ALIMENTATION COUCHE-TARD INC.
INVESTORS PRESENTATION September 2017
FORWARD-LOOKING INFORMATION AND CAUTIONARY LANGUAGE This presentation and the accompanying oral presentation contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “projected”, “estimate”, “may”, “anticipate”, “believe”, “expect”, “plan”, “intend” or similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact contained in these slides are forward-looking statements. Forward-looking statements involve numerous assumptions, risks and uncertainties. A variety of factors, many of which are beyond Alimentation Couche-Tard Inc.’s (“Couche-Tard”) control, may cause actual results to differ materially from the expectations expressed in its forward-looking statements. These factors include, but are not limited to, the effects of the integration of acquired businesses and the ability to achieve projected synergies, fluctuations in margins on motor fuel sales, competition in the convenience store and retail motor fuel industries, foreign exchange rate fluctuations, and such other risks as described in detail from time to time in documents filed by Couche-Tard with securities regulatory authorities in Canada, including those risks described in Couche-Tard’s management’s discussion and analysis (MD&A) for the year ended April 30, 2017. Couche-Tard’s MD&A and other publicly filed documents are available on SEDAR at www.sedar.com. Unless otherwise required by law, Couche-Tard does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by it or on its behalf. No financial information presented in this presentation as of a date more recent than April 30, 2017 has been audited. While the information contained in this presentation is believed to be accurate, Couche-Tard expressly disclaims any and all liability for any losses, claims or damages of whatsoever kind based upon the information contained in, or omissions from, this presentation or any oral communication transmitted in connection therewith. In addition, none of the statements contained in this presentation are intended to be, nor shall be deemed to be, representations or warranties of Couche-Tard and its affiliates. Where the information is from third-party sources, the information is from sources believed to be reliable, but Couche-Tard has not independently verified any of such information contained herein. This presentation is not, and under no circumstances is to be construed as, a prospectus, an offering memorandum, an advertisement or a public offering of securities. Under no circumstances should the information contained herein be considered an offer to sell or a solicitation of an offer to buy any securities.
2
AGENDA
3
1.
Company Highlights
2.
Ambitions & Strategy
3.
Value Creation & Financial Review
4.
Recent acquisitions summary
KEY DATA •
Listed on the Toronto Stock Exchange
ATD.B
•
Market Cap1
Approx. CA$34B
•
Revenue
US$37.9B Fiscal Year 20172 US$9.8B Q1 2018 YTD2 (+16.9%)
•
Gross Profit
US$6.5B Fiscal Year 20172 US$1.7B Q1 2018 YTD2 (+14.4%)
•
EBITDA
US$2.4B Fiscal Year 20172 US$0.7B Q1 2018 YTD2 (+12.2%)
•
Number of stores3
•
Europe
2,754
International
1,749
FY2017
US$2.7B / 1.09x
Q1 2018
US$6.4B / 2.31x
S&P
BBB (Stable outlook)
Moody’s
Baa2 (Stable outlook)
Ratings
4
9,471
Net Debt / Leverage4
•
13,974
North America
1. As at September 8, 2017. 2. Fiscal Year ended 30/04/2017 and Q1 2018 YTD being 12 weeks to 23/07/2017. 3. Includes Couche-Tard’s Company-Owned/Dealer-Operated and Dealer-Owned-Dealer-Operated sites as at July 23, 2017. 4. Long term interest-bearing debt, net of cash and cash equivalents and temporary investments divided by EBITDA adjusted for non-recurring items. Refer to the Corporation’s MD&As for more details.
ALIMENTATION COUCHE-TARD INC.
COMPANY HIGHLIGHTS
WHO WE ARE Couche-Tard is a Canada based group and a world leader in the convenience store and road transportation fuel retail sector • In North America, Couche-Tard is the largest independent convenience store operator in terms of number of company-operated stores. • In Europe, Couche-Tard is a leader in convenience store and road transportation fuel retail in Scandinavia, Ireland and the Baltic countries, with a significant presence in Poland.
North America
• 9,471 convenience stores throughout North America, including 8,129 stores offering road transportation fuel in all 10 Canadian provinces and 42 U.S. States, and employing about 95,000 people. • More than 1,200 locations in the U.S. supplied with road transportation fuel through CrossAmerica Partners LP.
Europe
• 2,754 stores, comprising a broad retail network across Scandinavia (Norway, Sweden and Denmark), Ireland, the Baltics (Estonia, Latvia and Lithuania), Poland and Russia. Including employees at its branded franchise stations, about 25,000 people work in its retail network, terminals and service offices across Europe.
International
• More than 1,700 stores operated by independent operators under the Circle K banner in 13 other countries or regions worldwide which brings the number of sites in Couche-Tard’s network to over 15,000.
Store count as at July 23, 2017.
6
A DISCIPLINED CONVENIENCE STORE OPERATOR AND INTEGRATOR Broad Geographic Footprint with Leading Market Positions
Superior Product Offerings
Track Record of Highly Disciplined Growth and Debt Reduction
• World class retailer and leading C-store operator with geographically diverse footprint • Strong banners, with our new global convenience brand “Circle KTM” and our fuel banner “Ingo” at unmanned stations in Scandinavia • Increasing focus on private label, fresh food products and famous for concepts • Industry leading merchandise gross margin • Proven integrator • Well positioned to lead further consolidation in fragmented industry • Committed to investment grade credentials post acquisition
Attractive Sector Dynamics
•Steady industry performance throughout downturns with strong projected growth •C-store sector well positioned to gain share from traditional food retail •Industry-leading returns in recessions
Powerful Financial Results
•Strong and consistent financial performance throughout all economic cycles •Prolific history of positive same-store comps and 22.5% Return on equity1 •Significant FCF generation (2012-2017) CAGR of 17%
Attractive Synergy Potential
•Proven ability to extract significant synergies from acquisitions •Transferring best practices across entire platform
Disciplined Management Culture
•Management team with strong track record and founders have 22%Management and Board need to hold a multiple of their salary in Shares •Decentralized operating model
Proven Capacity to Transform and Innovate
•Company successfully went trough 3 transformations over its existence
(1) As of April 30, 2017.
7
NORTH AMERICAN NETWORK
Largest independent convenience store operator in the US in terms of number of company operated stores
• In the US, the convenience sector is fragmented and in a consolidation phase
• Couche-Tard acquired The Pantry in March 2015, one of the largest independently operated convenience stores in the US
• On June 28, 2017, Couche-Tard acquired 100% of the outstanding shares of CST Brands, the 4th largest chain in North America. Leader in the Canadian convenience store industry
• In Canada, the convenience store sector is dominated by a few major players including Couche-Tard and integrated oil companies. Some of the latter are selling, or expected to sell their retail assets.
• On September 7, 2016, Couche-Tard received the approval from the Canadian Competition Bureau to acquire from Imperial Oil Limited 279 sites in Ontario and Quebec and finalized the integration of these sites during the third quarter of fiscal 2017. Canada
US
Couche-Tard Circle K Mac’s, Esso & CST (will be rebranded to Circle K)
Circle K Kangaroo Express & CST (will be rebranded to Circle K)
Total network of 9,471 stores in North America As at July 23, 2017.
8
EUROPEAN NETWORK
Leader in convenience store and road transportation fuel retail in the Scandinavian and Baltic countries and Ireland
• The European convenience store sector is often dominated by a few major players, including integrated oil companies. Some of these are in the process of selling, or are expected to sell their retail assets
• Key brands: Circle K
Being rebranded from Statoil
Ingo
Unmanned Scandinavian stations
Topaz
Will be rebranded to Circle K
2,754 stores in 9 countries or regions in Europe As at July 23, 2017.
9
INTERNATIONAL PRESENCE Central / South America Mexico 461
Asia China
United Arab Emirates
86
31
Guam
Honduras 25
5
Convenience stores operated by independent operators under the Circle K brand
•
License agreement to use the brand name Circle K
Hong Kong
Egypt Costa Rica
•
13
332
9
Macau 30
Vietnam
Philippines 16
246
Malaysia 6
Indonesia 489
More than 1,700 licensed Circle K stores in Asia, Costa Rica, Egypt, Honduras, Mexico and U.A.E
As at July 23, 2017.
10
CONSOLIDATED NETWORK RECAP
Canada
U.S.
Europe
International presence
Total
COCO(1)
1,602
5,759
1,968
-
9,329
CODO(2)
251
131
360
-
742
DODO(3)
1
623
426
-
1,050
377
727
-
-
1,104
-
-
-
1,749
1,749
2,231
7,240
2,754
1,749
13,974
-
-
981
-
981
# With fuel
1,194
6,935
2,752
-
10,881
% With fuel
54%
96%
99.9%
-
78%
Franchise/Affiliated(4) Licensed(5) Total Of which: Automats
(1) Sites for which the real estate is controlled by Couche-Tard (through ownership or lease agreements) and for which the stores (and/or the service stations) are operated by Couche-Tard or one of its commission agents. (2) Sites for which the real estate is controlled by Couche-Tard (through ownership or lease agreements) and for which the stores (and/or the service stations) are operated by an independent operator in exchange for rent and to which Couche-Tard sometimes provides road transportation fuel through supply contracts. Some of these sites are subject to a franchise agreement, licensing or other similar agreement under one of our main or secondary banners. (3) Sites controlled and operated by independent operators to which Couche-Tard supplies road transportation fuel through supply contracts. Some of these sites are subject to a franchise agreement, licensing or other similar agreement under one of our main or secondary banners. (4) Stores operated by an independent operator through a franchising, licensing or another similar agreement under one of our main or secondary banners. (5) Stores operated by independent operators under the Circle K banner in other countries or regions worldwide. As at July 23, 2017. Excludes CrossAmerica Parners LP
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COUCHE-TARD IS A WORLD LEADER Couche-Tard is a leading global convenience store operator with EBITDA of $2.5 billion • Well diversified across geographies • Focus on growing high margin categories REVENUES
Revenues By Products LTM Q1 2018
Merchandises and services
Motor Fuel
Other
Total
$10,971M
$27,213M
$1,147M
$39,331M
Europe 12%
US 1%
Europe 25%
Canada 2%
Other 3%
Canada 17%
US 71%
US 62%
Canada 13%
Europe 97%
Merchandise and services 28%
Motor fuel 69%
GROSS PROFITS
Gross Profit By Products LTM Q1 2018
Merchandises and services
Motor Fuel
Other
Total
$3,780M
$2,700M
$221M
$6,701M
Europe 14%
Europe 35%
Canada 9%
Other 3% Motor fuel 40%
Canada 17%
Financial data presented for the LTM as of Q1 2018.
12
US 7%
US 69%
Canada 11%
US 54%
Europe 84%
Merchandise and services 57%
A HISTORY OF STRONG FINANCIAL PERFORMANCE Gross Profit
Same Store Sales Growth 2012
2013
2014
2015
2016
2017
2.7%
1.0%
3.8%
3.9%
4.6%
2.0%
1.6%
2.0%
2.8%
3.5%
2.0%
1.9%
3.4%
2.9%
0.1%
0.1%
0.6%
1.7%
3.4%
6.6%
2.6%
2.5%
2.4%
2.6%
1.0%
-0.9%
0.0%
1.3%
-0.1%
0.9%
-0.3%
(in millions of US Dollars)
Merchandise sales
+17% CAG
US
6,082 4,610
4,988
6,482
5,268
Europe Canada
2.8%
Motor Fuel Volume
2,975
US Europe 2012
2013
2014
2015
2016
2017 Canada
Free Cash Flow (1)
EBITDA (in millions of US Dollars)
(in millions of US Dollars)
+23% CAG 2,331 1,376
1,640
2,396
865
1,876
13
1,065 890
404 2013
2014
2015
2016
2017
2012
2013
Proven track record of consistent growth (1)
979
614
841 2012
+17% CAG
Free Cash Flow defined as: EBITDA minus total CAPEX (excluding price paid for acquisitions), net dividends paid, net interests paid and net income taxes paid plus proceeds from disposal.
2014
2015
2016
2017
STELLAR STOCK PERFORMANCE
800%
800%
700%
700%
600%
600%
500%
500%
400%
400%
300%
300%
200%
200%
100%
100%
0% 4/26/2011
4/26/2012
4/26/2013
4/26/2014
4/26/2015
Couche-Tard Grocery Drugstores Dollar Stores
Source: Yahoo Finance. As of September 1, 2017. (1) On June 28, 2017, ACT acquired CST Brands.
14
4/26/2016
4/26/2017
C-Stores Home Improv. Mass Merch.
0% 4/26/2011
4/26/2012
4/26/2013
4/26/2014
4/26/2015
4/26/2016
4/26/2017
Couche-Tard
Casey's
Delek
Marathon
Murphy
CST Brands(1)
ALIMENTATION COUCHE-TARD INC.
AMBITIONS & STRATEGY
OUR VISION
TO BECOME THE WORLD’S PREFERRED DESTINATION FOR CONVENIENCE AND FUEL
16
OUR GLOBAL BRAND
17
REBRANDING STATUS
Project well under way: More than 1,800 stores(1) in North America and 1,300 stores(1) in Europe are now proudly displaying our new global convenience brand Circle K • Scandinavia market already completed – Outstanding success • Baltics, Poland and Canada are now underway and results up to now are promising • United States ongoing
(1) As of July 23, 2017
18
THE PROMISE BEHIND THE BRAND
19
NEW GLOBAL BRAND – SAME APPROACH TO SERVING OUR CUSTOMERS
SUPER GLOBAL SUPER LOCAL
20
WORKING ON TWO CLOCK SPEED
KEY FOCUS AREAS
Famous For Categories
STRATEGIC INITIATIVES
Digital
Private Label Products M&A Roadmap People Lean and Efficient Operations
21
Convenience Offer of the Future
ADDING EXPERTISE, TALENT AND LEADERSHIP TO ACCELERATE OUR STRATEGY
New Chief Marketing Officer Position
New Chief Information Officer Position
Creation of a Global Categories Group
22
New Chief Human Resource Officer Position
Creation of a Global Fuel Group
OUR TWO STRONGEST PRODUCT CATEGORIES
TIME & CONVENIENCE
23
TIME & CONVENIENCE
Shoppers recognize the c-store channel of trade for its convenient locations, extended hours of operations, one-stop shopping, graband-go foodservice, variety of merchandise and fast transactions Industry offers speed of service to time-starved consumers who want to get in and out of the store quickly Addresses consumer desires to satisfy and immediate need for food, refreshment and fuel 83% of the in-store merchandise that convenience stores sell is consumed within one hour of purchase, and 65% is immediately consumed
24
US C-STORE INDUSTRY FACTS
Convenience stores have an unmatched speed of transaction: The average time it takes a customer to walk in, purchase an item and depart is between 3 to 4 minutes Convenience stores are everywhere. There are 155 thousand convenience stores in the United States—or one store for about every 2,100 people— and c-stores account for more than one-third (34.1%) of all outlets in the United States. The convenience store industry is a destination for food and refreshments An average convenience store selling fuel has around 1,100 customers per day, or more than 400,000 per year. Cumulatively, the U.S. convenience store industry alone serves nearly 160 million customers per day, and 58 billion customers every year. The convenience store industry is America's primary source for fuel - Self-serve at the pump is a part of most convenience stores' fueling operations
25
MAKING IT EASY BRAND PILLARS SUPPORTING OUR PROMISE
26
BRAND PILLARS – PRODUCTS FOR PEOPLE ON THE GO
Food
27
Hot Dispensed Beverages
Cold Dispensed Beverages
Car Wash
Private Label
Fuel
BRAND PILLARS – EASY VISTS
Predictable in-store and forecourt experience
Clean
In-stock
Fast transaction
#2 reason impacting shoppers’ decision of which c-store to visit (after location)
Out-of-stock is #1 reason for missed sale in c-stores
88% of US adults want their store checkout experience to be faster
Source
28
Convenience store news
BRAND PILLARS – FAST & FRIENDLY SERVICE
Recruitment & Hiring
29
Employee engagement
Employee turnover
Service standards
Training
Physical appearance
LOCATION
30
We completed the construction, relocation or reconstruction of 91 stores during fiscal 2017 and 23 since the beginning of fiscal 2018.
STRATEGIC INIATIVES - PREPARING FOR THE ROAD AHEAD
31
DIGITAL TRANSFORMATION
32
DIGITAL – CONTROL OUR DESTINY AND CREATE OUR FUTURE Customer Experience & Brand Promise
Employee Experience & Value Proposition
Fuel
Procurement
Warehousing
Logistics
Construction & maintenance
Operations & HSE
Network, Format & Concept
Sales & Service
Convenience
Backbone Make it easy to hit the target
Stem Define right quality and deliver at lowest possible cost
Front-end Constantly sharpen the customer offer
We view digitialization as a tremendous opportunity to drive growth and create value throughout our organization.
33
OUR VIEWS ON DIGITAL
It is not a temporary thing … it is part of every aspect of how we do business It is not a one-time program … it is a shift of mindset and way of working It is not just IT or Marketing … it is orchestration across the entire arrow
34
BROAD PORTFOLIO OF DIGITALIZATION OPPORTUNITIES
Loyalty
Mobile Payments
Social Medias
Site Presence
Car Connectivity
Data Analytics
Insights and Merchandizing Strategy
Employees Communication Tools
Personalized Promotions
Supply Chain
POS Transformation
Artificial Intelligence
Robotics
Reporting
Our strategy will be to focus on opportunities that can unlock the greatest business benefits with main objectives being: • Enhancing our customers’ experience behind the Circle K brand promise • Enhancing our employees’ experience behind the employee value proposition • Driving operational performance and back office efficiency
35
MOBILITY IS CHANGING – BRINGING SIGNIFICANT OPPORTUNITIES
36
TRANSPORTATION VEHICLES - USEFUL FACTS Average lifecycle of vehicles is 16-19 years
Global vehicle fleet is more than 1.2 billion vehicles and is expected to reach 2 billion in 2035
2016 Worldwide electric vehicle sales % total: 1.10%
Worldwide electric vehicle fleet is approximately 2 million vehicles or 0.2% of total fleet
US electric vehicles penetration is less than 1%
Currently, total cost of ownership for electric vehicles is significantly higher than ICE vehicles
Limited line-up of electric vehicles
#1 selling vehicle in the US: Ford F-150
Charging infrastructure and technology not mature
Electric vehicle range remains limited
Number of vehicles is increasing
Number of miles driven per vehicle is increasing
In the US, the electric grid is highly carbonized
US fuel retail industry is highly fragmented. More than 60% of the 154k cstores are operated by single store or small chain operators ($200M
Synergies CST Brands, Inc •
Synergies The Pantry • Target for the first 24 months: $125M • Realized: >$125M
55
Initial target for the first 36 months: $150M –$200M
COST CONTROL – PART OF OUR DNA
Disciplined Culture
Year-over-year expense growth
Optimization of Shared Services Strategy
Continuous Benchmarking
1.9% 1.5% 0.8% AI, Robotics
2013
2014
2015
2016
2017 (1)
-0.9%
Scalable Organization, Systems & Processes
Cost Efficient Systems Economies of Scale
5-year Average : +0.7% (1) Adjusted for the estimated impact of the 53rd week. 56
Sharing of Best Practices
0.2%
0.2% 2012
Cost Control
CAPITAL STRUCTURE & FINANCIAL DISCIPLINE Competitive cost of debt Rapid deleveraging after acquisitions
Well spread maturities
Cost Discipline
Access to liquidities – Cash and credit facilities
Disposal of non-core assets
Dividend growth
57
Careful allocation of capital
STRONG CAPITAL STRUCTURE & FINANCIAL DISCIPLINE Free Cash Flow (in million dollars US)
+17 % CAG
979
1,065 890
865
Adjusted Leverage Ratio (2) 3.07:1
975
614 404
2012
2013
2014
2015
2016
2017
2018 Q1 LTM
Investment Grade Credit Profile
Average Cost of Debt 2.7 %
Free Cash Flow ~$1.0 Billion
Capital Structure & Financial Discipline
~$1.5 Billion available under credit facilities Standard&Poors: BBB (Stable)
58
Moody’s: Baa2 (Stable)
~$1.0 Billion in Cash
$2.5 Billion and CA $700M of senior unsecured notes (3)
STRONG AND SCALABLE FREE CASH FLOW CONVERSION
81
Capital Structure & Financial Discipline
95
1,065
890
979
865
102 85
614
404
1,376 7
841
50
289
91
2012
EBITDA Dividends
2,331 77
172
1,640
1,876 63 79 172
56
65
457
459
2013
2014
279
351
2,396 360
104
87
563 2015⁽¹⁾
Business disposals Income tax paid
807 2016⁽²⁾
Net capex Interest paid
145 899 2017
DISCIPLINED CAPITAL ALLOCATION Capital Structure & Financial Discipline
Income producing 73%
CAPITAL EXPENDITURES ALLOCATION
27%
23%
39%
40%
34%
38%
2016
2017
Development
Commercial Programs
Income producing 78%
Maintenance
Continuous improvement in capital allocation efficiency
RESULT OF THE VALUE CREATION EQUATION : ADJUSTED DILUTED NET EARNINGS PER SHARE AND RETURN ON EQUITY GROWTH
Adjusted Diluted Net Earnings per Share (USD)
Return on Equity Value Creation
+22% CAG 2.08
2.21
1.79
22.0% 21.5% 22.6%
24.9%
27.0% 22.5%
1.35 1.11 0.81
2012 2013 2014 2015 2016 2017
61
2012 2013 2014 2015 2016 2017
RESULT OF THE VALUE CREATION EQUATION : DIVIDEND GROWTH Dividends Paid – US Millions 145
Value Creation
145
+24 % CAG 104 87 50
2012
56
65
Dividend vs Free cash flow 2013
2014
2015
2016
2017
2018 Q1 LTM
Quarterly dividend increased twice during fiscal 2016, from CA 5.50¢ per share to CA 7.75¢ per share, an increase of 41%. In the second quarter of fiscal 2017, the quarterly dividend increased to CA 9.00¢ per share (remained at CA 9.00¢ for the third and fourth quarters of fiscal 2017 as well as for the first quarter of fiscal 2018).
62
FCF +17 % CAG1
979
1,065 890
865
975
614 404 50
56
2012
2013
65
2014
87
104
2015
2016
Free cash flow
145
145
2017
2018 Q1 LTM
Dividend
RESULT OF THE VALUE CREATION EQUATION : STOCK VALUE GROWTH
5-Year Stock Performance Value Creation
450.0%
350.0%
250.0%
150.0%
50.0%
-50.0% 8/30/2012
8/30/2013
8/30/2014
Variance ACT stock price (%)
Source: Bloomberg. As of August 30, 2017.
63
8/30/2015
8/30/2016
Variance TSX index (%)
8/30/2017
ALIMENTATION COUCHE-TARD INC.
ACQUISITIONS COMPLETED DURING FY18 Value Creation
CST TRANSACTION SUMMARY & OVERVIEW Transaction Summary • Acquired 100% of the outstanding shares of CST Brands Inc. (“CST”), representing a total enterprise value of US $4.4 billion or approximately US, $4.2 billion excluding the value of CST’s equity participation in CrossAmerica Partners LP (“CAPL”). • In order to meet Canadian regulatory authorities’ requirements, ACT sold to Parkland Fuel Corporation a large portion of CST’s assets in Canada and retained 157 company-operated stores. • In order to meet US regulatory authorities’ requirements, ACT sold 70 sites to Empire Petroleum Partners, LLC. And retained 1,106 sites
Gross Profits (2)
5% 30% 41% 54%
70%
Strategic & Financial Impact • Transaction is expected to generate between US$150M and US$200M in annual cost synergies to be realized over the next 3 years • Provides ACT control over CAPL’s General Partner, ownership of associated Incentive Distribution Rights and equity stake of 20.5% in CAPL (CAPL is a distributor of branded and unbranded petroleum for motor vehicles in the U.S.)
(1) (2)
65
As of March 31, 2017. Excludes CrossAmerica Partners LP. LTM for the period ended March 31, 2017. Excludes CrossAmerica Partners LP.
Merch. & Serv. Fuel
US
Canada
HIGHLIGHTS OF THE TRANSACTION
Strategic Importance
Acquisition Rationale
• Unique opportunity to acquire one of few remaining potential North American public targets exceeding 1,000 stores
• Operating model alignment
• Top-line upside
• Strong geographic
• Sharing of business awareness and best practices
• ACT to approach 9,500 North American stores
• Void fill in US Southeast
• Increased scale and leverage to create brand awareness and take advantage of merchandise and fuel procurement opportunities
• Entry in Texas • Strenghtening of existing network • Talent acquisition and crosslearning potential • Valuable real estate portfolio • MLP structure
66
Significant Synergies Potential
• Cost optimization • Optimization of supply conditions • Optimization of distribution strategy • Elimination of redundant costs
PRO FORMA PROFILE FOR CST - FINANCIAL
(1)
(2)
At Closing Pro Forma
(billions of US Dollars)
Revenues % of total GP % of total
37.9
8.2
46.1
82%
18%
100%
6.5
1.2
7.6
85%
15%
100%
2.4
0.7
3.1
12,664
1,263
13,927
Pre-synergies EBITDA Contribution
22% 78%
EBITDA(3) Store network Debt
7.6
DEBT/EBITDA
2.4
Couche-Tard has strengthened its leadership position as a global convenience store operator with pro forma EBITDA of $3.1B (1) (2) (3)
67
Couche-Tard Fiscal 2017 results After reflecting sale to Parkland and the sales agreement with Empire Petroleum, CST LTM financial results as at March 31, 2017. EBITDA includes a gain of $347 million from disposal of assets. Includes Couche-Tard’s Company-Owned/Dealer-Operated and Dealer-Owned/Dealer-Operated sites as well as its International licensees as at June 30, 2017. Excludes CrossAmerica Parners LP
• On July 10, 2017, Alimentation Couche-Tard Inc. announced that it had signed an agreement with Holiday Companies to acquire all of the issued and outstanding shares of Holiday Stationstores, Inc. and certain affiliated companies (“Holiday”), an important convenience store player in the Upper Midwest United-States, with 522 stores, a food commissary and a fuel terminal in Newport, Minnesota, which supplies one third of the stations. 374 stores are operated by Holiday and 148 by franchisees • Holiday has a strong car wash business with 221 locations • Allows Couche-Tard to expand it’s geographic footprint into the Upper Midwest U.S. and to gain a strong position in the Greater Twin Cities metropolitan area. The acquired sites are located in the following states: Minnesota, Wisconsin, Washington, Idaho, Montana, Wyoming, North Dakota, South Dakota, Michigan and Alaska. • The transaction is anticipated to close in the fourth quarter of Couche-Tard’s fiscal year 2018 and is subject to customary regulatory approvals and closing conditions. The Corporation expects to finance the transaction by using its available cash and existing credit facilities.
68
A DISCIPLINED CONVENIENCE STORE OPERATOR AND INTEGRATOR Broad Geographic Footprint with Leading Market Positions
Superior Product Offerings
Track Record of Highly Disciplined Growth and Debt Reduction
Attractive Sector Dynamics
Powerful Financial Results
Attractive Synergy Potential
Disciplined Management Culture
Proven Capacity to Transform and Innovate
Optimistically transforming our future 69
