Q2 2014 Supplementary Slides July 24, 2014 1 Forward-looking - - PowerPoint PPT Presentation

q2 2014 supplementary slides
SMART_READER_LITE
LIVE PREVIEW

Q2 2014 Supplementary Slides July 24, 2014 1 Forward-looking - - PowerPoint PPT Presentation

Q2 2014 Supplementary Slides July 24, 2014 1 Forward-looking Statements This presentation for Loblaw Companies Limited (Loblaw) may contain forward-looking statements about Loblaws objectives, plans, goals, aspirations, strategies,


slide-1
SLIDE 1

1

Q2 2014 Supplementary Slides

July 24, 2014

slide-2
SLIDE 2

2

Forward-looking Statements

This presentation for Loblaw Companies Limited (“Loblaw”) may contain forward-looking statements about Loblaw’s

  • bjectives, plans, goals, aspirations, strategies, prospects and opportunities. It may also contain statements about the

acquisition by Loblaw of Shoppers Drug Mart, including, but not limited to, statements relating to the strategic benefits expected to result from the transaction. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may” and “should” and similar expressions. Forward-looking statements reflect 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. Loblaw can give no assurance that such estimates, beliefs and assumptions will prove to be correct as they are inherently subject to significant business, economic, competitive and other risks and uncertainties, and as such, are subject to change. Information on these risks and uncertainties are included in reports filed by Loblaw and Shoppers Drug Mart with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Other risks and uncertainties not presently known to Loblaw or that Loblaw presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking

  • statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Loblaw disclaims any
  • bligation to update or revise any forward-looking statements, whether as a result of new information, future events or
  • therwise, except as required by law.

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.

slide-3
SLIDE 3

3

Key Financial Metrics – Loblaw – Q2 2014

Consolidated Revenue +37.1% (+2.4% ex. Shoppers Drug Mart) Adjusted Operating Income +65.1% (-1.8% ex. Shoppers Drug Mart) Adjusted EBITDA +54.2% (flat ex. Shoppers Drug Mart) Adjusted EPS +17.2% Retail Revenue (ex SDM) +1.6% Retail Adjusted Gross Margin (ex SDM) 22.1% (-20bps) Retail Adjusted EBITDA Margin (ex SDM) 6.2% (-40bps) Net Efficiencies Achieved (ex SDM) +45bps in labour and supply chain partially offset by ~25bps franchise investments Other notable costs (ex SDM) ~20bps incremental collective labour agreements ~15bps derivatives gain in Q2 2013 Free Cash Flow $801M QTD, $381M YTD Capex ($) $338M YTD

slide-4
SLIDE 4

4

Key Operational Metrics–Q2 2014—Loblaw

Loblaw Square Footage Growth

0.8% – vs Q2/13

Industry STM* Square Footage Growth

3.1% – vs Q2/13

Basket Size

Increase in fresh penetration drove higher baskets

Traffic

Slight decline driven by competitive square footage growth

Tonnage

In line with the overall market

Internal Inflation

In line with CPI

PC Plus

Over 6.2 million total members

Same Store Sales

1.8% (excl. Shoppers Drug Mart; 1.7% adjusted for

Easter timing)

Net Promoter Score – LCL National

Over 70% of our banners are in the performance zone

*Supermarket Type Merchandise

slide-5
SLIDE 5

5

Key Financial Metrics – Q2 2014 - Shoppers Drug Mart

Revenue +2.8% Adjusted Operating Income +1.9% (-2.8% excluding synergies) Adjusted Operating Margin 8.4% (-10bps) Adjusted EBITDA +1.1% Adjusted EBITDA Margin 10.8% (-20bps) Adjusted Gross Profit

  • 30bps

Adjusted SG&A

  • 20bps
slide-6
SLIDE 6

6

Key Operational Metrics – Q2 2014 Shoppers Drug Mart

Retail Square Footage Growth

+1.8%

Pharmacy Sales

+2.5%

Pharmacy SSS

+2.5%

# Rx Dispensed (Rx Count)

+4.1% (+3.8% on same store sales basis)

Average Rx Value

  • 1.7%

Generic Penetration

62.8% (vs 61.3% Q2 2013)

Front of Store Sales

+3.0%

Front of Store SSS

+2.4%

Loyalty (Optimum)

Over 10 million active members

slide-7
SLIDE 7

7

Adjusted Debt by Segment

Q2 2014 Retail PCF REIT

  • Con. & Elim.

Bank Indebtedness $ 335 $ 335 $ - $ - $ - Short term debt 605

  • 605
  • Long term debt due within one year

74 41 33

  • Long term debt

11,797 7,961 1,245 6,670 (4,079)(a) Trust Unit Liability 715

  • 715

Capital securities 224 224

  • Certain other liabilities

34 34

  • $ 13,784

$ 8,595 $ 1,883 $ 6,670 ($ 3,364) Less: PCF Debt Independent Securitization Trusts in S-T debt 605

  • 605
  • Independent Securitization Trusts in L-T debt

750

  • 750
  • Guaranteed Investment Certificates

528

  • 528
  • Independent Funding Trusts

476 476

  • Trust Unit Liability

715

  • 715

Total Adjusted Debt $ 10,710 $ 8,119

  • $ 6,670

($ 4,079)

(a) REIT debt includes Class C LP units, and Class B exchangeable units held by Loblaw retail, eliminated in the consolidation and eliminations segment.

slide-8
SLIDE 8

8

Adjusted Debt

Q1 2014 Reported Adjusted Debt $6,434

  • Capital Securities -added to the definition of Adjusted Debt

224 $6,658

  • $3.5B term loan to partially fund the cash portion of the

purchase price for Shoppers Drug Mart 3,500

  • Shoppers Drug Mart MTN's assumed on acquisition

500

  • Bank Indebtedness

296

  • Finance Leases

145

  • Transaction Costs

(41)

  • Other

2 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 Q2 2014 Reported Adjusted Debt $10,710

$4,402 ($350)