Canadian Tire Corporation - 2018 Investor Presentation - AWS
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Canadian Tire Corporation 2018 Investor Presentation
Forward Looking Information
Caution regarding forward-looking statements: This document contains forward-looking statements that reflect management’s current expectations related to matters such as future financial performance and operating results of the Company.
Forward-looking statements provide information about Management’s current expectations and plans and allow investors and others to better understand the Company’s anticipated financial position, results of operations and operating
environment. Readers are cautioned that such information may not be appropriate for other purposes.
Certain statements other than statements of historical facts included in this document may constitute forward-looking statements, including, but not limited to, statements concerning Management’s current expectations relating to possible or
assumed future prospects and results, the Company’s strategic goals and priorities, its actions and the results of those actions and the economic and business outlook for the Company. Often, but not always, forward-looking statements can be
identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “believe”, “estimate”, “plan”, “can”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “aspire”, “foresee”, “continue”, “ongoing” or the
negative of these terms or variations of them or similar terminology. Forward-looking statements are based on the reasonable assumptions, estimates, analyses, beliefs and opinions of Management, made in light of its experience and perception
of trends, current conditions and expected developments, as well as other factors that Management believes to be relevant and reasonable at the date that such statements are made.
By their very nature, forward-looking statements require Management to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that the Company’s assumptions, estimates, analyses, beliefs and
opinions may not be correct and that the Company’s expectations and plans will not be achieved. Examples of material assumptions and Management’s beliefs, which may prove to be incorrect, include, but are not limited to, the effectiveness of
certain performance measures, current and future competitive conditions and the Company’s position in the competitive environment, the Company’s core capabilities, and expectations around the availability of sufficient liquidity to meet the
Company’s contractual obligations. Although the Company believes that the forward-looking information in this document is based on information, assumptions and beliefs that are current, reasonable, and complete, such information is
necessarily subject to a number of factors that could cause actual results to differ materially from Management’s expectations and plans as set forth in such forward-looking statements. Some of the factors, many of which are beyond the
Company’s control and the effects of which can be difficult to predict, include: (a) credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates; (b) the ability of the Company
to attract and retain high-quality employees for all of its businesses, Dealers, Canadian Tire Petroleum retailers, and Mark’s and SportChek franchisees, as well as the Company’s financial arrangements with such parties; (c) the growth of certain
business categories and market segments and the willingness of customers to shop at its stores or acquire the Company’s consumer brands or its financial products and services; (d) the Company’s margins and sales and those of its competitors;
(e) the changing consumer preferences and expectations related to eCommerce, online retailing and the introduction of new technologies; (f) the possible effects on our business from international conflicts, political conditions, and developments
including changes relating to or affecting economic or trade matters; (g) risks and uncertainties relating to information management, technology, cyber threats, property management and development, environmental liabilities, supply chain
management, product safety, changes in law, regulation, competition, seasonality, weather patterns, climate change, commodity prices and business disruption, the Company’s relationships with suppliers, manufacturers, partners and other third
parties, changes to existing accounting pronouncements, the risk of damage to the reputation of brands promoted by the Company and the cost of store network expansion and retrofits; (h) the Company’s capital structure, funding strategy, cost
management program, and share price and (i) the Company’s ability to obtain all necessary regulatory approvals. Management cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also
adversely affect the Company’s results. Investors and other readers are urged to consider the foregoing risks, uncertainties, factors and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements.
For more information on the risks, uncertainties and assumptions that could cause the Company’s actual results to differ from current expectations, please refer to section 5.1 (Three-Year (2018 to 2020) Financial Aspirations) and all subsections
thereunder and section 12.0 (Risks and Risk Management) of the MD&A contained in the Company’s 2018 Report to Shareholder. Please also refer to section 2.8 (Risk Factors) of the Company’s Annual Information Form for fiscal 2018, as well as
the Company’s other public filings, available on the SEDAR (System for Electronic Document Analysis and Retrieval) website at www.sedar.com and at investors.canadiantire.ca
The forward-looking information contained herein is based on certain factors and assumptions as of the date hereof and does not take into account the effect that transactions or non-recurring or other special items announced or occurring after
the statements are made have on the Company’s business. The Company does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new
information, future events or otherwise, except as required by applicable securities laws.
2018 INVESTOR PRESENTATION | FORWARD LOOKING INFORMATION 2
Shaping Retail in Canada
For over 95 years, Canadian Tire Corporation
has proudly offered products and services to
help Canadians from coast-to-coast navigate
the landscape we know so well and love so
much.
2018 INVESTOR PRESENTATION | SHAPING RETAIL IN CANADA 3
Founded in 1922 by John William (J.W.) Billes and Alfred Jackson ~1,700 retail and gasoline outlets
(A.J.) Billes, the Company has grown to ~1,700 retail and gasoline
outlets with tens of thousands of employees across the country
Tens of thousands of employees across the
and around the world.
country and around the world
Canadian Tire Corporation (CTC) constantly looks for opportunities
to grow its business and provide Canadians with everything they
need for Life in Canada. The Company opened its first gas bar in
1958 and launched its Financial Services business in 1968. In 1996,
CTC added a specialty store for automotive parts called PartSource.
In 2002, the Company acquired Mark’s and in 2011 it acquired
Forzani Group Ltd., currently operated as SportChek, comprised of
leading sport retail stores.
On July 3, 2018, CTC acquired Helly Hansen, a leading global brand
in sportswear and workwear based in Oslo, Norway.
2018 INVESTOR PRESENTATION | SHAPING RETAIL IN CANADA 4
Canadian Tire Corporation Today
With approximately 1,700 locations and a
portfolio of world-class products, CTC is one
of Canada’s most recognized and trusted
brands and the place that Canadians turn to
every day to prepare for the Jobs and Joys of
Life in Canada.
2018 INVESTOR PRESENTATION | SHAPING RETAIL IN CANADA 5
CTC has moved from being a mass-merchant to a
customer-centric enterprise, working as One Company,
focused on One Customer throughout their lifetime in
Canada.
The power of our brand is evident through our one
billion interactions per year with Canadians from in-
store visits, to digital engagement, to the use of our
credit card and eCommerce offerings.
2018 INVESTOR PRESENTATION | SHAPING RETAIL IN CANADA 6
Corporate Overview
BRINGING OUR CUSTOMERS THE PRODUCTS THEY NEED FOR THE JOBS AND JOYS OF LIFE IN CANADA
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (2018)
• Iconic and trusted brands • Focus on owned brands & product Revenue +5.9%
Canadians love development Normalized Net Income +5.8%
(attributable to shareholders of
• Credibility in heritage categories • Advancements in in-store & digital
CTC)1
customer experience
• Triangle Rewards Loyalty and Credit Normalized Diluted +12.0%
Card program creates personalized • Triangle Rewards insights to drive Earnings Per Share1
relationships with more than 12 increased customer engagement
million loyalty members and 2.1
• Focus on operational excellence
million active credit card holders
• Expansion of Helly Hansen brand
• Shared real estate, marketing, supply
offering in Canada and opportunity
chain & support services
to grow owned brands through Helly
• Strong balance sheet and credit rating Hansen’s international platform
1 – Refer to section 7.1.1 of the Q4 and full year 2018 MD&A for a description of normalizing items
2018 INVESTOR PRESENTATION | OVERVIEW 7
NOVEMBER 2017 INVESTOR PRESENTATION | OVERVIEW 8
Our Core Business is Retail
KEY BUSINESS DIVISIONS – Bringing our customers the products they need for the Jobs and Joys of Life in Canada
Banners
2018 Revenue1 C$9.2B C$2.0B C$1.2B C$0.3B C$1.3B
= C$14.1B
Reporting Retail Financial
Segments Services
CTC Business Automotive Living Fixing Seasonal Playing/ Sports Apparel Wholesale Financial
Divisions
Products Gas Home Cleaning Home Repair Gardening Hockey Industrial Wear Work Wear Credit Cards
& Services by Category Auto Parts & Home Décor Paint Outdoor Tools Golf Men’s Wear Urban Retail Deposits
Maintenance Home Org Tools Backyard Living & Cycling Women’s Wear Sportswear In-store Acquisitions
Tires Kitchen Fun Fitness Athletic Apparel & Financing
Auto Service Gardening Toys & Games Camping Lifestyle & Adventure Insurance
Outdoor Adventure Outdoor Tools Christmas Trees Hunting Footwear
Car Care & Accessories Home Essentials & Seasonal Décor Fishing Accessories
Roadside Assistance Pet Care
1 – Revenue reported for retail banners and Financial Services includes inter-banner and inter-segment revenue. Numbers may not add due to rounding.
2018 INVESTOR PRESENTATION | OVERVIEW 9
Canadian Tire Retail
As one of the most trusted and iconic Canadian brands,
leading the way in Automotive, Playing, Fixing, Seasonal
and Living divisions, we are Canada’s Store.
We continue to innovate with exciting merchandise
strategies, great new Owned Brands and market-leading
programs like We Do New and TESTED that drive our
product offering based on customer insights. Whether it’s
through digital innovation, deliver-to-home, or Canada’s
first self-serve pick-up towers, we are reaching more
Canadians than ever before.
We provide customers with the most relevant assortment
and exclusive products they need for the Jobs and Joys of
Life in Canada.
2018 INVESTOR PRESENTATION | CTR 10Canadian Tire Retail
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (2018)
• One of Canada’s most trusted • Grow new product pipeline through Revenue $7.2B
and iconic brands owned and national brands Sales growth +2.4%
• Market leader across core categories • Develop unique and personalized Comparable sales growth +2.1%
customer connections and
• Superior real estate locations Canadian Tire store count
experiences through Triangle
and national store network Canadian Tire Retail 503
Rewards insights
Other1 105
• Strong Associate Dealer network
• Revitalize and localize assortments
focused on local community and
needs
1 – Other Canadian Tire banners include PartSource and PHL
2018 INVESTOR PRESENTATION | CTR 11SportChek
SportChek is Canada’s leading health, fitness and
wellness retailer. With more than 400 locations across
the country, SportChek is Canada’s largest sporting
goods retailer.
SportChek and its retail banners (including Sport Chek,
Hockey Experts, Sports Experts, National Sports,
Atmosphere and Sports Rousseau) sell a vast assortment
of sports-related products – from athletic footwear, to
athletic and leisure apparel, to sports equipment.
SportChek believes sport is whatever moves you and
remains passionate about inspiring customers to live an
active lifestyle
2018 INVESTOR PRESENTATION | SPORTCHEK SPORTS 12SportChek
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (2018)
• Canada’s largest sporting goods • Analytics-driven decision making for Revenue $2.0B
retailer in-store merchandising and staffing Sales growth +1.1%
to optimize sales and profitability
• Strong relationships with national Comparable sales growth +2.0%
vendor brands • Expanding owned brands presence
Store count 409
• CTC’s digital lab and testing ground • Develop unique and personalized
customer connections and
experiences through Triangle
Rewards insights
• Enhancing store network
productivity
2018 INVESTOR PRESENTATION | SPORTCHEK 13Mark’s
Canadians take pride in who they are and what
they do. Mark’s, known as L’Équipeur in Quebec,
offers quality clothing that is simple yet significant.
From industrial and casual apparel to footwear and
accessories, everything is well made, built to last,
infused with utility and designed with wearable
style that’s uniquely them, uniquely Mark’s.
Mark’s, founded in 1977, offers owned and national brand products that you can
depend on wear after wear and built for your life in Canada. With over 380 stores
across the country, we have strong roots in communities from coast to coast and our
commitment to Canadians is to relentlessly pursue the best products that work as hard
as the people who wear them. Mark’s, we are the Well Worn.
2018 INVESTOR PRESENTATION | MARK‘S 14Mark’s
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (2018)
• Product development, innovation • Sustain brand growth through ‘Well Revenue $1.2B
and quality Worn’ campaign Sales growth +3.0%
• Strong owned, exclusive and national • Expand eCommerce capabilities Comparable sales growth +2.8%
brands
• Develop unique and personalized Store count 386
• National store network customer connections and
experiences through Triangle
• Leader in industrial apparel
Rewards insights
2018 INVESTOR PRESENTATION | MARK‘S 15Helly Hansen
Founded in Norway in 1877, Helly Hansen continues to
develop professional grade apparel that helps people stay and
feel alive. A leader in designing innovative and high-quality
products for the harshest outdoor conditions, the company
has developed many first-to-market innovations, including
the first supple waterproof fabrics more than 140 years ago.
Helly Hansen is a leader in technical sailing and performance
ski apparel, as well as premium workwear. It also operates
Musto, the world’s leading technical sailing brand.
Helly Hansen’s outerwear, base layers, sportswear and
footwear are sold in more than 40 countries and trusted by
outdoor professionals and enthusiasts worldwide.
2018 INVESTOR PRESENTATION | HELLY HANSEN 16Helly Hansen
Acquisition presentation is posted on the Investor Relations site1
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (Since Acquisition2)
• Trusted and celebrated global brand • Brings complete assortment across
that professionals use and trust CTC banners Revenue total $348M
Revenue - Canada $52M
• Global leader in technical • Strengthens CTC’s ability to
Revenue - Foreign $296M
performance apparel from sea to distribute current and future owned
mountains brands
EBITDA $52M
• Wholesale, store network and ship- • International footprint with multi-
to-home capabilities globally year expansion plan underway
1 – Helly Hansen acquisition presentation, dated May 10th, 2018, can be found in the archived Events & Presentation section of the Investor Relations website
2 –CTC acquired Helly Hansen on July 3, 2018
2018 INVESTOR PRESENTATION | HELLY HANSEN 17Our Owned Brands
CTC’s Consumer Brands Division is a driving force behind our growth
strategy, made possible with our experience in product
development, quality management and direct sourcing.
Built on a foundation of legacy brands, including Motomaster and
Mastercraft, we continue to expand and evolve our portfolio through
the acquisition of new brands and those that are home-grown. Our
Owned Brands, some of which are Paderno, WOODS, NOMA,CANVAS,
Sher-Wood, Golfgreen, Vermont Castings, Premier and Denver Hayes,
account for billions of dollars in sales and provide us with an incredible
competitive advantage and runway for growth.
In 2018 we added Helly Hansen to our family, strengthening our core
outdoor and workwear businesses and accelerating our ability to
distribute our brands internationally.
2018 INVESTOR PRESENTATION | OWNED BRANDS 18CT REIT
CT Real Estate Investment Trust (CT REIT), which is listed on the Toronto
Stock Exchange, owns over 325 commercial properties across Canada,
comprising approximately 26 million square feet of gross leasable area
(GLA). Nearly 50% of the GLA in the REIT’s high-quality portfolio is located
in Canada’s six largest urban markets.
CT REIT’s strategic alignment with CTC, its most significant tenant and
majority unitholder, has enabled it to deliver a track record of attractive,
low risk growth, reflected in five consecutive distribution increases in the
same number of years.
With high occupancy, low lease turnover, and a strong investment grade
credit rating, CT REIT offers a compelling set of attributes for investors
looking for growth and security
2018 INVESTOR PRESENTATION | CT REIT 19CT REIT
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (2018) Growth
• Irreplaceable high quality Canadian • Acquisition, development and Property revenue $472.5M +6.6%
real estate portfolio intensification opportunities Funds from $246.0M +3.5%
• Investment grade anchor • Canadian Tire Corporation operations
tenant – Canadian Tire property pipeline Adjusted funds $205.2M +5.6%
from operations
• Exceptional cash flow predictability • Contractual annual rent escalations
and reliable monthly distributions for Canadian Tire Corporation AFFO payout ratio 76%
properties
2018 INVESTOR PRESENTATION | CT REIT 20Canadian Tire
Financial Services
Financial Services offers a host of products and
services to provide our customers with solutions
to meet their everyday financial needs.
As the financial services arm of Canadian Tire
Corporation, Canadian Tire Financial Services
(CTFS) is primarily engaged in marketing the
Triangle portfolio of credit cards to Canadians.
CTFS’s close integration with CTC’s retail banners
and Associate Dealers is a competitive
advantage in acquiring new accounts and
meeting the needs of CTC’s most loyal
customers.
2018 INVESTOR PRESENTATION | FINANCIAL SERVICES 21Canadian Tire Financial Services
STRENGTHS GROWTH FINANCIAL HIGHLIGHTS (2018) Growth
• $5.8 billion in credit card receivables • Derive insights from Triangle Revenue $1.3B +8.9%
Rewards loyalty and credit card GAAR $5.8B +10.7%
• 2.1 million active credit card holders
program to:
Average number 2,035 +7.4%
• Extensive customer data and strong
Strengthen relationships with of accounts with
analytics capabilities
existing customers a balance
• Award winning customer service (thousands)
Increase share of tender across all
CTC banners
• Strengthen digital/mobile
capabilities
2018 INVESTOR PRESENTATION | FINANCIAL SERVICES 22Triangle RewardsTM
Canadian Tire evolved its iconic loyalty program, Canadian Tire Money, with the introduction of
Triangle RewardsTM in April 2018.
Triangle Rewards is a loyalty program that lets customers
collect Canadian Tire Money faster, redeem it at more places
and delivers personalized offers. Customers can earn
Canadian Tire Money online and in-store at Canadian Tire,
SportChek, participating Mark’s and Atmosphere locations
and on fuel purchases at any Canadian Tire gas bar.
Members are able to redeem Canadian Tire Money at
Canadian Tire, SportChek, Mark’s and Atmosphere stores.
In October 2018,Triangle Rewards expanded, giving
Canadians the ability to earn Canadian Tire Money on fuel
purchases at participating Husky locations across Canada.
Canadian Tire Money is Canada’s first loyalty program, dating back to 1958, and has long been
considered Canada’s second currency. With more than 12 million members nationwide, Canadian Tire
Money is so deeply rooted in Canadian heritage it is even included in the Oxford English Dictionary.
2018 INVESTOR PRESENTATION | TRIANGLE REWARDS 23Triangle Rewards Program Overview
CROSS BANNER EARN AND SPEND 1:1 MARKETING DIGITAL EXPERIENCE BUSINESS INSIGHTS
PROMOTION
Offer full value to Collect rewards faster Personalize 1:1 Enable strong digital Understand customer
customers as and redeem at communications and engagement and multi- path to purchase to
One Company multiple banners promotional offers channel experience evolve assortment and
improve customer
experience
The Triangle Rewards program links CTC banners together in the eyes of the more than 12 million
loyalty members and 2.1 million active credit card holders and offers personalized experiences for the
Jobs and Joys of life in Canada
2018 INVESTOR PRESENTATION| TRIANGLE REWARDS 24Sustainability
Sustainability is an imperative for CTC. A sustainable approach to our business means we will always work towards
building a better country for all Canadians and we have a history of contributing to the health of our planet. We
recognize that we have a supporting role to play in reducing Greenhouse Gas emissions. Since 2011,we have been
working on reducing our emissions with targets to reach by 2022, our 100th anniversary.
As a Company, we have made it a top priority to be more energy efficient, use
fewer resources and produce less waste in our buildings and operations. A
signature accomplishment of this commitment is the highly energy-efficient
design and construction of our new Bolton Distribution Centre (DC) in Caledon,
Ontario. In 2018, the Bolton DC was awarded LEED Gold certification by the
Canada Green Building Council for exceptional sustainability efforts. It is one of
the first buildings of this size to be recognized with such an achievement.
As more Canadians seek out environmentally friendly products, it is important to
CTC to continue to bring innovative and eco-friendly products to our customers
and enable them to make informed purchase decisions with the environment in
mins with more than 850 energy-efficient products offerings in our store
2018 INVESTOR PRESENTATION | ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE 25Jumpstart Charities
Canadian Tire Jumpstart Charities is our primary vehicle
for fundraising and charitable giving. It is a national
charity dedicated to helping kids overcome financial and
accessibility barriers to sport and recreation in order to
provide inclusive play for kids of all abilities. Jumpstart
helps eligible families cover the costs of registration,
transportation and equipment, and provides funding to
selected organizations for recreational infrastructure
and programming.
Since its inception in 2005, Jumpstart has distributed
over $168 million to give more than 1.9 million kids a
sporting chance. In 2018 alone, Jumpstart awarded
multiple $1 million accessibility grants, completed the
construction of four universally accessible Jumpstart
Playgrounds, and supported Canada’s current and future
Paralympic Athletes through the Parasport Jumpstart
Fund.
2018 INVESTOR PRESENTATION | JUMPSTART CHARITIES 26Delivering Solid Results
STORES AND RETAIL REVENUE FINANCIAL SERVICES GROSS AVERAGE NORMALIZED DILUTED EPS AND DIVIDENDS PER SHARE
Retail revenue ($ per share) (Dividends $ per share)
($ billions) (Number of Stores)
ACCOUNTS RECEIVABLE
($ millions)
2018 INVESTOR PRESENTATION | DELIVERING RESULTS 27Balanced Capital Capital Allocation Framework
Allocation 1. Invest in the business
2. Maintain investment grade credit rating
Since 2013, Canadian Tire Corporation has 3. Repurchase shares/grow dividend (target payout ratio of
returned in excess of $3.5 billion to 30% - 40%)
shareholders while investing $3.2 billion in 4. Inorganic growth opportunities 0.0
its store network, IT and distribution
capacity. 0.0
Announced intention in November 2018 to $1.2B $1.2B 0.0
$1.2B
repurchase an additional $300-400 million
Class A Non-Voting shares in excess of anti- 0.4 0.6
0.0
0.6
dilutive repurchases by the end 2019.
0.0
In July 2018, completed the issuance of 0.2
0.2
$650 million aggregate principal amount of 0.2 0.0
unsecured medium term notes. Canadian 0.6 0.0
Tire Corporation maintains a BBB (high) and 0.4 0.4
BBB+ rating and a stable outlook from DBRS 0.0
and S&P, respectively. 2016 2017 2018
CAPEX* Dividends Share Repurchase**
* Excluding REIT capital **Buybacks in excess of anti-dilutive buybacks
2018 INVESTOR PRESENTATION | CAPITAL ALLOCATION 28Returning Value
to Shareholders
Policy to maintain dividend payments equal ANNUAL DIVIDENDS
(C$)
16.0% CAGR
to 30% to 40% of the prior year’s normalized
3.60
basic net earnings.
Member of S&P/TSX Canadian Dividend
Aristocrats index.
2.60
2.30
2.10
1.88
1.40
1.20
1.10
0.84
0.84
0.82
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2018 INVESTOR PRESENTATION | CAPITAL ALLOCATION 29Capital Investments
The 2018 to 2020 three-year average annual CAPITAL INVESTMENTS
(2016 – 2018)1
operating capital expenditure is expected to
1,000 8%
be within the range of $450 million to $500
900 5%
million. % of revenue 6%
3%
800 3%
4%
2018 includes retail store network
700
investment, and investment in IT and in $0.6B
2%
600
digital technology. 0%
500 $0.4B $0.4B
The annual and average annual operating 400
-2%
capital expenditures outlined above do not -4%
300
include spending related to distribution -6%
200
capacity, the cost of third-party acquisitions
100 -8%
by CT REIT as part of its growth strategy, or
capital to fund future initiatives relating to 0 -10%
2016 2017 2018
operational efficiency.
Store Network IT Supply Chain/DC Other
1 – Excludes REIT capital for third-party acquisitions.
2018 INVESTOR PRESENTATION | CAPITAL ALLOCATION 30Summary
EXTENSIVE REACH AND SCALE OF BUSINESS DIFFERENTIATORS DELIVERING STRONG FINANCIAL RESULTS
• The vast majority of Canadians • More than 500 Associate Canadian • Clearly defined growth plan with
reside within 15 minutes of a Tire Dealers in local communities underlying financial aspirations
Canadian Tire store. across Canada
• Strong balance sheet and multiple
• The Triangle Rewards program links • Attracting and retaining world-class funding sources
CTC banners together in the eyes of talent to grow business
• Committed to balanced approach for
the more than 12 million loyalty
• Experienced leadership in key returning capital to shareholders
members and 2.1 million active
functions across the Company
credit card holders and offers
personalized experiences for the • Continued focus on being a brand- $14.1 billion in revenue
Jobs and Joys of life in Canada led organization
33.6 million retail square feet
Financial Services GAAR of $5.8 billion
(All numbers are current as of Q4 2018)
2018 INVESTOR PRESENTATION | SUMMARY 312019 Forward Looking Information
20191
OPERATING CAPEX2 Expectation for 2018 to 2020 three-year average annual operating CAPEX within
the range of $450 million to $500 million. The Company expects its 2019 annual
operating capital expenditure to be within the range of $475 million to $550
million.
TAX RATE3 Approximately 26.5%
TARGETED DIVIDEND PAYOUT 30% to 40% of the prior year's normalized earnings, after giving consideration
RATIO4 to the period end cash position, future cash flow requirements, capital market
conditions and investment opportunities
SHARE REPURCHASE PROGRAM5 Announced its intention to purchase $300-400 million of its Class A Non-Voting
Shares (the “2019 Share Purchase Intention”), in excess of the amount required
for antidilutive purposes, by the end of 2019.
1 – Forward looking information – refer to slide 2 for additional information
2 – Operating CAPEX excludes spending related to distribution capacity, the cost of third-party acquisitions by CT REIT or capital to fund future initiatives relating to operational efficiency
3 – Refer to Section 10.0 of the 2018 MD&A for additional information on tax matters. Excludes any impact of the change in fair value of the redeemable financial instrument
4 – Refer to Section 9.2 of the 2018 MD&A for additional information on dividends.
5 – Refer to Section 9.1 of the 2018 MD&A for additional information on shares outstanding.
2018 INVESTOR PRESENTATION | FORWARD LOOKING INFORMATION 32Financial Aspirations
THREE YEAR FINANCIAL ASPIRATIONS 2018 - 20201,2
Financial Aspirations3 Select Material Assumptions3
CONSOLIDATED COMPARABLE SALES 3%+ • Individual business units contribute positively to Consolidated
GROWTH (EXCLUDING PETROLEUM) Comparable Sales Growth
(annual aspiration)
• Sales growth driven by an innovative assortment and an
optimized mix of owned and national brands
DILUTED EARNINGS PER SHARE4 (EPS) 10%+ • Realization of the Consolidated Comparable Sales Growth
(average annual increase over three aspiration
year period)
• Successful rollout of operational efficiency programs and
initiatives
RETURN ON INVESTED CAPITAL 10%+ • Realization of Consolidated Comparable Sales Growth and
(aspiration by end of 2020) average annual Diluted EPS growth aspirations
• Prudent management of working capital
1 – Established on November 9th, 2017
2 – Forward looking information – refer to slide 2 for additional information
3 – Refer to Section 5.1 of the 2018 MD&A for additional information of the Company’s three year financial aspirations
4 – Based on normalized results
2018 INVESTOR PRESENTATION | FINANCIAL ASPIRATIONS 2018 – 2020 33Thank You
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