Dollarama Inc. · TSX:DOL
Dollarama — Scotia Back to School Conference 2010
18 slides from Dollarama's conference presentation, September 2010
Slide 1: Investor Presentation
Investor Presentation September 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements 1. This presentation contains forward-looking statements about our current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments. Several assumptions were made by Dollarama
Slide 3: Dollarama Overview
Dollarama Overview [DOLLARAMA (L)
Slide 4: Dollarama Today
Dollarama Today 3. Largest operator of dollar stores in Canada with 623 stores • All stores Company owned and operated • Over 13,000 employees • Average store square footage space is 9,800 sq. ft. • Average store annual sales are $2.2 million Strong value proposition at select fixed price points of
Slide 5: Highly Attractive Everyday Product Value
Highly Attractive Everyday Product Value 4. Broad assortment of more than 4,000 SKUs Majority of all products are Private Label Fixed price points of $0.69, $1.00, $1.25, $1.50 and $2.00 Merchandise mix: General Merchandise: 51% Consumables: 36% Seasonal: 13%
Slide 6: Financial Performance
Financial Performance [DOLLARAMA (L)
Slide 7: Superior Financial Performance
Superior Financial Performance 6. Proven track record of profitable growth Sales ($M) Normalized EBITDA* ($M) 1,332 214 1,254 192 16% CAGR 972 1,089 20% CAGR 153 888 146 146 743 122 634 104 585 508 82 69 373 47 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q 2'11 2002 2003 2004 2005 2006 2007 2008 20
Slide 8: Financial Highlights
Financial Highlights 7. FY10 Results (in C$ Millions) Fiscal Year Ended Y-o-Y Jan. 31, 2010 Feb. 1, 2009 Growth Sales $ 1,254 %Sales $ 1,089 %Sales 15.1% Gross Margin $ 443 35.3% $ 365 33.5% 21.4% Normalized EBITDA(1) $ 192 15.3% $ 153 14.1% 25.2% Normalized EBIT(1) $ 167 13.3% $ 131 12.1% 27.0% Net
Slide 9: Financial Highlights
Financial Highlights 8. Second Quarter and 26 Weeks Results (in C$ Millions) Second Quarter Ended 26 Weeks Ended Aug. 1, 2010 Growth Aug. 1, 2010 Aug. 2, 2009 Growth Sales $ 344 %Sales 13.2% $ 655 %Sales $ 577 %Sales 13.6% Gross Margin $ 121 35.3% 20.2% $ 228 34.8% $ 192 33.3% 18.8% Normalized EBITD
Slide 10: Growth Strategy
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Slide 11: Significant Store Growth Potential
Significant Store Growth Potential 10. Average of 51 net new stores per Thousands of People year over the last 4 fiscal years per Store Quebec market is not saturated 106 52 Dollarama is underpenetrated in 38 37 the Ontario and Western Canada Western Ontario Atlantic Quebec Canadian market is signif
Slide 12: Attractive New Store Economics
Attractive New Store Economics 11. Efficient capital model • $400K in leasehold improvements & fixtures • $200K in opening inventory Quick sales ramp-up • Average year-one sales of $1.8M Rapid payback of less than 2 years Low maintenance capital expenditure requirements Strong profitability, low cap
Slide 13: Strong Momentum in CSS Growth
Strong Momentum in CSS Growth 12. Comparable Store Sales Growth Introduced multiple price-point product offering 9.3% 8.6% 7.5% 7.8% 7.0% 7.3% 3.0% '03 - '09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Average Recent initiatives accelerating CSS growth
Slide 14: SSS Growth Strategies
SSS Growth Strategies 13. Traffic Count • Transactions are up ~1.5% FY2011 YTD • High Brand awareness o ~ 98% in Québec o ~ 94% in Ontario • Continue to execute Private Label strategy • High traffic to purchase conversion rate of 85% • No advertising
Slide 15: CSS Growth Drivers
CSS Growth Drivers 14. Expand multiple price-point strategy Percent of Sales from Items • Launched February 2009 Priced > $1 • Strong consumer enthusiasm to date 39% Maintain compelling consumer value 34% 30% • Assortment expansion 27% 24% 12% 0% Q1'FY10 Q2'FY10 Q3'FY10 Q4'FY10 Q1'FY11 Q2'FY11 FY09
Slide 16: CSS Growth Drivers
CSS Growth Drivers 15. Payment Methods • Introduction in all locations in FY09 • Penetration level - 32% of sales in Q2FY11 • Debit transactions are 2.5 times higher than cash transactions Scanning • Scanner devices roll-out to be completed in November of 2011 • Enhance replenishment & store in-stoc
Slide 17: Near-Term Objectives
Near-Term Objectives 16. Open 30 – 40 stores per year Sustain attractive same store sales Maintain operating margins Maintain SG & A Cost to Sales Ratio Repay debt with free cash flow
Slide 18: [DOLLARAMA (L)
[DOLLARAMA (L)