Canadian Tire Corporation, Limited · TSX:CTC
Canadian Tire — Investor Day (March 2022)
20 slides from Canadian Tire's investor day presentation, Mar 10, 2022
Slide 1: Gregory Craig, Executive Vice President and Chief Financial Officer
Gregory Craig Executive Vice President and Chief Financial Officer March 10, 2022
Slide 2: Forward-looking information
Forward-looking information Canadian Tire Corporation’s 2022 Investor Day presentation contains forward-looking that the Company’s expectations and plans will not be achieved. Examples of material information that reflects Management’s current expectations relating to matters such as future assumpti
Slide 3: Forward-looking information (2)
Forward-looking information (2) The following table sets out additional risks and assumptions applicable to the forward-looking Material risks: information described below: • Risks associated with the Consolidated Comparable Sales Growth aspiration described above • Lower or lesser contribution from
Slide 4: Forward-looking information (3)
Forward-looking information (3) For more information on the material risk factors and uncertainties that could cause the Capital Expenditure Intentions: Expect to spend $3.4B over the next 4 years (2022-25) Company’s actual results to differ materially from predictions, forecasts, projections, expec
Slide 5: Our Better Connected Strategy: what you've heard today
Our Better Connected Strategy: what you’ve CUSTOMER EXPERIENCE PRODUCT heard today We will attract We will deliver We will design new members Canada’s best and deliver world and create omnichannel class products valuable experience, with and evolve our relationships digital at the core. product thro
Slide 6: Building on a solid foundation
Building on a solid foundation Past performance and investments in core capabilities set us up well for future growth Historical 2021 2017-2019 Comparable sales1 18% growth <3% vs. 2019 Diluted earnings ~9% 46% vs. 2019 per share growth 2021: $18.38 2019: $12.58 2021: $18.91 normalized 2019: $13.04
Slide 7: Path to Better growth, profitability, returns
Path to Better Better topline Better Better growth profitability returns 7
Slide 8: Better growth: diverse drivers of retail growth
Better growth: diverse drivers of retail growth Market share Increase loyalty Enhanced Increased owned gains in a sales through omnichannel brands mix growing market Triangle rewards experience 8
Slide 9: Better profitability: maintaining retail gross margin
Better profitability: maintaining retail gross margin Balancing headwinds Retail Gross Inflation and Supply chain tailwinds to Margin (freight) maintain Excluding Petroleum1 margins Owned brands around Pricing & leverage 2021 levels promotional efficiency 35.9% 140 bps increase since 2019 1This is a
Slide 10: Better profitability: Owned Brands
Better profitability: Owned Brands Owned brands penetration1 2021-2025 39 45%+ 16 22%+ 66 ~65% 1This is a Supplementary Financial Measure. See Section 9.3 of the Company's MD&A for the Fourth Quarter and Full-Year 2021 ended January 1, 2022, which is available at www.sedar.com and 10 incorporated by
Slide 11: Better profitability: driving CTC Owned Brands penetration
Better profitability: driving CTC Owned Brands penetration1 43%+ 38% 2025 33% 2021 Owned brand margin differential2 of 600-700 bps 2016 1This is a Supplementary Financial Measure. See Section 9.3 of the Company's MD&A for the Fourth Quarter and Full-Year 2021 ended January 1, 2022, which is availabl
Slide 12: Owned Brands: Helly Hansen, a key Owned Brand
Owned Brands: Helly Hansen — a key Owned Brand in our Canadian portfolio Strategy to triple Executing acquisition business in Canada growth strategy by 2025 vs. 2018 New products Plan to grow share in being introduced U.S. and selected at CTC banners international markets 12
Slide 13: Better profitability: operational efficiency journey
Better profitability: operational efficiency journey Additional $100M $200M+ • Contributing to more than 100 bps of retail Initiatives will include: SG&A rate1 improvement since 2019 • Robotic automation at distribution centres • Improved labour productivity, better customer • Implementation of a ne
Slide 14: Better returns
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Slide 15: Better returns: investing strategically in the business
Better returns: Modernization investing and efficiency enablers strategically in the business Omnichannel customer Fulfilment experience infrastructure and automation $3.4B of which ~$1.2B will over the next be invested in the 4 years CTR store network 15
Slide 16: Better returns: investing in the business
Better returns: investing in the business ~$2.2B will be focused on driving a better ~$675M ~$500M omnichannel customer experience fulfilment modernization ~$1.2B in store Triangle Accelerating Strengthen Continued network personalization digital supply chain modernization and improved transformatio
Slide 17: Better returns: capital allocation priorities
Better returns: capital allocation priorities Organic investments in the business • $3.4 billion over the next 4 years Dividend growth • 2022 dividend, up 11% to $5.20 per share; 12th consecutive increase Strong cash • Longer term dividend payout ratio1 of 30%-40% generation to fund Share repurchase
Slide 18: Better outcomes: CTC financial aspirations 2022-2025
Better outcomes: CTC financial aspirations 2022-2025 Historical 2025 2017-2019 Comparable sales growth achieved on <3% 4%+ average annual basis Diluted earnings per share $12.58 $26.00+ by 2025 2019: $13.04 normalized Retail ROIC <10% ~15%+ by 2025 18
Slide 19: Path to achieving our financial aspirations
Path to achieving our financial aspirations Low/Mid Teens Growth $26.00+ $26.00+ Mid/High Single by 2025 Digit Growth $18.38 Diluted EPS Normalized (more than double pre-pandemic) XX $18.91 $12.58 $12.31 $10.67 $10.64 2017 2018 2019 2020 2021 2022 2023 2024 2025 19
Slide 20: CTC's Path to Better
CTC’s Path to Better Differentiated and resilient business Delivering Better connected strategy better topline growth, better profitability Disciplined capital allocation and better returns Clear financial aspirations 20