Couche-Tard Is a World Leader
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ALIMENTATION COUCHE-TARD INC. INVESTOR PRESENTATION November 2018 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 29, 2018. 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 29, 2018 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. Note: All figures include contribution from CAPL unless otherwise noted. 2 ALIMENTATION COUCHE-TARD INC. COMPANY HIGHLIGHTS 3 KEY FACTS Listed on the Toronto Stock Exchange ATD.B Largest Canadian Market Cap1 Approx. CA$36B company based on Revenue US$51.4B Fiscal Year 2018 revenues US$29.5B Q2 2019 YTD2 (+34%) Gross Profit US$8.1B Fiscal Year 2018 US$4.4B Q2 2019 YTD2 (+16%) EBITDA US$3.0B Fiscal Year 2018 5-year CAGR +5.1% US$1.8B Q2 2019 YTD2 (+15%) Number of stores3 15,994 • North America 9,943 • Europe 2,718 • CAPL network 1,291 • Circle K branded sites under licensing 2,042 agreements Net Debt / Adjusted Net Leverage Ratio4 • FY2018 US$7.7B / 3.13x • Q2 2019 US$6.7B / 2.79x Ratings • S&P BBB (Stable outlook) • Moody’s Baa2 (Stable outlook) 1. As at November 19, 2018. 2. Fiscal Year ended 04/29/2018 and Q2 2019 YTD being 24 weeks to 10/14/2018. 3. Includes Couche-Tard’s Company-Owned/Dealer-Operated and Dealer-Owned-Dealer-Operated sites as at October 14, 2018. 4. Long term interest-bearing debt plus the product of eight times rent expense, net of cash and cash equivalents and temporary investments divided by EBITDAR (Earnings before Interest, Tax, Depreciation, Amortization, Impairment and Rent expense) adjusted for specific items; overall ratio 4 excludes the contribution from CAPL. Refer to the Corporation’s MD&As for more details. OUR COMPANY TIMELINE Acquisition of The Pantry Inc., a Entry into US leading convenience store Acquisition of the assets of operator in the southeastern Johnson Oil Company, United States. Inc., owner of 225 Bigfoot stores, all located in the Global Circle K brand is U.S. Midwest launched Acquisition of 278 Esso- Couche-Tard branded Canadian fuel and becomes an active convenience sites located in player in the US Ontario and Québec from market consolidation. Imperial Oil Start of operations Acquisition of The Entry into Europe: Acquisition of Topaz, Acquisition of CST Brands, with the opening of a Circle K Corporation Acquisition of Statoil the leading 4th largest chain in North first convenience store from ConocoPhillips Fuel & Retail, a leading convenience and fuel America, and Holiday in Laval, Québec. Company Scandinavian road retailer in Ireland. Stationstores, a Midwest Consolidation of transport fuel retailer powerhouse Canadian Market 5 OUR NETWORK – NORTH AMERICA QUEBEC WEST Corporate stores: 461 CODO: 2 DODO: - CENTRAL CANADA Affiliated stores: 224 Corporate stores: 464 CODO: 227 QUEBEC EAST AND ATLANTIC DODO: - Affiliated stores: 131 Corporate stores: 355 WESTERN CANADA CODO: - Corporate stores: 305 DODO: - Our North American CODO: - Affiliated stores: 12 DODO: - Affiliated stores: - Network – NORTHERN TIER Corporate stores: 372 CODO: 9 GREAT LAKES 9,943 stores, employing DODO: 26 Corporate stores: 490 Affiliated stores: 131 CODO: - DODO: - Affiliated stores: 101 about 105,000 people WEST COAST Corporate stores: 239 COASTAL CAROLINAS CODO: 75 Corporate stores: 433 DODO: 242 CODO: 1 Affiliated stores: 309 DODO: 22 Affiliated stores: 19 In North America, Couche-Tard is the MIDWEST Corporate stores: 439 largest independent convenience ARIZONA CODO: 6 Corporate stores: 643 DODO: 97 CODO: - Affiliated stores: 33 store operator in terms of number of DODO: - Affiliated stores: 2 company-operated stores. SOUTHEAST Corporate stores: 424 CODO: 9 DODO: 67 ROCKY MOUNTAINS Affiliated stores: 42 We are in all provinces in Canada and Corporate stores: 437 CODO: 2 DODO: 1 in 48 out of 50 states in the US. Affiliated stores: 63 SOUTH ATLANTIC Corporate stores: 420 CODO: 1 Leading market share in key growth GULF COAST DODO: 21 Corporate stores: 578 Affiliated stores: - HEARTLAND CODO: 1 markets. TEXAS Corporate stores: 337 DODO: 45 Corporate stores: 742 CODO: 23 Affiliated stores: 45 FLORIDA CODO: - DODO: 35 Corporate stores: 530 DODO: 70 Affiliated stores: 19 CODO: 7 Affiliated stores: 14 DODO: 47 Affiliated stores: 93 As at October 14, 2018. 6 OUR NETWORK – EUROPE NORWAY Corporate stores: 229 CODO: 217 RUSSIA DODO: 23 Corporate stores: 33 inc. automats: 184 CODO: - DODO: - Our European inc. automats: - SWEDEN Corporate stores: 645 Network – CODO: 103 DODO: 16 ESTONIA inc. automats: 471 Corporate stores: 77 2,718 stores, CODO: - DODO: - inc. automats: 17 DENMARK Corporate stores: 428 employing about CODO: - DODO: 22 LATVIA inc. automats: 210 Corporate stores: 68 25,000 people CODO: - DODO: 14 inc. automats: 4 In Europe, Couche-Tard is a leader in LITHUANIA convenience store and road IRELAND Corporate stores: 85 Corporate stores: 162 CODO: - transportation fuel retail in CODO: 12 DODO: 1 DODO: 232 inc. automats: 12 Scandinavia, Ireland and the Baltic Affiliated stores: 3 inc. automats: - countries, with a significant presence POLAND Corporate stores: 276 in Poland. CODO: - DODO: 72 inc. automats: 85 As at October 14, 2018. 7 OUR NETWORK – WORLDWIDE Asia Mongolia Approximately 2 United Arab China Emirates 82 2,042 stores Saudi 35 Arabia 4 under licensing agreements Mexico Hong Kong 725 322 worldwide Egypt Vietnam 296 24 Macau Well positioned to participate in Honduras 30 Guam many high growth markets. 30 13 Costa Rica Cambodia 12 5 Indonesia 462 Central / South America As at October 14, 2018. 8 COUCHE-TARD IS A WORLD LEADER Couche-Tard is a leading global convenience store operator with EBITDA of $3.2 billion • Well diversified across geographies • Focus on growing high margin categories Merchandise and Service Motor Fuel Other Total REVENUES $13,990M (25%) $41,528M (73%) $1,430M (2%) $56,948M Canada US Canada Canada Canada 2% 2% 15% 13% 13% By Products Europe Europe 11% 20% LTM Q2 2019 Europe US 20% Europe US 67% US 96% 74% 67% Merchandise and Service Motor Fuel Other Total GROSS PROFIT $4,845M (57%) $3,484M (41%) $220M (2%) $8,549M Canada Canada Canada Canada 15% 13% 12% 14% US By Products Europe US 65% LTM Q2 2019 13% 12% Europe Europe 21% US 29% US Europe 72% 58% 76% Financial data presented for the LTM as of Q2 2019. All figures exclude contribution from CAPL. 9 COUCHE-TARD PROVIDES TWO VALUABLE RESOURCES 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, 000 TIME & CONVENIENCE 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. 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. 83% of the in-store merchandise that convenience stores sell is consumed within one hour of purchase, and 65% is immediately consumed = online resistant The convenience store industry is America's primary source for fuel 10 ALIMENTATION COUCHE-TARD INC. OUR GROWTH MODEL 11 OUR FOUR PILLARS OF VALUE CREATION – THE EQUATION Capital Organic Cost Structure & Value Acquisitions Growth Discipline Financial Creation Discipline GROWTH DISCIPLINE 12 OUR GLOBAL BRAND – CIRCLE K 13 OUR GROWTH – NETWORK STORE COUNT 2014 8,500 2015 10,100 2016 10,600 2017 10,900 2018 12,700 Notes: (1) Network store count excludes CAPL and International sites under licenses.