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“WHY INVEST IN NORTH WEST?”
- 1. Who We Are
Presentation by Edward Kennedy, President & CEO The North West - - PowerPoint PPT Presentation
Presentation by Edward Kennedy, President & CEO The North West - - PowerPoint PPT Presentation
Presentation by Edward Kennedy, President & CEO The North West Company October 5, 1999; Toronto WHY INVEST IN NORTH WEST? 1. Who We Are 2. Growth 3. Income # of stores Revenue Canada = 151 $494 million Alaska = 25 $135
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# of stores Revenue Canada = 151 $494 million Alaska = 25 $135 million
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“WHY INVEST IN NORTH WEST?”
1. Who We Are !
- 2. Growth
3. Income
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Source: Statistics Canada Census 1996
49% 34% Population Under 25 Years of Age NWC Markets Canadian Average
Northern Canada Growth Rate Canadian Growth Rate
2.3% 1.1%
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ECONOMIC DRIVERS ECONOMIC DRIVERS
URBAN MARKET Lower interest rates Higher consumer confidence
Increased housing
turnover
Increased home improvement,
appliances, electronic sales ABORIGINAL MARKET Population growth, Political action, Land claims Increased spending on housing & infrastructure Increased employment, spending in all non-food categories; Nunavut NATURAL RESOURCES MARKET Resource price cycle New capacity
Jobs, overtime, increased
employment and spending in all non-food categories.
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" Achieve Canadian productivity
gains
“V2K+” GROWTH STRATEGIES # Increase Canadian market share $ Accelerate Alaska performance
trend
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% Admin. expenses reduced by $5 mm
" Achieve Canadian Productivity Gains
% Eliminate $35 million in under-
performing assets
% Gains from technology (central MMS,
auto replenish, tickets-off, auto receiving)
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% Expand in-store offer for food, everyday needs
and financial services
# Increase Canadian Market Share
% Expand catalogue offer for apparel, AF&E % Shift to more “extreme value” price points % Build people capability in foods % Achieve 5% comp. sales growth by 2000
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$ Accelerate Alaska Performance Trend
$1.8 $2.2 $3.6 $6.3 $2.2 $3.3 $0.6 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 1994 1995 1996 1997 1998 1998 6Mos. 1999 6Mos.
EBITDA
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% Leverage local market knowledge curve
$ Accelerate Alaska Performance Trend
% Increase “mid-sized” new store growth rate % Move on opportunities created by local
market consolidations
% Exit “can’t be fixed” locations
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EARNINGS PER UNIT*
$0.68 $1.18 $1.40 $1.82 $0.70 $0.92 $0.00 $0.50 $1.00 $1.50 $2.00 1995 1996 1997 1998 1998 6Mos. 1999 6Mos.
Before Unusual Items
* Earnings per share for 1995 - 1997
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“WHY INVEST IN NORTH WEST?”
1. Who we are ! 2. Growth !
- 3. Income
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100% - 15 M units 100% - 15 M units
NWF STRUCTURE NWF STRUCTURE
UNITHOLDERS
100% - sub debt $175 M 100% common 15 M shares
NWF NWC
$11.67 sub debt @ 12.5% 1 common share
EACH UNIT NWF NWC
Income distributable per unit: 1998 - 1.25 1999 - 1.44
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$37.9 $33.3 $44.1 $42.2 $45.1 $22.0
0.00 10.00 20.00 30.00 40.00 50.00
PRE-TAX CASH FLOW
1994 1995 1996 1997 1998
$ in millions
1999 6 Mos.
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DEBT : EQUITY
177 175 172 172 178 $ Millions 169 160 147 160 164 140 1.3 1.1 1.3 1.1 1.2 1.1 50 100 150 200 250 1994 1995 1996 1997 1998 SA 99 1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 Debt Equity debt : equity
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“WHY INVEST IN NORTH WEST?”
1. Who we are ! 2. Growth ! 3. Income !
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MERCHANDISING INDICES: MERCHANDISING INDICES:
FOOD STORES 57.8% NWF.UN 18.5% SPECIALITY STORES 14.0% TSE 2.1% MERCHANDISING 0.3% DEPARTMENT STORES -21.1% WHOLESALE DIST. -31.1% HOSPITALITY -54.7%
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OTHER COMPARABLES:
Canadian Tire 41.10 1.0 19.2 Sears Canada 26.00 0.9 18.3 Wal-Mart 95.38 0.4 49.7 Empire 25.30 1.1 5.5 Loblaws 40.50 0.5 38.2 Safeway 51.50
- 32.9
NWF.UN 14.35 8.3 7.9* * Does not include a $0.74 charge related to Canadian re-structuring Closed Apr.5 /99 Yield % P/E
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QUESTIONS?
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