Empire Co Ltd Class A · TSX:EMP.A
Empire Co Ltd Class A — Sobeys — Debt Investor Presentation (June 2010)
19 slides from Empire Co Ltd Class A's debt investor presentation, Jun 1, 2010
Slide 1: Fixed Income Update
Fixed Income Update June 1, 2010
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking statements which reflect management’s expectations regarding the Company’s objectives, plans, goals, strategies, future growth, financial condition, results of operations, cash flows, performance, business prospects and opportuniti
Slide 3: Our Progress
Our Progress • We have invested heavily in our stores, supply chain and infrastructure; stronger than ever. • We have significantly improved our offering, merchandising and execution in all our regions. • We have stronger management and a deeper bench. • We are more competitive than ever and it show
Slide 4: Store Productivity
Store Productivity Tools & Processes • Work Force Management • Fresh Item Management • Computer Assisted Ordering
Slide 5: Sales Productivity
Sales Productivity Sales Productivity • Private Label Optimization • Retail Price Optimization • Basket Analytics
Slide 6: Supply Chain
Supply Chain • Automation – Distribution & Store Cost Reduction – Service Level Improvements – DSD Consolidation • Global Sourcing • Vendor Engagement & Investment – “Sell-side” Performance
Slide 7: Customer Insights…Foundation
Customer Insights…Foundation • Company wide loyalty programs • Proprietary database • Highly qualified external partners • Strengthened internal resources
Slide 8: Customer Insights…Underway
Customer Insights…Underway • Customer specific promotions • Insight driven assortments & pricing • Insight collaboration with suppliers
Slide 9: Ontario Discount – FreshCo Launch
Ontario Discount – FreshCo Launch FreshCo delivers: • Unconventionally fresher, cheaper • Low prices, less compromise • Clean, convenient and contemporary shopping environment • Tailored product assortments for each store 8 Stores in Mississauga & Brampton More to Come
Slide 10: Revenue
Revenue ($ in billions) 5 year CAGR = 4.4% Year-over-Year = 3.4% $14.8 $15.1 $13.8 $11.1 $11.5 $12.7 $13.0 $12.2 2005 2006 2007 2008 2009 LTM YTD F09 YTD F10 Fiscal Year-End 39 Weeks
Slide 11: Same-Store Sales Growth
Same-Store Sales Growth 8.0% 3.6% 8.0% 6.0% 2.4% 6.0% 1.6% 2.0% 4.0% 1.8% 4.0% "Real" Comp 2.0% 4.0% 2.7% Inflation 1.3% 2.6% 3.0% 3.0% 2.0% Deflation 2.0% 2.0% 2.0% 1.7% 1.8% 1.0% 1.0% 0.0% 0.0% 0.0% 0.0% 0.0% -1.5% -2.0% -2.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 3.5% 2.3% 2.0% 2.6% 3.0% 5.4% 7.6% 4.6
Slide 12: EBITDA
EBITDA ($ in millions) 5 year CAGR = 8.2% Year-over-Year = 5.8% $741.3 710.3 $561.8 $530.8 634.2 528.2 531.6 499.0 4.78% 4.89% 2005 2006 2007 2008 2009 LTM YTD F09 YTD F10 Fiscal Year-End 39 Weeks
Slide 13: Operating Income (EBIT)
Operating Income (EBIT) ($ in millions) 5 year CAGR = 6.1% Year-over-Year = 9.1% $431.6 $403.9 $330.8 $303.1 $363.8 $331.6 $322.6 $291.0 2005 2006 2007 2008 2009 LTM YTD F09 YTD F10 Fiscal Year-End 39 Weeks
Slide 14: EBITDA & EBIT Margin
EBITDA & EBIT Margin 5.50% 4.91% 4.80% 4.60% 4.50% 4.09% 3.50% 2.86% 2.73% 2.64% 2.50% 2.24% 1.50% 2007 2008 2009 LTM EBITDA Margin EBIT Margin
Slide 15: Investing in Our Network
Investing in Our Network Square footage Total retail store count (millions) +14% over last five years +2% over last five years 27.9 27.5 1,314 1,296 1,332 1,348 1,343 1,338 27.2 26.4 25.4 25.1 2005 2006 2007 2008 2009 Q3 F10 2005 2006 2007 2008 2009 Q3 F10 Fiscal Year-End
Slide 16: Capital Investments
Capital Investments Capital Investments – Fiscal 2009 • Over $382 million invested in expansion or improvement • 47 new stores opened or relocated • 11 stores expanded • 52 stores closed Capital Investments – F2010 Q1-Q3 • Over $262 million invested in expansion or improvement • 30 stores opened, ac
Slide 17: Our Financing Policy
Our Financing Policy • Committed to being a solid investment grade credit Rating Outlook DBRS BBB Stable S&P BBB- Stable • Committed to maintaining a strong balance sheet • Balance of short-term and long-term duration and rates • Maintain flexibility through strong banking relationships and access t
Slide 18: Key Credit Metrics
Key Credit Metrics Funded Debt to Total Capital has improved to 27.7% from 35.6% at the end of Fiscal 2008. Q3 F2010 F2008 F2009 T12M (1) Funded Debt (adjusted for leases) / EBITDAR 2.7x 2.3x 2.3x Funded Debt / Total Capital 35.6% 31.2% 27.7% (1) Funded Debt (adjusted for leases) / Total Capital 53.
Slide 19: Summary
Summary We will continue to: • Improve our offering • Improve our service • Develop and support our people • Increase our productivity • Lower our costs and execute well…store by store