Scotiabank Back to School 2013

Transcription

1 Scotiabank Back to School 2013

2 ForwardLookingStatement Today's presentation contains different statements that could be construed as being forward looking information. In general, any statement which does not constitute a historical fact, may be deemed a forward looking statement. Expressions such as expect, intend, are confident that, will and other similar expressions are generally indicative of forward looking statements. The forward looking statements are based upon certain assumptions regarding the Canadian food industry, the general economy, and our annual budget as well as our 2013 action plan. These forward looking statements do not provide any guarantees as to the future performance of the Company and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ significantly. A description of the risks which could have an impact on these statements can be found under the Risk Management section of the 2012 Annual Report. We believe these statements to be reasonable and pertinent at this time and represent our expectations. The Company does not intend to update any forward looking statements, except as required by applicable law. In addition certain non IFRS financial measures may be discussed or referred to today. These measures are for information purposes only. They do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public companies. 2

3 Agenda Agenda Company Overview Metro Strategy Recent Activity 2014 Priorities Question Period 3

4 Company Overview Richard Dufresne Senior Vice President and Chief Financial Officer

5 Overview 565 Food Stores 259 drugstores Ontario Food Stores Quebec Food Stores 5

6 ($ millions) $450 Metro Financial Overview $520 $548 $542 Strong Cash Flow Generation $546 Share Repurchases +$1.1 billion over the last 5 years *2014 NCIB Renewal: 7M shares $393.7M $223 $226 $313 $317 $253 $190.1M $162.9M $158.9M 4M 4.6M 4.6M 4M 4.6M 4.0M 4.2M 4.2M $216.2M 4M 6.0M 4.2M 4.2M 4.2M Cash Flow From Operations Net of Working Capital Free Cash Flow net of dividends, working capital, and CAPEX Dividend Growth 18 consecutive years CAGR 24.0% ($ millions) 207 Corporate Capital Expenditures $1.1 billion over 5 years F

7 Financial Overview Strong Balance Sheet 35% 30% 32.7% Long-Term Debt/Total Cap 30.7% 29.9% 29.1% 27.7% Long term debt : $655.9 M 25% 20% 15% 10% $70 $60 $50 $40 $30 $20 $ % Q Market value +$650M (post-sale) % Q3 Long term debt/ebitda 0.8x $600M revolver, maturity extended to November 3, 2018 S&P and DBRS BBB Stable credit rating Financial flexibility to make acquisitions $0 Sep 2010 Sep 2011 Sep 2012 Sep

8 Return on Shareholders Equity Solid long-term returns 26% 24% 22.9% 24.9% 23.0% 24.2% 24.1% 24.3% 22% 21.3% 20.8% 20.9% 21.2% 20% 19.8% 18% 16% 16.1% 15.6% 15.1% 14.7% 16.4% 16.6% 15.4% 14% 12% 10% 8

9 Share Price Performance Year 10 Years % +4.8% 0 September 2012 September 2013 S&P/TSX Metro S&P/TSX Metro % +69.2% 5 Years % % S&P/TSX 15 Years Metro S&P/TSX Metro % % 9

10 Metro Strategy Richard Dufresne Senior Vice President and Chief Financial Officer

11 Current Market Environment Challenged consumer No food price inflation Discount square footage growth Highly promotional Ethnic offering in fast growth Top line and SSS growth under pressure Sources : Barclay Capital; Conference Board of Canada; Nielsen, State of the North American Consumer, Global Online Consumer Confidence Surveys Sept

12 Strategy: Conventional store upgrades Best Customer Experience Continue to invest in retail network / new and remodels Improve product offering Fresh HMR Health and Wellness High service levels across the store Léger Survey 2013 Québec: Best customer experience among food retailers 12

13 Strategy: Metro Store Upgrades 13

14 Strategy: Metro Store Upgrades 14

15 Strategy: Metro Store Upgrades 15

16 Strategy: Metro Store Upgrades 16

17 Strategy: Metro Store Upgrades 17

18 Strategy: Loyalty Reward Loyal Customers Integral part of our fresh banner growth strategy Better knowledge of our shoppers behaviour metro.ca Loyalty Personalization Leverage our digital platform 18

19 Strategy: Discount Growth Best Customer Value Continue to open discount stores Customer experience : Best value Best deals / events Competitive shelf pricing Win with Fresh Location and convenience Reduce costs 19 19

20 Strategy: Adonis Opportunity Opened our 7th Adonis store in downtown Montreal 2 planned for next year Capture share of fast growing ethnic category Improve ethnic offering in Metro, Super C, Food Basics 20

21 Strategy: Grow Pharmacy Professional practice focus 186 drug stores in Québec 73 drug stores in Ontario 2031: 25,5% 21 21

22 Recent Activity Richard Dufresne Senior Vice President and Chief Financial Officer

23 Recent Activity New Produce Distribution Center 240,000 sq. ft $50M investment Ramp up on track 23

24 Recent Activity 24

25 Recent Activity 25

26 Recent Activity: Adonis Downtown Montreal 26

27 Recent Activity: Adonis Downtown Montreal 27

28 Recent Activity: Adonis Downtown Montreal 28

29 Recent Activity: Adonis Downtown Montreal 29

30 Recent Activity TARGET Partnership McMahon/Brunet will operate 18 Brunet in store pharmacies Scheduled to open by summer 2014 Partnership will significantly increase presence of Brunet in Greater Montreal Solid growth platform for our pharmacy business 2031: 25,5% 30 30

31 Recent Activity: New Digital Ecosystem METRO.CA NEWSLETTER FACEBOOK Most popular grocer site in Canada Open rate: 40% Most popular grocer page in Canada 31

32 Video Video

33 2014 Priorities Richard Dufresne Senior Vice President and Chief Financial Officer

34 2014 Priorities CAPEX 10 new stores 19 major renovations/expansions 6 conversions $275M investment 34

35 Recent Activity: Ontario Restructuring Reorganization in Ontario is part of our long term strategy Address changing market dynamics Reduce costs $40M special restructuring charge in Q stores affected Conversions to Food Basics banner, closures, and collective agreement buyouts 2031: 25,5% Merchandising team restructuring 35 35

36 Conclusion Strong track record Well-positioned in both markets in a mature industry Continue to invest in our retail network Competitive square footage growth will challenge top-line Financial capacity for growth/acquisitions 36

37 Thank you