annual Report
• Cover from 2005 Annual Report Investor Meetings October 2006
Slide 3: Key Facts
Key Facts • 2005 revenue $850 million • 199 stores • 6,000 employees 4 Investor Meetings October 2006
Slide 4: The North West Company is a leading retailer of food and everyday products
The North West Company is a leading retailer of food and everyday products and services to rural communities and urban neighbourhoods across: 1) Northern Canada 2) Alaska 3) Western Canada Our purpose is to enhance lives by offering shopping choices that are convenient, dependable and lifestyle driv
Slide 5: Sales & Other Revenue
Sales & Other Revenue CAGR 3.4% $ in Millions 1000 850 783 789 800 750 704 629 659 617 626 586 592 591 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Investor Meetings October 2006
Slide 6: EBITDA
EBITDA CAGR 4. 9% $ in Millions 100 85.5 76.6 80 70.5 72.3 72.8 63.9 59.4 62.0 60.0 60 57.1 50.6 48.0 40 20 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Investor Meetings October 2006
Slide 7: Cash Flow from Operations
Cash Flow from Operations CAGR 9.5% $ in Millions $90 $80 70.9 $70 63.2 59.2 58.9 $60 55.8 52.1 $50 47.8 44.9 $40 36.0 26.2 30.6 $30 24.0 $20 $10 $0 199 199 199 1997 1998 1999 2000 2001 2002 2003 2004 2005 4 5 6 Investor Meetings October 2006
Slide 8: Balance Sheet
Balance Sheet Financial Strength = Flexibility $300 1.2 1.01 $250 1.0 Debt 0.92 Equity ($ in millions) $200 0.69 0.8 0.62 Debt:Equity $150 0.56 0.6 0.51 0.46 $100 0.4 $50 0.2 $0 0.0 171 170 176 191 152 220 137 219 128 228 121 236 112 243 1999 2000 2001 2002 2003 2004 2005 Investor Meetings October 2
Slide 9: 2005 Performance
2005 Performance NWF CASH PAID OUT & REINVESTED Fiscal Year 2005 2004 2003 2002 2001 Cash flow from Operations/unit $ 4.39 3.92 3.65 3.67 3.74 Payout $ 1.88 1.80 1.90* 1.56 1.46 Payout % 42.8 45.9 52.1 42.5 39.0 Reinvested $ 2.51 2.12 1.75 2.11 2.28 *includes special distribution of $0.34 Investor M
Slide 10: 2006 Second Quarter Performance
2006 Second Quarter Performance SALES GROWTH • Consolidated +8.1% • Canada Food +8.3% • Canada General Merchandise +10.9% • Alaska Food +18.8% Investor Meetings October 2006
Slide 11: 2006 Second Quarter Performance
2006 Second Quarter Performance SAME STORE SALES GROWTH • Canada Food +6.1% • Canada General Merchandise +1.8% • Alaska +2.0% Investor Meetings October 2006
Slide 12: 2006 Second Quarter Performance
2006 Second Quarter Performance NET EARNINGS ($ in millions) $14 12.8 $12 10.8 $10 9.1 9.3 8.9 $8 $6 $4 $2 $0 Q2 2002 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Investor Meetings October 2006
Slide 13: 2006 YTD Second Quarter Performance
2006 YTD Second Quarter Performance NET EARNINGS ($ in millions) $24 22.5 $22 $20 18.5 $18 $16 15.4 15.7 14.5 $14 $12 $10 $8 $6 $4 $2 $0 YTD YTD YTD YTD YTD Q2 Q2 Q2 Q2 Q2 2002 2003 2004 2005 2006 Investor Meetings October 2006
Slide 14: Restructuring
Restructuring First Step - completed April 30, 2006 - transfer of Canadian business assets to L.P. - maintains income taxes near 2005 amounts - increase in Canadian earnings over 2005 flows to the Fund Investor Meetings October 2006
Slide 15: Second Step
Second Step - Change flow of earnings from L.P. - Canadian pre-tax earnings to the Fund Investor Meetings October 2006
Slide 16: Previous
Previous Canadian Operations Taxes Interest Dividends Fund Investor Meetings October 2006
Slide 17: First Step (existing)
First Step (existing) Canadian Operations Taxes Interest Dividends Increase in Canadian earnings over 2005 Fund Investor Meetings October 2006
Slide 18: Second Step
Second Step Canadian Operations Pre-tax earnings Fund Investor Meetings October 2006
Slide 19: Next Level Performance
Next Level Performance Investor Meetings October 2006
Slide 20: Learning
Learning Next Level Performance • 173 managers trained in Best Practice • Need for follow-up identified • New plan brings training to stores Investor Meetings October 2006
Slide 21: Alaska Commercial Company
Alaska Commercial Company Next Level Performance • 11 years of profit growth • ROI leads North West Investor Meetings October 2006
Slide 22: 2006 Growth Initiatives
2006 Growth Initiatives • Retail Food • New Stores • Healthcare • Gas Bars Investor Meetings October 2006
Slide 23: 2006 Growth Initiatives
2006 Growth Initiatives Retail Food • Leading same store sales • Focus on being “Priced Right” • Better promotions, more newness Investor Meetings October 2006
Slide 24: 2006 Growth Initiatives
2006 Growth Initiatives Retail Food Investor Meetings October 2006
Slide 25: 2006 Growth Initiatives
2006 Growth Initiatives New Stores • New stores drive “plus” growth • 24 new stores in 2005-07 • GT, AC and Northern Canada Investor Meetings October 2006
Slide 26: 2006 Growth Initiatives
2006 Growth Initiatives Healthcare • Five new pharmacies/ telepharmacies in 2006 • Winnipeg hub site in 2007 • Expand non-prescription products Investor Meetings October 2006
Slide 27: 2006 Growth Initiatives
2006 Growth Initiatives Gas Bars • Another “Everyday Store” fit • 7-11 convenience plus complete food • Testing in road stores in 2007 Investor Meetings October 2006
Slide 28: Capital Spending
Capital Spending • 20 million in growth capital • New locations • New businesses • Major store expansions Investor Meetings October 2006
Slide 29: Leadership at North West
Leadership at North West • Being Accountable • Getting Aligned • Delegating to the Right Level • Building Trust Investor Meetings October 2006
Slide 30: Investor Meetings October 2006
Investor Meetings October 2006
The North West Company — Investor Presentation (October 2006) on 6ix