Aimia Inc. · TSX:AIM
Aimia — Groupe Aeroplan — Investor Presentation (March 2009)
29 slides from Aimia's investor presentation, March 2009
Slide 1: Investor Presentation
Investor Presentation March 2009 A Confidential Presentation
Slide 2: Senior Management Team
Senior Management Team Rupert Duchesne President & Chief Executive Officer David Adams Executive Vice President & Chief Financial Officer Patricia Moran Head of Investor Relations 2 GROUPE AEROPLAN
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation may contain forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "w
Slide 4: About Groupe Aeroplan
About Groupe Aeroplan Global leader in loyalty management with a presence on three continents 25 years operating experience Financial highlights in 2008 • Gross billings of $1.4 billion • Adjusted EBITDA of $317 million • Free cash flow of $301 million • Cash balance of $665 million Widely h
Slide 5: Major Milestones
Major Milestones Voted World’s Best Aeroplan FFP by OAG formed (award also rec’d IPO of as stand-alone for 2002) Aeroplan Introduction entity of Income Fund of ClassicPlus Air Canada ($2B market cap) Flight Rewards 1984 1991 2001 2002 2003 2004 2005 2006 2007 2008 2009 Completed integration Conversi
Slide 6: Groupe Aeroplan Overview
Groupe Aeroplan Overview (60% ownership ) LMG LMG Insight & Programs / Services Communication (Air Miles Middle East) Established 1984 2002 2001 2007 Travel, financial Consumer goods, Consumer goods, Data analytics with services, hotels, gas grocery, utilities, food apparel, financial worldwide appl
Slide 7: Attractive Business Model
Attractive Business Model Earning - Miles “Cash Inflow” Member buys Commercial Miles products partners buy deposited in or services & miles from member’s “earns” miles Groupe account Aeroplan Redeeming - Miles “Cash Outlfow” Member Groupe Member redeems miles Aeroplan buys product enjoys with Groupe
Slide 8: Investment Highlights
Investment Highlights
Slide 9: Investment Highlights
Investment Highlights Global leader in loyalty management with a growth platform • Aeroplan Program is Canada’s premier loyalty marketing program • Nectar Program is UK’s largest coalition loyalty marketing program Diversified and recurring revenues with long-term agreements • Aeroplan and Necta
Slide 10: Global Leader in Loyalty Management
Global Leader in Loyalty Management Aeroplan Program is Canada’s premier loyalty marketing program with 25 years of experience and more than 4 million active members Nectar Program is UK’s leading coalition loyalty program with more than 10 million active members Rewards Management Middle East
Slide 11: Strong Growth Platform
Strong Growth Platform Complementary businesses which leverage retail, travel, financial and customer data analytics services expertise across three continents Owner of Air Miles trademark in a number of jurisdiction, including Canada Track record of launching new programs with international e
Slide 12: Loyalty Marketing Partner of Choice
Loyalty Marketing Partner of Choice 85+ partners representing 170+ brands (Air Miles Middle East) 12 GROUPE AEROPLAN
Slide 13: Diversified Revenue Base
Diversified Revenue Base The LMG acquisition allowed Groupe Aeroplan to diversify its revenue base, expand geographically and gain retail expertise • Ability to leverage cross sector know-how: financial, retail and travel • Reduced exposure to Air Canada with gross billings representing 17% in 200
Slide 14: Selected Long-Term Agreements
Selected Long-Term Agreements CIBC Sainsbury’s American Express Long standing relationship Represents over 17% of Agreement entered into in since 1991 2008 gross billings 2003 for co-branded 10-year agreement Strategic partnership charge cards and expiring in 2013 with agreement membership
Slide 15: Strategic Relationship With Air Canada
Strategic Relationship With Air Canada Air Canada is Canada's largest full-service airline Air Canada is a founding member of Star Alliance, the world's most comprehensive air transportation network Aeroplan manages Air Canada’s frequent flyer program Air travel is #1 reward choice of Aeropl
Slide 16: Minimal Impact from Air Canada
Minimal Impact from Air Canada Groupe Aeroplan estimated that a 10% capacity reduction by Air Canada would only have an impact on Groupe Aeroplan’s gross billings in the single digit millions • To date, Air Canada has announced capacity reductions of 9 – 11%, mostly on routes where Aeroplan does n
Slide 17: Strong Base of Members with Attractive Demographics
Strong Base of Members with Attractive Demographics Aeroplan Program Nectar Program Strong base of over 4 million active Strong base of approximately 10 members million active members Attractive demographics of Represents approximately 50% of UK membership base households • Majority of Canad
Slide 18: Flexible Business Model
Flexible Business Model Groupe Aeroplan retains significant control over the rewards available for redemption, providing it with a number of levers which enhance financial flexibility Revenue Redemptions Number of members & partners Rewards mix Engagement of members Rewards availability
Slide 19: Aeroplan Program - Stability of Miles Issued vs. Miles Redeemed
Aeroplan Program - Stability of Miles Issued vs. Miles Redeemed Aeroplan Program was not significantly affected during the period Air Canada was under CCAA protection from April 2003 to September 2004 • Over the past six years, Aeroplan miles issued and redeemed have remained relatively stable and
Slide 20: Financial Highlights
Financial Highlights
Slide 21: Adjusted EBITDA Matches Cash Cycle
Adjusted EBITDA Matches Cash Cycle GAAP Adjusted Basis Recognized when miles Recognized when miles redeemed, not when Revenue sold and cash received miles sold and cash (Gross billings) received Recognized on an Redemption Recognized estimated basis when Costs when miles redeemed miles sold
Slide 22: Financial Performance
Financial Performance Groupe Aeroplan generated gross billings and adjusted EBITDA of $1,421 million and $317 million, respectively, in 2008 • Gross billings CAGR of 23.5% from 2005 to 2008 • Adjusted EBITDA CAGR of 23.5% from 2005 to 2008 • Adjusted EBITDA margin declined to 22% in 2008 reflectin
Slide 23: Breakage
Breakage Breakage represents miles which are not expected to be redeemed By its nature, breakage is subject to estimates and judgment The consolidated weighted average estimated breakage factor for 2008 is 17% • Aeroplan Program breakage: recognized over the estimated life of a mile, currently
Slide 24: Strong Cash Flow Generation
Strong Cash Flow Generation Track record of strong operating and free cash flow generation Strong cash flow generation provides significant financial flexibility to Groupe Aeroplan • Generated $323 million and $301 million of operating and free cash flow, respectively, in 2008 Operating and Free
Slide 25: Strong Cash Position
Strong Cash Position Groupe Aeroplan has always maintained a significant cash position even after the LMG acquisition in Q4 2007 • Cash, cash equivalents and short-term investments amount to $665 million as at December 31, 2008 (including the $400 million reserve) Cash, Cash Equivalents & Short-Te
Slide 26: Redemption Reserve
Redemption Reserve Aeroplan Program • Considered prudent at time of IPO to establish the $400 million reserve to provide safety net in the event of unusually high redemption activity or loss of a major partner • To date, Groupe Aeroplan has not had to use the funds held in the reserve • Policy is
Slide 27: Investment Grade Profile
Investment Grade Profile Groupe Aeroplan obtained two investment grade ratings in the Fall of 2008 • S&P: BBB- (positive outlook) • DBRS: BBB (stable) Committed to maintaining an investment grade profile • Target leverage of approximately 2.5x Total Debt to Adjusted EBITDA Total Debt / Adjusted
Slide 28: Capital Structure
Capital Structure Short-term priority is to refinance the $300 million bridge facility that can be extended to December 2009 of which an amount of $100 million may be further extended at the Company’s option to June 2010 Groupe Aeroplan maintains the ability to repay the $300 million bridge faci
Slide 29: Investment Highlights
Investment Highlights Global leader in loyalty management with a growth platform • Aeroplan Program is Canada’s premier loyalty marketing program • Nectar Program is UK’s largest coalition loyalty marketing program Diversified and recurring revenues with long-term agreements • Aeroplan and Necta