Q Supplementary Slides. February 26, 2015

Transcription

1 Q Supplementary Slides February 26,

2 Forward-looking Statements This Presentation for Loblaw Companies Limited ( Loblaw or the Company ) contains forward-looking statements about the Company s objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects and opportunities. Specific forwardlooking statements in this presentation include, but are not limited to, statements with respect to the Company s anticipated future results, events and plans, synergies and other benefits associated with the acquisition of Shoppers Drug Mart Corporation ( SDM ), future liquidity and debt reduction targets, planned capital investments, and status and impact of Information Technology ( IT ) systems implementation. These specific forward-looking statements are contained throughout this News Release including, without limitation, in the Outlook section of this News Release. Forward-looking statements are typically identified by words such as expect, anticipate, believe, foresee, could, estimate, goal, intend, plan, seek, strive, will, may, on track and should and similar expressions, as they relate to the Company and its management. Forward-looking statements reflect the Company s current estimates, beliefs and assumptions, which are based on management s perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company s expectation of operating and financial performance in 2015 is based on certain assumptions including assumptions about anticipated cost savings, operating efficiencies and continued growth from current initiatives. The Company s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. The Company can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Numerous risks and uncertainties could cause the Company s actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including those described in Section 15 "Enterprise Risks and Risk Management" of the MD&A in the 2014 Annual Report and the Company s Annual Information Form ( for the year ended January 3, 2015). Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in the Company s materials filed with the Canadian securities regulatory authorities from time to time, including, without limitation, the section entitled "Risks" in the Company's Annual Information Form for the year ended January 3, Readers are cautioned not to place undue reliance on these forwardlooking statements, which reflect the Company s expectations only as of the date of this News Release. Except as required by law, the Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation uses certain non-gaap measures, such as Adjusted Operating Income, Adjusted Operating Margin, Adjusted EBITDA and Adjusted EPS which Loblaw believes provide useful information to both management and investors in measuring financial performance. These measurers do not have a standard meaning prescribed by GAAP, and therefore, they may not be comparable to similarly titled measurers presented by other publicly traded companies, and should not be construed as an alternative to other financial measures determined in accordance with GAAP. 2

3 Key Financial Metrics Loblaw Q Consolidated Revenue Adjusted EBITDA Adjusted Operating Income $11,413M, +49.4% (+9.4% ex. Shoppers Drug Mart) $950M, +94.3% (+22.3% ex. Shoppers Drug Mart) $681M, % (+33.4% ex. Shoppers Drug Mart) Adjusted EPS $0.96, +68.4% Retail Revenue (ex SDM) $8,110M, +9.3% Retail Adjusted Gross Margin (ex SDM) Retail Adjusted EBITDA Margin (ex SDM) Retail Adjusted Operating Income (ex SDM) Net Efficiencies Achieved (ex SDM) 21.9% (flat vs Q4/13) 6.7% (+80bps) $343M, +37.8% Efficiencies in Labour and Supply Chain Net Synergies $49M Free Cash Flow Capex ($) $439M QTD ($977M YTD) $400 QTD; $1,086 YTD (Includes Intangible Asset Additions) 3

4 Key Operational Metrics Q Loblaw Same Store Sales Core-Grocery* Basket Size Traffic Tonnage +3.3% (ex Gas Bar (50bps) and the negative impact of a change in the distribution model by a tobacco supplier (40bps); including these items core grocery comp SSS was 2.4%) Increase in fresh penetration and loyalty participation drove higher basket Increased Slight decline due to specific promotional activity in Q4/13 which was not repeated in Q4/14 Internal Inflation Slightly above Q4 Food CPI of 3.5% Loblaw STM Square Footage Growth +0.7% vs Q4/13 Industry STM Square Footage Growth PC Plus Net Promoter Score LCL National SAP Stores Converted *Comparable on a 13 Week Basis +0.7% - vs Q4/13 Over 8.2 million total members Trending above last year Substantially all corporate grocery stores and the associated DCs completed as at end of Q4; 447 Stores, 21 DCs 4

5 Key Financial Metrics Q Shoppers Drug Mart Revenue $3,054M, +11.2% Adjusted Gross Profit $1,221M, +14.3% Adjusted Gross Profit Margin 40.0% (~+110bps) Adjusted EBITDA $352M, +13.9% Adjusted EBITDA Margin 11.5% (~+30bps) Adjusted Operating Income $290M, +16.9% Adjusted Operating Margin 9.5% (~+50bps) 5

6 Key Operational Metrics Q Shoppers Drug Mart Retail Selling Square Footage Growth +0.7% Pharmacy Sales $1,372M, +11.5% Pharmacy SSS +4.2% # Rx Dispensed (Rx Count) +13.8% (+6.0% on same store sales basis) Average Rx Value -1.7% Generic Penetration 64.1% (vs 62.4% Q4 2013) Front of Store Sales $1,682M, +10.9% Front of Store SSS +3.6% Loyalty (Optimum) Over 10 million active members 6

7 13 th Week Impact (13 week vs. 12 week) (12 week vs. 12 week) (13 weeks) (12 weeks) (12 weeks) $ Change % Change $ Change % Change Revenue $11,413 $10,624 $7,640 $3, % $2, % Revenue (ex SDM) 8,359 7,785 7, % % EBITDA $900 $829 $492 $ % $ % Adjusted EBITDA % % Adjusted EBITDA (ex SDM) % % Operating Income $507 $436 $296 $ % $ % Adjusted Operating Income % % Adjusted Operating Income (ex SDM) % % 7

8 Adjusted Debt by Segment $ Millions Q Retail PCF REIT Con. & Elim. Bank Indebtedness $ 162 $ 162 $ - $ - $ - Short term debt Long term debt due within one year Long term debt 11,042 7,361 1,005 6,763 (4,087) (a) Trust Unit Liability Capital securities Certain other liabilities $ 13,204 $ 7,816 $ 1,989 $ 6,764 ($ 3,365) Less: PCF Debt Independent Securitization Trusts in S-T debt Independent Securitization Trusts in L-T debt Guaranteed Investment Certificates Independent Funding Trusts Trust Unit Liability Total Adjusted Debt $ 9,995 $ 7,318 $- $ 6,764 ($ 4,087) (a) REIT debt includes Class C LP units, and Class B exchangeable units held by Loblaw retail, eliminated in the consolidation and eliminations segment. 8

9 Adjusted Debt Adjusted Debt at Acquisition $11,060 $1.5B Choice Properties REIT Monetization 1,500 $1.6B Repayment of Term Loan (1,600) 4.85% MTN Matured and Repaid (350) Other 100 Q Reported Adjusted Debt $10,710 $350M Repayment of Term Loan (350) $40M Additional Drawings on CP REIT Credit Facility 40 Other 16 ($350) ($294) Q Reported Adjusted Debt $10,416 $321M Repayment of Term Loan (321) $161M Repayment of Bank Indebtedness (161) Other 61 ($421) Q Reported Adjusted Debt $9,995 9