Empire Co Ltd Class A · TSX:EMP.A
Empire Co Ltd Class A — Investor Presentation (September 2021)
25 slides from Empire Co Ltd Class A's investor presentation, September 2021
Slide 1: Investor Presentation
Investor Presentation September 2021 Katie Brine, Director Finance, Investor Relations Email: katie.brine@sobeys.com
Slide 2: Disclaimers
Disclaimers Forward-Looking Information This presentation contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize the Company’s financial position and understand management’s expectations regarding the Company’s strategic priorities, objective
Slide 3: CEO's Direct Reports
CEO’s Direct Reports Michael Medline President & Chief Executive Officer Pierre Vivek Mike Sarah Michael Simon Sandra Doug Danielle Mohit St-Laurent Sood Venton Joyce Vels Gagné Sanderson Nathanson Amirault Grover Chief E-commerce Innovation, Related Discount Chief Chief Marketing General Chief of S
Slide 4: Empire Company Limited – Who are we?
Empire Company Limited – Who are we? Quick Facts – Empire(1) • Canadian company headquartered in Stellarton, Nova Scotia. Share price (CAN$)(2) $39.24 • Key businesses include food retailing and related real estate through wholly-owned subsidiary Sobeys Inc. and a 41.5% equity accounted 52-Week High
Slide 5: Investment Profile
Investment Profile ▪ Second largest grocery retailer in Canada. ▪ Acquisition of 51% of Longo’s, a specialty grocery retailer in Ontario and their Grocery Gateway e-commerce business in May, 2021 will accelerate growing presence in the largest grocery market in Canada. +10.9% Dividend ▪ Significant
Slide 6: Fiscal 2021 Sustainability Achievements
Fiscal 2021 Sustainability Achievements Focused on the environmental, social and governance (ESG) factors that matter most to our stakeholders People Planet Products Grow and empower a diverse, equitable, Reduce our impacts, take action on climate change and do OurPartTM to protect Do OurPartTM by d
Slide 7: Key Achievements – Last twelve months
Key Achievements – Last twelve months 2020 July – Unveiled the Company’s new three-year strategy, Project Horizon. (see slide 10). August • Reached important five-year labour agreement in Alberta. • S&P Upgrades Sobeys Inc. Credit Rating to Investment Grade – Sobeys now has an investment grade credi
Slide 8: Successful Completion of Project Sunrise
Successful Completion of Project Sunrise In the fourth quarter of fiscal 2017, the Company launched Project Sunrise, a three-year transformation. As of the fourth quarter of fiscal 2020, Project Sunrise was successfully completed, exceeding management’s initial expectations of $500 million in net be
Slide 9: Project Sunrise – Exceeded 3 Year Target
Project Sunrise – Exceeded 3 Year Target Next 3 Year Growth Plan, Project Horizon, on Track $2.8 Sales ($B) • Increase in stock price of over 150% since January 2017. +4.4% CAGR(1) $2.6 • February 28th 2020 – the Canadian environment began to be impacted by the COVID-19 pandemic. $2.4 • Foundation h
Slide 10: Project Horizon
Project Horizon Three-year growth strategy for core business expansion and e-commerce acceleration. Management targeting an incremental $500 million in annualized EBITDA, driving an improvement in EBITDA margin of 100 basis points by fiscal 2023. To be achieved through: 1) Growth in market share Ben
Slide 11: Ontario Market
Ontario Market Significant Growth Opportunity The Company is focused on increasing its market share in urban markets through a three- pronged approach of introducing an industry leading grocery e-commerce platform to Canadians, rapidly growing the number of Farm Boy locations in Ontario; and recentl
Slide 12: Project Horizon – Voilà
Project Horizon – Voilà Your groceries delivered. Just like that. The Company is accelerating its plans to win Canadian grocery e-commerce. ▪ Powered by Ocado Group plc’s (“Ocado”) industry-leading technology, Voilà fills orders through its automated Customer Fulfilment Centres (“CFC”). ✓ Robots ass
Slide 13: Project Horizon Voilà and Ocado Solutions
Project Horizon Voilà and Ocado Solutions With more than 15 years at the forefront of innovation and success in grocery e-commerce, Ocado has partnered exclusively in Canada with Empire on our end-to-end e-commerce solution, Voilà. Key facts: F21 ▪ Empire’s e-commerce sales growth (compared to last
Slide 14: Project Horizon – FreshCo Expansion Progress
Project Horizon – FreshCo Expansion Progress FreshCo Expansion to Western Canada Empire expects to convert up to 25% of the 255 Safeway and Sobeys full-service format stores in Western Canada to the FreshCo discount format. During the first quarter, the Company opened one location and expects to ope
Slide 15: Capital Allocation
Capital Allocation Capital Expenditure (1) • The Company invested $147.0 million in capital expenditures(1) for the quarter ended July 31, 2021 (first quarter of fiscal 2021 – $119.8 million), including renovations and construction of new stores, investments in e-commerce fulfilment centres and Fres
Slide 16: Longo's and Grocery Gateway – Key Investment Highlights
Longo’s and Grocery Gateway – Key Investment Highlights 1 Aligned with Project Horizon Strategic Priorities 2 Enhances Empire’s Presence in Urban Markets in Toronto 3 Differentiated Specialty Grocery Retailer 4 Strong Online Grocery Offering in the GTA 5 Unique Private Label Offering 6 Retention of
Slide 17: Financial Results – Annual
Financial Results – Annual Fiscal F2021 F2020 F2019 F2018 F2017 52 weeks 52 weeks 52 weeks 52 weeks 52 weeks (1)(2) (1) 1-May-21 2-May-20 4-May-19 5-May-18 6-May-17 Sales $28,268.3 $26,588.2 $25,142.0 $24,214.6 $23,806.2 Same store sales growth (decline), excluding fuel 5.6% 5.7% 2.7% 0.5% (2.2)% Gr
Slide 18: Outlook
Outlook The Company expects that fiscal 2022 will continue to be affected by COVID-19, with some normalization of business throughout the year as vaccination rates increase and COVID-19 restrictions are relaxed. Management has observed increased levels of food consumption outside of the home and rel
Slide 19: Appendices A – E
E M P If RE Appendices A-E COMPANY LIMITED
Slide 20: Appendix A – Overview of Longo's
Appendix A – Overview of Longo’s ▪ Founded in 1956 by three brothers, Longo’s is a specialty grocery retailer, focused on providing customers with high quality fresh products, and offers a range of locally sourced meats and produce. ▪ Longo’s operates in the Greater Toronto Area (“GTA”), Canada’s la
Slide 21: Appendix A – Longo's Transaction Overview
Appendix A – Longo’s Transaction Overview ▪ Empire has agreed to purchase 51% of Longo’s, for $357 million. ▪ The acquisition is based on a total enterprise value of $700 million. ▪ Longo’s shareholders can receive up to $125 million of the initial consideration in Empire non-voting Class A shares.
Slide 22: Appendix B – Geographic Profile
Appendix B – Geographic Profile National scale and presence, operating over 1,500 stores in all 10 provinces, as well as more than 350 retail fuel locations. West Total Canada = 1,968 423 Atlantic 464 102 231 49 Voilá 41 722 91 Voilá 359 32 Voilá Quebec Voilá Ontario Alberta – Curbside pickup now av
Slide 23: Appendix C – Financial Results – 12 Quarter Review
Appendix C – Financial Results – 12 Quarter Review Fiscal Fiscal 2021 Fiscal 2020(1) Fiscal 2019 2022 Q1 F22 Q4 F21 Q3 F21 Q2 F21 Q1 F21 Q4 F20 Q3 F20 Q2 F20 Q1 F20 Q4 F19 Q3 F19 Q2 F19 Jul. 31 May 1 Jan. 30 Oct. 31 Aug 1 May 2 Feb. 1 Nov. 2 Aug. 3 May 4 Feb. 2 Nov. 3 2021 2021 2021 2020 2020 2020 2
Slide 24: Project Horizon – Voilà Timeline
Project Horizon – Voilà Timeline December 10, 2020: January 22, 2018: ▪ Location of CFC #3 announced in Calgary, Alberta; will deliver to customers in the first half of 2023. ▪ Sobeys signs agreement with Ocado to bring world’s leading ▪ Early Voilà operating metrics: online grocery delivery solutio
Slide 25: Appendix D – Voilà Network
Appendix D – Voilà Network ▪ In early March, Voilà opened its first spoke location in Etobicoke, Ontario. ▪ Total investment in Voilà for fiscal 2022 s expected to be approximately $80 million, including its share of the investment in the Montreal and Calgary CFCs, up to 90 new store pickup location
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